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Analyst: Entrectinib's Potential Gives Ignyta's Stock 116% Upside

Analyst: Entrectinib's Potential Gives Ignyta's Stock 116% Upside

Analysts at Ladenburg Thalmann turned incrementally bullish on Ignyta Inc (NASDAQ: RXDX) after the company's therapy for the treatment of rare lung cancer showed encouraging results in a preliminary clinical trial among patients with a defective cancer-causing gene that is found in around 2 percent of all lung cancer instances.

The firm's Kevin DeGeeter maintains a Buy rating on Ignyta's stock with a price target boosted from $20.25 to $31.

The revised outlook is based mostly on data that was released at the World Conference on Lung Cancer, DeGeeter explained in a report. The company's therapy, entrectinib, showed an improvement of DOR (duration of response) of 28.6 months, which marks an improvement from 17.2 months at the last update in April 2017. The DOR of 28.6 months also comes in ahead of the current standard of care, crizotinib, at 18.3 months.

Assuming that Ignyta's data is replicated in a full phase 2 study then entrectinib will become the preferred frontline therapy as the superior DOR suggests patients would receive a longer benefit from therapy, DeGreeter said. Accordingly, the analyst revised the company's expected market share in 2022 from 46.5 percent to 56.8 percent and entrectinib revenue is now modeled to be $907 million, up from a prior estimate of $574 million.

Ignyta continues to look for a potential partner for international commercial rights to entrectinib which would give the company a "significant near term catalyst"

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Latest Ratings for RXDX

Dec 2017DowngradesBuyNeutral
Oct 2017MaintainsOverweight
Jun 2016Initiates Coverage onOverweight

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Posted-In: cancer Kevin DeGeeter Ladenburg Thalmann lung cancer Rare DiseasesAnalyst Color Price Target Analyst Ratings Best of Benzinga


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