Keryx reported a number of positive developments during March that captured the market's attention. Here's a review of the highlights:
- Keryx reported its fourth-quarter results. Total revenue rose 65% to $9.53 million, which is a solid result given that the company was still dealing with supply-disruption issues through November. That figure also squeaked by the $9.5 million in revenue that Wall Street was expecting.
- Management announced that the largest Medicare Part D plan sponsor in the U.S. has added Keryx's lead product Auryxia to its formulary. The company now believes that 85% of patients with Medicare and commercial insurance plans can access the drug.
- Keryx also announced that it made good on its promise to file a label-expansion claim for Auryxia with the U.S. Food and Drug Administration. The agency accepted the company's label-expansion application, for the treatment of iron deficiency anemia in patients with non-dialysis-dependent chronic kidney disease. The target date for a decision is Nov. 6, 2017.
Given the upbeat financial, reimbursement, and regulatory news, it is easy to understand why traders bid up shares during the period.
2017 is shaping up to be a make-or-break year for Keryx. Now that Auryxia's supply issues are firmly in the rearview mirror, the company can put all of its resources into growing sales. That should be an easier task now that payers are on board. Meanwhile, a potential label expansion into the non-dialysis market provides the company with a real shot at massively growing its addressable market. Finally, Keryx still hasn't announced its commercialization plans for Europe; a definitive plan to commercialize the drug in the region could be enough to get the markets excited.
On the downside, Keryx is still losing money hand over fist. Net loss in 2016 was $161 million, which means that the company's current cash balance of $112 million might not be enough to see it through the end of the year. That could hint that another capital raise could be on the way.
Overall, Keryx remains an interesting company that has bet the farm on the success of Auryxia. While the upside could be substantial if everything works out, I'd recommend that potential investors continue to approach this stock with caution.