Astrazeneca scoops up zs pharma for _2.7b – astrazeneca group plc (nyse_azn) _ seeking alpha

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AstraZeneca (NYSE: AZN) has agreed to buy ZS Pharma (NASDAQ: ZSPH) for $2.7B in cash, pipping Swiss firm Actelion to the prize in the latest bout of healthcare dealmaking.

ZS Pharma holders will get $90 per share, a 42% premium to yesterday’s close, for the company’s proprietary technology to develop novel treatments for hyperkalaemia, or high potassium levels.

AstraZeneca said the deal will not impact its financial guidance for 2015.

AZN -1.1%; ZSPH +40.6%


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Ha! I just started researching ZS Pharma as their drug seemed superior to RLYP’s. Sadly, multi-billion dollar AZN completed their DD first before I could own one millionth of ZSPH.

Congrats to ZSPH longs!

Please do your through dd before claiming zsph better than rlyp. 7.7% edema, 7% hypertension taking zsph drug. what population is treated with these meds, elderly (renal problems, hypertension) and now giving them a drug that raises their BP and salt intake will worsen their problem. s

What you say is false. No changes in BP have been noted in any ZS study. You should reread the papers and take your own advice. Wishing and wanting ZSPH to not be better than patiromer will not make it happen. Sorry you own relypsa at $40 at share. AZ got into a bidding war for ZSPH for a reason.

Here’s a up to date Analysis of $ZSPH & $RLYP, RLYP is next buyout

AstraZeneca ($AZN) just bought $ZSPH for $2.7B. Did anyone see that coming? I didn’t. They must have outbid Actelion by $200M. The timing is interesting. Potential approval of ZS-9, although still seven+ months away, has likely been derisked in the eyes of $AZN due to the approval of Veltassa. The ZS-9 safety data has not yet been reported, although presumably $AZN has seen at least some of it.

I think the biggest question on everyone’s mind right now is “Why did ZSPH get scooped up for a tidy $2.7B so early on, and where is the buyout for RLYP?” Understanding this scenario requires understanding the motivations of all involved players. Let’s start with facts that may have motivated ZSPH to accept an early pre-approval buyout.

The ZS-9 safety trial (to be presented 11/7/15) allows titration of drug dose. This is presumably due to the previously recognized drug related edema. Previously, 14.1% of patients receiving a 15g dose of ZS-9 developed edema. The safety trial starts patients on the 10g dose (which previously produced 2-3x the incidence of edema relative to placebo), but allows the patient to increase to 15g if sub-therapeutic or decrease to 5g if experiencing edema. If edema develops after increasing the dose, presumably the dose would then be decreased – however if this occurs the patient would presumably return to being sub-therapeutic… of note, the 5g dose was only marginally effective.

This dose-dependent edema produces two problems. The first relates to the FDA label. Target population for these drugs is moderate to severe chronic kidney failure and heart disease. Both of these populations are almost universally on salt (sodium) and fluid restricted diets. Failure to adhere to sodium and fluid restriction can result in water retention, which manifests as edema, increased blood pressure and most importantly, more rapid progression of heart/kidney disease.

There is a very real risk that the FDA will approve ZS-9, but with restrictions or at least a boxed warning regarding chronic kidney failure and heart failure. Since these are the specific target populations, this would be a problem.

ZS-9 is months behind Relypsa’s Veltassa. Relypsa is pressing their first to market advantage by teaming up with Sanofi’s experienced nephrology sales force, by rapidly completing contracts with payers including medicare and by completing studies showing the drugs additional benefit of helping control blood pressure (important for HF/CKD patients). The FDA would may require additional safety trials of ZS-9, which will take time and money. Given the above advantages held by Veltassa and considering the additional regulatory risk ZSPH faces, we can see why ZSPH may have been eager to accept an early buyout.

AstraZeneca, meanwhile, has acquired a coveted hyperkalemia drug. With a massive worldwide patient population and annual sales targets exceeding $1 to $1.5B, scooping up a potential candidate for a mere $2.7B is apparently worth the risk. ZS-9 does have some advantages. The onset of action may be somewhat faster than Veltassa, which of course is meaningless in treating the chronic outpatient population but it may give ZS-9 the edge in some patients hospitalized for hyperkalemia. RLYP has estimated that this hospital population makes up about 2% of the market. Also, drug binding data for ZS-9 is quite limited (it binds lithium in vitro), but if we assume everyone is innocent until proven guilty (that always works, right?) it may sneak through the FDA without a warning about potential drug binding. Even though it seems likely that ZS-9 will be second line in treating chronic outpatient hyperkalemia due to the sodium content, dose dependent edema and the unnecessary difficulty of titrating the dose to avoid edema, there will be a market for ZS-9 in the hospital setting. Some doctors may also select ZS-9 for chronic therapy for various reasons; unless of course this is restricted by the FDA due to the drugs sodium content and sequelae.

Where does this leave Relypsa? Where is the buyout? Let’s view the situation from their perspective.

RLYP has the first drug approved for hyperkalemia in over 50 years. The potential market is huge and the closest possible competition is a full eight months behind. They received a broad label from the FDA. They have approximately $280 million in cash, so there is no underlying financial stress. They have a deal with Sanofi to utilize their experienced nephrology salesforce to market Veltassa. Sanofi sells Kayexalate, which is an old treatment for hyperkalemia, so their salesforce is presumably ready to rock and roll. Veltassa hits the market in less than two months with the majority of payer contracts ready by Jan/Feb. The only potential weakness behind the Veltassa story is the issue with the 6hr oral medication window. However, analysis has shown that the drugs shown to bind can be taken once daily and so that should not be a problem. In addition, the company is completing human drug interaction studies in January which by all reports should alleviate concerns. Regarding the 6hr window, clinicians have stated that they would handle this by telling patients to “do their best”, just like they do with the peculiarities of other meds.

The point is that right now if we were to imagine a buyout discussion taking place between two celebrity figures, Relypsa would be Arnold in Terminator 2. They are bargaining from a position of strength. Given the obvious interest in hyperkalemia drugs, it is more likely than not that Relypsa has potential suitors sniffing around. My personal thesis is that Sanofi is interested (perhaps they would like to replace some Kayexalate revenue since Veltassa will take that market) but has not yet offered an acceptable price. Perhaps watching AZN and Actelion already duking it out to get a bite of the hyperkalemia market will light a fire under $SNY to man up and pay. If not Sanofi, somebody else will step in.

Veltassa is not without side effects. There is a 7% incidence of constipation while taking the drug, however the clinician running the studies stated that this was generally mild and resulted in very few dropouts. Preliminary ZS-9 data reported a 5% incidence of “GI” side effects.

Most interestingly, the data reported yesterday at the American Society of Nephrology Kidney Week 2015 showed that Veltassa therapy was associated with an improvement in blood pressure. This benefit was seen in patients taking metoprolol and other blood pressure medications that, in a test tube, were shown to bind with Veltassa. This data supported that the “test tube binding” (seen at temperature and pH extremes designed to maximize drug interactions) has no clinical impact on the effectiveness of these medications, and in fact appears to by some means improve blood pressure control. Controlling blood pressure is a critically important aspect of treating chronic heart failure and chronic kidney disease patients.

Speaking of blood pressure, recall that ZS-9 is made in part out of sodium. The sodium is exchanged for potassium in the bowel and the sodium is left behind. Most ingested sodium is absorbed. The reason that chronic kidney disease and heart failure patients are on low-sodium diets is because too much sodium is associated with increased blood pressure and increased blood pressure will increase the rate of disease progression in these patients.

Veltassa exchanges calcium for potassium. Unlike sodium, only about 5% of ingested calcium is absorbed. The data shows no evidence of any deleterious impact of this small amount of extra calcium.

In summary, it would be foolish and unnecessary for RLYP to accept a low buyout given their position of strength. Clearly there are several parties interested in the hyperkalemia market and I expect it to be only a matter of time before an acceptable buyout offer is made for Relypsa.

No evidence of Blood pressure changes or weight gain nor evidence of blood sodium or urinary sodium excretion changes with ZS treatment. ZS also uses hydrogen as exchange ion. Show me evidence of sodium loading related to edema. There is none.

ZS Pharma has not said that. Relypsa has as counter messaging to make their inferior drug look better. The amount sodium in a 5 gram dose of ZS is 400 mg. Even if it

Were 100% absorbed is not that big of an issue as Relpysa thinks it is.

@Saywhat? 5g ZS9 -> 400 mg sodium ->1g salt (NaCl), 10g ZS9 -> 2g salt, 15g -> 3g salt.

Most sodium will release in the stomach, where PH=2.0, high concentration of protons exchange with sodium first. sodium releases and absorbs.

count ions of ZS9 include H+ and Na+, so the drug is acid, need more water to dilute, e. g., ~200 ml per their protocol .

My conclusion is: 1. long term using of extra Na + water lead to edema, which is dose dependent as shown in ZS004. I am curious to see the results of ZS004e study, which they start with 10g ZS9 daily. This already finished, but they do not want to release. instead they show the interm data of 005, which start from 5g daily. so they are trying to hide something?

2. 1-3g extra salt is not health either. mind you, increase 3g salt daily lead to BP increase 10/4 mm/Hg from a randomize study.

http://1.usa. gov/1WVVptc

The market for HK is what you know I meant! clearly ZS is better else why would the big boys be fighting it out for ZSPH. ZS will

Own 80% of the market share that

Is why Relypsa is not apart of Sano fi or

amgen right now and likely will never be.

The drugs are very, very similar in most respects. One contains a high dose of sodium and is known to have a direct dose dependent relationship with fluid overload and is being sold to a population of patients who are almost without exception on salt and fluid restriction. The other drug has shown drug-drug binding in a test tube, and although to date no clinical in human data suggest any clinical relevance or evidence of in vivo binding there is currently a box warning which limits concurrent dosing.

There have been 15 cases of edema in 913 subjects treated in published studies. The rate of death was 5 times higher in veltassa studies than the rate of Edema in ZS-9 studies. The Edemaoccurred primarily in sicker patients given 15 g doses. 90% patients will be treated with 5g doses which despite

Your fantasy works better than veltassa without Edema at all.