Three Things You Need to Know From Keryx Biopharmaceuticals (KERX)’s Q2 Earnings

Zerenex seems promising due to its ability to mitigate iron deficiency anemia associated with CKD while controlling phosphate levels. Bentsur is excited because he believes that “Zerenex is the only phosphate binder that has the potential to actually obtain a label” in the U.S. for the indication.

If Keryx is successful with securing the CKD indication for Zerenex, it would drastically bump up the revenue potential for the drug. Analysts think peak sales for Zerenex with this indication could be more than $500 million. Stifel Nicolaus analyst Stephen Willey projects the figures could be between $550 and $600 million.

Still a buy?
Keryx’s shares have soared more than 220% so far this year. Is the high-flying biotech stock still a buy? I think so.

Assuming Zerenex receives U.S. approval in 2014 and estimates of peak sales of around $300 million are roughly on target, the market cap for Keryx should realistically be well above $1 billion. If a second indication for CKD is eventually obtained, Keryx should be worth a lot more than that. Currently, the company’s market cap stands near $730 million.

I wouldn’t be surprised to see bigger players make a bid for Keryx at some point. Amgen, Inc. (NASDAQ:AMGN) is one possible candidate that would make a good fit. The big biotech already commands a significant presence in the renal disease market with products including Epogen and Sensipar. With more than $21 billion in cash socked away, Keryx would be an easy pickup for Amgen, Inc. (NASDAQ:AMGN).

AstraZeneca plc (ADR) (NYSE:AZN) is another distinct possibility. The British drugmaker has been actively licensing drugs related to kidney disease from smaller companies and had $8 billion in its coffers at the end of March. Most recently, AstraZeneca plc (ADR) (NYSE:AZN) paid $350 million upfront with possible milestone payments of $465 million to Fibrogen for its experimental drug FG-4592, which targets treatment of anemia in patients with CKD and end-stage renal disease.

Even if Keryx doesn’t become an acquisition target, I think its future looks bright. Biotech investors should still take a hard look at adding this stock to their portfolios.

The article 3 Things You Need to Know From Keryx’s Q2 Earnings originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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