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Keryx Biopharmaceuticals Inc. saw its stock gain 26.3 percent in value after reporting plans to soon begin pivotal development of KRX-101 (sulodexide), a product for diabetic nephropathy.

The New York-based company said it would proceed to the next portion of its Phase II/III program on the recommendation of the Collaborative Study Group. The recommendation is based on a safety evaluation by an independent Data Safety Monitoring Committee of the first interim analysis from a 150-patient Phase II trial of KRX-101, and an efficacy assessment of the same data set conducted by the Collaborative Study Group, a nonprofit renal clinical trial outfit comprised of academic and tertiary nephrology care centers that is conducting the U.S.-based program.

On Wednesday, the company's stock (NASDAQ:KERX) gained $2.95 to close at $14.18.

"We are certainly pleased with the positive response this news has received from the investment community," Michael Weiss, Keryx's chairman and CEO, told BioWorld Today. "We have spent a lot of time over the last 12 months making sure the investors were familiar with our program, both the risks and the potential, and I believe that has helped to prepare investors for this news. We are very excited to be moving into the pivotal portion of the program. It's a major milestone for the company and sets us on a path, if successful, to bringing our first drug to the market."

Keryx's strategy is subject to finalization of its clinical trial plan with the FDA. Should the agency sign off, the company expects to begin Phase III and Phase IV studies of KRX-101 within the next three months. The investigational drug, a first-in-class oral heparinoid compound, belongs to a proposed new class of kidney-protecting drugs called glycosaminoglycans.

The clinical protocol, as discussed with the FDA, consists of a single Phase III trial in patients with microalbuminuria to support accelerated approval based on the surrogate marker of regression of microalbuminuria. In addition to Phase III, Keryx expects to complete a Phase IV confirmatory study in patients with overt nephropathy (macroalbuminuria) that will measure clinical outcomes. As part of its commitment to the FDA, Keryx plans to begin Phase IV at about the same time it starts Phase III.

"If we commence and complete our trials as currently projected, we believe we can file an NDA in 2007," Weiss said. "We have already received fast-track designation, so while there are no guarantees, we should be entitled to a six-month review on our NDA."

The Phase II trial, which will continue to completion, is part of a Phase II/III program designed to assess KRX-101's safety and efficacy in diabetes patients who continue to have persistent microalbuminuria despite treatment with maximum approved doses of standard-of-care therapy - ACE inhibitors or A2 receptor blockers (ARBs). Weiss said the Collaborative Study Group has not provided a quantitative assessment of KRX-101's efficacy, but the company expects to have interim data in May and final data by the American Society of Nephrology meeting, which typically is held in the fall.

In Phase II, patients are being treated for six months and then followed for an additional two months after therapy. The randomized, double-blinded, placebo-controlled study is comparing 200-mg and 400-mg daily doses of KRX-101 to placebo. All patients will continue to receive maximum approved doses of ACEs or ARBs during the treatment and follow-up periods.

The Phase III portion of the program is expected to follow substantially the same design, and the entire Phase II/III program is expected to enroll between about 750 and 1,000 patients.

Prior Phase II findings, published two and a half years ago in the Journal of American Society of Nephrology, revealed dose-dependent reductions in proteinuria among Type I and Type II diabetics who received daily treatment for four months with KRX-101 doses of 50 mg, 100 mg and 200 mg. The data also showed that KRX-101's therapeutic effect was additive to ACE inhibitor treatment.

Keryx holds the license to patents surrounding KRX-101 in North America and several other territories, including Japan, and Weiss said the company does not plan to out-license such rights.

"We are currently not looking for partners," he said. "We believe that there are rational ways for us to approach the marketing of KRX-101 that would not require partnering with a large company. As we better educate ourselves on the market, we will make decisions on the marketing of KRX-101 and whether that might include a partner. For now, our sole focus is on developing KRX-101 and completing our clinical programs at the earliest possible time."

He added that the company's current focus is on developing the product for the U.S. market.

Outside of KRX-101, Keryx is developing clinical-stage oncology compounds, including KRX-0401, an oral AKT inhibitor in Phase II trials. The company also continues to look to in-license or acquire other clinical-stage drug candidates to expand its pipeline.

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