Rigel Pharmaceuticals' (NASDAQ:RIGL) stock fell hard last year, as investors became worried about blood pressure increases in clinical-trial patients taking its rheumatoid arthritis drug candidate R788. But today it's headed in the other direction -- and how! -- as the company has shown that the side effect is fairly manageable.

In the first of two phase 2b trials expected this month, R788 continued to show good efficacy beating placebo in most measurements at both of the tested doses. The 100 mg twice a day worked better than the 150 mg once a day dose, (which is a little disappointing because patients prefer once-daily dosing), but it's not a major concern.

More importantly, the blood pressure was manageable. The trial was set up so that doctors could adjust or add blood pressure medications for patients whose blood pressure was increasing and the side effect seems fairly manageable. Rheumatologists are used to dealing with high blood pressure because other rheumatoid arthritis drugs like NSAIDs and steroids increase blood pressure in some patients, so they're not likely to shun the drug as long as the side effect is manageable.

What's so exciting about R788 is that it's an oral drug that's going after a huge market that's dominated by drugs that have to be injected or infused -- Abbott Labs' (NYSE:ABT) Humira; Johnson & Johnson's (NYSE:JNJ) Remicade, which is sold outside the U.S. by Schering-Plough (NYSE:SGP); and Amgen (NASDAQ:AMGN) and Wyeth's (NYSE:WYE) Enbrel.

Phase 3 trials will be expensive to run, so Rigel expects to get a partner before initiating the trials next year. One pharma we can cross off the list of potential partners is Pfizer (NYSE:PFE) because it has a oral rheumatoid arthritis drug, CP-690,550, in phase 3 trials already.

Investors are going to need to be patient -- R788 is a ways away from being on the market -- but so far it looks like Rigel may have a blockbuster on its hands.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is an Inside Value pick. Johnson & Johnson is an Income Investor selection. The Fool has a disclosure policy.