Why Keryx Biopharmaceuticals' Shares Fell Some More Today

Image source: Getty Images.

Continue Reading Below

What: Keryx Biopharmaceuticals (NASDAQ: KERX) fell 9% today, bringing its two-day drop to 42%.

So what: Yesterday the biotech said that it was having supply issues

And like clockwork, today a rash of law firms issued notices that they're initiating investigations on behalf of Keryx Biopharmaceuticals' investors, and at least four analysts downgraded the stock to hold or market perform.


<3>More From Fool.com

Continue Reading Below

LeBron James: The Next Warren Buffett?

Social Security: 3 Things to Know Before Taking Benefits Early

3 Social Security Secrets You Probably Don't Know


Now what: There's no new news here.

Anytime a stock drops substantially, law firms run around asking who wants to join a lawsuit. Since the supply disruption happened at Keryx's contract manufacturer, it's probably going to be hard for the lawyers to prove that management did something wrong. In fact, the company has been working to get a second supplier for Auryxia, and the Food and Drug Administration is already reviewing the application to manufacture the drug at a new location.

And downgrades weren't all that surprising given the uncertainty caused by the supply issues.

That being said, it's not unreasonable for Keryx Biopharmaceuticals' shares to have fallen further today as investors digest the news and try and figure out how to properly value the biotech and its uncertain future. While product will hopefully be available in the fourth quarter -- although that's certainly not guaranteed -- it's hard to know how the interruption will affect sales during the relaunch.

A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them,
just click here

Brian Orellifree for 30 daysconsidering a diverse range of insightsdisclosure policy