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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
C Mosseri Marlio
28 Nov 14 01:16:46
$KERX Auryxia reduces phosphate below 4.0 mg/dL & ameliorates iron deficiency anemia in CKD patients. Its a Big Deal: http://t.co/SClYr9eBmI
FinSentS NASDAQ
27 Nov 14 23:27:32
$KERX:US Keryx Biopharmaceuticals: 40% Upside In The Bear Case #KERYX BIOPHARMACEUTICALS INC http://t.co/H7gxS00oET #NASDAQ
DIRTY CARL
27 Nov 14 22:12:05
Commented on: "Keryx Biopharmaceuticals: 40% Upside In The Bear Case" http://t.co/5dBQsUHbzY $KERX $FSNUY $SHPG $SNY
Stockaholics
27 Nov 14 21:25:29
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $YPF $KERX $ATSG
Stockaholics
27 Nov 14 20:40:17
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $TSL $KERX $GGAL
Mathew Abraham
27 Nov 14 18:55:44
RT @matt_finston: $Kerx nice write up http://t.co/iN89MUfWrU
Molekule Consulting
27 Nov 14 17:49:02
RT @SeekingAlpha: Keryx Biopharmaceuticals: 40% Upside In The Bear Case http://t.co/Pp9SX52hS7 $FSNUY $SHPG $SNY $KERX
Matt finston
27 Nov 14 17:17:49
$Kerx nice write up http://t.co/iN89MUfWrU
Seeking Alpha
27 Nov 14 16:59:18
Keryx Biopharmaceuticals: 40% Upside In The Bear Case http://t.co/Pp9SX52hS7 $FSNUY $SHPG $SNY $KERX
Stockaholics
27 Nov 14 14:31:46
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $TSL $KERX $GGAL
Irma Doucet
27 Nov 14 13:01:25
$KERX 4 Reasons Why Wall Street Hates Keryx Biopharmaceuticals Inc. http://t.co/QMyd9XePUL
Clair Voight
27 Nov 14 10:31:51
$KERX 4 Reasons Why Wall Street Hates Keryx Biopharmaceuticals Inc. http://t.co/R8royORvsv
Penny Stock Secret
27 Nov 14 09:54:30
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Penny Stock Secret
27 Nov 14 02:52:08
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roy vimer
27 Nov 14 01:13:15
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Stockaholics
27 Nov 14 00:55:20
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Stockaholics
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Stockaholics
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Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $TSL $KERX $GGAL
Penny Stock Secret
26 Nov 14 13:00:09
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Penny Hustlers
26 Nov 14 12:35:49
$VGGL: Like how that was the last stock I mentioned last night? Not cryptic, just didn't expect that type of big news. $CLDX, $RGLS, $KERX
Extreme Stocks
26 Nov 14 11:42:29
lookn4wins: KERX -0.06% Stock Charts $KERX Keryx http://t.co/2vYNncwFKv
OTPicks.com
26 Nov 14 11:13:25
http://t.co/stbZjE9zIq lookn4wins: KERX -0.06% Stock Charts $KERX Keryx: lookn4wins http://t.co/BowHmUiYAw http://t.co/stbZjE9zIq
OTPicks.com
26 Nov 14 11:13:23
http://t.co/AJqTeJyy9C lookn4wins: KERX -0.06% Stock Charts $KERX Keryx: lookn4wins http://t.co/C9au4lMngd http://t.co/AJqTeJyy9C
lookn4wins
26 Nov 14 11:09:07
KERX -0.06% Stock Charts $KERX Keryx Biopharmaceuticals Inc. (NASDAQ) Any opinions on KERX? Please reply to th http://t.co/PI7xQRSuJS
TickerChirp
26 Nov 14 09:44:03
Leading Tweets Relevant to $KERX (Keryx Biopharmaceutical symbol KERX) on 11/26/2014 http://t.co/aGuV6jLrnm
Stockaholics
26 Nov 14 09:13:08
Our Penny Stock Pick On $STTK Gained 171% And Closed up Over 85%! Huge News: https://t.co/MMLz0V8NAH $YPF $KERX $ATSG
Stockaholics
26 Nov 14 08:26:02
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4-traders.com
26 Nov 14 08:25:05
Keryx Biopharmaceuticals : announces results from ferric citrate phase 3 long-term safety extension study http://t.co/br6vpZVSJ4 $KERX
Clair Voight
26 Nov 14 07:02:22
$KERX Keryx Biopharmaceuticals (KERX) Is Today's Dead Cat Bounce Stock http://t.co/9LkcwYzKLc
Penny Stock Secret
26 Nov 14 05:44:29
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Stockaholics
25 Nov 14 20:38:28
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Janiah Clyburn
25 Nov 14 20:12:54
RT Stocks Trending: $SWVI, $AAPL , $NOK , $SIRI , $KERX , $AMD
Stockaholics
25 Nov 14 19:52:39
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Penny Hustlers
25 Nov 14 18:03:33
For what it's worth, $CLDX, $KERX and $RGLS my solid "long term" watches. $SPHS and $PERI I believe will pay off at some point, $VGGL too.
Penny Stock Secret
25 Nov 14 12:53:27
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chartguy89
25 Nov 14 11:02:36
KERX 15.93 Stock Charts $KERX Keryx Biopharmaceuticals Inc. (NASDAQ) Last Updated: 11/25/2014 13:02:33 KERX St http://t.co/tafaOUCHYo
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25 Nov 14 06:11:22
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25 Nov 14 05:11:25
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Hung Tran, MS, MD
25 Nov 14 04:29:53
Misunderstood by WS after its FDA approval of Ferric Citrate, yet the firm and its drug are excellent $KERX http://t.co/x7u5ElomYD
Red Acre Investments
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Samuel Brown
24 Nov 14 14:02:13
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Penny Stock Secret
24 Nov 14 13:44:48
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By  +Follow March 26, 2014 2:20AM
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