Oppenheimer analysts are out with research notes on drug makers Relypsa Inc (NASDAQ:RLYP) and Opko Health Inc. (NYSE:OPK). While one analyst is bullish on Relypsa following recent FDA setback for a competitor’s drug, the other continues to be sidelined on Opko following draft coverage decision for 4Kscore.

Relypsa Inc

Oppenheimer analyst Carlos Solorzano reiterated an Outperform rating on shares of Relypsa, with a price target of $36, after competitor AstraZeneca announced receipt of a complete response letter (CRL) from the FDA for ZS-9, a treatment for dangerously high potassium. The CRL allows Relypsa and partner Sanofi to further establish Veltassa as the sole option for nephrologists and cardiologists learning to prescribe a new treatment for chronic hyperkalemia.

Solorzano noted, “FDA issued a complete response letter for ZS-9, citing issues observed during a preapproval manufacturing inspection and receipt of recently-submitted data, which it has yet to review. While there is still the chance that ZS-9 is approved and that this is only a delay (albeit a significant one), no guidance was given on the timing of when the manufacturing issues could be resolved. Our expectation was that ZS-9 would get approved and that there would be some language/black-box warning in the label surrounding the edema rates previously observed. We think that ZS-9 could still be approved, but this setback for ZS-9 will likely give Veltassa an even better lead in the market.”

“We continue to view Veltassa as an effective/ safe drug for the treatment of hyperkalemia, which is potentially a >$1B market. Given the increased risk tied to the ZS-9 approval, we are incrementally more confident in the commercial potential of Veltassa,” the analyst concluded.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Carlos Solorzano has a yearly average return of 6.4% and a 42.9% success rate. Solorzano has a 33.2% average return when recommending RLYP, and is ranked #1691 out of 3972 analysts.

Out of the 10 analysts polled by TipRanks (in the past 3 months), 8 rate Relypsa stock a Buy, 1 rates the stock a Hold and 1 recommends a Sell. With a return potential of 67%, the stock’s consensus target price stands at $30.11.

Opko Health Inc.

In addition, Oppenheimer’s Rohit Vanjani reiterated a Perform rating on shares of Opko Health, after the company announced that it received a draft Medicare local coverage decision for the 4Kscore test from Novitas Solutions, a Medicare Administrative Contractor (MAC).

Vanjani wrote, “The MAC is important since it includes New Jersey under its Medicare jurisdiction, where OPK will have its centralized facility for the test. Provided the coverage decision becomes final (comment period to end on 7/7/16), our understanding is that Medicare covered patients will get 4Kscore reimbursed.”

“While the Novitas decision is certainly important, we note that the Palmetto MAC announced a draft non-coverage decision. Since the influential MolDx group is attached to Palmetto, there could be other impacts should that decision become final (comment period to end 7/29/16). We believe that the primary impact would be if commercial payors decide to follow suit with MolDx,” the analyst added.

According to TipRanks.com, analyst Rohit Vanjani has a yearly average return of 9% and a 51% success rate. Vanjani has a 69% average return when recommending OPK, and is ranked #313 out of 3972 analysts.

Out of the 4 analysts polled by TipRanks, 2 rate Opko Health stock a Buy, while 2 rate the stock a Hold. With a return potential of 48%, the stock’s consensus target price stands at $15.67.