NEW YORK (AP) -- Shares of Affymax Inc. jumped more than 14 percent Thursday after the company said it would be supplying its anemia drug to Fresenius Medical Care, one of the largest dialysis center operators in the nation.
THE SPARK: Sales of the company's anemia drug, Omontys, are going to get a bump. The supply deal provides for discounts and rebates. Fresenius agreed to use Omontys at more than 100 U.S. dialysis centers within the next few weeks, and it may expand use of the drug from there. The companies did not disclose financial terms of the agreement, which is scheduled to end in April.
THE BIG PICTURE: The deal could get Omontys to large numbers of patients and helps it compete with other anemia drugs like Amgen Inc.'s Epogen and Aranesp. In late 2011 Amgen announced a seven-year supply deal with another large dialysis company, DaVita Inc.
Omontys is a once-per-month injection designed to treat anemia caused by chronic kidney disease. The drug was approved in late March and reached the market in late April, shortly after Medicare assigned a reimbursement code for Omontys. The reimbursement code makes it easier for dialysis organizations to get reimbursement for Medicare after using the drug to treat patients.
Aranesp and Epogen are injected once per week or more often. Sales of the drugs have fallen in recent years because of safety concerns and restrictions on their use.
SHARE ACTION: Affymax stock surged $1.73 to $13.68 in midday trading. The shares have more than doubled in value since Dec. 7, when a Food and Drug Administration panel recommended that Omontys receive marketing approval.