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

By  +Follow March 26, 2014 2:20AM
Tickers Mentioned:

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
27 Aug 14 19:38:39
http://t.co/hjgLwIcNgz DennyT: TLT Balance Sheet $TLT $AXY.TO $EMES $FXI $KERX: DennyT http://t.co/Po03VXMkg5 http://t.co/hjgLwIcNgz
Vamsi Varanasi
27 Aug 14 19:07:25
$KERX all in for approval !!
27 Aug 14 16:54:27
$KERX resistance at fib 1.618. Crab PRZ $21.13 to $24.13 http://t.co/up3cUymKqS
27 Aug 14 15:37:32
Also on the shorter term radar watching $KERX and $NKTR
Bulls vs Bears
27 Aug 14 13:29:28
$KERX: Keryx Biopharmaceuticals, Inc. Announces Second Quarter and Six Month 2014 ... http://t.co/H3PdmzAagJ http://t.co/TK8EglmQvp
Risk Master
27 Aug 14 12:38:39
$KERX en fuego. Thank you Seth Klarman for turning me on to this stock. I think their ferric citrate drug will be approved and be a big hit
Bill Gunderson
27 Aug 14 11:37:00
Nice little breakout in $KERX today. I am long in MY speculative trading account.
Wall Street News
27 Aug 14 11:29:17
$KERX: Q2 2014 Keryx Biopharmaceuticals, Inc. Earnings Release - Before Market Open http://t.co/e3PkjamLb4 http://t.co/nmDO5VfnOB
27 Aug 14 10:31:23
$SMH Semiconductor ETF Market Vectors (SMH) 51.03 +0.03 (+0.06%) $HAL $KERX $HLF http://t.co/elnGCaRUGf
Investors Hangout
27 Aug 14 10:25:43
jim50: $KERX Close Date=Aug-27-2014 Open=18.15 High=18.2 http://t.co/d9NM09hOZn
Investors Hangout
27 Aug 14 10:25:43
jim50: $KERX Close Date=Aug-27-2014 Open=18.15 High=18.2 http://t.co/yfkHg2AMnC
27 Aug 14 10:25:03
watch $KERX above 18.10, will test 18.50
27 Aug 14 09:58:39
$KERX Close Date=Aug-27-2014 Open=18.15 High=18.2 Low=17.73 Close=18.06 Volume=815055 http://t.co/84mQqOCTNq
Michael Torres, PhD
27 Aug 14 09:58:00
RT @shaneblackmon: Near-term catalyst stocks all on fire... $SNSS, $KERX, $CPRX, $OREX
Shane Blackmon
27 Aug 14 09:57:23
Near-term catalyst stocks all on fire... $SNSS, $KERX, $CPRX, $OREX
Market Updater
27 Aug 14 09:29:38
$KERX: Keryx Biopharmaceuticals Coverage Initiated by Analysts at FBR Capital ... http://t.co/0AkI1oxi0x http://t.co/UPozLGyDMK
Investors Hangout
27 Aug 14 09:28:17
DennyT: TLT Balance Sheet $TLT $AXY.TO $EMES $FXI $KERX http://t.co/lHqqEsqkaR
Investors Hangout
27 Aug 14 09:28:17
DennyT: TLT Balance Sheet $TLT $AXY.TO $EMES $FXI $KERX http://t.co/uyJKEODkAT
Investors Hangout
27 Aug 14 09:28:16
DennyT: ZEN.V Insider Roster $ZEN.V $KERX $CUR $BIIB $GLD http://t.co/usYLtZJ9t1
Investors Hangout
27 Aug 14 09:28:16
DennyT: ZEN.V Insider Roster $ZEN.V $KERX $CUR $BIIB $GLD http://t.co/oGXVYSAo23
Extreme Stocks
27 Aug 14 09:24:05
DennyT: ZEN.V Insider Roster $ZEN.V $KERX $CUR $BIIB $GLD http://t.co/EihIOp9bUY
27 Aug 14 09:23:17
http://t.co/hjgLwIcNgz DennyT: ZEN.V Insider Roster $ZEN.V $KERX $CUR $BIIB $GLD: DennyT http://t.co/ksoOOtxXbo http://t.co/hjgLwIcNgz
27 Aug 14 09:23:15
http://t.co/QkCFZ8H3V8 DennyT: ZEN.V Insider Roster $ZEN.V $KERX $CUR $BIIB $GLD: DennyT http://t.co/29a4zV0wVP http://t.co/QkCFZ8H3V8
$$$ Money $$$
27 Aug 14 09:15:02
$KERX $EXAS $ISIS might be out of juice now. Time to see gravity?
27 Aug 14 08:59:04
$GWPH Showing on my streamers $RBY $EXK $MTVX $KERX $TNA http://t.co/KyiokoOeOl
Investors Hangout
27 Aug 14 08:25:53
DennyT: JCP Recent News $JCP $KERX $ACHN $SD $AGQ http://t.co/6sjOqgXzlo
Investors Hangout
27 Aug 14 08:25:50
DennyT: JCP Recent News $JCP $KERX $ACHN $SD $AGQ http://t.co/c2QCODmHqr
27 Aug 14 08:12:16
$CLDX $FOLD $GLUU $KERX $KITE $MIK $OWW $SPWR $TSL autocharts @ http://t.co/hj7PGeTQk3
K. Trox
27 Aug 14 07:56:52
September is huge for biotech: $AMRN, $CPRX $KERX $ALIM $DSCO $XOMA $LPCB and others all have FDA or data
27 Aug 14 07:55:11
God bless Yahoo Finance: "People viewing $AMPE also viewed: $ARNA $KERX $ROSG $PIP $GALE $DNDN "
Investors Hangout
27 Aug 14 07:50:06
DennyT: LNKD Bloomberg $LNKD $AEM $KERX $XOM $RIG http://t.co/hFbEmzNCgi
Investors Hangout
27 Aug 14 07:50:04
DennyT: LNKD Bloomberg $LNKD $AEM $KERX $XOM $RIG http://t.co/nNHCjqUo4U
Paul Antompietri
27 Aug 14 07:40:25
Damn, the IV on those Dec 24 calls on $KERX I sold is shooting up. Who's buying those things up?
Wall Street News
27 Aug 14 07:29:23
$KERX: Keryx drug improves phosphorus, iron in kidney patients -trial http://t.co/PhJxXuZrSl http://t.co/y8s61uK471
27 Aug 14 07:14:38
http://t.co/Vv1sYDyeQn jim50: ZIP CASH TRAIN: $KERX Current Price Date=Aug-26-2014 Open=17.28 http://t.co/6Ii5Ufhj4L
Investors Hangout
27 Aug 14 07:14:27
jim50: $KERX Current Price Date=Aug-26-2014 Open=17.28 http://t.co/12BvDids9E
Investors Hangout
27 Aug 14 07:14:24
jim50: $KERX Current Price Date=Aug-26-2014 Open=17.28 http://t.co/jnVbWNnbn7
27 Aug 14 07:11:17
$KERX Current Price Date=Aug-26-2014 Open=17.28 High=18.16 Low=17.07 Close=17.89 Volume=3866700 http://t.co/oTdm1cgoGY
Investors Hangout
27 Aug 14 06:46:52
DennyT: TKMR Financials $TKMR $GS $TZA $KERX $ATHM http://t.co/cGgc9NQDg1
Investors Hangout
27 Aug 14 06:46:50
DennyT: TKMR Financials $TKMR $GS $TZA $KERX $ATHM http://t.co/8ArcMuFBxh
27 Aug 14 06:44:02
$kerx Maxim Group Maintains Buy On Keryx; Sees 39% Upside For The Stock http://t.co/oV0GEB9MYq
Alexander Morris
27 Aug 14 06:32:13
$KERX: Exc 1DyHIGH=18.16, hits:1, ch:+1.6%, PrvCHi, 6:7Accel+Dy, tf:7f, MedFlt[80.3M], HiPctSht[25%:7d], PrvClGap+[+1.5%], 3HiDays
Wall Street Monitor
27 Aug 14 06:29:26
$KERX: Coverage initiated on Keryx Biopharma by FBR Capital http://t.co/ljVVonpG3g http://t.co/VBdPS2fQqZ
27 Aug 14 06:24:11
http://t.co/9yIzeMgdPq Verified $18.74 profit in $KERX none
27 Aug 14 06:17:28
$KERX PRZ @ $21 level
27 Aug 14 06:08:15
$KERX above yesterday’s highs is compelling #biotech #20tgt
27 Aug 14 05:49:10
Watchlist for 8/27/14: $MBLY $MNKD $KERX $EXAS $HPJ $ISNS $TWTR $FB...good luck everyone
27 Aug 14 05:38:35
Keryx Biopharmaceuticals Given Buy Rating at Maxim Group $KERX http://t.co/oZrhC1tEvP
Business News Now
27 Aug 14 05:29:24
$KERX: Your September Biotech Back-to-School Calendar http://t.co/YMcIxP2m8v http://t.co/vKEci4jUQC
Denise Brooks
27 Aug 14 05:19:50
Watch List for 8/27: $KERX $MBLY $GWPH $ALXN $WU $ISIS Happy Trading!
By  +Follow March 26, 2014 2:20AM



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