Affymax may consider filing for bankruptcy; cuts workforce by 75 percent

Drug maker Affymax Inc said it may consider selling itself or filing for bankruptcy among a range of strategic alternatives as it struggles with the recent recall of its sole commercial product, the anemia drug Omontys.

Shares of the company slumped over 50 percent to $1.34 in extended trade on Monday after being halted earlier.

Affymax also fired its chief commercial officer and slashed about 230 jobs, or about 75 percent of its workforce, as part of a plan to cut costs.

The company said on February 23 that it would recall Omontys, citing serious adverse events, including death, in patients taking the drug. The shares fell 85 percent on the news.

Affymax said it was shifting most of the activities related to the investigation of the recall to its partner Takeda Pharmaceutical Co Ltd <4502.T> as it could not estimate if it had enough financial resources to complete the probe.

"If the company and Takeda are unable to rapidly identify and rectify the causes of the safety concerns to the satisfaction of the FDA, which is highly uncertain, Omontys may be permanently withdrawn from the market," the company said.

Affymax reported cash balance of about $67 million as of February end. It had liabilities that included potential contract manufacturing organization commitments of up to an estimated $33 million and outstanding debt obligations of up to about $11 million under its existing credit facility.

It also expects to incur between $8 million and $10 million in costs related to the job cuts.

Shares of the company closed at $2.92 on the Nasadaq.

(Reporting by Zeba Siddiqui in Bangalore; Editing by Sriraj Kalluvila)