Rigel Pharmaceuticals, Inc. (RIGL) Message Board

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Biotech / Medical : Rigel Pharmaceuticals, Inc. (RIGL)

RIGL 37.87

+33.8%

3:59 PM EST

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From: mopgcw	11/5/2008 12:25:18 PM
	of 566

CS: Rigel Pharmaceuticals Inc. (RIGL) Outperform [V] M. Aberman CP: US$ 8.71 TP: US$ 34 CAP: US$ 318m 3Q08 - Still Positive on R788 - Lowering Estimates and Target Price to $34 (from $37) • Conclusion: The earnings were not the focus on the call, rather it was an opportunity to revisit toxicity concerns with R788 following the ACR meeting. Given the completeness of the meeting last weekend, we did not learn any gain any particular new insights. That said, we have reviewed other agents that have been approved recently (e.g. Cymbalta, Effexor) that have had similar mean increases in blood pressure that gives us some additional comfort. Based on the questions on the call, investors clearly remain wary over the toxicity profile of R788 and we think this may not wane until (1) a commercial partnership is signed in 1H09, and/or (2) Phase IIb data are released in 3Q09. • What's New? Rigel announced 3Q08 EPS of ($1.03) incl. options vs. our estimate of ($1.01) and consensus of ($0.87). Operating expenses incl. options of $38.7 M were in-line with our estimate of $38.3 M. • Implication: Remain Outperform with a $34 PT (from $37). We were surprised to the stock reaction last week to the data presented at ACR. That said, based on the compounds profile, we believe we have been appropriately conservative in our approach to R788's probability of success (~45%) and think today's reaction was over blown. That said, in today's market we recognize a return to earlier levels will likely take time. We look towards a partnership announcement in 2009 as the next important catalyst and PIIb data later in 2009 and remain Outperform rated.

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