Rigel scores blockbuster $1.24B pact with AstraZeneca

AstraZeneca has agreed to pay $100 million upfront and $345 million in development and early sales milestones in exchange for the right to take the lead on Rigel (RIGL) Pharmaceuticals' rheumatoid arthritis therapy, which is sitting on the threshold of a late-stage trial. AZ also tacked on $800 million in bonus sales milestones provided that R788 achieves "considerable levels of commercial success." And Rigel is positioned to earn stepped double-digit royalties.

Aiming at a piece of the rapidly growing $13 billion RA market, AZ's deal puts the pharma company in charge of the development, regulatory filings, manufacturing and global commercialization activities for fostamatinib disodium. TheStreet notes that R788 looked promising in a Phase II match-up with a placebo, but adds that high blood pressure raised concerns as the leading side effect.

"There is a very real and pressing unmet medical need in the area of rheumatoid arthritis," says Anders Ekblom, executive vice president of development at AstraZeneca. "Given the debilitating effect this disease can have on patients, AstraZeneca looks forward to working together with Rigel to continue development of this innovative investigational compound."

Rigel's shares immediately began an 8% slide on the news, which prompted some head scratching among the analysts. "We only heard good news from the conference call, we don't see a fundamental reason for the sell-off, and we are strong buyers of RIGL today," wrote Rodman & Renshaw analyst Simos Simeonidis.

AZ is now designing a Phase III clinical trial for the drug that should get started in the second half of this year. And the companies are aiming for regulatory approval in 2010.

- check out the press release
- here's the story from The Wall Street Journal
- here's the piece from TheStreet