Rigel Pharma (RIGL): Restructuring A Positive - Jefferies
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Jefferies analyst, Eun Yang, reiterated her Buy rating on shares of Rigel Pharmaceuticals (NASDAQ: RIGL) and raised the price target to $9 from $8.50 after the company announced a cost restructuring to prioritize fostamatinib commercialization. There are no changes planned for the development plans of IRAK inhibitor R191 however.
Yesterday, RIGL announced a ~38% workforce reduction (46 positions), largely in research, which is expected to complete by 12/15/16. RIGL expects the reduction to yield ~$17M-$20M in cost savings annually following a one-time $5.7M severance charge in 3Q16. The company will retain a smaller research organization to continue active programs (e.g., fosta in IgAN & AIHA, R191). RIGL also announced retirement of co-founder/EVP & president of discovery and research Donald Payan, and appointment of Eldon Mayer as EVP & CCO. Mr. Mayer previously held commercial roles at Questcor Pharmaceuticals, Connetics Corporation, Chiron Corpoartion, Alza Corporation & Schering-Plough.
Shares of Rigel Pharmaceuticals closed at $3.45 yesterday.
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