Image source: Getty
Continue Reading Below
Shares of renal diseases-focusedKeryx Biopharmaceuticals (NASDAQ: KERX) roared back to life in September, vaulting more than 28% during the month, according to data fromS&P Global Market Intelligence.
There wasn't a lot of news released during the month to justify such a strong move. In fact, the only press release to come out of the company was an announcement that its management would be presenting at two investor healthcare conferences.
Judging by the stock's strong response, those presentations must have gone quite well. Perhaps that's because they gave Keryx's management team a chance to shed more light on the manufacturing issues that were causing a supply disruption for its one and only drug, Auryxia.
As a reminder, when the company announced the supply issues, it also abandoned its financial guidance for the year. In turn, shares plunged 44% in August.
The only thing that matters from here is how quickly the company can fix the supply issue and right the ship. Thankfully, it does appear that demand for Auryxia is starting to grow. Last quarter the company reported new prescriptions growth of 44% over the year-ago period, which hints that providers are starting to feel more comfortable using the drug.
However, we don't know if the company will be able to sustain that momentum given the supply disruption. After all, Auryxia faces some stiff competition from Sanofi's Renagel and Renvela. Sanofi rang up about $232 million in sales of those two drugs last quarter, so it has every incentive to convince providers to stick with a therapy that they already know well.
I'd advise potential investors to stay on the sidelines until we have proof that this supply issue is behind the company and that Auryxia's growth trajectory remains on track. Keryx said that everything should be back to normal by the fourth quarter, so it won't be long until we have new information to work with.
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 Feroldi has no position in any stocks mentioned.Like this article? Follow him onTwitter where he goes by the handle@Longtermmindsetor connect with him on LinkedIn to see more articles like this.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.