Shares of Rigel Pharmaceuticals Inc fell sharply before markets opened yesterday and after the drug developer said partner AstraZeneca would not seek regulatory approval for the potential rheumatoid arthritis treatment fostamatinib.
AstraZeneca would also return the compound's rights to Rigel, which said it would be a couple of months before it figured out the next move regarding the potential drug.
Rigel has no approved products, and fostamatinib is its most advanced experimental drug. In 2010, the company licensed fostamatinib to one of the world's largest drug makers, British company AstraZeneca.
Rigel shares also slipped in April, following the the companies announcing mixed results from a late-stage clinical trial of fostamatinib.
South San Francisco, California based Rigel, said yesterday that additional studies of the drug also showed mixed initial results, with patients taking one of the treatment regimens in the study not showing any statistically significant difference from those taking a placebo, or fake drug.
Rigel shares were down $1.13 cents, around 25 per cent, to $3.39 yesterday in premarket trading. The stock had already fallen around 30 per cent so far this year, as of close on Monday.
Meanwhile, AstraZeneca would take a $140-million charge after deciding not to seek approval for the drug. The company said in a statement yesterday, that the pretax impairment charge to research and development expenses would occur in the second quarter.
According to industry watchers, Fostamatinib was the latest disappointment for AstraZeneca, which had had setbacks in developing treatments for depression and diabetes.
''The results of the late-stage trials did not measure up to the promising results we saw earlier in development,'' Briggs Morrison, executive vice president of AstraZeneca's global medicines development, said in the statement. ''We remain committed to the search for new treatments for patients with rheumatic and inflammatory diseases.''
AstraZeneca shares were up 0.2 per cent to 3,361 pence and were trading at 3,357 pence as of 8:19 am in London. The stock has totted up gains of 15 percent this year, valuing the company at £42 billion ($64.4 billion).
According to Morrison, the drugmaker had other experimental rheumatoid arthritis drugs in the second of three stages of human testing usually required for regulatory approval.
According to the company's forecast, operating costs for the year would show ''a slight increase'' from 2012 on a constant currency basis.