Shares of renal diseases-focused Keryx Biopharmaceuticals (KERX) roared back to life in September, vaulting more than 28% during the month, according to data from S&P Global Market Intelligence.
There wasn't a lot of news released during the month to justify such a strong move. In fact, the only press release to come out of the company was an announcement that its management would be presenting at two investor healthcare conferences.
Judging by the stock's strong response, those presentations must have gone quite well. Perhaps that's because they gave Keryx's management team a chance to shed more light on the manufacturing issues that were causing a supply disruption for its one and only drug, Auryxia.
As a reminder, when the company announced the supply issues, it also abandoned its financial guidance for the year. In turn, shares plunged 44% in August.
The only thing that matters from here is how quickly the company can fix the supply issue and right the ship. Thankfully, it does appear that demand for Auryxia is starting to grow. Last quarter the company reported new prescriptions growth of 44% over the year-ago period, which hints that providers are starting to feel more comfortable using the drug.
However, we don't know if the company will be able to sustain that momentum given the supply disruption. After all, Auryxia faces some stiff competition from Sanofi's Renagel and Renvela. Sanofi rang up about $232 million in sales of those two drugs last quarter, so it has every incentive to convince providers to stick with a therapy that they already know well.
I'd advise potential investors to stay on the sidelines until we have proof that this supply issue is behind the company and that Auryxia's growth trajectory remains on track. Keryx said that everything should be back to normal by the fourth quarter, so it won't be long until we have new information to work with.