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Keryx Focuses on Kidney Drug Aurexia Despite Generic Threat

Zacks Equity Research

We issued an updated research report on Keryx Biopharmaceuticals, Inc. KERX on Mar 15, 2017.

Keryx announced its fourth quarter 2016 results on Mar 1, 2016 and posted wider-than-expected loss in the quarter. Nevertheless, revenues surpassed the estimates.

Keryx’s share price has decreased 2.6% year to date, while the Zacks classified Medical - Biomedical and Genetics industry gained 9.6%.

The company’s only marketed product, Auryxia (ferric citrate) is approved in the U.S. for the control of serum phosphorus levels in patients with chronic kidney disease (CKD) on dialysis. In the fourth quarter of 2016, net sales of Auryxia in the U.S. were $8.2 million, up 70.8%, despite the three-month supply interruption from Aug to Nov 2016.

In August 2016, Keryx announced an interruption in the supply of Auryxia, as its contract manufacturer had issues related to the conversion of the API into the finished product, leading to a disruption in the supply of Auryxia.

Consequently, the company withdrew its guidance for 2016. However, in Nov 2016, Keryx announced that the FDA has approved a second drug product manufacturer, Patheon Manufacturing Services, for supplying Auryxia as a finished product.

Auryxia’s prescriptions were filled during the quarter were 8,700, which included about 4,500 prescriptions written in the month of December. Notably, it was the first full month of sales post resupply of Auryxia. In Jan 2017, Auryxia prescriptions increased 3.3%, even though the overall market for phosphate binder prescriptions declined by 2.6%.

Keryx is working on expanding Auryxia's label to include the treatment of IDA in adults with stage III–V NDD CKD. In Mar 2017, the FDA accepted the company’s supplemental New Drug Application (sNDA) for Auryxia for review and gave a Prescription Drug User Fee Act (PDUFA) target action date of 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 is expected to significantly boost sales of Auryxia.

Meanwhile, the company is looking for potential partners to commercialize the drug in the EU. Ferric citrate (the compound name for Auryxia for additional indications) 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.

However, Auryxia faces stiff competition in the U.S. from existing players. Apart from over-the-counter drugs like some calcium carbonate and metal-based products including aluminum and magnesium, Sanofi’s SNY specialty medicines arm, Genzyme Renagel and Renvela, Shire plc’s SHPG Fosrenol, and Fresenius Medical Care’s FMS PhosLo and Velphoro are already available in the market. Since Auryxia is in early stages of commercialization, the company may face a tough time gaining share.

The company intends to focus on the growth of Auryxia in the U.S. dialysis market. The company’s label expansion efforts on Auryxia in the iron-deficiency anemia (IDA) indication is encouraging given that the IDA market holds great potential.

Keryx Biopharmaceuticals, Inc. Price and Consensus

Keryx Biopharmaceuticals, Inc. Price and Consensus | Keryx Biopharmaceuticals, Inc. Quote

Zacks Rank & Key Picks

Keryx is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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