Relypsa Inc (NDAQ:RLYP) — to be acquired by Galenica AG (VTX:GALN) for $32 per share in cash is soaring this morning up about 58 percent at the time of this writing in early morning. On the other hand shares of Galenica are down on the announcement by about 8 percent. What are the details of the deal? Here is what the sell side analysts are saying about the pharma news.

Relypsa Inc RLYP

Relypsa Inc (NDAQ:RLYP) bid – analysts react

Cantor Fitzgerald

Relypsa will be acquired by Galenica for $32 per share, a 59% premium over the last closing price. We have thought that Relypsa would likely be acquired at some point, given the opportunity to grow Veltassa to be a significant commercial brand, though admittedly we expected this to occur later rather than sooner as the Veltassa rollout advances. While the $32 takeout is below our $41 price target, we think that “cash in hand” is likely to be sufficient to have investors tender shares. The company will host a conference call this morning (details below), where we expect to gain incremental color on this transaction, and we maintain our current rating and price target pending additional information from the call.


Galenica and Relypsa announce agreement for acquisition for $32 in cash. The implied equity value is about $1.53 billion. RLYP closed at $20.10 or $899 million market capitalization. The all-cash tender offer at $32 per share represents a 59% premium and covers all outstanding RLYP common stock. Following completion the remaining RLYP shares would be converted in line with the tender offer. Galenica anticipates completion of the acquisition in Q3 2016. Recall on August 20, 2015 Relypsa and Vifor Fresenius Medical Care Renal Pharma (VFMCRP), a common company of Galenica and Fresenius Medical Care announced a partnership for commercialization of Patiromer FOS (for oral suspension) in territories outside the U.S. and Japan. Relypsa received a $40 million upfront cash payment and was eligible to receive up to $125 million in regulatory and sales milestones and double digit royalties on net sales of Patiromer FOS and guided to MAA submission in H1 2016. On April 25, 2016 the companies announced submission of a Marketing Authorization Application (MAA) for European approval of Veltassa.

Earlier this morning (likely before the stock soared on the news) Morgan Stanley opined:

We think sales of Relypsa’s only drug, Veltassa, could miss both our estimate ($2mn) and consensus ($2.5mn) for Q2, based on monthly prescription data provided by the company, which suggests a sales range of $1.8-1.9mn, depending on the gross-to-net adjustment. We expect weakness in the stock around earnings based on below-consensus revenues and commentary around patient usage patterns and persistency, which we think is likely to disappoint.