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Keryx Biopharmaceuticals Inc. (NASDAQ:KERX) is a New York-based biotherapeutics company that develops and commercializes drugs for the treatment of cancer and renal diseases. Recently, Keryx stock soared to a new 52-week high despite launching any new drug in the market. I believe that this small cap stock has a strong potential to rise further.
The Growth Story Of Keryx
The company reported positive Phase III clinical trial results for its drug Zerenex. The drug is a patented formulation of ferric citrate, and can be used to treat patients of End Stage Renal Disease. It was the final obligation under the clinical program. Now Keryx is working to present it for FDA approval in the second quarter this year. The company has already raised finances for the product launch by offering 55 million shares in January.
In addition, Keryx Biopharmaceuticals is also developing an oral anti-cancer drug KRX-0401 which inhibits Akt activation in the phosphoinositide 3-kinase pathway. It also affects many other pathways that can potentially cause cancer. The drug has shown positive results so far.
Fundamental Analysis
Keryx Biopharmaceuticals has very strong fundamentals. It has about $14.68 million in cash and cash equivalents, and absolutely no debt which lowers the chance of a secondary public offering. Keryx has 81.68 million shares outstanding. Company insiders own about 15% of the stock which reflects their confidence in the company.
After the big news about Zerenex in January, the stock surged 108 percent to set a new 52-week high. As the drug has very high potential of getting an FDA approval, the momentum in stock prices is likely to continue.
Recently, investment management firm BlackRock Inc. (NYSE:BLK) doubled down on its previous 5% stake, indicating that the company sees Zerenex market opportunity, and is positioning itself to benefit from the upcoming events like drug launch.
Not everything is going right with Keryx Biopharmaceuticals, though. The company has been facing several lawsuits. However, the legal battles are estimated to have only minor impact on the company.
Conclusion
Despite certain tailwinds and recent appreciation in price, I expect Keryx to rise further after a period of consolidation. Zerenex has very high potential of getting approved. The drug maker may also be seen as a potential buyout target, in which case the stock will jump even further. Overall, Keryx has a promising future ahead.