Rigel Pharma Gets Bulls From JPMorgan Before New Phase 3 Data: What To Know

JPMorgan’s Anupam Rama believes data from the two phase 3 trials of fostamatinib would be positive and that Rigel Pharmaceuticals, Inc. (NASDAQ: RIGL)'s 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 $5 price target.

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.