Affymax (NASDAQ:AFFY) shareholders were hit with a devastating blow on Monday, February 25th after the company announced a voluntary recall of its sole marketed product, OMONTYS. The recall was due to
new postmarketing reports regarding serious hypersensitivity reactions, including anaphylaxis, which can be life-threatening or fatal.
As of Saturday's press release announcing the recall, the company stated that fatal reactions occurred in 0.02% of patients receiving the drug for the first time (approximately 3-5 patients of the 25,000 who have received the drug). Overall, approximately 0.20% of patients who have received the drug experienced some type of serious hypersensitivity reaction (approximately 50 patients). All lots of the drug were recalled, so the company apparently could not find a specific lot at fault and had no timeframe on when or if the issue would be resolved due to the early stage of the investigation.
Affymax and its partner, Takeda Pharmaceutical Company Limited (OTCPK:TKPYY), received FDA approval to market OMONTYS on March 27, 2012 for the treatment of anemia due to chronic kidney disease [CKD] in adult patients on dialysis. The data submitted to the FDA for marketing approval were from two randomized, controlled, open-label Phase 3 trials, Emerald 1 and Emerald 2. With efficacy obviously not the issue due to strong data backing it, I simply wish to look at the safety profile of these two trials to ascertain what could have possibly gone wrong. Still known as "peginesatide" at the time of the Phase 3 trials, OMONTYS is administered via injection once per month, instead of the 13 times per month regimen of epoetin.
According to the data release, the safety profile for peginesatide was acceptable via a
generally similar adverse event rate, these data provide additional information on the maintenance of Hb within treatment targets over time (up to 100 weeks), as well as cardiovascular safety results of this once-monthly agent in the dialysis patients studied.
Reviewing the "serious adverse events" patient set in the Emerald 1 trial data comparison between peginesatide and epoetin, we see that of the serious events patients the following was noted: death (11.1 percent versus 11.2 percent), stroke (2.3 percent versus 4.5 percent), myocardial infarction (4.8 percent versus 5.9 percent), unstable angina (2.7 percent versus 2.6 percent), congestive heart failure (11.3 percent versus 9.7 percent) and arrhythmia (6.9 percent versus 6.7 percent).
For the Emerald 2 trial data comparison of the serious events patients the following was noted: death (10.5 percent versus 12.5 percent), stroke (2.6 percent versus 2.9 percent), myocardial infarction (4.4 percent versus 4.8 percent), unstable angina (1.8 percent versus 1.8 percent), congestive heart failure (8.1 percent versus 8.4 percent) and arrhythmia (5.0 percent versus 6.2 percent). In summary, both the incidences of serious events as well as the distribution of event types were very similar between OMONTYS (peginesatide) and the standard of care. Please note that the comparisons given were percentages of the patient populations with adverse events, not of the total patient populations.
What went wrong and what could have been the difference between the peginesatide Phase 3 trials involving over 1,600 patients treated and the now marketed OMONTYS? Without a more thorough understanding of the exact manufacturing process involved in the creation of OMONTYS, I can only guess. Any number of side reaction products, differences in raw materials used in manufacturing OMONTYS, carrier (liquid that the active ingredient is dispersed in for injection via intravenous or subcutaneous administration) quality, pre-existing allergy to a preservative or other compound in the mix or a host of other issues could be at fault. Time will only tell where the investigation might lead and how long it might take.
Could this be the end of OMONTYS in the market? Perhaps it will be. We may never see OMONTYS marketed in the U.S. again if the issue is not identified, resolved and protected against in the future. For investors, the risk of investing even at these depressed levels is still elevated, as the company has no other compound in development noted on its website. With Affymax being a "one trick pony", the downside from even the current suppressed levels could still be significant. With only a limited knowledge of the exact manufacturing process, I did notice something that could potentially be revealing in the description of the drug:
Peginesatide is an ESA that is a synthetic, pegylated dimeric peptide comprised of two identical, 21-amino acid chains covalently bonded to a linker derived from iminodiacetic acid and β-alanine. Peginesatide is manufactured as an acetate salt. The dimeric peptide (approximate MW 4,900 daltons) is covalently linked to a single lysine-branched bis-(methoxypoly(ethylene glycol)) ((NYSE:PEG)) chain (approximate MW 40,000 daltons).
So, without knowing more about the process and other compounds utilized in the production process, I wish to focus on the PEG chain. With PEG likely being a compound supplied as a raw material in one form or another in the manufacturing process as it is substituted onto the synthetic peptide, the chemical process would have to contend with having enough PEG to be able to completely react in the mixture to ensure all the pertinent reactive sites (the places on the synthetic peptides that the PEG would covalently bond with).
However, there would also be a balancing act in the process in not having too much of the PEG incorporated into the mixture as there are obvious cost implications of wasted raw material as well as possible side reactions with other parts of the molecule or with other chemicals in the manufacturing process if excess PEG was still present. This process would either be finely tuned to incorporate the exact amount of PEG necessary, or be able to remove the excess PEG after the necessary reactions take place. With this in mind, the balancing act of adding exactly the right amount must be considered or the subsequent steps in the manufacturing process must take into consideration the removal of excess PEG.
So, why do I focus on PEG in the process? For one thing, I know little about the proprietary process of manufacturing OMONTYS due to the company's wise decision to not disclose such proprietary information. This leaves little to work with in terms of what could have gone wrong with regard to chemical reactions. However, with PEG obviously being utilized, and with the possibility of the finished product being contaminated with the compound in the marketed products that have now been recalled, I thought its investigation was prudent and pertinent.
The American Academy of Allergy, Asthma and Immunology website gives a great deal of information for patients and caregivers on a host of issues pertaining to allergies, asthma and the body's immune response to multiple agents. Pertinent to the subject at hand, the website addresses potential responses to PEG in the human body. In a document titled "Anaphylaxis to Polyethylene Glycol", the author discusses serious adverse events to PEG. Although much of the document pertains to an orally ingested product, it does discuss "prick testing" in which potential allergens are placed onto a scratched or needle pricked area on the skin in order to allow some of the allergen to enter the body.
Responses to the various potential allergens are noted as redness or irritation present or other defining endpoints. The prick test indicates the strong correlation between orally-ingested allergens and dermally incorporated allergens as there is obviously a strong association in terms of sensitivity. The opening statement to the various presented patient issues immediately piqued my interest. It stated "Anaphylaxis to polyethylene glycol ingestion is well recognized." Although many of these cases are due to oral ingestion, I believe the events are pertinent and could present a POSSIBLE explanation of what could be happening with OMONTYS.
First, I present an excerpt from Affymax's press release about the voluntary recall:
The reported serious hypersensitivity reactions have occurred within 30 minutes after such administration of OMONTYS. There have been no reports of such reactions following subsequent dosing, or in patients who have completed their dialysis session.
Now an excerpt from the PEG anaphylactic responses case studies:
A 58-year-old man consulted for an anaphylactic shock in 2002 30 min after oral intake of citrate de betaine UPSA® effervescent tablets (UPSA, Agen, France) for dyspepsia. He reported also several reactions of immediate contact urticaria after using corticosteroid creams betneval® (betamethasone valerate; GlaxoSmithKline, Marly-le-Roi, France) and nerisone® (diflucortolone valerate; Schering SA, Lys-lez-Cannoy, France) in 2005 for an eczema. In 1995, he presented a maculopapulous exanthema after oral intake of penglobe® (bacampicillin; AstraZeneca, Rueil-Malmaison, France).
After multiple prick tests, the common denominator among the drugs he had the adverse responses to was PEG.
On another website, PEG 3350 (commonly given orally for constipation) also made note of anaphylaxis due to PEG in stating
anaphylactic reaction has been reported by people with multiple sclerosis, asthma, high blood pressure, premedication, pain.
If this is true of IV or injected PEG still in the OMONTYS products being recalled, the mentioned pre-existing conditions, if present in the patients with the severe adverse events, could explain much. Please note that the website presenting this statement was not of a scientific or medical nature, and the information on it pertaining to PEG should be investigated more fully.
Northeastern University professor, Rishikesh Manohar Sawant, presented a dissertation in 2008 titled "Polyethylene glycol (PEG) as a key component of long-circulating delivery systems for therapy and imaging." In that paper, he noted
The high-molecular-weight dextrans used as drug carriers may have a rather broad molecular size distribution and can cause anaphylactic reactions.
These high-molecular weight dextrans were produced via a process called PEGylation in which highly-branched dextrans are produced. Could higher-molecular weight compounds than the intended peginesatide been produced causing similar problems? If so, could this product have been produced from the presence of excess PEG in the manufacturing process? As I alluded to earlier, in many chemical reactions a discrete amount of a reactant is used in order to optimize the yield (conversion into the desired final product). However, excess levels of the reactant (possibly PEG as I think relevant) could find other reactive groups on the same molecule or react with other compounds in the mix producing potentially undesirable products with unknown side effects. Although this is only conjecture, it does provide for evidence of possible negative effects due to excess PEG in this product, or at least a poor byproduct that could be the result of excess PEG.
Also giving a little credibility to the PEG theory is one of the contraindications noted for Lorazepam via
Lorazepam injectable is also contraindicated in patients with known hypersensitivity to polyethylene glycol, propylene glycol or benzyl alcohol.
With an established concern for PEG as being a compound of interest in the OMONTYS investigation, we must realize that PEG is widely used as a precursor to drugs, as a solvent, plasticizer, surfactant or for other reasons. Many widely used laxatives use PEG as the main active ingredient to relieve the symptoms of constipation. For example, Miralax incorporates PEG 3350 as an active ingredient. Although these products are generally recognized as safe, adverse events still occur, although I find it difficult to find data supporting the exact percent of patients who ingest the compound that experience such complications.
Without concrete quantitation of the values, I can find information alluding to the fact that these events may occur more commonly than what I had thought, although I cannot be certain that the levels are equivalent to OMONTYS's 0.20% adverse events or 0.02% fatal events. I have found a great website to perform searches on FDA-approved drugs in order to perform searches for undesirable side effects on these drugs, adverseevents.com . When searching for some common drugs with PEG incorporate into the mixture as an active ingredient, I found the following: Colyte, used as a laxative to help cleanse the bowels before a colonoscopy was suspected in 45 adverse events from 11/01/1997 to 08/27/2012 with 4 deaths and 13 life-threatening effects noted (2 cardiac arrests and 1 Anaphylactic Reaction); Trilyte, also a laxative, was suspected in 35 adverse events from 11/01/1997 to 08/27/2012 with 4 of these events due to hypersensitivity and a total of 5 life-threatening events with 1 fatality.
The most convincing piece of information I have found that gives more credibility to PEG being a possible suspect in the OMONTYS adverse events and death are through another website I frequent to ascertain safety profiles for various drugs drugcite.com. With PEG 3350 being widely used as a laxative, I believe it provides the best information pertaining to PEG's safety profile. When reviewing the adverse events associated with PEG 3350, I found that PEG 3350 was implicated, as the suspect causing the adverse event of death in 0.18% of all adverse events reported (again, not of the total use of PEG, just as a percentage of all adverse events reported).
So, is residual PEG the culprit due to its own safety profile or due to second reactions producing unintended products such as the afore-mentioned higher molecular weight dextrans which were thought to induce anaphylaxis? I'm not certain and can only say this is speculation only. Personally, I think it is a possibility, but likely not the issue, due to a host of other probable reasons. With a virtually identical safety profile in OMONTYS as epoetin in the over 1600 patient Phase 3 trials, I believe this is not an issue that "fell through the cracks" but is rather, related to changes in the manufacturing process, since the Phase 3 product manufacturing.
Being involved with investigations in other chemical manufacturing processes myself, the investigation will be methodical and will take some time with raw materials and manufacturing environment (reaction rates, temperatures, pH) likely being logical first steps, lab records of any analytical work performed being closely scrutinized and any deviations from standard operating procedures closely investigated. Likewise a full-scale investigation of the medical records of the adverse event and fatal event patients is likely already underway in hopes of finding some type of common condition(s) that gave these particular patients greater sensitivity to OMONTYS.
Ultimately, Affymax and Takeda will have to convince the FDA that the issue has been located and can be reconciled, with affirmation that a repeat of these events will be minimized. Depending on the issues found (if any can be found), greater quality control at some or all steps of the manufacturing process may be necessary, a certain portion of the targeted patient group must be identifiable and excluded from administration or even a different manufacturer of the drug may have to be found. The 85% drop in the company's common stock due to the recall is a huge drop, but is a legitimate correction until company updates provide investors some indication of the issue at hand, what the resolution may be (if one can be found) and what time frames are involved with regard to the resolution of the problem and the satisfaction of any FDA concerns with regard to the issue.
Adverse events can and will continue to occur. Affymax needs to convince the healthcare sector and the FDA that the events will be minimal and outweigh the benefits of the anemia drug. I advise investors to closely monitor events as they unfold before opening or closing a position in Affymax common shares. Although upside gains could be substantial if an acceptable resolution is found, the downside can still be great. In my opinion, risks associated with an investment in Affymax are now comparable to those of development phase pharmaceuticals with no marketed products but with promising therapies in the latter stages of development.
Great gains or losses will be the two possible scenarios that will play out for Affymax. Interested investors are advised to perform much additional research and determine if the gamble is worth the associated risks. For my personal risk level, I will trade in and out of a portion of my Affymax shares while maintaining a small base holding. However, this investment for the interim is not for the risk averse.
Disclosure: I am long AFFY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.