After a third-party administrator of Rigel Pharmaceuticals' (NASDAQ:RIGL) investor relations website posted incorrect information about its lead drug candidate, shares in the clinical-stage biotech rocketed upward by as much as 40% before settling to a 16.7% gain on Thursday.
Rigel Pharmaceuticals doesn't have any drugs on the market yet, but it could win approval for its first therapy soon. An FDA decision on Tavalisse is expected on April 17.
Although the decision isn't expected for a few more days, eagle-eyed investors jumped to buy shares after noticing a post on the company's website describing Tavalisse as "the company's first FDA approved product."
The posting, however, was a mistake. According to a Rigel Pharmaceuticals statement, an error by the external host of its investor relations website resulted in the information being shared. The company has since removed the post and management says that "the FDA is continuing its review of the NDA [New Drug Application]."
Mistakes happen, but this one could prove costly if the FDA doesn't wind up approving Tavalisse and shares end up sinking as a result.
It's certainly possible that the inadvertent posting was simply an update to the website that was supposed to go live following the formal announcement, but that's guesswork, and there's no guarantee that an OK is forthcoming.
Nevertheless, there is an opportunity for Rigel to make the transition from clinical-stage to commercial-stage company, and Tavalisse could contribute meaningful revenue someday if it does get a green light. The drug is under review as a treatment for ITP, a disorder in which the immune system attacks blood platelets, resulting in abnormally low platelet counts.
The addressable market is 100,000 patients, and for many, the current treatment of steroids or spleen removal are far from ideal. Trial results suggest that Tavalisse could provide doctors with a convenient oral formulation that doesn't require weekly office visits or dietary restrictions. Those advantages could lead to the drug's becoming an important treatment option.
Overall, we'll know soon enough if Tavalisse is a go or not. Perhaps, it's best to wait on the sidelines, though -- until we know for sure that the FDA has signed off on the treatment.