I love the fall season and not because of the start of Monday Night Football or the World Series. No, I love September because it usually sees a myriad of investor conferences and presentations. In fact, later this week Thomas Weisel Partners (TWPG) is holding a healthcare conference in Boston, and Bear Sterns Co. (BSC) will sponsor one the following week in New York.
One of the companies presenting at both events is Affymax (AFFY) 24.25. This small cap company is of interest because it has a lead drug candidate labeled Hematide in phase three clinical trials for the treatment of anemia in chronic renal failure, and for cancer patients suffering from anemia. According to the corporate website, one in nine Americans suffer from chronic kidney disease, and the worldwide market for the management of anemic patients suffering from chronic kidney disease is estimated at approximately $12 billion. Currently, Amgen (AMGN) is the market leader through its sales of Epogen and Aranesp to treat this condition.
Adding to the buzz of Affymax’s upcoming presentation is a recent court ruling by a U.S. District Court judge last Tuesday. According to AP reports, in a summary judgment, the judge ruled that Roche’s (OTCQX:RHHBY) drug candidate Mircera infringes on an Amgen Inc. patent. A trial is set to begin this week.
How does this concern Affymax?
Well, it is argued that Roche’s drug Mircera, and Amgen’s Epogen and Aranesp are developed from a similar process causing a patent fight. Affymax’s Hematide is developed differently. Therefore, Affymax will not have to be concerned with patent issues if, and when, its drug comes to market. So far, the clinical trials involving Hematide have gone well. It also has a favorable partnership with Takeda Pharmaceuticals regarding the marketing of hematide both in the U.S., and globally. I am hoping the conferences will provide an updated timeline on the phase three trial, and its projected completion date.
Hematide is not the only issue this company may discuss. Investors may also want to know how the company’s arbitration is transpiring with Johnson & Johnson (JNJ) regarding patent issues of research, and development stemming from a three year R&D agreement between Affymax N.V. and Ortho Pharmaceutical, a subsidiary of Johnson & Johnson that was entered into in 1992. This ongoing litigation involves peptide research, and at some point it could have a material impact on AFFY’s prospects.
Finally, Hematide is a synthetic peptide-based erythropoiesis-stimulating agent [ESA]. The FDA recently raised safety concerns regarding ESAs, and increased mortality and side effects. It has moved to put revised warnings including black box warnings on currently marketed ESAs. The FDA is scheduled to convene a joint meeting in September 2007 of the Cardiovascular and Renal Drugs advisory committee, and the Drug Safety and Risk Management advisory committee to discuss updated information on the risks, and benefits of ESAs.
Affymax deserves watching by buyers and sellers, and the company's presentations could provide fodder for both.