Biotech Values

[turtlepower]

RIGL - AF had an interesting piece and I think some of his points are valid.

"Rigel Pharmaceuticals is selling more stock, but wasn't the small drug maker supposed to raise money by partnering its experimental rheumatoid arthritis drug?

Announced Wednesday after the close, Rigel said it intends to sell 6 million shares with an over-allotment option for another 900,000-shares. At Wednesday's closing price, the offering would gross just under $53 million.

Rigel ended the second quarter with about $80 million in cash, enough to get the company into the middle of next year.

The new offering will bolster the company's bank account and could help it at the negotiating table as it seeks a partner for R788, a novel pill for rheumatoid arthritis.

Or, does this new offering signal that Rigel is having trouble finding a partner interested in R788?

The drug is certainly not without controversy. An oral pill for rheumatoid arthritis could be a very big deal given that current medicines -- most notably the so-called "anti-TNFs" like Amgen's(AMGN Quote) Enbrel and Abbott Labs' Humira -- are given by injection.

But in July, Rigel reported negative results from a phase II study in which R788 failed to improve the rheumatoid arthritis of patients who had previously failed anti-TNF medicines. The setback sent Rigel shares sharply lower and raised questions about the future of the drug. Two previous phase II studies of R788 in patients who had not yet been treated with anti-TNFs yielded more positive results.

Rigel downplayed the negative results from this most recent phase II study, insisting that the primary goal was to develop R788 first as drug that would compete head to head against the anti-TNFs like Enbrel and Humira. This is where the drug has shown more promise in phase II studies.
The challenge of that approach is that Enbrel and Humira are very effective drugs with well-known safety records, and a potential partner may not feel comfortable funding trials that try to directly unseat these very well established therapies. Moreover, R788 still has unresolved safety questions, including an elevated high blood pressure risk."

http://www.thestreet.com/story/10599708/2/psst-these-drug-firms-are-getting-bought-biobuzz.html