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) came rushing out the gate on massive volume Thursday
morning, soaring just shy of 60% on some 20 million shares
(versus 2.55 million on average) in early Tuesday's trade. The
mad rush to buy RLYP stock was sparked by news that
would pay about $1.53 billion for the biotech firm.
Galenica's offer translates into $32 per share, a 59% premium to
Wednesday's close of $20.10. That's good news for RLYP stock
holders - especially to those who held on through the 50% drop
from January through March. Even before today, shares had only
recovered to a 30% loss since the start of the year.
Both companies' boards approved the deal, and Galenica plans
into two separately listed companies when the deal is
Shares of Galenica, which is traded on the VTX, dropped
roughly 9% in response.
What Galenica Wants With RLYP Stock
Galenica's plan is to get its hands on Relypsa's Veltassa drug
and a foothold in the U.S. commercial market.
With RLYP, Galenica's business unit, Vifor Pharma, will hold
the global rights to Relypsa's Veltassa drug, the first medicine
in half a century approved in the States for hyperkalemia, a
potassium blood condition whose
can range from mild malaise to severe heart rhythm
From Executive Chairman of Galenica Etienne Jornod:
"The combination of Vifor Pharma and Relypsa is an important
step towards achieving our goal of building a world-leading
specialty pharmaceutical company focused on nephrology,
cardiology and gastroenterology medicines. This acquisition will
give Vifor Pharma direct access to the key U.S. market, enabling
us to maximize the potential of our compelling product portfolio
and enhancing our growing attraction as an international partner
of choice. This transaction demonstrates the commitment of the
Galenica Board of Directors to achieve the separation of Vifor
Pharma and Galenica Santé, with both businesses in the strongest
possible position. We look forward to welcoming Relypsa to Vifor
But there's also some roadblocks with Veltassa as well, as the
Food and Drug Administration slapped it with a strict
"black box" warning
from the FDA stating that Veltassa is "not appropriate for rapid
correction of severe hyperkalemia because lowering of serum
potassium may take hours to days."
That led to a slow uptake for the drug as doctors distanced
themselves from recommending it, which was what caused much of
the rout in RLYP stock this year. Still, being the only new
drug in a specific market has its benefits, and Veltassa is now
the market leader for hyperkalemia drugs.
The condition affects some 3 million in the U.S. alone and the
market is potentially worth about
. But Galenica could soon see competition in the likes of
the ZS-9, a drug from
AstraZeneca Plc (ADR)
) - if it ever gets approval from the FDA, that is. Once it does,
it likely won't carry the same FDA black box warning, which could
see it claw some market share from Veltassa.
In the meantime, Galenica plans to continue growing through
licensing deals and buyouts, with Vifor focusing on cardio-renal
and gastroenterology drugs.
As of this writing, John Kilhefner did not hold a position
in any of the aforementioned securities.
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