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What: Shares in Rigel Pharmaceuticals (NASDAQ:RIGL) jumped by 13.9% today after the company updated investors on its clinical-drug pipeline yesterday.

So What: The company doesn't have any drugs on the market yet, but it did report second-quarter revenue from contracts of $8.6 million, stemming from collaboration deals with Bristol Myers Squibb and BerGenBio AS. The biotech also reported that expenses were $22.2 million in Q2, up from $19.2 million a year ago. The bump up in costs is due to higher costs associated with its clinical-drug pipeline, including costs associated with its most-advanced drug fostamatinib.

Fostamatinib is in phase 3 trials as a therapy for the treatment of ITP, an immune-system disorder in which a patient's immune system attacks blood platelets, resulting in abnormally low platelet counts. Rigel estimates that 100,000 people suffer from chronic ITP.

Currently, treatment typically involves the use of steroids; however, if treatment fails, the patient's spleen can be removed, creating additional patient risks. Phase 2 results for fostamatinib were solid, and results from the first of two phase 3 trials is expected in August. If the trial is a success, the company plans to file a new drug application with the FDA as soon as Q1, 2017.

Now What: A positive outcome for fostamatinib would be a big win for Rigel. If approved, fostamatinib could provide doctors with a convenient oral formulation that doesn't require weekly office visits or dietary restrictions. Those advantages could help fostamatinib establish a foothold in the indication. 

Rigel's stock, however, is risky because a trial failure could significantly set back any path toward eventual profitability. For that reason, most investors ought to focus on other ideas to avoid the risk of a stumble in the trial, or with FDA regulators. Investors should also recognize that Rigel's $95 million in cash is expected to get it only through Q3 of next year. Therefore, there's a good chance that the company will need to do a dilutive stock offering sometime in the next year.