Why Did JPMorgan Just Downgrade Keryx Bio?

JPMorgan's Whitney Ijem downgraded the rating on Keryx Biopharmaceuticals KERX from Overweight to Neutral.

The company reported its 4Q15 net Auryxia sales for the United States, marginally ahead of the consensus, with total sales in line with the Street expectations. U.S. sales rose 49 percent quarter on quarter, driven by a 9 percent price increase in September.

Keryx Bio guided to U.S. sales of $31–$34 million for the United States, with the higher end of the range in line with the consensus. Following the 46 percent total prescription growth in 4Q, the company guided to 20–35 percent quarter-on-quarter growth through 2016.

Related Link: Schroer: Biotech Will Turn Around

"While KERX continues to point to growth drivers in 2016 (larger sales force, more real world data), we are growing less confident that this launch will gain steam. On the one hand, doc feedback continues to indicate that Auryxia's profile is of interest," the JPMorgan report stated.

However, the stock has been struggling, and the analyst does not see potential growth drivers that could "meaningfully move the needle" in 2016. Therefore, Ijem would prefer to step to the sidelines until there are more tangible signs that the launch could drive a turnaround.