The FDA has approved Keryx Biopharmaceuticals, Inc.’s (KERX) ferric citrate to control serum phosphorus levels in patients suffering from chronic kidney disease (CKD) on dialysis. However, the news adversely affected the stock price, which fell more than 5%, as the drug was approved with several warnings.
Ferric citrate is not recommended for patients with an accumulation of iron (hemochromatosis) in their body. Treatment with ferric citrate may also lead to increased iron in storage sites. Moreover, the safety of using the drug is yet to be established in case of patients suffering from gastrointestinal bleeding or inflammation. Such limitations restrict the patient population.
Additionally, the FDA has also rejected the company’s proposed brand name, Zerenex, for the drug. Keryx is now working with the U.S. regulatory body regarding a new brand name for the drug. The company expects to have a new brand name before the launch of the drug within the next 12 weeks.
The drug was approved on the basis of results from Keryx’s phase III program on ferric citrate. Results showed that ferric citrate successfully reduced serum phosphorus levels to well within the guidelines laid down by the Kidney Disease Outcomes Quality Initiative.
We remind investors that ferric citrate is already approved in Japan under the trade name Riona, for the treatment of patients suffering from all stages of CKD. Keryx has also filed for the drug in the EU as a treatment of hyperphosphatemia in patients suffering from CKD. A final decision on the approval of the drug in the EU is expected by mid 2015.
The company intends to start a phase III pivotal study in the U.S. on ferric citrate shortly for the treatment of iron deficiency anemia in patients suffering from stage 3 to 5 non-dialysis dependent CKD. Top-line results from the study are expected by the end of next year. The company plans to file a supplemental New Drug Application for the drug in 2016 in the event of the results from the study being positive.
Our Take
Apart from ferric citrate, Keryx has no approved products. As a result the company is primarily dependent on ferric citrate for growth. Needless to say, ferric citrate’s approval in the U.S. is a major positive for the company. However, the limitations and warnings have restricted its sales potential. We expect investor focus to stay on the drug going forward.
Keryx Biopharmaceuticals currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the healthcare sector include Gilead Sciences Inc. (GILD), Allergan Inc. (AGN) and Endo International (ENDP). All three carry a Zacks Rank #1 (Strong Buy).
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