Shares of Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Take a Beating After All-In Drug Fails in Late-Stage Trial

Failing to hit its goal in a late-stage trial of a drug Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) developed with intent to commercialize, shares of the pharmaceutical company took a steep dive.

Shares of Rigel Pharmaceuticals Inc. plummeted Thursday, as a late-stage trial of the drug the company went all in to develop and commercialize missed its goal.

The primary endpoint of a second phase 3 trial for Rigel’s fostamatinib, a treatment for chronic immune thrombocytopenia, which is a condition that causes patients to bruise and bleed easily, was a stable platelet response from adult patients.

But one patient in the placebo group achieved a stable platelet response. That was enough to make the difference between those on treatment and those on placebo statistically insignificant, meaning the study failed to meet its primary endpoint.

The stock RIGL, -0.37% tumbled 21% in midday trade. It pared earlier losses of as much as 39% to a seven-month low, but was still the biggest percentage loser on the Nasdaq exchange. Volume spiked to 14.2 million shares, or about 13 times the full-day average.

A big concern for investors is that last month, Rigel said it was slashing its workforce by 38% so it could direct its focus on commercializing fostamatinib, after the drug candidate met primary targets in previous late-stage trials. It was only leaving a “smaller research department” to continue identifying and developing other drug programs.

FactSet

At least investors weren’t completely blindsided by the disappointing trial results. Before Thursday’s selloff, the stock had already tumbled 19% amid a seven-session losing streak. The current eight-day stretch of losses would equal the longest losing streaks suffered in the 16 years since Rigel went public.

The company wasn’t giving up just yet, saying that if data from a prior study were combined with the latest study data, the difference between the treatment and placebo groups would be statistically significant.

“We believe that the totality and consistency of data from the FIT Phase 3 program, which included two phase 3 studies and one long-term extension study, strongly supports a clear treatment effect, with a sustained clinical benefit of fostamatinib,” said Chief Executive Raul Rodriguez. “As a result, we will continue to pursue this opportunity. Our next step is to seek feedback from the FDA.”

Rigel’s stock has lost 15% year to date, while the iShares Nasdaq Biotechnology exchange-traded fund IBB, +0.28% has dropped 20% and the S&P 500 SPX, -0.14% has gained 4.9%.

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Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) shares are trading -15.22% on the news and in the range of $1.95 – 2.96 during the current trading session.  When taking a look at which direction the stock might be headed, investors often look to brokerage analysts who cover the stock.  Sell-side research firms on Wall Street currently have a consensus one-year price target of $8.25 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.

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Sell-side analysts are projecting earnings per share of $-0.20 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-0.77 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading -22.99% away from its 50 day moving average of $3.54.  Based on the most recent available data, the equity is -37.67% off of its 52-week high of $4.38 and +45.21% away from its 52-week low which is $1.88.

Today, the stock opened at $2.00 and the last bid at the time of writing stood at $2.73.  During the session thus far, the equity dipped down to $1.95 and touched $2.96 as the high point.  Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) has a market cap of $258.23M and has seen an average daily volume of 2104870 over the past three months.

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