Citi analyst Yigal Nochomovitz believes AstraZeneca's (AZN) acquisition of ZS Pharma (ZSPH) validates his bull thesis on the chronic hyperkalemia market where. He sees ZS Pharma's ZS-9 and Relypsa's Veltassa both achieving peak U.S. sales of $1B by 2023. The valuation gap between ZS's takeover price of $2.7B and Relypsa's $800M market capitalization is "embarrassing from a market efficiency perspective," Nochomovitz tells investors in a research note. ZS-9 and Veltassa are "much more similar than different" as both provide a "fundamentally novel option" for the control of chronic hyperkalemia, a 3M-plus addressable U.S. patient population, the analyst argues. Further, Veltassa is already approved by the FDA whereas ZS-9's expected FDA approval is in May 2016, he adds. Nochomovitz sees "no reason" why Relypsa won't be the next takeover target. The stock is trading up $2.10 to $20.85 in pre-market trading after ZS Pharma reached an agreement to be acquired. ZS is up 41%, or $25.73, to $89.04.

Consensus $4.56. Backs FY24 revenue view up low double-digit to low teens percentage, consensus $50.95B. Sees FY24 core tax rate 18%-22%.