I am loaded as much as I can be and holding for $15+, $15 is my target but all depends on news and strength I might hold out for more. Checked out article on Amgen and earnings for epogen.
Affymax is entering the market as use of the anemia drugs is declining because of safety concerns and a new Medicare payment system. Sales of Epogen, Amgen’s main drug for dialysis, dropped to $2 billion in 2011 from $2.5 billion in 2010.
Amgen has also taken steps to lock Affymax out of the market, signing contracts with the two big dialysis chains that together treat around two-thirds of the nation’s roughly 400,000 dialysis patients, virtually all of whom have anemia.
In exchange for presumably big discounts from Amgen, one of the chains, DaVita, agreed to use Amgen’s drugs for at least 90 percent of its needs through the end of 2018. Fresenius, the other big chain, signed a three-year nonexclusive deal, according to Amgen’s regulatory filings.
John A. Orwin, chief executive of Affymax, which is based in Palo Alto, Calif., said there was still a substantial market in midsize and small dialysis providers.
“There’s a group of people who are very anxious to talk to us,” he said in an interview this month. Takeda, the big Japanese drug company, will help market Omontys, which is known generically as peginesatide.
Mr. Orwin said Omontys could be given once a month by injection or infusion, while Epogen is typically given three times a week.
He said Tuesday that while the list price for Omontys might not be that different from that of Epogen, Affymax intended to make its product less expensive in its contract negotiations with dialysis providers, after factoring in discounts, rebates and the savings in nursing time from the less frequent dosing.
“We know we need to be part of the solution to lower costs,” he said. He said a typical cost to treat a patient with Epogen was $6,000 a year, though doses vary.
Anemia drugs built Amgen into the world’s biggest biotechnology company
Over the years, Amgen has defended its monopoly in patent lawsuits against Genetics Institute, Transkaryotic Therapies and Roche.
Amgen divided its seminal invention into several patents, the first of which expired in 2004. But some of the patents were not granted until years later, giving Amgen protection until as late as 2015, longer than the 20 years envisioned in patent law.
In Europe there was only one patent, and it expired several years ago. Amgen has since faced competition so there are now near-generic versions of Epogen, known as biosimilars, on the market there.
Unlike the drugs found to infringe Amgen’s patent, Omontys is not a version of the Epo protein made in living cells. It consists of two small protein fragments, called peptides, that are made chemically and do not share amino acid sequences with Epo, according to Affymax.
Over the years, financial incentives and heavy marketing by Amgen have turned Epogen into a major moneymaker, and one of the largest pharmaceutical expenses for Medicare.
Dialysis clinics could make a profit from using Epogen because Medicare and private insurers would reimburse them more than they would pay to buy the drug from Amgen. That gave the clinics an incentive to use more of the drug.
But last year Medicare began paying a set fee to cover a complete dialysis treatment, including Epogen. So Epogen has now become a cost that lowers profit, giving clinics an incentive to use as little of the drug as possible. The Food and Drug Administration meanwhile has also increased restrictions on the use of Epo drugs after various studies showed that overuse increased the risk of heart attacks, strokes and other cardiovascular problems.
Omontys has the same safety warnings on its label since it is considered in the same class of drugs. Moreover, in clinical trials involving patients with kidney disease who were not undergoing dialysis, those who got Omontys had a higher rate of certain cardiovascular problems than those who received Amgen’s Aranesp.
Affymax argued that those patients were distinct from those getting dialysis, where the increased incidence of problems was not seen. An advisory committee to the F.D.A. apparently agreed, recommending approval of Omontys in December by a vote of 15 to 1 with one abstention.
But in a post on his blog, the Kidney Doctor, Dr. Ajay K. Singh, an influential nephrologist at Brigham & Women’s Hospital in Boston, questioned whether the division of patients based on whether they undergo dialysis “makes any sense from a safety perspective.”
Affymax shares rose 58 cents, to $14.31, on Tuesday. Omontys is the first product approved for the company, which has a market capitalization of around $500 million. Shares of Amgen rose 29 cents to $67.81