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Keryx Biopharmaceuticals Announces Third Quarter 2018 Financial Results

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  • Third quarter 2018 total revenues of $28.0 million including net U.S. Auryxia® (ferric citrate) product sales of $26.6 million, a 96 percent increase compared to the third quarter of 2017
  • Approximately 47,500 Auryxia Prescriptions were written in the third quarter of 2018, nearly double the number reported in the third quarter of 2017
  • Merger with Akebia Therapeutics on track to close by year end, subject to stockholder approval and the satisfaction of other closing conditions

BOSTON, Nov. 08, 2018 (GLOBE NEWSWIRE) -- Keryx Biopharmaceuticals, Inc. (NASDAQ:KERX), a biopharmaceutical company focused on bringing innovative medicines to people with kidney disease, today announced its financial results for the third quarter ended September 30, 2018. The company also reviewed its commercial progress with Auryxia and provided a general business update.

"We continued to see significant growth year-over-year in the number of prescriptions written and the revenue generated by Auryxia," said Jodie Morrison, interim chief executive officer of Keryx Biopharmaceuticals. "We are continuing to make progress on consummating our merger with Akebia and have scheduled a stockholder meeting to approve the transaction for December 11, 2018. We are excited about the potential strategic, financial and operational benefits of this transaction and are aiming, subject to stockholder approval and satisfaction of other customary conditions, to close the transaction by the end of the year."

Business Highlights

  • Net U.S. Auryxia product sales were $26.6 million in the third quarter of 2018, as compared to $13.6 million in the same quarter in 2017, representing growth of 96 percent.
  • Approximately 47,500 Auryxia prescriptions were reported in the third quarter of 2018, representing 9.4 million Auryxia tablets. This compares to approximately 25,200 prescriptions and 5.4 million Auryxia tablets in the third quarter of 2017.
  • Auryxia market share for the third quarter of 2018 was 6.4 percent, compared to 3.5 percent in the third quarter of 2017.
  • The breadth of physicians prescribing Auryxia continued to expand in the third quarter of 2018 compared to the same period in 2017, with approximately 6,500 prescribers in the 2018 quarter, nearly 2,000 more than the third quarter of 2017.
  • The depth of Auryxia prescribing also increased significantly in the third quarter of 2018, with a 28 percent increase in the average number of prescriptions per prescriber as compared to the third quarter of 2017.
  • As expected, there was a shift in channel mix for Auryxia during the third quarter of 2018, with 61 percent of prescriptions coming through IMS reporting channels and 39 percent coming through specialty pharmacies (including Fresenius Rx and Davita Rx); the shift in mix is due the closing of Davita's specialty pharmacy business, which occurred in September 2018.
  • The gross-to-net adjustment for Auryxia for the third quarter of 2018 was 50 percent.  This is consistent with year-to-date 2018 gross-to-net adjustment of 50 percent. 

Akebia Merger Update

  • On June 28, 2018, Keryx announced that it had entered a definitive merger agreement with Akebia Therapeutics, Inc. that is expected to close by the end of 2018, subject to stockholder approvals and satisfaction of customary closing conditions.
  • If the merger is consummated, Keryx stockholders would continue to participate in the growth of Auryxia and gain access to an innovative Phase 3 product candidate with the potential to compete in a complementary multi-billion-dollar market, upon successful completion of its development program. The combined company would have substantial financial resources, an integrated platform for the development and launch of renal drugs and be led by a seasoned executive with decades of experience in the renal field.
  • The definitive proxy materials were filed with the Securities and Exchange Commission (SEC) on October 30, 2018 and the companies' respective stockholder meetings are scheduled for December 11, 2018 for stockholders of record as of October 22, 2018.
  • The Keryx Board continues to unanimously support the merger and recommends that stockholders vote FOR the merger proposals at the upcoming stockholders' meeting.

Given the pending merger with Akebia, Keryx will not be holding a conference call to discuss third quarter 2018 results.

Third Quarter Ended September 30, 2018 Financial Results

"I'm pleased to be reporting another solid quarter of Auryxia performance, having nearly doubled revenue over the same period a year ago, driven primarily by increases in volume," said Scott Holmes, senior vice president and chief financial officer of Keryx Biopharmaceuticals. "We believe the proposed merger with Akebia will put us in a strong position financially, with Akebia's significant cash position today and Auryxia's growing revenues contributing to the financial strength of the combined company in the future."

Total revenues for the quarter ended September 30, 2018 were $28.0 million, compared with $15.0 million during the same period in 2017. Total revenues for the third quarter of 2018 include $26.6 million in net U.S. Auryxia product sales, as compared to $13.6 million in the third quarter of 2017. Total revenues for the third quarter of 2018 also include $1.4 million in license revenue, as compared to $1.4 million during the same period in 2017.

Cost of goods sold for the quarter ended September 30, 2018 were $7.5 million, compared with $5.9 million during the same period in 2017.

Selling, general and administrative expenses for the quarter ended September 30, 2018 were $26.5 million, as compared to $22.7 million during the same period in 2017. Selling, general and administrative expenses for the quarter ended September 30, 2018 included $3.4 million in non-cash stock compensation expense, as compared to $2.9 million during the third quarter of 2017.

Research and development expenses for the quarter ended September 30, 2018 were $7.9 million, as compared to $9.3 million during the same period in 2017. Research and development expenses for the quarter ended September 30, 2018 included $0.4 million in non-cash stock compensation expense, as compared to $0.5 million during the same period in 2017.

Net loss for the quarter ended September 30, 2018 was $17.0 million, or $0.14 per share, as compared to a net loss of $23.5 million, or $0.20 per share, for the same period in 2017. Net loss for the quarter ended September 30, 2018 included $2.2 million in non-cash interest expense related to the amortization of a discount recognized in connection with the modification of the convertible senior notes.

Cash and cash equivalents as of September 30, 2018 totaled $41.1 million.

About Auryxia® (ferric citrate) tablets
Auryxia (ferric citrate) was approved by the U.S. Food and Drug Administration (FDA) on September 5, 2014 for the control of serum phosphorus levels in patients with chronic kidney disease on dialysis and approved by the FDA on November 6, 2017 for the treatment of iron deficiency anemia in patients with chronic kidney disease not on dialysis. Auryxia tablets were designed to contain 210 mg of ferric iron, equivalent to 1 gram of ferric citrate, and offers convenient mealtime dosing. The starting dose of Auryxia for the treatment of hyperphosphatemia for patients on dialysis is six tablets per day (two per meal) and for the treatment of iron deficiency anemia in patients not on dialysis is three tablets per day (one per meal). For more information about Auryxia and the U.S. full prescribing information, please visit www.Auryxia.com.

IMPORTANT U.S. SAFETY INFORMATION FOR AURYXIA® (ferric citrate)

CONTRAINDICATION

AURYXIA® (ferric citrate) is contraindicated in patients with iron overload syndromes, e.g., hemochromatosis.

WARNINGS AND PRECAUTIONS

  • Iron Overload: Increases in serum ferritin and transferrin saturation (TSAT) were observed in clinical trials with AURYXIA in patients with chronic kidney disease (CKD) on dialysis treated for hyperphosphatemia, which may lead to excessive elevations in iron stores. Assess iron parameters prior to initiating AURYXIA and monitor while on therapy. Patients receiving concomitant intravenous (IV) iron may require a reduction in dose or discontinuation of IV iron therapy.
  • Risk of Overdosage in Children Due to Accidental Ingestion: Accidental ingestion and resulting overdose of iron-containing products is a leading cause of fatal poisoning in children under 6 years of age.  Advise patients of the risks to children and to keep AURYXIA out of the reach of children.

ADVERSE REACTIONS

Most common adverse reactions with AURYXIA were:

  • Hyperphosphatemia in CKD on Dialysis: Diarrhea (21%), discolored feces (19%), nausea (11%), constipation (8%), vomiting (7%) and cough (6%) 
  • Iron Deficiency Anemia in CKD Not on Dialysis: Discolored feces (22%), diarrhea (21%), constipation (18%), nausea (10%), abdominal pain (5%) and hyperkalemia (5%)

SPECIFIC POPULATIONS

  • Pregnancy and Lactation: There are no available data on AURYXIA use in pregnant women to inform a drug-associated risk of major birth defects and miscarriage. However, an overdose of iron in pregnant women may carry a risk for spontaneous abortion, gestational diabetes and fetal malformation.  Data from rat studies have shown the transfer of iron into milk, hence, there is a possibility of infant exposure when AURYXIA is administered to a nursing woman.

To report suspected adverse reactions, contact Keryx Biopharmaceuticals at 1-844-445-3799.

Please click here to view the Full Prescribing Information for Auryxia.


Keryx Biopharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(unaudited)

  Three Months Ended
September  30,
Nine Months Ended
 September 30,
    2018     2017     2018     2017  
Revenues:        
Net U.S. Auryxia product sales $ 26,590   $ 13,597   $ 71,317   $ 38,218  
License revenue   1,446     1,399     4,219     3,741  
Total Revenues   28,036     14,996     75,536     41,959  
         
Operating Expenses:        
Cost of goods sold   7,506     5,856     24,535     14,508  
License expense   867     838     2,531     2,244  
Research and development   7,896     9,275     25,058     25,051  
Selling, general and administrative   26,453     22,746     81,001     70,835  
Total Operating Expenses   42,722     38,715     133,125     112,638  
         
Operating Loss   (14,686 )   (23,719 )   (57,589 )   (70,679 )
 
Other Income (Expense):
       
Other income (expense), net   (2,309 )   241    
(3,454

)
 
(62,272

)
Loss Before Income Taxes   (16,995 )   (23,478 )  
(61,043

)
 
(132,951


)
         
Income tax expense (benefit)   --     20
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