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Edited Transcript of KERX earnings conference call or presentation 1-Mar-17 1:00pm GMT

Thomson Reuters StreetEvents

Q4 2016 Keryx Biopharmaceuticals Inc Earnings Call

New York Mar 1, 2017 (Thomson StreetEvents) -- Edited Transcript of Keryx Biopharmaceuticals Inc earnings conference call or presentation Wednesday, March 1, 2017 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Amy Sullivan

Keryx Biopharmaceuticals, Inc. - SVP of Corporate Development & Public Affairs

* Greg Madison

Keryx Biopharmaceuticals Inc - CEO

* Scott Holmes

Keryx Biopharmaceuticals Inc - CFO

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Conference Call Participants

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* Reni Benjamin

Raymond James & Associates, Inc. - Analyst

* Whitney Ijem

JPMorgan - Analyst

* Andrew Berens

Morgan Stanley - Analyst

* Yigal Nochomovitz

Citigroup - Analyst

* Matt Kaplan

Ladenburg Thalmann & Company Inc. - Analyst

* Boris Peaker

Cowen and Company - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Keryx Biopharmaceuticals conference call. At this time, all lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session.

(Operator instructions)

I would now like to hand the call over to your speaker today, Ms. Amy Sullivan.

Thank you, please go ahead.

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Amy Sullivan, Keryx Biopharmaceuticals, Inc. - SVP of Corporate Development & Public Affairs [2]

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Thank you, Alana.

This is Amy Sullivan. Good morning, and thank you for joining us for our fourth-quarter and full-year 2016 financial results conference call. As a reminder, we released preliminary results at the annual J.P. Morgan Healthcare Conference earlier this year, and we released final financial results this morning.

The agenda for our call today will be as follows. Greg Madison, our CEO, will open the call to discuss our business highlights. Scott Holmes, our CFO, will review the financial results for 2016, and then Gregg will return to discuss near-term opportunities and our future outlook. After the prepared remarks, we will open the call for Q&A.

We issued a press release a short while ago reporting our consolidated financial results and recent commercial progress. We're using slides today to support our call that can be accessed through the Investor section of our website. I want to note that we are providing monthly prescriptions for January on this call, as we feel it's important given the recent return to market. We do not plan to provide monthly prescription information moving forward.

Before beginning the call, please be advised that various remarks we make about our future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Keryx cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated. We encourage you to review all of the risk factors associated with our business to be filed in our 10-K later today and other 10-Q and as SEC filings, as well as the Forward-Looking Statements section in our press release issued this morning.

This conference call is being recorded for audio rebroadcast on Keryx's website, where it will be available for the next 15 days. All participants will be on listen-only mode.

I will now turn the call over to Greg.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [3]

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Thanks, Amy.

Good morning to those of you who have joined us on the call today.

Our vision here at Keryx Biopharmaceuticals is to build a leading (inaudible) business. We believe we have an outstanding foundational medicine in Auryxia. Providing growth in dialysis is our number one priority, and we are encouraged with the results thus far in 2017. We also have a near-term opportunity to expand the label of Auryxia in another indication for the treatment of iron deficiency anemia that, if approved, would enable us to bring Auryxia to a significantly larger patient population, who could potentially benefit from treatment.

As we look to the future, we continue to keep an eye out for assets that could bring value to patients and our Company. Taken altogether, we believe we are building the foundation to achieve this vision.

As we begin 2017, we are well-positioned for growth. First, we are seeing strong early momentum for Auryxia in dialysis. Approximately 4,650 prescriptions were filled at pharmacies in January 2017. Second, we expect to hear this month from the FDA regarding our FDA filing. If accepted, we will receive a target action date, or PDUFA date, which would put us on a timeline for potential approval and launch in late 2017.

Third, we've strengthened our leadership team by adding to executive team members. Christine Carberry is our Chief Operating Officer, and Melissa Bradford-Klug is Chief Business Officer. Both Christine and Melissa are proven leaders, and bring strong operational and strategic expertise into our organization.

With an overview of our these highlights, let me turn the call over to Scott for review of our financial results for 2016.

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Scott Holmes, Keryx Biopharmaceuticals Inc - CFO [4]

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Thanks, Greg.

Good morning, everyone. I will now just spend a few minutes on the final 2016 financial results.

Auryxia sales during the fourth quarter of 2016 totaled $8.2 million, as compared to $4.8 million in the fourth quarter of 2015. As a reminder, in the fourth quarter of 2016, we began recognizing revenue under the ex-factory method or upon shipment upon product sales to our wholesalers. This change, coupled with the reintroduction of Auryxia in mid-November, resulted in approximately $2.5 million worth of inventory restocking in the fourth quarter of 2016, which we do not expect to repeat.

Auryxia sales for the full year of 2016 were $27.2 million, as compared to only $10.1 million in 2015. This growth was achieved despite a three-month supply interruption.

Total revenues for the fourth quarter and full year 2016, which include license revenues from our partnership with JT/Torii, were $9.5 million and $32 million, respectively. The change in revenue recognition policy and the need to accrue for potential product returns also resulted in a slight increase in our gross to net, which increased to 44% during Q4. At this time, we expect our gross to net to be between 40% and 45% in 2017.

We ended the fourth quarter with just under $112 million in cash, having grown $20.4 million. During the full year of 2016, we have earned $88.5 million. We believe that our current cash position and financial plan will allow us to continue to make investments, key investments, to advance our commercial efforts in dialysis; make investments in the commercial launch activities for IDA; and the continued investments in our supply chain.

Finally, given the recent reintroduction of Auryxia, and while we are very pleased with the momentum we are seeing, we are not providing Auryxia sales or other financial guidance on the call today. We will continue to evaluate performance and trends, and may choose to provide guidance at a later date. With that, I will now turn the call back to Greg.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [5]

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Great. Thanks, Scott.

Let's spend the next few minutes discussing how we plan to maximize the potential for Auryxia and our plans to build a leading [mail] Company. The growth prospects for longer-term development of Auryxia and achieving our vision are very promising. What particularly excites me is that with Auryxia's mechanism of action, we have the potential to treat two different complications of CKD, where significant patient needs are currently not being met. We'll look first at our current opportunity, dialysis.

More than 30% to 40% of people with end-stage renal disease are on a phosphate binder that is not currently working for them. As a result, a need exists for a phosphate binder to improve this outcome for patients. We believe that Auryxia, the non-calcium non-chewable phosphate binder, can address this need. Our initial commercial efforts are focused on this patient segment.

Second, there is a tremendous need for an effective, well-tolerated, and convenient treatment option for pre-dialysis patients with iron deficiency anemia. IDA is common in chronic kidney disease, and the prevalence in severity increases as the disease advances. There are currently no FDA-approved oral iron therapies to treat iron deficiency anemia in pre-dialysis patients.

Auryxia has also shown the ability to increase iron parameters, including TSAT and paraffins, and could address the unmet need in these patients. It is our belief that Auryxia's mechanism of action could broaden access of Auryxia to many more people with chronic kidney disease and position us for market leadership.

Now looking at the overall CKD market can help put the potential opportunity for Auryxia into perspective. For Auryxia's current indications, there are approximately 450,000 dialysis patients in the US, including 350,000 currently taking a phosphate binder. To increase adoption of Auryxia for these patients, our field-based team is aligned with 95 sales territories, calling on target nephrologists in associated dialysis centers.

On the pre-dialysis side, in the US there approximately 1.7 million pre-dialysis patients under the care of nephrologists. Including approximately 650,000 currently being treated for iron deficiency anemia, which represents a near-term opportunity should we receive the expanded indication. This is almost twice as many patients as compared to the phosphate binder market.

Additionally, there are 250,000 to 400,000 patients who are estimated to have iron deficiency anemia but not currently being treated. This represents a large market development opportunity. So in total, there are approximately 1.0 to 1.3 million patients who could potentially benefit from treatment with Auryxia.

Looking closely now at the dialysis market, we are very pleased to see the positive indicators from market insight showing Auryxia's profile and brand perception remain strong. Our field-based teams did a great job not only staying engaged during supply interruption, but also supporting the return of Auryxia to patients. Over the past few months, we have recaptured the majority of patients previously on Auryxia, and we have now shipped shifted our full attention to identifying new patients. It is a very encouraging sign that in January we returned to our pre-interruption proportion of switch and naive patients. With 70% of our patients are prescriptions being switched from another phosphate binder and 30% being binder naive.

Going forward, prescribers report that their Auryxia utilization expectations will be at or above pre-interruption levels. We see this panning out in the early prescription trends. These insights and behaviors are translating into prescriptions and growth.

As a reminder, in December, we reported 4,500 prescriptions in our first full month following return to the market. As we noted at that time, at the beginning of each year the phosphate binder markets typically declines due to changes in patient insurance plans. You can see on the slides beginning in 2016 that this market dynamic impacted Auryxia prescriptions.

Now, we are very pleased to report that despite an overall market decline in January 2017, we drove growth in Auryxia prescriptions as compared to December 2016. Although prescriptions demand is not yet available for the entire month of February, we continue to see positive trends for Auryxia compared to the overall market. This is very encouraging and positions us well not only to drive continued growth in dialysis, but also as we prepare to expand Auryxia's label to treat iron deficiency anemia in pre-dialysis patients if approved.

I would like now to shift to the current treatment landscape for iron deficiency anemia in pre-dialysis patients. You've heard me say that there is significant need for improved therapy in these patients. We've done a lot of market research to understand that need. What we hear consistently is that there are a significant number of patients who suffer from iron deficiency anemia. There is a clear need for an effective, well-tolerated, and convenient treatment option.

Today, patients can be treated with oral iron or IV iron. We hear over and over again from nephrologists that they are generally dissatisfied with these options, as they each have several limitations. Oral iron is the most widely used treatment today for iron deficiency anemia. Although it's convenient and available, nephrologists report low satisfaction due to often intolerable side effects, specifically G.I. issues such as constipation. On this slide, you can see third-party research showing the low level of satisfaction, with oral iron ranked lowest in satisfaction rates among the vast array of medications commonly used by nephrologists. Recent market research also shows that an overwhelming majority of patients do not respond optimally to oral iron therapy.

As for IV iron, nephrologists view this option as an effective treatment. However, less than 20% of patients being treated today for iron deficiency anemia are given IV iron. There are three main reasons they point to for being reluctant to prescribe this therapy.

First are safety concerns. Although rare, the risk of anaphylaxis is a concern among nephrologists. Second are logistical reasons, as patients need to be referred to an infusion center for treatments since nephrologists typically do not give IV iron in an office setting.

Third is (inaudible) protects the patient's veins from unnecessary puncture to ensure the veins are in the best state possible so a fistula can be successfully placed, which has significance to achieving quality dialysis. These market insights illustrate that there is a large unmet need in the market for an effective, well-tolerated, and convenient treatment option. We believe Auryxia has the potential to become the standard of care for treating iron deficiency anemia in pre-dialysis patients.

Our critical brand strategies are designed to position Auryxia to fill this need. Our overall objective is to position Auryxia to new standard of care for treating iron deficiency anemia. We believe we can achieve this in two ways. First, differentiating Auryxia from traditional oral irons; and, second, establishing an oral iron centric treatment paradigm for anemia and non-dialysis chronic kidney disease.

One of the most important elements to the potential launch into the pre-dialysis patients with iron deficiency anemia is the significant leverage it provides. Recall that the nephrologists treating pre-dialysis patients are the very same nephrologists who treat dialysis patients, and we are calling on them today. We see a very high overlap with currently targeted nephrologists who write the majority of phosphate binders with those who write the majority of oral iron.

Thus, we believe we are right-sized and don't foresee a need to expand our field force. Therefore, all of the work that our field teams perform today -- generating awareness of Auryxia, expanding clinical experience and familiarity to medicine -- will give us a head start as we move into the launch for iron deficiency anemia.

In addition, the existing formulary coverage we have in place for the dialysis indication provides access from reimbursements to the majority of people with iron deficiency anemia not yet on dialysis. To this end, we not only have the breadth to become the first line phosphate binder. But with our commercial leverage and Auryxia's mechanism of action, we can go beyond dialysis and establish first-line treatment for iron deficiency anemia. For us, we are more optimistic than ever before about the potential to achieve our vision and build a leading renal Company.

The three pathways to support our expected growth are, first, to maximize Auryxia's potential, which we have thoroughly reviewed. Second is to expand our portfolio. We believe that we could add significant value to our Company by adding strategic assets to our portfolio.

We will seek to add assets that leverage the infrastructure we have built to support our foundational medicine, Auryxia. Third, is to manage our growth and talent. We are committed to creating a culture of success and appropriate staffing, with high-quality talent to support our potential growth.

To summarize, we are very encouraged by the strong prescription momentum entering 2017 and the insights we are hearing from our physicians. We look forward to receiving a target action date for the sNDA we submitted in January to expand Auryxia's indication. We believe there is a large unmet need in iron deficiency anemia. We believe Auryxia can fill this as an effective, well-tolerated, convenient iron therapy. Which also provides operational efficiencies by leveraging our existing infrastructure, access, and familiarity established with Auryxia.

We also have a strong committed team in place to address the unmet needs, both in dialysis and non-dialysis CKD, and benefit from the large potential market opportunity in these two patient populations.

Thank you for joining us today. We look forward to keeping you updated on our progress and to meeting with many of you at our upcoming investor healthcare conferences in March and throughout the year.

Operator, we will now open the lines for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

Reni Benjamin, Raymond James.

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Reni Benjamin, Raymond James & Associates, Inc. - Analyst [2]

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Good morning, guys. Thanks for taking the questions and congratulations on the progress. Greg, can you talk a little bit or provide any sort of feedback from sales just regarding this -- call it positive surprise regarding prescriptions and how fast it's kind of come back to kind of pre-interruption levels? What is driving that?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [3]

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It's an excellent question. The way I would describe it is a couple ways maybe. I think honestly it all started back on August 1, right, when we had the unfortunate experience of having to announce a supply interruption.

It was at that moment that it was kind of a big moment for us, and I will say our field teams, both on the sales side as well as our medical teams, they did a magnificent job. They really did a nice job of making sure that during that time, they were present, they were engaged, they were out there with our physicians and the staff to make sure they understood what was going on. And I know we've talked about that, but I can't tell you how much of an impression that makes in the nephrology community.

This is a very tight-knit community, and the fact that we were out there in a very difficult situation by being upfront front and center and being present and not hiding our houses here, that goes a long, long way. That's first and foremost.

Second, I think that physicians, as we have spoken to them, despite the unfortunate experience they had to have, I think they've come to gain a real appreciation for what Auryxia meant to their patients. We talked before how we targeted the 30% to 40% of patients that aren't currently achieving their outcomes on current phosphate binders, and that's where a lot of her business is coming from. Nephrologists really saw that with Auryxia, these patients were getting into target range, were tolerating the medication oftentimes at a lower pill burden as well. I think when it went away, in some weird way, they were forced with the reality of what might happen if Auryxia was gone.

And so when it came back, I think they had a fuller appreciation of what the medicine can do, how it affected their patients overall. And so I think you combine the efforts of our field-based teams, the research we heard, the profiles of Auryxia, I think all that kind of culminates in the fact that we came back very, very strong in December. And then certainly, we're really pleased with the strengths we see in January into February here as well.

So I think combination of things. The relationships that we have, the clinical experience they have now had, the benefits they see in the patient population, and the unmet need is still there. There is still 30% to 40% of patients who are not reaching their target goals on current phosphate binder therapies. We believe Auryxia can help solve some of that. So I think that's really the results we're seeing here, and I think it just set us up very, very nicely for driving growth in 2017 in the dialysis segment.

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Reni Benjamin, Raymond James & Associates, Inc. - Analyst [4]

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Got it. And then regarding the investment, investments that you guys are putting into the potential for IDA, can you talk a little bit more about that because in your prepared remarks, you mentioned that you feel that the sales force is right sized as it is right now. So what other investments are you thinking about?

And maybe related to that, in terms of market opportunity, can you help us understand how many people who have IDA also have high phosphates? Is that pretty much everyone? Is that a small sliver? And how do you expect -- or how do you expect to message that when you're talking with physicians?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [5]

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Two questions, so two answers. The investments we're making particularly, as you would imagine, there's a lot of things going on a medical affair side as we kind of continue to generate awareness regarding the Phase 3 clinical data that was recently published in [Jayson] earlier this year. So continue to drive awareness of that publication and data, continue to drive awareness from physicians of the need to treat for patients that have iron deficiency anemia, and that's being done in a multitude of ways.

On the commercial side, all the preparations really gearing up for a potential launch in late 2017. So market research, preparation of sales materials, all those types of things are things that are being done right now is going to be stacked in any type of pre-launch activities. We're well on our way for launch planning. There's a lot of work going on, but those are your typical big investments that you usually make.

Your second question, it's a really important one for us here. And your question of what percentage of patients have high phosphates, but also have IDA? I would tell you that for pre-dialysis patients, there is very, very few patients that have what will be deemed as hyperphosphatemia, and therefore, physicians use a phosphate binder in the pre-dialysis setting. From a clinical perspective or biology perspective, if you will, typically phosphate levels rise quickly once the kidneys are very close to finally shutting down. So it's really late, late, late stage pre-dialysis where phosphate levels typically start to rise up very quickly.

Interesting for us, what we see clearly is that Auryxia, regardless of what your phosphate levels may be, could potentially be a very effective treatment option for iron deficiency anemia, and we showcase that with that Phase 3 data. So for us, the fact that whatever phosphate levels are in pre-dialysis patients almost don't matter for us.

We're going to position this as a very effective treatment for iron deficiency anemia. Phosphate levels aren't really a deciding factor in this, almost the same way that in dialysis today, we're really focused on the unmet need which is hyperphosphatemia can be a very effective treatment for just treating phosphates when we're not really focused on the iron benefits per se. So a bit of a mirror image here, Reni. I guess net, net for us the patient population that we see that needs the treatment here, it doesn't matter what their phosphate levels are. The big need is for treating iron deficiency anemia.

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Reni Benjamin, Raymond James & Associates, Inc. - Analyst [6]

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Got it, thanks. Congrats again, and I will jump back in the queue.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [7]

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Thank you.

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Operator [8]

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Whitney Ijem, JPMorgan.

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Whitney Ijem, JPMorgan - Analyst [9]

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Hi, guys. First question is just on reimbursement in the IDA space. If you are successful in getting approval, though, will you have to go back and sort of renegotiate with all the payers? I guess that's the first part of the question. And then the second part of the question is, for the, I think, third of payers that you're not on, formulated with currently, do you think an IDA label will kind of help gain access there?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [10]

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Whitney, it is Greg. The really nice move here is that the short answer is no. We do not need to go back and start all over again with the process. So the reimbursement coverage we have, we have access to the vast majority of patients on commercial and Part D on an unrestricted basis, all of that will translate directly into the iron deficiency anemia indication.

So we don't have to start all over again, so in many ways this is a very different launch for us where we literally hit the ground running, both in terms of familiarity with the medicine from a dialysis perspective, to relationships our field teams have, and as you point out, importantly, access will be in place on the day of launch for iron deficiency anemia. So we don't have to start again.

We also do believe that a couple of big plans that we have remaining out there that the potential indication here definitely gives us an opportunity to further differentiate Auryxia from other phosphate binders and kind of put into almost a different class if you will. So our teams are fully prepared. They are talking to the payers out there today. I would say that our expectation for 2017 is that the reimbursement access we have today is what we will operate with, certainly more than sufficient to drive significant growth in dialysis, but will certainly take the opportunity with IDA to see if we can further expand that access as we go forward.

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Whitney Ijem, JPMorgan - Analyst [11]

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Got it. And then just thinking about your current cash position, you mentioned continued investment in the supply chain, so I guess can you give us a little bit more color on what you meant by that? And then the second part is, you've also talked about adding assets to kind of fit in with your current infrastructure. I guess how are you thinking about that and any timelines given your current cash position?

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Scott Holmes, Keryx Biopharmaceuticals Inc - CFO [12]

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Sure, Whitney, this is Scott. How are you? So in relation to the investments mentioned on the supply chains side, it really falls into two categories. One is just the continued rebuilding of sufficient inventory levels. We have good inventory levels today, but that's certainly an area where we continue to build inventory overtime to the appropriate levels.

Second, you'll recall that we have said that the capacity we have in our supply chain at this time with Patheon is certainly sufficient now and for the foreseeable future. However, with the market opportunity that we believe exists in IDA, ultimately down the road, there will be additional capacity that is needed.

So that pathway to achieving that additional capacity is a rather long road, so you have to start that some years in advance. So those are the types of investments that we'll begin to think about in 2017 as we, not only fortify the supply chain, but plan for supply chain expansion for future years. I'll turn the call back to Greg for the second question.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [13]

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Yes. I think your second question was on additional assets. And, look to be clear, we've got a lot of work in front of us right now for both dialysis and preparation for IDA. So I would say that we are laser focused on ensuring that we execute on both of those plans. And we hired Melissa as Chief Business Officer to certainly take a look at the landscape, understand what's out there and available. And as we think about where we are today, but not only where we are today, but where we're going to be in the future, we're developing a real expertise here in nephrology space where we've got roughly 140 people out there on a daily basis between sales, account managers, medical liaisons, talking to nephrologists, establishing relationships. I think it makes perfect sense for us to think about how we can leverage that infrastructure.

That being said, there is no rush, there is the timeline as we're operating here. We believe we have a massive opportunity for Auryxia both in dialysis and IDA. But it certainly makes sense for us at this time to be scouring the landscape and make sure that if there's something we believe makes sense and can add value, that we don't want to miss it.

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Whitney Ijem, JPMorgan - Analyst [14]

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Great. Thanks for taking the questions.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [15]

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Thanks, Whitney.

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Operator [16]

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Andrew Berens, Morgan Stanley.

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Andrew Berens, Morgan Stanley - Analyst [17]

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Hi, guys. Thanks for taking the question. Some of them were already answered. But I guess to help understand, Greg, once you position Auryxia as an iron management -- or as an anemia management agent, how do you think the payers will treat it in terms of step edits, potentially? And how do you guys have confidence that there won't be step edits in place if you get a label that says for use after oral iron failure.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [18]

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So we have done an extensive amount of research and talked to our payers. Obviously we do that on a fairly daily basis here to understand not only the opportunity of dialysis, but as we prepare for IDA. What I can tell you is, recall that there are no FDA approved oral iron treatments for iron deficiency anemia in the pre-dialysis population.

So as we think about the patients that are being treated today, the overwhelming majority of patients that are treated with oral iron, it's done through OTC medications. Right, so you can pick up iron down at the drugstore. Therefore, that's not something the payers can really actively track and understand what patients are on it, what patients aren't. There is nothing in their database that can give them an indication of that.

So that's one potential example of -- if they want to think about putting a step edit in place, it's just very difficult for them to operationalize that and implement that. So they think very pragmatically about what makes sense, what doesn't make sense, how much cost and effort would have to tie into that, and that's a good example of something that even if they thought about wanting to do it, it's just very difficult to implement. So we've had multiple discussions, and we have a very strong confidence that today the access and reimbursement we have for Auryxia in the dialysis setting will directly translate into the iron deficiency anemia setting. And that means a lot of access, unrestricted access, no step edits, no prior authorizations.

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Andrew Berens, Morgan Stanley - Analyst [19]

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Okay. Thank you.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [20]

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You bet.

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Operator [21]

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Yigal Dov Nochomovitz, Citigroup.

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Yigal Nochomovitz, Citigroup - Analyst [22]

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Hi, guys. Thanks for taking the question. Could you give a little more clarity on the decision to not provide monthly TRx going forward? It would seem to be, obviously, very useful for us to track the launch. And also, what is your latest calculation on the capture ratio for IMS? Thank you.

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Scott Holmes, Keryx Biopharmaceuticals Inc - CFO [23]

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Sure, Yigal, happy to do that. As we stated, we do not plan to provide monthly prescription data aggregated going forward. I think it'd be rather unconventional to do so, frankly. From the time of launch, we certainly reported consolidated data on a quarterly basis. I think coming out of the supply interruption, we felt that it was important to give folks an initial read of the receptivity of the product upon return to the market, and we think that with coming out of 2016 and into 2017, it was important to show that change that we saw from December to January given what the market typically does. So we feel that's really the last period that will be necessary.

And importantly, the reason for that is because the available weekly IMS data, in reference to your question regarding the capture rate, we still typically see that IMS is representing between 55% and 60% of the total prescriptions that we see pulled through. So that's where we consistently see in that both pre- and post-interruption 55% to 60% in the total scripts that are coming to IMS. So we feel that with that data, the market has sufficient data about the uptake of the product and, therefore, won't be providing additional monthly information going forward.

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Yigal Nochomovitz, Citigroup - Analyst [24]

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Okay. Got you. And, Scott, you also mentioned that you are not ready yet to provide guidance. What factors or what elements would you need to see in the trajectory to feel comfortable doing that, and is there a realistic possibility that you would be able to provide some new guidance for 2017 at a later point this year?

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Scott Holmes, Keryx Biopharmaceuticals Inc - CFO [25]

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So we will continually evaluate whether or not to provide guidance, and certainly, it's still possible that we could do that later in 2017 at the right time. I think importantly, we are in the process now of completing and getting data on February, which is only third, fourth months post-resupply. So the importance of the trends in the early uptake that we see and then applying those trends moving forward is something we really need to see a little bit more there before we have a good solid ground and get a sense of exactly where the product is headed in 2017.

We certainly have our plans and our internal forecast, but we want to be a lot more certain about things before we go to the market with guidance. But we will continue to evaluate the possibility of providing guidance later in 2017.

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Yigal Nochomovitz, Citigroup - Analyst [26]

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Okay, thanks. And, Greg, just a couple of questions on regulatory. Have you had any significant interaction with the FDA ahead of the acceptance of the SNDA? And if so, what has been the tenor of that back and forth with FDA? And then just separately, any update on resolving the manufacturing issues at Norwich, and to what extent do you believe that getting that back online is necessary or relevant to drive 2017? Thanks.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [27]

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I will go in reverse order. So we continue to work with Norwich. They are definitely part of our plans for 2017, and we, too, do expect to try to get them back online here before the end of the year. So a lot of work going on there. In the meantime, we certainly -- as Scott had noted, we have plenty of capacity coming out of both Patheon sites to supply the market place. So our inventory levels look good for right now.

I would say that on the regulatory side, as you know, we don't typically comment on any type of regulatory interactions. We did have a pre-SNDA meeting a back several months ago before we made the application. We felt good enough coming out of that meeting to certainly submit the application overall, and we will go forward from there and just await to hear the decision. We should hear relatively soon on the acceptance of that filing as well as the target date for an action.

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Yigal Nochomovitz, Citigroup - Analyst [28]

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Thank you.

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Operator [29]

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(operator instructions)

Matt Kaplan, Ladenburg Thalmann.

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Matt Kaplan, Ladenburg Thalmann & Company Inc. - Analyst [30]

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Hey, guys, can you hear me? Just going back to the manufacturing a little bit. I guess should we expect any additional write-offs of unusable inventory going forward than where we are now?

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Scott Holmes, Keryx Biopharmaceuticals Inc - CFO [31]

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This is Scott. We do not expect any additional write-offs moving forward on the inventory side. We feel that's been taken care of.

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Matt Kaplan, Ladenburg Thalmann & Company Inc. - Analyst [32]

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Okay, great. And then, in terms of preparation for the launch in IDA, what are your plans in terms of strategy for manufacturing and prep there given the potential size of that market?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [33]

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As I stated, I think certainly in the near term into the -- over next year or two, we have ample capacity to address not only the dialysis market, but also the IDA market if we receive approval there. We won't publicly comment on our strategy around manufacturing necessarily, but it's safe to say that we will continue to bolster the supply chain and look to add capacity to that supply chain to meet the needs of the market.

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Matt Kaplan, Ladenburg Thalmann & Company Inc. - Analyst [34]

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And then in terms of the IDA opportunity, can you talk about in terms of your strategy there any plans to augment the pricing of the drug?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [35]

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I'm not sure what you mean by augmenting the pricing, Matt.

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Matt Kaplan, Ladenburg Thalmann & Company Inc. - Analyst [36]

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In terms of, is there a plan to decrease the price to help you gain access or grab for specific market share in IDA?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [37]

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No. We don't comment on our pricing strategy, but I can tell you there is no plans for us to decrease the price. We are very pleased with the access we have today, that access, again, will directly translate into the iron deficiency anemia market. Remember it is the same exact pill. Same skew, same pill, same MDC that's used for dialysis patients with hypokalemia, but will also be used in the pre-dialysis patient population.

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Matt Kaplan, Ladenburg Thalmann & Company Inc. - Analyst [38]

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Very good. Thanks for the updates.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [39]

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You bet. Thanks, Matt.

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Operator [40]

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Boris Peaker, Cowen.

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Boris Peaker, Cowen and Company - Analyst [41]

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Great. My first question is on the European opportunity. Is there any update there, any discussion with partners, anything you anticipate to happen this year?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [42]

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No. Right now, there's not much to update there. As we've commented several times now, that reimbursement landscape has shifted dramatically ever since we got approval there overall. It's still an interesting market. We're happy to have the indication, and we will certainly be open if any potential partners want to come forward. But, no, I wouldn't count on any significant revenues coming out of Europe in the near term here. We continue to keep that option open for us because it's an interesting market, but no real updates to provide there. Our focus right now on driving growth in dialysis and preparation for IDA which we think provides a significant opportunity for us.

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Boris Peaker, Cowen and Company - Analyst [43]

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So just a question on that, you mentioned there was over a million patients in the pre-dialysis setting that could benefit from Auryxia. What's the low hanging fruit in that market? Certainly it's not all million that need it, but what's really, you think, easiest to capture, which subgroup?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [44]

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Yes, Boris. Our near-term opportunity on that would certainly be the 650,000 patients today that are being treated for iron deficiency anemia, and the vast majority of those patients are being treated today with oral iron, over the counter oral iron mostly. As you've heard over and over again from nephrologists, the level of dissatisfaction with those oral iron therapies is pretty significant. We also have market research indicating that the vast majority of those patients are not receiving optimal outcomes with that over the counter oral iron therapy. So to us, that's the low hanging fruit to go after right away.

They're the same nephrologist we're calling on today, they are seeing patients in the pre-dialysis setting that have iron deficiency anemia, they're using treatment options that are not to their level of satisfaction, and I think Auryxia presents an opportunity if we get the approval to kind of fill that void.

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Boris Peaker, Cowen and Company - Analyst [45]

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And lastly, do you think you would need an outcome study at some point to really convince people in the pre-dialysis setting of the benefit of the drug, or just the hemoglobin endpoint is adequate?

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [46]

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What physicians want right now is an effective, well-tolerated, and convenient treatment option to treat these patients for iron deficiency anemia. We believe that the data we have thus far, we will certainly be able to go after that and provide an opportunity to expand the utilization of Auryxia.

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Boris Peaker, Cowen and Company - Analyst [47]

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Okay, great. Thank you very much for taking my question.

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Operator [48]

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Reni Benjamin, Raymond James.

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Reni Benjamin, Raymond James & Associates, Inc. - Analyst [49]

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Hi, guys. Thanks for taking the question again. A quick one for Scott. The 40% to 45% gross to net, can you talk a little bit about the components there, how you see that changing over time and when the indication, hopefully, for IDA is approved, what that blend could potentially look like?

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Scott Holmes, Keryx Biopharmaceuticals Inc - CFO [50]

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So I think as we've stated, we expect 40% to 45% in the 2017 timeframe. I think as we move beyond 2017, that certainly analysis that we are still conducting. The mix of business obviously has a big impact on the gross to net from whether it's commercial or Part D. So as we continue to complete our work around the IDA opportunity and where that business is coming from, we will be prepared in the future to make further comment around the gross to net in 2018 and beyond. But certainly, over time, that gross to net will likely tick up in 2018 and beyond that. That's the best I can give you at this point.

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Reni Benjamin, Raymond James & Associates, Inc. - Analyst [51]

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Got it. Thanks very much.

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Operator [52]

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There are no further questions at this time. I would now like to hand the conference back to Mr. Greg Madison. Please continue.

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Greg Madison, Keryx Biopharmaceuticals Inc - CEO [53]

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Great. Thanks, operator, and thank you again for joining us this morning. We look forward to updating you on our continued progress throughout the year. And we wish everybody a good day.

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Operator [54]

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Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.