It's not often you see stocks triple in one day, but that's what Rigel Pharmaceuticals (NASDAQ:RIGL) did yesterday. You might be surprised, however, as to why the developmental-stage drugmaker shot up like a rocket ship.

It didn't find the cure for cancer, or even get its first drug approved; all it did to cause the bump in price was release positive phase 2 clinical trial results for its rheumatoid arthritis (RA) drug candidate, R788.

Now, don't get me wrong -- the results looked pretty good. The two highest doses of R788 caused statistically significant reductions in subjects' ACR scores, which measure the signs and symptoms of RA. But these are results of a phase 2 trial; there are still plenty of things that could go wrong, and Rigel is still years away from a marketed drug.

In fact, the safety profile was less than stellar. Patients experienced low white blood cell counts, signs of liver issues, and gastrointestinal (GI) side effects, although most of the subjects were able to continue in the trial on a lower dose.

So why are investors so excited about phase 2 results? Essentially, it boils down to the fact that the drug is taken orally. Currently, the main RA drugs available to patients -- including Enebrel, which is co-marketed by Wyeth (NYSE:WYE) and Amgen (NASDAQ:AMGN); Rituxan, from Biogen Idec (NASDAQ:BIIB); and Genentech (NYSE:DNA) and Abbott Laboratories' (NYSE:ABT) Humira -- are either injected or given by transfusion. Since not too many patients like needles, an oral compound could compete exceptionally well in the crowded RA market.

While the results certainly look promising, I don't think they justify the almost $900 million market cap investors have bestowed upon the company. Rigel isn't ready to go into an expensive phase 3 study, so it plans to do a larger six-month phase 2 study to confirm that it has the right dose. With no drugs in phase 3 trials, investors are taking a lot of risk buying in at this level.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Biogen is a pick of the Stock Advisor newsletter. The Fool has a disclosure policy.