Rigel Pharmaceuticals (NASDAQ:RIGL) CEO, President and Director Raul R. Rodriguez bought 1 million shares of RIGL stock for $688,400 over the past week.
- The transaction is the largest purchase by any insider over the last twelve months.
- The shares of the company have climbed 82.0% over the last seven days.
Rigel Pharmaceuticals is a biotechnology company involved in developing drugs to treat patients suffering from hematologic disorders, cancer, and rare immune diseases.
Rigel stock has been soaring higher, led by a purchase of 1 million shares by the company’s CEO, President, and Director Raul R. Rodriguez.
The transaction lends a positive outlook as it aligns management and shareholders' interests. The transaction marks a 521% increase in stake by the CEO, which appears considerably positive. The purchase of shares is the largest transaction by an insider over the last 12 months. However, overall insider ownership remains low. Following the transaction, insiders own only 1.2% of the total stock. Overall, the insider ownership percentage remains low despite large transactions. As per the data by Fintel, the insider accumulation score on the stock is 27.7, indicating a lower accrual score compared to its peers.
RIGL shares have gained 82.1% over the last seven days, subsequent to the CEO Raul R. Rodriguez transaction.
What happened?
Rigel Pharmaceuticals reported in an 8-K it has been unsuccessful in its Phase 3 clinical trial for its fostamatinib drug, FORWARD. The medicine is used to treat patients with premature destruction of healthy red blood cells (hemolysis). The phase 3 trial came on the heels of very successful results in Phase 2, which was conducted solely in the United States.
In the post-trial evaluation, management assessed that although the clinical trial had failed to have a significant effect on the patients in the Eastern European region, it was well received in western Europe and the United States. This means there has been a different result based on regions. Management now aims to analyze the data based on geographic differences.
The company’s success in other markets gives hope that it might succeed in the eastern European countries.
Currently, there is no approved medicine or therapy for treating patients with warm autoimmune hemolytic anemia (wAIHA). In the US, the company’s drug is already approved under the name Tavalisse. It is a kind of fostamatinib, used in treating patients with chronic immune thrombocytopenia who have had an insufficient response to a previous treatment.
The current stock price remains near its 52-week low price of $0.64.
Based on the recommendations of seven Wall Street analysts, three have given the stock a buy rating, four have recommended a hold rating, and none of them have given a sell rating. The 12-month price target is $2.61, reflecting an upside potential of 113.93% from the last price of $1.22.
Riley equity researchers have raised their FY2022 earnings estimate for Rigel Pharmaceuticals to an earnings loss of $0.52 per share, up from their prior estimated loss of $0.53 per share. The consensus estimate for Rigel Pharmaceuticals' current full-year earnings is $0.52 per share.
The options market is bullish, with a put-to-call ratio of 0.17.
Tavalisse is gaining traction in the US market.
In the Q1 2022 earnings results, RIGL delivered strong sales for TAVALISSE. The company shipped 1,836 bottles of the medicine directly to patients and clinics, the highest since its launch. Net product sales increased by an impressive 31% compared to the prior year. The increasing number of interactions with physicians, along with the company’s marketing initiatives, propelled top-line growth. Management expects this strength to continue as the company enhances its sales initiatives.
RIGL ended the quarter with cash and cash equivalents of $107.5 million. The company also has $30 million remaining in its credit facility with MidCap. In addition to this, RIGL is also eligible for potential development milestone payments totalling up to an additional $835.0 million. This should be sufficient to support its ongoing project requirements.
Institutional investors are bullish on the stock.
Institutional investors have grown their positions in Rigel Pharmaceuticals during the second quarter. Of the 328 institutional owners, 320 held long positions in the stock, according to the data by Fintel. Major investors have been FMR LLC, BlackRock Inc., FDGRX-Fidelity Growth Company Fund, Vanguard Group Inc., State Street Corp, and Invesco Ltd.
Hedge funds and other institutional investors own 80.33% of the company’s stock.
Concluding remarks
Rigel Pharmaceuticals is focused on bringing drugs for treating rare blood diseases to patients globally. The company has been successful in the US and western European countries. However, it is still evaluating the difference in results due to the geographies. According to Coherent Market Insights, the haematology market is estimated to grow at a CAGR of 7.64% between 2021 and 2028 to reach USD 13.44 billion by 2028. If RIGL is successful in launching its drug, it will significantly benefit the shareholders. However, uncertainty prevails.
Currently, the stock is trading at a discount at a P/S multiple of 2.69x, lower than the industry average of 4.24x. A risk-seeking investor can consider investing in the stock from a long-term perspective.
By Sakshi Agarwalla for Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.