Relypsa finally finds a buyer as Veltassa partner Galenica coughs up $1.5B

After a year of takeover rumors that seemed to fizzle out into nothing, Relypsa has finally found its match in the biotech’s drug marketing partner and Swiss healthcare company Galenica, which will buy the company for $1.53 billion.

After AstraZeneca's ($AZN) $2.7 billion buyout last year of ZS Pharma and its hyperkalemia candidate ZS-9, it looked a sure thing that Relypsa would be next, given that it now has FDA approval for its hyperkalemia drug Veltassa (patiromer), a treatment which could make blockbuster sales in a market potentially worth $6 billion at peak.

But investors and analysts waited, and waited some more, but no formal suitors seem to come, with a few names like Actelion (which lost out narrowly to AstraZeneca with ZS Pharma) being bandied about, but all to no avail.

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Then Relypsa got another major boost: ZS-9, which was meant to be approved in May, was knocked back by the FDA in a complete response letter over manufacturing concerns coming out of the ZS Pharma unit.

The drug could be delayed by a year, leaving Veltassa breathing room to grow into the market and also gain a supplemental approval downgrading its safety risks. Its U.S. sales have been sluggish since launch, although they look to be slowly picking up. 

It looked as if Astra had backed the wrong horse, so surely now a Big Pharma player would swoop in? For two months, no one did, until today when Galenica quietly walked in with a $32-a-share ($1.53 billion) offer for the company--a 59% premium on its share price at close yesterday. 

It’s a neat fit because Galenica owns Vifor Pharma, Veltassa’s European marketing partner; both companies submitted the drug for EMA back in the spring.

The drug has been co-marketed in the U.S. with French Big Pharma Sanofi ($SNY)--however, Galenica/Vifor said it would now gain “full global rights” to the drug, meaning it will likely lose Sanofi as a partner.

In a statement, the company said: “The acquisition of Relypsa is expected to significantly strengthen Vifor Pharma ahead of the planned split of the Galenica Group into two independent companies in 2017.” Relypsa will be delisted and integrated into Vifor. 

Etienne Jornod, executive chairman of Galenica, said: “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.”

The markets have not reacted kindly, however, sending Galenica's shares down by more than 8% this morning. 

John Orwin, president and chief executive officer of Relypsa, added: “We are very proud of the team that built Relypsa into the company it is today and brought Veltassa to patients in need. Vifor Pharma is a recognized international leader in the cardio-renal space that shares a strong commitment to patients and closely aligned values with Relypsa.

“We are excited to announce this transaction today, which we believe offers significant and immediate value to our shareholders. We look forward to continuing our mission of improving patients' lives as part of the Vifor Pharma organization and are confident that our combined expertise, resources and commercial strength will help us build on the significant progress we have made since launching Veltassa in the United States.”

The deal is expected to be done by the third quarter.

 

Related Articles:
AstraZeneca’s $2.7B hyperkalemia drug ZS-9 rejected by FDA
After ZS Pharma buyout, Relypsa slated to be next on the hit list
Relypsa sets up hyperkalemia showdown with AstraZeneca

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