U.S. Markets closed

Amgen climbs, Affymax plummets following drug recall

Amgen (AMGN) is advancing after Affymax (AFFY) initiated a safety recall for Omontys, a drug which treats anemia brought on by chronic kidney disease. Omontys was recalled because the drug has caused serious hypersensitivity reactions in some patients that can be fatal, Affymax stated. Amgen's Epogen drug also treats anemia in patients with kidney disease. In a note to investors earlier today, Piper Jaffray analyst M Ian Somaiya wrote that the recall of Omontys makes it less likely that Amgen's Epogen will lose market share to Omontys. The recall also decreases the likelihood that Epogen will lose market share to another competing drug, Roche's (RHHBY) Mircera, and biosimilars, as the FDA may now be stricter with those drugs, the analyst wrote. The recall of Omontys should increase the revenue that Amgen obtains from Epogen by $300M-$500M annually through 2016, and strengthen the drug's competitive position over the longer term, Somaiya believes. The analyst maintained an Overweight rating on Amgen, which gained $3.31, or 3.81%, to $90.13 in early trading. Meanwhile, shares of Affymax tumbled $14.02, or 84.87%, to $2.50.