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Rigel Down on Phase II Setback

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Rigel Pharmaceuticals, Inc. (RIGL) recently announced disappointing results from a phase II study on R343. The company announced that its asthma candidate failed to meet primary or secondary objectives in the phase II SITAR (SYK Inhibition for Treatment of Asthma with R343) study. Rigel’s share price went down 13.5% following the news.

R343 is an inhaled SYK inhibitor, being developed for the treatment of patients suffering from allergic asthma.

In Sep 2012, Rigel had initiated the phase II, double-blind, multi-center study (n=270) on R343. The primary objective of the study was to measure the change in pre-bronchodilator FEV1 (a measure of lung function) from baseline in each patient under R343 in comparison to those under placebo. R343 was however well tolerated during the study.

Following the dismal results, Rigel has decided to discontinue the development of R343 for this indication.

This is not the first time Rigel received disappointing news this year. Earlier, in Jun 2013, AstraZeneca (AZN) returned rights to rheumatoid arthritis (:RA) candidate, fostamatinib. AstraZeneca arrived at the decision based on mixed data from the OSKIRA phase III program and decided against pursuing regulatory filings for the candidate.

We remind investors that AstraZeneca was collaborating with Rigel for the worldwide development and commercialization of fostamatinib since Feb 2012.

Apart from these candidates, Rigel also has R333 (discoid lupus erythematosus) and R348 (chronic dry eye) in phase II development.

We are disappointed with the pipeline setback at Rigel. We expect investor focus to shift to the other candidates in the company’s pipeline. While phase II data on R333 should be out later this year, data on R348 is expected in the first half of 2014.

Rigel currently carries a Zacks Rank #3 (Hold). At present, companies like Biogen Idec (BIIB) and Gilead Sciences, Inc. (GILD) look attractive with both carrying a Zacks Rank #1 (Strong Buy).

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