Merck (MRK) Said to be Interested in Relypsa (RLYP) - Source

Merck & Co (NYSE: MRK) plans to make a non-binding offer to acquire Relypsa, (Nasdaq: RLYP), a biopharmaceutical company with a market cap of over $900 million, according to a source claiming to have direct knowledge of the situation. A price could not be learned.

A representative from Relypsa said they do not comment on market speculation when asked to respond to the rumor. A representative from Merck also declined to comment.

In October, Relypsa’s Veltassa was approved by the FDA to treat hyperkalemia, a condition in which the amount of potassium in the blood is too high.

In November, competitor ZS Pharma (NASDAQ: ZSPH) was acquired by AstraZeneca (NYSE: AZN) for approximately $2.7 billion. ZS Pharma was also actively pursued by other parties, including swiss drugmaker Actelion Ltd. Some of these same buyers may have now turned their attention to Relypsa.

Given ZS Pharma's price tag, some analysts and investors viewed Relypsa as relatively undervalued. A Citigroup analyst called the nearly two billion dollar valuation gap between ZS Pharma and Relypsa at the time "embarrassing" and suggested it could be the next high profile takeover. The analyst pointed out that ZS-9 and Veltassa are more similar than different, and noted that Veltassa is already approved by the FDA, whereas ZS-9's expected FDA approval is in May 2016.

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