Espicom View: This follows shortly on from AstraZeneca's decision to return rights to the SYK inhibitor drug, fostamatinib, to Rigel Pharmaceuticals in H1 2013, on the back of mixed Phase III results in rheumatoid arthritis. At that time, Espicom speculated on the difficulties that Rigel will face if trying to continue with fostamatinib and noted that the company may concentrate on its earlier stage pipeline. The current failure of the SYK inhibitor, R343, potentially leaves only two drugs in Rigel's clinical pipeline, one for discoid lupus and the other for dry eye syndrome; two indications that even combined, have a much smaller market than allergic asthma, and the company's future looks bleak.
R343, Rigel Pharmaceuticals' inhaled spleen tyrosine kinase (SYK) inhibitor being evaluated as a potential therapeutic for patients with allergic asthma, has failed to meet the primary or secondary endpoints in a recently completed Phase II study. The primary endpoint was the change in pre-bronchodilator FEV 1 from baseline to dosing completion at week eight, comparing active doses with placebo. R343 was shown to be relatively safe and well tolerated at both doses. In light of these overall findings, the company has decided not to pursue this indication with R343.
James M Gower, chairman and CEO of Rigel noted that this result was unexpected, based on the collection of data that the company had previously seen with R343 in this therapeutic area. According to Gower, Rigel is 'fortunate to have a robust pipeline of clinical and preclinical programs to focus on that includes fostamatinib, R333 for discoid lupus erythematosus and R348 for dry eye'. He noted that Rigel will be reviewing its portfolio and will discuss these plans in the near-term. Of note, Rigel had previously partnered with Pfizer on the development of R343, but the bigger company pulled out of this collaboration in 2011 as a result of its decision to exit the allergy and respiratory therapeutic area within research and development, leaving Rigel to fund the compound's development.
In June, mixed top-line results were reported from OSKIRA (Oral SYK Inhibition in Rheumatoid Arthritis)-2 and OSKIRA-3, the remaining pivotal Phase III trials investigating fostamatinib disodium, the first oral SYK inhibitor in development for rheumatoid arthritis (RA). Based on the totality of results from the OSKIRA Phase III programme, including the data previously reported from OSKIRA-1, AstraZeneca decided not to proceed with regulatory filings for fostamatinib and to return the rights to the compound to Rigel. At that time, Rigel noted that it would decide whether to continue the ongoing studies and pursue regulatory filings. Shares in Rigel dropped by 18% following the release of this news, closing at US$4.53 and US$3.71 on June 3 and 4 respectively. The company's share prices during 2013 had never really recovered from the 34.6% drop experienced after the release of mixed data from the Phase IIb OSKIRA-IV monotherapy study in December 2012. In June, Espicom speculated that the FDA is unlikely to accept the mixed Phase III data, and even if approval was gained, Rigel would be trying to compete with pharma giants AbbVie and Pfizer, already marketing respectively the blockbuster, Humira, and the recently-approved first-in-class JAK inhibitor, Xeljanz, for RA. We believed that the company would be unable to attract another partner for fostamatinib, and would be more likely to cut its losses with this drug and concentrate on its earlier-stage pipeline.
The damage of R343 failing may be too much for Rigel to come back from, as although it has R333 and R348 in clinical development, discoid lupus is estimated to affect around 300,000 Americans and dry eye syndrome approximately 5mn, versus the 15mn Americans estimated by the Asthma and Allergy Foundation of America to have allergic asthma. Rigel has no marketed drugs, and currently, its only potential sources of revenue are up-front payments, R&D contingent payments and royalty payments pursuant to its collaboration arrangements. For Q2 2013, Rigel reported a net loss of US$22.8mn, compared to a net loss of US$24.7mn in the same period of 2012. For the six months ended June 30 2013, Rigel reported a net loss of US$48.3mn compared to a net loss of US$47.9mn for the same period of 2012.
As of June 30, Rigel had cash, cash equivalents and available for sale securities of US$251.6mn, and expected to end 2013 with cash and investments in excess of US$200.0mn. The company anticipated that this would be sufficient to fund operations into 2015. Also in its Q2 filing, Rigel noted that it expects to report Phase II data with R333 in discoid lupus in the autumn. All eyes will be on these results to see if Rigel can turn around its failing fortunes.