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Potential Blockbuster Hyperkalemia Drug, And Mast Therapeutics

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This week examines significant developments from biotech companies AstraZeneca (AZN), Relypsa (RLYP), and Mast Therapeutics (MSTX). AZN deserves investor attention because on May 26th, 2016 the FDA rejected its potential blockbuster hyperkalemia drug, ZS-9, citing concerns over its pre-manufacturing process. More specifically, the FDA issued a complete response letter (CRL) and 483 form to AZN, which states a drug will not be approved in its current state, but does not require new clinical data for potential future approval. This came as a surprise to many who expected a smooth road to approval for ZS-9 after AZN purchased ZS Pharma for $2.7 billion last December. AZN shares were only down 1% as a result of the news, but competitor RLYP saw its shares jump ≈29%. Previously, a general market consensus had arisen that AZN would swoop in with a superior drug and claim most of the market for hyperkalemia, but with the FDA’s denial of ZS-9 that future looks murkier. This surprising catalyst provides an excellent opportunity to interview an expert about the long term effect this will have on the hyperkalemia landscape and what the future looks like for both AZN and RLYP. MSTX warrants investor interest after their CEO announced they would be delaying the release of Phase 3 top-line data for EPIC (using vepoloxamer to treat sickle cell disease) by more than a month due to delays locking their patient dataset. Despite this announcement, MSTX’s stock price has risen more than

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