A double-dose of promising news has prompted the share price of Keryx Biopharmaceuticals (NASDAQ:KERX) move in the right direction. However, after rallying for more than 50% in last two months, it is the time to evaluate of it is the start of a bullish trend or a one-time blip. It has been a tough year for the company’s shareholders as stock price of the renal disease focused treatment developer have achieved nothing substantial since start of the year. The shares tumbled in first half of the year and now have managed to found some ground after the company announced promising news to get back on track.
The buzz
Keryx made two big announcements in the month of October that contributed significantly to the business.First it raised $125 million of capital from a ‘zero-coupon’ Notes offering the Baupost Group. Those notes can be converted into KERX common shares at a rate of $3.74 a share. This offering boosted company’s cash position up to nearly $225 million. Also, the company reported that it would be executing a cost-reduction plan that would minimize its operating costs next year by as much as $92 million. The sales are expected to surge in 2016 which combined with cost-reduction plan will help the company to achieve operating break-even.
The progress
Secondly, Keryx Biopharmaceuticals (NASDAQ:KERX) reported its third-quarter financial report in the month of October. The revenue came at $4.2 million compared to the analysts’ expectation of $3.8 million. This increase was largely led by a strong 45% surge in script volume for ‘Auryxia’, the Keryx’s only approved drug, which targets tonormalize serum phosphorus levels in patients undergoing dialysis. This provides some credence to company’s previous claims that payment was a major hurdle to a fast ramp for its drug.The funds infusion and strong sales number of Auryxia seems to have sent Keryx’s detractors racing to close their short position, which aided to skyrocket the stock price.