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Keryx Biopharmaceuticals (KERX): Baupost Group Boosts Its Stake

Seth Klarman is bullish on Keryx Biopharmaceuticals (NASDAQ:KERX) and his fund, Baupost Group, has recently surged its position in the company. As a new filing with the SEC showed, Baupost Group currently holds around 18.30 million shares of Keryx Biopharmaceuticals, which represent almost 20% of the outstanding stock. Previously, Baupost held approximately 10.54 million shares of the company.


Keryx Biopharmaceuticals (NASDAQ:KERX) is now one of the largest investments in Baupost Group’s equity portfolio, in which almost a half is represented by healthcare stocks. The stock gained around 19% since the beginning of the year, when Baupost initiated a holding in the company. Mr. Klarman raised his fund’s stake in the company the next day after the company had said that it has initiated the pivotal Phase 3 study of Ferric Citrate for the treatment of iron deficiency anemia in patients with non-dialysis dependent chronic kidney disease. Moreover, many other investors also see a potential in Keryx Biopharmaceuticals (NASDAQ:KERX) as they have increased their stakes during the second quarter. One of them is healthcare-focused investor, James E. Flynn, whose fund, Deerfield Management, increased its position by 177% on the quarter to 3.88 million shares, held as of the end of June.

Among the insiders, however, several employees of the company have reduced their stakes during the past several months. Most recently, the Chief Financial Officer of Keryx Biopharmaceuticals (NASDAQ:KERX), James Oliviero, has sold around 2,700 shares, reducing his stake to some 153,400 shares. In September, Mr. Oliviero sold a more significant portion of his investment, shedding around 144,200 shares. Taking into account that the CFO last declared acquiring shares back in 2009, when he paid around $0.90 per unit, Mr. Oliviero made a significant profit by selling shares at over $15.00 apiece.

With Keryx Biopharmaceuticals (NASDAQ:KERX) advancing its research and development, analysts are also optimistic about the prospects of the company. Keryx has a consensus rating ‘Buy’, while the average target price stands at around $23, which is a significant premium over the current price of the stock.

Baupost Group is one of the largest hedge funds in the world, which means that it has enormous resources to do the research on its investments, which why his bullish activity is worth following. For example, Baupost initiated a stake in Micron Technology, Inc. (NASDAQ:MU), during the second quarter of last year and the stock doubled in value since then. The second-largest position in Baupost’s equity portfolio is Idenix Pharmaceuticals Inc (NASDAQ:IDIX), in which Baupost has been consistently increasing its position since 2011, the stock trippling in value over the last several years, and surging by over 300% since the middle of the current year.

Disclosure: none

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