Roth Capital started coverage on Rexahn Pharmaceuticals (AMEX: RNN) with a Buy rating and $3 price target.
Analyst Joseph Pantginis, Ph.D., noted that Rexahn was a re-focused, re-tooled company with a clear focus on oncology drug development. He feels the company was in a state of transition during 2011 and 2012, with 2013 representing a year of putting all the pieces in place, making 2014 an important execution year for the company.
Key investment drivers Pantginis highlights are:
Transition to oncology focus is complete and new company direction is set: New management and three clinical-stage onlology assets put the company in a good position. Importantly, as the products move forward into Phase II, management has indicated that it will move forward with well designed randomized studies in order to get meaningful answers, Pantginis noted.
A rapidly-advancing pipeline: Pantginis notes Rexahn's current pipeline: A Phase IIa trial of Archexin in metaststic renal cell carcinoma (mRCC) should begin shortly. (Recall that the company has promising results from a Phase IIa exploratory clinical trial in pancreatic cancer in hand.) Additionally, a Phase Ib clinical trial of DNA synthesis inhibitor RX-3117 was just initiated. (Recall that a promising Phase I trial in solid tumor data is in hand and that the IND has been cleared by the FDA). Lastly, a Phase I trial of Supinoxin (RX-5902) in solid tumors is ongoing.
Partnering interest around the assets and platforms could drive the long-term validation of the company. While management is weighing partnerships for each of its products, Pantginis thinks RX-3117 is the lead prospect. He thinks management will aim for a partnership in mid-2014 or so. In addition, the analyst thinks Rexahn's technologiesprovide for long-term partnership opportunities given that they could be used for multiple product candidates and companies.
old Joe forgot to mention that when he said this Roth and RNN management had an offering planned near a dollar and that roth had a conflict of interest as a placement agent looking for a commission
Rexahn shares have languished in the $0.30 - $0.70 range over the last two years. With the pieces now in place, Pantginis thinks there's a ground-floor opportunity with the stock.