Adding KERX

I added Keryx today at an entry price of $6.67.

Keryx is developing a drug, Zerenex, for use in end stage renal disease patients (ESRD) who have elevated phosphorous levels (hyperphosphataemia). On January 28th KERX announced results from its phase three trial for Zerenex. The trial showed a statistically significant improvement phosphorus levels compared with a placebo in ESRD patients on dialysis. The drug also improved iron levels, reducing the need for intravenous iron and Erythropoiesis-Stimulating Agents.

Following the announcement the company’s share price advanced from $3.43 on Jan. 25 to a high of $9.98 on Jan. 31.

The company announced a public offering on Jan 30th at a price of $8.49.  On Feb. 1st a research firm (IPD Analytics) issued a report claiming “it is unclear whether Zerenex will qualify for New Chemical Entity (NCE) exclusivity or a Patent Term Extension (PTE) on one patent that covers Zerenex.” KERX has a patent on Zerenex that will block generic competition until 2017. The issue is whether they have the ability to extend that protection.

IPD claims that a previously approved product (Ferriseltz – a contrast agent) is close enough in structure to Zerenex to rule out the potential for NCE exclusivity. The Patent Office however can choose to grant PTE even in the absence of a NCE designation.

The share price seems to have found support at ~$6.55 – 35% off its recent high. It seems therefore that the market has absorbed the exclusivity issue and reduced the share price accordingly. With time there is a good chance that the price will see some upward movement based on anticipation of: refutation of the IP issues, news of a deal with a marketing partner, submission of the NDA.



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