Shares of Keryx Biopharmaceuticals (NASDAQ:KERX), a drug developer with a focus on renal disease, got a haircut during the month of July: The stock lost more than 18% of its value, according to data from S&P Capital IQ. During the month, Keryx investors were treated to updates that brought both good news and bad news.

KERX Chart

So what
Keryx announced that the European Medicine Agency's Committee for Medicinal Products for Human Use adopted a positive opinion on Keryx's drug Fexeric.

Fexeric, which helps to control the phosphorous levels of patients who have chronic kidney disease and are on dialysis, is already approved for sale in the U.S. under the brand name Auryxia. Keryx should hear an official decision on the drug's approval within a few months time and expects to have a strategy for a European commercial launch in place by the end of the year.

While this was certainly good news for investors, Keryx stock still managed to drop mainly due to an analyst report issued by Roth Capital that gave two reasons for shareholders to be cautious.

First, the report noted that manufacturing capacity issues are likely to act as a near-term barrier to the company's expansion effort into Europe. Second, initial sales for Auryxia in the U.S. have been disappointing, which has increased the company's trepidation about the drug's sales potential.  

These factors caused the analyst to drop his price target for the stock from $23 all the way down to $11, and the stock dropped as a result. 

Now what
Auryxia prescriptions do appear to have flatlined since May, which has worried investors.

Source: Bloomberg Intelligence.

However, a drop in prescriptions should not have taken investors completely by surprise, as management warned us during the company's first-quarter conference call that it would offer samples of Auryxia instead of vouchers, which would cause a disruption in weekly reported prescription data since samples do not count as new prescriptions, like vouchers do.

While the switchover to sampling could remain a short-term headwind against weekly sales figures, management believes it is a good move to build awareness of Auryxia in the long term and ultimately drive higher sales growth.

I don't think we have enough data yet to make a decision either way, and with the company set to report second-quarter earnings later this week, I think it's smart to wait for an update from management to see whether the strategy is working before we can call this dip a buying opportunity.