Market Overview

Soaring +11% In Pre-Market, Rigel Receives Buy Initiation Amid Fostamatinib Phase 3 Optimism

Share:
Soaring +11% In Pre-Market, Rigel Receives Buy Initiation Amid Fostamatinib Phase 3 Optimism

The first Phase 3 trials for Rigel Pharmaceuticals, Inc. (NASDAQ: RIGL)'s Syk inhibitor are expected to be announced in August as many investors and analysts prepare for the results.

H.C. Wrainwright's Positive Take On Phase 3

H.C. Wainwright & Co's Shaunak Deepak initiated Rigel Pharmaceuticals at Buy with a price target of $6.00.

"We believe fosta (Fostamamtinib) is likely to show a significant benefit over placebo, due to a historically low placebo-response rate in ITP (0–5 percent)," stated Deepak. Additionally, positive data from the phase 2 study supports the probable success of the phase 3 study according to the analyst.

If the Phase 2 data were to be replicated in Phase 3, Deepak believes Rigel Pharmaceuticals could "bring fostamatinib to market in the U.S. by 2018 with a 50-person sales team. Assuming fosta targets TPO-failing ITP patients, we believe RIGL could sell $200 million in 2024."

Related Link: JPMorgan Sees Double-Digit Sales Ahead For NuVasive, Upgrades To Overweight

'Partnerships Expected to Curb Cash Burn'

In addition to positive expectations for Fostamatinib, Deepak saw "further catalysts this year in two more speculative Phase 2 fosta trials, as well as RIGL's current and potential new partnerships."

"We see drug discovery and development as a way to mitigate cash burn through partnerships. In 2015, RIGL earned $41.5 million in upfront payments and could earn over $500 million in milestone payments and potential royalties from its partners including Aclaris, BerGenBio, BMS, and Daiichi Sankyo," stated Deepak.

At time of writing, Rigel was up 11.11 percent in Wednesday's pre-market trading at $2.50.

Latest Ratings for RIGL

DateFirmActionFromTo
Aug 2018Initiates Coverage OnBuy
May 2018MaintainsOutperformOutperform
May 2018MaintainsBuyBuy

View More Analyst Ratings for RIGL
View the Latest Analyst Ratings

Posted-In: Analyst Color Biotech Long Ideas News Health Care Price Target Initiation Analyst Ratings Best of Benzinga

 

Related Articles (RIGL)

View Comments and Join the Discussion!

Is Imperva A Likely Takeover Target Following Q2 Negative Pre-Announcement?

Goldman Says Williams Cos. Dividend Cut Is Priced In, Reinstates At Buy