Raptor Pharmaceuticals Dives on Q4 Losses

Shares in small-cap pharma company Raptor Pharmaceuticals (RPTP) plunged Friday after a disappointing earnings report took the wind out of the sails of a company that hit a 52-week high just three weeks ago on positive data for its Huntington’s Disease treatment RP-103. Shares traded down over 20 percent in the wake of the earnings report.

Raptor released its earnings data after market close on Thursday and showed net sales for PROCYSBI®, a treatment for nephropathic cystinosis, hit $10.2 million for Q4 2013 and $16.9 million for the full year. Guidance for 2014 estimated PROCYSBI sales to be $55-65 million and, and the company had cash on hand of $83.1 million as of the end of 2013.

“The year ended December 31, 2013 was a period of significant achievement for Raptor and I am pleased by our commercial progress and the strong market acceptance for PROCYSBI," said CEO Christopher M. Starr, Ph.D. "We are preparing to discuss with regulators the encouraging 18-month treatment results from our Phase 2/3 clinical trial with RP103 in Huntington's disease in order to determine our next steps in the development of RP103 for this potential indication."

However, reported Q4 losses were greater than expected, prompting the market to respond negatively to the report. The company’s non-GAAP loss of $0.19 a share for Q4 was wider than the $0.16 expected by analysts, prompting a sell off.

Shares closed Thursday at $14.79, but gapped down 6.2 percent at market open to $13.88. As the morning wore on, losses continued to mount, with shares down over $3 to under $12 apiece by 11am.

While the negative earnings data is likely the catalyst, certain technical factors may be contributing to the strength of this downturn. The stock appears to be breaking out of an upward wedge pattern negatively, falling sharply after hitting its 52-week high. It had already passed through a short-term rising support level from above, as well as its 20-day and 50-day moving average. Friday’s move, though, has the stock breaking through a longer-term support level at $12 a share and sharply crossing its 200-day SMA from above.

However, given the strength the company has shown recently, this could simply be a correction. The stock had tripled in value in less than a year to reach its 52-week high in late February.