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PropThink: RPTP To Rise On Proven Strategy & Upcoming FDA Decision

December 28, 2012 - London

By Ivan Deryugin

Raptor Pharmaceutical (NASDAQ:RPTP) is developing treatments for rare diseases and has a compelling pipeline positioned to take advantage of unmet medical needs. The company has a strong chance to secure approval for its lead product candidate Procysbi (previously known as RP103) in several months for the treatment of nephropathic cystinosis, and clinical data is solid, offering patients a more convenient and safer choice relative to existing treatments. Raptor is working on several new indications for Procysbi, and if the treatment is approved on its PDUFA date of April 30th, the company is likely to quickly gain a leadership position in the nephropathic cystinosis treatment market; analysts see annualized sales of up to $153 million (Raptor's current market capitalization is around $271 million). Investors who add to or initiate positions in the stock should see profits leading up to approval as the average price target for Wall St. analysts is $9.00 a share, indicating up to a doubling of the stock on positive news and PR103's commercial potential.

Big advantages and pay offs for treatments of ultra-rare disorders. Developing drugs for ultra-rare diseases continues to offer significant opportunities for niche biotech companies and their shareholders. A focused strategy aimed at filling an unmet need in a very small patient population provides key advantages such as patient and physician advocacy, faster and more efficient regulatory review, government funding and special market exclusivities, and nearly guaranteed health insurance coverage. Companies like Alexion Pharmaceuticals (NASDAQ:ALXN), which sells Soliris for the treatment of PNH and aHUS, have proven that the business strategy can generate substantial returns. Sarepta Therapeutics (NASDAQ:SRPT), for instance, with its focus on treating Duchenne Muscular Dystrophy, outperformed the broader markets YTD by roughly 400% despite that its candidates are still in development. Raptor Pharmaceutical, with a development program geared towards ultra-rare disorders and an upcoming FDA decision on its lead candidate, is a prime example of a company positioned to benefit from a substantially underserved market. 

Procysbi: A Promising Treatment with an Upcoming PDUFA Date 

Raptor is a development-stage biotechnology company with several assets in its pipeline, the most notable of which is Procysbi. The drug is a treatment for nephropathic cystinosis, an extraordinarily rare disease with only 2,000 cases worldwide and just 500 in the United States. The disease, which causes the amino acid cysteine to accumulate in the body's cells, affects 1 in 100,000-200,000 newborns each year and leads to poor growth, kidney failure, brain damage, and often-premature death. Nephropathic cystinosis is currently treated primarily by cysteamine therapy, marketed as Cystagon by Mylan (NYSE:MYL). Procysbi, a delayed release version of standard cysteamine therapy, aims to make treating this disease far easier with half the dosing frequency that its predecessor requires and fewer side effects. Procysbi is designed to be delivered only twice a day, versus the four daily doses required for Cystagon, including one in the middle of the night. It's no wonder then that providers report high instances of patient noncompliance when using Cystagon, particularly as this population is largely children and adolescents. Continue reading.

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