Oppenheimer: Own Relypsa (Here's 14 Reasons)

Oppenheimer commented on Relypsa Inc

Monday and maintained an Outperform rating with a $60 price target. Analyst Yigal Nochomovitz presented 14 "reasons to own" the stock that investors may have overlooked "surrounding the Patiromer vs. ZS-9 dataset debate." 1. "FDA feedback suggests no need for QD study." 2. "Patiromer Phase 2b studies enrolled patients with significantly higher comorbidity rates than ZS-9 studies, so any death rate comparison looks invalid to us." 3. The "death rate in ZS-Pharma's 12-month trial (ZS004/ZS004E) remains an open variable." 4. The "Patiromer death rate [is] below real-world mortality expectation for comparable population." 5. "ZS-9 hypokalemia rate looks higher than Patiromer in Phase 3." 6. "We see the sodium exchange ion for ZS-9 as a potential safety concern." 7. "Relypsa granted carcinogenicity and peri/postnatal study waiver, but unclear where FDA stands on ZS-9 here." 8. The timing and strategy around the ZS-9 filing was "still unclear." 9. "Onset of action debate misses the point on acute hyperkalemia." 10. "Control of chronic hyperkalemia represents the bulk of the commercial opportunity where Patiromer has already shown control through 52 weeks and we have only seen potassium control data through 1-month for ZS-9." 11. "Patiromer-treated patients maintain baseline serum calcium and magnesium levels." 12. "None of the patient deaths on Patiromer across all studies (19/748) were attributable to low magnesium and/or low potassium and no deaths were related to Patiromer by the independent Safety Review Board." 13. "Short-term Phase 3 trial death rates comparable." 14. "Similar mortality rates between Phase 2 and Phase 3 for Patiromer suggest underlying comorbidities as the driver, not Patiromer." Nochomovitz's investment thesis included that the chronic hyperkalemia market was large with approximately 3 million patients in the U.S., it lacked approved or effective therapies and was addressable by multiple winners. For Relypsa, the thesis implied "that Relypsa should conservatively capture ~5 percent US peak share, translating into a ~$1B revenue opportunity and a $60 price target." Relypsa Inc recently traded at $38.39, down 4.41 percent.