Keryx Biopharmaceuticals KERX reported a loss of 44 cents per share in the fourth quarter of 2014, much wider than both the Zacks Consensus Estimate of a loss of 38 cents and the year-ago quarter figure of 21 cents.
Keryx generated $0.6 million of license revenues in the fourth quarter of 2014.
Quarter in Detail
Research and development expenses decreased 44.4% from the year-ago quarter to $10.5 million primarily due to the capitalization of inventory.
In Sep 2014, the FDA approved Keryx’s Auryxia for controlling serum phosphorus levels in patients suffering from chronic kidney disease (CKD) on dialysis. The approval was however accompanied by a few warnings. The drug was launched by the company during the end of 2014.
General & administrative expenses came in at $34.0 million, up from $7.3 million in the year-ago quarter primarily due to increase in pre-commercial/commercial activities and associated personnel costs in preparation for the commercialization of Auryxia.
2014 Results
License revenues came in at $10.8 million in 2014, up from $7 million in 2013. Annual loss came in at $1.23 per share, much wider than the loss of 58 cents per share in the year-ago quarter.
Pipeline Update
We remind investors that Keryx has already submitted a marketing authorisation application filing to the European Medicines Agency (EMA) seeking the approval of Auryxia for the treatment for hyperphosphatemia in patients with CKD, including dialysis- and non-dialysis-dependent CKD. The review process is ongoing and Keryx has responded to the EMA’s 120-day questions and expects a decision by mid-2015.
Keryx is also working on the label expansion of Auryxia. The company has initiated a phase III study on Auryxia for the treatment of iron-deficiency anemia in patients with stages III to V CKD, who have previously not responded to oral iron therapy in Sep 2014. The study will enroll 230 patients and will evaluate changes in hemoglobin levels as the primary endpoint. The study is expected to be completed by the end of 2015. Assuming successful completion, Keryx intends to file a supplemental new drug application with the FDA.
Our Take
The wider-than-expected loss incurred in the fourth quarter of 2014 was disappointing. Apart from Auryxia, Keryx currently has no other approved products. Hence, the company will have to depend solely on Auryxia for growth. However, quite a few limitations and warnings have restricted its sales potential substantially. We expect investor focus to remain on the drug, going forward.
Keryx Biopharmaceuticals currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the healthcare sector include Isis Pharmaceuticals ISIS, ANI Pharmaceuticals, Inc. ANIP and Lannett Inc. LCI. All three carry a Zacks Rank #1 (Strong Buy).
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