Relypsa Inc (RLYP) Pops on More Buyout Rumors

RLYP is trading higher on an unconfirmed buyout rumor from AZN

Dec 24, 2015 at 9:54 AM
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Biopharmaceutical company Relypsa Inc (NASDAQ:RLYP) has been making an impressive comeback over the last two months. After dropping more than three-quarters of its value between its March high and October low, the stock has clambered back to a net loss of just 9.3% for 2015. In fact, the shares have outperformed the S&P 500 Index (SPX) by an astounding 72 percentage points over the past 40 trading days.

Today RLYP is trading 1.4% higher at $28.31, after the Daily Mail alluded to rumors that AstraZeneca plc (ADR) (NYSE:AZN) may be interested in buying the company. In fact, the article mentions a potential offer of $46 per share -- a 62.5% premium over today's price. This news comes less than two weeks after sources said Merck & Co., Inc. (NYSE:MRK) may be looking to purchase the drugmaker.

Analysts and traders have been cheering on RLYP's recent rally. Only one of the eight analysts following the stock gives it anything less than a "strong buy" rating. And while about 20% of Relypsa's available float is still sold short, these bears have been backing off over the last couple of weeks, with short interest falling 3%.

In the option pits, calls have been the contracts of choice by a hefty margin. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Relypsa Inc (NASDAQ:RLYP) calls have been bought to open at nearly 17 times the rate of puts over the past 50 days of trading -- a ratio that stands higher than 70% of comparable readings in the last year.

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