Drug developer Rigel Pharmaceuticals Inc. (NASDAQ: RIGL) watched its shares plummet 35% yesterday following a report that rheumatoid arthritis treatment it was developing with AstraZeneca plc (NYSE: AZN) did not show the expected benefits in a mid-stage drug trial. Compared with a competitive drug, Humira, from Abbott Laboratories (NYSE: ABT), fostamatinib, the drug licensed by Rigel to AstraZeneca, did not perform as well.
This was doubly bad news for Rigel, for which fostamatinib is its only drug with near-term economic potential. The company has other drugs in its pipeline, but only one is set to begin Phase II trials next year and others are even further in the future.
AstraZeneca has said it will continue with larger study on fostamatinib’s benefits, and that is probably what’s bringing Rigel a little relief today. AstraZeneca licensed the drug from Rigel for $100 million cash and a potential $345 million more if certain benchmarks are reached. Rigel could also receive up to $800 million in royalty payments once the drug hits the market.
Shares of Rigel are up 15.5% today after yesterday’s beating. Just before noon shares are trading at $6.36 in a 52-week range of $5.37 to $11.44.