Regulus Therapeutics Will Quadruple In Price Within 12 Months, According To Wedbush

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Shares of Regulus Therapeutics Inc RGLS are down roughly 6 percent on Thursday afternoon, following the announcement that dosing has begun in a first-in-human Phase I clinical study of the company’s proprietary anti-microRNA-21, RG-012, which is being developed in conjunction with Genzyme / Sanofi SA (ADR) SNY. The RG-012 is designed to treat the Alport Syndrome, a rare kidney disease that has no approved therapy at the time.

Related Link: Regulus Initiates Phase I Clinical Study of RG-012, a microRNA Therapeutic in Development for the Treatment of Alport Syndrome

Despite the stock’s tumble, Wedbush analysts Liana Moussatos, Ph.D. and Kelechi Chikere, Ph.D., seem quite bullish. After the Alport Syndrome Program entered the clinic, the firm reiterated an Outperform rating on the stock, accompanied by a $41 price target. The stock currently trades around $10.36

Regarding the RG-012, the experts commented, “We and management believe results from this trial and the ongoing natural history study (ATHENA) are likely to aid in the design of the clinical proof-of-concept study, which we anticipate to begin later this year. Robust preclinical data suggested a survival benefit. Although Alport syndrome is rare, with premium pricing we anticipate that if successful RG-012 could achieve worldwide gross peak sales of over $2 billion.”

The analysts then look at the bigger picture at Regulus Therapeutics. The company recently announced a sudden management reshuffle, after former CEO,

Kleanthis Xanthopoulos, stepped down. His place will be taken by the company’s former Chief Medical Officer (CMO), Paul C. Grint, M.D.

This unexpected change in management has triggered a marked downtrend for the stock. And, in this tumble, Wedbush sees an opportunity. “We recommend buying on weakness as we and the Board of Directors believe Paul can take the reigns as Regulus evolves as a clinical stage company,” the analysts say.

In addition, the experts are motivated by “a series of potentially material clinical catalysts in 2015-2016 from three clinical programs” (see table below)

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Posted In: Analyst ColorBiotechLong IdeasHealth CarePrice TargetReiterationAnalyst RatingsMoversTrading IdeasGeneralAlport syndromeKelechi ChikereKleanthis XanthopoulosLiana MoussatosPaul C. GrintWedbush
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