Redhill (NASDAQ:RDHL) is a biopharmaceutical company with a diversified, balanced R&D pipeline and late-stage assets focusing on gastrointestinal (GI) diseases and inflammation. The three most advanced Phase III-stage products have been significantly de-risked, target areas with high unmet need and may deliver four key readouts with the next 18 months. We initiate coverage of RedHill with a valuation of NIS1.21-1.29bn or NIS9.5-10.1/share.
Key late stage assets to deliver multiple catalysts
RedHill’s main value drivers are late-stage assets in GI and the inflammation area, while in total the company has eight clinical-stage products. RedHill’s strategy focuses on both established and innovative technologies, acquiring them with low upfronts and leveraging the potential by expanding the label, formulating novel combinations or targeting indications that are not too crowded with branded drugs. The three most advanced assets include RHB-105 for Helicobacter pylori (H. Pylori) infection (confirmatory Phase III to start in H117); RHB-104 for Crohn’s disease (CD) (first DSMB in Q416, second DSMB expected in Q217 and to include an option for early termination) and relapsing-remitting multiple sclerosis (final results Q416); and Bekinda for gastroenteritis (top-line results expected in mid-2017) and diarrhoea-predominant irritable bowel syndrome (IBS-D; top line results mid-2017).
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