Rigel Attacks Rheumatoid Arthritis with AstraZeneca (RIGL, AZN)
Rigel Pharmaceuticals (NASDAQ: RIGL) may be the biotech winner this Tuesday. The company has signed a pact with AstraZeneca (NYSE: AZN) which could ultimately bring in about $1.25 billion if all targets are met. This pact is a licensing agreement for Rigel’s rheumatoid arthritis drug R788 or fostamatinib disodium.
Rigel said last year that its R788 significantly improved rheumatoid arthritis symptoms in patients in a phase II study and Rigel has been seeking a development partner to help finance phase III studies.
AstraZeneca will design a global phase III study for the RA drug and believes that the study will be initiated in the second half of this year. We will double-check the goal dates here because the new drug application target date appears to be 2013 for the FDA and European Medicines Agency.
AstraZeneca is making an upfront payment of $100 million as the first part of the pact. There is also an additional amount which can go up to an additional $345 million if certain milestones are achieved. But the big kicker here for Rigel comes in the form of up to an additional $800 million if specific sales are achieved as well as significant stepped double-digit royalties on global sales.
Rigel had a market cap of about $488 million based on a close of $9.43 on Friday. The company effectively has no sales and its September-2009 balance sheet lists approximately $156 million in cash and short-term investments with effectively no considerable long-term debt.
Rigel closed at $9.43 on Friday and we have shares trading up 6% at $10.00 ahead of the opening bell. Its shares have traded in a range of $4.19 to $14.75 over the last 52-weeks.
JON C. OGG
FEBRUARY 16, 2010
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