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FDA approves Keryx's kidney drug with warnings, shares fall

(Adds comments from conference call, shares)

By Amrutha Penumudi

Sept 5 (Reuters) - Keryx Biopharmaceuticals Inc won U.S. approval for its drug to lower phosphate levels in patients with chronic kidney disease (CKD), but the approval included an unexpected safety warning on the label.

The drug, ferric citrate, must carry a label specifying that patients being given additional iron intravenously might need to cut dosage or stop additional iron therapy as the treatment has been shown to increase iron levels.

Keryx's shares closed down 5.4 pct at $17.01 on Friday, recovering from a slump of as much as 22 percent earlier in the session.

Ferric citrate is currently the only drug in its class to increase iron stores in the body. However, the FDA-mandated label does not include the benefits of the drug in treating anemia.

FBR Capital Markets & CO analyst Andrew Berens called the label "less than optimum", noting that the label indication did not highlight anemia.

CKD is characterized by an ever-worsening loss of kidney function. Kidneys are unable to flush out waste, resulting in abnormally high levels of phosphate in the blood, a condition known as hyperphosphatemia.

The disease can also cause severe iron deficiency.

Ferric citrate binds to any phosphate ingested with food, making it impossible for the body to absorb it and also boosts blood iron levels.

Keryx said on Friday that the drug is expected to be launched in the next 12 weeks.

"In terms of dollars, the total U.S. market size for phosphate binders is about $1.2 billion, which has been growing on a year-over-year basis," Keryx CEO Ron Bentsur told Reuters.

"We believe, over the years, ferric citrate has the potential to be a dominant product in the market."

Keryx also said the FDA was still deliberating whether to grant the drug New Chemical Entity (NCE) status, which is given to products containing active molecules that have never been approved by the FDA or marketed in the United States.

The company said ferric citrate had a "reasonable chance" of being granted NCE status.

The drug is likely to face stiff competition from French drugmaker Sanofi SA's Renvela, which has captured about half the market for CKD, according to Maxim Group Analyst Jason Kolbert.

"The patents covering Renvela expire in September, prompting concern that a generic version with a lower price will compete against ferric citrate," Kolbert said.

"However, ferric citrate reduces total patient care cost by its ability to control iron levels and increase red blood cell count."

Analysts expect ferric citrate to be priced at between $5,000 and $7,500 a year, and Kolbert expects it to corner about 8 percent of the market by 2015.

Ferric citrate is also being tested in pre-dialysis patients, with late-stage tests expected in the fourth quarter.

(Reporting By Amrutha Penumudi in Bangalore; Editing by Simon Jennings)