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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
nasdaqfan
4 Jul 15 00:50:36
XLV Consumer Discretionary Select Sector SPDR Current Price http://t.co/tCtUdKCP39 $XLV $AUQ $KERX $XFN.TO #XLV #pennystocks #stocks
jim50
4 Jul 15 00:46:08
PGF PowerShares Financial Preferred Portfolio Bid Size http://t.co/7Lh0AIjrLx $PGF $SAND $KERX $FEZ #PGF #pennystocks #finance
lookn4wins
4 Jul 15 00:44:10
PG PowerShares Financial Preferred Portfolio Ask Size http://t.co/v7xT1RrWpj $PG $DY $FR.TO $KERX #PG #pennystocks #stockmarket
DennyT
4 Jul 15 00:43:36
ONTY Pandora Media, Inc. Ex-Div Date http://t.co/ot45F8i91J $ONTY $DIA $KERX $XLP #ONTY #stockmarket #stockmarket
IH News Desk
4 Jul 15 00:43:17
NBRI Netflix, Inc. Exchange http://t.co/5TXfhKeZbQ $NBRI $KERX $UNG $ADMD #NBRI #stock #investing
danrocks
4 Jul 15 00:42:11
MAIN Medinah Minerals, Inc. E.P.S. http://t.co/JQPs0efdyt $MAIN $KERX $CYBR $AVID #MAIN #share #stock
DennyT
4 Jul 15 00:41:34
KERX Keryx Biopharmaceuticals Stock Message Board http://t.co/lZL3YxP40s $KERX $CGRA $MCDOWELLN.IN $NBRI #KERX #invest #share
Emylers
4 Jul 15 00:41:34
KERX Keryx Biopharmaceuticals Company Info http://t.co/tRCEzGQf68 $KERX $TSLA $GREK $MCDOWELLN.IN #KERX #nasdaq #nasdaq
clayton
4 Jul 15 00:41:10
KMB Kinder Morgan Inc. Bid http://t.co/nmCdxMGhHU $KMB $NKE $GOOGL $KERX #KMB #share #stocks
IH News Desk
4 Jul 15 00:41:06
KERX Kirkland Lake Gold Inc. Dividend http://t.co/uKru873P1w $KERX $AUQ $MMTC $KKD #KERX #stockmarket #finance
IH NASDAQ OMX
4 Jul 15 00:41:06
KERX Kirkland Lake Gold Inc. P/E Ratio http://t.co/iFydMMYcCi $KERX $DIS $NKO.TO $NBG #KERX #stocks #share
Emylers
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GREK Global X FTSE Greece 20 ETF Ideas http://t.co/jPiyWFpYkq $GREK $GGAL $KERX $ED #GREK #stocks #finance
Rosner Stocks
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EPD Enterprise Products Partn % Change http://t.co/U3k40aKZ7r $EPD $CMGO $KERX $XOP #EPD #finance #stocks
clayton
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EWW Mexico iShares Dividend http://t.co/shx8f3yvkg $EWW $PG $CHL $KERX #EWW #stocks #share
nasdaqfan
4 Jul 15 00:36:04
ED Consolidated Edison, Inc. Prev Close http://t.co/opJHbKtGAg $ED $BITA $MELY $KERX #ED #invest #invest
Jake13
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DBLTX Deere & Co. Last Price http://t.co/CRx26zYG5G $DBLTX $VLTC $FXI $KERX #DBLTX #stockmarket #finance
nasdaqfan
4 Jul 15 00:32:16
ALDR Alder Biopharmaceuticals Inc. 52Wk Low http://t.co/HVAp2qwFMZ $ALDR $KERX $UNG $NEM #ALDR #investing #stock
Stockaholics
3 Jul 15 20:08:02
$SUTI Has Now Seen 400% Gains In The Past 2 Weeks! Special Update: http://t.co/l1zbyeWEGo $YPF $KERX $ATSG
Stock Dawgzz
3 Jul 15 20:07:20
Our Platinum Subscribers Saw Their Penny Stock Alerts Gain Over 200% In 2 Weeks! Big Update: http://t.co/Lhta1y8KaK $YPF $KERX $ATSG
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Penny Stockington
3 Jul 15 19:46:09
$SUTI Has Gained 66.67%, Since Our Penny Stock Blog Alert! Huge News: http://t.co/llIxl7cUOL $TSL $KERX $GGAL
StockenheimerSchmidt
3 Jul 15 19:43:45
Our Stock Pick On $PPCH Is Up 370% For Our Subscribers, Since Our Original Release At .02! Huge News: http://t.co/Ab9x726B1J $TSL $KERX $GGA
stockschamp
3 Jul 15 14:28:18
Premium Alerts Ranked #1 For Gains 2834% Last Week http://t.co/8WvnrVmkBS .. $TSL $KERX $GGAL
Jack Trader
3 Jul 15 14:06:06
$KERX Large Inflow of Money Witnessed in Keryx Biopharmaceuticals, Inc. http://t.co/vW3uA5Zprv
ProTradersNews
3 Jul 15 10:49:23
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stockschamp
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2 Jul 15 15:15:47
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iStock Market
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Stockaholics
2 Jul 15 15:12:44
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2 Jul 15 14:49:17
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Penny Stockington
2 Jul 15 14:48:29
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By  +Follow March 26, 2014 2:20AM
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