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Why Keryx Biopharmaceuticals Was Obliterated in September
What happened? Biotech stocks were sold off in September, as the iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) fell 9% during the month.
What happened? Shares of Keryx Biopharmaceuticals (NASDAQ:KERX), fell even harder, shedding nearly 40% of its value despite releasing good news.
So What? On September 24th Keryx received approval to sell Auryxia, the company’s only FDA approved drug, in Europe under the brand name Fexeric. The European market looks huge, and should more than double Keryx’s current addressable market opportunity. Keryx has not yet found a partner to commercialize Fexeric in Europe but expects to announce a go-to-market strategy before the end of the year. However, on September 3rd, analysts at Citigroup initiated coverage on Keryx’s stock and rated it a “sell”, which caused a huge drop. Analysts have been lowering their price target for the company’s shares all year as sales of Auryxia are off to a slower start than they were expecting.
Now what? Short sellers continue to put huge pressure on the stock. If Keryx can grow Auryxia sales in the U.S. and successfully commercialize Fexeric in Europe then its stock could be poised for a huge upward movement. Until we see clear signs of that happening I’m content to watch this story from the sidelines.