FBR Analyst Comments on Keryx Biopharmaceuticals (KERX) Ahead of 2Q:16 Earnings Results


After an encouraging update from Keryx Biopharmaceuticals (NASDAQ:KERX) management about approved drug Auryxia, a phosphate binder designed to treat iron deficiency anemia (IDA) for non-dialysis dependent patients suffering from chronic kidney disease, FBR analyst Christopher James favorably previews the biotech company’s second-quarter results. James reiterates a Buy rating with a price target of $13.00, marking a nearly 74% increase from where the stock is currently trading.

James forecasts with a capture rate of 57%, growth of Auryxia prescriptions could realistically reach 12,565 for this quarter- a growth of 37% improvement compared to the first quarter’s growth of 16%. The analyst remains “encouraged by the strong growth across IMS scripts.” James feels so encouraged, in fact, that he now estimates revenues of $7.7 million, compared to his preceding, significantly lower estimate of $6.7 million.

Following discussion with management where James touched base about Keryx progress for this quarter, the analyst points to some key takeaways. First, the positive results of prescription growth are evidence of solid execution regarding the launch of this IDA therapy drug. Second, James predicts even further growth for commercial sales due to a price hike this second quarter, specifically a price increase of 9.9%. The analyst believes this will likely result in a tailwind translating to a subsequent surge in revenue for Keryx.

Lastly, James predicts, “Long term, we believe the expansion of Auryxia’s use in non-dialysis Iron Deficiency Anemia (IDA) patients has significant potential to increase prescribing physician awareness and expand the market opportunity for the drug.” For now, James holds great anticipation for this coming quarter, when he believes Keryx will submit a supplemental New Drug Application to file with the FDA.

As usual, we advise taking analyst notes with a grain of salt. They often successfully move the stock price, but you always need to take key things into perspective. According to TipRanks, Christopher James has a 36% success rate, averaging a loss of 15.1% in his annual returns.

TipRanks analytics exhibits KERX as a Moderate Buy. Of the 4 analysts polled in the last 3 months, 2 rate a Buy and 2 maintain a Hold. The 12-month average price target is $11.00, marking a 48% upside from where the shares last closed.

 

  • David Moskowitz

    90% of early stage kidney disease can be reversed, as I published in 2002 (see GenoMed.com). Even though nobody in healthcare or the media will tell you, the dialysis industry is on borrowed time.

    • brian1248

      Interesting, if true. I haven’t had the chance to read the article you cited yet. However, KERX has received approval in the EU for non-dialysis, and is looking to expand the label in the US as well for non-dialysis patients, and the patient population for non-dialysis treatment is quite large.

      Looking at a study ( http://www.ajkd.org/article/S0272-6386(03)50004-X/abstract?cc=y= ) that was contemporaneous (2003) with the one that you cite concerning the prevalence of CKD in various stages, they state “The prevalence of CKD in the US adult population was 11% (19.2 million).
      By stage, an estimated 5.9 million individuals (3.3%) had stage 1
      (persistent albuminuria with a normal GFR), 5.3 million (3.0%) had stage
      2 (persistent albuminuria with a GFR of 60 to 89 mL/min/1.73 m2), 7.6 million (4.3%) had stage 3 (GFR, 30 to 59 mL/min/1.73 m2), 400,000 individuals (0.2%) had stage 4 (GFR, 15 to 29 mL/min/1.73 m2), and 300,000 individuals (0.2%) had stage 5, or kidney failure.”