After reporting quarterly earnings that beat consensus, the market sold-off shares of Relypsa. The stock fell 19.2% on the day. What went wrong? Relypsa lost $1.26 per share ($0.20 ahead of consensus) on revenue of $12.38M. The problem? Sales. Only $0.6M of it. Per the press release: "Total revenues for the first quarter 2016 were $12.4 million, which included net product revenues of $0.6 million from Veltassa® (patiromer) for oral suspension and collaboration and license revenue of $11.8 million." The Veltassa sales were very disappointing for its initial launch. It will take time for sales to pick up. Starter kits, samples, trials, and other tactics will cost the company money at first. There is a second negative point for Relypsa. The company closed a $150M debt (secured term loan) offering that will cost it 11.5 percent in interest. Only $17M of it will be used for debt retirement. At least this move does not dilute shareholders. Today, the short-sellers win. At a 31.5 percent float they are holding a profitable trade. Possible downside to $12. When it gets there, longs should consider the stock again. Eventually – if sales scale – Relypsa’s stock will trade to $25. Note to members: coverage on MannKind (MNKD) will resume tomorrow. Sign up for updates.