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Market Sentiment Around Loss-Making Keryx Biopharmaceuticals Inc (NASDAQ:KERX)

Jason Fuller

Keryx Biopharmaceuticals Inc’s (NASDAQ:KERX): Keryx Biopharmaceuticals, Inc., a commercial stage biopharmaceutical company, focuses on providing medicines for patients with kidney disease in the United States. On 31 December 2017, the US$619.12M market-cap posted a loss of -US$163.44M for its most recent financial year. The most pressing concern for investors is KERX’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for KERX’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Keryx Biopharmaceuticals

Expectation from analysts is KERX is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$23.29M in 2020. So, KERX is predicted to breakeven approximately 2 years from now. How fast will KERX have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 69.98% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqCM:KERX Past Future Earnings May 11th 18

Underlying developments driving KERX’s growth isn’t the focus of this broad overview, however, bear in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. KERX currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of KERX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at KERX, take a look at KERX’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further examine:

  1. Historical Track Record: What has KERX’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Keryx Biopharmaceuticals’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.