Affymax’s Omontys Recalled After Deaths; Uncertain Future Ahead For Company

Affymax and its partner Takeda recalled all of their ESA product after rare but unexplained patient fatalities, leaving both the product’s and the company’s future in limbo. The safety concerns may fuel fears about the unknowns of biologic production.

Product recalls are never good for a drug company; for Affymax Inc. it could be a death-blow. The Palo Alto, Ca.-based biotech – along with partner Takeda Pharmaceutical Co. Ltd. -- announced the night of Feb. 23 that they are recalling all lots of Affymax’s only product after allergic reactions to the anemia drug Omontys (peginesatide) led to several patient deaths.

Affymax CEO John Orwin called the news “surprising” during a Feb. 25 investor update. The recall was also a surprise to analysts and investors alike – pushing the stock down 85%, or $14.05, to $2.46 by mid-day Monday. The stock has a 52-week high of $27.74.

According to the joint statement issued by the companies, three patients out of the 25,000 who have been given Omontys since its launch in March 2012 had fatal reactions to the drug within 30 minutes of receiving their first dose via intravenous administration. The company indicated that these deaths occurred since mid-February when Affymax issued its last update on the progress of the product’s launch. Two other deaths of patients taking Omontys were disclosed previously, but in both cases, the cause was believed to be cardiovascular and not due to hypersensitivity to the product. The companies did not report hypersensitivity in any of the patients who received the drug subcutaneously, but all versions of the product have been pulled, and marketing has ceased.

Affymax and Takeda are now evaluating the cause of all five deaths, as well as other reports of allergic reactions to Omontys, including anaphylaxis, which resulted in the need for emergency medical intervention. The overall rate of hypersensitivity to the drug since launch was 0.2%, with a third of these reactions being serious in nature, the companies said.

“If we can identify and address the underlying cause, the FDA has said they would work with us on appropriate next steps for the product,” Orwin said on the call. The company was not available for further comment. A Takeda spokesperson noted in an email that, “Patient safety is Takeda’s number one priority,” and that the company will be working closely with Affymax and FDA regarding the matter.

Omontys is an erythropoiesis-stimulating agent (ESA) that aids in the production of red blood cells. It was approved by FDA in March 2012 for the treatment of anemia in chronic kidney disease patients receiving dialysis. The drug entered a mature market dominated by Amgen Inc.’s Epogen (epoetin alfa) and to a lesser degree Aranesp (darbepoetin alfa). The companies have been having a hard time convincing dialysis providers to use the drug because of long-term contracts that Amgen has with some of the largest dialysis providers.

“To put these developments in context, we looked back at the FDA Adverse Events Reporting System (AERS) database for both Omontys and competitor Amgen’s Epogen,” Robert W. Baird analyst Christopher Raymond wrote in a Feb. 25 note. Raymond’s comparison showed that 60 deaths occurred in patients taking Epogen over the past 8.5 years since the drug became available in the U.S., even with more than 260,000 patients taking the drug annually. The database recorded 10 events of anaphylaxis in patients on Epogen since 2004, while Raymond estimates approximately 17 cases of anaphylaxis occurred since last March in patients taking Omontys, based on the company-provided data. “While this is a rough comparison against the new information released by the company this weekend, we think it sadly illustrates there are increased safety risks associated with Omontys,” he said.

The Previous Omontys Update

According to SEC filings, Affymax received notice from Fresenius Medical Care AG, the country’s largest dialysis provider, on Feb. 13 that the provider was halting expansion of the pilot program it began in July because it had enough patient data to evaluate the experience with the drug. Fresenius has been using Omontys in about 100 of its 2,000 facilities – or about 18,000 patients. Affymax and Fresenius have been collecting patient data concerning administration and reaction since the program began and plan to use the data to conduct an analysis of the drug (Also see "Fresenius News Not All Bad For Affymax’s Omontys" - Pink Sheet, 15 Feb, 2013.).

The letter from Fresenius did acknowledge that some patients experienced allergic reactions to Omontys, similar to reactions seen in patients taking the market-leading Epogen, -- the reactions were called “mild” although Fresenius admitted some were severe. Fresenius even went on in the letter to recommend that patients on Omontys should continue receiving the drug and that physicians trialing Omontys should continue prescribing it to patients, should they so choose. The current recall mandates that all patients stop use of the drug; although the companies noted that no reactions were seen in those patients that had multiple doses or in patients that completed their dialysis session.

“Bottom line, regardless of the [Fresenius] experience, in light of the new safety information and product recall we think it will be a tough road ahead for [Affymax] to regain the faith of the nephrology community,” wrote Raymond.

Broader Implications

Affymax reported on its third-quarter conference call in the fall that it had about $100 million in cash and equivalents on its balance sheet. The company currently has no other marketed products and no products in its pipeline. Orwin told “The Pink Sheet” DAILY in an interview in mid-February that Affymax was in the market for late-stage or commercialized products to add to its portfolio.

Beyond Affymax, the industry may view the Omontys story as a cautionary tale against follow-on biologics. While Omontys is not a biosimilar, it is a pegylated version of an ESA that was being positioned as a more cost-effective, advantageous dosing option to an already proven biologic – a position that many biosimilar manufacturers are expected to take (Also see "Reimbursement of Biosimilar and Biosimilar-similar ESAs" - Pink Sheet, 30 Apr, 2012.).

“Safety issues with Affymax’s Omontys shifts focus to complexities associated with manufacturing complex biotech drugs. In our opinion, such events cause a fair amount of skepticism regarding safety of biosimilars,” Deutsche Bank analyst Robyn Karnauskas wrote in a Feb. 25 note.

Affymax noted during its investor call that Omontys given during Phase III clinical trials was done with a single-dose unit, while the drug given to patients after approval was done via multi-dose vials. The incidence of reactions in the Phase III program were on par with that of the real-world data, but the company noted that the reactions patients had during the clinical trials were not of a serious nature. The company has yet to determine whether manufacturing played a role in the safety issues that have arisen.