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What: Shares of Keryx Biopharmaceuticals (NASDAQ:KERX), a biopharma developing therapies for patients with kidney disease, dropped by approximately 34% at the start of trading today after the company pulled its full-year forecast as a result of supply issues for its only approved drug, Auryxia. Auryxia is a treatment for high serum phosphorus levels in patients with chronic kidney disease who are on dialysis. 

So what: This supply issue is only the latest hiccup in Keryx's quest to steal market share away from Sanofi's (NASDAQ:SNY) rival drugs Renagel and Renvela. For instance, Auryxia generated a meager $8.3 million in net U.S. sales for the second quarter of 2016, compared to a far more impressive $232 million (at current exchange rates) for Sanofi's market-leading drugs during the same period -- despite Auryxia being on the market for over a year and a half at this point. Put simply, Keryx doesn't appear to be convincing doctors to switch patients to its drug at a significant rate, and a supply interruption could make things even worse moving forward. 

Now what: Per its press release, Keryx expects this supply issue for Auryxia to be resolved sometime during the fourth quarter of 2016. That's not exactly a reassuring assessment of the situation, and investors should probably expect short-sellers to pile into this stock as a result. After all, there aren't any major near-term catalysts on the calendar to scare off short-sellers right now, perhaps aside from the forthcoming supplemental NDA for Auryxia as a treatment for iron deficiency anemia in stages 3-5 non-dialysis dependent chronic kidney disease (CKD) patients. As such, bargain hunters may want to steer clear of this falling knife for the time being.

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