Bad News for AstraZeneca PLC is Good News for Relypsa
May 27, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Relypsa Stock Jumps as FDA Delays AstraZeneca’s Hyperkalemia Drug Approval
Bad news for UK-based AstraZeneca is good news for Redwood City, California-based Relypsa , at least for now. The U.S. Food and Drug Administration (FDA) issued AstraZeneca with a Complete Response Letter (CRL) about its New Drug Application (NDA) for sodium zirconium cyclosilicate (ZS-9), a drug to treat hyperkalemia. The CRL essentially delays approval for the drug based on problems found in a manufacturing inspection.
In December 2015, Relypsa’s drug, Veltassa (patiromer) hit the market in the U.S. for hyperkalemia, or elevated blood potassium levels. The market projection for the drug is about $6 billion—which at the moment, Relypsa has totally to itself.
Veltassa is the first new treatment for the disease in over 50 years, but was approved with the FDA’s black-box warning. A black-box warning is an alert that there are potential serious side effects with the drug. In the case of Veltassa, the drug isn’t supposed to be taken within six hours of taking any other oral drugs.
Many investors believed that AstraZeneca’s ZS-9 would be approved without a black-box warning, which would give it a stronger position in the market. In a recent analyst note by Berenberg, once AstraZeneca refiles with the FDA, it might take another six months. “Assuming the company can refile in a matter of months, an approval in Q1 2017 could be possible.”
Shore Capital, another investment group, said in a note, “Although ZS-9 is unlikely to receive a black box warning relating to binding of other oral medications, in our view, there are concerns it may receive a warning related to increasing sodium levels. We forecast sales of $40 million in 2016 for ZS-9, reaching $1,163 million in 2023.”
Relypsa also submitted a supplemental New Drug Application (sNDA) to the FDA that had additional data from a Phase I drug-drug interaction trial to eliminate Veltassa’s black-box warning.
Bidnessetc also notes that Veltassa hasn’t exactly blown the doors off the market since its launch, despite having a co-promotion deal in the U.S. with Paris-based Sanofi SA . “ZS09’s approval delay and possible Veltassa label change can help give the scripts a push forward in coming months. The events may also reignite takeover interest in Relypsa, which had been drowned out in the past few months.”
When AstraZeneca acquired San Mateo, California-based ZS Pharma , and picked up ZS-9 along the way, there were other companies that had also bid on ZS Pharma. They still have an interest in picking up a drug in the lucrative hyperkalemia market. Possible buyers have included Pfizer , Biogen and Merck & Company .
AstraZeneca is trading at $29.75, up from $28.38 on May 19.
Relypsa is trading for $19.50, up from $14.51 on May 10.
In its statement, AstraZeneca said, “The CRL refers to observations arising from a pro-approval manufacturing inspection. The FDA also acknowledged receipt of recently-submitted data which it has yet to review. The CRL does not require the generation of new clinical data. AstraZeneca and ZS Pharma are evaluating the content of the CRL and will work closely with the FDA to determine the appropriate next steps for the NDA.”
The drug is currently being reviewed in Europe and Australia.