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Keryx CEO vs. a Short-Seller: Zerenex Patent Debate

Bentsur: Next, we have also heard about the possibility that older ferric citrate filings could impede on our ability to obtain Patent Term Extension. First, we don't know whether any of these older filings physically exist or whether they were actually 505(b) filings, meaning NDAs, or rather just nutraceutical filings. Even if they do exist and one or more of them were actually 505(b) filings, such filings occurred prior to the 1962 Kefauver Harris Act, which required efficacy studies of drugs from that point forward in order to be approved. All older filings received an eight-year grace period to conduct efficacy studies or appeal their case in order to remain on the market. The cutoff date for the Kefauver Harris Act grace period was July of 1970, and in fact, all four older ferric citrate filings show up as being pulled from the market on that date, meaning, none of them made the cut as an approved drug and no ferric citrate approval appears after that date. Incidentally, two ferric ammonium filings do appear after the July 1970 cutoff date, meaning ferric ammonium approvals deemed have been approved subsequent to the Kefauver Harris Act.

Keryx short-seller: There is no such thing as a nutraceutical filing. I don't think these very old ferric ammonium citrate filings are relevant because iron citrate itself was approved by the FDA in 1973! Though forty years have passed, the active ingredient remains the same -- iron. If you don't believe me about the tenuous thread upon which Zerenex's exclusivity hangs, look at Keryx's own 2011 10-K filing, which includes a statement that perifosine (in clinical development at that time) would qualify for NCE. Notably absent is a similar statement regarding NCE status for Zerenex.

Bentsur: So while we're very much engaged in dialogue with prospective partners, and there does seem to be significant interest, we were not at all apprehensive about launching the drug on our own, if the timing and or economics of the business development discussions do not coincide with our goals or expectations.

Keryx short-seller: While Big Pharma has done its share of ill-advised partnerships and acquisitions, one thing Big Pharma almost always does well is due diligence on intellectual property and market exclusivity. In this regard, I agree with Ron's comment above. Keryx will be launching Zerenex on its own. His warning Tuesday to that effect will be prove to be prescient in the days and months ahead.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
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