Affymax Inc. (AFFY:US) dropped to its lowest value ever after the company said it will fire three-quarters of its workforce and hire a bank to evaluate a possible sale or bankruptcy after the recall of its only drug.
Affymax plunged 64 percent to $1.05 at the close in New York, its lowest price since the shares began trading in December 2006. The Palo Alto, California-based company has fallen 73 percent in the past 12 months.
About 230 positions, including the medical affairs field organizations, will be cut as a reason is sought for the reported hypersensitivity reactions to anemia treatment Omontys that caused the recall, the company said yesterday in a statement. Affymax said the bank will consider options including a sale of the company or assets, restructuring, winding down operations and bankruptcy.
“While this decision was extremely difficult, aligning and managing our limited resources around our product investigation is our most important priority,” John Orwin, Affymax’s chief executive officer, said in the statement.
On Feb. 25, Affymax fell the most ever after recalling Omontys, which is used by kidney dialysis patients. Affymax and its partner Osaka, Japan-based Takeda Pharmaceutical Co. (4502) at the time said they were analyzing data from three patients who died to find a cause for the reactions.
Affymax said in a separate filing that it is unable to estimate how long the investigation will take and whether the company would be able to finish it.
“With limited funds and resources, the company may not be able to complete the investigation or ever identify the causes of the safety concerns,” Affymax said in the filing.
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