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What's in the Offing for Keryx (KERX) This Earnings Season?

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Keryx Biopharmaceuticals, Inc. KERX is expected to report first-quarter 2018 results on May 3, before the market opens.

Last quarter the company reported a negative earnings surprise of 44.44%. Keryx’s performance over the last four quarters has been disappointing. The company reported a wider-than-expected loss in the trailing four quarters, with an average negative surprise of 25.57%.

Keryx’s shares have lost 0.9% year to date, compared with the industry’s 9.9% decline.

 Factors Influencing This Quarter

Apart from license fees, Keryx’s top line comprises revenues generated by its only marketed product Auryxia (ferric citrate). Auryxia is used to treat patients with chronic kidney disease (CKD) on dialysis.

In November 2017, the FDA granted an approval for an additional indication of Auryxia to treat adults with iron deficiency anemia (“IDA”) and chronic kidney disease, not on dialysis. Moreover, Keryx claims that Auryxia is the only oral treatment option available for this indication. Auryxia is already approved to control serum phosphorus levels in adults with chronic kidney disease on dialysis. With the latest approval, this drug can treat two complications of chronic kidney disease.  It also represents a significant opportunity for physicians to treat their patients at an earlier stage of the disease before their anemia becomes more severe. Hence, the approval should significantly boost Auryxia’s sales.

Meanwhile, the company is looking for potential partners to commercialize the drug in the EU. Ferric citrate has been considered as a new active substance by the European Commission. This provides it with 10 years of data and marketing exclusivity in the region.

The company also remains focused on creating rapid awareness for the new indication and differentiating Auryxia from existing treatment options along with communicating the favorable insurance access to Auryxia that prescribers and patients can expect to see.

Further, the company supports a number of ongoing trials, including several investigator-sponsored clinical studies, and one new phase IV study called COMPASS. The COMPASS study will continue to expand the clinical dataset for Auryxia as a treatment for iron deficiency anemia by studying it in people who haven't been treated previously with low iron and in different dosing regimens such as twice-a-day.

However, with Auryxia being the only approved product in Keryx’s portfolio, the company is entirely dependent on Auryxia for growth. 

What Our Model Indicates

Our proven model does not show an earnings beat for Keryx this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. However, that is not the case here as you will see below.

Zacks ESP: Keryx’s has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 19 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Keryx’s has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement.

 

Keryx Biopharmaceuticals, Inc. Price and EPS Surprise

 

Keryx Biopharmaceuticals, Inc. Price and EPS Surprise | Keryx Biopharmaceuticals, Inc. Quote

Stocks That Warrant a Look

Here are some biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Pfizer Inc. PFE is scheduled to release results on May 1. The company has an Earnings ESP of +1.36% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank  stocks here.

Gilead Sciences, Inc. GILD is scheduled to release results on May 1. The company has an Earnings ESP of +0.32% and a Zacks Rank #2.

Celgene Corporation CELG is scheduled to release its results on May 4. The company has an Earnings ESP of +0.63% and a Zacks Rank #3.

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