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Seeking Alpha is Bringing Down Raptor Pharmaceuticals Thursday (RPTP)

OLYMPUS DIGITAL CAMERALooks like Seeking Alpha is going to bring down another name Thursday. Raptor Pharmaceuticals (NASDAQ: RPTP) is tanking 9 percent early Thursday after a Seeking Alpha article cast doubt on its recently approved drug, Procysbi.

“…we believe that the present value of future cash flows RPTP can expect to earn from Procysbi is less than $4.00/share even under ideal conditions, including 100% peak cysteamine market share, universal acceptance by payers, and an average selling price of $250,000/year in the US and $150,000/year in the rest of the world. We assign zero value to RPTP’s pipeline due to strong evidence that the fundamental theories behind its leading indications are flawed.”

The article points out that Raptor is trying to sell Procysbi, a drug indicated for the treatment of nephropathic cystinosis, for $250,000 per year per patient but that’s 25 times the price of competing drug, Cystagon.

If it were 25 times more effective, there might be reason to charge more but according to the article, the only benefit to Raptor’s drug is that the patient only has to take it twice per day instead of four times with Cystagon. For that reason, the drug is off to a “mediocre” start.

Second, nearly all insurers list the drug as non-formulary, meaning the patient has to pay for as much as 50 percent of the quarter-million dollar annual cost.

The article is causing a large-scale sell off in the stock today but over the past 3 months, its still up more than 70 percent.

[stock-tools exchange="NASDAQ" symbol="RPTP" image_height="230" image_width="350"]

Disclosure: At the time of this writing, the author had no position in the company mentioned.

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