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What to Expect from Keryx (KERX) Stock This Earnings Season?

Zacks Equity Research

Keryx Biopharmaceuticals, Inc. KERX is expected to report first-quarter 2017 results on May 4. Last quarter, the company missed expectations by 18.52%. In fact, Keryx’s performance over the last four quarters has been disappointing. The company reported a wider-than-expected loss in three of the trailing four quarters, with an average negative surprise of 35.16%.

Keryx’s share price has increased 0.7% year to date, while the Zacks classified Medical - Biomedical and Genetics industry gained 4.8%.
Let’s see how things are shaping up for the company this quarter.

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 approved as tablets to control serum phosphorus levels in patients with chronic kidney disease (CKD) on dialysis.

Notably, with Auryxia being the only approved product in Keryx’s portfolio, the company is entirely dependent on it for growth. Launched in the U.S. in late Dec 2014, Auryxia is still in its early stages of commercialization. Insufficient reimbursement and lengthy selling cycles have impacted the ramp up in Auryxia’s sales.

However, Keryx is working on its commercial efforts for Auryxia. In fact, the company is currently working on gaining formulary status for the drug. Additionally, it is operating on contracting the remaining insurance providers to expand patient access to Auryxia. This should enable more contact with the prescribers, both current physicians and those who have not prescribed Auryxia yet. The company expanded its field-based team to 95 sales representatives.

Moreover, Keryx is working on expanding ferric citrate's (the compound name for Auryxia in additional indications) label to include the treatment of iron-deficiency anemia (IDA) in patients with stage III–V non-dialysis dependent chronic kidney disease indication (NDD CKD). In Mar 2017, the FDA accepted the company’s supplemental New Drug Application (sNDA) for Auryxia for review (PDUFA date: Nov 6, 2017). If approved for this indication, Auryxia could be the first FDA-approved oral medicine to treat IDA in this patient population. A potential approval will significantly boost sales of Auryxia.

Keryx Biopharmaceuticals, Inc. Price and EPS Surprise

 

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

What Our Model Indicates

Our proven model does not conclusively 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: Earnings ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 18 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, 0.00% ESP makes surprise prediction difficult for the quarter.

Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Stocks to Consider

Here are some health care stocks that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter.

Fibrogen Inc. FGEN has an Earnings ESP of +23.81% and a Zacks Rank #3. The company is expected to release results on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead Sciences, Inc. GILD has an Earnings ESP of +2.77% and a Zacks Rank #3. The company is scheduled to release results on May 2.

Ultragenyx Pharmaceutical Inc. RARE has an Earnings ESP of +0.59% and a Zacks Rank #3. The company is expected to release results on May 8.

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