Monday, September 08, 2014

Keryx Biopharmaceutical's Kidney Drug Approved - What Now?

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 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.”

Editor David J Phillips no longer holds a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

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