Shares of biotechnology company Rigel Pharmaceuticals, Inc. RIGL have surged 41.4% in the past year against the industry’s decline of 13.4%. The stock also outperformed the sector and S&P 500 Index during this time frame.

The outperformance can be attributed to the strong growth of leading drug, Tavalisse, and an impressive pipeline progress.

RIGL Outperforms Industry, Sector and Industry

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Tavalisse Growth Boosts RIGL’s Top Line

Rigel’s first approved product Tavalisse (fostamatinib disodium hexahydrate) showed encouraging uptake in 2024. The drug is the only approved oral SYK inhibitor for the treatment of adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment. The drug is also approved in the EU, UK and Japan.

Last month, Rigel provided a business update and outlook for 2025. Tavalisse generated $104.8 million in net product sales in 2024.

Rigel is also making good progress with its second FDA-approved product, Rezlidhia (olutasidenib). The drug is indicated for the treatment of adult patients with relapsed or refractory (R/R) mutated isocitrate dehydrogenase-1 (mIDH1) acute myeloid leukemia (AM R/R AML with a susceptible IDH1 mutation as detected by an FDA-approved test. Rigel in-licensed the drug from Forma with exclusive, worldwide rights for its development, manufacturing and commercialization.

Rigel entered into an exclusive license agreement with Dr. Reddy's RDY in November to develop and commercialize the drug in all potential indications throughout Dr. Reddy's territory, which includes Latin America, South Africa, certain countries in the Commonwealth of Independent States (CIS), India, certain countries in Southeast Asia and North Africa, Australia and New Zealand.

Rigel is entitled to receive an upfront cash payment of $4.0 million from RDY with the potential for up to $36.0 million in future regulatory and commercial milestone payments.

The company added a third product, Gavreto, to its commercial portfolio in 2024. The drug was added to RIGL’s portfolio after the company acquired commercial rights of the drug from Blueprint Medicines Corporation BPMC. Gavreto became commercially available from Rigel in June 2024.  The drug's incremental contribution boosted the company's top line in 2024.

RIGL Makes Impressive Pipeline Progress

Apart from these approved drugs, RIGL is developing other drugs, and the pipeline progress has been encouraging.

Last month, the FDA granted Orphan Drug designation to R289, Rigel's potent and selective dual inhibitor of IRAK1 and IRAK4, for the treatment of myelodysplastic syndromes (MDS). RIGL is evaluating the candidate in an ongoing phase Ib study evaluating the safety, tolerability, pharmacokinetics and preliminary activity in patients with lower-risk myelodysplastic syndromes (LR-MDS) who are relapsed or refractory to prior therapies.  

The candidate was also granted Fast Track designation by the regulatory body for this indication.

RIGL also announced that the first patient was enrolled in a phase Ib/II triplet therapy trial of decitabine and venetoclax in combination with Rezlidhia in patients with mIDH1 AML. The study is being sponsored and conducted by The University of Texas MD Anderson Cancer Center.

RIGL’s Upbeat 2025 Outlook

Rigel anticipates total revenues of approximately $200-$210 million in 2025, including product sales of approximately $185-$192 million. The company also expects to report positive net income in 2025 while funding existing and new clinical development programs.

RIGL’s Valuation and Estimate Movement

Going by the price/sales ratio, RIGL’s shares currently trade at 1.74x forward sales, lower than its mean of 2.38x but higher than 1.64x for the drug industry.

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The Zacks Consensus Estimate for 2024 earnings per share (EPS) has gone up to 22 cents from 17 cents over the past 60 days. The EPS estimate for 2025 has also jumped 13 cents to $1.05.

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Invest in RIGL Stock

We are optimistic about RIGL, buoyed by its strong performance in 2024 and upbeat guidance for 2025. Growth in Tavalisse sales should fuel top line. Contributions from its other drugs should also boost the top line.

Given RIGL's current valuation, we believe there is more room for growth and recommend prospective investors to add the stock to their portfolio.

RIGL currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.


 

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Dr. Reddy's Laboratories Ltd (RDY) : Free Stock Analysis Report

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Blueprint Medicines Corporation (BPMC) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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