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
second quarter ended June 30, 2018. The company also reviewed its
commercial progress with Auryxia and provided a general business
update.
“We are very pleased with the continued strong
performance of Auryxia, which is a testament to the appreciation
physicians have for the product profile and to the commitment and
drive of our commercial and field-based teams,” said Jodie
Morrison, interim chief executive officer of Keryx
Biopharmaceuticals. “On June 28th, we announced that Keryx had
entered a definitive merger agreement with Akebia Therapeutics that
will create a fully integrated company focused on the development
and commercialization of therapeutics for patients with chronic
kidney disease. We believe that the combined company will be well
positioned to create significant shareholder value and accelerate
growth beyond what either company would achieve separately.”
Business Highlights
- Net U.S. Auryxia product sales were $24.1 million in the second
quarter of 2018, as compared to $14.1 million in the same quarter
in 2017, representing growth of 71 percent.
- Approximately 42,500 Auryxia prescriptions were reported in the
second quarter of 2018, representing 8.4 million Auryxia tablets.
This compares to approximately 21,100 prescriptions and 4.5 million
Auryxia tablets in the second quarter of 2017.
- The breadth and depth of physicians prescribing Auryxia
continued to expand in the second quarter of 2018 compared to the
same period in 2017, with approximately 50 percent more physicians
writing Auryxia prescriptions and prescribers on average writing
Auryxia for more of their patients.
- 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 shareholder
approvals and customary closing conditions. If approved, Keryx
shareholders would 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. Additionally, Keryx shareholders gain a
seasoned executive with decades of experience in the renal field to
lead the combined organization.
Second Quarter Ended June 30, 2018
Financial Results
“Revenue growth in the second quarter of 2018,
as compared to the second quarter of 2017, was driven by
significant increases in Auryxia prescription and tablet demand,”
said Scott Holmes, senior vice president and chief financial
officer of Keryx Biopharmaceuticals. “Post the close of the second
quarter we established an asset-based revolving credit facility
with Silicon Valley Bank for up to $40 million. We believe this
non-dilutive financing instrument will provide financial
flexibility to our company as we continue to increase demand for
Auryxia in both indications.”
Total revenues for the quarter
ended June 30, 2018 were $25.7 million, compared with $15.1 million
during the same period in 2017. Total revenues for the second
quarter of 2018 include $24.1 million in net U.S. Auryxia product
sales, as compared to $14.1 million in the second quarter of 2017.
Total revenues for the second quarter of 2018 also include $1.6
million in license revenue, as compared to $1.0 million during the
same period in 2017.
Cost of goods sold for the
quarter ended June 30, 2018 were $7.4 million, compared with $4.4
million during the same period in 2017.
Selling, general and administrative
expenses for the quarter ended June 30, 2018 were $28.7
million, as compared to $25.0 million during the same period in
2017. Selling, general and administrative expenses for the quarter
ended June 30, 2018 included $4.4 million in non-cash stock
compensation expense, as compared to $3.2 million during the second
quarter of 2017.
Research and development
expenses for the quarter ended June 30, 2018 were $8.8
million, as compared to $9.0 million during the same period in
2017. Research and development expenses for the quarter ended June
30, 2018 included $0.6 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
June 30, 2018 was $21.5 million, or $0.18 per share, as compared to
a net loss of $86.5 million, or $0.77 per share, for the same
period in 2017. Net loss for the quarter ended June 30,
2018 included $1.3 million in non-cash interest expense related to
the amortization of a discount recognized in connection with the
modification of the convertible senior notes. Net loss for the
quarter ended June 30, 2017 included $63.0 million in non-cash
charges related to the restructuring of our convertible
debt.
Cash and cash equivalents as of
June 30, 2018 totaled $49.5 million.
Conference Call
InformationKeryx Biopharmaceuticals will host an investor
conference call today, August 8, 2018, at 8:00 a.m. ET to discuss
financial results for the second quarter of 2018. To participate in
the conference call, please dial (888) 584-2172, (774) 264-7578
(international) and refer to conference ID: 9756999. The call will
be webcast live with slides and accessible through the Investors
section of the company’s website at www.keryx.com for a period of
15 days after the call.
About Auryxia® (ferric citrate)
tabletsAuryxia (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.
About Keryx Biopharmaceuticals,
Inc.Keryx Biopharmaceuticals, Inc., with headquarters in
Boston, Massachusetts, is focused on the development and
commercialization of innovative medicines that provide unique and
meaningful advantages to people with kidney disease. The Keryx team
consists of approximately 200 committed people working with passion
to advance the care of people with this complex disease. This
dedication has resulted in two FDA-approved indications for Keryx’s
Second medicine, Auryxia® (ferric citrate) tablets. For more
information about Keryx, please visit www.keryx.com.
Keryx Biopharmaceuticals,
Inc.Condensed Consolidated Statements of
Operations(In thousands, except share and per
share amounts)(unaudited) |
|
|
|
|
|
Three Months EndedJune
30 |
Six Months EndedJune
30 |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
2017 |
|
|
|
Revenues: |
|
|
|
|
|
|
Net U.S. Auryxia product sales |
$ |
24,105 |
|
$ |
14,116 |
|
$ |
44,727 |
|
24,621 |
|
|
|
License revenue |
|
1,644 |
|
|
1,028 |
|
|
2,773 |
|
2,343 |
|
|
|
Total
Revenues |
|
25,749 |
|
|
15,144 |
|
|
47,500 |
|
26,964 |
|
|
|
|
|
|
|
|
|
|
Costs
and Expenses: |
|
|
|
|
|
|
Cost of goods
sold |
|
7,428 |
|
|
4,379 |
|
|
17,029 |
|
8,653 |
|
|
|
License
expense |
|
987 |
|
|
617 |
|
|
1,664 |
|
1,406 |
|
|
|
Research and
development |
|
8,774 |
|
|
9,012 |
|
|
17,162 |
|
15,776 |
|
|
|
Selling, general
and administrative |
|
28,711 |
|
|
24,986 |
|
|
54,548 |
|
48,089 |
|
|
|
Total Costs and
Expenses |
|
45,900 |
|
|
38,994 |
|
|
90,403 |
|
73,924 |
|
|
|
|
|
|
|
|
|
|
Operating
Loss |
|
(20,151 |
) |
|
(23,850 |
) |
|
(42,903 |
) |
(46,960 |
) |
|
|
Other Expense: |
|
|
|
|
|
|
Other expense, net |
|
(1,367 |
) |
|
(62,627 |
) |
|
(1,145 |
) |
(62,513 |
) |
|
|
Loss Before
Income Taxes |
|
(21,518 |
) |
|
(86,477 |
) |
|
(44,048 |
) |
(109,473 |
) |
|
|
|
|
|
|
|
|
|
Income taxes |
|
- |
|
|
20 |
|
|
(634 |
) |
|
40 |
|
|
|
Net
Loss |
$ |
(21,518 |
) |
$ |
(86,497 |
) |
|
(43,414 |
) |
|
(109,513 |
) |
|
|
|
|
|
|
|
|
|
Net Loss Per
Common ShareBasic and diluted net loss per common
share |
$ |
(0.18 |
) |
$ |
(0.77 |
) |
$ |
(0.36 |
) |
$ |
(1.00 |
) |
|
|
|
|
|
|
|
|
|
Shares Used in
Computing Net Loss Per Common Share |
|
|
|
|
|
|
Basic and diluted |
|
120,451,811 |
|
|
112,590,188 |
|
|
120,149,604 |
|
|
109,846,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keryx Biopharmaceuticals,
Inc.Selected Consolidated Balance Sheet
Data(In
thousands)(unaudited) |
|
|
|
|
|
June 30, 2018 |
|
December 31, 2017 |
Assets |
|
|
|
Cash and cash
equivalents |
$ |
49,458 |
|
$ |
93,526 |
Accounts receivable,
net |
$ |
15,430 |
|
$ |
8,146 |
Inventory |
$ |
48,584 |
|
$ |
28,695 |
Other current
assets |
$ |
12,142 |
|
$ |
11,199 |
Total assets |
$ |
145,651 |
|
$ |
158,872 |
|
|
|
|
Liabilities and
Stockholders’ Deficit |
|
|
|
Accounts payable and
accrued expenses |
$ |
54,647 |
|
$ |
45,031 |
Convertible senior
notes |
$ |
130,088 |
|
$ |
125,000 |
Total liabilities |
$ |
186,843 |
|
$ |
172,967 |
Stockholders’
deficit |
$ |
(41,192) |
|
$ |
(14,095) |
|
|
|
|
Forward-looking
Statements
Some of the statements included in this press release,
particularly those regarding the commercialization of and demand
for Auryxia, the asset-based revolving credit facility and the
proposed merger with Akebia Therapeutics, Inc., including the
expected timing of the closing of the merger and the expected
benefits thereof to us and our shareholders, may contain
forward-looking statements that involve a number of risks and
uncertainties. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Among the factors that
could cause our actual results to differ materially are the
following: our ability to successfully transition the chief
executive role to Ms. Morrison and, if needed, to a permanent chief
executive; the risk that the borrowing base we may utilize at any
one time under the asset-based revolving credit facility may be
significantly lower than the total commitment; our ability to
successfully market Auryxia and whether we can increase adoption of
Auryxia in patients with CKD on dialysis and successfully launch
Auryxia for the treatment of iron deficiency anemia in patients
with chronic kidney disease, not on dialysis; whether we can
maintain our operating expenses to projected levels while
continuing our current clinical, regulatory and commercial
activities; our ability to continue to supply Auryxia to the
market; the risk that increased utilization by Medicare Part D
subscribers will increase our gross-to-net adjustment greater than
we anticipate; the risk that the proposed merger with Akebia
Therapeutics, Inc. does not close due to the failure to obtain
stockholder or regulatory approval or otherwise; the risk that
Akebia’s or Keryx’s respective businesses may suffer as a result of
uncertainty surrounding the merger and disruption of management’s
attention due to the merger; risks that the merger disrupts current
plans and operations and the potential difficulties in employee
retention as a result of the merger; the risk that the expected
benefits of the proposed merger or other commercial opportunities
may otherwise not be fully realized or may take longer to realize
than expected; and other risk factors identified from time to time
in our reports filed with the Securities and Exchange Commission.
Any forward-looking statements set forth in this press release
speak only as of the date of this press release. We do not
undertake to update any of these forward-looking statements to
reflect events or circumstances that occur after the date hereof.
This press release and prior releases are available at
http://www.keryx.com. The information found on our website is not
incorporated by reference into this press release and is included
for reference purposes only.
Additional Information and Where to Find
It
In connection with the proposed merger, Akebia and Keryx plan to
file with the SEC and mail or otherwise provide to their respective
stockholders a joint proxy statement/prospectus regarding the
proposed transaction. BEFORE MAKING ANY VOTING DECISION, AKEBIA’S
AND KERYX’S RESPECTIVE STOCKHOLDERS ARE URGED TO READ THE JOINT
PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY WHEN IT BECOMES
AVAILABLE AND ANY OTHER DOCUMENTS FILED BY EACH OF AKEBIA AND KERYX
WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED
BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE
PROPOSED TRANSACTION. Investors and stockholders will be able to
obtain a free copy of the joint proxy statement/prospectus and
other documents containing important information about Akebia and
Keryx, once such documents are filed with the SEC, through the
website maintained by the SEC at www.sec.gov. Akebia and Keryx make
available free of charge at www.akebia.com and www.keryx.com,
respectively (in the “Investors” section), copies of materials they
file with, or furnish to, the SEC.
Participants in the Solicitation
This document does not constitute a solicitation of proxy, an
offer to purchase or a solicitation of an offer to sell any
securities. Akebia, Keryx and their respective directors, executive
officers and certain employees and other persons may be deemed to
be participants in the solicitation of proxies from the
stockholders of Akebia and Keryx in connection with the proposed
merger. Security holders may obtain information regarding the
names, affiliations and interests of Akebia’s directors and
officers in Akebia’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2017, which was filed with
the SEC on March 12, 2018 and its definitive proxy statement
for the 2018 annual meeting of stockholders, which was filed with
the SEC on April 30, 2018. Security holders may obtain
information regarding the names, affiliations and interests of
Keryx’s directors and officers in Keryx’s Annual Report on
Form 10-K for the fiscal year ended December 31,
2017, which was filed with the SEC on February 21, 2018, and
the Amendment No. 1 on Form 10-K/A, which was filed
with the SEC on April 30, 2018, and its definitive proxy
statement for the 2018 annual meeting of stockholders, which was
filed with the SEC on May 31, 2018. To the extent the holdings
of Akebia securities by Akebia’s directors and executive officers
or the holdings of Keryx securities by Keryx’s directors and
executive officers have changed since the amounts set forth in
Akebia’s or Keryx’s respective proxy statement for its 2018 annual
meeting of stockholders, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with
the SEC. Additional information regarding the interests of such
individuals in the proposed merger will be included in the joint
proxy statement/prospectus relating to the proposed merger when it
is filed with the SEC. These documents (when available) may be
obtained free of charge from the SEC’s website at www.sec.gov,
Akebia’s website at www.akebia.com and Keryx’s website at
www.keryx.com.
KERYX BIOPHARMACEUTICALS CONTACT:Amy Sullivan;
Senior Vice President, Corporate AffairsT: 617.466.3519;
amy.sullivan@keryx.com
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