Keryx Biopharmaceuticals, Inc. (KERX-$17.01) announced that the FDA approved Ferric
Citrate (formerly known as Zerenex) for the control of elevated serum
phosphorus levels in patients with chronic kidney disease (CKD) on dialysis.
The share price declined more than 5% on the news, however, on investor
concerns that an unexpected safety warning – the drug package label must
include the potential risk of “iron-overload” – could slow market share uptake.
Given hemochromatosis is a known risk with the iron-based
phosphate binding, the sell-off had more to do with a “profit-from-the-news”
event than the putative warning label.
Premium subscribers at PropThink.com were one-step ahead of
Wall Street, having been told earlier: “Given
uncertain commercialization prospects for the
oral phosphate binder Zerenex in obtaining meaningful market share in the
dialysis-treatment space due to managed care and
competitive risks, investors might look to lock in existing gains with a
suggested options hedge strategy – at least until a clearer picture emerges on
the potential use of Zerenex in managing elevated serum phosphorus levels and
iron deficiency anemia in non-dialysis dependent (NDD) CKD patients.”
Read more at
PropThink: BOOKING GAINS ON KERYX AND WHAT TO LOOK FOR
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