Rigel Pharmaceuticals, Inc. (NASDAQ: RIGL) shares were up over 10% on the day, after the company announced that the U.S. Food and Drug Administration (FDA) accepted the company’s New Drug Application (NDA), for the use of a treatment for patients with chronic or persistent immune thrombocytopenia. Now that we have an idea of the catalyst that moved RIGL, let’s take a look at why the FDA’s decision was pivotal for the company.
FDA Accepts Rigel’s NDA
On June 19, 2017, Rigel Pharmaceuticals announced that the FDA accepted its filing of an NDA for the use of TAVALISSE in patients with persistent or chronic immune thrombocytopenia (ITP). That in mind Rigel Pharma is expecting the action date for the U.S. Food and Drug Administration to complete its reviewing process by April 17, 2018, under the Prescription Drug User Fee Act (PDUFA). Keep in mind that the action date is subject to change.
The company filed its NDA due to its data from its Phase III clinical trial testing of Tavalisse in ITP. The Phase III clinical trial stage included three studies and two randomized placebo-controlled studies, as well as an open-label extension study.
According to Rigel President and Chief Executive Officer Raul Rodriguez, “The FDA acceptance for filing of our NDA is an exciting milestone for Rigel…If approved, we believe TAVALISSE™ will provide a new treatment option for patients with chronic or persistent ITP. We look forward to working closely with the FDA as they review our submission.”
What You Need to Know About Rigel
- Rigel Pharmaceuticals is a biotech company aimed at developing, discovering and providing novel small-molecule treatments that could potentially improving the lives of patients with immune and hematological conditions.
- RIGL shares were up over 10% today, after the company announced the FDA accepted its NDA submission.
- Rigel had shares outstanding of 122.43M, floating shares of 107.36M and a short interest of 3.29%, as May 31, 2017.
- The company is operating at a loss, and therefore, its trailing 12-month price-to-earnings ratio (P/E) is immeasurable. Moreover, it had a trailing 12-month price-to-book ratio of 3.6, while the industry average was 1.6. Additionally, RIGL had a trailing 12-month price-to-sales ratio of 13.2, while the drug manufacturers – specialty & generic industry average was 2.5.
- As of June 16, 2017, RIGL shares were down 3.85% over the past month and over 10% over the past three months.
Here’s a look at RIGL on the daily chart.
The Bottom Line
With the FDA accepting Rigel’s NDA for Tavalisse, it could potentially add another source of revenue stream. hat said, these are just a few reasons why some market participants may be bullish on the stock. On the other hand, some traders and investors might be bearish on RIGL. Now, based on the company’s valuation ratios, Rigel Pharmaceuticals might be considered overvalued by some value investors. Moreover, the stock traded above its upper Bollinger Band, as shown in the chart above. Therefore, some traders may be viewing this as a potential mean reversion trade.
That said, there are multiple reasons why traders may be bullish or bearish on the name, and you would want to take into account the company’s fundamentals and potential growth in its net income and revenues.