Keryx Biopharmaceuticals, Inc. (Nasdaq:KERX), a biopharmaceutical
company focused on bringing innovative medicines to people with
renal disease, today announced its financial results for the first
quarter ended March 31, 2016.
“In March, our recently expanded and fully trained
field team began calling on physicians, dietitians and the entire
dialysis care team to enhance awareness of Auryxia and drive
increased adoption,” said Greg Madison, chief executive officer of
Keryx Biopharmaceuticals. “Through the expansion of our field team,
we are able to increase the reach and frequency of contact with the
treating community, and I am confident that with their efforts we
will continue to increase uptake of Auryxia in people with chronic
kidney disease (CKD) on dialysis.”
Mr. Madison continued, “In the first quarter, we
announced positive top-line results from our pivotal Phase 3 study
evaluating ferric citrate in people with non-dialysis dependent CKD
struggling with iron deficiency anemia (IDA). These results bring
us one step closer to treating another important complication of
CKD. The rapid, durable and significant responses observed with
ferric citrate in the study were a major milestone for Keryx and
confirmed the unique attributes of ferric citrate’s mechanism of
action, which delivers iron orally through the body’s natural
absorption process. As we look ahead, our top priorities for this
year are to increase adoption of Auryxia in the dialysis setting,
submit a regulatory application seeking label expansion, and
prepare for potential launch in 2017 in the new indication.”
FIRST QUARTER 2016 BUSINESS
HIGHLIGHTS
Auryxia Commercialization
- Auryxia net U.S. product sales for the first quarter of 2016
were $5.6 million compared with $0.4 million in the first
quarter of 2015. First quarter 2016 Auryxia product sales resulted
from approximately 9,150 prescriptions, which represented 17
percent growth in total prescriptions compared to the fourth
quarter of 2015.
- In the first quarter of 2016, cumulative target physicians who
have written a prescription for Auryxia increased approximately 25
percent from the fourth quarter of 2015. This reflects continued
efforts to increase the breadth of physicians prescribing
Auryxia.
Potential Label ExpansionPivotal
Phase 3 Trial Aimed at Increasing the Number of Adults Eligible for
Treatment with Ferric Citrate
- In March, the company announced that its 24-week pivotal Phase
3 trial evaluating ferric citrate for the treatment of iron
deficiency anemia in adults with stage 3-5 non-dialysis dependent
CKD demonstrated statistically significant differences between
ferric citrate- and placebo-treated patients for the primary and
all pre-specified secondary endpoints. Specifically, 52 percent
(61/117) of patients who received ferric citrate achieved the
primary endpoint, which was a 1g/dL or greater rise in hemoglobin
at any time point during the 16-week randomized efficacy period,
compared with 19 percent (22/115) in the placebo group
(p<0.001). Importantly, the vast majority of patients who
achieved the primary endpoint (57/61) had a durable response. In
terms of safety, during the randomized efficacy period, the
majority of adverse events reported were mild to moderate, with the
most common being diarrhea. Read the full press release of the
top-line Phase 3 results here.
- The company intends to submit an sNDA for approval to the U.S.
FDA in the third quarter of 2016.
- Keryx plans to submit detailed Phase 3 results for presentation
at the American Society of Nephrology’s 2016 Kidney Week taking
place November 15 – 20, 2016, and plans to submit data for possible
publication in a peer reviewed medical journal.
Corporate
- In April, Keryx announced new appointments and changes to its
board of directors.
First Quarter Ended March 31, 2016
Financial Results“As a result of our continued focus on
commercial execution and fiscal discipline, we met or exceeded all
of our internal financial goals in the first quarter and,
therefore, are progressing nicely toward achieving our previously
stated 2016 full year financial objectives,” said Scott Holmes,
chief financial officer of Keryx. “The passion and commitment that
my colleagues at Keryx bring to work each day both in the field and
in our home office will drive us to achieve our goals in 2016 and
beyond.”
At March 31, 2016, the company had cash and cash
equivalents of $170.5 million.
Total revenues for the quarter
ended March 31, 2016 were approximately $6.8 million, compared with
$1.2 million during the same period in 2015. Total revenues for the
quarter consisted of Auryxia net U.S. product sales of $5.6
million, and license revenue of $1.2 million associated with
royalties received on ferric citrate net sales from Keryx's
Japanese partner.
Cost of goods sold for the quarter
ended March 31, 2016 was $1.1 million or 19 percent of Auryxia net
U.S. product sales, as compared with $0.1 million or 18 percent
during the same period in 2015.
Research and development expenses
for the quarter ended March 31, 2016 were $7.6 million compared
with $9.6 million during the same period in 2015. The decrease was
primarily due to a decrease in costs associated with the company’s
recently completed Phase 3 clinical trial evaluating ferric citrate
for the treatment of IDA in adults with stage 3-5 non-dialysis
dependent CKD.
Selling, general and administrative
expenses for the quarter ended March 31, 2016 were $20.8
million, as compared with $18.9 million during the same period in
2015. The increase was primarily related to incremental costs
associated with hiring and onboarding of Keryx’s expanded field
team.
Net loss for the first quarter
ended March 31, 2016 was $41.0 million, or $0.39 per share,
compared to a net loss of $27.7 million, or $0.28 per share, for
the comparable quarter in 2015. The company’s net loss for the
quarter ended March 31, 2016 includes $15.7 million in non-cash
interest expense related to amortization of the debt discount on
its convertible senior notes, as well as a $2.0 million non-cash
charge related to the increase in fair value of the derivative
liability that was recorded in connection with the issuance of the
convertible senior notes.
Cash Operating Expenses (a non-GAAP
measurement)*Total operating expenses (excluding cost of
goods sold and license expenses) for the first quarter ended March
31, 2016 were $28.4 million, which included $4.5 million in
non-cash expenses, thereby making cash operating expenses $23.9
million for the first quarter. During the same period in 2015,
total operating expenses were $28.5 million, which included $4.5
million in non-cash expenses, thereby making cash operating
expenses $24.0 million.
Non-cash expenses referenced above include
stock-based compensation expense, depreciation expense and certain
non-cash commercial expenses, such as product samples.
2016 Financial GuidanceThis
section contains forward-looking guidance about the financial
outlook for Keryx Biopharmaceuticals
Keryx today reiterated the following financial
guidance provided in February 2016.
Auryxia net U.S. product sales:
Keryx expects full year 2016 Auryxia net U.S. product sales to be
in the range of $31 to $34 million, and expects sales to ramp
throughout the year, as it realizes the full impact of its expanded
field team.
Cash operating expenses: Keryx
expects its 2016 cash operating expenses will be in the range of
$87 to $92 million. Cash operating expense guidance excludes cost
of goods sold, license expenses, and other non-cash expenses.*
* Please refer to the section below titled
“Use of Non-GAAP Financial Measures” for information about Keryx’s
use of non-GAAP financial measures.
Conference Call Information Keryx
will host an investor conference call today, Thursday, April 28,
2016, at 8:00 a.m. ET to discuss financial results for the first
quarter of 2016. In order to participate in the conference call,
please call 1-(888) 396-2320 (U.S.), 1-(774) 264-7560 (outside the
U.S.), call-in ID: 90827914. The call will also be webcast with
slides, which will be accessible through the Investors section of
the company's website at www.keryx.com. The audio replay will be
available at http://www.keryx.com for a period of 15 days
after the call.
About Non-Dialysis Dependent Chronic Kidney
Disease and Iron Deficiency AnemiaIt is estimated that
approximately one in 10 U.S. adults are affected by CKD, which has
no cure. Treatment today consists of measures to help control signs
and symptoms, reduce the impact of many complications to make a
person more comfortable and slow disease progression.
Iron deficiency anemia is one of the most common
complications of chronic kidney disease. IDA develops early in the
course of CKD and worsens with disease progression, is extremely
prevalent in the non-dialysis dependent CKD population and is
associated with fatigue, lethargy, decreased quality of life and is
also believed to be associated with cardiovascular complications,
hospitalizations, and increased mortality. There are five stages of
CKD; in stages 1 and 2 people are typically under the care of a
primary care physician and have a mild loss of kidney function.
Typically, as people progress to stage 3 hemoglobin levels begin to
fall, the patient experiences moderate to severe loss of kidney
function and is generally referred to a nephrologist. Stage 4 is
characterized as advanced disease with multiple complications.
Stage 5 is considered kidney failure and the stage in which a
patient would often initiate dialysis. It is estimated that
approximately 1.6 million adults with stage 3-5 CKD in the U.S.
alone are also afflicted with iron deficiency anemia. Currently
available oral iron supplements are associated with limited
efficacy and dose-limiting tolerability issues. No oral iron
medicines are currently FDA approved to treat iron deficiency
anemia in non-dialysis dependent CKD patients, and the NDD-CKD
patient population remains underserved.
About Auryxia™Auryxia™ (ferric
citrate) was approved by the U.S. Food and Drug Administration on
September 5, 2014 and is indicated in the U.S. for the control of
serum phosphorus levels in patients with CKD on dialysis. The U.S.
approval of Auryxia was based on data from the company's Phase 3
registration program. In the Phase 3 clinical trials, Auryxia
effectively reduced serum phosphorus levels to within the KDOQI
guidelines range of 3.5 to 5.5 mg/dL.
Auryxia binds with dietary phosphate in the GI
tract and precipitates as ferric phosphate. The unbound portion of
Auryxia has been shown to increase serum iron parameters including
ferritin and transferrin saturation (TSAT). Iron absorption from
Auryxia may lead to excessive elevations in iron stores.
Accordingly, physicians should assess and monitor iron parameters
before starting and while on Auryxia, and may need to decrease or
discontinue IV iron for these patients. The most common adverse
events for Auryxia treated patients were gastrointestinal-related,
including diarrhea, nausea, vomiting and constipation. For more
information about Auryxia and the US full prescribing information,
visit www.Auryxia.com.
IMPORTANT U.S. SAFETY INFORMATION FOR
AURYXIA™ Contraindication: Patients
with iron overload syndrome, e.g. hemochromatosis, should not take
Auryxia™.
Iron Overload: Iron
absorption from Auryxia may lead to increased iron in storage
sites. Iron parameters should be monitored prior to and while
on Auryxia. Patients receiving IV iron may require a reduction in
dose or discontinuation of IV iron therapy.
Accidental Overdose of
Iron: Accidental overdose of iron containing products
is a leading cause of fatal poisoning in children under 6 years of
age. Keep Auryxia away from children as it contains
iron. Call a poison control center or your physician in case
of an accidental overdose in a child.
Patients with Gastrointestinal Bleeding or
Inflammation: Safety has not been established for
these patients.
Adverse Events: The most
common adverse events with Auryxia were diarrhea (21%), nausea
(11%), constipation (8%), vomiting (7%) and cough
(6%). Gastrointestinal adverse reactions were the most common
reason for discontinuing Auryxia (14%). Auryxia contains iron and
may cause dark stools, which is considered normal with oral
medications containing iron.
Drug
Interactions: Doxycycline should be taken at least 1
hour before Auryxia. Ciprofloxacin should be taken at least 2
hours before or after Auryxia.
For Full Prescribing Information for Auryxia,
please
visit http://auryxia.com/important-safety-information/
Keryx Biopharmaceuticals, Inc. |
Condensed Consolidated Statement of
Operations |
(In thousands, except share and per share
amounts) |
(unaudited) |
|
|
Three Months EndedMarch
31 |
|
|
|
|
2016 |
|
|
2015 |
|
|
Revenues: |
|
|
|
Net U.S. Auryxia product sales |
$ |
5,616 |
|
$ |
422 |
|
|
License revenue |
|
1,209 |
|
|
753 |
|
|
Total
Revenues |
|
6,825 |
|
|
1,175 |
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
Cost of goods sold |
|
1,071 |
|
|
76 |
|
|
License expenses |
|
726 |
|
|
452 |
|
|
Research and development |
|
7,616 |
|
|
9,591 |
|
|
Selling, general and
administrative |
|
20,809 |
|
|
18,880 |
|
|
Total Operating
Expenses |
|
30,222 |
|
|
28,999 |
|
|
|
|
|
|
Operating
Loss |
|
(23,397 |
) |
|
(27,824 |
) |
|
Other Income
(expense): |
|
|
|
Other income (expense),
net |
|
(17,547 |
) |
|
107 |
|
|
Loss Before
Income Taxes |
|
(40,944 |
) |
|
(27,717 |
) |
|
|
|
|
|
Income taxes |
|
20 |
|
|
22 |
|
|
Net
Loss |
$ |
(40,964 |
) |
$ |
(27,739 |
) |
|
|
|
|
|
Net Loss Per
Common ShareBasic and diluted net loss per common
share |
$ |
(0.39 |
) |
$ |
(0.28 |
) |
|
|
|
|
|
Shares Used in
Computing Net Loss Per Common Share |
|
|
|
Basic and diluted |
|
105,649,571 |
|
|
100,553,490 |
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Data |
(In thousands) |
(unaudited) |
|
|
March 31, 2016 |
|
December 31, 2015 |
Assets |
|
|
|
Cash and cash
equivalents |
$ |
170,531 |
|
|
$ |
200,290 |
|
Inventory |
$ |
42,198 |
|
|
$ |
41,881 |
|
Total assets |
$ |
229,532 |
|
|
$ |
258,685 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Accounts payable and
accrued expenses |
$ |
17,328 |
|
|
$ |
26,795 |
|
Deferred revenue |
$ |
3,718 |
|
|
$ |
3,526 |
|
Derivative liability |
$ |
48,693 |
|
|
$ |
46,686 |
|
Convertible senior notes,
net of discount |
$ |
106,521 |
|
|
$ |
90,773 |
|
Total liabilities |
$ |
180,137 |
|
|
$ |
171,751 |
|
Stockholders’ equity |
$ |
49,395 |
|
|
$ |
86,934 |
|
Forward Looking Statements Some of the
statements included in this press release, particularly those
regarding the commercialization and ongoing clinical development of
Auryxia and our expected cash operating expenses, may be
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: whether we can increase adoption of Auryxia in patients
with CKD on dialysis; whether we can maintain our operating
expenses to projected levels while continuing our current
clinical,regulatory and commercial activities; whether we will able
to identify and negotiate acceptable terms with a commercialization
partner in the E.U.; whether we or a partner can successfully
launch Fexeric in the E.U.; whether Riona® will be successfully
marketed in Japan by our Japanese partner, Japan Tobacco, Inc. and
Torii Pharmaceutical Co., Ltd; the risk that the FDA may not concur
with our interpretation of our Phase 3 study results in
non-dialysis dependent (NDD) CKD, supportive data, conduct of the
studies, or any other part of our regulatory submission and could
ultimately deny approval of ferric citrate for the treatment of IDA
in adults with stage 3-5 NDD CKD; the risk that if approved for use
in NDD-CKD that we may not be able to successfully market Auryxia;
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.
Use of Non-GAAP Financial MeasuresTo supplement
the financial measures presented in Keryx’ press release and
related conference call or webcast in accordance with accounting
principles generally accepted in the United States (“GAAP”), Keryx
also presents expected cash operating expenses in the 2016
financial guidance discussion above, which is a non-GAAP financial
measure. This non-GAAP financial measure’s most comparable GAAP
financial measure is total operating expenses. Keryx believes that
the non-GAAP financial measure cash operating expenses provides
investors with useful information regarding the company’s financial
condition and prospects because this measure helps an investor
better understand the company’s expected liquidity needs.
Also, this non-GAAP measure is used by Keryx management for
internal review of the company’s operating performance.
A “non-GAAP financial measure” refers to a numerical measure of
the company’s historical or future financial performance, financial
position, or cash flows that excludes (or includes) amounts that
are included in (or excluded from) the most directly comparable
measure calculated and presented in accordance with GAAP in the
company’s financial statements. Keryx provides the non-GAAP measure
listed above as additional information relating to Keryx’ expected
operating results as a complement to results provided in accordance
with GAAP. The non-GAAP financial information presented here should
be considered in conjunction with, and not as a substitute for or
superior to, the financial information presented in accordance with
GAAP. There are significant limitations associated with the use of
non-GAAP financial measures. Further, these measures may differ
from the non-GAAP information, even where similarly titled, used by
other companies and therefore should not be used to compare Keryx’
performance to that of other companies.
About Keryx Biopharmaceuticals, Inc. Keryx
Biopharmaceuticals, with headquarters in Boston, is focused on
bringing innovative medicines to market for people with renal
disease. In December 2014, the company launched its first
FDA-approved medicine, Auryxia™ (ferric citrate) in the United
States. In January 2014, ferric citrate was approved for use
in Japan, where it is being marketed as Riona® by Keryx's Japanese
partner, Japan Tobacco Inc. and Torii Pharmaceutical Co. Ltd. In
September 2015, the European Commission granted European market
authorization for Fexeric® (ferric citrate coordination complex).
For more information about Keryx, please visit www.keryx.com
KERYX BIOPHARMACEUTICALS CONTACTS:
Amy Sullivan
Vice President, Corporate Development and Public Affairs
T: 617.466.3519
amy.sullivan@keryx.com
Lora Pike
Senior Director, Investor Relations
T: 617.466.3511
lora.pike@keryx.com
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