Why Rigel Pharmaceuticals Shares Were Shellacked

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Rigel Pharmaceuticals (NASDAQ: RIGL  ) , a clinical-stage small molecule drug company focused on inflammatory and autoimmune disorders, dropped as much as 21% after the company resumed full responsibility for its rheumatoid arthritis pill, Fostamatinib, and reported topline data from two late-stage studies involving the drug.

So what: It probably wouldn't have been such a bad day had licensing partner AstraZeneca (NYSE: AZN  ) decided that, based on the data from the two Oskira studies, and previous clinical findings, it would take a $140 million charge and return all rights of Fostamatinib back to Rigel. Essentially, AstraZeneca feels there's little reason to waste additional research funds since it wasn't planning to seek a new drug application filing anyway based on the data. The actual top-line data demonstrated a statistically significant ACR20 response rate at 24 weeks in the 100mg dosage group in both trials; however, the treatment group receiving the once-daily 150mg dose following four weeks at 100mg in the Oskira-3 trial didn't show a statistical significance.

Now what: Rigel has been put between a rock and a hard place. It has plenty of statistical data to be combed through and a drug with a potential benefit for rheumatoid arthritis sufferers, but probably not enough to get approved by the Food and Drug Administration, nor to compete against AbbVie's blockbuster Humira or Pfizer's newer medication, Xeljanz. With no drugs currently approved, it appears as if Rigel is going to burn more cash as it decides what next to do with Fostamatinib. For Humira, it means continued smooth sailing, at least until its patents run out in late 2016, and for Xeljanz it likely means its portion of the pie will grow unabated as well. As has been the case all along, I'd suggest keeping a good distance away from Rigel.

Craving more input? Start by adding Rigel Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

Is there life after Humira for AbbVie?
In the pharma business, great success comes with a caveat. AbbVie is a perfect example, as investors in the new company are left wondering what the future holds once the company's golden goose, Humira, is cooked. The Fool's brand new premium report on the company answers the high-profile questions that AbbVie investors are asking. Simply click here now to claim your copy today.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2470957, ~/Articles/ArticleHandler.aspx, 9/27/2016 11:48:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,180.60 85.77 0.47%
S&P 500 2,154.40 8.30 0.39%
NASD 5,289.13 31.64 0.60%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 11:33 AM
AZN $33.37 Down -0.18 -0.54%
AstraZeneca CAPS Rating: ****
RIGL $3.43 Up +0.02 +0.59%
Rigel Pharmaceutic… CAPS Rating: ***
PFE $33.74 Up +0.10 +0.30%
Pfizer CAPS Rating: ****