What: Shares of Keryx Biopharmaceutical (NASDAQ:KERX), a drug developer with a focus on creating products that help treat renal diseases, were up more than 10% in early-morning trading after the company announced it is raising capital via a convertible senior note offering. 

So what: The company has announced that it is selling $125 million in zero-coupon convertible notes to The Baupost Group that mature in October 2020. If The Baupost Group chooses to exercise the notes, they will convert into shares of Keryx's common stock at a price of $3.74 per share. Keryx stated that, when including this offering, it now has a cash position of approximately $225 million. 

Keryx has also announced that it will be increasing the number of directors on its Board to eight, and The Baupost Group now has the right to appoint a director of their choosing to Keryx's Board by the end of this year. 

In addition to the note offering, the company announced that it will be implementing a cost-reduction strategy to right side its operating expenses, which the company believes will reduce its operating costs in 2016 to between $87 million and $92 million.

Now what: The Baupost Group, which was founded by the legendary investor Seth Klarman, has been an investor in Keryx's stock for quite some time, and it currently holds roughy 25% of all of the common shares outstanding. If Baupost chooses to convert its investment into common shares down the road, its ownership position could certainly grow substantially from here, as Keryx's current market capitalization, even after today's big move, is still only about $430 million in total. This investment certainly shows that Baupost has some faith in the future prospects of Keryx, so I think the market was correct to bid up shares today.

Between this capital infusion, the European approval, and the 50% increase in the sales force, Keryx may finally have everything it needs to take meaningful market share away from Renvela, which is something that Sanofi (NASDAQ:SNY) investors should probably keep an eye on.

The Baupost Group is certainly bullish on the future prospects of Keryx; otherwise, they wouldn't have made this new investment. It therefore might not be a bad idea to piggyback alongside a great investor, and buy a few shares of this beaten-up biopharma.