Rigel Pharmaceuticals Inc said it would stop the development of its drug to treat skin lesions in patients with discoid lupus, a chronic skin disease, after the treatment failed a mid-stage trial.
Shares of the company fell nearly 9 percent to $3.24 in premarket trading.
This is the third setback for Rigel this year and comes about two months after the company stopped the development of its asthma drug, which failed a mid-stage trial.
British drugmaker AstraZeneca stopped developing Rigel's rheumatoid arthritis treatment, fostamatinib, in June, which it licensed from Rigel in 2010.
Rigel said on Thursday the skin disorder drug, codenamed R333, failed to reduce the redness and roughness of flaky skin in patients with discoid lupus, a disease characterized by sores that can lead to scarring and hair loss.
Chief Executive Officer James Gower said the company would now focus on its drugs to treat dry-eye disease and a blood disorder, both of which are currently in mid-stage studies.
Rigel also said it met with the U.S. Food and Drug Administration to discuss fostamatimib as a treatment for a blood disorder, and would start two late-stage studies of the drug in the first half of 2014.
Shares of the company, which have fallen about 22 percent since AstraZeneca scrapped its rheumatoid arthritis drug, closed at $3.54 on Wednesday on the Nasdaq.
(Reporting By Vrinda Manocha in Bangalore; Editing by Saumyadeb Chakrabarty and Savio D'Souza)