Wall Street didn't give Affymax much of a chance at success today in front of an FDA advisory committee, but the Palo Alto, CA-based company clearly proved its skeptics wrong.

Affymax (Nasdaq: AFFY) received a 15-1 positive recommendation from an expert panel of FDA advisors today, who said the benefits of its experimental anemia drug outweigh its risks to the heart. The FDA isn't required to follow the advice of its advisory panels, although it usually does, especially when the vote is so lopsided in favor of a new product being allowed on the U.S. market.

Many investors wrote off Affymax in June 2010, as I described in a feature as a couple of weeks ago ahead of this important FDA advisory meeting. That's because a quartet of pivotal clinical trials that enrolled 2,600 patients showed that kidney patients who aren't yet on dialysis had an increased rate of heart-related serious adverse events -- such as heart attack, stroke, congestive heart failure, and death -- when they got the Affymax drug instead of the usual treatment from Amgen. About 21.6 percent of patients on the Affymax drug had those serious adverse events, compared with 17.4 percent on the Amgen drug.

But Amgen's drug has been associated with some well-documented safety issues as well, and Affymax's drug, peginesatide, showed comparable safety and effectiveness in trials that strictly limited enrollment to patients on kidney dialysis. When the total set of evidence was considered, FDA staff said that some of the patients on the Affymax drug may have had worse outcomes because they were sicker when they entered the studies. The FDA has a deadline of March 27 to complete its formal review of the Affymax drug, and if it gives the green light, then peginesatide will be the company's first marketed product, and the first drug ever to directly challenge Amgen's 22-year monopoly in treating anemia of kidney dialysis patients.

Affymax hasn't yet settled on a pricing strategy for its anemia drug, but CEO John Orwin suggested in an interview last month that his company could be in a position to compete by offering a lower-priced, fewer-hassles, yet highly effective alternative. This will be one of the key dynamics to watch as Affymax gets closer to its FDA decision date, and it will be fascinating to see what Amgen does, if anything, to respond.

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Luke Timmerman is the National Biotech Editor of Xconomy, and the Editor of Xconomy Seattle. Email him at [email protected] or follow him on Twitter at twitter.com/ldtimmerman.