Why Raptor Pharmaceuticals Shares Vaulted Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Raptor Pharmaceuticals , a biopharmaceutical company focused on treating rare, and often fatal, diseases, leapt by as much as 24% after the company received U.S. orphan drug exclusivity for Procysbi from the Food and Drug Administration.

So what: Procysbi, which is a treatment approved by the FDA to treat a metabolic lysosomal storage disorder known as nephropathic cystinosis, will now be protected from any form of competition for seven years, through April 30, 2020. The orphan drug designation is granted to those drugs designed to treat diseases that affect less than 200,000 people. According to Raptor, only an estimated 500 people in the U.S. and 2,000 people worldwide suffer from nephropathic cystinosis.


Now what: While this is clearly great news that Raptor is going to be able to sell Procysbi without any competition for a period of seven years, we also have to understand that it's just a starting point from a sales perspective. The U.S. peak sales estimates for the drug are only $60 million, meaning Raptor is going to need additional drug approvals if it has any hope of turning a profit. With Raptor at a valuation in excess of $500 million, I'm beginning to wonder if the company hasn't exceeded the maximum speculation limit for this flight higher and would certainly suggest taking some profits at these levels.

Craving more input? Start by adding Raptor Pharmaceuticals to your free and personalized Watchlist so you can keep up on the latest news with the company.

It's no secret that biotech stocks like Raptor have been soaring recently, but the best investment strategy is to pick great companies and stick with them for the long-term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today

The article Why Raptor Pharmaceuticals Shares Vaulted Higher originally appeared on Fool.com.

Fool contributor  Sean Williams  has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle  @TMFUltraLong . Try any of our Foolish newsletter services  free for 30 days . We Fools may not all hold the same opinions, but we all believe that  considering a diverse range of insights  makes us better investors. The Motley Fool has a  disclosure policy .

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investing in Emerging Markets

Learn to invest in a globalized world.

View Course »

Investment Strategies

What's your investing game plan?

View Course »

Add a Comment

*0 / 3000 Character Maximum