NEW YORK (TheStreet) -- Shares of Keryx Biopharmaceuticals (KERX) - Get Report were plummeting 10.38% to $4.23 on heavy trading volume this afternoon after the company said yesterday it expects production issues to interrupt the supply of its only approved drug.
Supply of the renal medication Auryxia will likely resume in the fourth quarter, the company said in a statement.
FBR Capital downgraded its stock rating on Keryx to "market perform" from "outperform" today due to the interruption in Auryxia supply. The firm also slashed its price target to $7 from $13, Barron's reports.
Keryx may experience additional headwinds even after production is reinstated, FBR Capital noted. The interruption also adds risk to the potential expansion of ferric citrate into iron deficiency anemia in pre-dialysis chronic kidney disease patients, the firm continued, according to Barron's.
"Although management reiterated its confidence that the interruption would not affect time lines for both sNDA filing and potential approval for expansion, we anticipate potential delays in the approval process due to the unidentified manufacturing problem," the firm said in an analyst note. "We shift our focus from IDA label expansion to the resolution of the production issue."
FBR Capital lowered its revenue forecasts for Auryxia sales to $19.4 million in 2016 with peak U.S. drug sales of $978 million in 2021. The firm lowered its probability of success for the drug's expansion to 70% from 80%.
About 6.88 million shares of Keryx have been traded so far today vs. its average trading volume of approximately 1.67 million shares a day.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate KERYX BIOPHARMACEUTICALS INC as a Sell with a ratings score of D-. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk.
You can view the full analysis from the report here: KERX