Company Update (NASDAQ:RLYP): Relypsa Inc Reports First Quarter 2016 Financial Results


Relypsa Inc (NASDAQ:RLYP), a biopharmaceutical company, reported financial results for the quarter ended March 31, 2016. Total revenues for the first quarter 2016 were $12.4 million, which included net product revenues of $0.6 million from Veltassa®(patiromer) for oral suspension and collaboration and license revenue of $11.8 million.

“We made great progress in our first full quarter with Veltassa on the market. We saw solid month-over-month growth of prescriptions, reported early success with payers, including agreements with the two largest pharmacy benefit managers, and have had a positive reception from treating physicians,” said John A. Orwin, president and chief executive officer of Relypsa. “Yesterday, we announced a debt financing that will support the ongoing U.S. launch of Veltassa. In addition, with the recent submission of an MAA requesting European approval of Veltassa, we are another step closer to bringing Veltassa to patients outside the United States.”

Quarterly Business Highlights

  • 2,498 new patients started taking Veltassa with a free-starter supply. 1,155 outpatient prescriptions were covered by payers and dispensed (retail TRx). 374 hospital/institution units were sold (non-retail).
  • The Centers for Medicare and Medicaid Services (CMS) included Veltassa in its Current Year (CY) 2016 Formulary Reference File (FRF) and agreements were signed with Express Scripts and CVS Caremark, the two largest pharmacy benefit managers in the United States.
  • Across all payer plans, Veltassa has broad coverage with more than 80 percent of all plans covering to date. Approximately half of the Company’s target national and regional payers have made coverage decisions for Veltassa and, of these, 75 percent have decided to cover Veltassa in a Tier 3 or better position.
  • Relypsa announced positive results from Phase 1 drug-drug interaction studies with Veltassa.
  • The company initiated a Phase 4 study (TOURMALINE), evaluating Veltassa’s safety and efficacy when given with and without food.

Recent Announcements and Upcoming Milestones

  • On April 25, 2016, Relypsa and Vifor Fresenius Medical Care Renal Pharma (VFMCRP) announced a Marketing Authorization Application (MAA) has been submitted to the European Medicines Agency (EMA) requesting European approval of Veltassa for the treatment of hyperkalemia.
  • On April 28, 2016, data from new analyses of studies with Veltassa were presented at the National Kidney Foundation 2016 Spring Meeting.
  • On May 3, 2016, Relypsa announced the close of a $150.0 million debt financing.
  • By mid-2016, the company plans to submit a supplemental New Drug Application (sNDA) to the U.S. Food and Drug Administration (FDA) requesting a label change for Veltassa based on the results of the drug-drug interaction studies.

Financial Results
Net loss for the first quarter 2016 was $54.8 million, or $1.26 per share, compared to $29.7 million, or $0.78 per share, for the comparable period in 2015.

Cash, cash equivalents and short-term investments totaled $205.3 million at March 31, 2016, compared to $240.7 million at December 31, 2015. Shares outstanding as of March 31, 2016 were 44.7 million. Including net proceeds from the debt financing announced on May 3, 2016, pro forma cash, cash equivalents and short-term investments totaled $336.3 million at March 31, 2016.

Total revenues for the first quarter 2016 were $12.4 million, which included net Veltassa product revenues of $0.6 million and collaboration and license revenue of$11.8 million, compared to no revenues for the comparable period in 2015. The increase in revenues was due to the commercial launch of Veltassa in December 2015 and revenue recognition associated with Relypsa’s collaboration and license agreement with VFMCRP executed in August 2015.

Cost of goods sold for the first quarter 2016 were $0.1 million, compared to no cost of goods sold for the comparable period in 2015. This increase is due to the commercial launch of Veltassa in December 2015.

Research and development expenses for the first quarter of 2016 were $16.3 million, compared to $15.8 million for the comparable period in 2015. The increase was primarily driven by costs associated with clinical studies of Veltassa, including the drug-drug interaction studies and initiation of the TOURMALINE study. This increase was partially offset due to Veltassa manufacturing costs being capitalized as inventory subsequent to Veltassa’s approval by the FDA on October 21, 2015.

Selling, general and administrative expenses for the first quarter 2016 were $50.6 million, compared to $13.5 million for the comparable period in 2015. The increase was primarily due to an increase in personnel expenses to support expanding operations and an increase in commercial, marketing and medical affairs activities in support of the commercial launch of Veltassa. (Original Source)

Shares of Relypsa are up 3.5% to $14.50 in after-hours trading. RLYP has a 1-year high of $37.45 and a 1-year low of $10.26. The stock’s 50-day moving average is $16.80 and its 200-day moving average is $19.29.

On the ratings front, Relypsa has been the subject of a number of recent research reports. In a report released yesterday, Cantor analyst Mara Goldstein reiterated a Buy rating on RLYP, with a price target of $42, which implies an upside of 174% from current levels. Separately, on April 26, H.C. Wainwright’s Ed Arce maintained a Buy rating on the stock and has a price target of $36.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mara Goldstein and Ed Arce have a total average return of -12.4% and 10.4% respectively. Goldstein has a success rate of 33.1% and is ranked #3785 out of 3838 analysts, while Arce has a success rate of 33.3% and is ranked #491.

Overall, one research analyst has rated the stock with a Sell rating, one research analyst has assigned a Hold rating and 9 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $29.75 which is 94.2% above where the stock opened today.

Relypsa, Inc. operates as a bio-pharmaceutical company focused on the development and commercialization of non-absorbed polymeric drugs to treat disorders in the areas of renal, cardiovascular and metabolic diseases. Its products include patiromer, a non-absorbed for the treatment of hyperkalemia and RLY6002, polymer drug discovery technology. The company was founded on October 29, 2007 and is headquartered in Redwood City, CA.