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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
crhz1978
17 Sep 14 08:05:50
$AVNR rallying on strong volume on positive Phase II news! 6m vol #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
Patrick
17 Sep 14 08:00:04
#SENTISHIFTUP $DJIA $IGN $NQ $T $KERX $PFE $GSK $PLUG $FDX $IMUC #quantheta
crhz1978
17 Sep 14 07:59:51
$AVNR rallying on strong volume on positive Phase II news! 5m vol #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:57:58
$AVNR rallying on strong volume on positive Phase II news! 12.80!!! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:56:53
$AVNR rallying on strong volume on positive Phase II news! 12.76!!! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:56:14
$AVNR rallying on strong volume on positive Phase II news! 12.75!!! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:55:23
$AVNR rallying on strong volume on positive Phase II news! 12.72!!! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:51:35
$ARIA - was trading near $25/share - will hit that price soon. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $AVNR
crhz1978
17 Sep 14 07:50:24
$AVNR rallying on strong volume on positive Phase II news! 12.67!!! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:50:12
$AVNR rallying on strong volume on positive Phase II news! 12.65!!! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:49:11
$AVNR rallying on strong volume on positive Phase II news! 12.60! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:44:34
$AVNR rallying on strong volume on positive Phase II news! up 4% #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:43:48
$AVNR rallying on strong volume on positive Phase II news! 4m vol. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:32:05
$AVNR rallying on strong volume on positive Phase II news! 4m vol #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:25:17
$AVNR AVP-923 would be first and only treatment for #aggression #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 07:23:07
$AVNR has turned green on HUGE spike in volume - $12.50! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:21:27
$AVNR has turned green on HUGE spike in volume - 3m shares #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:19:24
$ANIP rallying nearly 7% #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:13:06
$AVNR has turned green on HUGE spike in volume - 2.5m shares #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:11:43
$ANIP surging over 6% - great company with tons of drugs and $TEVA partnership #news #alzheimers $pfe $jnj $dndn $ctic $kerx $AVNR $IMUC
crhz1978
17 Sep 14 07:07:24
$AVNR has turned green on HUGE spike in volume here comes $13 #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:07:04
$AVNR has turned green on HUGE spike in volume - news???? #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:05:11
$AVNR has turned green on HUGE spike in volume - News? #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:04:35
$AVNR has turned green on HUGE spike in volume -buyout? News? #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
Allec
17 Sep 14 07:04:34
I'm in a good mood here is a little free money. Short $kerx
crhz1978
17 Sep 14 07:03:39
$AVNR has turned green on HUGE spike in volume - buyout? News? #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $IMUC
crhz1978
17 Sep 14 07:01:57
$AVNR has turned green on HUGE spike in volume - buyout???? #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl
crhz1978
17 Sep 14 07:00:56
$AVNR getting ready to rally after profit-selling - 1m shares! Over $12! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl
crhz1978
17 Sep 14 06:59:36
$CNDO surging nearly 10% #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $AVNR
crhz1978
17 Sep 14 06:54:04
$ANIP SURGING 5%! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn $avnr $IMUC
crhz1978
17 Sep 14 06:50:38
$AVNR getting ready to rally after profit-selling - 1m shares! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 06:35:05
$AVNR getting ready to rally after profit-selling. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 06:32:42
$AVNR getting ready to rally after profit-selling. SQUEEZE! #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
Andrew Borzello
17 Sep 14 06:28:10
RT @crhz1978: $IMUC surging 23% on positive phase II news. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
Andrew Borzello
17 Sep 14 06:28:01
RT @crhz1978: $IMUC surging 26% on positive phase II news and start of Phase III. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebo…
Andrew Borzello
17 Sep 14 06:27:37
RT @crhz1978: $IMUC surging 26% on positive phase II news and start of Phase III #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola…
Andrew Borzello
17 Sep 14 06:27:25
RT @crhz1978: $IMUC surging 20% on positive phase II news and start of Phase III. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebo…
Andrew Borzello
17 Sep 14 06:27:05
RT @crhz1978: $IMUC surging 21% on positive phase II news and start of Phase III. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebo…
C Mosseri Marlio
17 Sep 14 06:04:39
@SashaDamouni Inability of generics to get sevelamer ANDAs approved post-patent expiry is one more reason why $KERX NCE issue is moot.
Vaulty Boy
17 Sep 14 05:59:10
$KERX, $IG, main watch
crhz1978
17 Sep 14 05:59:06
$IMUC surging 21% on positive phase II news and start of Phase III. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 05:46:48
$IMUC surging 20% on positive phase II news and start of Phase III. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 05:25:57
$IMUC surging 26% on positive phase II news and start of Phase III #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 05:14:13
$IMUC surging 26% on positive phase II news and start of Phase III. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
crhz1978
17 Sep 14 05:11:35
$IMUC surging 23% on positive phase II news. #news #alzheimers $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $regn
Mike Robinson
17 Sep 14 04:52:23
RT @Emory_R: RA Capital fined by SEC for short selling violations http://t.co/MWOXNupkWU 17times June 2009-July 2013 $kerx $sgmo $insm $ex…
Ralph
17 Sep 14 04:47:40
RT @NathanAhron: $kerx ceo sold 50k shares...
TheTrader91
17 Sep 14 04:45:29
http://t.co/XM6J7EmyH6 Verified $37.15 loss in $KERX 9/12/14
biotech 2050
17 Sep 14 02:31:19
RT @adamfeuerstein: SEC says RA Capital violated Rule 105 on $HALO $CTIC $SGMO $SNTA $ACHN $IMGN $CLDA $MELA $OGXI $EXAS $GTXI $VVUS $BGMD …
Ian Estepan
17 Sep 14 00:25:46
RT @NathanAhron: $kerx ceo sold 50k shares...
				
				
By  +Follow March 26, 2014 2:20AM
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