On news that the FDA rejected AstraZeneca's (AZN) ZS-9 drug that competes with Veltassa, Relypsa (RLYP) surged to over $22 to start trading. The news is positive for Relypsa as the market feared that the black-box label of Veltassa would restrict it's competitiveness versus a fully approved ZS-9. The major catch is that AstraZeneca got a CRL stating issues with pre-approval manufacturing inspections and recently submitted data that the FDA hasn't reviewed yet. Most importantly, the CRL doesn't require the generation of new clinical data. The end result is that the drug approval is likely delayed, but not blocked. The news is good in that it provides Relypsa time to work on removing the restrictive label before ZS-9 is approved, but the stock has lost over $4 from the original gain today due to reality setting in that the long-term competitive position that forecasted higher sales for the competitors drug isn't altered, at least yet. Disclosure: No position