Shareholders Sue After Anemia Drug Recall

SAN FRANCISCO (CN) - Affymax inflated its stock price by failing to disclose that 2 percent of patients who used its now-recalled Omontys drug suffered life-threatening anaphylaxis - and that 1 in 100 of those 2 percent died of it, shareholders claim in a class action.

Lead plaintiff Scott E. Stevens claims Affymax's share price dropped by 85 percent after the U.S. Food and Drug Administration recalled the drug.

Omontys was injected to treat anemia-related kidney disease in adult patients undergoing dialysis.

Stevens claims that Affymax "failed to disclose that 2 percent of patients who were administered Omontys experienced hypersensitivity reactions resulting in anaphylaxis, a serious and life-threatening allergic reaction, a third of which needed medical intervention - and that 0.02 percent of those administered the drug experienced fatal anaphylaxis reactions."

Affymax stock reached a high of $27.74 per share, on Oct. 17, 2012, the complaint states.

But on Feb. 23 this year, Affymax announced that the FDA demanded "a total recall of the drug due to reports of anaphylaxis, with the FDA calling it a 'serious and life-threatening' allergic reaction," according to the complaint.

"'Serious and fatal' hypersensitivity reactions have been reported in some patients within 30 minutes of receiving their first does of the drug," the complaint states.

Affymax price sank from $16.52 per share to $2.42 per share on the news, the complaint states.

Stevens seeks class certification and compensatory damages for securities fraud.

He is represented by Shawn Williams, with Robbins, Geller, Rudman, & Dowd.

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