Bidding War Could Push Receptos Price From $211 to $348 a Share
June 17, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Analysts watching San Diego-based Receptos are speculating that a bidding war could drive share prices sky high.
On June 10 BioSpace reported that Receptos had rejected takeover bids by U.K.-based AstraZeneca PLC , Israel-based Teva Pharmaceutical Industries Ltd. and Foster City, Calif.-based Gilead Sciences, Inc. . The company, in April, had ended enrollment in the RADIANCE Phase III trial of ozanimod in patients with Relapsing Multiple Sclerosis (RMS) and were looking for a development partner.
Instead of partnership bids, the company found itself the target of several acquisition offers. Reportedly AstraZeneca offered about $200 per share. Teva and Gilead apparently proposed $280 per share.
In a recent report Liana Moussato, an analyst with Wedbush Securities, indicated her target prediction was $348 per share. She cited the company as an “Outperform” rating and that the ozanimod drug had potential peak annual sales of $15 billion for 3 million potential patients.
Earlier estimates, Moussato indicates, were based on an assumption that Receptos would take in about half of U.S. sales, a quarter of European sales, and about 12.5 percent of sales around the rest of the world. A reevaluation of the trial data and the market suggests the company’s therapeutic could account for a larger slice of the market.
“We calculate our acquisition value using a sum-of-parts with each component calculated using a 30 percent discount from net peak revenues to the end of 2015 (as we anticipate RCPT’s acquisition in 2015) and applying a 1-10x multiple depending on stage of development to reflect risk,” Moussato wrote.
This optimism seems to be reflected in news that Edward Torres, managing director at Lilly Ventures and one of Receptos' board of directors disclosed to the U.S. Securities and Exchange Commission (SEC) that he had recently acquired 220,000 shares of the stock priced at $179.00 per share, a deal worth $39,378,188.
A little surprisingly, OctaFinance interpreted this to mean that Receptos stock is expensive and there was a chance the prices would drop. OctaFinance notes that PsychSingal Social has Receptos stock as “Buy,” which is echoed by analysts and Hedge Funds. OctaFinance rates the stock as “Neutral.”
Receptos stock has been on a bit of a rollercoaster lately. Over the last year, however, it has been on a steady rise. On July 17, 2014, shares sold for $34.49. On Dec. 22, 2014, shares sold for $136.43. It hit $189.70 on June 11, 2015, dropped on June 16 to $174.14 and is currently selling for $192.20.
In addition to ozanimod for multiple sclerosis, Receptos has indicated positive Phase II results for its TOUCHSTONE trial for moderately-to-severely active Ulcerative Colitis (UC). It hopes to begin a Phase III trial in UC and a Phase II trial in Crohn’s disease this year.
In the MS space, however, Actelion Ltd. ’s ponesimod has shown promise in late-stage trials. Ponesimod is an orally active, selected sphingosine-1-phosphate receptor 1 immunomodulator that shows promise in a number of autoimmune disorders, including multiple sclerosis.
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