Rigel Pharmaceuticals is a relatively small biopharmaceutical company ($800m capitalization) primed for growth in 2021 and beyond. From increasing product sales (%40+ year over year), to forming large partnerships w/ major companies (Eli Lilly) in the industry, to finding new indications for their lead product Tavalisse (fostamatinib; R406) that apply to the current pandemic they're on track for a breakout. Below I'll be discussing their fundamentals, pipeline, price targets, and the rational behind fostamatinib being a severe Covid therapeutic unlike any other.
Fostamatinib background and what you should know about its role in preventing severe Covid
Fostamatinib is orally taken and FDA approved to treat Immune thrombocytopenia; a disease by which the immune system destroys blood platelets. Fostamatinib has been shown to have a 78% response rate in chronic patients who receive this as a second line therapy. Currently the company has made about $60m in net sales from ITP in 2020 and is expecting steady growth in 2021. Their partners have also gained approval for this indication in Europe and Canada; with Israel expected in early 2021, and Asian markets sometime in 2022. Rigel will receive milestone payments and royalties for sales outside the US.
Warm Autoimmune Hemolytic Anemia is a disease by which the immune system destroys red blood cells and there are no approved treatments for this debilitating disease. Fostamatinib is the only drug in a phase 3 wAIHA study and is expected to complete enrollment by the summer of 2021 with hopeful trial completion sometime early 2022. The FDA has also granted this trial with a fast-tracked status which will knock 3 months off the review process.
The same immune pathway (SYK) that fostamatinib acts on to stop blood platelet and red blood cell destruction has also been demonstrated by the National Institute of Health to stop the immune destruction of neutrophils. This neutrophil destruction (NETosis in this case) normally happens in a highly regulated way - essentially the immune system destroys neutrophils to release their cellular contents into the blood serum, which acts like small fibrotic nets that can stop pathogens from spreading but in severe Covid it is done to such an extent that it can become very problematic and leads to thrombosis that may cause multi-organ failure, heart attack, stroke and death. When this takes place in the lungs it may cause the mucous to become thick and gel-like and lead to respiratory distress. An interesting video of an NIH doctor discussing NETosis implications in Covid has been linked below along with their study using fostamatinib.
Additionally, a Harvard and MIT study found that elevated mucin-1 was linked to poor Covid outcomes. Mucin-1 is a protein that is normally found in the lungs and may serve as an innate defense against pathogens, however if too much mucin-1 is released it can lead to acute respiratory distress syndrome and acute lung injury. They ran a screen of the 3700 drugs in their database looking for an FDA approved drug that could inhibit mucin 1 and found only 1 FDA approved drug that could both inhibit mucin-1 and preserve cellular integrity; fostamatinib. The implications however, they noted, go beyond Covid as mucin-1 elevation is an indicator of poor outcomes in other non-Covid lung diseases such as viral pneumonias, cystic fibrosis and COPD. The CEO gave an interview to TheFly several months ago and indicated that the non-Covid lung injury opportunity may be a much larger and more enduring than Covid alone. Note that late in 2019 before Covid was a known entity the company by chance had completed a mouse study where they were able to prevent acute lung injury as well so it was already on their radar.
Further, a University of Amsterdam study identified the mechanism by which a cytokine storm was occurring in severe Covid patients. Cytokine storms can damage tissue, lead to organ failure, and cause respiratory distress. They found that these patients were producing anti-igg antibodies that were causing their immune system to over-react. When they applied just these antibodies to serum that was not from severe patients they able to replicate the cytokine storm in vitro. They understood that the SYK pathway could likely stop this over-reaction and used the SYK inhibitor fostamatinib to fully neutralize the cytokine storm.
This research lead to two investigator sponsored clinical trials by the NIH and Imperial College of London that are now studying fostamatinib on severe Covid patients. Rigel itself has an on-going phase 3 Covid trial as well and this year received a $16.5M grant from the Dept of Defense to complete that study. Results from the investigator sponsored trials are expected by early April, and if compelling the CEO suggested in a JPMorgan presentation that they will combine any available phase 3 data with those studies and pursue an emergency use authorization to market their drug for the treatment of Covid-19. Additionally a Covid partnership has been mentioned because, "the opportunity is just so large."
Rigel has an extensive drug discovery program and have Rip1 and Irak1/4 inhibitors in development
Rigel developed its experimental RIP1 inhibitor through stage 1 and very recently partnered with Eli Lilly to further develop RIP1 for multiple indications in stage 2 studies. Just this week it was announced Rigel will receive $125M upfront from Lilly, with the opportunity to earn $835 million in milestone payments, as well as royalties from any future drug sales. While this is a co-development agreement Lilly holds most of the responsibility and Rigel's royalty % will be based on the amount of their involvement.
Rigel has an Irak1/4 drug program that has recently completed a phase 1 study. A possible partnership may be in the works here as well but as Rigel has experience in the rheumatic indications they may go it alone.
Additionally, Rigel has out-licensed multiple drugs from which they receives on-going milestone payments from w/ the potential for future royalties.
Price Target and institutional ownership
This week, as news from the Eli Lilly deal was announced multiple analysts who follow the company increased their price targets of Rigel. Only Pantginis noted he has Covid factored into his PT.
H.C. Wainwright analyst Joseph Pantginis increased his price target from $8 to $11.
Cantor Fitzgerald analyst Kristen Kluska increased her price target from $5 to $7.
BMO Capital analyst Do Kim raised the price target from $8 to $9.
Rigel is currently valued at $4.6
Rigel has a high institutional ownership ranging between 80-90%.
Ticker: RIGL
Drug Pipeline
https://www.rigel.com/pipeline/
Eli Lilly Partnership
Dept of Defense funding
Harvard/MIT study
https://www.cell.com/cell-reports-medicine/fulltext/S2666-3791(20)30181-630181-6)
U of Amsterdam study
https://www.biorxiv.org/content/10.1101/2020.07.13.190140v1.full.pdf
NIH study
https://academic.oup.com/jid/advance-article/doi/10.1093/infdis/jiaa789/6046406
NIH doctor discussing NETosis
https://www.youtube.com/watch?v=YcvJ2kEGOZ0
Covid Clinical Trials
https://clinicaltrials.gov/ct2/show/record/NCT04579393?term=Fostamatinib&draw=3
https://clinicaltrials.gov/ct2/show/NCT04581954?term=fostamatinib&cond=Covid19&draw=1
https://clinicaltrials.gov/ct2/show/NCT04629703?term=fostamatinib&cond=Covid19&draw=2&rank=1
Submitted February 20, 2021 at 07:12AM by Gay_Demons https://ift.tt/3pxDnmk
