Shares in hyperkalemia drug group Relypsa Inc (NASDAQ:RLYP) surged on Thursday after a long-awaited US$1.53bn takeover bid emerged.
The stock rocketed US$11.78, or 58.6%, to US$31.88 after Swiss rival Galenica AG (VTX:GALN) offered US$32 a share for the developer of a treatment for excessive potassium in the blood.
Takeover speculation has surrounded Relypsa since AstraZeneca PLC (LON:AZN) announced it was buying rival hyperkalemia drug group ZS Pharma (NASDAQ:ZSPH) in November last year.
Relypsa has already partnered with a Galenica-related company and the firms applied for European marketing consent for hyperkalemia drug Veltassa in April.
Brokers reckon Galenica's offer may not be the end of the story as a rival bidder may emerge, with players such as Actelion mentioned in the past.
Wedbush re-iterated its 'outperform' rating and US$51 price target on Relypsa.
The broker's Liana Moussatos said: "While we see US$32 per share as an acceptable offer, we believe there is room for at least one additional bidder.
"With millions of chronic kidney disease (CKD) and heart failure patients experiencing hyperkalemia, we estimate the potential for peak annual sales to reach over US$1bn just in the US and view the offer of $1.53 billion as approximately one-time peak sales."
Hyperkalemia, or high potassium levels, occurs in 23-47% of patients with CKD and/or chronic heart failure and can cause cardiac arrest and death, with a mortality rate of up to 20%.
Galenica expects to complete the acquisition of Relypsa in the third quarter of 2016.
It said the deal would further strengthening its business unit Vifor Pharma by gaining full global rights to Veltassa.
A spokesman said: "Through this acquisition, Vifor Pharma will gain a fully-integrated commercial organisation in the US and significantly strengthen its presence in the US cardio-renal market, a key area of focus."