Keryx: Strong Upside Potential From Perifosine

Keryx Biopharmaceuticals (KERX), a company known for its never-ending fight against life threatening diseases, specifically cancer and renal disease, recently announced that it would soon release the late stage clinical trail information for its new drug Perifosine (KRX-0401). Perifosine is targeted towards stopping tumor growth by inhibiting AKT activation in the phosphoinositide 3-kinase pathways.

The drug is in Phase-III testing for colorectal cancer as well as for mulitple myeloma, also known as Kahler's Disease. There are Phase I and Phase II tests being performed for various other types of tumors. Rumors state that the drug could be the elusive cure for cancer that man has sought out for so long, and if this is the case, then Keryx will skyrocket to the top of the industry.

Both Keryx and AEterna Zentaris (AEZS), another biotech company that works with Keryx by providing licenses for product candidates, are expected to receive a boost in sales of stock when Perifosine launches. The drug, if FDA approved, will revolutionize treatment of several life threatening diseases. Some say that the approval is almost guaranteed.

The question remains, however, whether to invest more money in Keryx or not. At the time of writing, shares are trading at around $5 per share, but some concern has arisen over the recent fluctuation in price. For instance, on March 5, the stock shot up 33%, but fell the following day by 21%. This sort of fluctuation is not uncommon in the market, but has increased in frequency for Keryx since the announcement of Perifosine.

On the topic of market fluctuations, according to Yahoo! Finance, Keryx suffered a large drop in value near the end of 2011, when the stock dropped below $2.50 per share. However, the volume remained the same. Then on March 3rd of this year, the volume jumped from 2,876,200 to 2,970,3500 on March 5, nearly a 1000% increase in volume. The value also jumped that day to nearly $5 a share, not yet equaling the stock value for 2011, but reaching the highest point of 2012 so far.

The company currently has a market cap of $352.9 million, along with volume of 2,950,345. The lowest price that Keryx stock has traded at within the last year was $2.27, with a high of $5.55.

Discussions on multiple stock forums advise to keep Keryx in mind in the following weeks, to see what results the Phase III clinical trials yield. I feel that should the trials prove fruitful, the value of stocks will go up in a big way.

One of Keryx's competitors, Baxter International (BAX), has a market cap of $33.2 billion, and is one of the leaders of the industry. Baxter, also a provider for those with kidney disease, might feel its position within the market flex as Keryx moves higher after the release of Perifosine. Baxter stock is trading at around $60 per share, and while there is no indication that this will change anytime soon, a chance remains that with Keryx' new found rise, competition could drive stock price higher.

Shire (SHPGY), on the other hand, may feel a more direct impact when and if Keryx stock increases in value. Shire, a direct competitor of Keryx, also produces medicines to treat life-threatening diseases. While it started as a company to develop drugs to treat ADHD, it expanded to cover a wider range of ailments that plague humans, particularly those caused by enzyme or protein deficiencies. The company's stock is trading at around $103 per share, and the market cap is at $18.83 billion.

Teva (TEVA) is another biotechnology company, and ranks number one for generic pharmaceutical companies. Producing generic and brand name products, Teva stock stands a chance of increasing in value when Perifosine releases in its generic form. It is likely that the demand for the oral anti-cancer agent will be high enough to drive up share price from its current price of roughly 44$ per share. Teva's market cap rests at $38.7 billion, and shows no signs of fluctuating too sharply in any direction.

The biotechnology company that leads in sales for the entire market, and sets a level that every other company aims to reach, is Amgen (AMGN). This powerhouse company holds a market cap of $53.5 billion, with stock trading around $68 per share. As the leader of sales in the biotechnology stock market, Amgen is a major competitor of Keryx, but isn't likely to feel any flux below it. As a company that produces products to fight cancer and kidney disease, it is a more direct competitor than the others listed. However, this giant holds the position that Keryx might one day reach, should the company continue to grow as it is doing.

My suggestion is this: with stock at such a low price, it would be very easy to buy an extreme number of shares with Keryx, or to invest more money. The company is poised on the brink of a change, and while the risk remains that stock price could go south, chances are much higher that the value of the company will rise tenfold. If this is the case, the stock bought at a low price will be worth far more than it currently is.

Keryx stock is a safe bet to make for the enterprising investor; the buyer has little to lose with the stock price so low. Even if the Perifosine release proves to be a disappointment and the drug is ineffective or fails to pass FDA approval, Keryx still has its other products that investors can rely on, making it a sure choice in an uncertain market.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.