Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Rigel Pharmaceuticals Rose as Much as 10.2% Today

By Maxx Chatsko – Apr 17, 2018 at 3:54PM

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 company's lead drug candidate was approved by regulators -- for real this time.

What happened

Shares of clinical-stage drug developer Rigel Pharmaceuticals (RIGL -1.64%) jumped over 10% today after the U.S. Food and Drug Administration (FDA) approved the company's New Drug Application (NDA) for its lead drug candidate. Fostamatinib, which goes by the brand name Tavalisse, was approved to treat a rare blood disorder called immune thrombocytopenic purpura (ITP).

The announcement from regulators follows an unusual hiccup last week in which the company's investor-relations contractor updated part of the website to say that Tavalisse was Rigel Pharmaceuticals' first FDA-approved drug. The company had to issue a press release to clarify that was indeed an error and that a decision wasn't expected until April 17. 

As of 3:11 p.m. EDT, the stock had settled to a 10.2% gain -- although shares were halted at around 1:30 p.m. EDT. The stock very well could rise even higher tomorrow when it's allowed to be traded again.

Several lines with arrows trending upward and drawn on a chalkboard.

Image source: Getty Images.

So what

Today's news is significant because it will allow Rigel Pharmaceuticals to shed its "clinical-stage biopharma" label and graduate to a commercial drug developer. Fostamatinib is expected to find market traction quickly, as it will provide a more convenient treatment option for patients with ITP compared to the current standard of care, which includes weekly doctor office visits, steroids, and even spleen removal.

The drug candidate also is in two phase 2 trials for two other blood disorders. Meanwhile, the $605-million pharma company has a robust pipeline of partnered drug candidates spanning cancer, dermatology, and asthma. Gaining marketing approval for Tavalisse provides a crucial avenue to monetizing years of research and will help to offset ongoing research and development activities. It could generate peak sales of $350 million per year.

Now what

Successfully advancing a drug candidate through the gauntlet of required clinical trials and securing marketing approval is no easy task, so Rigel Pharmaceuticals shareholders should celebrate today's news. It'll take several more quarters -- and a decent amount of cash -- to ramp up sales and marketing activities to provide Tavalisse with the best launch possible. Now, investors and Wall Street analysts will turn their attention to launch activities and prescription growth over time.

Maxx Chatsko 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.
$1.20 (-1.64%) $0.02

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

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.