RedHill BioPharma: A Highly De-risked and Undervalued Biopharma Company with a Deep Pipeline


Summary:

  • RDHL is an Israeli-based clinical and commercial stage biopharmaceutical company with a large and diverse pipeline specializing in gastrointestinal (GI) indications and other inflammatory diseases.

  • RDHL has many catalysts coming in September/October, including Phase 2 results in IBS-D, an NDA resubmission for migraine treatment, and an FDA meeting following a successful Phase 3 trial in acute gastroenteritis/gastritis.

  • Long-term, RDHL also has promising Phase 3 trials in Crohn’s Disease and H. pylori with estimated completion in mid-late 2018.

  • Current uncertainty in the market seems to be due to investment in a recent acquisition and commercialization of three FDA-approved drugs, leading to the potential need for fundraising and thus dilution.

  • With many late-stage assets that are de-risked due to similarities to approved treatments or previously completed trial data, RDHL has a high likelihood of success across various indications.

Investment Thesis:

RedHill BioPharma is developing technologies that are substantially de-risked, late-stage clinical assets that are largely previously-approved drugs that are either 1) new formulations or combination therapies, and/or 2) being used to treat unique indications. Many of its lead assets have been evaluated in clinical trials and have shown efficacy, including the compounds being tested in the Phase 2 IBS-D trial and Phase 3 Crohn’s Disease trial. While there is some risk from their propensity to acquire or license commercial assets, we believe that these early efforts to commercialize and establish a presence in the US market will help RedHill as its pipeline approaches the commercial stage. Based on the strength and diversity of this pipeline, we see many opportunities at upside.

Company Overview:

RedHill BioPharma (NASDAQ: RDHL) is an Israeli-based biopharmaceutical company with both clinical and commercial stage products. It primarily tests pre-existing drugs in new inflammatory indications, focusing primarily on gastrointestinal (GI) indications such as Irritable Bowel Syndrome with Diarrhea (IBS-D), Crohn’s Disease (CD), and acute gastroenteritis/gastritis. RDHL does not have a unique drug candidate that is not currently on the market. Instead, RDHL licenses or acquires previously approved products and creates unique combinations...

Read the rest of our RDHL report.


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