Rigel endures another clinical setback as eye drug flunks Phase II

Rigel Pharmaceuticals' ($RIGL) pipeline just got a little thinner, as another failed clinical trial has dimmed its hopes in dry eye disease, the latest in a string of missteps for the biotech.

In a Phase II study, Rigel's R348 missed its primary and secondary endpoints in patients with dry eye disease, failing to significantly beat placebo in eye staining, tear production and disease symptom scores over 12 weeks, the company said. Rigel has decided against moving into Phase III with the drug, which inhibits the JAK and SYK enzymes, but it's choosing not to interrupt an ongoing Phase II study testing the treatment's effect on dry eye in patients with graft-versus-host disease.

Separately, the South San Francisco company is calling it quits on R118, an indirect AMPK activator targeting muscle pain, citing some alarming side effects in Phase I.

That trims Rigel's proprietary pipeline down to just fostamatinib, an oral SYK blocker that once held promise in rheumatoid arthritis. After a 2013 late-stage failure cast a shadow over the drug's potential in that disease, ex-partner AstraZeneca ($AZN) washed its hands of the program and handed it back to Rigel, which is now studying it in a Phase III trial on the blood disorder immune thrombocytopenic purpura and planning a Phase II for IgA nephropathy, an autoimmune disease of the kidneys.

After AstraZeneca walked out on fostamatinib, Rigel regrouped and restructured, shedding R&D staffers and focusing on mid-stage studies of R333, a topical lupus treatment, and R348. Months later, the former drug came up short in Phase II, leading the company to abandon yet another program.

Now, with R348's dry eye indication following suit, the company is again narrowing its focus.

"Demonstrating clinical benefit in patients with dry eye disease remains a significant challenge for the pharmaceutical industry," CEO James Gower said in a statement. "Our energies and resources going forward are committed to supporting fostamatinib in its advanced clinical development."

Rigel's shares opened about 11% down on Wednesday morning, and the biotech's value has plummeted nearly 65% since fostamatinib's first failure in arthritis.

- read the statement