Receptos, Inc (RCPT) Price Target Raised to $348 at Wedbush; Analyst Sees Bidding War

(Updated - June 16, 2015 3:53 PM EDT)

Wedbush analyst Liana Moussatos maintained an Outperform rating on Receptos, Inc (NASDAQ: RCPT) and raised her price target to $348.00 (from $211.00), saying recent bids cause them to re-evaluate their valuation target.

The analyst expects a bidding war for the company. "As the emerging clinical profile for ozanimod in RMS and UC has become best-in-class in our view, we anticipated Receptos to become an acquisition target," Moussatos said. "We estimate about 3 million treatable RMS and IBD patients, we project gross peak annual sales could reach over $15BN. In addition, RPC4046 (AbbVie can opt-in) could reach over $1BN and the oral GLP-1 could achieve another $5BN. Consequently, with a pipeline potentially worth over $21BN and in light of recent industry interest, we believe our $211/share is too low."

Moussatos said recent reports the company rejected a $200/share bid from AstraZeneca (NYSE: AZN) and $280/share bids from both Gilead Sciences (NASDAQ: GILD) and Teva Pharma (NYSE: TEVA), and countered with a $350/share bid, could be accurate.

The analyst believes Receptos can get close to $350 per share. "Our previous $211/share was based on Receptos receiving half of US sales, 25% of European, and 12.5% of rest-of-world," she said. "However, a global pharmaceutical company would not need to give away that much and if we adjust our valuation for a global pharma’s net peak annual sales and discount to year-end 2015 for our anticipated acquisition timing, we achieve $348/share or $10.9 billion market cap for an acquisition price."

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 $174.74 yesterday.

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