BMO Thinks Rigel's Fostamatinib Market Opportunity Will Be Further Validated

Between Monday morning and Tuesday, shares of Rigel Pharmaceuticals, Inc. RIGL jumped more than 50 percent on the back of the announcement that the company’s oral spleen tyrosine kinase (SYK) inhibitor, fostamatinib, had met the primary endpoint in the final stage trial program for adult chronic/persistent immune thrombocytopenia treatment.

The stock gave up some of gains on Wednesday, probably reflecting some profit taking. Shares lost 14.25 percent, closing at $3.37.

Ahead of this tumble, BMO analyst Do Kim reiterated an Outperform rating on Rigel, hiking his price target from $4 to $6.

Related Link: Rigel's Oral Spleen Tyrosine Kinase Inhibitor Meets Primary Endpoint In Final Stage Trial In Chronic ITP

The analyst argued that "the significant 18% response rate versus placebo support FDA approval (pending similar results from second study)" and BMO’s WW peak sales estimate of $742 million in ITP. Furthermore, the rate boosts the odds of the AIHA Phase II study due to the same disease mechanism.

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BMO analysts think "the positive ITP data will attract an ex-US partner, further validating fostamatinib's market opportunity."

While timing would depend on how long prior discussions go on for, a partnership could be closed shortly after the release of the results of the second Phase III study in October or November.

The firm anticipates an FDA filing to come some time in the first quarter of 2017.