Keryx Biopharmaceuticals (NASDAQ: KERX)

Keryx Biopharmaceuticals (KERX) focuses on the acquisition, development and commercialization of medically important, novel pharmaceutical products for the treatment of life-threatening diseases, including renal disease and cancer. Its products under development include Zerenex, an oral iron-based compound in phase II clinical development for the treatment of hyperphosphatemia in patients with end-stage renal disease in the United States and Japan; and KRX-0401, an oral anti-cancer agent in phase II clinical development that modulates Akt, and various other key signal transduction pathways, including the JNK and MAPK pathways, which are pathways associated with programmed cell death, cell growth, cell differentiation and cell survival. The Company also has an active in-licensing and acquisition program designed to identify and acquire additional drug candidates. It has strategic alliances with AEterna Zentaris Inc.; Panion & BF Biotech Inc.; Japan Tobacco Inc.; and Torii Pharmaceutical Co. Ltd. for the manufacture and commercialization of its products.

KERX was founded in 1998 and is based in New York, New York.

Source: Reuters.com, SEC Filings

Financial Summary

For the third quarter ended September 30, 2009, KERX posted a net income of $0.6 million, or $0.01 per diluted share. This compares to a net loss of $6.8 million, or $0.15 per diluted share, for the third quarter in 2008. The change in net income (loss) was primarily attributable to the recognition of $3.5 million in other revenue, related to the settlement of a dispute with the former licensor of Sulonex (sulodexide), in July 2009, over issues arising from the terminated license agreement, a $1.4 million decrease in other selling, general and administrative expenses, and a $1.4 million decrease in non-cash compensation expense related to equity grants.

Meanwhile, net income for the nine months ended September 30, 2009, was $15.1 million, or $0.31 per diluted share, compared to a net loss of $49.1 million, or $1.11 per diluted share, for the comparable period in 2008

KERX’s cash, cash equivalents, interest receivable and investment securities as of Sept. 30 totaled $41 million, as compared to $22.7 million at December 31, 2008. On Sept. 30, the Company announced it had completed a $20 million registered direct offering of common stock and warrants, which provided proceeds to the Company of approximately $18.4 million, net of offering costs of approximately $1.6 million which were paid subsequent to Sept. 30, 2009.

Source: http://investors.keryx.com/phoenix.zhtml?c=122201&p=irol-newsArticle&ID=1353211&highlight=

Financial Strength

Source: http://www.reuters.com/finance/stocks/analyst?symbol=KERX.W

Analyst Consensus

Analysts polled by Thomson Reuters rate shares of KERX a “Buy.”

Analyst Recommendations and Revisions

Source: http://www.reuters.com/finance/stocks/analyst?symbol=KERX.W

Source: http://www.reuters.com/finance/stocks/analyst?symbol=KERX.W

Investment Highlights

KERX is a biopharmaceutical company focused on the acquisition, development and commercialization of

medically important, novel pharmaceutical products for the treatment of life-threatening diseases, including

renal disease and cancer.

Products Under Development

Zerenex™

Zerenex™ (ferric citrate) is an oral, iron-based compound that has the capacity to bind to phosphate and form non-absorbable complexes. Zerenex is in phase II clinical development for the treatment of hyperphosphatemia (elevated serum phosphorous levels) in patients with ESRD in the United States and Japan.

In 2008, the Company completed the dosing in the 90-day toxicology study in rats and 16-week toxicology study in canines. These studies will assist the Company in designing the chronic toxicity studies, which the Company is planning, with its Japanese partner. In 2008, KERX completed its phase II high-dose tolerance and safety study.

KRX-0401

KRX-0401 (perifosine) is an oral anti-cancer agent that modulates Akt, and a number of other key signal transduction pathways, including the JNK and MAPK pathways, all of which are pathways associated with programmed cell death, cell growth, cell differentiation and cell survival. More than 1,800 patients have been treated with KRX-0401 in trials conducted both in the United States and Europe.

Seven phase I single agent studies of KRX-0401 have been completed; three in Europe by Zentaris and four in the United States by the United States National Cancer Institute (NCI), a department of the National Institutes of Health (NIH), as part of a Co-operative Research and Development Agreement (CRADA). Thirteen phase 1/2 studies of KRX-0401 in combination with other drugs have been conducted by KERX. The NCI has completed a number of phase II clinical trials studying KRX-0401 as a single agent, including studies in prostate, breast, head and neck, and pancreatic cancers, as well as melanoma and sarcomas. In total, nine NCI clinical trials have been conducted across these six tumor types.

Recent Developments

KERX has recently initiated a phase III registration clinical trial for KRX-0401 (perifosine), the Company’s PI3K/Akt pathway inhibitor, in relapsed and refractory multiple myeloma patients. The primary endpoint is progression-free survival and secondary endpoints include overall response rate, overall survival and safety. This trial is being conducted pursuant to a special protocol assessment (SPA) with the FDA. Additionally, the FDA has granted perifosine orphan drug and fast track designations in this indication.

KERX CEO Ron Bentsur said, “This study initiation represents a major milestone for the Company and demonstrates the capabilities of our internal clinical team. We would like to thank Dr Richardson, Dr Anderson and the other clinical investigators involved for their dedication to the perifosine multiple myeloma development program.”

A week prior to that announcement, the Company reported updated phase 1/2 data, including new survival data, on KRX-0401(perifosine) in the treatment of advanced multiple myeloma at the 51st annual meeting of the American Society of Hematology.  Commenting on the data, Dr. Paul Richardson, clinical director of the Jerome Lipper Multiple Myeloma Center, Dana-Farber Cancer Institute, stated, “Perifosine continues to demonstrate an impressive response rate and extended progression-free survival when combined with bortezomib and dexamethasone in a heavily pre-treated patient population. The new survival data reported is particularly encouraging with a median overall survival of more than two years. We look forward to pursuing this combination in the randomized phase III trial.”

On December 2, the Company announced it received FDA Fast Track designation for KRX-0401(perifosine) for the treatment of relapsed/refractory multiple myeloma, significantly reducing the FDA review time of a new drug application, and therefore can expedite the time to market for perifosine in multiple myeloma.

In addition to multiple myeloma, other clinical development efforts with perifosine are focused in the areas of colorectal cancer, renal cell carcinoma and other tumor types.

For its lead product candidate, KERX had previously announced the results of the phase II study of Zerenex (ferric citrate) for the treatment of elevated serum phosphorous levels, or hyperphosphatemia, in patients with end-stage renal disease (ESRD) on thrice weekly hemodialysis. The study was a multicenter, open-label clinical trial, which enrolled 55 patients. The primary objective of this study was to assess the tolerability and safety of Zerenex (ferric citrate) with doses ranging from approximately 1 gram per day to 12 grams per day. The FDA also reviewed the final reports for the 90-day rat and 16-week canine toxicology studies. The FDA indicated that the results of the phase II study and the toxicology studies were adequate to support entry into a phase III program. KERX is in the process of finalizing the phase III program in consultation with the FDA. The FDA also reviewed the protocols for the ongoing chronic toxicology studies (six-month rat and 42-week canine), which can be completed after the phase III program has begun.

Market Opportunity

A report provided by U.S. Renal Data System revealed that there are approximately 485,000 patients

with end-stage renal disease, or ESRD, in the U.S. This number is reportedly projected to increase 60% to approximately 785,000 by 2020. The report went on to say that majority of ESRD patients, more than 350,000, require dialysis.

According to the American Cancer Society estimates, there are approximately 45,000 people in the United States living with multiple myeloma, an incurable but treatable cancer of the plasma cell.  Multiple myeloma is the second most-common hematologic cancer, representing 1% of all cancer diagnoses and 2% of all cancer deaths. In 2009, it was estimated that there will be 20,580 new cases of multiple myeloma and an estimated 10,500 deaths from multiple myeloma in the U.S. Despite progress in the treatment of multiple myeloma, patients continue to relapse, become refractory to prior treatments and eventually die from their disease. Thus, new therapies are needed to treat these patients and extend their survival.

Source:  Keryx Biopharmaceuticals Inc.

Technical Analysis

KERX is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

KERX’s MACD is indicating a weak bullish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bearish, the MACD has crossed below its 9-day moving average or signal line. This suggests that positive momentum has begun to slow.

At it’s last close, KERX closed below its 13-day moving average. This is generally considered to be an indication of a bearish trend.

Comparative Analysis

KERX is operating in hotly-contested pharmaceutical and biotechnology industries. The Company faces

competition with pharmaceutical companies and biotechnology companies, as well as universities and

public and private research institutions, many of which have significantly greater capital resources, larger

research and development staffs and facilities and greater experience in drug development, regulation,

manufacturing and marketing than we do. To compete successfully in this industry, the Company states

that it must identify novel and unique drugs or methods of treatment and then complete the development of

those drugs as treatments in advance of its competitors. The drugs that we are attempting to develop will

have to compete with existing therapies. If the Company fails to complete its clinical trial programs, or if

such clinical trials take longer to complete than it projects, the Company’s ability to execute its current

business strategy will be adversely affected. KERX is unlikely to report meaningful revenue from the sale of

its products over the next two to three years.

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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