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Keryx (KERX) Q4 Earnings: What's in Store for the Stock?

Zacks Equity Research

Keryx Biopharmaceuticals, Inc. KERX is expected to report fourth-quarter 2016 results on Mar 1. Last quarter, the company recorded a negative earnings surprise of 77.27%. Let’s see how things are shaping up for this announcement.

Keryx’s share price has decreased 16.6% year to date, while the Zacks classified Medical - Biomedical and Genetics industry gained 5.9%.

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.

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.

Following the approval, the company has rebuilt supply and expects to make Auryxia available to wholesalers. As a result of this, Aurexia sales is expected to improve in the fourth quarter of 2016.

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). The company expects to file a supplemental new drug application with the FDA as soon as it receives an agreement from the FDA for its pediatric clinical plan. We expect management to update on these plans at the upcoming earnings conference call.

Surprise History

Keryx’s track record has been disappointing so far. Over the four trailing quarters, the company posted an average negative earnings surprise of 43.03%, reporting in-line earnings only once in the last four quarters, while missing the same on all the other three occasions.

What Our Model Indicates

Our proven model does not conclusively show that Keryx is likely to beat estimates 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: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 27 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Keryx Biopharmaceuticals, Inc. Price and EPS Surprise

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

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.

Pacira Pharmaceuticals, Inc. PCRX has an Earnings ESP of +20% and a Zacks Rank #2. The company is scheduled to release results on Mar 1.

Syndax Pharmaceuticals, Inc. SNDX has an Earnings ESP of +18.18% and a Zacks Rank #3. The company is scheduled to release results on Mar 2.

Exelixis, Inc. EXEL has an Earnings ESP of +200% and a Zacks Rank #2. The company is scheduled to release results on Feb 27.

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Exelixis, Inc. (EXEL): Free Stock Analysis Report
Keryx Biopharmaceuticals, Inc. (KERX): Free Stock Analysis Report
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