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)