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Xerenex Kidney Treatment: A Game Changer for Keryx Biopharmaceuticals (KERX)

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Keryx Biopharmaceuticals (NASDAQ:KERX)’s latest kidney drug called Zerenex is a game changer for the company after achieving positive results from its long-term Phase 3 study, which is the second and final obligation under the special protocol assessment (SPA) clinical program with U.S. Food and Drug Administration (FDA). Zerenex is a phosphate binder designed to treat hyperphosphatemia in patients suffering from end stage renal disease (ESRD).

The company reported that Zerenex met the primary efficacy endpoint with high statistical change in serum phosphorous in the four-week Efficacy Assessment Period of the study compared with placebo in the intent-to-treat group. The secondary efficacy endpoints result was also remarkable after demonstrating its ability to increase iron storage parameters and reduce the need for intravenous (IV) iron and erythropoietin-stimulating agents (ESA). Zerenex proved its efficacy and safety in treating patients with ESRD.
Keryx Biopharmaceuticals (NASDAQ:KERX)Keryx Biopharmaceuticals (NASDAQ:KERX) estimated that ESA and IV iron account $2 billion and $400 million respectively, in the United States market. Zerenex could reduce the costs of treatment for kidney patients in the United States by approximately $750 million a year.

At present, the leading phosphate binder drug is Sanofi SA (ADR) (NYSE:SNY)’s Renvela/Renagel, which accounts for 50 percent of the market. Based on the third quarter financial result of Sanofi, Renvela/Renagel generated €164 million. Its sales were up by 12.6 percent compared with its result in the same quarter a year ago. According to Sanofi, its strong sales performance was driven by increased sales in the United States by 17.2 percent or €115 million.

Keryx Biopharmaceuticals CEO, Ron Bentsur is confident that Zerenex has the potential to become the leading phosphate binder drug in the market. Burrill Institutional Research analyst, Reni Benjamin believed that Zerenex has the ability to compete once it enters the generics market by 2014. The phosphate binder market is huge and generates $1.5 billion annually.

Joseph Pantginis, analyst at Roth Capital shares the same view. According to him, Zerenex has a significant opportunity to become the first phosphate binder that provides meaningful properties to manage anemia associated with dialysis patients. He raised his price target for the shares of Keryx Biopharmeceuticals from $7 to $15 a share. He also predicted the approval of Zerenex in the U.S. and European markets next year.

There is also a possibility for Keryx Pharmaceuticals to establish a partnership with DaVita HealthCare Partners Inc (NYSE:DVA), one of the leading providers of dialysis treatment for patients with ESRD. DaVita provides kidney dialysis treatment to 142,000 patients with chronic kidney failure. Eighty nine percent (89%) of its patient are covered under government-based healthcare programs, particularly Medicare. Since, Zerernx offers huge savings due to reduced use for IV iron and ESA, dialysis treatment providers such as DaVita would consider switching its phosphate binder treatments to patients. Bentsur pointed out that Sanofi’s generic Renvela doesn’t have the capacity to compete with the amount of cost savings offered by Zenerex.

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