NEW YORK

Affymax Inc. stock continued to rise Friday after a Rodman & Renshaw analyst started covering the stock with an "Outperform" rating only days before the government is expected to rule on an anemia drug.

THE SPARK: Analyst Michael King Jr. expects Affymax's anemia drug peginesatide to be approved in the next few days, and he said some dialysis providers will prefer peginesatide to older drugs because it peginesatide only needs to be administered once per month. King said one older drug, Amgen Inc.'s Epogen, is given 13 times a month on average.

The Food and Drug Administration is scheduled to make a decision on peginesatide by Tuesday. An advisory committee said in December that the drug should be approved.

Amgen is working to support its sales by creating long-term supply agreements with big dialysis companies like DaVita Inc. and Fresenius Medical. But King said Affymax could pick up sales with other companies.

"Affymax has a significant near-term opportunity with the medium and small dialysis organizations," he wrote. King set a price target of $20 per share on the stock.

THE BIG PICTURE: Affymax wants to market peginesatide to adult patients on kidney dialysis. Those patients often suffer from anemia, a blood disorder that causes dizziness and weakness. Epogen is in the same class of drugs and it is used to treat the same condition. King said Amgen has had a "monopoly" on anemia drugs for dialysis patients over the last 20 years.

SHARE ACTION: Affymax stock gained 87 cents, or 7 percent, to $13.31 in afternoon trading. The shares have more than doubled in value since Dec. 8, when the FDA advisory panel said the drug should be approved. Affymax shares are up 62.8 percent since Jan. 30.

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