Rigel Pharmaceuticals, Inc. (RIGL) Message Board

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

RIGL 30.29

-1.2%

1:02 PM EST

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From: mopgcw	5/5/2009 5:17:21 PM
	of 566

CS: Rigel Pharmaceuticals Inc. (RIGL) OUTPERFORM [V] M. Aberman CP: US$ 7.10 TP: US$ 15 CAP: US$ 259.7m Remain Outperform Ahead of PIIb Data - Revising Estimates and Lowering Target Price to $15 (from $16) • Conclusion: We updated our model to reflect the operating results of 1Q09. We continue to believe in the potential of R788 and eagerly await the top-line results of the Phase IIb Taski2 and Taski3 trials in July. As a reminder, we believe the reaction to Rigel shares following the American College of Rheumatology meeting last December was overblown. Ultimately, we think the PIIb trials will confirm R788's efficacy, which should remove the overhang from the different results in the Mexico and North American cohorts from the PIIa trial. We also believe the magnitude of blood pressure increase will be lower in the PIIb program with both better management of pre-existing hypertension and management as treatment related blood pressure increases. Of note, we contend that the blood pressure increase is not a "show stopper" given other agents that have BP increases in their label. LFT changes and neutropenia will also bear watching in the PIIb program. • What's New? Rigel reported 1Q09 EPS of ($0.78) excluding restructuring charges compared with our estimate of ($0.98) on lower than expected R&D expenses as well as stock-based compensation expenses. The company had cash/equivalents of $104.8 M which it believes will be sufficient to fund operations through 2Q10. • Implication: Remain Outperform with $15 TP (from $16). With the stock back at where it traded before the PIIa data in RA, we think Rigel presents a compelling value as R788 is one of few oral therapies in development for the treatment of RA with blockbuster commercial potential. Positive data from the Taski2 and Taski3 trials should result in significant appreciation followed by a potential partnership deal that could drive further upside. As such, Rigel is one of our top picks in the small cap biotech space.

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