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Affymax plunges after Fresenius pauses expansion of drug pilot

Shares of drug maker Affymax (AFFY) fell sharply this morning after the company disclosed that a partner was halting further expansion of a pilot program for Omontys, a drug approved by the FDA for the treatment of anemia due to chronic kidney disease in adult patients on dialysis. Affymax said that on February 13, Fresenius Medical Care North America, a unit of the German kidney dialysis company Fresenius Medical Care AG (FMS), communicated that it had accumulated enough experience with Omontys Injection in its dialysis facilities and that it will pause further expansion of the Omontys pilot that began in late July of last year. FMCNA's pilot was intended to determine the role of Affymax's drug as an alternative Erythropoiesis Stimulating Agent on the dialysis company's formulary. The Fresenius unit said that two months into its pilot program, the FDA released revised product information for Omontys that added language similar to the prescribing information for an alternative therapy, Epogen, concerning the risk for allergic reactions. Fresenius added that, to date, it has seen infrequent allergic reactions in its patient population receiving their first dose of Omontys. Fresenius added that as it completes its analysis in the next week or two, it plans to provide an update on the pilot experience and any future recommendations. In a note to investors sent after the disclosure, RW Baird analyst Christopher Raymond said the stock's reaction to the news was misplaced, calling the Fresnius pause a positive development. The firm reiterated its $30 price target on Affymax shares and recommended buying the stock while it was down. In early morning trading, shares of Affymax plunged $3.51, or 20.82%, to $13.40.