UPDATE: Credit Suisse Initiates Coverage on Receptos with Outperform Rating, $21 PT on R&D Focus

In a report published Monday, Credit Suisse analyst Ravi Mehrotra initiated coverage on

with an Outperform rating and $21.00 price target. In the report, Credit Suisse noted, “Founded in 2009, RCPT is focused on the research and development of drugs for the treatment of immunological and metabolic disorders. RCPT's key asset is RPC1063, which is a ‘2nd-generation' S1P1 modulator, currently enrolling into a PII/III trial for relapsing multiple sclerosis (RMS) and a PII for ulcerative colitis. The MS market (which we estimate will reach $19B by 2018, the expected launch year for RPC1063) is currently going through a revolution, catalyzed by a plethora of new therapeutic agents, most notably by BIIB's Tecfidera. In our view, the main losers in this revolution are the incumbent ABCR class of drugs (currently holding ~80% global patient market share); the biggest winners will be oral agents. We think the totality of RPC1063's clinical profile, notably improved half-life/fast recovery of lymphocytes, and CV/hepatoxicity over Gilenya (the ‘1st-generation' S1P1 launched in 2010; CS estimates $2.6B in 2017) may effectively position RPC1063 in a different 'bucket' from Gilenya.” Receptos closed on Friday at $15.87.