* Drug failed to improve patients' lung function
* Rigel to review drug pipeline, discuss plans in
* Stock drops 17 pct to life-low
(Adds analyst comment, background, stock movement)
Aug 26 Rigel Pharmaceuticals Inc said
it will stop developing its experimental asthma drug after the
therapy failed in a mid-stage trial, sending its shares down as
much as 17 percent to a life-low.
The failure of the inhaled drug is the latest blow to the
company's pipeline after its partner AstraZeneca pulled
out of developments of their rheumatoid arthritis pill in June.
The inhaled asthma drug, R343, was being tested as a
treatment for patients with allergic asthma, but failed to meet
any of its goals, including improving lung function.
"This comes as a surprise after Phase I data demonstrated
that R343 attenuates both the early and long acting response,
which encompasses the full spectrum of current therapies,"
Leerink Swann analyst Marko Kozul wrote in a note to clients.
The drug was shown to be relatively safe and well tolerated.
Rigel said it would review its drug pipeline and discuss its
plans in the 'near-term.'
The company's pipeline now consists of therapies for lupus
and dry eye, and the rheumatoid arthritis drug, fostamatinib --
the rights to which were returned to Rigel by AstraZeneca in
June after disappointing clinical data.
"In September 2013, Rigel plans to announce salvage plans
for Fos-D (fostamatinib) for indications other than rheumatoid
arthritis," Kozul said.
However, he said there were low expectations from those
plans and also from the mid-stage data expected from the
company's lupus and lymphoma trials.
He cut his price target on the stock to $5 from $7.
Rigel shares were down 10 percent at $3.27 in morning trade
and was the top percentage loser on the Nasdaq. The stock
touched a life-low of $3 earlier in the session.
(Reporting by Esha Dey in Bangalore; Editing by Savio D'Souza)