KERX might have Nerf qualities
KERX is a stock I have not heard about prior to today. It’s also a company name which I have never heard of before today. I took the chance that there will be a small bounce in the stock and bought some shares. Usually this works out for me, though usually does not equal always.
DNDN worked out for me last year. I bought some calls after the stock dropped, and after it initially bounced. Same for POZN, only I bought stock instead of calls. But the same bounce play.
Will KERX bounce? I’m not positive it will, but I am willing to bet $200 on it.
Here’s the KERX news:
NEW YORK (Dow Jones)–Keryx Biopharmaceuticals Inc. (KERX) has lost 85% of its value in premarket trading Monday after a Phase III trial of its Sulonex treatment for diabetic nephropathy failed to meet its main goal.
“We are all very disappointed with the outcome of this study,” Chairman and Chief Executive Michael S. Weiss said.
Shares of the New York drug developer recently changed hands at 79 cents, down $4.47, or 85%, from Friday. The stock has been trading for most of this decade and was close to $20 just two years ago.
Cowen & Co. analyst Phil Nadeau notes that Keryx has about $65 million in cash, or about $1.50 a share, but likely will need to raise money over the next year.
Keryx plans to focus its resources on Perifosine, a cancer drug, and Zerenex, which treats elevated phosphate levels in kidney disease patients.
The company plans to have Perifosine in a pivotal program this year and to have Zerenex in a Phase II trial by the end of the year.
“This data removes the only reason to own Keryx, in our opinion, as we lack conviction that either perifosine or Zerenex will be successfully commercialized,” wrote Nadeau, who downgraded the stock to neutral from outperform and recommended investors stay on the sidelines until the company’s pipeline matures.
Cowen joined a number of Wall Street firms downgrading the stock, including JPMorgan, Bear Stearns, Jefferies and Rodman & Renshaw.
“Given the overall lack of investor enthusiasm for the remainder of the company’s pipeline, we expect KERX to likely trade closer to cash,” wrote JPMorgan analyst Cory Kasimov
Why not take a chance?
Buy:
KERX 200 @ $.80
Maybe I’ll lose money on this. Maybe not. Only time and patience will control this outcome.
Right now I’m holding onto two stocks with sub-$1.00 values. I wonder if the psychic detective of investing would approve or not.
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