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Keryx (KERX) Loss Wider Than Expected in Q4, Stock Down

Zacks

Keryx Biopharmaceuticals Inc. KERX reported a loss of 26 cents per share in the fourth quarter of 2017, wider than Zacks Consensus Estimate of a loss of 18 cents. The loss was however narrower than the year-ago loss of 32 cents.

Revenues came in at $18.7 million in the quarter, beating the Zacks Consensus Estimate of $17 million and surpassed the prior-year figure of $9.5 million.

Keryx‘s only marketed drug, Auryxia, is already approved to control serum phosphorus levels in adults with chronic kidney disease on dialysis.

In November 2017, the FDA approved an additional indication of Auryxia to treat adults with iron deficiency anemia (“IDA”) and chronic kidney disease, not on dialysis. With the latest approval, Auryxia can now be prescribed to treat two chronic kidney complications.


Quarter in Detail

Auryxia net product sales in the United States came in at $17.3 million, up from $8.2 million in the prior-year quarter. Sales were up 27% sequentially. Sales in the quarter were driven by strong prescription demand. Auryxia’s prescription increased 22% sequentially to 30,400 in the quarter, which represents 6.5 million Auryxia tablets.

License revenues came in at $1.4 million, up 7.7% year over year. Keryx earns license revenues from royalties on net sales of Riona (Japan's trade name for Auryxia) from its Japanese partners.

Research and development expenses increased to $12.6 million in the quarter from $6.2 million in the year-ago quarter, primarily owing to manufacturing and clinical activities to aid Auryxia’s long-term growth.

Selling, general and administrative expenses were $28.8 million, up 25% backed by continued commercialization of Auryxia and preparations related to the launch of the drug for IDA.

The company did not provide any guidance for 2018 as the company waits to see how Auryxia is adopted by the patients in the IDA setting.

The uncertainty surrounding the expected contribution from the IDA indication probably hurt investor sentiments and thus shares of the company fell by about 9.3%. Over a year, Keryx’s share price has declined 22.5%, as against the industry’s growth of 1.4%.

2017 Results

In 2017, Keryx reported loss of $1.43 per share narrower than the loss of $1.52 in 2016.

Revenues in 2017 were $60.6 million, up 89.6% year over year.

Our Take

Keryx’s loss in the fourth quarter was wider than expected but sales beat estimates. The FDA approval for Auryxia for an additional indication might boost sales of the company, given that the IDA market holds great potential.

Keryx Biopharmaceuticals, Inc. Price, Consensus and EPS Surprise

Keryx Biopharmaceuticals, Inc. Price, Consensus and EPS Surprise | Keryx Biopharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

Keryx carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the health care space are XOMA Corp XOMA, Exelixis EXEL and Sucampo Pharma SCMP. All of them carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 in the last 60 days. The company pulled off a positive earnings surprise in one of the last four quarters, with an average beat of 47.92%. Share price of the company skyrocketed 556.9% over a year.

Exelixis’ earnings per share estimates have moved up from 72 cents to 77 cents for 2018 in the last 60 days. The company delivered positive earnings surprise in the last four quarters, with an average beat of 572.92%. Share price of the company surged 37.6% over a year.

Sucampo’s delivered a positive earnings surprise in three of the last four quarters, with an average beat of 15.63%. Share price of the company surged 55.2% over a year.

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