A ‘buy’ recommendation and a $2 price target bodes well for the clinical-stage specialty pharmaceutical company.
RegeneRx Biopharmaceuticals Inc (OTCMKTS:RGRX) shares gained more than 7% on Monday morning, after its prospects were written up by Rodman & Renshaw.
A ‘buy’ recommendation and a $2 price target bodes well for the clinical-stage specialty pharmaceutical company, which is currently evaluating a possible treatment for dry eye syndrome.
Analyst Raghuram Selvaraju says the ‘unmet need’ in dry eye syndrome represents a ‘massive market opportunity’.
Rodman & Renshaw’s recommendation suggests more than 300% upside to the current share price, of 48.2 cents.
Results from a Phase 2b/3 trial, possible coming in the second quarter, present investors in RegeneRx with a potential value-adding trigger and it also pointed to the possibility that data could be released from a separate Phase 3 trial for the treatment of neurotrophic keratitis (NK) during the second quarter as well.
“Safety is critical for dry eye therapeutics, as adverse reactions often lead to treatment discontinuation,” Selvaraju said in a note.
Selvaraju added that compared to Restasis, the only FDA approved treatment available, RegeneRx’s treatment was well tolerated in a prior Phase 2a trial and that could help the drug quickly seize market share if it is approved.
The analyst also emphasised that RegeneRx benefits from licensing arrangements which allows for non-dilutive funding for its trials.
“RegeneRx has a unique licensing setup that we feel should benefit its shareholders.
“All ongoing trials of RGN-259 is sponsored by ReGenTree, a joint venture established by RegeneRx and GtreeBNT. GtreeBNT is responsible for funding all trials and holds a majority stake in the JV.”
The analyst added: “RegeneRx bears no financial risk for the clinical testing of RGN-259 and maintains a low operational cash burn.”
Source: Proactive Investors