There’s no denying the best sector for investors right now is the COVID-19 plays on the coronavirus. We at Insider Financial have nailed quite a few this year, from Inovio Pharmaceuticals to Moderna and most recently with Vaxart. Rigel Pharmaceuticals stock is just the latest COVID-19 runner.
Rigel Pharmaceuticals stock exploded up the charts after instigating an investigator-sponsored trial (IST) with the Imperial College London to evaluate the efficacy of fostamatinib, its oral spleen tyrosine kinase (SYK) inhibitor, for the treatment of COVID-19 pneumonia. This is indeed big news and drove shares up 90% on Tuesday. Taking a closer look, we see if this rally has legs or not.
About Rigel Pharmaceuticals Stock
First up, here’s a little background info for those that aren’t familiar with Rigel Pharmaceuticals stock. Rigel Pharmaceuticals is a biotechnology company dedicated to discovering, developing, and providing novel small molecule drugs that significantly improve the lives of patients with immune and hematologic disorders, cancer and rare diseases.
The company’s first FDA approved product is TAVALISSE® (fostamatinib disodium hexahydrate) tablets, the only oral spleen tyrosine kinase (SYK) inhibitor, for the treatment of adult patients with chronic immune thrombocytopenia who have had an insufficient response to a previous treatment. The product has been approved by the European Commission for the treatment of chronic immune thrombocytopenia in adult patients who are refractory to other treatments and is marketed in Europe under the name TAVLESSE® (fostamatinib).
Rigel’s clinical programs include a Phase 3 study of fostamatinib in warm autoimmune hemolytic anemia (AIHA); a completed Phase 1 study of R8354, a proprietary molecule from its interleukin receptor-associated kinase (IRAK) inhibitor program; and an ongoing Phase 1 study of R5524, a proprietary molecule from its receptor-interacting protein kinase (RIP) inhibitor program.
In addition, Rigel has product candidates in clinical development with partners Aclaris Therapeutics, AstraZeneca, BerGenBio ASA, and Daiichi Sankyo.
The Investigator-Sponsored Trial
SYK is a key mediator of immunoreceptor signaling in a host of inflammatory cells. By inhibiting SYK, fostamatinib may specifically inhibit the infiltration and activation of monocytes and neutrophils in the lungs that are prominent in COVID-19.
The IST will be a two-stage trial with patients randomized (1:1:1) to fostamatinib, ruxolitinib, or standard of care. The primary objective will be to determine the efficacy of fostamatinib and ruxolitinib compared to standard of care to reduce the proportion of hospitalized patients progressing from mild or moderate to severe COVID-19 pneumonia.
Rigel will provide support for this trial along with Novartis.
MIT Harvard Study
Researchers at The Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard recently screened 3,713 FDA-approved compounds that reduce the abundance of a protein called mucin-1 (MUC1), a biomarker to predict the development of acute lung injury and acute respiratory distress syndrome. Fostamatinib was the only one that qualified, demonstrating preferential depletion of MUC1 from epithelial cells without affecting cell viability.
Rigel Pharmaceuticals Stock Not Just A Covid-19 Play
What’s most exciting about Rigel Pharmaceuticals is that is not just a Covid-19 play. RIGL is more de-risked today, than it was before, with European sales of Tavalisse about to begin, under licensee Grifol. Tavalisse has been estimated to reach $300 million in peak sales for ITP alone. Biopharma stocks usually trade with a market cap around 5x sales. This would give Rigel Pharmaceuticals stock a share price of $8 to $9.
Raul Rodriguez, Rigel’s president, and CEO summed things up best when he said:
The COVID-19 global pandemic continues to extract a significant human and economic toll and there remains a serious and immediate need for safe and effective therapies. Severe COVID-19 pneumonia can lead to acute respiratory distress syndrome, or ARDS, which can often be fatal. Given encouraging data from pre-clinical models of fostamatinib, we believe there is potential for SYK inhibition to help treat the severity of the disease for these patients and to prevent ARDS.
The current stock price clearly ignores the potential of Tavalisse. While there might be a short-term dip on some weak longs exiting and the shorts jumping on (9% of the float is short), Rigel Pharmaceuticals stock has long-term potential and is more than just a Covid-19 play.
As always, good luck to all (except the shorts)!
We will be updating our subscribers as soon as we know more. For the latest updates on NASDAQ:RIGL, sign up today!
Disclosure: We have no position in NASDAQ:RIGL or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article.