Why Keryx Biopharmaceuticals, Inc. Shares Swooned

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Keryx Biopharmaceuticals (NASDAQ: KERX  ) , a biopharmaceutical company focused on developing products to treat renal disease, fell as much as 15% after reporting weaker-than-expected first-quarter results.

So what: For the quarter, Keryx reported licensing revenue of $10 million from JT/Torii, the company's marketing partner for Zerenex, a treatment for hyperphosphatemia in patients with chronic kidney disease on dialysis, in Japan. This compares favorably with the $7 million in licensing revenue recorded in the year-ago quarter. Net loss for the quarter widened to $13.5 million, or $0.15 per share, from just $2.1 million, or $0.03 in Q1 2013. Higher expenses tied to its expected launch of Zerenex were the main reason losses widened. Comparatively, Wall Street anticipated a much narrower loss of just $0.08 per share. Also, per Keryx's press release, it ended the quarter with $155.1 million in cash, cash equivalents, and short-term investments following a $107.6 million cash raise in the first quarter.

Now what: Simply put, we're getting close to crunch time for Keryx with its PDUFA decision date on Zerenex right around the corner (June 7), and investors are a little skittish, to say the least. Despite strong clinical results there's no such thing as a guaranteed approval when it comes to the FDA, and Keryx's recent dilutive offerings to raise cash for the Zerenex launch combined with its higher operating costs pushed the company's loss well beyond what investors had expected. As we've seen in recent years, getting a drug approved is only half the battle. Being able to effectively market that drug and turn a profit is an entirely different uphill battle. Considering that Keryx shares have already had a monstrous run higher, I'd be perfectly content sticking to the sidelines until well after its PDUFA date and, if approved, even waiting out a few initial quarters of sales to get a bead on its initial acceptance.

Keryx shares have soared over the past year, but even it could have a tough time keeping pace with this top stock over the long run
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year, his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252%, and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Read/Post Comments (0) | 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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2949650, ~/Articles/ArticleHandler.aspx, 9/3/2015 5:55:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated Moments ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 4:00 PM
KERX $5.06 Down -0.97 -16.09%
Keryx Biopharmaceu… CAPS Rating: **