Shares of Rigel Pharmaceuticals, Inc. (RIGL) have been on a downward trend ever since the company announced last month that it was discontinuing the development of its pipeline candidate R333. The company decided to terminate the development of the candidate after its disappointing performance in a phase II study. The candidate was being developed for treating active skin lesions in patients suffering from discoid lupus erythematosus.
Rigel Pharma reported narrower than expected loss in the third quarter of 2013 earlier in the month. However, quarterly results failed to reverse the declining trend and shares have continued to fall.
Rigel Pharma’s third-quarter 2013 loss (excluding restructuring costs) of 25 cents per share was narrower than the Zacks Consensus Estimate of a loss of 29 cents as well as the year-ago loss of 36 cents. Lower operating costs were primarily responsible for the narrower loss.
Rigel Pharma did not generate any revenues in the third quarter of 2013. The company did not generate revenues in the year ago quarter as well.
Research and development expenses came in at $17.6 million in the third quarter of 2013, down 12.9%. General and administrative expenses decreased 13% to $4.7 million in the third quarter of 2013. The reduction in operating costs was due to a decline in share-based compensation expenses.
We remind investors that during the third quarter of 2013, Rigel Pharma trimmed its work force by approximately 18% (30 positions) in order to utilize its resources more efficiently.
Rigel Pharma was also in the news when AstraZeneca (AZN) returned the former the rights to pipeline candidate, fostamatinib. AstraZeneca took this decision following the below par results of the candidate in the rheumatoid arthritis indication. Rigel Pharma intends to continue developing fostamatinib for treating patients suffering from immune thrombocytopenic purpura.
The company intends to commence 2 phase III studies on the candidate in the first half of next year. Top line data from the studies is expected in 2015.
Rigel Pharma currently carries a Zacks Rank #3 (Hold). At present, companies like Actelion Ltd. (ALIOF) and AMAG Pharmaceuticals Inc. (AMAG) look more attractive with a Zacks Rank #1 (Strong Buy).
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