Ignyta Gets A Bullish Initiation From JPMorgan

JPMorgan’s Anupam Rama believes Ignyta Inc (NASDAQ: RXDX) is an emerging key player in the targeted drug development arena in oncology.

Rama initiated coverage of the company with an Overweight rating and price target of $15.

Underappreciated Asset

“On the heels of promising phase 1/2 data presented at AACR 2016 in April, we believe the company’s lead program Entrectinib is an underappreciated and differentiated asset, both from a clinical and commercial perspective,” the analyst mentioned.

Rama also views two of Ignyta’s other pipeline candidates, Taladegib and RXDX-105, as potential drivers of long-term value for the company.

The analyst pointed out that Entrectinib has best-in-class potential in tumors caused by NTRK, given the compelling response rate during Phase 1 in lung, head, neck and colorectal cancer.

Related Link: Ignyta's Entrectinib Data May Come By Year's End; Cantor Keeps Buy Rating, But Stock Slips

“We view ROS1 mutation data with Entrectinib as compelling as well. Entrectinib’s CNS activity is likely also to be a potential key differentiator to the competition,” Rama stated.

Commercial Opportunity

In fact, the analyst sees attractive commercial opportunity for the product in NTRK+ solid tumors, given the relative unmet need.

Within NTRK NSCLC/CRC alone, the analyst believes there could be peak sales potential of $225 million in the U.S.

“The balance of 2016 is a clinical execution story with entrectinib/STARTRK-2 program, with interim data expected 2Q17. Data from the RXDX-105 phase 1b study is expected 4Q,” Rama added.