Wedbush Remains Bullish on Relypsa Inc (RLYP) Ahead of Drug Launch

By Sarah Roden 

Relypsa Inc RLYP announced that Veltassa is launching in the U.S. commercial market. The drug treats patients with hyperkalemia, or elevated potassium levels. This is the first new therapy to hit the markets for this condition in the last 50 years. In light of the launch, Liana Moussatos of Wedbush reiterated an Outperform rating on the company and raised her price target from $75 to $86.

The analyst is confident that Veltassa will have a successful launch. Sales representatives from Relypsa and Sanofi, who is a co-detailing partner on the drug, have been teaching doctors about the drug since it was approved in late October. Although the drug comes with a drug-to-drug interaction, or DDI, warning, Moussatos does not find this worrisome enough to "materially curb" prescription rates. The analyst is looking forward to results from the DDI study, expected in 2016. She comments, "While we are unaware of evidence from Veltassa's clinical program that suggests a DDI, we believe positive results from the DDI study could reduce the time required in the product insert to dose other drugs with in vitro binding to less than six hours before and after Veltassa dosing."

Overall, the analyst believes that a successful launch of the drug "is likely" thanks to the company's sales team, "contracts with top-tier specialty pharmacies and distributors, and the patient support hub (Veltassa Konnect) for the chronic market." She believes that the full year 2016 estimates for the drug are in reach (a mean estimate of $38.7MM while her full-year sales projection is higher at $48.5MM). At the end of the day, Moussatos estimates that peak sales "could reach over $1 billion in the U.S. alone."

Liana Moussatos is a top-ranked analyst with a 50% success rate recommending stocks in the healthcare sector and a +23.3% average return per rating. According to TipRanks, all 8 analysts covering the stock recommend buying. The average 12-month price target between these 8 analysts is $48.63, marking a 79% potential upside from where shares last closed.