Nomura Securities Starts Receptos, Inc (RCPT) at Buy

Nomura Securities initiates coverage on Receptos, Inc (NASDAQ: RCPT) with a Buy rating and a price target of $63.00.

Analyst M. Ian Somaiya said, "We believe Receptos’s lead drug, RPC1063, a selective S1P1 receptor modulator for relapsing-remitting multiple sclerosis (RRMS), could improve on Gilenya’s safety limitations while demonstrating similar efficacy. The recent release of top-line Phase II results in RRMS makes a strong case for a differentiated safety profile. However, our base-case scenario assumes that the FDA applies a class label to RPC1063, potentially limiting widespread uptake and requiring high-risk cardiovascular (CV) patients to undergo firstdose monitoring. Under this scenario, we expect WW peak sales of $3.7bn. We believe a clean label, avoiding Gilenya's long list of warnings, would increase adoption and represent upside to our estimates. In addition, we see a favorable risk/reward heading into the RPC1063 Phase II study for ulcerative colitis (UC, data 4Q14E), as investors have placed no value in UC. We estimate UC could reach $2.4bn in WW peak sales and could be worth an additional $65 to our DCF valuation. FY14E EPS at ($4.13); FY15E EPS at ($4.91)."

For an analyst ratings summary and ratings history on Receptos, Inc click here. For more ratings news on Receptos, Inc click here.

Shares of Receptos, Inc closed at $40.43 yesterday.

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