Ignyta Gets A Bullish Initiation From JPMorgan

JPMorgan’s Anupam Rama believes Ignyta Inc RXDX is an emerging key player in the targeted drug development arena in oncology.

Rama initiated coverage of the company with an Overweight rating and price target of $15.

Underappreciated Asset

“On the heels of promising phase 1/2 data presented at AACR 2016 in April, we believe the company’s lead program Entrectinib is an underappreciated and differentiated asset, both from a clinical and commercial perspective,” the analyst mentioned.

Rama also views two of Ignyta’s other pipeline candidates, Taladegib and RXDX-105, as potential drivers of long-term value for the company.

The analyst pointed out that Entrectinib has best-in-class potential in tumors caused by NTRK, given the compelling response rate during Phase 1 in lung, head, neck and colorectal cancer.

Related Link: Ignyta's Entrectinib Data May Come By Year's End; Cantor Keeps Buy Rating, But Stock Slips

“We view ROS1 mutation data with Entrectinib as compelling as well. Entrectinib’s CNS activity is likely also to be a potential key differentiator to the competition,” Rama stated.

Commercial Opportunity

In fact, the analyst sees attractive commercial opportunity for the product in NTRK+ solid tumors, given the relative unmet need.

Within NTRK NSCLC/CRC alone, the analyst believes there could be peak sales potential of $225 million in the U.S.

“The balance of 2016 is a clinical execution story with entrectinib/STARTRK-2 program, with interim data expected 2Q17. Data from the RXDX-105 phase 1b study is expected 4Q,” Rama added.