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Who Will Buy Relypsa, And At What Price?


Small biopharma Relypsa soared last week as Reuters and others reported the company was seriously considering putting itself up for sale.

Interest should be high given the huge premium competitor ZS Pharma fetched in November, and the fact that the company has the first new drug for the hyperkalemia market in several decades.

In this article, we run down the most logical list of suitors and at what price Relypsa would likely be acquired.

The company will do fine as a stand-alone entity, even if value would be created more quickly in the likely scenario of being purchased by a larger player.

A small biopharma stock called Relypsa Inc. (NASDAQ:RLYP) has been in the news this week. The stock soared more than 65% on Thursday on news from Reuters and other sources that the company was seriously considering putting itself for sale. The stock gave back some of those gains on Friday, but ended the week approximately 50% higher than last Monday.

These shares are likely to be volatile in the coming weeks and months and any buyout talks and rumors around them will ebb and flow driving the stock up or down as they do. However, as I have stated many times on these pages starting in January; Relypsa being acquired by a larger player in the industry makes too much sense not to have at least a 50% chance of occurring in the foreseeable future.

There are a couple of reasons I believe this to be the case. First, the company's primary competitor in the hyperkalemia market ZS Pharma (NASDAQ:ZSPH) was acquired at a large premium in a $2.7 billion purchase by drug giant AstraZeneca (NYSE:AZN) in early November. The company's drug ZS-9 should be approved shortly or if the FDA wants to wait for more safety data sometime late this summer. Relypsa's Veltassa was approved late in 2015.

Both drugs have been shown in trials to be effective in treating hyperkalemia, which is a buildup of potassium in the blood stream and believed to be a $2 billion annual market...