Keryx (KERX) Warming Up To Q4 Earnings: What's In Store?

Keryx Biopharmaceuticals, Inc. (NASDAQ:KERX) is scheduled to report fourth-quarter 2017 results on Feb 7 before the market opens.

Last quarter the company reported a negative earnings surprise of 17.65%. Keryx’s performance over the last four quarters has been disappointing. The company reported a wider-than-expected loss in the trailing four quarters, with an average negative surprise of 19.09%.

Keryx’s share price has decreased 16.5% year to date, underperforming the industry’s 2.9% rally.

Factors Influencing This Quarter

Apart from license fees, Keryx’s top line comprises revenues generated by its only marketed product Auryxia (ferric citrate). Auryxia is used to treat patients with chronic kidney disease (CKD) on dialysis.

In March 2017, the nation’s largest Medicare Part D plan sponsor added Auryxia to its Medicare Part D plan formularies. With these formulary additions, 95% of the patients taking a phosphate binder across Medicare Part D and commercial plans now have unrestricted access to Auryxia.

During third-quarter 2017 earnings release, FDA granted an approval for an additional indication of Auryxia to treat adults with iron deficiency anemia and chronic kidney disease, not on dialysis. Moreover, Keryx claims that Auryxia is the only oral treatment option available for this indication. With the latest approval, this drug can treat two chronic kidney diseases. Hence, the approval should significantly boost Auryxia’s sales in the fourth quarter.

Meanwhile, the company is looking for potential partners to commercialize the drug in the EU. Ferric citrate has been considered as a new active substance by the European Commission. This provides it with 10 years of data and marketing exclusivity in the region.

Further, the company supports a number of ongoing trials, including several investigator-sponsored clinical studies, and one new phase IV study called COMPASS. The COMPASS study will continue to expand the clinical dataset for Auryxia as a treatment for iron deficiency anemia by studying it in people who haven't been treated previously with low iron and in different dosing regimens such as twice-a-day.

What Our Model Indicates

Our proven model does not conclusively show an earnings beat for Keryx this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. However, that is not the case here as you will see below.

Zacks ESP: Keryx’s has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 18 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Keryx’s has a Zacks Rank #4, which decreases the predictive power of ESP. Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement.

Stocks That Warrant a Look

Here are some biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Alkermes (NASDAQ:ALKS) is scheduled to release fourth-quarter results on Feb 21. The company has an Earnings ESP of +34.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Anthera Pharmaceuticals (NASDAQ:ANTH) is expected to release fourth-quarter results on Feb 26. The company has an Earnings ESP of +20.47% and a Zacks Rank #2.

Exelixis (NASDAQ:EXEL) , which is expected to release fourth-quarter results on Feb 26, has an Earnings ESP of +21.98% and a Zacks Rank #1.

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