April 8, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Redwood City, Calif.-based Relypsa ’s took a big jump yesterday, going from $14.26 to its current price of $24.32 on rumors that the company might be up for sale.
Reuters cited unidentified insiders saying potential buyers contacted the company regarding an acquisition and Relypsa is seriously considering a potential sale. It apparently is working with Centerview Partners Holdings LLC, an investment bank, to evaluate offers. The stock jump gave it a market cap of almost $1 billion.
Relypsa focuses on polymer-based medicines for overlooked and undertreated disorders. In December 2015, its drug Veltassa (patiromer) went on the market in the U.S. for the treatment of hyperkalemia, or elevated blood potassium levels. Analysts project that the market for the drug could be about $6 billion.
This has given the company a headstart on a potential competitive drug, ZS-9, developed by San Mateo, Calif.-based ZS Pharma . ZS-9 (sodium zirconium cyclosilicate) had positive interim results from a Phase III trial in November 2015. In December, UK-based AstraZeneca closed on its acquisition of the company for $2.7 billion.
According to the Reuters sources, several companies that had been beat out by AstraZeneca in buying ZS Pharma are now looking to acquire Relypsa.
Before Veltassa was approved, treatment for hyperkalemia was mostly through diet restrictions, which often faced poor patient compliance. In the U.S. alone, about 3 million people with chronic kidney disease or heart failure are potential patients for the drug. Although Relypsa currently has the market to itself the U.S. Food and Drug Administration is scheduled to make a decision of ZS-9 on May 26.
Valtessa, however, has a fairly big problem—it has been approved with a “black-box warning” label because of binding issues with other oral medications. Essentially, if patients are on other drugs—very common in this patient group—they’re supposed to avoid taking them within six hours of taking Veltassa.
Todd Campbell, writing for The Motley Fool, warns investors, “If AstraZeneca’s competing hyperkalemia drug gets approved with a less-restrictive label than Veltassa, it could become the gold standard. Given that backdrop, acquirers may exercise some caution, at least until the end of May when they’ll know how the label reads.”
Merck & Co. , Pfizer (PFE) and Biogen have all expressed interest in buying undervalued biotech companies. What isn’t so clear is why they would be interested in Relypsa if it’s going to get blown out of the market in the next two months.
At the company’s year-end financial statements on Feb. 24, it indicated it had inked a collaboration and licensing deal with Vifor Fresenius Medical Care Renal Pharma (VFMCRP) to develop and commercialize Veltassa outside the U.S. and Japan, as well as a co-detailing agreement with Paris-based Sanofi to promote the drug in the U.S. It’s also added almost 300 employees.
It has also put in a request to the FDA for a label change after Phase I drug-drug interaction studies were completed. It plans to submit a Marketing Authorization Application (MAA) for Veltassa with the European Medicines Agency (EMA) in the first half of this year, and is evaluating a possible Phase 4 study for Veltassa in patients with resistant hypertension and in hemodialysis patients.
