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A week ago, Reuters reported that small-cap biotech Relypsa Inc (NASDAQ: RLYP) is exploring a sale, with the help of investment bank Centerview Partners Holdings LLC, due to interest in its main hyperkalemia drug Veltassa.
Shares of Relypsa then spiked from $14 to a high of $25.60 per share on the report. Although the stock remains near its post-report levels, some wonder whether the timing makes sense.
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The Prospects Of A Deal Right Now
Cantor Fitzgerald analysts like the prospect of a deal right now.
A Relypsa sale would make sense, they said, stating the shares have "strategic value given the larger opportunity in the hyperkalemia and limited competition."
A Different Take: Timing Could Be Questionable
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Raymond James analyst Dr. Reni Benjamin, for one, recently issued a note questioning the timing of the sale talk. Key competitor ZS Pharma Inc (NASDAQ: ZSPH) has a labeling approval decision coming May 26 for hyperkalemia drug ZS-9 -- an alternative to Veltassa. The value of Relypsa's drug, and the company as a whole, will be more clear after this date.
Additionally, he said, Relypsa is burning $60 million in cash per quarter and would only acquire limited marketing rights, specifically in the U.S. and Japan.
Relypsa Said To No Longer Have Centerview As Advisor At The Moment
A source familiar with the matter told Benzinga on Thursday that at this time, Relypsa no longer has Centerview Partners as an advisor. The source added that due to the expense of such expertise, Centerview's presence in ongoing M&A evaluation at Relypsa can only occur over a limited period. They did not mention the possibility of a sale over the longer-term.
Relypsa declined to comment on its current relationship with Centerview Partners, while the latter could not be reached.
Centerview Partners has closed 47 of 54 transactions in the healthcare sector since 2010, an 87 percent success rate, including 4 transactions still pending.
Relypsa shares closed Thursday near $22 per share, flat on the day.
Nick Donato contributed to this report.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.