Why Raptor Pharmaceuticals Shares Spiked and Then Dropped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotech company Raptor Pharmaceuticals spiked as much as 17% after the Food and Drug Administration approved its nephropathic cystinosis drug, Procysbi. Shares ended the day up 5.3%.

So what: Procysbi is a twice-daily oral medication that, from an ease-of-use standpoint, easily trumpedMylan's Cystagon, which has to be taken four times daily and can interrupt sleep patterns. Having proved non-inferior to Cystagon, barring concerns over Procysbi's safety, there didn't seem to be much that was going to prevent an FDA approval. According to JMP Securities, the drug has peak sales potential of $60 million in the United States.

Now what: Congratulations to Raptor and shareholders for its first drug approval. However, $60 million isn't going to make much of a dent unless it gets Procysbi approved overseas as well. In addition, Raptor had already had a huge run-up into today's PDUFA decision, so taking some profits off the table here may not be such a bad idea.

Craving more input? Start by adding Raptor Pharmaceuticals to your free and personalized Watchlist so you can keep up on the latest news with the company.

While you can certainly make huge gains in biotechs like Raptor, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article Why Raptor Pharmaceuticals Shares Spiked and Then Dropped originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.