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Keryx (KERX) Loss Narrower than Expected in Q1, Sales Beat

Zacks

Keryx Biopharmaceuticals Inc. KERX reported a loss of 18 cents per share in the first quarter of 2018, narrower than Zacks Consensus Estimate of a loss of 19 cents. The loss was also narrower than the year-ago loss of 21 cents.

Revenues came in at $21.8 million in the quarter, beating the Zacks Consensus Estimate of $21.7 million and surpassed the prior-year figure of $11.8 million.

Keryx’s only marketed drug, Auryxia, is already approved to control serum phosphorus levels in adults with chronic kidney disease on dialysis. It is also approved to treat adults with iron deficiency anemia (“IDA”) and chronic kidney disease, not on dialysis (approval received in November 2017). Thus, 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 $20.6 million, up 96% from $10.5 million in the prior-year quarter. Sales in the quarter were driven by increase in Auryxia prescription and tablet demand. Auryxia’s prescription increased to 34,600 in the quarter, which represents 6.9 million Auryxia tablets, compared with about 15,800 prescriptions and 3.4 million Auryxia tablets in the first quarter of 2017.

The company launched Auryxia for the treatment of IDA in adults living with chronic kidney disease, not on dialysis, late in the fourth quarter of 2017.

License revenues came in at $1.1 million, down 15.4% 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 $8.4 million in the quarter from $6.8 million in the year-ago quarter, primarily owing to higher non-cash stock compensation expense in the quarter.

Selling, general and administrative expenses were $25.8 million, up 11.7%.

Over a year, Keryx’s shares have gained 12.9%, as against the industry’s decline of 11.4%.

The company exchanged its $125 million convertible senior notes due 2020 issued in 2015 and raised an additional $10 million in a private transaction with funds managed by The Baupost Group L.L.C. As part of the exchange, the company issued new $164.746 million convertible senior notes due 2021. The new notes allow the company to pursue an asset-based revolving line of credit facility, for up to $40 million, as a non-dilutive financing source that could leverage the company’s growing asset base.

Zacks Rank & Stocks to Consider

Keryx carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the same space worth considering are Ligand Pharmaceuticals LGND, Enanta Pharmaceuticals, Inc. ENTA and Catabasis Pharmaceuticals CATB. While Ligand sports a Zacks Rank #1 (Strong Buy), Enanta and Catabasis carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up from $4.20 to $4.43 for 2018 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters, with an average beat of 31.79%. The company’s shares have rallied 25.4% year to date.

Enanta’s earnings per share estimates have moved up from 86 cents to $2.48 for 2018 over the past 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 372.02%. The stock has rallied 68.2% so far this year.

Catabasis’ loss estimates narrowed from $1.09 to 90 cents for 2018 and from $1.76 to $1.43 for 2019, in the past 60 days. The company came up with a positive earnings surprise in all the preceding four quarters, with an average beat of 14.56%. The stock has rallied 9.4% so far this year.

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