Affymax (NASDAQOTH:AFFY) has collapsed under the weight of a recall of its only product, Omontys. Shares are down 85% in 2013 as what once looked like a promising challenger to Amgen's (NASDAQ:AMGN) Epogen is beset by safety questions that could leave it permanently shelved.

Bizarrely shares of Affymax spiked more than 50% in a single day earlier this month, and despite no hard news backing the move, weary shareholders were hoping this was the beginning of a turnaround.

Unfortunately, that doesn't appear to be the case. Affymax fell another 64% today after disclosing that it was slashing its workforce dramatically and reiterating that it was looking at strategic options including bankruptcy. Amgen was up 2% as Omontys is stuck on the sidelines for the foreseeable future.

Health-care analyst David Williamson tackles the days news and spells out what it means for Affymax and investors.

David Williamson has no position in any stocks mentioned. Follow him on Twitter: @MotleyDavid.

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