Keryx Biopharmaceuticals (NASDAQ:KERX), a biopharmaceutical company focused on bringing innovative therapies to market for patients with renal disease, announced its financial results for the first quarter ended March 31, 2015.
“With the first full quarter of launch behind us, we have made great progress in securing formulary wins for Auryxia™ (ferric citrate), which is a critical catalyst for future success,” said Greg Madison, Chief Executive Officer of Keryx. “Today, I am pleased to report that over the past two months, we have achieved two additional Medicare Part D formulary wins, with approvals now at 8 of the top 15 Part D plans, we have made significant progress since launch and are advancing towards our goal of 80% unrestricted access.”
First Quarter 2015 Business Highlights
- For the quarter ended March 31, 2015, Keryx reported total revenue of approximately $1.2 million, including net U.S. Auryxia product revenue and license revenue associated with royalties received on sales of Riona® (ferric citrate) in Japan. The Company recognized U.S. product sales based on 1,218 prescriptions filled for Auryxia during the quarter, based on data received fromIMS Health and specialty pharmacies that don’t report data to IMS, including Davita Rx and Fresenius Rx.
- In January 2015, Keryx completed an underwritten public offering of common stock, which provided proceeds to the Company of approximately $118.3 million, net of underwriting discounts and offering expenses. Keryx ended the first quarter with $168.8 million in cash and cash equivalents. Additionally, the Company ended the first quarter with approximately $27.2 millionof inventory on its consolidated balance sheet, primarily consisting of Auryxia active pharmaceutical ingredient.
- The Company is seeking to expand the indication for Auryxia to include the treatment of iron deficiency anemia in patients with stages 3 – 5 non-dialysis dependent chronic kidney disease (CKD), who have previously not responded to oral iron therapy. Keryx initiated a phase 3 study for this target indication in September 2014 and this study is now more than 70% enrolled. This placebo controlled study is expected to enroll 230 patients and will evaluate changes in hemoglobin as the primary endpoint. The Company is on track to complete the study by the end of 2015. If this study is successful, Keryx intends to file a supplemental new drug application with the FDA seeking label expansion of Auryxia.
- The European review of the marketing authorization application (MAA), seeking regulatory approval of Auryxia as a treatment for hyperphosphatemia in patients with CKD, including dialysis- and non-dialysis-dependent CKD, is ongoing. In January, the Company responded to theEuropean Medicine Agency’s (EMA) 120-day questions. In April, Keryx requested a 2-month extension to provide adequate time to respond to the final questions from the EMA and expects a mid-2015 opinion from the Committee for Medicinal Products for Human Use (CHMP) and subsequent regulatory approval from the EMA.
First Quarter Ended March 31, 2015 Financial Results
At March 31, 2015, the Company had cash and cash equivalents of $168.8 million. In January 2015, the Company completed an underwritten public offering of common stock, which provided proceeds to the Company of approximately $118.3 million, net of underwriting discounts and offering expenses of approximately $8.2 million.
The net loss for the first quarter ended March 31, 2015 was $27.7 million, or $0.28 per share, compared to a net loss of $13.5 million, or $0.15 per share, for the comparable quarter in 2014, representing an increase in net loss of $14.2 million. In the first quarter ended March 31, 2015, the Company recognized total revenue of approximately $1.2 million, which included net U.S. Auryxia product revenue of$422,000 and license revenue of $753,000 associated with royalties received on ferric citrate sales in Japan. The first quarter ended March 31, 2014 included $10.0 million of license revenue related to a non-refundable milestone payment for the achievement of marketing approval in Japan by our partner, Japan Tobacco Inc. and Torii Pharmaceutical Co., Ltd (JT and Torii). The net loss for the first quarter endedMarch 31, 2015 included $4.3 million of stock-based compensation related to the recording of the fair value of equity awards granted.
For the first quarter ended March 31, 2015, research and development expenses decreased by $6.8 million to $9.6 million, as compared to $16.4 million for the three months ended March 31, 2014. The change was due to a $2.9 million decrease in regulatory and clinical study expenses related to Auryxia and a $3.8 million decrease in expenses related to the manufacturing of Auryxia, which were expensed in the comparable period in 2014 and primarily capitalized as inventory following the approval of Auryxia inSeptember 2014. The three months ended March 31, 2015 included $2.0 million of expenses for medical affairs activities, as the medical affairs group will increasingly be supporting additional research and development of Auryxia in the post-approval setting and, therefore, the associated costs are included in research and development expenses as of January 2015. The three months ended March 31, 2014, included a $2.0 million one-time milestone payment to the licensor of Auryxia for JT and Torii’s achievement of the Japanese marketing approval milestone in January 2014.
For the first quarter ended March 31, 2015, selling, general and administrative expenses increased by$11.6 million to $18.9 million, as compared to $7.3 million for the three months ended March 31, 2014. The increase was primarily related to a $10.2 million increase in commercial activities and associated personnel costs related to the commercialization of Auryxia, which included a $1.7 millionincrease in associated stock-based compensation expense related to the recording of the fair value of equity awards granted. (Original Source)
Shares of Keryx closed last Friday at $10.9 . KERX has a 1-year high of $18.48 and a 1-year low of $10.33. The stock’s 50-day moving average is $12.32 and its 200-day moving average is $13.70.
On the ratings front, Keryx has been the subject of a number of recent research reports. In a report issued on April 20, Stifel Nicolaus analyst Stephen Willey reiterated a Buy rating on KERX, with a price target of $17, which represents a potential upside of 56.0% from where the stock is currently trading. Separately, on March 5, Maxim Group’s Jason Kolbert reiterated a Buy rating on the stock and has a price target of $32.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Stephen Willey and Jason Kolbert have a total average return of 35.4% and 3.3% respectively. Willey has a success rate of 64.0% and is ranked #28 out of 3590 analysts, while Kolbert has a success rate of 41.6% and is ranked #1072.
In total, one research analyst has assigned a Hold rating and 6 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $10.9 which is 130.9% above where the stock closed last Friday.
Keryx Biopharmaceuticals Inc is a biopharmaceutical company focused on therapies for patients with renal disease. Its first product is the AuryxiaTM (ferric citrate), an oral, absorbable iron-based compound.