Jefferies Positive on Ignyta (RXDX) After Management Meeting

Ignyta, Inc (NASDAQ: RXDX) management provided more clarity on the development and regulatory strategies for entrectinib and taladegib. With a good cash position to support ≥4 clinical programs into mid-17, Jefferies analyst, Gena Wang, sees a buying opportunity for long-term shareholders after the recent pull back based on 3 potential positive catalysts in 2016:

1) duration of response for entrectinib,

2) FDA decision on taladegib development path,

3)'105 clinical proof of concept data.

Based on LLY's regulatory feedback, single-arm trials would be adequate for approval for both 1st and 2nd line BCC (n=120 for 2L; n=150 for 1L) in the US while a comparator would be required in EU for 1L BCC. Mgmt plans to confirm with FDA on approval pathway after finishing tech transfer with LLY (1H16) and initiate registration studies in BCC in 2H16. The company expects a faster route to approval for taladegib in the 2L setting given the high unmet need and promising responses seen in Ph1 (38% ORR in Hedgehog inhibitor-experienced patients). Additionally, combo and mono trials outside BBC might be initiated in 2H16.

Initial clinical proof of concept in selected pts is expected at ASCO (Jun 3-7). Although initial activity was seen in one patient in the ongoing all-comer Ph1 trial, the activity and dosing regimen of ‘105 remain to be established in Ph1b basket study in pts with selected genetic alterations (data at ASCO). We look for more complete characterization of PK profile and response rates in patient harboring RET or BRAF rearrangements.

Key upcoming catalysts include:

1) entrectinib ALKA/STARTRK1 longer follow up with exiting pts at AACR/ASCO/ESMO

2) FDA feedback on taladegib registration pathway likely in 2H16

3) '105 initial proof of concept data in selected pts population at ASCO

No change to Buy rating or $20 PT.

For an analyst ratings summary and ratings history on Ignyta, Inc click here. For more ratings news on Ignyta, Inc click here.

Shares of Ignyta, Inc closed at $9.98 yesterday.

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