Keryx withdraws 2016 forecast on renal drug supply disruption

(Reuters) - Keryx Biopharmaceuticals Inc withdrew its full-year forecast due to a disruption in production of its only approved drug, Auryxia, sending its shares down by more than a third in morning trading on Monday.

Keryx said it expected to restore the supply of the renal drug in the fourth quarter.

“Just as Auryxia was building traction, it is a disappointment to see a manufacturing disruption,” Maxim analyst Jason Kolbert wrote in a note.

“While we believe the long-term picture is still robust and intact, the short term will be difficult and is not predictable,” he said, downgrading the stock to “hold” from “buy”.

Keryx had earlier forecast net sales of $31 million-$34 million for Auryxia in the United States this year.

Auryxia’s U.S. net sales rose to $8.3 million in the second quarter from $1.8 million a year earlier, but were well below the estimate of $10 million by J.P. Morgan analysts.

Keryx is working with its current contractor to resolve the production-related issue and rebuild adequate supply, the company said on a conference call. It is also working to sign up another contractor to manufacture the drug.

The drug, approved in the United States in September 2014, treats abnormally high phosphate level in the blood of end-stage renal disease patients.

Keryx has been facing challenges with the drug’s adoption in the U.S. market, which analysts attribute to the perception among nephrologists that Auryxia is not a differentiated product.

The company had cash and cash equivalents of $155.8 million at the end of June.

Keryx shares were down 30 percent at $5.15 in late morning trading.

Reporting by Amrutha Penumudi in Bengaluru; Editing by Kirti Pandey