Friday, January 16, 2015

Seeking Alpha: Receptos Shopping For A Partner With Strong Data In Hand

Receptos (NASDAQ:RCPT) has come along quite nicely since I first wrote about it as a Top Idea in August of 2013. The shares' 150%-plus move has been fueled by strong clinical data, as lead drug RPC1063 ('1063) has shown solid efficacy and cleaner safety in relapsing multiple sclerosis and very encouraging data in ulcerative colitis. The latter has created a very real possibility that '1063 could be a multi-indication blockbuster, as an effective oral therapy for ulcerative colitis and Crohn's disease could be a real blockbuster.

Investors may feel a little starved for big catalysts in 2015. The Phase III RADIANCE and SUNBEAM studies in MS won't have data to show until 2017 and the expectations are already high for the company's expected release of 32-week data from the Phase II ulcerative colitis study. That said, the company may put a new diabetes drug into human studies in 2015 and the company has made no secret that it intends to find a partner for '1063.

These shares aren't nearly the bargain they once were, but there is still significant potential value locked in the MS, UC, and Crohn's programs. It is going to take time to produce the clinical data that it will take to unlock that value, but I'd be in no rush to sell these shares and I would consider them if this recent sell-off continues.

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Receptos Shopping For A Partner With Strong Data In Hand

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