Relypsa got a big boost in May when a rival stumbled. Now it’s being rewarded with a buyout offer worth close to three times the price it went public at in 2013.
Switzerland’s Galenica Group has agreed to buy Relypsa (NASDAQ: [[ticker:RLYP]]) for $32 a share in cash, or $1.53 billion overall, to grab rights to Relypsa’s drug patiromer (Valtessa). The bid, which still needs the approval of Relypsa shareholders, represents a roughly 59 percent premium to Relypsa’s $20.10 closing price on Tuesday. The offer is also worth roughly three times the $11 per share price of Relypsa’s IPO, though it’s short of the levels the Redwood City, CA, company traded at just a year ago, before the biotech bubble deflated.
Shares of Relypsa surged over 57 percent in pre-market trading on Thursday.
Relypsa’s drug, patiromer, is meant to lower dangerous blood potassium levels, a condition called hyperkalemia, in patients with heart failure or chronic kidney disease. Hyperkalemia, which often occurs as a result of deteriorating kidney function, can cause irregular heartbeats and even sudden death. Patiromer, a powder mixed with water and taken daily, is supposed to essentially soak up the excess potassium and help clear it from the body.
Relypsa won FDA approval of the drug in October, meaning it became the first treatment for people with high blood potassium levels in more than 50 years. It’s currently under review in Europe.
Galenica already had an inside look at patiromer. In August 2015, the company, through its Vifor Pharma subsidiary, partnered with Relypsa on the drug, grabbing rights to patiromer everywhere except the U.S. and Japan. The deal gives Galenica the rest of the rights to patiromer. There are about 3 million people in the U.S. with hyperkalemia and either stage 3 or 4 chronic kidney disease or heart failure, according to Relypsa.
A Relypsa buyout became much more likely after a key competitor failed to win approval of a rival drug. AstraZeneca bought ZS Pharma in 2015 for $2.7 billion for a drug called ZS-9, which like patiromer was meant for hyperkalemia patients. But the FDA rejected ZS-9 in late May, leaving Relypsa with control of the market, at least for now. AstraZeneca hasn’t given a timeline, but it still intends to vie for approval of ZS-9 again.
Relypsa was founded in 2007 as a spinout of Santa Clara, CA-based Ilypsa, which had just been acquired by Amgen (NASDAQ: [[ticker:AMGN]]) that year. Its CEO is John Orwin (pictured), the former head of Affymax, a biotech whose anemia drug, peginesatide, was pulled from the market after it was linked to severe allergic reactions.
Here’s more on Relypsa’s history, ZS Pharma, and hyperkalemia.
