Affymax Shares Approach the Abyss with Anemia Drug Recall

Michael Teague |

Affymax Shares Approach the Abyss with Anemia Drug RecallBiotech company Affymax (AFFY) saw its stock price enter more or less of a free-fall, plunging more than 85 percent to lead all decliners Monday. Shares of Affymax are currently trading around $2.50, down from Friday's close of $16.52. The precipitous decline is the direct result of news that its anemia treatment drug Omontys not only caused allergic reactions in 50 patients (0.2 percent of users so far), but was actually responsible for the deaths of five others.



Omontys is administered intravenously, and has been used in the treatment of anemia resulting from chronic kidney disease since it was approved and reached the market last April. The drug functions by enhancing the kidney’s production of erythropoietin, a protein that regulates the production of red blood cells, and had the advantage over competitors of necessitating injections only once a month. Similar products from Amgen (AMGN) and Johnson & Johnson (JNJ) require several injections per-month.

The news is particularly disastrous for Affymax as Omontys is the only product it makes, and arrives not long after the company, in tandem with Japan's biggest drug manufacturer Takeda (TKPYY), went ahead on an agreement to supply the drug to the major U.S. dialysis provider, DSI Renal.  Five analysts immediately downgraded the company after Saturday’s announcement of the fiasco. The recall has essentially emptied the company of nearly all of its value, based on reactions from analysts covering the stock. Shares of Amgen traded up as high as 5 percent on the news, while Johnson & Johnson has stayed mostly flat.

[Image via Flickr]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
JNJ Johnson & Johnson 137.29 -1.05 -0.76 3,917,467 Trade
GBT:CA BMTC Group Inc. 15.39 0.18 1.18 5,277
AMGN Amgen Inc. 169.96 0.12 0.07 1,533,133 Trade

Comments

Emerging Growth

Yangtze River Development Ltd

Yangtze River Development Ltd through its subsidiary is a real estate development company. The Company is engaged in the development of residential and commercial real estate in tier-three cities in…

Private Markets

Voleo

Voleo is a free download that allows you to form investment clubs with your friends, family, colleagues, classmates, teammates…basically anyone you know and trust. Invest and manage a stock portfolio…

The Green Organic Dutchman

The Green Organic Dutchman Ltd. ("TGOD") produces farm grown, organic cannabis for medical use. The company grows its high quality organic cannabis in small batches using craft growing, all natural…