Keryx Biopharmaceuticals (NASDAQ:KERX), a biopharmaceutical company focused on bringing innovative therapies to market for people with renal disease, today announced its financial results for the third quarter ended September 30, 2015. The company also reviewed its commercialization progress with Auryxia, corporate milestones, cash position and upcoming activities, including:
- Auryxia U.S. commercialization: Auryxia prescription volume increased approximately 45 percent from second quarter to third quarter.
- Potential geographic expansion: Strong label granted for marketing authorization in E.U.; commercial strategy is to identify a partner to access the European market.
- Potential label expansion: Enrollment completed in July in Phase 3 pivotal program in pre-dialysis, iron deficiency anemia; expect to announce top-line safety and efficacy results early in the second quarter of 2016.
- Financial: Pro-forma cash position of $227.2 million at September 30, 2015.
“In the third quarter, we achieved unrestricted reimbursement access to the majority of phosphate binder patients and our sales force has begun to leverage that to drive increased breadth and depth of prescribing in their target accounts,” said Greg Madison, chief executive officer of Keryx. “Moving forward, our top priorities are to execute on the Auryxia launch in the U.S., complete the Phase 3 pivotal study evaluating ferric citrate for the treatment of iron deficiency anemia in pre-dialysis patients, and prepare the U.S. regulatory submission seeking label expansion. All of these efforts underscore our commitment to improve the lives of patients with chronic kidney disease.”
Auryxia U.S. Commercialization
- Net U.S. Auryxia product sales for the third quarter were approximately $3.2 million, based on approximately 5,350 Auryxia prescriptions.
- 26 percent of previously non-prescribing physicians who received a starter kit since mid-May 2015 have converted to revenue generating Auryxia prescribers.
- Keryx is on track to complete its sales force expansion initiative by end of year. The expansion will enable increased reach and frequency of contact with physicians, dieticians and the entire dialysis care team.
- The upcoming American Society of Nephrology, being held November 3 – 8, is expected to include three Auryxia-related poster presentations that provide further understanding of Auryxia’s safety profile, efficacy controlling serum phosphorus levels, and effect on iron parameters.
Product Expansion Opportunities
- In September, Keryx announced that the European Commission approved Fexeric® (ferric citrate coordination complex) for the control of serum phosphorus levels, or hyperphosphatemia, in adults with non-dialysis and dialysis-dependent chronic kidney disease (CKD).
- Keryx announced its commercial strategy for the E.U. is to partner, either through a pan-European partnership or regional partnerships.
- Dosing continues in the Phase 3 study evaluating ferric citrate in people with stages 3-5 non-dialysis dependent CKD and iron deficiency anemia, who have previously not responded or were intolerant to oral iron therapy. The company expects to complete the study inJanuary 2016 and release top-line safety and efficacy results early in the second quarter of 2016. If this study is successful, Keryx intends to submit for approval with the FDA in the third quarter of 2016.
- Keryx added $125 million to its cash position as a result of previously announced private placement of convertible senior notes earlier this month. The company also implemented a cost reduction plan to re-align its operating expense structure.
THIRD QUARTER FINANCIAL RESULTS
“We will continue to closely manage our financial profile, which has been designed to ensure we are financially strong as we work to position Auryxia as a market leader,” said Scott Holmes, chief financial officer of Keryx. “With our increased cash position and re-aligned cost structure, we are well positioned to take the Auryxia franchise to cash flow positive.”
At September 30, 2015, the company had pro-forma cash and cash equivalents of $227.2 million.
Total revenues for the third quarter ended September 30, 2015 were approximately $4.2 million, compared to $0.3 million in total revenue in the third quarter of 2014. Total revenues for the third quarter of 2015 includes the following:
- Net U.S. Auryxia product sales of $3.2 million, and
- License revenue of $1.0 million associated with royalties received on ferric citrate net sales from Keryx’s Japanese partner, Japan Tobacco Inc. and Torii Pharmaceutical Co. Ltd during the second quarter of 2015.
Cost of goods sold for the third quarter ended September 30, 2015 was $3.1 million, which includes$2.6 million related to manufacturing charges incurred as a result of not fully utilizing planned production at certain of the company’s third party manufacturers.
Research and development expenses for the third quarter ended September 30, 2015 were $11.2 million compared to $19.1 million for the three months ended September 30, 2014. The decrease was primarily due to a $4.4 million decrease in expenses related to the manufacturing of Auryxia, which were primarily expensed in the comparable period in 2014 and have been capitalized as inventory since the approval of Auryxia in September 2014.
Selling, general and administrative expenses for the third quarter ended September 30, 2015 were$20.2 million, as compared to $16.4 million for the three months ended September 30, 2014. The increase was primarily related to a $3.5 million increase in sales expense related to the commercialization of Auryxia.
Net loss for the third quarter ended September 30, 2015 was $30.7 million, or $0.29 per share, compared to a net loss of $35.3 million, or $0.38 per share, for the comparable quarter in 2014.
2016 Financial Guidance
Keryx anticipates that cash operating expenses in 2016 will be in the range of $87 million to $92 million. Non-cash operating expenses and cost of goods sold are not included in guidance. Operating expenses will be primarily directed towards U.S. commercialization and label expansion activities for Auryxia.
Keryx plans to provide additional full year 2016 financial guidance, including guidance for net U.S. Auryxia product sales in early 2016. (Original Source)
Shares of Keryx Biopharmaceuticals closed yesterday at $4.00. KERX has a 1-year high of $17.97 and a 1-year low of $3.04. The stock’s 50-day moving average is $4.09 and its 200-day moving average is $7.85.
On the ratings front, Keryx Biopharmaceuticals has been the subject of a number of recent research reports. In a report issued on October 19, FBR analyst Christopher James reiterated a Hold rating on KERX, with a price target of $10, which represents a potential upside of 150.0% from where the stock is currently trading. Separately, on October 16, Maxim Group’s Jason Kolbert reiterated a Buy rating on the stock and has a price target of $11.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Christopher James and Jason Kolbert have a total average return of -29.7% and -15.4% respectively. James has a success rate of 21.7% and is ranked #3766 out of 3808 analysts, while Kolbert has a success rate of 29.2% and is ranked #3803.
The street is mostly Neutral on KERX stock. Out of 8 analysts who cover the stock, 4 suggest a Hold rating , 3 suggest a Buy and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $3.00, which reflects a potential downside of -25.0% from last closing price.
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.