Both Relypsa Inc (NASDAQ:RLYP) and EXACT Sciences Corporation (NASDAQ:EXAS) received good news about their flagship products this week. Relypsa announced May prescription data for Veltassa while a task force reaffirmed its support of Exact Sciences’ Cologuard. Analysts remain bullish on both companies and comment on what the good news means for share prices.
Relypsa is most known for Veltassa, its FDA-approved drug to treat hyperkalemia. Analyst Mara Goldstein of Cantor Fitzgerald weighs in on the biotech company with bullish sentiments after May prescription numbers were released and dives deeper into her expectations for the drug.
Analysts lauded Veltassa as the first new hyperkalemia drug to be approved in 50 years. However, there are concerns that a competing drug, ZS-9 from AstraZeneca, will enter the market in a year and challenge Veltassa’s market share, following a delay imposed by the FDA. These concerns don’t faze Goldstein as she highlights strong Veltassa script growth in May, noting that outpatient prescriptions grew 33% month over month to 1,230. The number of starter pack prescriptions also increased from 1,216 to 1,385 month over month.
Goldstein expects Veltassa to have a “volatile” launch but notes that there are several signs of encouragement. She explains, “Our view has been and continues to be that sales will be well skewed to year-end, and prescription numbers thus far are in line with our forecast.” Now, Goldstein notes that her forecast of $1.4 million in Veltassa sales for the second quarter may be too conservative, explaining, “Our revenue forecast for Veltassa has been very back-end loaded for CY:16, and we think the level of prescribing thus far indicates that our annual forecast is achievable.”
Thanks to the strong Veltassa script data, Goldstein reiterates a Buy rating on Relypsa with a $41 price target, marking well over a 100% upside from current levels.