SOUTH SAN FRANCISCO - Rigel (NASDAQ:RIGL) Pharmaceuticals, Inc. (NASDAQ:RIGL) is set to implement a reverse stock split of its common stock at a 1-for-10 ratio, effective at the start of trading on Thursday, June 27, 2024. This decision, approved by stockholders and the company's Board of Directors, aims to elevate the per-share trading price of Rigel's stock and enhance its marketability, particularly among institutional investors.
The reverse stock split will consolidate every 10 shares of Rigel's existing common stock into one new share, reducing the total number of shares from approximately 175.6 million to 17.6 million. Adjustments will also be made to the exercise prices and the number of shares underlying the company's equity incentive plans. Authorized shares and the par value will remain unchanged.
The company's common stock will continue trading on The Nasdaq Global Select Market under the ticker symbol RIGL, with a new CUSIP number post-split. Rigel's objective with the reverse stock split is to address the low per-share market price of its stock, which it believes has affected its appeal and perception among potential investors.
For registered stockholders, no action is required to receive post-split shares held in book-entry form. Those holding shares through brokers or other nominees will see their accounts automatically adjusted. Shareholders with physical stock certificates will be contacted with instructions for exchanging their shares. No fractional shares will be issued; instead, shareholders entitled to fractions will receive a cash payment.
The move is also aimed at ensuring compliance with Nasdaq's minimum bid price requirement for continued listing. The reverse stock split is detailed in the Form 8-K filed by Rigel, as well as in its definitive proxy statement filed with the Securities and Exchange Commission on April 10, 2024.
This information is based on a press release statement from Rigel Pharmaceuticals , Inc.
In other recent news, Rigel Pharmaceuticals announced the upcoming release of GAVRETO, a medication designed to target specific types of cancer. The U.S. Food and Drug Administration (FDA) has granted full approval for its use in treating non-small cell lung cancer and accelerated approval for advanced thyroid cancer. The company is currently in discussions with the FDA about the requirements for confirmatory trials for the thyroid cancer treatment.
In terms of financial performance, Rigel reported net product sales of $21.1 million for TAVALISSE and $4.9 million for REZLIDHIA in the first quarter of 2024. Despite a 5% decrease in net product sales for TAVALISSE compared to the same period in 2023, the company's CEO, Raul Rodriguez, expressed confidence in the growth trajectory of both products. Rigel ended the quarter with $49.6 million in cash, cash equivalents, and short-term investments.
The acquisition of GAVRETO was completed by Rigel from Blueprint Medicines (NASDAQ:BPMC) Corporation in February 2024, with the aim of leveraging Rigel's existing infrastructure to expand its hematology and oncology business. The company also reported that it is pursuing additional in-licensing deals and acquisitions to further expand its portfolio. These are among the recent developments as Rigel continues to focus on product expansion and market positioning in the oncology sector.
InvestingPro Insights
In light of Rigel Pharmaceuticals' recent announcement regarding a reverse stock split, a closer look at the company's financials may offer investors additional context. According to InvestingPro, Rigel's market capitalization stands adjusted at $167.72 million USD. While the reverse stock split aims to enhance marketability and appeal, particularly among institutional investors, it's important to note that Rigel's revenue over the last twelve months as of Q1 2024 was reported at $119.25 million USD, with a gross profit margin of 76.0%. Despite these figures, the company has experienced a revenue decline of 4.66% in the same period.
InvestingPro Tips highlight that analysts have mixed views on the company's prospects. On one hand, two analysts have revised their earnings upwards for the upcoming period, indicating potential optimism in Rigel's future performance. On the other hand, analysts do not anticipate the company will be profitable this year, and it has not been profitable over the last twelve months. Additionally, the company does not pay a dividend to shareholders, which may influence investment decisions for those seeking regular income streams.
For investors considering Rigel Pharmaceuticals as part of their portfolio, it's worth noting that the company's price has seen a 5.93% total return over the past week, which could be a reflection of market reactions to the reverse stock split announcement. However, with a year-to-date price total return of -34.06%, the company's share price performance has been under pressure.
Investors looking for a comprehensive analysis can find additional InvestingPro Tips for Rigel Pharmaceuticals. There are more tips available that delve into the company's financial health and market performance, which could be particularly useful in assessing the impact of the reverse stock split. To access these insights and make the most informed decisions, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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