UPDATE: Bank of America Initiates Coverage on Relypsa on Rare De-Risked Late Stage Product Story
In a report published Thursday, Bank of America analyst Rachel McMinn initiated coverage on Relypsa (NASDAQ: RLYP) with a Buy rating and $40.00 price target.
In the report, Bank of America noted, “We are initiating coverage of Relypsa (RLYP) with a Buy rating and a $40 price objective. We view RLYP as a unique recently public biotech company, with a de-risked late-stage strategically attractive drug candidate, with billion dollar peak sales potential. RLYP's only product candidate has positive Phase 3 results for the treatment of hyperkalemia (HK), an underserved condition of elevated level of serum potassium which can lead to abnormal heart rhythms, cardiac arrest and death. While catalysts are limited until an expected approval in 2015, we believe shares are attractively priced given the limited risks to approval and our expectation for a steady global sales ramp to $1B by 2021. Our PO is based on a 4.5x multiple of probability adjusted US peak sales and an 8x on EU royalty, discounted for time, and supported by our discounted cash flow projections.”
Relypsa closed on Wednesday at $23.29.
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