What happened

Shares of Rigel Pharmaceuticals (NASDAQ:RIGL) soared more than 90% on Tuesday after the biotech company announced the start of a clinical trial for a potential treatment for COVID-19 pneumonia. 

So what 

Imperial College London will conduct the trial to evaluate the efficacy of fostamatinib for the treatment of COVID-19 pneumonia. Fostamatinib is Rigel's oral spleen tyrosine kinase (SYK) inhibitor. It's already approved for the treatment of an autoimmune disorder in the U.S. and Europe, which could help to speed the delivery of the drug to COVID-19 patients if it proves effective.

A person in a business suit is drawing an upwardly sloping line.

Rigel Pharmaceuticals' stock rocketed higher on Tuesday. Image source: Getty Images.

Researchers at Harvard and MIT recently led an effort to screen compounds that reduce a biomarker used to predict the development of lung injuries and respiratory distress in patients. Of the 3,713 compounds they studied, fostamatinib was the only FDA-approved compound that did so.

"Severe COVID-19 pneumonia can lead to acute respiratory distress syndrome, or ARDS, which can often be fatal," Rigel CEO Raul Rodriguez said in a press release. "Given encouraging data from pre-clinical models of fostamatinib, we believe there is potential for SYK inhibition to help treat the severity of the disease for these patients and to prevent ARDS."

Now what

Patients will randomly receive either fostamatinib, Novartis' (NYSE: NVS) chemotherapy ruxolitinib, or standard of care. The goal of the trial is to determine whether these treatments reduce the number of patients who progress from mild or moderate COVID-19 pneumonia to more severe cases.

Rigel and Novartis will provide support for this trial, and Rigel intends to eventually begin a trial of its own design. "We are pleased to be able to support the exciting work being done by our colleagues at Imperial College London," Rodriguez said. "Their efforts will be valuable as we explore fostamatinib in COVID-19 and pursue our plans for a Rigel-led study."