Rigel Pharmaceuticals, Inc., (NASDAQ: RIGL) is a biotechnology company dedicated to discovering, developing and providing novel small molecule drugs that significantly improve the lives of patients with immune and hematologic disorders, cancer and rare diseases. Rigel’s pioneering research focuses on signaling pathways that are critical to disease mechanisms.

 

The company recently announced that TAVALISSE™ (fostamatinib disodium hexahydrate) is available by prescription for the treatment of thrombocytopenia in adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to previous treatment. TAVALISSE, an oral spleen tyrosine kinase (SYK) inhibitor that targets the underlying autoimmune cause of the disease by impeding platelet destruction, was approved by the U.S. Food and Drug Administration in April 2018.

 

As per management, Healthcare providers and adults living with chronic ITP have been in need of a new and different treatment option. The company is excited to bring TAVALISSE to this patient population and to have an experienced team in place to answer questions and help patients and providers to start accessing TAVALISSE.

 

Before this, the company reported financial results for the first quarter ended March 31, 2018 and discussed the following achievements:

• On April 30th, Rigel announced that the American Journal of Hematology published positive results from the Fostamatinib in Thrombocytopenia (FIT) Phase 3 clinical program. The study, “Fostamatinib for the Treatment of Adult Persistent and Chronic Immune Thrombocytopenia: Results of Two Phase 3, Randomized, Placebo-Controlled Trials,” is available on the journal website.
• On April 24, Rigel completed an underwritten public offering of common stock with proceeds of approximately $58.4 million, net of underwriting discounts and commissions and other estimated offering expenses.
• On April 3, the company announced topline data from its proof-of-concept Phase 2 study of fostamatinib in patients with IgA nephropathy (IgAN), an orphan autoimmune disease of the kidneys.
• On March 8, Rigel presented data from Stage 1 of the Phase 2 study of fostamatinib in patients with warm antibody autoimmune hemolytic anemia (AIHA) at the Thrombosis and Hemostasis Societies of North America.

 

As per management, the company has made incredible progress in the recent quarter and the second half of 2018 holds great potential for the company. In addition to the approval of TAVALISSE this quarter, RIGL also completed significant financing for the company which furthered its runway substantially.

Upcoming Catalysts:

The company has top-line data from its proof of concept Phase II study with fostamatinib in patients with IgA nephropathy, showing a positive trend in patients with higher levels of proteinuria at baseline. The company also provided an updated to stage one of its Phase II study with fostamatinib in autoimmune hemolytic anemia which showed an excellent response rate.

Analysts tracking the stock believes that the company is well poised for significant value creation via efficient development and commercialization. Notably, The FDA’s approval of TAVALISSE for chronic ITP represents a huge milestone for Rigel and allows the company to advance its efforts to transition the company into commercialization, so that it may bring this therapy to a patient population in need of treatment options.  Also, the recent financing is expected to support company’ liquidity for at least next one year.

 

The company is in an extremely favorable risk-reward position, and there is enormous potential which we are yet to see in terms of share appreciation of the company. Considering all this, the market cap of just $523.4 million and share now ruling at $3.20, can move to a level of $7.50 in next six months.

 

About the company: The company’s first FDA approved product is TAVALISSE™ (fostamatinib disodium hexahydrate), an oral spleen tyrosine kinase (SYK) inhibitor, for the treatment of adult patients with chronic immune thrombocytopenia who have had an insufficient response to previous treatment. Rigel’s current clinical programs include Phase 2 studies of fostamatinib in autoimmune hemolytic anemia and IgA nephropathy. Besides, Rigel has product candidates in development with partners BerGenBio AS, Daiichi Sankyo, and Aclaris Therapeutics.

 

Pipeline:

First Quarter 2018 Results:

 

• For the first quarter of 2018, Rigel reported a net loss of $24.4 million, or $0.17 per share, compared to a net loss of $15.3 million, or $0.13 per share, in the first quarter of 2017.
• There were no contract revenues from collaborations in the first quarter of 2018. Contract revenues from collaborations of $3.6 million in the first quarter of 2017 were comprised primarily of the $3.3 million payment from BerGenBio AS, as a result of advancing BGB324, a selective, potent and orally available small molecule AXL kinase inhibitor, to a Phase 2 clinical study.
• As of March 31, 2018, Rigel had cash, cash equivalents and short-term investments of $94.3 million, compared to $115.8 million as of December 31, 2017. In April 2018, Rigel completed an underwritten public offering in which it received proceeds of approximately $58.4 million, net of underwriting discounts and commissions and estimated offering expenses. Rigel expects that its cash, cash equivalents, and short-term investments will be sufficient to support its current and projected funding requirements, including the launch of fostamatinib for chronic ITP in the U.S., through at least the next 12 months.

 

Key risk factors and potential stock drivers:

• Successful completion of the upcoming milestones would lead future direction for the company. Any adversities related to these forthcoming milestones might adversely impact the overall investor sentiments.
• RIGL is still an early stage entity and has not yet generated meaningful revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it. The company’ prospects are significantly dependent on TAVALISSE, which might have limited sales potential initially. Moreover, fostamatinib is still away from commercialization.
• RIGL has a history of operating losses. Therefore, any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor.

 

Stock Chart:

Comments:

• On Friday, June 15th, 2018, RIGL closed at $3.20, on an average volume of 9.3 million shares exchanging hands. Market capitalization is $523.456 million. The current RSI is at 37.39
• In the past 52 weeks, shares of RIGL have traded as low as $2.14 and as high as $4.71
• At $3.20, shares of RIGL are trading below its 50-day moving average (MA) at $3.68 and below its 200-day moving average (MA) at $3.68
• The present support and resistance levels for the stock are at $3.08 & $3.36 respectively.

 

 

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