Keryx Biopharmaceuticals (NASDAQ:KERX) just withdrew guidance for 2016 after an interrupted drug supply for its only pipeline drug, Auryxia, a drug created to treat dialysis patients with chronic kidney disease. On the heels of this negative news, Cowen analyst Boris Peaker reiterates a Neutral rating on KERX shares, not listing a price target.
In addition, the drug maker released second-quarter financial results, which came in ahead of both Peaker’s estimate of $7.2 million as well as the Street’s projection of $7.4 million with a solid $8.3 million in sales for Auryxia in the United States. The real trouble enters with a forecast that once ranged between $31 to $34 million now pulled entirely as a result of manufacturing issues causing a supply interruption for the drug.
Following a management update, Peaker believes sales will be halted by the end of this month and according to management, the analyst fears the supply will not be returned again until at least November of this year. Sales will hit zero once distribution supply is fully exhausted. Keryx will have to rely upon sales from the past month of July and only partial sales for this month, when the supply is expected to run out.
Peaker details his frustration, “We view the interruption as detrimental to a new brand that is working to build confidence with health care professionals and patients alike. Management does not anticipate providing 2017 sales guidance on the 4Q16 call due to supply limitation. However, the company noted that its pre-dialysis NDA for Auryxia, which is expected to be filed in 3Q16, will not be impacted by the supply interruption.” With everything riding on Auryxia, a halt in supply is not what investors had in mind for a progress update.
According to TipRanks, Boris Peaker is a 5-star ranked analyst, having reached a ranking of #409 out of 4,083 analysts. Peaker carries a 42% success rate and average 9.2% in his annual returns.
TipRanks analytics demonstrate Keryx Biopharmaceuticals is a Hold. 100% of 4 analysts who have offered recommendations for KERX shares in the last 3 months maintain a Hold. The price target is $7.00, marking a 48% upside.