Cantor Reiterates Buy On Relypsa Following Veltassa Launch

• The share price of Relypsa Inc RLYP has appreciated 41.62 percent over the past three months to reach $28.89 on December 24.
• Mara Goldstein of Cantor Fitzgerald has reiterated a Buy rating and price target of $42 on the company.
• Following the official launch of Veltassa, Goldstein expressed a preference for the stock, believing that Veltassa was an underpriced asset with the potential to drive the stock valuation.

Analyst Mara Goldstein expects the company’s 2016 sales to be backend loaded, and that “the combination of this and scrutiny on prescription trends could exacerbate volatility.”

Although investors would look to prescription data to assess market uptake of Veltassa, Goldstein mentioned that prescription data was unlikely to be available from the current market sources and that Relypsa would provide monthly updates instead.

“We think this will help to gauge market dynamics, but reimbursement is likely to be a gating factor, and we expect clarity on this to evolve throughout 2016.” Goldstein stated.

With the entire sales force having made about 8,000 calls since Veltassa’s approval in October, Goldstein believes that the drug is off to a solid start, given the high level of awareness already created, aided by the robust showing at Kidney Week.

“We expect results of drug-drug interaction studies to be available in 1Q:16, which could further refine Veltassa's profile,” Goldstein added, while mentioning that a decision regarding Medicare reimbursement was expected later in 1Q:16, “followed by commercial carriers in 1H:16.”