Leerink initiated coverage on Regulus Therapeutics (NASDAQ:RGLS) with an “outperform” rating and 12-month price target of $2. The stock closed at $1.18 on Jan. 4.
“We believe that following numerous clinical setbacks, the company’s new management has designed a promising lead program, RG-012, for the treatment of Alport syndrome,” writes analyst Joseph Schwartz.
In addition, the company’s drug discovery platform has resulted in a second anti-miR therapy for a rare renal disease that has moved from the lab to the clinic in just 24 months, he added.
“We believe positive interim 24-week data for RG-012 in the third quarter of 2018 may provide investors with validation for the company’s new lead anti-miR programs and significant appreciation in the stock price,” Mr. Schwartz said.
Sanofi has the right to opt-in to develop RG-012 after seeing 48-week data, which is expected in the first quarter of 2019. Sanofi could potentially do so earlier, but in any case would pay Regulus $80-millon to exercise its rights, Mr. Schwartz said, which “could increase our price target to $6.”
