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ZS Pharma's Main Competitor Could Face Headwinds Soon, So Go Overweight ZSPH: Morgan Stanley

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In a report published Thursday, Morgan Stanley analyst Andrew S Berens initiated coverage of ZS Pharma Inc (NASDAQ: ZSPH) with an Overweight rating and a price target of $67.

Analyst Andrew Berens said that ZS Pharma's sole product, ZS 9, had a favorable profile to treat hyperkalemia. The product's strength lies in its advantage over competitor partiromer in terms of onset of action and planned distribution.

"We believe that ZS-9 for hyperkalemia (elevated potassium) should fare well commercially against Relypsa's patiromer, given its rapid onset of action, more palatable administration, stability at room temperature, and planned distribution mode," Berens added.

In the report Morgan Stanley noted, "We also think patiromer could face near-term regulatory headwinds, potentially resulting in a delay or unfavorable label, benefiting ZSPH, but also note ZS-9 long-term data are pending."

ZS-9 normalized potassium levels within 3-4 hours, much faster than patiromer from Relypsa Inc (NASDAQ: RLYP), and it would be easier to "incorporate the drug into existing hyperkalemia treatment paradigms, which treat the condition urgently," Berens said.

ZS Pharma plans to distribute the drug via traditional conduits making it more accessible that patiromer. Concerns related to the possible adverse effects of ZS9 on renal function may pose some risk in the future, the report stated, while adding that there would be more clearity only after the company releases long term data.

Latest Ratings for ZSPH

Nov 2015CitigroupDowngradesBuyNeutral
Nov 2015Morgan StanleyDowngradesOverweightEqual-Weight
Nov 2015Credit SuisseDowngradesOutperformNeutral

View More Analyst Ratings for ZSPH
View the Latest Analyst Ratings

Posted-In: Morgan StanleyAnalyst Color Initiation Analyst Ratings


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