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News of Delayed Medicare Policy Spikes Keryx Biopharmaceuticals (KERX) Stock

By  +Follow March 26, 2014 2:20AM
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Shares in small-cap Keryx Biopharmaceuticals (KERX) showed strength on Wednesday, taking off about an hour after the opening bell and gaining nearly 20 percent. The massive spike, which took shares from $14.40 a share to over $16.85 from 10:26 am to 10:36 am ET by news that the "doc fix" bill includes language for Medicare to delay moving oral-only End-Stage Renal Disease (ESRD) Drugs into the ESRD bundle until 2024. Shares reached highs of $17.29 apiece by early afternoon and stayed above $16.50 for much of the day.

A note sent by Guggenheim Partners to clients at 10:20am included the revelation that the "doc fix" bill currently moving through congress includes a provision delaying the inclusion of ESRD drugs that don't have an IV alternative from the ESRD bundle until 2024. This 8-year delay for moving oral-only ESRD drugs into the bundle comes after a previous 2-year delay bumping the date to 2016 and should be a boon to those companies producing medications falling into the oral-only ESRD category.

The legislation, which has been subject to rushed negotiations as the March 31 expiration of a previous 3-month patch passed in December of last year fast approaches, is scheduled for a house vote tomorrow. Without this "doc fix," doctors participating in Medicare would get hit by a 24 percent reduction in their reimbursements, an ongoing issue that dates back to 1990s legislation targeting federal spending. House Speaker John Boehner stated at a Wednesday press conference that the short-term fix won't affect any negotiations on a long-term solution.

"That does not preclude any work from being done on the long-term fix in terms of how we pay doctors,” he said. “I think we need to take this step first.”

Keryx, which is developing KRX-0502 to treat hyperphosphatemia (an excess of phosphate), a disease common among patients suffering from chronic kidney disease, appears to be one of the companies that should benefit from the delay. The drug is what’s known as a “phosphate-binder,” a group of drugs that have been part of Medicare's focus on its policies for treating ESRD.

The Centers for Medicare and Medicaid Services (CMS) began shifting its PPS for ESRD drugs in 2011. The shift in policy means that payments from Medicare for ESRD treatments will now be “bundled,” offering a single payment through Medicare part B for the entirety of the treatment, including dialysis and oral drugs. This differs from the previous policy of certain medications related to dialysis treatment, like phosphate binders, being paid for separately through Medicare part D.

However, Keryx has a number of other fundamental and technical factors that could be driving the day’s gains. Certainly, the dramatic spike at 10:26 is most likely connected a specific news item, but the stock was up 2.3 percent prior to the big spike and appeared to be climbing. This could be attributed to a rash of “buy” ratings on the stock coming from nine different analysts, with the most recent from Mizuho on March 20 with a price target of $25 a share.

However, technical factors could also be what was driving the price up early and may also have contributed to the size of the big jump at 10:26. The stock had been trading in a fairly defined up channel since mid-October, with a rising support level that was moving largely in tandem with the 50-day SMA.

On March 19, though, the stock started a plunge that had it crossing its 20-day and 50-day SMAs and crashing through support. This selling spree ultimately resulted in a 14-day RSI of 35, where under 30 is traditionally viewed as a sign a stock is oversold, and a 14-day Stochastic RSI of 0.00, well below the 0.20 level traditionally viewed as an indicator shares are oversold.

As such, some rebound for Keryx seemed likely today regardless of any news items and technical factors could have provided additional upward pressure to the buying spree sparked by the rumors about Medicare’s policy delay.

 

Editor's note: Article has been editied since its initial publication. A previous reference to a tweet from Chad Fugere was removed after he contacted Equities.com to clarify the source of his information.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for KERX
Christopher Hickman
27 Aug 15 12:11:50
$KERX should be bought out by $FMS for about how much? 18? or 21??
James P Worthy
27 Aug 15 10:13:08
$KERX Keryx Biopharmaceuticals (KERX) Highlighted As Weak On High Volume http://t.co/Og8DSTAnnE
IH News Desk
27 Aug 15 09:49:40
XLF Financials Select Sector SPDR Day High http://t.co/4FC2YCuchI $XLF $AA $NUGT $KERX #XLF #stockmarket #stockmarket
IH NASDAQ OMX
27 Aug 15 09:49:11
TZA Direxion Daily Small Cap Bear 3x Shares Shares http://t.co/Xec2AoMEm7 $TZA $KERX $XRT $CLF #TZA #finance #share
clayton
27 Aug 15 09:49:11
UCO ProShares Ultra DJ-UBS Crude Oil Ask Size http://t.co/jmN3cAGgQJ $UCO $KERX $CELG $LABU #UCO #stockmarket #stockmarket
Stock Forums
27 Aug 15 09:49:09
UWTI VelocityShares 3x Long Crude ETN Exchange http://t.co/nL5M1p1nqS $UWTI $IYT $KERX $ASHR #UWTI #finance #stockmarket
IH News Desk
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TQQQ ProShares UltraPro QQQ Open http://t.co/KNQYmP9ZDc $TQQQ $CYBR $NBD.TO $KERX #TQQQ #stocks #tradeideas
Lucky Jimmy
27 Aug 15 09:48:04
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IH NASDAQ OMX
27 Aug 15 09:45:41
SPXS Direxion Daily S&P 500 Bear 3X Shares Summary http://t.co/drBANaRb9O $SPXS $KERX $XEG.TO $HGU.TO #SPXS #stockmarket #share
lookn4wins
27 Aug 15 09:45:39
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KO Coca Cola Co. Filings http://t.co/eIWtlaVZxH $KO $HVI.TO $KERX $SOXL #KO #invest #nasdaq
DennyT
27 Aug 15 09:41:05
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Investors Hangout
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Investors Hangout
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leahanne
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Stock Forums
27 Aug 15 09:40:17
KERX Keryx Biopharmaceuticals Ask Size http://t.co/Gu0j6SxhBK $KERX $ITB $EUM $TCK/B.TO #KERX #stocks #invest
lookn4wins
27 Aug 15 09:37:23
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DennyT
27 Aug 15 09:37:19
FORD Forward Industries, Inc. EOD Data http://t.co/Tk56zC2hT2 $FORD $EEM $NKE $KERX #FORD #investing #pennystocks
clayton
27 Aug 15 09:37:14
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Rosner Stocks
27 Aug 15 09:35:09
EFA iShares MSCI EAFE Index Fund EOD Data http://t.co/Y3tbS4OgRO $EFA $ERBB $CVX $KERX #EFA #investing #stock
Investors Hangout
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IH NASDAQ OMX
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DIS Walt Disney Co. 52Wk High http://t.co/WBPglYl7za $DIS $KERX $CVC $NQ #DIS #stock #pennystocks
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Investors Hangout
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danrocks
27 Aug 15 08:51:24
Right now KERX is number 109 for the largest percentage gain out of 250 stocks. $KERX KERX is up +8.48% in the http://t.co/D6xX0eqyzS
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Quartermaster
27 Aug 15 08:06:45
$kerx strong
Greg David
27 Aug 15 06:11:21
http://t.co/APzP66vnr4 IN PLAY: $CRK $SOGCQ $KERX $ICBU $MCUR $CLNE $EXK $KALO $FONU $AVEO $AMKR $AGEN $JASO http://t.co/5hO7ALUgjM
Breaking News Now
27 Aug 15 06:01:08
$KERX: Brokerages Set Keryx Biopharmaceuticals Target Price at $14.32 …: http://t.co/WKif9R3va1
WKRB News
27 Aug 15 05:56:38
Brokerages Set Keryx Biopharmaceuticals Target Price at $14.32 $KERX http://t.co/bFiBlOTOSh
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27 Aug 15 05:14:51
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27 Aug 15 04:49:05
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StockenheimerSchmidt
27 Aug 15 04:48:45
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Penny Stockington
27 Aug 15 04:44:35
Our Stock Alert On $GEQU Nearly QUADRUPLED In 2 Weeks! Special Update: http://t.co/EYbtsRHt9t $YPF $KERX $ATSG
WatchTheFunds
27 Aug 15 03:19:03
$KERX Institutional ownership up 1.37% Q/Q, with 991,248 net purchase http://t.co/YS7zmgzxlu http://t.co/sX4NGwH3yY
Dave
26 Aug 15 22:06:16
http://t.co/L46QQZciCc IN PLAY: $CRK $SOGCQ $KERX $ICBU $MCUR $CLNE $EXK $KALO $FONU $AVEO $AMKR $AGEN $JASO http://t.co/DaYipeuYVN
Stockaholics
26 Aug 15 20:59:16
Platinum Subscribers Saw Our Stock Picks Gain 4,000% In 10 Months! See Our New Pick: http://t.co/g5i9WatmiT $TSL $KERX $GGAL
Paul Henry
26 Aug 15 17:37:57
We Sent A SECRET New Penny Stock Pick To Our Platinum Members! Get Exclusive Special Access: http://t.co/sJCFystTVz $YPF $KERX $ATSG
Michael James
26 Aug 15 17:35:50
Subscribers Saw A 525% Gain On $GEQU & A SECRET New Pick Is Out! See The Private Info: http://t.co/RzgF9M02nG $YPF $KERX $ATSG
Michael Cook
26 Aug 15 17:35:19
After 3,000% Gains In The Past Year, We Have A Major New Pick Out! Big Update: http://t.co/QTGaTmzV8y $YPF $KERX $ATSG
Paul Henry
26 Aug 15 14:57:38
We Sent A SECRET New Penny Stock Pick To Our Platinum Members! Get Exclusive Special Access: http://t.co/sJCFysLuN7 $TSL $KERX $GGAL
Michael James
26 Aug 15 14:55:17
Subscribers Saw A 525% Gain On $GEQU & A SECRET New Pick Is Out! See The Private Info: http://t.co/RzgF9MhDfe $TSL $KERX $GGAL
Michael Cook
26 Aug 15 14:54:50
After 3,000% Gains In The Past Year, We Have A Major New Pick Out! Big Update: http://t.co/QTGaTmijJY $TSL $KERX $GGAL
Lucretia
26 Aug 15 14:14:18
$KERX Keryx Biopharmaceuticals (KERX) Highlighted As Weak On High Volume http://t.co/MhhSMMQhMz
				
				
By  +Follow March 26, 2014 2:20AM
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