Human blood from a patient with anemia. Image source: Dr. Graham Beards via Wikimedia.

What: Keryx Biopharmaceuticals (NASDAQ:KERX) is up about 13% at 1:00 p.m. ET after releasing phase 3 data for Auryxia (ferric citrate) in patients with chronic kidney disease that aren't on dialysis.

So what: In the study, 52% of patients who got Auryxia had a 1 g/dL increase in hemoglobin compared to 19% of patients who received the placebo. Hemoglobin level is a measure of anemia, a common complication of chronic kidney disease, caused by low iron levels. The ferric part of ferric citrate refers to iron, so it's not surprising Auryxia would increase iron levels, and thus increase hemoglobin levels.

Keryx plans to submit an application to the Food and Drug Administration to market Auryxia for patients with chronic kidney disease who aren't on dialysis in the third quarter, putting an approval for the expanded indication next year.

Now what: Auryxia is already approved in patients with chronic kidney disease who are on dialysis, but adding patients who aren't dialysis-dependent increases the potential market by 1.6 million people in the U.S.

While that sounds like a lot, the current indication allows the drug to be used in about 450,000 patients, and Keryx Biopharmaceuticals sold just $4.8 million worth of the drug in the fourth quarter. Quadrupling that isn't going to make Auryxia a blockbuster.

Today's data and the eventual approval is a good first step, but the key for Keryx Biopharmaceuticals will be to convince doctors that Auryxia is better than iron supplements. While they're not FDA-approved to treat iron-deficient anemia in non-dialysis chronic kidney disease, the iron supplements can be had at a fraction of the price, making it challenging for Keryx to capture a large fraction of the market.

Of course, at a market cap under $550 million, it doesn't look like investors are expecting booming sales, so there's more upside from a successful launch in non-dialysis chronic kidney disease than downside if Auryxia produces lackluster sales, like it has in dialysis patients.

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