Good reply, but consider that PEARL and EMERALD were designed to be studied together and the hazard ratio of the combined study was 1.13 which is a trend to worse safety. If you cherry pick the data to just the dialysis setting you got a 0.95 hazard ratio. BUT they EMERALD study was open label, and open label studies are notoriously easier on the evaluated drug when it comes to safety. The drug made it through the FDA though so Kudos to AFFY, they put together a great submission file and convinced a not so easy panel, but now nephrologists are left to ask "Who is the sicker patient, a CKD patient not on dialysis or one on dialysis?" obviously the one on dialysis is sicker. Why would this population be BETTER off than a less sick population. When in doubt wait it out, is the right mantra here, let other people test the drug and use it when the drug is proven in the clinical setting. This would be fine for AFFY, except for the coming biosimilar competition. The timing just doesn't work. They can still hope for a take out so I would not short AFFY, but I would be taking profits.
Many of the points you made are being addressed in the post marketing studies. The time to achieve target hgb and variability are thus far looking like they may not be as problematic as once thought. Those conducting the post marketing studies are factoring in such issues as missed outpatient treatments after getting the monthly dose in their cost analysis and they will base their decisions accordingly. Also their have been studies where longer acting ESAs seem to consume less iron which would be another positive factor in cost analysis. Finally, there are about 10% of patients who receive dialysis at home and therefore are dosed less often and the longer acting ESAs are ideal for this situation.
As far as the studies showing poorer outcomes in CKD pts with omontys, there are many that are looking into the data. In the ckd studies, omontys was compared to Amgen's longer acting aranesp and omontys was dosed every month as it is in dialysis pts despite the fact that it is excreted by the kidneys. Aranesp, which has a similar half life as omontys in patients retaining significant renal function, was dosed every 2 wks and I have speculated that this is perhaps part of the reason for the discrepancy in the ckd studies. There are other hypotheses as well. The bottom line is that dialysis patients are not just sicker versions of ckd pts but are fundamentally different in that most have a procedure 3x per week and they have less , if any, remaining renal function. The FDA recognized this when they approved omontys only for patients with end stage renal disease. As we learn more, we could possibly see expanded indications but even without that I think there is a good chance for this company to do very well.
Hey Brian nice reply, it is refreshing to get some intelligent discourse on a yahoo board for a change.
I agree with the rationale for approval by the FDA, the fact that they looked at dialysis patients as a different patient population altogether, and likely also the fact that given the distribution only through clinics that there was very little risk for off label use. I do think Omontys is a good drug otherwise I would have never been long at $5 before the FDA panel. Anybody who really looked at the data saw that the hazard ratio in the CKD population was driven by an unusually low death rate in the Aranesp arm, not by a significant amount of problems with Pegenesatide, but the failure still creates a shadow of a doubt.
Unfortunately, I do think there will be enough nephrologists who find Omontys on the formulary at the clinic they work with that retain enough of a shadow of a doubt on safey that market share will be limited early in Omontys life cycle, but the company just doesn't have enough time to establish themselves before increased competition comes to market in the form of Mircera and biosimilars. If it was Omontys vs EPO for 10 years I would expect 30% share or higher and pricing at parity. However competition is going to mean splitting the market several ways and at a bigger price cut. The only way for AFFY to address the issue of missed sessions is with additional rebates either on a case by case basis or extra price cuts up front. The bigger the discounts the higher the share needed to make money. Perhaps there are savings to be had on other drugs like Iron, but that isn't something you can count on. You will notice that I did recognize the potential for the drug in the PD and HHD setting, but ultimately they will spit the market with Mircera in this market and any incenter share they do garner inthe next two years will be eroded by competition.
I said before I though the only way out was a take out. I believe that to be true over the long term, but in the near term there is also the chance for the stock to pop when Wolter Kluwer reports monthly script data, if I were long I would use this strength to sell because unless AFFY can get to a total expense run rate under $100M they may never get past break even.