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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
Penny Stockington
28 Mar 15 01:07:15
Our Penny Stock Pick On $RCGP Gained As Much As 236% In 2 Days! Get Our Next Pick Early: http://t.co/22aEoRaezM $TSL $KERX $GGAL
StockenheimerSchmidt
28 Mar 15 01:04:23
$RCGP tripled in value within 2 days as of yesterdays high! high! Big News: http://t.co/RWkbY02YnU $TSL $KERX $GGAL
Penny Stockington
28 Mar 15 00:44:49
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Stockaholics
28 Mar 15 00:19:18
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Stock Dawgzz
28 Mar 15 00:19:14
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StockenheimerSchmidt
28 Mar 15 00:17:23
$RCGP tripled in value within 2 days as of yesterdays high! high! Big News: http://t.co/RWkbY02YnU $YPF $KERX $ATSG
dougheuring
27 Mar 15 18:28:47
@TexDotOrg $KERX http://t.co/qlMeyYP6km
BioPharm Insight
27 Mar 15 16:30:39
$KERX ferric citrate CKD use debated by experts
dailystockplays.com
27 Mar 15 16:16:26
Doji Stocks http://t.co/78nEAAa5Or $PBR $EPI $GLD $LLY $SBUX $NPBC $PLD $AGNC $VNQ $CVC $JCI $BIIB $FTI $LYG $OHI $AFL $CHRW $MPW $KERX
Penny Stockington
27 Mar 15 11:36:10
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Stock Rocket
27 Mar 15 11:30:10
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27 Mar 15 10:04:42
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Stockaholics
27 Mar 15 10:01:00
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dougheuring
27 Mar 15 08:00:06
JMP Rx Launch Tracker – Trends for Imbruvica, Iclusig, Otezla, Xtandi and Auryxia $KERX $ARIA $PCYC $CELG $MDVN http://t.co/D7qvieNQBs
Mark B. Spiegel
27 Mar 15 06:54:28
@nerifede I don't believe they're 3-mo scripts. Bottle has 200 pills & $KERX web site sample script is 200 http://t.co/IpihSnIL5a
Mark B. Spiegel
27 Mar 15 06:41:22
@nerifede The $KERX Auryxia refill rate is only around 30% vs 55% for Renvela. This speaks to potential serious Auryxia tolerability issues.
Federico
27 Mar 15 06:39:02
$kerx, new scripts numbers for Auryxia (WE 03/20/2015), up 12% since last week: TR x: 169 (up from 151) NR x: 142 (up from 134)
On Time Picks
27 Mar 15 06:12:24
DewDiligence: I don’t follow $KERX closely enough to have: DewDiligence http://t.co/udeG0xAHe4
NASDAQ
27 Mar 15 03:16:23
$KERX - Wait For The Big Biotechs To Stabilize - Cramer's Lightning Round (3/26/15) http://t.co/iz15nvpYnb
Rachel Smith
27 Mar 15 03:16:21
$KERX - Wait For The Big Biotechs To Stabilize - Cramer's Lightning Round (3/26/15) http://t.co/H8mxuvOCrf
StockNews
27 Mar 15 03:16:12
$KERX - Wait For The Big Biotechs To Stabilize - Cramer's Lightning Round (3/26/15) http://t.co/7pS1tcQXNf
Stocks News&Markets
27 Mar 15 03:16:10
$KERX - Wait For The Big Biotechs To Stabilize - Cramer's Lightning Round (3/26/15) http://t.co/Rr2wL3EKZt
Seeking Alpha
27 Mar 15 03:00:08
Wait For The Big Biotechs To Stabilize - Cramer's Lightning Round (3/26/15) http://t.co/WNE6bQhmf1 $DVAX $CELG $H $MAR $KERX $HAL $HIMX
Stock Rocket
27 Mar 15 01:20:36
$THCZ Has Become One Of The Hottest Penny Stocks Of The Year So Far! Check It Out: http://t.co/3wv3AMJ7Ni $YPF $KERX $ATSG
StockenheimerSchmidt
27 Mar 15 01:18:22
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Stockaholics
27 Mar 15 01:16:47
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Stock Rocket
27 Mar 15 00:39:32
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Penny Stockington
27 Mar 15 00:36:21
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StockenheimerSchmidt
27 Mar 15 00:32:18
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Penny Stockington
27 Mar 15 00:22:14
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Breaking News
27 Mar 15 00:07:03
$KERX: Yesterday's Losers: National Bank of Greece (ADR) (NYSE:NBG ...: http://t.co/MMh4iy1Yh2
On Time Picks
26 Mar 15 19:02:25
wadegarret: Dewdiligence- $KERX: wadegarret http://t.co/2B9CPj9yfr
StockNewsWires
26 Mar 15 16:42:02
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26 Mar 15 15:59:02
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Stock Dawgzz
26 Mar 15 15:23:12
Our Penny Stock Newsletter Alert On $RCGP Gained 57% Mid-Day Today! Blog Update: http://t.co/Dk7CzkVjdH $YPF $KERX $ATSG
StockenheimerSchmidt
26 Mar 15 15:16:44
Our Penny Stock Picks Have Gained Over 1485% In The Past 4 Months! MASSIVE Update: http://t.co/Cu9lMFFRwA $YPF $KERX $ATSG
Stockaholics
26 Mar 15 15:05:18
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Stock Dawgzz
26 Mar 15 14:42:58
Our Penny Stock Newsletter Alert On $RCGP Gained 57% Mid-Day Today! Blog Update: http://t.co/Dk7CzkVjdH $TSL $KERX $GGAL
Penny Stockington
26 Mar 15 13:55:56
Our Penny Stock Pick On $THCZ Is Up 321.54% In Less Than 6 Weeks! Big News: http://t.co/PqlF5t9PRj $YPF $KERX $ATSG
Stock Rocket
26 Mar 15 12:59:08
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Stock Rocket
26 Mar 15 11:18:31
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Penny Stock Secret
26 Mar 15 11:13:29
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StockenheimerSchmidt
26 Mar 15 11:08:30
Our Penny Stock Picks Have Gained Over 1485% In The Past 4 Months! MASSIVE Update: http://t.co/Cu9lMFFRwA $TSL $KERX $GGAL
Penny Stockington
26 Mar 15 10:51:12
Our Penny Stock Pick On $THCZ Is Up 321.54% In Less Than 6 Weeks! Big News: http://t.co/PqlF5t9PRj $TSL $KERX $GGAL
Samuel Brown
26 Mar 15 09:01:27
$KERX Keryx Biopharmaceuticals Shares May Hit $25 http://t.co/XsKScMbfcR
Penny Stock Secret
26 Mar 15 07:31:23
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Keith Abrams
26 Mar 15 06:47:46
Covered $KERX short for quick profit to free up more $$ awaiting bargains. Coveting $AERI, $OTIC (after previously selling them for profit).
Homegameralert
26 Mar 15 06:47:13
looking at $CNAT, $BSX, $ATRS, $ALXA, $NVGN, $GALE, $KITE, $KERX, $ANIP, and $ONCY, good pipelines earnings and outlook news
Stockaholics
25 Mar 15 22:37:59
Our Penny Stock Alerts Gained Over 680% In The Past 2 Months! Special Update: http://t.co/8VP5dUIIVo $YPF $KERX $ATSG
StockenheimerSchmidt
25 Mar 15 22:30:48
Our Stock Tips Gained Over 600% In The Past 2 Months! Special Update: http://t.co/jUh1Sp2QCy $YPF $KERX $ATSG
				
				
By  +Follow March 26, 2014 2:20AM
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