BTIG Still Buying Relypsa As May Prescription Trends Show Steady Veltassa Increases

Relypsa Inc RLYP reported that paid prescriptions for Veltassa in hyperkalemia increased to 1,230 in May, from 928 in April, and that 1,385 free starter packs were dispensed, representing a 14 percent increase from April.

BTIG’s Timothy Chiang maintained a Buy rating on the company, with a price target of $35.

Prescription Growth Expected

“Without any competition from ZS-9, we believe Veltassa may be in a better position to gain formulary access,” Chiang mentioned.

The analyst expects prescription trends to continue to grow steadily through 2016, with an inflection in 2H, when insurance coverage is likely to be obtained.

In addition, an FDA decision regarding the company’s proposed labeling changes for Veltassa is expected before the year end.

Veltassa Sales

According to the BTIG report, “Veltassa is patent protected until 2030 via composition of matter patents, which provides a long runway for sales growth. Veltassa is the first FDA approved product to treat this medical condition in patients over 50 years of age.”

Chiang believes that the current medical treatment are limited and consist of dietary potassium restrictions, diuretics and Kayexalate, which can lead to serious GI toxicity and a very poor tolerability profile.

“Based on an estimated price of ~$600 per month for Veltassa and initial gross to net discounts of ~25 percent, our 2016-2018 sales estimates are $26.5 million, $84.5 million, and $203 million, respectively, with sales estimated to reach ~$500 million by 2020,” Chiang added.