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Keryx (KERX) Q3 Loss Wider than Expected, Restores Supply

ANIK CBM KERX INFI

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Keryx Biopharmaceuticals Inc. (KERX - Free Report) reported third-quarter 2016 loss of 39 cents per share, which was significantly wider than both the Zacks Consensus Estimate of 22 cents and the year-ago loss of 29 cents.

 

On the other hand, revenues came in at $6.3 million in the quarter, above the Zacks Consensus Estimate of $5.8 million. Reported revenues also improved from the prior-year figure of $4.2 million.

Quarter in Details

Net sales of Auryxia in the U.S. were $5.1 million, up 59.4%. The drug’s prescriptions amounted to approximately 9,700 in the reported quarter.

License revenues came in at $1.3 million, up 30% year over year. Keryx earns license revenues from royalties on net sales of Riona (Japan trade name for Auryxia) from its Japanese partners, Japan Tobacco Inc. and Torii Pharmaceutical Co. Ltd.

Research and development expenses declined 22.3% year over year to $8.7 million primarily due to a decrease in costs associated with the company’s recently completed phase III study on ferric citrate (the compound name for Auryxia in additional indications).

Selling, general and administrative expenses were $20.2 million, up 1.5%.

Meanwhile, Keryx is working on expanding Auryxia's label to include the treatment of iron-deficiency anemia stage III–V non-dialysis dependent chronic kidney disease. The company expects to file a supplemental new drug application (sNDA) with the FDA as soon as it receives an agreement from the FDA for its pediatric clinical plan.

Auryxia Supply Update

On a separate press release, Keryx announced that the FDA has granted approval to its application for a second drug product manufacturer, Patheon Manufacturing Services, for supplying Auryxia, as a finished product. Following the approval, the company has rebuilt supply and expects to make Auryxia available to wholesalers.   

We remind investors that on its last quarterly earnings call, Keryx had announced an imminent interruption in the supply of Auryxia. The company stated that its contract manufacturer had issues related to the conversion of the active pharmaceutical ingredient into the finished product, leading to a disruption in the supply of Auryxia.

Our Take

Keryx’s third-quarter results were disappointing, with the company reporting a wider-than-expected loss. Nevertheless, revenues surpassed estimates. Approval for a second drug product manufacturer should solve the supply issues related to Auryxia.

Going forward, we expect investors to focus on further updates from the company related to its submission of a sNDA for a potential label expansion of Auryxia.

KERYX BIOPHARMA Price, Consensus and EPS Surprise

 

KERYX BIOPHARMA Price, Consensus and EPS Surprise | KERYX BIOPHARMA Quote

Zacks Rank & Key Picks

Keryx currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. (ANIK - Free Report) , Cambrex Corporation (CBM - Free Report) and Infinity Pharmaceuticals, Inc. (INFI - Free Report) . Each of these stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates have increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 33.14%.

Cambrex’s earnings estimates have increased from $2.46 to $2.55 for 2016 and increased from $2.91 to $3.06 for 2017 over the last 60 days. The company has posted a positive earnings surprise in three of the four trailing quarters with an average beat of 19.78%.

Infinity posted a positive earnings surprise in all of the four trailing quarters with an average beat of 67.62%.

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