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Biotech Stock Mailbag: Keryx, Sangamo, Threshold and Amarin

Stocks in this article: KERX SGMO THLD AMRN AEZS CELG

The difference in phosphorous levels between Zerenex and placebo needs to be statistically significant in order for the study to be deemed positive.

Keryx has already run shorter phase III studies of Zerenex demonstrating lowered serum phosphorous levels so there's little reason to believe the long-term study will produce contradictory results.

Zerenex is an iron-based phosphate binder, which is different from competing drugs. Dialysis causes patients to become anemic, requiring treatment with intravenous (IV) iron and erythropoietin-stimulating agents (ESAs) like Amgen's Epogen. Keryx believes Zerenex can grab a significant share of the phosphate binder market if the drug boosts patient iron stores enough to reduce IV iron and/or ESA use.

Along with measuring serum phosphate, the long-term Zerenex study also assesses changes over time in iron levels (ferritin and TSAT levels) and changes in IV iron and ESA use. These are key secondary endpoints of the study. Note, the study has 13 pre-specified secondary endpoints, according to a detailed summary published in Hemodialysis International last year.

Wait to see the iron data that Keryx discloses, but I'd be cautious about over-interpretation. The study does not control for either IV iron or ESA use, which makes it harder for Zerenex to show a benefit. Zerenex is iron-based so it will be no surprise to see improvements in ferritin and TSAT levels, but at what cost? Iron causes lots of constipation, so make sure to pay attention to the safety data and toxicities reported by Keryx.

Also, there will be considerable debate about what constitutes a meaningful reduction in IV iron and ESA use -- if any is observed. That's a question for the FDA to settle when it comes to putting together Zerenex's label. Given the "modest" iron benefit observed in prior Zerenex studies, I'm skeptical Keryx can collate enough data to convince FDA -- and dialysis clinics, more importantly -- that there's compelling financial reasons to choose Zerenex over cheaper generic alternatives.

Johnnyboy writes: "Any clue why Sangamo Biosciences (SGMO - Get Report) has doubled in the last couple of weeks on no news? I like the company and I think their technology is promising but pivotal results are months if not years away. Is this another case of stock pumping before they announce new financing?"

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