Rigel Pharmaceuticals still has reason to celebrate

RCEO, President and Director of igel Pharmaceuticals (NASDAQ:RIGL), Raul R. Rodriguez, purchased 1 million shares of RIGL for $688,400 during the past week.

  • The trade is the largest purchase made by an insider in the last twelve months.
  • Shares of the company have soared 82.0% in the past seven days.

Rigel Pharmaceuticals is a biotechnology company involved in the development of drugs to treat patients with blood disorders, cancer and rare immune diseases.

Rigel shares soared, thanks to the purchase of one million shares by the company’s CEO, president and director, Raul R. Rodriguez.

The transaction offers a positive outlook as it aligns the interests of management and shareholders. The transaction marks a 521% increase in the CEO’s stake, which looks considerably positive. The stock purchase is an insider’s largest trade in the past 12 months. However, overall insider ownership remains low. Following the transaction, insiders only hold 1.2% of the total stock. Overall, the percentage of insider ownership remains low despite large transactions. According to data from Fintel, the insider accumulation score on the stock is 27.7, indicating a lower accumulation score than its peers.

RIGL shares have gained 82.1% in the past seven days, following CEO Raul R. Rodriguez’s trade.

What happened?

Rigel Pharmaceuticals reported in an 8-K that it failed its Phase 3 clinical trial for its fostamatinib drug, FORWARD. The drug is used to treat patients with premature destruction of healthy red blood cells (hemolysis). The phase 3 trial followed the very positive results of phase 2, which was conducted only in the United States.

In the post-trial evaluation, management felt that although the clinical trial did not have a significant effect on patients in the Eastern Europe region, it was well received in Eastern Europe. the West and the United States. This means that there was a different result depending on the regions. Management is now aiming to analyze the data based on geographic differences.

The company’s success in other markets raises hopes that it could succeed in Eastern European countries.

Currently, there are no approved drugs or treatments for the treatment of patients with warm autoimmune hemolytic anemia (wAIHA). In the United States, the company’s drug is already approved under the name Tavalisse. It is a kind of fostamatinib, used in the treatment of patients with chronic immune thrombocytopenia who have had an insufficient response to previous treatment.

The current price of the stock remains near its 52-week low of $0.64.

Based on recommendations from seven Wall Street analysts, three gave the stock a buy rating, four recommended a hold rating, and none gave the stock a sell rating. The 12-month price target is $2.61, reflecting an upside potential of 113.93% from the last price of $1.22.

Equity researchers at Riley raised their estimate of earnings for Rigel Pharmaceuticals’ fiscal year 2022 to a profit loss of $0.52 per share, up from their previous estimated loss of $0.53 per share. The consensus estimate for Rigel Pharmaceuticals’ current annual earnings is $0.52 per share.

The options market is bullish, with a put-call ratio of 0.17.

Tavalisse is gaining ground in the American market.

In the results of the first quarter of 2022, RIGL achieved strong sales for TAVALISSE. The company shipped 1,836 vials of the drug directly to patients and clinics, the highest since its launch. Net product sales increased 31% over the prior year. The growing number of physician interactions, along with the company’s marketing initiatives, propelled revenue growth. Management expects this strength to continue as the company strengthens its sales initiatives.

RIGL ended the quarter with cash and cash equivalents of $107.5 million. The company also has $30 million remaining in its credit facility with MidCap. In addition to this, RIGL is also eligible for potential development milestone payments totaling up to an additional $835.0 million. This should be sufficient to meet the requirements of ongoing projects.

Institutional investors are bullish on the stock.

Institutional investors added to their positions in Rigel Pharmaceuticals during the second quarter. Of the 328 institutional owners, 320 held long positions in the stock, according to Fintel data. The main investors were FMR LLC, BlackRock Inc., FDGRX-Fidelity Growth Company Fund, Vanguard Group Inc., State Street Corp and Invesco Ltd.

Hedge funds and other institutional investors own 80.33% of the company’s shares.

Final remarks

Rigel Pharmaceuticals is focused on providing drugs for the treatment of rare blood diseases to patients around the world. The company has been successful in the United States and Western European countries. However, it still assesses the difference in results due to geographical areas. According to Coherent Market Insights, the hematology market is expected to grow at a CAGR of 7.64% between 2021 and 2028 to reach USD 13.44 billion by 2028. If RIGL is successful in launching its drug, it will significantly benefit shareholders . However, uncertainty prevails.

Currently, the stock is trading at a discount at a P/S multiple of 2.69x, below the industry average of 4.24x. A risk-seeking investor may consider investing in the stock with a long-term perspective.

By Sakshi Agarwalla for Fintel.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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