On Monday (NASDAQ:MNDY), Citi maintained a positive outlook on Rigel Pharmaceuticals (NASDAQ:RIGL), increasing the stock's price target to $49.00 from the previous $40.00 while keeping a Buy rating. The adjustment comes after Gavreto, one of Rigel's products, reported sales of $7.1 million, surpassing both the analyst's estimate of $2.8 million and the consensus estimate of $4.1 million.
This performance is attributed to genuine demand rather than inventory stocking, and it has helped align the drug's sales trajectory with the forecasted $28 million for the fiscal year 2023 under Blueprint Medicines (NASDAQ:BPMC).
Rigel Pharmaceuticals has shown a significant growth in its quarterly revenue, which has doubled to approximately $39 million over the past two years, up from around $19 million in the fourth quarter of 2022. Despite this overall growth, the blood disorder treatment Tavalisse has seen a more or less stable growth rate, with a compound annual growth rate (CAGR) of about 4% over the past eight quarters.
Meanwhile, Rezlidhia, another treatment offered by Rigel, has experienced a robust growth rate of approximately 30% CAGR since its launch in the fourth quarter of 2022, although it remains a product generating less than $10 million.
The company's future growth may rely increasingly on Gavreto and its development pipeline. Notably, it wasn't just the profitable quarter, boosted by a one-time $10 million milestone payment from Kissei Pharmaceuticals, that caught attention.
The spotlight was also on the initial data from the American Society of Hematology (ASH) abstract for Rigel's R289, a dual IRAK 1/4 inhibitor, which is in development for relapsed/refractory lower-risk myelodysplastic syndromes (LR-MDS). Although still in early stages, R289 appears to have a compelling profile compared to Geron (NASDAQ:GERN)'s recently launched Rytelo.
In light of these developments, Citi has incorporated R289 into its financial model for Rigel Pharmaceuticals, contributing to the raised price target. The upgrade reflects the firm's confidence in the company's current performance and its potential for future growth driven by its product pipeline.
In other recent news, Rigel Pharmaceuticals reported robust growth in its Q3 earnings, with a notable increase in sales and a net income of $12.4 million, a significant turnaround from the previous year's net loss. Total (EPA:TTEF) net sales surged to $38.9 million, a 44% increase compared to the same period last year, propelled by the integration of GAVRETO and strong sales trends for TAVALISSE and REZLIDHIA.
Moreover, Rigel announced a $10 million agreement with Kissei to develop REZLIDHIA in Asia, with potential future payments reaching up to $152 million. The company also achieved net income breakeven for the first time in Q3, indicating a disciplined approach to finances.
Rigel plans to expand its commercial portfolio and advance its development pipeline, particularly with R289, and will present data at the ASH annual meeting in the near future. These are among recent developments, reflecting Rigel's focus on strategic growth and product pipeline development. The company's financial turnaround and strong sales growth, coupled with upcoming presentations and collaborations, are key highlights in Rigel's recent performance.
InvestingPro Insights
Rigel Pharmaceuticals' recent performance and future prospects are further illuminated by data from InvestingPro. The company's market capitalization stands at $388.76 million, reflecting investor confidence in its growth potential. This optimism is supported by the company's strong revenue growth, with a 21.65% increase over the last twelve months and an impressive 96.58% quarterly growth as of Q3 2024.
InvestingPro Tips highlight that Rigel is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of 0.87. This suggests that the stock may be undervalued considering its growth prospects, aligning with Citi's bullish outlook and increased price target. Additionally, the company has been profitable over the last twelve months, with analysts predicting continued profitability this year.
The stock's recent performance has been remarkable, with InvestingPro data showing a 169.84% price return over the past year and a 124.2% return over the last six months. This aligns with the article's mention of Rigel's growing revenue and the positive reception of its product pipeline, particularly Gavreto and the promising R289.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Rigel Pharmaceuticals, providing a deeper understanding of the company's financial health and market position.
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