Tuesday, July 14, 2015

Seeking Alpha: Xenoport Not Getting Much Love Ahead Of Key Data

Serial disappointments have made investors understandably cagey about Xenoport (NASDAQ:XNPT) and the question of whether its "transported prodrugs" can really achieve meaningful improvements in efficacy and/or safety. Even so, I find it curious that the shares have been so weak over the past six months as the company approaches key data from a study of XP23829 (or '829) in psoriasis. I don't believe there is anything like enough evidence to say that this is "another Receptos (NASDAQ:RCPT)", a company that has seen a pronounced run in its shares on the back of strong data in multiple sclerosis and ulcerative colitis, but the fact remains that this company may yet have a clinical pipeline candidate with more than $1 billion in revenue potential in both multiple sclerosis and psoriasis.

I continue to believe that Xenoport is a long-shot story. The company has yet to establish that its R&D approach can develop meaningfully better drugs, but bulls can fairly retort that it only takes one success for the stock to work. The multiple sclerosis and psoriasis markets are competitive markets already, and likely to become more so, but even modest assumptions regarding the odds of clinical success would argue that Xenoport is undervalued ahead of what could be a significant share-moving event.

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Xenoport Not Getting Much Love Ahead Of Key Data

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