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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.


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Results for KERX
StockNews
27 Feb 15 14:31:04
$KERX - Annual Report (10-k) http://t.co/dqhjCq32ZK
Stocks News&Markets
27 Feb 15 14:31:03
$KERX - Annual Report (10-k) http://t.co/Lq2O4FYeF5
Market Parse
27 Feb 15 14:00:32
@RamosInvestment $KERX Your tweet has been featured on Market Parse, for iPhone. http://t.co/YHInvBkJcO
dougheuring
27 Feb 15 13:48:46
JMP Biotechnology Rx Launch Tracker – Trends for Imbruvica, Iclusig, Otezla, Xtandi and Auryxia $CELG $PCYC $KERX http://t.co/7JAqJcVlBl
BreakingStocksNews
27 Feb 15 13:26:04
$KERX: JP Morgan Reiterates Positive Outlook On Keryx ...: http://t.co/MnIHF4K1QR
Smarter Analyst
27 Feb 15 13:21:52
$KERX J.P. Morgan Reiterates Positive Outlook On Keryx Biopharmaceuticals Following 4Q14 Update http://t.co/wz5SiPKy9v
Breaking News Now
27 Feb 15 13:13:11
$KERX: Keryx Biopharmaceuticals Price Target Cut to $27.00 by Analysts at ...: http://t.co/hCkFh9JGOX
ProTradersNews
27 Feb 15 13:13:08
$KERX: Keryx Biopharmaceuticals Price Target Cut to $27.00 by Analysts at ...: http://t.co/xwJmU9XIfz
WallStreetConsensus
27 Feb 15 13:13:02
PT Chg 2/27: $KERX, $VALE, $DDD, $RPTP, $KOP, $NXTM, $AL, $ENOC, $CERS, $IM, $MDXG, $BKS Full: http://t.co/k7oRoWuTnw http://t.co/yExiImor7g
BreakingStocksNews
27 Feb 15 13:11:09
$KERX: Keryx Biopharmaceuticals Price Target Cut to $27.00 by Analysts at ...: http://t.co/Egxrllurnh
Breaking News Now
27 Feb 15 13:01:03
$KERX: BTIG Remains Neutral On Keryx Biopharmaceuticals Following ...: http://t.co/3BQLeL6AgU
Stocks News&Markets
27 Feb 15 13:00:59
lx21 made $14,370 on $KERX -Check it out! http://t.co/GWYL9Regww Learn #howtotrade http://t.co/axK8SMSgo9 $UNXL $CYCC $AVEO $XIN $ABTL
Large Void Bot
27 Feb 15 13:00:30
Popular: $BPOP, $GPRO, $ORLY, $CAS, $MHK, $SKH, $ORN, $TRUE, $FISI, $KERX
Woll Street
27 Feb 15 12:48:41
$KERX volume ramp https://t.co/4VAalb4biR bottoming play
NoanetTrader
27 Feb 15 12:47:47
$KERX nice eod push, looks like focusing there could pay off.
dougheuring
27 Feb 15 12:36:44
JMP $KERX raised target from 19to 21 http://t.co/lT9gfeeZlL
NoanetTrader
27 Feb 15 12:28:47
Commented on StockTwits: in terms of charts... I am going through $KERX right now, decent looking setup imo... http://t.co/hhkyCoUJu9
Investors Hangout
27 Feb 15 12:22:44
clayton: KERX 11.99 Keryx Biopharmaceuticals $KERX added http://t.co/DvRBRuTX4n
Investors Hangout
27 Feb 15 12:22:44
clayton: KERX 11.99 Keryx Biopharmaceuticals $KERX stock http://t.co/wuXjCxuRbO
Investors Hangout
27 Feb 15 12:22:40
clayton: KERX 11.99 Keryx Biopharmaceuticals $KERX added http://t.co/ij56Vv0gni
Investors Hangout
27 Feb 15 12:22:40
clayton: KERX 11.99 Keryx Biopharmaceuticals $KERX stock http://t.co/oRoGvJgKBh
clayton
27 Feb 15 12:21:58
KERX 11.99 Keryx Biopharmaceuticals $KERX added to my watch list. Right now with KERX I am watching the last p http://t.co/tCvWItetUj
clayton
27 Feb 15 12:21:37
$KERX KERX 11.99 Keryx Biopharmaceuticals $KERX stock added to my watch list. Right now with KERX I am watching the http://t.co/GaviSwxkj4
NoanetTrader
27 Feb 15 12:00:50
$KERX nice price action
Trending Articles SA
27 Feb 15 12:00:03
Keryx Biopharmaceuticals' (KERX) CEO Ron Bentsur on Q4 2014 Results - Earnings Call Transcript http://t.co/YgxSpl4W3g $KERX
Stock Rocket
27 Feb 15 11:24:32
Our Penny Stock Picks Gained Over 342% In 2 weeks! Get Our Next Alerts Early: http://t.co/WWiSMpV7jj $YPF $KERX $ATSG
danrocks
27 Feb 15 11:24:20
Right now KERX is number 200 for the largest percentage gain out of 250 stocks. $KERX KERX is up +1.91% in the http://t.co/9wJhi8lMU8
danrocks
27 Feb 15 11:23:58
$KERX KERX Stock is number 200 for the largest percentage gain out of 250 stocks. $KERX KERX is up +1.91% in the las http://t.co/bwYYFMROeA
Stock Rocket
27 Feb 15 10:16:39
Our Penny Stock Picks Gained Over 342% In 2 weeks! Get Our Next Alerts Early: http://t.co/WWiSMpV7jj $TSL $KERX $GGAL
Homegameralert
27 Feb 15 09:58:15
grabbing more $JCP, $KERX, on earnings and growth
StockEarnings.com
27 Feb 15 09:20:31
$KERX Earnings result is already out. Check out historical price reaction after ER. http://t.co/shRtFlkApB
Alexander Morris
27 Feb 15 09:09:19
$KERX: Exc 1DyHIGH=11.95, hits:2, ch:+0.3%, News, phNearCl:BrkPLo+PHi[+3.9%], 3:1Accel+, tf:0100111, medFlt:74M, HiPctSht[33%:11d]
Smarter Analyst
27 Feb 15 08:59:32
$KERX BTIG Remains Neutral On Keryx Biopharmaceuticals Following Earnings Update http://t.co/5DEXainWpH
Jeffrey Blake
27 Feb 15 08:31:36
$KERX UPDATE: Keryx Biopharmaceuticals Posts Q4 Loss http://t.co/ox2YMuscqX
John Ablemann
27 Feb 15 08:31:34
$KERX What Awaits Keryx Biopharmaceuticals (KERX) this Earnings? http://t.co/9zGVvDsD2z
WKRB News
27 Feb 15 08:07:23
Roth Capital Trims Keryx Biopharmaceuticals Target Price to $27.00 $KERX http://t.co/YoMCiTiaVo
Joe
27 Feb 15 08:07:16
Roth cuts $KERX PT from $32 to $27.
US Consumer News
27 Feb 15 08:00:44
Keryx Biopharmaceuticals's PT cut by Roth Capital to $27.00. buy rating. http://t.co/usNXwkXpiQ $KERX #KERX
Analyst Ratings
27 Feb 15 08:00:42
Keryx Biopharmaceuticals's PT cut by Roth Capital to $27.00. buy rating. http://t.co/O6ZdJPlW1e $KERX #KERX
The Legacy News
27 Feb 15 07:57:12
Keryx Biopharmaceuticals $KERX Issues Earnings Results http://t.co/QAae1OcZWq
Stock Trade Alerts
27 Feb 15 07:49:11
RT @Estimize: $KERX misses the Estimize EPS Consensus by 7c and the Estimize Revenue Consensus by $1.59M - http://t.co/SoDxPb1Os6
John Smith
27 Feb 15 07:48:26
$ACUR surging 20%. Set sell limits high force squeeze #Euro #cncb #jimcramer $gsk $shpg $azn $c #investing #money #biotech $eglt $aria $kerx
Banking Privately
27 Feb 15 07:46:32
RT @theflynews: On The Fly: Pre-market Movers $BLOX $CLNE $MNST $SPLK $HZNP $KERX $RESN $TUBE $WTW $JCP $PBPB $NVAX $MOSY $OC... http://t.…
John Smith
27 Feb 15 07:43:49
$ACUR surging 19% on upgrade -strong Egalet partner . #Euro #cncb #jimcramer $gsk $shpg $azn $c #investing #money #biotech $eglt $aria $kerx
John Smith
27 Feb 15 07:42:30
$ACUR surging 18% on upgrade -strong Egalet partner . #Euro #cncb #jimcramer $gsk $shpg $azn $c #investing #money #biotech $eglt $aria $kerx
SIAnalystWire
27 Feb 15 07:36:10
Roth Capital Trims PT on Keryx Biopharma $KERX to $27; 'Blocking and Tacking' w/ Medicare to ... http://t.co/zQLKcKWD1F
Estimize
27 Feb 15 07:23:08
$KERX misses the Estimize EPS Consensus by 7c and the Estimize Revenue Consensus by $1.59M - http://t.co/SoDxPb1Os6
Estimize
27 Feb 15 07:23:06
$KERX reports FQ4 earnings of -44c EPS and $0.57M Revs - http://t.co/leD8VfzfTS
Andrei
27 Feb 15 07:20:54
RT @nerifede: $KERX, #Auryxia scripts 02/20/2015: TR x: 92 (up from 71, +29%), NR x: 89 (up from 69, +29%)
Federico
27 Feb 15 07:16:15
$KERX, #Auryxia scripts 02/20/2015: TR x: 92 (up from 71, +29%), NR x: 89 (up from 69, +29%)
				
				
By  +Follow March 26, 2014 2:20AM
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