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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
Homegameralert
2 Sep 14 13:36:52
@jimcramer what do you think of $KERX in your draft for recievers, its awesome and ready to fly down the field for a touchdown!
Stock Rocket
2 Sep 14 13:12:32
$DGLY is up 940.2% in 3 weeks! Our new penny stock alerts are coming soon: http://t.co/G4xan5kQD5 $YPF $KERX $ATSG
Stock Rocket
2 Sep 14 12:52:59
$DGLY is up 940.2% in 3 weeks! Our new penny stock alerts are coming soon: http://t.co/G4xan5kQD5 $TSL $KERX $GGAL
dougheuring
2 Sep 14 12:36:39
$kerx Roth Capital Reiterates Buy On Keryx As All Eyes On Zerenex Approval Decision; Sees 95% Chance Of Success http://t.co/UJ2urx2X3f
TickerChirp
2 Sep 14 11:14:09
The Top Tweets for $KERX (KERYX BIOPHARMACEUTICAL symbol KERX) on 09/02/2014 http://t.co/oGWninNYkg
On Time Picks
2 Sep 14 10:58:20
maytepper: $KERX Roth Capital Reiterates Buy On Keryx As: maytepper http://t.co/cXh1vopOXL
OTPicks.com
2 Sep 14 07:40:30
http://t.co/rruxxRYVwc $heff: $KERX..Full FDA Approval of Keryx's Zerenex Expected -: $heff http://t.co/YSkfZl8itm http://t.co/rruxxRYVwc
C Mosseri Marlio
2 Sep 14 07:33:23
$KERX "margin of safety" is its applicability to iron deficiency anemia such as in treating CHF: http://t.co/geoFM6JgC5 #safe #convenient
Stock News Updates
2 Sep 14 06:29:29
$KERX: Barbarian At The Gate: Keryx Biopharmaceuticals (KERX) http://t.co/Zj688BVYc5 http://t.co/v54WDN6kut
16
2 Sep 14 06:23:46
RT @AustinJamison1: #etrade @etrade Sept '13 acc.up 30% year to date..Mrkts been strong, follow me 4 picks $KERX FDA approval 9/7 #Winning …
Maksim Venko
2 Sep 14 06:09:12
My watchlist/wishlist for the week: $GPRO & $MBLY if they get any cheaper; $PGNX $KERX $OREX $NKTR $HALO $TTPH $INCY $SNSS $TTPH $ZIOP
Tom Wrigley
2 Sep 14 06:07:37
"@AnalystWire: Full FDA Approval of Keryx's $KERX Zerenex Expected - Roth Capital http://t.co/MYCFeKuej1" #biotech $KERX $18.19
SIAnalystWire
2 Sep 14 06:00:39
Full FDA Approval of Keryx's $KERX Zerenex Expected - Roth Capital http://t.co/U6jKJOTlfP
BuyersStrike
2 Sep 14 05:52:45
. @chasingthealpha This should explain it. "People viewing $AMPE also viewed: $ARNA $KERX $ROSG $PIP $GALE $DNDN ". Retail idiots.
Damien
2 Sep 14 05:47:03
still watching $KERX over 18.50
Companies in News
2 Sep 14 05:29:36
$KERX: Barbarian At The Gate: Keryx Biopharmaceuticals (KERX) http://t.co/qTRIDEIf6M http://t.co/dctb58qYth
Don Fishback
2 Sep 14 04:50:36
Academic Algorithms:(Term LT-ST Difference) $KERX, $BLOX, $CONN, $SFLY, $YHOO http://t.co/WAe18T8FFI
OptionApps
2 Sep 14 04:50:35
Academic Algorithms:(Term LT-ST Difference) $KERX, $BLOX, $CONN, $SFLY, $YHOO http://t.co/ewqMLYJzjG
Don Fishback
2 Sep 14 04:50:35
Academic Algorithms:(Volatility HV-IV Difference) $KERX, $BLOX, $MEI, $BBRY, $YHOO http://t.co/WAe18T8FFI
OptionApps
2 Sep 14 04:50:35
Academic Algorithms:(Volatility HV-IV Difference) $KERX, $BLOX, $MEI, $BBRY, $YHOO http://t.co/ewqMLYJzjG
Don Fishback
2 Sep 14 04:50:34
1 Month Increase in ATM IV (Point change) $KERX, $CODE, $YHOO, $BLOX, $CONN http://t.co/WAe18T8FFI
OptionApps
2 Sep 14 04:50:34
1 Month Increase in ATM IV (Point change) $KERX, $CODE, $YHOO, $BLOX, $CONN http://t.co/ewqMLYJzjG
Don Fishback
2 Sep 14 04:50:33
1 Week Increase in ATM IV (Point change) $CODE, $ARWR, $KERX, $BBRY, $BBBY http://t.co/WAe18T8FFI
OptionApps
2 Sep 14 04:50:33
1 Week Increase in ATM IV (Point change) $CODE, $ARWR, $KERX, $BBRY, $BBBY http://t.co/ewqMLYJzjG
DMO
2 Sep 14 04:20:49
RT @StockMatusow: Admission of having wrong opinion = $KERX, the bulls are right there. I did not consider its small molecule = immune from…
dougheuring
2 Sep 14 04:07:53
JMP - Biotech Balance Labor Day marked the start of a catalyst filled fall season. $kerx $nvs $cytk http://t.co/rt2ZSLES69
StockMatusow
1 Sep 14 23:29:41
But in all honesty,the bulls will end up right on $KERX, IF Zerenex is approved and its likely to be unless manufacturing issue, that's all!
StockMatusow
1 Sep 14 23:27:28
Admission of having wrong opinion = $KERX, the bulls are right there. I did not consider its small molecule = immune from biobetter, sims
Bulls vs Bears
1 Sep 14 21:29:29
$KERX: Seth Klarman's The Baupost Group Buys eBay, SunEdison Semiconductor ... http://t.co/9FctbfGwEZ http://t.co/cmclTg0DkP
Stockaholics
1 Sep 14 20:44:23
$IWEB closed up 100% today, on more than 290 MILLION shares traded! Huge News: http://t.co/ucQcnpafDY $YPF $KERX $ATSG
Stockaholics
1 Sep 14 20:23:46
$IWEB closed up 100% today, on more than 290 MILLION shares traded! Huge News: http://t.co/ucQcnpafDY $TSL $KERX $GGAL
Dan
1 Sep 14 17:45:58
$KERX OI for maturity 09/20/2014. 14.00 Highest put. 16.00 Highest call. http://t.co/UT5IAGzvKb
Andrew
1 Sep 14 17:31:24
“@getsome25: @Biotechinvesto9 what is ur opinion on $kerx and it's approval chances? @andrewdobish” any opinion @CNBCFastMoney @jimcramer
Dan
1 Sep 14 17:30:29
$KERX Max Pain is 15.00 for maturity 09/20/2014. Last close = 18.19. http://t.co/0c4pyhpZta
Market News
1 Sep 14 17:29:32
$KERX: Barbarian At The Gate: Keryx Biopharmaceuticals (KERX) http://t.co/n3ogfK8vtp http://t.co/KtPSCtEoAW
Andrew Errichiello
1 Sep 14 16:43:12
@Biotechinvesto9 what is ur opinion on $kerx and it's approval chances? @andrewdobish
Stockaholics
1 Sep 14 16:16:41
$IWEB closed up 100% today, on more than 290 MILLION shares traded! Huge News: http://t.co/ucQcnpafDY $YPF $KERX $ATSG
Stockaholics
1 Sep 14 15:55:49
$IWEB closed up 100% today, on more than 290 MILLION shares traded! Huge News: http://t.co/ucQcnpafDY $TSL $KERX $GGAL
Jeffrey Blake
1 Sep 14 10:01:16
$KERX Keryx Biopharmaceuticals Sees Unusually High Options Volume (KERX) http://t.co/igNxOCFcSs
Lucretia
1 Sep 14 10:01:15
$KERX Keryx Biopharmaceuticals (KERX) in Focus: Stock Adds 8.4% in Session http://t.co/fOnWtzZGr8
Rick  dan
1 Sep 14 09:45:33
Bio Tech stocks are pure Bubble will fall back 60% watch out $PBYI $ICPT $ALNY $MDVN $BCRX $PTCT $ACAD $BIIB $KERX $TKMR $ALXN $ACHN $REGN
Market News
1 Sep 14 06:29:20
$KERX: Seth Klarman's The Baupost Group Buys eBay, SunEdison Semiconductor ... http://t.co/SmQg0K8l7i http://t.co/AgkONOdO8f
Don Fishback
1 Sep 14 04:50:29
Academic Algorithms:(Term LT-ST Difference) $KERX, $BLOX, $CONN, $SFLY, $YHOO http://t.co/WnqNSrZdwk
OptionApps
1 Sep 14 04:50:29
Academic Algorithms:(Term LT-ST Difference) $KERX, $BLOX, $CONN, $SFLY, $YHOO http://t.co/PwMGnoPTOY
Don Fishback
1 Sep 14 04:50:28
Academic Algorithms:(Volatility HV-IV Difference) $KERX, $BLOX, $MEI, $BBRY, $YHOO http://t.co/WnqNSrZdwk
OptionApps
1 Sep 14 04:50:28
Academic Algorithms:(Volatility HV-IV Difference) $KERX, $BLOX, $MEI, $BBRY, $YHOO http://t.co/PwMGnoPTOY
Don Fishback
1 Sep 14 04:50:27
1 Month Increase in ATM IV (Point change) $KERX, $CODE, $YHOO, $BLOX, $CONN http://t.co/WnqNSrZdwk
OptionApps
1 Sep 14 04:50:27
1 Month Increase in ATM IV (Point change) $KERX, $CODE, $YHOO, $BLOX, $CONN http://t.co/PwMGnoPTOY
Don Fishback
1 Sep 14 04:50:26
1 Week Increase in ATM IV (Point change) $CODE, $ARWR, $KERX, $BBRY, $BBBY http://t.co/WnqNSrZdwk
OptionApps
1 Sep 14 04:50:26
1 Week Increase in ATM IV (Point change) $CODE, $ARWR, $KERX, $BBRY, $BBBY http://t.co/PwMGnoPTOY
				
				
By  +Follow March 26, 2014 2:20AM
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