RedHill Biopharma Ltd (RDHL)

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RedHill Biopharma is a new buy at H.C. Wainwright; highlights potential of Aemcolo

May 18, 2021 3:20 PM ETRedHill Biopharma Ltd. (RDHL)
By: Dulan Lokuwithana, SA News

RedHill Biopharma (RDHL +7.1%) is “building the next leading gastroenterology-focused specialty pharmaceuticals franchise in the U.S.,” says H.C. Wainwright analyst Raghuram Selvaraju initiating the coverage on the stock with a buy rating.

The price target of $23.00 per share indicates an upside of ~264.5% to the previous close.

With a note titled, “A Trifecta of Products With a Pipeline Punch,” the analyst points to the company’s commercialized products, Movantik (naloxegol), Talicia (a combination of omeprazole magnesium, amoxicillin, and rifabutin), and Aemcolo (rifamycin).

A partnership with Cosmo Technologies, Aemcolo received the FDA approval in 2018 for the treatment of travelers' diarrhea.

Selvaraju highlights Aemcolo as giving the company the “greatest long-term upside of the three,” arguing that it could target two additional indications similar to XIFAXAN (rifaximin) from Bausch Health: diarrhea-predominant irritable bowel syndrome and hepatic encephalopathy.

Thanks to the demand for XIFAXAN, Bausch Health managed to mitigate the contraction in its Salix segment to ~5.8% YoY in 2020 recording ~$1.9B of revenue for the year.