The pre-announcement KERX runup is in full effect.
Shares of Keryx Biopharmaceuticals (KERX) have been in the spotlight since late last year when investors starting taking notice of the company's expected release of Phase III trial results for the cancer treatment Perifisone, partnered with AEterna Zentaris (AEZS).
This week KERX shares blew past the five dollar mark, before closing just under that mark, on huge volume as an article on Seeking Alpha proclaimed that Perifisone approval is all but a "done deal," a comment that sparked some headline wars from other media outlets that are not so convinced an approval is imminent.
It's not unusual for share prices of companies in the biotech and pharmaceutical sectors to move higher in anticipation of expected FDA decisions, but it's always a good move - in my opinion - to take advantage of such spikes by selling a few trading shares into such runs in case the decision does not turn out positive.
Additionally, it's common these days to see shares drop post-FDA-decision even when the decision is positive, take Human Genome Sciences (HGSI) and Biodelivery Sciences (BDSI) as examples, so it's even more worthwhile to protect a speculative investment in this volatile climate than before.
Given the high prolie debates currently surrounding KERX, expect a volatile ride over the coming weeks.
Perifisone was in-licensed from Aeterna Zentaris (AEZS) as a potential first-in-class oral anti-cancer drug that inhibits Akt activation in the phosphoinositide 3-kinase (PI3K) pathway, but Keryx also sports another Phase III product, Zerenex, whic is an oral compound intended to treat hyperphosphatemia (elevated phosphate levels) in patients with end-stage renal disease.
The two products form a viable one-two punch for Keryx's late stage pipeline.
The advancement of that one-two punch through mid and late stage trials has increased the KERX share price from under a buck to highs over six over the past few years.
Many have also speculated that this company is a prime takeover target, given that large pharmaceutical companies are looking to boost their pipelines in light of many popular money-makers coming off label over the next few years. That said, it's likely that any acquisition would take place on the back end of trial results when potential buyers would have a better idea of what they're getting.
The recent headline debates has thrust Keryx into the forefront of biotech news these days was reinvigorated over the past few days when the Seeking Alpha report contradicted TheStreet.com's popular biotech blogger, who believes that Perifisone will fail.
Enjoy the ride, but remember that sometimes the best strategy is to trade into these spikes in order to reduce the overall risk of the investment; although that's just this guy's opinion.
Disclosure: No position.