Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Rigel Pharmaceuticals, Inc. Is Jumping Higher Today

By Cory Renauer - Updated Oct 2, 2017 at 12:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The FDA dropped a big hint that mixed data for Rigel's lead candidate isn't going to be a problem.

What happened

Shares of Rigel Pharmaceuticals, Inc. (RIGL 10.00%), a clinical-stage biotech, are on the rise today after the company announced results of a recent meeting with the Food and Drug Administration. It looks like the agency isn't too concerned with mixed data from pivotal trials supporting the company's first new drug application for Tavalisse, formerly fostamatinib. In response, the stock has risen 33.9% as of 10:58 a.m. EDT during Monday's session

So what 

Between 60,000 and 125,000 Americans suffer from an incurable blood-based disease called immune thrombocytopenic purpura (ITP). Tavalisse could generate perhaps $350 million in peak annual sales if approved to treat this underserved group, but mixed results during pivotal trials underpinning the candidate's new drug application have kept the stock depressed. The stock is surging today because the FDA won't require an independent advisory committee meeting to discuss the application, which strongly suggests the mixed results aren't going to be an issue after all.

Upward sloping chart drawn on a chalkboard.

Image source: Getty Images.

Although Tavalisse sailed through the first of two studies to see if it can improve the rate of stable platelet responses for patients with ITP, Rigel stock tanked last October after the candidate technically failed a second, nearly identical trial. As in the first trial, 18% of the fostamatinib-receiving patients achieved a stable platelet response. Unfortunately, one respondent in the placebo arm hit the mark as well. This rendered the difference between the treatment arm and the placebo arm statistically insignificant for the second pivotal trial, but taken together, the data strongly suggests the drug is effective.

Now what

Of course, the FDA might not be planning to convene a panel of independent physicians to discuss Rigel's application because the agency already knows it will require more efficacy data. I'd say the odds of this are slim. The FDA generally spends a couple months mulling over new drug applications before it agrees to begin a formal review, and Rigel crossed this hurdle in June.

Instead of preparing for an advisory committee meeting, the company will probably ready itself for its first commercial launch instead. The FDA is expected to deliver an approval decision during or before next April. If approved, today's gains will probably seem minor in comparison.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Rigel Pharmaceuticals, Inc. Stock Quote
Rigel Pharmaceuticals, Inc.
RIGL
$1.54 (10.00%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.