J.P. Morgan’s Anupam Rama believes that data from the two phase 3 trials of fostamatinib would be positive and that Rigel Pharmaceuticals, Inc.’s RIGL stock could see 90-150 percent upside if that was the case.
The analyst upgraded the rating on the company from Neutral to Overweight, with a price target of $5.
Rama also pointed out that in the event that the data was negative, the worst case scenario would a 55 percent downside to the stock, from its current levels.
Data Expectations
Top-line Phase 3 data for fostamatinib in idiopathic thrombocytopenic purpura (ITP) is expected in mid-2016, with a potential NDA filing in early-2017. The analyst estimates worldwide peak sales for the drug at $360 million.
Rama mentioned that physician feedback for the earlier Phase 2 data had been positive, highlighting robust early proof of concept.
“We view ~20 percent improvement in sustained response over placebo as the beatable / clinically meaningful phase 3 activity benchmark,” Rama stated, while adding, “Based on physician commentary, we do not have any over-arching safety concerns.”
The analyst believes that there is high probability of success for the ongoing Phase 3 trials, and noted that topline fostamatinib data, expected in mid-2016, could be a “transformative catalyst” for Rigel Pharmaceuticals.
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