Roth Affirms Keryx Biopharma (KERX) at 'Buy'; CHMP Opinion on Fexeric Not Unexpected

Roth Capital affirms Keryx Biopharmaceuticals (Nasdaq: KERX) with a Buy rating and $11 price target after the company announced the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has adopted a positive opinion for the marketing authorization of ferric citrate coordination complex (EU approved brand name Fexeric) recommending approval for the treatment of elevated serum phosphorus levels, or hyperphosphatemia, in adults with chronic kidney disease (CKD).

Analyst Joseph Pantginis commented, The CHMP decision is not unexpected to us. Management has indicated that it intends to provide visibility on the E.U. commercial strategy by the end of 2015. There are several open questions regarding marketing in the E.U. and revolves around partnering the drug, in our belief. Manufacturing capacity requirements are a potential leading issue. While this represents a positive major blocking issue to generic competition in our belief, it may also act as an issue for potential partners based on the required infrastructure (or a major re-tasking of equipment) investment.

Therefore, does Keryx invest in its own manufacturing in the E.U.? Additionally, potential E.U. partners may be looking for management to deliver on its U.S. guidance for meaningful Auryxia traction in 2H15 (disappointing so far) to act as a signal for potential E.U. success. In the end, anticipated E.U. approval is on the first step to a more complex commercial story, in our belief. We are maintaining our Buy rating on Auryxia's differentiated profile. However we have increased trepidation as Auryxia is now in a major "show me" phase based on company guidance for meaningful prescription traction in 2H15. The prescriptions have taken a concerning dip following the recent announcement of two more private insurance payers (undisclosed) adding Auryxia to their Medicare Part D formulary. We believe Keryx will remain highly volatile and recommend owning shares by only the most risk tolerant investors currently.

For an analyst ratings summary and ratings history on Keryx Biopharmaceuticals click here. For more ratings news on Keryx Biopharmaceuticals click here.

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