Here it is
Keryx Biopharmaceuticals (KERX: Nasdaq)
By MKM Partners ($3.43, Jan. 28, 2013)
Keryx announced successful top-line results from the long-term Phase 3 study of Zerenex (ferric citrate), the company's ferric iron-based phosphate binder drug candidate, for the treatment of elevated serum phosphorus levels, or hyperphosphatemia, in patients with end-stage renal disease on dialysis.
Zerenex met the study's primary endpoint, demonstrating a highly statistically significant change in serum phosphorus versus placebo over the four-week Efficacy Assessment Period of the study and critical important Zerenex also met the key secondary endpoints of increasing ferritin and transferrin saturation (TSAT) and reducing the use of intravenous (IV) iron and erythropoiesisstimulating agents (ESAs) versus the active control over the 52-week Safety Assessment Period of the study.
Keryx (ticker: KERX) will submit a New Drug Application (NDA) with the Food and Drug Administration and a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) for Zerenex in the second quarter. We note that the trial was run under a Special Protocol Assessment (SPA) agreement.
Based on our assumptions, we project 2020 earnings per share of $1.88. We lower our discount rate (based on the data) to 15% (from 25%) and average our three metrics -- free cash flow to the firm, discounted EPS and sum-of-the-parts -- together to determine our (average) price target of $9.00 per share (versus the old target price of $4.00 at 25% discount rate).