My point is that the Velphoro label says "Mean changes in iron parameters (ferritin, transferrin saturation (TSAT) and transferrin) and vitamins (A, D, E and K) were generally not clinically meaningful and showed no apparent trends across the treatment groups. " but there is no similar discussion of iron parameters for Ferric Citrate. Why not? Doesn't that seem odd to you? When ther is NO change in iron parameters, the FDA includes it in the label description, but when there is clear change in iron parameters... no mention. Pretty inconsistent, don't you think?
I hear you, and think you are making valid points. It would be interesting to compare the full Velphoro label with Ferric Citrate.
As for insider sales, you are also probably right. Greg likely has not vested in any shares yet, although Ron has a huge vest upon launch of the first FDA approved drug. I can't remember James contract but If my memory is correct I think Ron goes up to nearly 2 million shares. The good news on that is he is going to be HIGHLY motivated to get the share price up.
I mean that the clinical benefits section of the label label should have listed the positive iron retention benefits of increased tsat, ferritin and hemoglobin since they were secondary endpoints agreed to in the Special Protocol Assessment. Having a label that says that doctors should monitor iron uptake for possible overload when there were zero patients in any trial that suffered from iron overload is ridiculous. I get that any reference to iron uptake may allow the company to discuss iron in its sales calls but it is a far cry from the killing two birds with one stone "this drug treats both hyperphosphotemia and iron deficiency in patients with end stage renal disease" that I had hoped for and frankly, expected. To me, that was the $25 per share label; and if we had received NCE (even though I don't think it matters because we WILL get PTE which is more valuable) we would have been ar $28-$30 in my view.
Over time, the iron benefit will get out there. Doctors will hear presentations, read peer reviews and journals, and ultimately receive pressure from insurance companies interested in realizing the pharmaco-economic benefits. And my bet is since anemia is the primary endpoint for CKD, the review for that post- Phase 3 SNDA will be done by the hematology group. If I am right (and I was trying to ask that question on the conference call), you can expect a different analysis and outcome -- and I would be surprised if the company did not receive an amended label for ESRD after that review.
I was obviously thrilled by the approval. Kerx now has a differentiated phosphate binder with blockbuster potential. At the same time, I am disappointed with the label and really disappointed by the FDA. The iron benefit was a secondary endpoint that was part of the SPA. I believe the FDA action was a combination of internal politics (anemia is a blood disorder under the jurisdiction of the hematology group whereas phosphate binders fall under the cardio/renal group) and external political pressure from Amgen and others who stand to lose substantial market share when the benefits of Z are fully appreciated by the medical community. Don't forget that Amgen was able to single-handedly remove oral binders from the bundling requirements of the ACA through its lobbying efforts getting a provision included in a bill that had nothing to do with the issue. Don't underestimate the political muscle of big pharma.
So what next? I sold 1/3 of my position on Friday and plan to hold the rest. I have been on this train for years and decided to take out my invested capital and a nice return. I still have a very substantial interest in the stock and I intend to watch what develops. On the positive side, I would be very surprised if Baupost was not a major buyer on Friday -- which we should find out relatively soon. I believe that potential BP purchasers who have been waiting in the wings will re-start acquisition dialogue, and it would not shock me to hear a deal before year end. Our days of risking single digit prices are OVER. On the negative side, I expect AF and others will try to make hay of the "warning" issue which is ridiculous. I expect shorts to start a new "failed execution" play; and I would not be surprised to see insiders (Ron, James, Greg) sell some shares as they are not likely to have an open window for long. CKD trial initiation soon; Next steps in Europe. Still lots of positives to come.
I know that that can happen. i made big money on Vivus. I was checking the FDA website regularly and the FDA posted the Vivus approval before the company put out a release. I was shocked. There was at least ten or fifteen minutes of trading before the company put out its release. Months later i was speaking with Tim Morris, the company CFO and asked him how that happened and he told me that the company had received a fax early in the morning (they are located in California) and thought that they had some time before the FDA would update its website. From what I have been told and had confirmed, the FDA always lets the company know first; but they will NOT wait around for the company to put out a press release. I am positive that Kerx will be all over this. It is highly unlikely that the FDA website will scoop the company -- although that does not stop me from hitting my Fda website refresh button about 100 times per day :-)
There has been a bit of probably unintentional mis-information on the board that should get clarified. I called the FDA for clarification. First, there is no PDUFA queue other than the natural queue that is set up by PDUFA date. Early releases are not done in order of the PDUFA date. There are target PDUFA dates and the FDA completes their review when they complete their review. Different divisions of the FDA have primary responsibility for review of drugs that fall within their division (ours is cardio/renal). So there are others that may have their PDUFA date after ours that may already have been approved or that may be approved before we hear anything. Second,If the PDUFA date falls on a weekend or business holiday, for purposes of measuring PDUFA target compliance, the date shifts to the next available business day. For our purposes, the FDA thinks of KERX's PDUFA date as Sept. 8. As for release of the approval/denial info, the FDA provides both the CRL or the approval to the company generally by fax before releasing the information publicly. They do NOT wait for a company press release before going public with the information but typically, they announce approvals on their website on the day following the approval. If you take a look on the FDA approval site you will see that the approval date is almost always the day before the posting date on the site. Finally , according to the officer I spoke with, with rare exceptions, they only announce approvals to companies and post information on their FDA website between the hours of 8;30 and 4:30 Monday through Friday.
Not that this all means anything -- by my reading that still means KERX could have received a fax today at 4:30 and be working on their press release for tomorrow. I actually do expect that we will hear something before next Monday. But either way,I thought it would be helpful to at least share the FDA answers to my questions -- always good to get it straight from the horse's mouth
We have been waiting for this day for quite some time. I sold 20% of my position when the delay was announced but have subsequently repurchased those shares. I don't know more than anyone else but I am extremely optimistic about approval. The fact that the drug is approved in Japan and JTT is using the same manufacturing facility as we are bodes very well. The fact that the FDA requested a compassionate use extension study and did not halt that study after the delay was announced bodes very well, and of course, the continued evidence of extraordinary safety and efficacy all point to approval.
I have been asking myself why has the approval been taking so long to be issued. I have seen a handful of compounds get approved days and weeks before the PDUFA, but in each instance, the labeling has been very straightforward. I think Ron telegraphed his views about both the likelihood of approval and the gating issue for the timing of that approval when he said something like "we expect to receive our draft of the label in the next few days". I do not believe that the FDA would be sending draft labels for a drug that they do not intend to approve. But I also think that that label may be the most important factor in determining our speed to market -- a differentiated label that speaks to both hyperphosphotemia and iron deficiency is a game changer that redefines the sales task of the drug reps. Instead of trying to convince drs to try something new, the sales rap becomes "why wouldn't you take fewer pills with fewer side effects to treat more symptoms and save time, inconvenience, discomfort and money?" Tough to say no to! Anyway, I am convinced that this label negotiation is what is causing the FDA to take full time, but as far as I am concerned, if we get the label we are looking for, they can take as long as they want. That said, I do think we will hear something next week. Good luck and God speed to all of us who have waited so long. First round's on me!
I thought the call was very positive. I do not believe that the company would give such a positive spin on their label discussions with the FDA unless they were given really positive guidance so I personally believe that approval on or before 9/7 is a lock. I would have loved to hear more info on the OLE study (reduction numbers on ESA's, hemoglobin levels etc.) but I am convinced that they are holding back the data so that they can get late breaker status at ASN. It is more important for them to make a splash in November than it is to give us all the details today. Glad to hear that they received the 120 day questions from the EMA. That tolls the clock until they respond. My experience is that average response times are typically 3 months or so, So I would expect the review to begin again late in Q4. I am looking forward to initiation of the P3 in CKD in "the coming weeks". I would love to see that get started so that we can possibly see results in 2015. All looks very good. You can't help but be impressed by Greg Madison and his team. They are taking a very methodical but determined approach to getting Z successfully launched. He obviously tempered expectations some yesterday with his data on typical launch sales in the first 12 months (12,000 to 14,000 patients) and speed of formulary acceptance-- which may have a similar effect on some people's projections, but I think it is good to establish reasonable benchmarks and expectations and then hopefully beat them. And when it comes to Ron Bentsur, I think he is doing an absolutely fantastic job. As for the stock, I will be looking for the Baupost holdings info next week. They got their Idenix money on Monday. so they have a fresh billion to spend! An increase there should really put the shorts in a tizzy. I am not expecting an immediate post approval buyout, but I believe Bentsur is positioning the company to succeed in either the go it alone or the buyout scenario.
Still here. Waiting for 9/7 but should be some positive near term catalysts: initiation of CKD phase 3, data from long term extension study, Japan sales data, and 13 f. Filing from Baupost due by 8/15. If they increased their stake, it will be very bullish. Knowing the size of their Idenix stake if traders get the sense that they are building similar size in Kerx it will be very tough for shorts to keep the borrow. It may not be as quiet a summer as people think.
Ron said sometime in the third quarter and he implied it could be as soon as late July or early August. When an investor asked him to take us through the timeline he said that the trial could be completed in a year or a little longer (from start of enrollment) and the results could be tabulated and the SNDA filed in another 3 months so that if all goes well we could be looking at an approved drug in two years time from today. Of course all sorts of could be quicker could be slower caveats, but two years from today is a good guidepost.
Company believes that it has answered the CMC questions and is prepared with additional info if there are follow-up questions. No new traisl or new data were necessary to provide the CMC response. Co. is optimistic that they will receive approval in Sept. Co is continuing to manufacture inventory; the manufacturing facility is continuing to provide drug to Japan; Co expects to launch the Phase 3 for CKD in the third quarter and is not waiting for approval from FDA. All these things speak to a high confidence on the company's part that CMC issues have been resolved.
I think it is a very low probability. They do not need to dilute further to market this drug. The Phase 3 for CKD is relatively small and inexpensive. Unless the FDA comes up with a major manufacturing deficiency requiring the company to toss their current inventory build, which seems unlikely at this point, they have a solid inventory. The only reason that they would need to dilute is if they were to in-license another compound. How realistic is that? Greg suggested that they are interested in a late stage asset in renal or cardio with a long patent tail. Hello. What do you think a compound like that will run? That sounds to me like they are interested in another drug positioned like Zerenex is today. And guess what? Assets like that are being valued north of a billion dollars today. KERX is nowhere near being in a position to acquire that kind of asset. Greg might as well have said we are interested in a merger -- because in my mind, that is the only way KERX finds a drug like the one he described. I bet they are interested in a merger...but the question is who will be the surviving entity? When you consider that the CEO will have nearly 2 million shares of KERX stock at that point, which way do you think he will want to go? In my opinion, this is all posturing for the future. KERX and its management team will do whatever brings the biggest value over the short to medium term to investors. They will build the platform if that's what it takes to get sold or they will sell. They will only buy if the asset is extremely cheap, an obvious tuck in and will better position the company for a take-out.
We need a bit more patience. I haven't posted because there is nothing new to post. No one is going to step up and buy this company until the FDA gives approval and the CKD trial is well underway. Then we get bought, in my view. That''s what I am holding for and that's what I believe will happen.
Baupost is Idenix's largest shareholder with more than 50 million shares -- a huge position it built by continuously buying over a long period of time. They have only ONE other concentrated position in small cap biotech: KERX. And they happen to be our largest shareholder as well. Like IDIX, they have been building the position. We know that they did not have a meaningful position at year end. My guess is that they initiated their position at the time of the secondary that the company did through JP Morgan at 14.50 back in late January. I doubt that they bought more than a few million shares then, because I know of several large institutions who played and they all got cut back on their orders big time. So to amass their current stake, they must have been buying and building, just as they did with Idix. These guys take big, concentrated positions for a reason. They are not short term investors making a bet. They are accustomed to setbacks --IDIX has certainly had its share--, and they use those opportunities to build their stake further. They do extensive research and when they have their position in place, they use their network to make things happen. Given that they are going to take more than a billion dollars off the table on the IDIX trade, do you think some of those funds will find their way into KERX stock? The connections can't be ignored. These are the only two small to mid-cap biotech stocks where Baupost has taken such a major position. Like IDIX, people who follow KERX believe that a big pharma take out is the likely ultimate outcome. Ron Renault, the CEO of Idenix was the former CFO of KERX and knows the Kerx players well. Watch for the increased Baupost position with the June 30 filing and watch that position continue to grow after IDIX/MRK closes. These guys don't screw around. Being short is very dangerous.
Look at the statistics of PDUFA delays followed by approvals (vs CRL's). A very high % of PDUFA delays get approved at second pass. Sucks to have to wait; but this is not a terrible outcome.
Actually the next award, the so-called 4th milestone award, comes on the first commercial sale of Zerenex following an FDA approval. If my memory serves me it is 500,000 shares -- a meaningful chunk of change for Ron. I also recall that he gets 100,000 shares for every country he outlicenses Zerenex for that generates a threshold upfront and total payment. Add that to the shares he has bought, the shares he was awarded when he came on board, the options that he has earned over the last 6 years, and he will have approx. 1.8 million in shares and options. Talk about an incentive to maximize shareholder value! Keryx has been paying below market salaries for years, but the stock and option plan is generous. Unlike James, Ron has held onto almost all of his shares; so he stands to earn the motherlode if this thing works. And all those comments about how he is incented to keep things going so that he can keep drawing his salary are inaccurate. Everything vests on a change of control. Can you say $45 or $50 million? He is hugely incented to get the company sold; and if he does not sell, it is because he and the board are convinced that there is greater value in commercializing the drug. I love it when the CEO's interests are completely aligned with shareholders.
Honestly, yes and no. You are right that the FDA usually gives advance notice of a PDUFA delay. So not hearing anything is a positive (although I have seen cases where they announce the delay as close as a week before). But the FDA does not generally pre-announce a CRL; so not hearing anything right up to the eve of PDUFA does not mean that we are out of the woods on that risk. I am still very optimistic that we will hear positive news on or before the PDUFA and extremely optimistic that any delay will still have us with an approved drug before year end. But as a wise man once said, there are no guarantees.