Why Receptos Inc. Shares Briefly Popped

Why Receptos Inc. Shares Briefly Popped

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 Receptos , a clinical-stage biopharmaceutical company focused on developing therapies to treat immune disorders, briefly popped as much as 11% following its fourth-quarter earnings report after the closing bell last night, but are now up a more modest 3%.

So what: For the quarter, Receptos reported $773,000 in revenue, primarily from amortized milestone payments, and a net loss of $15.2 million, or $0.86 per share, which is significantly larger than the $4.5 million loss reported in the year-ago quarter. However, this loss of $0.86 met expectations, which is a nice change after Receptos had reported three straight quarterly losses that were much wider than expectations. The other major quarterly highlight includes the initiation of patient enrollment in a phase 3 trial involving RPC1063 in relapsing multiple sclerosis.

Now what: As you might expect with clinical-stage biotechs, their earnings reports are often non-events, and just a reason for management to further showcase a company's pipeline development. In this case, it appears that investors were pleased that Receptos' loss didn't balloon past the Street's expectations, and that it completed a sizable share offering in January which should give it ample cash to conduct its clinical research for quite some time. As for me, I'd much rather wait for the concrete data set to be released in mid-2014 surrounding RPC1063 than chase Receptos blindly higher at these levels.

Receptos shares may have soared recently, but even it may struggle to keep up with this top stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

The article Why Receptos Inc. Shares Briefly Popped originally appeared on Fool.com.

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.The Motley Fool has no position in any companies mentioned in this article. 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.