Why Rigel Is Worth A Look Despite Failed Study In IgAN

Summary

• Rigel suffered a setback as its lead candidate failed to achieve statistical significance in a proof-of-concept study in IgAN.
• The company now has a PDUFA coming up.
• Recent pullback has reduced the downside risk, making Rigel worth a look.

In February, I had discussed Rigel Pharmaceuticals (NASDAQ:RIGL) and its upcoming catalyst, the FDA's decision on New Drug Application (NDA) for Tavalisse (fostamatinib disodium) in ITP. I had noted back then that chances of approval at the April 17th PDUFA look slim but a sharp pullback on an unfavorable decision would make RIGL worth a look. Since then, RIGL shares have actually fallen quite sharply. First, it was the sell-off in the broader market that hurt RIGL shares. Next, it was the failure of proof-of-concept Phase II study of fostamatinib in patients with IgA nephropathy (IgAN). Despite the setback, I believe that RIGL is worth a look after the recent sell-off.

Upcoming PDUFA

The FDA will take a decision on Rigel's NDA for Tavalisse (fostamatinib disodium) in ITP. The NDA submission is based on data from three studies, two of which (047 and 048) were identical. The data from these studies though was underwhelming. In one of the studies, 18% of the 76 patients receiving fostamatinib achieved a stable platelet response compared to none receiving a placebo control (p=0.0261). This study achieved statistical significance, however, the second study did not. In the second study, the fostamatinib arm once again achieved 18% response rate but there one patient in the placebo arm who achieved a stable platelet response.

Rigel still went ahead and submitted the NDA as the combined data from both these studies were statistically significant. However, the combined data is underwhelming compared to the data for the two approved drugs in ITP. Interestingly, both these drugs were approved almost a decade ago. I discussed the data for both these drugs in my February article. Moreover, the approved drugs have a better safety profile. The better safety profile, more than efficacy, is the reason I continue to believe that RIGL has a slim chance of approval at the PDUFA on April 17th. Even if the FDA approves the drug, I believe Tavalisse would have limited commercial potential.

But I Am Not Writing Off Rigel

While we are two weeks away from the major catalyst for Rigel, shares have already suffered, initially because of the sell-off in the broader market and on Tuesday because fostamatinib failed in a proof-of-concept study in another indication.

The Phase II study was evaluating fostamatinib in patients with IgA nephropathy (IgAN), an orphan autoimmune disease of the kidneys. The trial failed to achieve statistical significance of mean change in proteinuria comparing fostamatinib dose groups to placebo controls in all patients studied.

There was some silver lining though. In a pre-specified subgroup analysis of patients, those that had greater than 1 gram/day of proteinuria at baseline, the initial data showed a greater reduction in proteinuria in fostamatinib-treated patients relative to placebo patients. It must be noted though that there was only a positive trend and the data itself was not statistically significant.

Press Release, Rigel Pharmaceuticals

The interesting thing to note though was that the response was dose-dependent. Based on this, I believe there is still some hope for RIGL in IgAN, an area where there is still significant unmet need. On the basis of this and the recent pullback in RIGL, I believe the stock is now worth a look. While this is an entirely speculative play, the downside risk from hereon is not significant. The upside though could be substantial, especially if the April 17th PDUFA springs a surprise.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[mghmd]

The ITP candidates for the drug have a serious condition and will have failed at least 2 or more therapies. There has been experience with >5000 patient years with the drug, which is reasonably safe. As a hematologist, I would be very surprised if the FDA fails to approve. The real promise of Tavalese is for a related condition, autoimmune hemolytic anemia, for which there is no approved drug. Ph2 studies have been quite +. There is also still hope for the IgA
nephropathy patients with more pronounced disease. Marketing this drug will be very easy. I think it is a strong speculation.

[Seekingß]

This stock could trade in the low 1s if this study fails. Buying at $3/sh instead of $4 a share is not going to make me feel better about buying here.