A Quick Primer On Regulus Therapeutics And Its Upside Potential

Shares of Regulus Therapeutics Inc RGLS have been on a tear to the upside. Here is a review the price action and a look at the multiple variables that seem to be falling in line for the equity to continue this dramatic push to the upside.

For the trailing 12 months prior (October 2013 to September 2014), to the announcement of the positive test results, on high volume, the average share price has been $7.67 and daily volume has been a meager 146,167 shares per session.

Regulus started its move to the upside on massive volume:

For the month of October 2014, the data shifts dramatically. The average volume has jumped to approximately 2.5 million shares on a daily basis and the equity price has moved up to $8.75 per share. This move can be attributed to the conference call on October 22 when Regulus announced that its RG-101 drug could have a :major impact on Hepatitis C treatment."

Wedbush Securities analysts summed it up, saying "patients who received a single injection of (Regulus’ drug RG-101 still had lower viral loads four weeks later. The drug worked in patients with different viral genotypes and varying treatment."

In effect, the drug works quicker and longer relative to the current available paradigms.

The Excitement

Wedbush went on to say, "With these results, we anticipate Regulus is likely to receive widespread interest from potential partners for development and commercialization."

Hepatitis C in figures, according to the Financial Times:
● Total HCV market should pass $20 billion in 2018 with about 150 million people who are infected with the virus

● More than 350,000 people die each year from hepatitis C-related liver diseases
● The body fights off the virus in about 25 percent of cases
● The market for hepatitis C treatments is forecast to hit $15.5bn by 2022

HCV medicines will generate billions of dollars in annual revenues, making them among the most lucrative of a new crop of drugs.

“This is a watershed moment for hepatitis C with newly available, highly effective, easy to administer therapies,” Professor David Goldberg, an epidemiologist at Health Protection Scotland, told Financial Times. With consolation on the horizon, Gilead Sciences, Merck or other large pharmas may have a vested interested in working with or outright buying out Regulus Therapeutics.

After Monday's market close, Regulus announced that it had engaged its prior shelf registration and would be "(issuing and selling) approximately $80,000,000 of shares of its common stock, of which approximately $70,000,000 of shares are being offered by Regulus and approximately $10,000,000 of shares are being offered by an existing stockholder of Regulus, Isis Pharmaceuticals, Inc."

The firm has not announced transaction prices; prior to the shelf, Regulus had 43.4 million shares outstanding and and a float of 16.5 million shares.

Posted In: Long IdeasNewsRumorsFDATrading IdeasWedbush
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