Relypsa Aims to Delay Need for Costly Dialysis in Kidney Patients
These days, drug developers are trying to do more than persuade the FDA that their products work well in patients. To increase the market appeal of their products, it also helps to compile evidence that they will save money for the health plans that approve expenditures on new drugs.
As commercial insurance companies, employers, and the government all clamor for cost-cutting measures in health care, companies such as Redwood City, CA-based Relypsa are looking past their hoped-for FDA approvals to the day when they go on the road to make sales. Relypsa is preparing to make a case that its lead drug candidate, patiromer, could help postpone the need for expensive dialysis treatments in patients with severe kidney disease, says Relypsa’s chief medical officer Lance Berman.
“If you can keep a renal patient out of the dialysis unit, you can save the payer a lot of money,” Berman says. “You also improve the quality of life of the patient.”
A decrease in dialysis costs might be an indirect benefit if patiromer accomplishes its primary purpose—to rid the body of dangerously high potassium levels in the bloodstream. If that works, it could serve as a kind of buffer, giving doctors more room to prescribe another important class of drugs that preserve kidney function but, as a side effect, raise potassium levels. It’s a complex story, but in short, Relypsa hopes to play a role in resolving a medical dilemma that often leaves doctors caught between two bad options.
Relypsa, (NASDAQ: RLYP), part of the big IPO class of 2013, has completed late-stage testing of patiromer, a polymer designed to capture excess potassium ions and transport them out of the body through the digestive tract. The buildup of high potassium levels, a condition known as hyperkalemia, can cause irregular heartbeats and even sudden death. One major cause of those high levels of potassium is chronic kidney disease, a progressive disorder that hampers the excretion of the dietary mineral.
The deterioration of kidney function can be slowed by treatment with drugs called RAAS inhibitors, which are also used to treat heart failure. These drugs can postpone the day when the patient with compromised kidney function needs dialysis. But in a medical Catch-22, the RAAS inhibitors can also cause blood potassium levels to rise. Reluctantly, doctors often suspend or reduce RAAS doses when patients develop hyperkalemia.
“The (RAAS) drugs increase hyperkalemia in patients already at risk for that,” says Relypsa CEO John Orwin.
However, if Relypsa’s drug is approved to soak up the extra potassium, doctors may be able to keep their patients on RAAS inhibitors for longer periods, the company says.
Berman says ears perked up at a meeting of health care payers when they heard of that possibility.
Chronic kidney disease is one of the serious potential consequences of Type 2 diabetes—a growing burden on the health care system. Last year, the American Diabetes Association estimated that the total costs due to diagnosed diabetes rose 41 percent in the five years between 2007 and 2012, from $174 billion to $245 billion. In 2012, $176 billion of that expense was attributed to direct medical costs. Hospital inpatient care took up 43 percent of that total medical cost.
Drug developers able to demonstrate that a new product can prevent hospitalizations or other expenses may be able to justify premium prices, or gain favorable placement in health plan formularies for the new drug.
Hyperkalemia has a range of causes, which include widespread burns, significant muscle damage, and certain blood disorders. But a major cause is kidney disease, which can result not only from Type 2 diabetes but also from high blood pressure, Berman says. Relypsa plans to seek FDA approval of patiromer as a treatment for hyperkalemia, whatever the cause.
But many patients in its target market suffer from compromised kidney function, heart failure, or both. Many are taking RAAS inhibitors, Berman says, and the potential market for patiromer also includes patients who have had to stop taking the RAAS inhibitors they need because their potassium levels are too high.
There are options for treating excess blood potassium, but they’re not considered great.
Patients can go on a potassium-restricted diet, but the mineral is almost ubiquitous in foods, including leafy greens, potatoes, carrots, tomatoes, oranges, bananas and a number of other fruits. Some diuretics can be used to flush out potassium. In addition, there’s an approved drug class that dates back to the 1950s called sodium polystyrene sulfonate, which includes the brand-name drug Kayexalate from Sanofi-Aventis. That drug’s downsides include side effects such gastric irritation, nausea, vomiting, constipation, and less commonly, diarrhea and perforation of the intestine.
Both Relypsa and a rival drug developer, Coppell, TX-based ZS Pharma, see an unmet need for a better therapy for millions of patients with hyperkalemia, who often suffer from related disorders—diabetes, heart failure, and kidney disease. Orwin estimates the potential market for patiromer at 2.4 million people in the United States alone.
Patiromer, a polymer suspended in fluid and taken by mouth, is designed to pass through the body without being digested. But when it reaches the colon, it binds to positively charged potassium ions and carries them out of the body as the polymer is eliminated from the digestive tract.
In data released in November from late-stage trials, Relypsa said patiromer reduced blood potassium levels to the normal range for 76 percent of trial participants after about a month of treatment. Relypsa points to other trial results to support the use of patiromer as a maintenance drug that could be taken over extended periods of time to keep potassium levels in check. In one study, trial participants remained on patiromer for as long as a year.
To see whether continued treatment was needed after potassium levels had been lowered with patiromer, Relypsa studied two classes of participants in its late-stage trial. Those who stopped taking patiromer were more likely to see their blood potassium rise again, while potassium levels were more likely to remain steady for those still on the drug.
“If you withdraw the product, the problem is going to come back,” Berman says.
ZS Pharma has also completed late-stage trials of its drug candidate for hyperkalemia. The compound, ZS-9, is a crystalline form of the inorganic molecule zirconium silicate that was also designed to bind potassium ions. In trial results released over the past few months, ZS Pharma has reported success with ZS-9 in lowering blood potassium levels in as little as 48 hours. The experimental drug, taken orally, was well tolerated and maintained control of potassium levels in trial participants receiving ZS-9 for 12 days, the company announced.
ZS Pharma plans to test ZS-9 in further trials for periods up to a year. The company intends to seek FDA approval by early 2015. Its rival, Relypsa, plans to file for FDA approval of patiromer by the third quarter of 2014.
In late 2013, Relypsa had hopes that its pending IPO would raise $120 million to fund the company through the process of securing FDA approval of patiromer. At the time, the number of health care IPOs had been surging. Also, Relypsa’s drug candidate had already been through late-stage clinical trials, while other companies seeking to go public were further behind.
“We saw the interest when we went on the road,” Orwin says.
But demand flagged during the week in November when Relypsa priced its offering, Orwin says. He thinks investors were fatigued after reviewing a rash of IPOs through the year; several companies even suspended their attempts to go public. Relypsa dropped its price to $11 a share, raising a net $77 million.
Since then, however, Relypsa’s shares have climbed steadily, and are now trading at more than $30.
“People started to more appropriately value the company,” Orwin says.
But while the additional share value is good for investors, it doesn’t add to Relypsa’s trove of operating cash. Orwin says the company will need to raise more money—probably through a combination of equity, debt, and a partnership deal for patiromer in markets outside the U.S. Relypsa holds worldwide royalty-free commercialization rights to patiromer. Relypsa acquired the drug when the company was founded in 2007 as a spinout of Santa Clara, CA-based Ilypsa, which was acquired that year by biotechnology giant Amgen of Thousand Oaks, CA.
The 69-employee company plans to build its own sales force to market the drug to kidney and heart specialists in the United States if the FDA approves it for sale, says Orwin, former CEO of Affymax and a former marketing executive at Genentech.
“Hyperkalemia is a potentially deadly medical complication,” Orwin says. “We believe patiromer will be an important new treatment for these patients.”