Wedbush Sees Room For Anther Relypsa (RLYP) Bidder
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Wedbush analyst Liana Moussatos reiterated her Outperform rating and $51 price target on Relypsa, Inc. (NASDAQ: RLYP) after the company agreed to be acquired by Galenica for $32/share. The analyst sees room for another bidder.
"While we see $32 per share as an acceptable offer, we believe there is room for at least one additional bidder," Moussatos commented. "On April 7th, a Reuters news article indicated that Relypsa received multiple overtures from potential buyers. With millions of CKD and heart failure patients experiencing hyperkalemia, we estimate the potential for peak annual sales to reach over $1 billion just in the U.S. and view the offer of $1.53 billion as approximately one-time peak sales. We note a comparable transaction when competitor ZS Pharma was acquired by AstraZeneca (AZN) for $2.7 billion in cash announced on November 6, 2015 citing current estimates for worldwide peak annual sales of ZS-9 to exceed $1 billion. Our $51 price target implies $2.285 billion equity value. A likely additional suitor in our view, Sanofi (SNY) sells a polymer-based (sevelamer) phosphate binder and reported $935 million in sales during 2015. On August 10, 2015 Relypsa and Sanofi announced a two year detailing agreement in which Sanofi provides commercial support from their established nephrology sales force and receives a service fee and potential incentive payments. We view Veltassa as a natural fit for Sanofi adding another nephrology drug to their polymers are not absorbed marketing theme."
Shares of Relypsa, Inc. closed at $20.10 yesterday.
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