Rigel sinks after adding another trial failure to its losing streak

Rigel Pharmaceuticals rang up another big setback today. Just weeks after announcing a plan to ax 30 staffers as it circled its wagons around a pair of mid-stage drugs--news that followed AstraZeneca's ($AZN) high-profile decision to abandon fostamatinib--one of the drug hopefuls failed a mid-stage study.

The biotech says that R333 flunked the primary endpoint in treating discoid lupus erythematosus in Phase II. And the company says that it will now dump its program for that indication. Shares of South San Francisco-based Rigel ($RIGL) dropped about 9% this morning on the news. For the year, the stock has slid a painful 60%.

Rigel added that it has now decided to push ahead with a pair of small Phase III studies on fostamatinib for immune thrombocytopenic purpura. Investigators will set out to obtain pivotal data on a total of 150 patients, looking for a durable platelet count increase on the enrollees.

Back in August Rigel reported that another mid-stage drug, R343, failed a Phase II study for allergic rhinitis. Pfizer jettisoned that program two years ago, triggering an adamant vow from Gower that the company would go it alone. AstraZeneca followed up earlier this year with its decision to scrap its late-stage effort in rheumatoid arthritis for fostamatinib after seeing only weak results in a major Phase III effort.

In Rigel's game plan, though, every setback is grounds for fresh optimism--no matter how many investors bail.

"These events provide clarity to Rigel's pipeline. We now have a clear picture of the Phase III program for fostamatinib in ITP and we plan to start the studies early next year," said Rigel CEO James Gower. "Unfortunately, discoid lupus is a difficult indication and R333 didn't provide the benefit we had hoped. However, this frees up resources to focus on our ITP and dry eye programs." 

- here's the press release