What's Next in Dialysis Iron Management?

Iron is on the minds of many Americans, especially with the superhero movie “Iron Man” raking in $100 million its first weekend in theatres. But hundreds of thousands of people have other reasons to think about iron, as it is a vital nutrient dialysis patients need to maximize their anemia treatments. Right now, two companies dominate the sales of dialysis-related iron treatments, but potential competition and changes in public policy could alter the iron drug market in the future.

A Market Snapshot

Watson Pharmaceuticals and American Regent are the two major players on the iron landscape. Watson markets Ferrlecit, a sodium ferric gluconate, which is approved for use in hemodialysis patients. It also markets an iron dextran product called INFed, which is used in iron-deficient patients who can’t take oral iron.

American Regent, on the other hand, markets the iron sucrose complex product Venofer, which is approved for use in hemodialysis, peritoneal dialysis and non-dialysis CKD patients. American Regent also markets Dexferrum, which is an iron dextran product, to iron-deficient patients who can’t take oral iron.

IMS Health, a pharmaceutical market research organization, has estimated the U.S. IV iron replacement therapy market is worth approximately $660 million. Furthermore, IMS breaks down the sales share of the iron market the following way: Venofer represents 61 percent, Ferrlecit has 30 percent, INFed has 7 percent, and Dexferrum represents 2 percent.

Market Stability

It’s unlikely any of these companies are going away anytime soon as their drugs are in constant demand from dialysis patients in need of iron therapy (see sidebar). According to the U.S. Renal Data System, there are approximately 340,000 patients on dialysis in the United States, and as many as 90 percent of dialysis patient received IV iron in their anemia management.

And these days, Americans are heavier and sicker, and the incidence of ESRD is expected to rise in the coming years, especially as the baby boomer generation moves into retirement. The National Kidney Foundation estimates there are approximately 26 million Americans with some form of kidney disease. That has lead to a subsequent increase in the number of people of dialysis. The ESRD patient population has increased 3 percent to 5 percent in each of the last five years, and the rate is expected to continue. Some estimates put the ESRD population at more than 700,000 by 2010.

A sicker population in no doubt an unfortunate matter for national healthcare, but it does ensure growth for certain sectors of the economy, which includes pharmaceutical companies.

New Companies on the Horizon

With capitalism comes competition, and the outlook for iron drugs is no different. Cambridge, Mass.-based AMAG Pharmaceuticals and Wixom, Mich.-based Rockwell Medical Technologies are two companies attempting to get the U.S. Food and Drug Administration to approve new iron drugs to be used by kidney disease patients.

In April, Jim Cramer, the animated host of the popular cable investing show “Mad Money,” gave high marks to AMAG’s stock. AMAG CEO Brian J.G. Pereira, MD, however, downplayed the event. “We don’t respond to what analysts and talk-show hosts say,” Pereira said. “Jim Cramer has a strong following, but the following is retail investors, not institutional investors. It’s a lot of fun watching him. Does he move the markets? He does, because small shareholders buy based on Cramer’s recommendation.”

AMAG was founded more than two decades ago and was based on super paramagnetic iron oxide nanoparticles. The technology was initially used to develop magnetic beads for clinical assays. At one time, the technology was going to be tried in floppy disks, but better technology eventually came along. In the late 1980s, magnetic resonating imaging began to emerge, and AMAG’s technology was developed into drugs to help image the bowels and lower GI tract for MRIs. But as the MRI technology got better, there was less need for these image-enhancing drugs.

AMAG’s ferumoxytol was also developed for imaging reasons, but the company saw an opportunity in the late 1990s to develop the drug into a therapeutic agent instead of a diagnostic. This led to a major overhaul of the company’s focus, which included it rebranding itself in 2007 from Advanced Magnetics Inc. to AMAG Pharmaceuticals Inc. AMAG’s ferumoxytol is an IV iron replacement drug that could allow for less frequent dosing, which could enhance patient convenience. Ferumoxytol can be administered in two, 17-second injections, which, for pre-dialysis patients, could be given in the doctor’s office.

In July 2007, AMAG reported ferumoxytol demonstrated statistically significant results in all primary and secondary endpoints in the open-label, multi-center, randomized study in chronic kidney disease patients on dialysis. In comparing ferumoxytol to oral iron as a treatment therapy, the primary endpoint of the 230-person study was the mean change in hemoglobin. The secondary endpoints included the proportion of patients with a rise of hemoglobin as well as the mean change in serum ferritin, which is a way to measure the body’s iron stores.

Adverse events happened in 49.¹ percent of patients after ferumoxytol administration and in 56.⁶ percent of patients after oral iron administration. One serious side effect happened in a patient taking ferumoxytol. The patient experienced low blood pressure, but recovered without symptoms. There were no drug-related adverse events in patients taking oral iron

The FDA is expected to render a decision on ferumoxytol by Oct. 19. “As far as we’re concerned, we are preparing to launch in the first quarter of ‘09, and our preparation is based on our expectation of a positive outcome,” Pereira said.

Iron and Dialysate

Rockwell Medical Technologies Inc., which develops renal drug therapies and dialysate products, is also developed an iron drug, called Soluble Ferric Pyrophosphate (SFP). The key difference with Rockwell’s drug-in-development is that it is administered through the dialysis patient’s dialysate instead of intravenously.

Current iron supplement therapy involves IV parenteral iron compounds, according to Rockwell, which deposit their iron load onto the liver rather than directly to blood plasma to be carried to the bone marrow. The liver slowly processes these iron deposits into a useable form. As a result of the time it takes for the liver to process a dosage of IV iron into useable form, there can be volatility in iron stores, which can reduce the effectiveness of EPO treatments.

“Our iron supplemented dialysate is distinctly different from IV iron compounds because our product transfers iron in a useable form directly from dialysate into the blood plasma, from which it is carried directly to the bone marrow for the formation of new red blood cells,” Rockwell wrote in a news release. “The kinetic properties of our iron compound allows for the rapid uptake of iron in blood plasma by molecules that transport iron called transferrin. The frequency and dosage of our iron supplemented dialysate is designed and intended to maintain iron balance in a steady state. We believe that this more direct method of iron delivery will be more effective at maintaining iron balance in a steady state and to achieve superior therapeutic response from EPO treatments.”

In late January, Rockwell announced it started a National Institutes of Health-sponsored, nine-month, 30-patient, clinical trial to study the safety and efficacy of SFP. Data from the study is expected to be published in late 2008, according to Rockwell.

Obstacles for New Drugs

But what kind of obstacles are these companies facing when they are trying to get onto market?

For one, it’s an established market. Watson and American Regent already have a firm foothold, which they have had for years, and it’s always hard to convince new customers—let alone physicians—of a new product. What could complicate things further is the massive consolidation the dialysis industry has gone though. As a result of two large acquisitions, 60 percent of all U.S. dialysis patients now dialyze at either DaVita or Fresenius. Watson alluded to this reality in its 2007 Annual Report: “A small number of customers control a significant share of the injectable iron market in which Ferrlecit competes. During 2007, our largest customer for Ferrlecit accounted for approximately 38 percent of our Ferrlecit sales. Continued consolidation may adversely impact pricing and create other competitive pressures on suppliers of injectable iron.”

This could present itself as an opportunity for newcomers into the market, as a smaller amount of buyers can demand more of those competing for their dollars. The negotiating leverage of large customers could squeeze product makers to tighten their prices, which could create an opening for anyone trying to break into the market.

Looming Generics?

Further complicating the competition landscape could be the introduction of generic versions of iron therapy into the marketplace. In 2004, Watson lost regulatory exclusivity for Ferrlecit opening up the possibility of a generic version to be submitted to the FDA. However, in February 2004, Watson requested that the FDA refuse generic versions until certain manufacturing, chemical, safety and efficacy requirements are satisfied. Watson submitted a second citizen’s petition to the FDA in late 2004, and in 2006 supplemented the petition asking the FDA to create guidelines to determine how to prove a generic version of Ferrlecit has the same active complex as Watson’s drug. The FDA, however, has not yet ruled on the requests.

AMAG also addressed concerns swirling around generic competition in its 2007 Annual Report: “In addition to competition from the above branded products or product candidates, the market opportunity for ferumoxytol would be negatively affected if generic iron replacement therapy products were to be approved and achieve commercial success. Companies that manufacture generic products typically invest far less resources in research and development than the manufacturers of branded products and can therefore price their products significantly lower than those already on the market. It remains unclear whether a generic product will enter this market.”

Affect of Bundling

In addition to industry consolidation and generics, public policy could also affect the iron drug market. Currently, dialysis is reimbursed by a composite rate with separately billable drugs reimbursed separately at 106 percent of the average sales price. However, Washington policy makers are putting the wheels in motion for bundling, which calls for the establishment of a base treatment payment rate for a dialysis session. The payment would include the current composite rate as well as items that are currently billed separately. At this point, it’s possible that bundling will be implemented by 2011.

“I think the first move by dialysis chains will be to use more iron to reduce EPO use,” Pereira said. “The dialysis chains will extract greater price reductions and make the irons compete with each other. Prior to bundling, the higher priced iron was a benefit to dialysis chains because they were reimbursed with ASP+6. We have clearly said we will come into the market with a premium. Bundling is going to create price competition among every drug group.”

Rockwell also commented on this in a news release: “We believe that if and when a single reimbursement rate per treatment is implemented by CMS that the provider market may find the potential economic advantages of our iron supplemented dialysate an attractive alternative to IV iron drugs. Providers may be attracted to SFP over IV iron products due to lower cost of administration and due to the potential of improved therapeutic response from EPO treatments.”

Let the competition begin.

The Patients Need for Iron

Simply put, iron helps red blood cells “breathe.” It works with proteins to make hemoglobin, which helps carry oxygen throughout the body from the lungs to tissues and organs. The body stores iron in the spleen, liver and bone marrow.

The kidney is a primary player in this symphony.

The kidneys create a protein called erythropoietin (EPO), which stimulates the bone marrow to create new red blood cells. This, in turn, causes the body to call on its iron stores to aid in hemoglobin production. And with kidney failure, the body loses its ability to produce EPO, which has a cascading effect on the rest of the body as fewer red blood cells are produced—a condition called anemia.

Low levels of red blood cells disrupt the flow of oxygen and can impair the function in other areas of the body—especially the heart and brain. Anemia is dialysis patients can also be caused from blood loss during treatment as well as low levels of iron in the body.

The advent of erythropoiesis-stimulating agents (ESAs), however, transformed anemia care in dialysis patients from risky blood transfusions to drug therapy. ESA therapy, such as Amgen’s Epogen, mimics the body’s natural protein and stimulates red blood cell production. But with the good can come the bad, and long-term ESA therapy causes the body to deplete its iron stores and the subsequent iron deficiency limits the ESA therapy’s effectiveness. Therefore, a large number of dialysis patients, as well as pre-ESRD patients, develop iron-deficiency anemia and need iron replacement therapy.