Rockwell Medical climbs on anemia drug data

NEW YORK (AP) -- Shares of Rockwell Medical Inc. jumped Thursday after the company reported successful results from a late-stage trial of its anemia drug.

THE SPARK: Rockwell Medical said the drug, called soluble ferric pyrophosphate, or SFP, raised patients' hemoglobin levels. Patients treated with the drug were also better able to maintain their hemoglobin levels. The company said a second late-stage trial of SFP is almost complete.

THE BIG PICTURE: The Wixom, Mich., company makes products used in the treatment of kidney disease and anemia. SFP is intended to treat anemia in patients with late-stage kidney disease, and it is designed to travel directly to the bone marrow, avoiding damage to the liver. The company says small, frequent doses of soluble ferric pyrophosphate could be safer and more effective than the standard treatment, which involves large doses of intravenous iron.

THE ANALYSIS: In a telephone interview, Stifel Nicolaus analyst Annabel Samimy said the results were "very good" and that SFP could change the use of iron therapy. That's because patients treated with the drug may not need as much IV iron and could take smaller doses of other anemia drugs called erythropoiesis stimulating agents, or ESAs.

Both treatments come with the risk of serious side effects: if patients have too much iron in their system, they can suffer organ toxicity and other problems, and the use of ESAs has been restricted in recent years because of side effect and safety concerns. Samimy noted that ESAs are also very expensive for dialysis centers.

The analyst said there has been a lot of confusion about SFP, as well as what effect it might have on the market for IV iron drugs. She expects peak sales of $150 million a year, and rates Rockwell Medical shares "Buy" with a price target of $11.

SHARE ACTION: Rockwell Medical shares rose 59 cents, or 15.7 percent, to $4.35. Before Thursday's move the stock had lost 58 percent of its value over the last year.