Shares of clinical-stage drug developer Rigel Pharmaceuticals (NASDAQ:RIGL) 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.
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.
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.