Relypsa (RLYP) to Be Acquired by Galenica in $1.53B Transaction.

Shares of Relypsa Inc. (RLYP) were trading up +11.67 or +58.06 percent to $31.77 per share in Thursday’s premarket after news broke late yesterday that they had entered into a definitive agreement in which Galenica AG will acquire Relypsa for $32 per share in cash. Relypsa stock closed at $20.10 per share, up +0.26 or +1.31 percent in Wednesday’s regular trading session.

Stock Analysis

Redwood City, California based Relypsa Inc. was founded in October of 2007 and is a biopharmaceutical firm specializing in developing treatments for conditions which are overlooked and undertreated, but that seriously impact or even threaten the lives of patients.

The company specializes in the discovery, development and commercializing of polymer based medicines. Relypsa went public in November of 2013 with an initial public offering of 6,850,000 shares at $11.00 apiece, listing its stock on the NASDAQ. The company’s first product approved by the FDA in the United States is Veltassa, an oral suspension for the treatment of hyperkalemia or high blood potassium levels.

Bern, Switzerland based Galenica AG was established in 1927 by 16 pharmacists in Clarens, when they founded a buying office for pharmaceutical products. The company has since become an international diversified business group that develops, manufactures and markets pharmaceutical products worldwide, in addition, the company provides logistical, database and networking services. The company is set to split into two divisions by the fourth quarter of 2016: Vifor Pharma and Galenica Santé, which will both be listed and traded as separate companies. Galenica AG shares are currently listed on the SIX Swiss Exchange.

The companies announced late last night that Galenica’s business unit, Vifor Pharma will gain full global rights to Relypsa’s Veltassa patiromer for oral suspension. In addition, the acquisition will give Vifor Pharma a fully integrated commercial infrastructure in the United States which will significantly increase the company’s presence in the U.S. cardio renal market.

The enterprise value of the transaction comes to $1.53 billion. At $32 per share, Galenica will pay a +59 percent premium over Relypsa stock’s closing price on Wednesday. The Board of Directors of both companies have approved the deal with the Board of Relypsa resolved to recommend the offer to shareholders.

John A. Orwin, Relypsa’s President and Chief Executive Officer said in the press release that, “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 takeover is structured as an all cash tender offer for all outstanding Relypsa common shares followed by a merger of all remaining Relypsa shares converted into an equivalent U.S. dollar per share consideration as in the tender offer. The deal is subject to the customary closing conditions including a majority of Relypsa shares tendered and the expiration or early termination of the waiting period under the Hart Scott Rodino Antitrust Improvement Act of 1976. The deal is expected to close by the third quarter of this year with Relypsa stock delisted and integrated into Vifor Pharma afterwards.

Other News About RLYP

Relypsa Announces New Employment Inducement Grants

Company has granted two employees options to purchase 5,700 shares of the company’s common stock for $20.67 apiece.

Brean Capital Weighs In On Relypsa Inc (RLYP) Following Call with Management

Analyst at Brean Capital had given a $26 per share price target last week.

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Published on Jul 21, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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