Wedbush Previews Raptor Pharmaceutical Q4, Lowers Sales Estimates

In a report published Monday, Wedbush analysts David M. Nierengarten, Ph.D., and Dilip Joseph previewed fourth quarter earnings for Raptor Pharmaceutical Corp. (NASDAQ: RPTP), “lowering sales estimates with US market saturation and slow EU launch.” The specialists reiterated an Underperform rating and a $7 price target on the stock.

The company is scheduled to report earnings on Thursday after market close, and analysts at Wedbush expect another disappointing quarter for Procysbi. The analysts trimmed their sales estimates for the quarter, from $18.6 million to $16.9 million (both below consensus of $21 million).

“After accounting for the impact of the inventory adjustment in 3Q,” Wedbush’s fourth quarter U.S. sales estimate of $16.0 million “represents a sequential decline of about 14%.” The firm also estimates $0.9 million in European sales, representing a quarter-over-quarter growth of just 5 percent, as it expects “the European ramp to be slower than previously expected as RPTP works through reimbursement approval on a country-by-country basis.” Worldwide sales forecasts for Procysbi in 2015 were also cut down, from $109.1 million to $95.3 million.

Procysbi does not look particularly promising: less than two years into its launch, the drug “has already tapped over half the cystinosis market in the US.” In addition, the analysts see “low likelihood of success for Procysbi in indications outside cystinosis,” and thus remains sellers of Raptor Pharmaceutical’s stock, as they think the franchise in that indication is worth $7 per share.

Wedbush estimates EPS of ($0.16) for the fourth quarter of 2014, and ($0.70) for the full year. For 2015, EPS are expected at ($0.40), versus a consensus of ($0.67).