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Based in San Diego, CA, Receptos (RCPT) scheduled a $71 million IPO with a market capitalization of $257 million at a price range mid-point of $15, for Thursday, May 9, 2013.

Nine other IPOs were scheduled for the week of May 6th. The full IPO calendar is here.

  • S-1 filed April 25, 2013
  • Manager, Joint Managers: Credit Suisse; Leerink Swann; BMO Capital
  • Co Managers: Wedbush PacGrow Life Sciences.

SUMMARY

RCPY is a biopharma still in stage 2 clinical trials with a long road ahead. RCPY lost $18 million in 2012 and has no product sales, but does have collaboration revenue.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualized Q1 '13 estimate

Cap (MM)

Sales

Earnings

BookVlue

TangibleBV

in IPO

Receptos (RCPY)

$257

30

-14

3.1

3.0

27%

Glossary

CONCLUSION
Pass on the RCPY IPO.

BUSINESS
RCPY is a biopharmaceutical company focused on discovering, developing and commercializing innovative therapeutics in immune disorders.

Product candidates span three distinct specialty disease areas. The lead asset, RPC1063, is being developed as an oral therapy for the treatment of Relapsing Multiple Sclerosis (RMS) and Inflammatory Bowel Disease (IBD).

The second asset, RPC4046, is being developed for the treatment of an allergic/immune-mediated disorder, Eosinophilic Esophagitis (EoE), which is an Orphan Disease.

RCPY is currently conducting two randomized Phase 2 studies for RPC1063. In addition, with respect to RPC4046, RCPY plans to request a pre-Investigational New Drug application meeting with the US Food and Drug Administration (FDA) by the end of 2013, subsequently submit an IND in the first half of 2014 and thereafter initiate a randomized Phase 2 study.

RCPY has entered into various collaboration arrangements and a license arrangement related to its G protein-coupled receptor (GCPR) structure-based drug design technology platform.

Under these agreements RCPY has received upfront payments, license fees, research and development funding and research and/or development milestones. During 2011 and 2012, RCPY recognized total revenue of $17.9 million related to these agreements.

RCPY has not generated any revenue from product sales. Expenses will increase as RCPY does the following:

•Advance the current Phase 2 portion of our Phase 2/3 study of RPC1063 in RMS;

•Advance the current Phase 2 study of RPC1063 in UC;

•Prepare for and initiate a Phase 2 study of RPC4046 in EoE;

•Continue research efforts;

INTELLECTUAL PROPERTY
RCPY has sought patent protection in the US and internationally for RPC1063 and for the discovery GLP-1R PAM program. AbbVie has sought similar patent protection for RPC4046, to which RCPY currently has a license to conduct a Phase 2 study of RPC4046 in EoE.

USE OF PROCEEDS
RCPY expects to net $93 million from its IPO.

Proceeds are allocated as follows:
• $14 million to fund the external development costs to substantial completion of the Phase 2 portion of our accelerated design, randomized Phase 2/3 study of RPC1063 in patients with RMS;

• $14 million to fund the external development costs to substantial completion of the randomized Phase 2 study of RPC1063 in patients with UC;

• $24 million to fund the external development costs for initiation of the Phase 3 portion of the accelerated design, randomized Phase 2/3 study of RPC1063 in patients with RMS;

• $11 million to fund the external development costs for the initiation and a majority of randomized Phase 2 study of RPC4046 in patients with EoE; and

•The remainder for internal development costs, in-house research activities, working capital and general corporate purposes, including regular debt service payments under its credit and security agreement with MidCap.

In addition to the net proceeds from the IPO, RCPY expects to use existing cash and cash equivalents as well as access to funds through the credit and security agreement entered into with MidCap in April 2013.

Disclaimer: This RCPY IPO report is based on a reading and analysis of RCPY's S-1A filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Receptos