Assessing Raptor Pharmaceutical Corp. (RPTP)’s Agreement With HealthCare Royalty Partners

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Another way of possibly commercializing a drug is ‘going alone’ or without the help of a marketing partner. An example of this would be Corcept Therapeutics Incorporated (NASDAQ:CORT) and their orphan drug Korlym. Corcept has a few more compounds in its pipeline which should help to drive share growth in the long term along with Korlym. An interesting tidbit comes with the idea of how Corcept Therapeutics Incorporated (NASDAQ:CORT) is able to price Korlym due to the fact that it is an orphan drug.

In terms of long-term shareholder value, given the idea that Raptor Pharmaceutical Corp. (NASDAQ:RPTP) will be paying over $21 million in interest, only time will tell if Raptor’s move was a good or bad move. One important idea is whether or not they create shareholder value. If the drug meets sales projections, and is as profitable as the company says; then this deal actually looks decent for shareholders. Instead of diluting (which would likely have been the other solution available for Raptor absent a licensing deal), they have taken on debt. While no shareholder likes to see more debt than necessary the amount of debt might not be as concerning as millions of additional shares being issued.

Alexander Maxwel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Assessing Raptor Pharmaceutical’s Agreement With HealthCare Royalty Partners originally appeared on Fool.com and is written by Alexander Maxwel.

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