UPDATE 1-U.S. drug developer Raptor Pharmaceuticals explores sale -sources
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April 6 (Reuters) – Raptor Pharmaceutical Corp, a U.S. company that develops drugs to treat orphan diseases, is reaching out to investment banks for a financial adviser to explore a sale of itself, according to people familiar with the matter.
The pharmaceutical industry is taking a greater interest in so-called orphan drugs because their strong patent protection helps ensure reliable pricing power for drug makers.
At the same time, volatile markets are making it difficult for small life sciences companies with expansive development pipelines such as Raptor’s to raise cash for research. This in turn makes these small companies more inclined to sell themselves to a well capitalized acquirer.
Raptor’s move is exploratory and may not lead to a sale, the people said this week, asking not to be identified because the deliberations are confidential.
The company did not respond to a request for comment. Its shares ended trading up 24.4 percent at $5.81 on the news on Wednesday, giving it a market capitalization of around $500 million.
Based in Novato, California, Raptor reported nearly $100 million in sales in 2015 from its drug procysbi, which treats the rare genetic disorder, nephropathic cystinosis. However, Raptor’s operating expenses exceeded $100 million in 2015.
(Reporting by Carl O’Donnell in New York; Editing by Leslie Adler and Steve Orlofsky)
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