Oppenheimer Warns Raptor Pharma Could Fall By ~50%, Suggests 'Sell While You Can'

In a report published Monday, Oppenheimer analyst Christopher Marai downgraded the rating on Raptor Pharmaceutical Corp. (NASDAQ: RPTP) from Perform to Underperform, with a price target of $8.Analyst Christopher Marai considers Raptor's shares as being "overvalued at their current valuation," saying that they already reflect "(1) anticipation of an acquisition, (2) anticipation of a larger market for Procysbi, (3) success of ongoing investigator and Raptor sponsored trials set to read out in 2H15.""We believe failure of Phase 2b in NAFLD as likely, but also highlight that the market for this drug is highly limited. New opportunities for Procysbi will require long, risky, costly, placebo-controlled studies for approval and dilutive financing," Marai added.In the report Oppenheimer noted, "We continue to recommend management sell the company. 2H15 trial readouts are unlikely to drive value in our view and are fundamentally more risky indications for Procysbi than cystinosis."The company reported failed interim results from Phase 2 trial of RP103/Procysbi in HD in 2014. The results of the 36-months are awaited, but this may necessitate a costly, long Phase 3 trial. Also the Leigh's data from the open-label Phase II-III is unlikely to be good enough for any forward movement on the regulatory clearance path.Procysbi >$300K/year price vs $10K generic may present a significant liability to an acquirer, the report mentioned.