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Why Rigel Is Poised to Bounce Back

By Brian D. Pacampara, CFA - Apr 8, 2013 at 9:46AM

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Market-trouncing returns could be written in this 4-star stock.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, clinical-stage drug development company Rigel Pharmaceuticals (RIGL -1.49%) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Rigel and see what CAPS investors are saying about the stock right now.

Rigel facts

Headquarters (founded)

South San Francisco, Calif. (1996)

Market Cap

$392.1 million

Industry

Biotechnology

Trailing-12-Month Revenue

$2.3 million

Management

Chairman/CEO James Gower
President/COO Raul Rodriguez

Return on Equity (average, past 3 years)

(17.6%)

Cash/Debt

$298.2 million / $0

Competitors

Amgen

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 891 members who have rated Rigel believe the stock will outperform the S&P 500 going forward.

Just this past Friday, one of those Fools, All-Star zzlangerhans, tapped Rigel as a particularly attractive bargain opportunity:

The street responded to news of mixed results of the OSKIRA-1 phase III trial of fostamatinib ... as though the trial was an unequivocal failure. In fact, the trial failed to show improvement over placebo in RA by radiographic criteria but did show stat sig improvement by clinical criteria. If this type of outcome holds through subsequent trials the company and partner AstraZeneca may submit an NDA on the basis that clinical improvement trumps radiographic improvement.

As of the end of 2012, Rigel has about [$300M] in liquid assets to support a market cap of [$392M] at [Friday's] close. That's a reasonable bet for a rebound, although my personal preference would have been to let the stock get beaten up further when OSKIRA-2 and OSKIRA-3 results are released later this quarter, and then hopefully mop up closer to cash.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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Stocks Mentioned

Rigel Pharmaceuticals, Inc. Stock Quote
Rigel Pharmaceuticals, Inc.
RIGL
$1.98 (-1.49%) $0.03
Amgen Inc. Stock Quote
Amgen Inc.
AMGN
$249.04 (0.62%) $1.54

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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