CKD results from Japanese trials forthcoming. Keryx thus far has generated strong results in late-stage studies for ESRD patients, the last stage of renal failure that requires regular dialysis to keep the blood filtered properly. But anemic CKD patients who have not yet progressed to dialysis represent a considerably larger market opportunity than ESRD alone, and thus far, the evidence suggests that Zerenex works in this larger population. Keryx is conducting its own CKD study, which will read out in the third quarter of this year, but Keryx’s Japanese partner JT Torii already filed for the CKD indication in Japan. While JT Torii has not released the results of its own studies in ESRD or CKD, the Japanese company plans to reveal these results in a major U.S. nephrology journal in the next few months (we expect this summer). The CKD findings will be highly suggestive of what to expect from Keryx’s own ongoing CKD study, which will read out next quarter. Thus, there are two real catalysts approaching to support Zerenex’s CKD indication, a market on which investors have yet to focus and analysts have not yet factored into models.
1.The publication of JT Torii’s CKD results that were part of the Japanese regulatory filing – sometime this summer.
2.The release of Keryx’s own Phase II CKD results, due in the third quarter.
As noted above, JT Torii’s filing for both indications in Japan suggests to us that Zerenex in CKD is safe and efficacious, and that these data will impress. In fact, analyst’s could begin to add the impact of this indication into models once CKD data materializes; as a result, financial forecasts and price targets for KERX should rise.
Issues with competing anemia products bode well for Zerenex and discussions at WCN. We note that in the last few months, the CKD treatment community has been confronted by two challenges to anemia treatment: Affymax’s (AFFY) Omontys recall in February and AMAG Pharma’s (AMAG) Rienso (Feraheme in the U.S.) recall last week. With Omontys off the market and Amgen’s (AMGN) Epogen now the only game in town, dialysis providers are likely to welcome Zerenex to help spare Epogen use and ultimately save money treating patients. On Wednesday, an analyst noted that Amgen has again raised the price of Epogen with competitors out of the way. While the Rienso recall (in response to a patient death) appears to be related to a single batch, providers are likely to give a little more thought to their prescribing habits for Feraheme/Rienso. Not only is Feraheme/Rienso known to cause severe hypersensitivity (patient’s wait near a crash cart for an hour after dosing) but it’s also an IV iron product, which is much less convenient than Zerenex’s oral formulation. In that regard, Zerenex has an opportunity to become standard treatment for anemia in CKD patients, over both oral and IV iron products, which have significant side effects.
Finally, Keryx will file a NDA for Zerenex with the FDA in the middle of the third quarter, an event that should drive shares incrementally higher. Keep in mind, the Phase III ESRD study was carried out under a Special Protocol Assessment from