HCW starts Rigel Pharma at buy

H.C. Wainwright initiated coverage of Rigel Pharmaceuticals (NASDAQ:RIGL) with a “buy” rating and $6 price target. The stock closed at $2.26 on Tuesday.

“We would be buyers of Rigel going into the August readout from the first Phase 3 trial for its Syk inhibitor, fostamatib, in immune thrombocytopenic pupura (ITP) based on compelling data from a Phase 2 trial,” writes analyst Shaunak Deepak.

“We see further catalysts this year in two more speculative Phase 2 fosta trials, as well as Rigel’s current and potential new partnerships,” he added.

In a Phase 2 study of fostamatib in ITP, 12 patients (75%) showed platelet count increases, eight of which showed sustained elevations (50%). “Should these data be replicated in Phase 3, we believe Rigel could bring fostamatib to market in the U.S. by 2018, with a 50-person sales team,” Mr. Deepak said.

Rigel also is expected to report data from Phase 2 studies of fostamatib in autoimmune hemolytic anemia (AIHA) and IgA nephropathy (Ian) in the second half this year. “While preclinical trials suggest that Syk inhibition may prove beneficial in each of these indications, Rigel has not yet generated clinical data in either,” he added.

In 2015, Rigel earned $41.5-million in upfront payments and could earn over $500-million in milestone payments and potential royalties from its partners, including Claris, Bergen Bio, BMS, and Daiichi Sankyo. “Based on company commentary, we expect new partnerships may be formed to support fosta development and commercialization efforts,” Mr. Deepak said.


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