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Relypsa (RLYP) Takeover Rumors Turn the Tables on Short Sellers

April 7, 2016 1:48 PM EDT

Relypsa (Nasdaq: RLYP) surged over 60% intraday on Thursday after Reuters reported that the company is working with Centerview Partners to review offers.

Rumors about a sale first emerged last year when AstraZeneca announced it plans to acquire ZS Pharma, a company developing a competing drug, ZS-9, for treatment of hyperkalemia. At the time of the offer, some analysts noted a massive valuation gap between ZS Pharma’s bid and Relypsa’s enterprise value.

In December, sources told StreetInsider.com that Merck (NYSE: MRK) was interested in acquiring the company.

Later that month, Relypsa launched its lead drug Veltassa. However, there was little fanfare on Wall Street and short interest ballooned to 12.7 million shares, or about 41% of the stock’s float. Shares eventually slipped to year-to-date lows at $11.60 on March 16.

Today’s report from Reuters noted that discussions are in their earlier stages and may not lead to a sale. It also did not mention price or potential timing of deal. Nonetheless, the news likely offers at least some respite for Relypsa supporters.



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