Roth upgrades Keryx to buy

Roth Capital Partners has upgraded Keryx Biopharmaceuticals (NASDAQ:KERX) to “buy” from “neutral” and raised its 12-month price target to $7 from $4, saying that “with the perifosine dust settled, the fundamentals of the Zerenex story are intact.” The stock closed at $1.45 on Wednesday.

Zerenex is in development for the treatment of hyperphosphatemia in end-stage renal disease patients on dialysis. Keryx recently returned the cancer drug perifosine to Aeterna Zentaris (NASDAQ:AEZS) after a Phase 3 trial failure.

“We reiterate our view that Zerenex represents a lower risk asset and believe that investors should own the stock ahead of the U.S. long-term Phase 3 study (SPA) read-out in the fourth quarter of 2012,” writes analyst Joseph Pantginis.

“We believe that the U.S. long term Phase 3 study of Zerenex will be positive, based on compelling results from the Phase 3 short-term study and from a Phase 3 trial conducted by partner JT/Torii in Japan,” he added.

Mr. Pantginis figures the NDA for Zerenex will be filed in late 2012 or early 2013 along with an MAA in Europe, and a similar time line in Japan for partner JT/Torii. “Any potential commercialization partner may likely be waiting, in our view, for the U.S. Phase 3 readout in the fourth quarter,” he added.