Why Keryx Biopharmaceuticals, Inc. Shares Swooned

Keryx shares dive after the company reports disappointing first-quarter results. Find out if this dip is a buying opportunity or a reason to stick to the sidelines.

May 8, 2014 at 1:08PM

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.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers