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 third
quarter ended September 30, 2016 and provided a corporate update.
“Our second contract manufacturer is successfully producing
Auryxia,” said Greg Madison, president and chief executive officer
of Keryx Biopharmaceuticals. “We are ready to promptly make Auryxia
available to pharmacies, pending approval of this manufacturer,
which has a November 13, 2016 PDUFA date. Since August, we have
been working closely with the kidney community to support them
through the supply interruption. We are committed to maintaining a
consistent supply of Auryxia, and we are working to ensure that the
renal care teams will confidently prescribe Auryxia again.”
BUSINESS UPDATE
- The company reported Auryxia net U.S. product sales for the
third quarter of 2016 of $5.1 million compared to $3.2 million in
the third quarter of 2015. Third quarter 2016 product sales reflect
approximately 9,700 reported prescriptions of Auryxia during the
period. In addition, Keryx announced it will change its method of
revenue recognition from the sell-through (deferred) method to the
pull-through (ex-factory) method beginning in the fourth quarter of
2016.
- On August 1, 2016, Keryx announced a temporary interruption in
the supply of Auryxia was imminent due to a production-related
issue at its existing manufacturer in converting active
pharmaceutical ingredient (API) to finished drug product. Keryx is
working with its existing manufacturer to resolve the issue and
resume production. Keryx filed a post-approval supplement
application with the U.S. FDA for approval of a second contract
manufacturer to supply finished drug product. The application has a
Prescription Drug User Fee Act, or PDUFA, action date of November
13, 2016. The company is prepared to promptly supply Auryxia to
pharmacies, pending FDA approval of its second contract
manufacturer. In October 2016, Keryx entered into a long-term
agreement with its second contract manufacturer for the manufacture
of commercial supply of finished drug product.
- Keryx announced that it has completed the sNDA seeking an
additional indication for the treatment of iron deficiency anemia
in adults with stage 3-5 non-dialysis dependent chronic kidney
disease (CKD), and is ready to submit the application to the FDA,
pending final agreement on its pediatric plan.
- Five abstracts related to ferric citrate have been accepted for
poster presentation at the upcoming American Society of
Nephrology’s (ASN) 2016 Kidney Week taking place November 15 – 20,
2016. Four of the five abstracts describe data from the pivotal
Phase 3 trial evaluating ferric citrate for the treatment of iron
deficiency anemia in adults with stage 3-5 non-dialysis dependent
CKD. The accepted abstracts are available online on the ASN
conference website. In addition, the company plans to submit
Phase 3 results for publication in a peer reviewed medical
journal.
FINANCIAL SECTION
Third Quarter Ended September 30, 2016 Financial
Results“In the third quarter, we focused on rebuilding
supply of Auryxia while at the same time continuing to invest
appropriately in future growth areas, including pre-launch
activities for the potential label expansion of ferric citrate for
the treatment of adults with IDA and stage 3-5 NDD-CKD,” said Scott
Holmes, chief financial officer of Keryx. “As we look ahead, we
will be focused on how quickly we can return Auryxia to patients
who had previously been prescribed our medicine, and on bringing
Auryxia to new patients who could potentially benefit from
treatment.”
At September 30, 2016, the company had cash and cash equivalents
of $132.2 million.
Total revenues for the quarter ended September
30, 2016 were approximately $6.3 million, compared with $4.2
million during the same period in 2015. Total revenues for the
third quarter of 2016 consisted of Auryxia net U.S. product sales
of $5.1 million, and license revenue of $1.3 million associated
with royalties received on ferric citrate net sales from Keryx's
Japanese partner. Beginning in the fourth quarter of 2016, the
company will change its revenue recognition policy from the
sell-through method based on patient prescription fulfillments to
the pull-through or ex-factory method based on sales of Auryxia to
wholesalers and pharmacy customers. This decision was made
following the company’s ability to reasonably estimate product
returns. Under the ex-factory method, revenue will be recognized
when wholesalers and direct customers receive orders of
Auryxia.
Cost of goods sold for the quarter ended
September 30, 2016 was $18.2 million as compared with $3.1 million
during the same period in 2015. Cost of goods sold during the third
quarter of 2016 included $13.8 million in write-offs of
work-in-process inventory that was determined to no longer be
suitable for commercial manufacture. Additionally, cost of goods
sold during the quarter also included $2.3 million related to
manufacturing charges incurred as a result of not fully utilizing
planned production at the company’s existing third-party drug
product manufacturer.
Research and development expenses for the quarter
ended September 30, 2016 decreased by 22 percent to $8.7 million as
compared to $11.2 million during the same period in 2015. The
decrease was primarily due to a reduction in clinical expenses
associated with the company’s 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 September 30, 2016 were $20.5 million as
compared with $20.2 million during the same period in 2015.
Net loss for the third quarter ended September
30, 2016 was $41.7 million, or $0.39 per share, compared to a net
loss of $30.7 million, or $0.29 per share, for the comparable
quarter in 2015.
Conference Call Information Keryx will host an
investor conference call today, Wednesday, November 9, 2016, at
8:00 a.m. ET to discuss financial results for the third 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: 11829223. 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® (ferric
citrate)Contraindication: Patients
with iron overload syndrome, e.g. hemochromatosis, should not take
Auryxia® (ferric citrate).
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
EndedSeptember 30, |
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
Revenues: |
|
|
|
|
|
|
Net U.S. Auryxia
product sales |
$ |
5,050 |
|
$ |
3,191 |
|
$ |
18,945 |
|
$ |
5,371 |
|
|
|
License
revenue |
|
1,287 |
|
|
1,017 |
|
|
3,505 |
|
|
2,526 |
|
|
|
Total
Revenues |
|
6,337 |
|
|
4,208 |
|
|
22,450 |
|
|
7,897 |
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
Cost of goods
sold |
|
18,196 |
|
|
3,065 |
|
|
24,365 |
|
|
3,445 |
|
|
|
License
expenses |
|
772 |
|
|
611 |
|
|
2,103 |
|
|
1,516 |
|
|
|
Research and
development |
|
8,674 |
|
|
11,150 |
|
|
23,320 |
|
|
28,704 |
|
|
|
Selling, general
and administrative |
|
20,521 |
|
|
20,205 |
|
|
61,518 |
|
|
59,847 |
|
|
|
Total Operating
Expenses |
|
48,163 |
|
|
35,031 |
|
|
111,306 |
|
|
93,512 |
|
|
|
|
|
|
|
|
|
|
Operating
Loss |
|
(41,826 |
) |
|
(30,823 |
) |
|
(88,856 |
) |
|
(85,615 |
) |
|
|
|
|
|
|
|
|
|
Other Income
(expense): |
|
|
|
|
|
|
Other income (expense),
net |
|
150 |
|
|
100 |
|
|
(38,395 |
) |
|
321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before
Income Taxes |
|
(41,676 |
) |
|
(30,723 |
) |
|
(127,251 |
) |
|
(85,294 |
) |
|
|
|
|
|
|
|
|
|
Income taxes |
|
20 |
|
|
22 |
|
|
60 |
|
|
67 |
|
|
|
Net
Loss |
$ |
(41,696 |
) |
$ |
(30,745 |
) |
|
(127,311 |
) |
|
(85,361 |
) |
|
|
|
|
|
|
|
|
|
Net Loss Per
Common Share |
|
|
|
|
|
|
Basic and diluted net
loss per common share |
$ |
(0.39 |
) |
$ |
(0.29 |
) |
$ |
(1.20 |
) |
$ |
(0.83 |
) |
|
|
|
|
|
|
|
|
|
Shares Used in
Computing Net Loss Per Common Share |
|
|
|
|
|
|
Basic and
diluted |
|
105,924,106 |
|
|
105,205,170 |
|
|
105,805,669 |
|
|
103,458,248 |
|
|
Selected Consolidated Balance Sheet Data(In
thousands)(unaudited) |
|
|
|
|
|
September 30, 2016 |
|
December 31, 2015 |
Assets |
|
|
|
Cash and cash
equivalents |
$ |
132,172 |
|
|
$ |
200,290 |
|
Inventory |
$ |
24,313 |
|
|
$ |
41,881 |
|
Total assets |
$ |
168,625 |
|
|
$ |
258,685 |
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Accounts payable and
accrued expenses |
$ |
18,038 |
|
|
$ |
26,795 |
|
Deferred revenue |
$ |
-- |
|
|
$ |
3,526 |
|
Derivative liability |
$ |
-- |
|
|
$ |
46,686 |
|
Convertible senior notes,
net of discount |
$ |
125,000 |
|
|
$ |
90,773 |
|
Total liabilities |
$ |
146,636 |
|
|
$ |
171,751 |
|
Stockholders’ equity |
$ |
21,989 |
|
|
$ |
86,934 |
|
|
|
|
|
|
|
|
|
Forward Looking Statements Some of the
statements included in this press release, particularly those
regarding future revenues and expenses and the commercialization
and ongoing clinical development of Auryxia, including those
statements related to the interruption in the supply of Auryxia and
when Auryxia may be available to patients again as well as the
submission of an sNDA to the FDA to expend the label of ferric
citrate to include the treatment of IDA in adults with stage 3-5
NDD-CKD, 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: our ability to quickly and
successfully identify and resolve the production-related issue; our
ability to quickly and successfully identify and engage secondary
suppliers of finished drug product; our ability to receive FDA
approval of any secondary suppliers of finished drug product
including approval of our second manufacturer by the assigned PDUFA
action date; 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 its subsidiary Torii Pharmaceutical Co., Ltd; the
risk that the FDA may not concur with our interpretation of our
Phase 3 study results in 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
for use in this indication; 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.
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, Strategic Operations and Corporate 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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