Overview

Keryx Biopharmaceuticals (KERX) is a commercial stage biopharmaceutical company focused on bringing innovative medicines to people with kidney disease. The company's long-term vision is to build a multi-product kidney care company. The company's marketed product, Auryxia (ferric citrate) tablets, is an orally available, absorbable, iron-based medicine. Auryxia is approved by the U.S. Food and Drug Administration, or FDA, for two indications. Auryxia was originally approved in September 2014 for the control of serum phosphorus levels in patients with chronic kidney disease, or CKD, on dialysis. Additionally, in November 2017, the FDA approved Auryxia for the treatment of iron deficiency anemia in adults with CKD, not on dialysis. With two FDA-approved indications, the company will leverage its U.S. clinical and commercial infrastructure to make Auryxia available to millions of people with CKD and either iron deficiency anemia or elevated levels of serum phosphorus, which is referred to as hyperphosphatemia. Ferric citrate is also approved in Japan under the trade name Riona and marketed by its Japanese partner, Japan Tobacco, Inc., or JT, and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii, and approved in Europe as Fexeric. The company use the brand name Auryxia when the company refer to ferric citrate for use in the approved indications in the United States. The company refer to the product as ferric citrate when referring to its investigational use. The company's vision of building a multi-product kidney care company includes expansion of its product portfolio with other medicines that can help patients with kidney disease.1

Strategy

The company's business is focused on creating long-term stockholder value by bringing differentiated medicines to the market for the treatment of people with kidney disease that provide meaningful benefits to patients and their healthcare providers. The three pathways to its strategy are:

Maximize Auryxia's Potential

Auryxia is approved for two indications in the United States. The company developed and subsequently launched Auryxia in the United States in late December 2014 following the FDA's approval of Auryxia for the control of serum phosphorus levels in adult patients with CKD on dialysis. In November 2017, the FDA approved Auryxia for the treatment of iron deficiency anemia in adult patients with CKD, not on dialysis. Auryxia is a non-calcium, non-chewable, orally-administered phosphate binder. Auryxia is the first FDA-approved oral iron medication that was specifically developed to treat iron deficiency anemia in CKD patients, not on dialysis. In the United States, there are approximately 450,000 adult patients with CKD requiring dialysis (referred to as End Stage Renal Disease), including approximately 350,000 adults currently taking a phosphate binder. The company estimate that in the United States, approximately 1.7 million adults under the care of a nephrologist for CKD have iron deficiency anemia, not on dialysis, including approximately 650,000 adults currently being treated by nephrologists for iron deficiency anemia. Iron deficiency anemia is common in the non-dialysis population and the prevalence and severity increases as CKD advances. Iron deficiency anemia is symptomatic and can significantly impact quality of life. Auryxia is being marketed in the United States to nephrologists and renal care teams through its specialty salesforce and commercial infrastructure. The company's field-based organization is aligned to 95 territories calling on target nephrologists and their associated dialysis centers. These target nephrologists treat CKD patients on dialysis and those not on dialysis. The company believe strong fundamentals are in place to drive commercial adoption of Auryxia in the dialysis setting and maximize the potential of Auryxia as a treatment of iron deficiency anemia in adults with CKD, not on dialysis.

Portfolio

The company will evaluate opportunities to expand its product portfolio with other medicines that can help patients with kidney disease. The company's business development activities include evaluating clinical-stage drug candidates, as well as commercially available medicines to in-license or acquire to add to its portfolio and provide it with new commercial opportunities. The company will seek to add assets that leverage the infrastructure Keryx Biopharmaceuticals has built to support its foundational medicine, Auryxia, including its clinical development and commercial teams. The company believe these efforts have the potential to provide additional revenues to it in the future.

Manage Growth and Talent

Keryx Biopharmaceuticals is committed to creating a culture of success and continue to engage a workforce of high-quality and talented people to support its potential growth.

Recent Developments

On April 27, 2018, Gregory P. Madison notified it of his resignation as its President and Chief Executive Officer and as a member of its Board. The company appointed Jodie P. Morrison as Interim Chief Executive Officer while the company conduct a search for its next Chief Executive Officer. On May 10, 2018, the company entered into an employment agreement with Ms. Morrison in connection with her role as Interim Chief Executive Officer.

On May 8, 2018, the company entered into a Notes Exchange Agreement, or the Notes Exchange Agreement, with funds managed by Baupost pursuant to which, on May 9, 2018, the company issued $164.746 million of Convertible Senior Notes due 2021, or the New Notes, to Baupost in exchange for (a) its outstanding $125 million Convertible Senior Notes due 2020, or the Existing Notes, and (b) an additional investment of $10 million in cash.

The New Notes were issued under an Indenture dated as of May 9, 2018, with The Bank of New York Mellon Trust Company, N.A. as trustee, or the New Indenture. Under the terms of the New Indenture, the New Notes may be converted into shares of its common stock, or the Shares, at the discretion of Baupost, at an initial conversion rate of 215.983 Shares per $1,000 principal amount of New Notes, which represents an initial conversion price of $4.63 based on the per Share closing price the day before entering into the Notes Exchange Agreement. The principal amount of the New Notes initially converts into a total amount of Shares approximately equal to the 33.4 million Shares into which the Existing Notes were convertible plus an additional approximately 2.2 million Shares in consideration of the additional cash investment. The conversion price of the New Notes is subject to adjustment based on the occurrence of certain events as set forth in the New Indenture. Further, the New Indenture subjects it to certain financial and business covenants. The New Indenture also allows it to secure up to a $40 million asset-based credit facility.

In connection with the issuance of the New Notes, on May 9, 2018, the company entered into a Registration Rights Agreement with Baupost, or the New Registration Rights Agreement, on substantially similar terms as the Registration Rights Agreement entered into in connection with the Existing Notes, pursuant to which the company agreed to information file a registration statement (the “Resale Registration Statement”) with the SEC covering the resale of the New Notes and the underlying Shares upon the written request of Baupost and (ii) use commercially reasonable efforts, subject to the receipt of necessary information from all the purchasers of the New Notes, to cause the SEC to declare the Resale Registration Statement effective. Further, the New Registration Rights Agreement permits Baupost to demand from time to time that the company file a shelf Registration Statement pursuant to Rule 415 of the Securities Act, from which any number of shelf takedowns may be conducted upon written request from Baupost. In addition, the New Registration Rights Agreement affords Baupost certain piggyback registration rights. Under the Registration Rights Agreement, Baupost also retains its existing right to appoint one individual to its Board of Directors for so long as Baupost beneficially owns twenty percent (20%) or more of its outstanding common stock and to a board observer for so long as Baupost beneficially owns ten percent (10%) or more of its outstanding common stock.

In connection with the issuance of the New Notes, information the Notes Purchase Agreement dated as of October 14, 2015 and the Registration Rights Agreement dated as of October 15, 2015, each between it and Baupost were each terminated pursuant to the Notes Exchange Agreement and (ii) the Indenture dated as of October 15, 2015, between it and The Bank of New York Mellon Trust Company, N.A., was discharged in connection with the cancellation of the Existing Notes. See Note 10 – Debt for additional information regarding the Existing Notes, the Notes Purchase Agreement, the 2015 Indenture and the 2015 Registration Rights Agreement.

References

  1. ^ https://fintel.io/doc/sec-kerx-keryx-biopharmaceuticals-10q-2018-may-10-18002
Tags: US:KERX
Created by Asif Farooqui on 2020/01/22 03:38
     
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