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Why Keryx Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Keryx Biopharmaceuticals (NASDAQ: KERX  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Keryx and see what CAPS investors are saying about the stock right now.

Keryx facts

Headquarters (founded)

New York (1997)

Market Cap

$610.6 million



Trailing-12-Month Revenue



CEO Ron Bentsur (since 2009)
CFO James Oliviero (since 2009)

Return on Capital (average, past 3 years)



$20.3 million / $0


Baxter International

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 26% of the 81 All-Star members who have rated Keryx believe the stock will underperform the S&P 500 going forward.

Earlier today, one of those Fools, zzlangerhans, succinctly summed up the Keryx bear case for our community:

Zerenex will almost certainly get first pass FDA approval. The issue with the drug is commercial potential and ability to compete against established phosphate chelators that happen to be going generic. Keryx bulls point to a dual benefit of iron supplementation, and the might have a valid point. However, a market cap close to [$700M] simply isn't justified without clearer indications that Zerenex will take significant market share. It's not surprising that Keryx raced to take advantage of the continuing speculative bubble in the stock with a large below-market financing.

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Read/Post Comments (6) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 31, 2013, at 10:15 AM, stepstocks wrote:

    Can you please expand on the LARGE BELOW-MARKET FINANCING. I thought the financing was at market not below........

  • Report this Comment On January 31, 2013, at 10:53 AM, goldozone wrote:

    currently have a market cap of $610.64 million and have been given a TD/TC ratio of 0.00 which is based on the statistical calculations of my formula. The company's fundamentals include a total of $20.25 million in total cash on its books (it should be noted that the company currently has a negative operating cash flow of $26.82 million and a negative free cash flow of $17.94 million), a book value of $0.23/share and absolutely no debt. That equates to a total debt-to-total-cash ratio of 0.00, which, in my opinion, is a good thing moving forward.

    Recent Key Developments

    January 28th: The company announced "that its Zerenex experimental kidney disease drug had met its late-stage trial goal of reducing phosphate levels in blood". As a result of meeting its late-stage trial goal Keryx also expects to submit a new drug application with the FDA and a marketing authorization application with the EMA for Zerenex in Q2.

    January 29th: Keryx announced a secondary offering to the tune of $55 million. In reference to the secondary offering the company noted, "we intend to use the net proceeds from the sale of our common stock to fund pre-launch/launch inventory build-up and select pre-commercial/commercial activities related to Zerenex, and other general corporate purposes".

  • Report this Comment On January 31, 2013, at 10:54 AM, goldozone wrote:

    Most of the market down today with RNN KERX up GLTA

  • Report this Comment On January 31, 2013, at 11:00 AM, goldozone wrote:


  • Report this Comment On January 31, 2013, at 2:57 PM, NoFoolInvest wrote:

    Keryx stock derseved runingup after good clinical trial results but I don't think Zenerex will be better than any phosphate binding drugs in the market in terms of efficacy and toxicity. It really doesn't matter even if Zenerex has higher iron benefit over the other drugs because iron supplement can be easily incorporated into dialysis to maintenance iron level in patients.

    Fosrenol from Shire which has broader implications than Zenerex has been sold in market for many years. Fosrenol is not only for lowering serum phosphorous level but also to treat chronic kidney disease. Its sales dropped in U.S. due to lower perscriptions and higher sales deductions. In 2011, Fosrenol generated sales of $166.9 million and royalties of $46.5 million. So Zenerex market potential is just overblown.

  • Report this Comment On January 31, 2013, at 9:53 PM, stepstocks wrote:

    NoFool i disagree...........You have been told why by kleeno on the other article. You still haven't listened to the CC have you?

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