The past two weeks were anything but easy for Rigel’s (RIGL) shareholders, who saw their shares crash more than 50%. Rigel started 2008 on the right foot after a 200% jump in a single day last December, following impressive data for the company’s flagship product, R788, in Rheumatoid arthritis (RA) patients. Less than one year after, Rigel has given back all its gains, following the disclosure of additional data from the same trial.
R788 was perceived as such a promising drug because it represented a highly anticipated paradigm shift in the treatment of RA: An oral drug that may be as effective as the current standard of care biologic agents. RA is a severe auto-immune disease, where the patient’s immune system attacks the body’s tissues, leading to a gradual destruction of the joints, which results in severe pains and disabilities. The rate of disease progression varies from patient to patient, but in the vast majority of cases, the disease is incurable, progressing over the patient’s lifetime. Therefore, despite the relatively low incidence of the disease, it has a high prevalence, affecting 1.3 million patients in the United States alone. Since there is no cure for the disease, patients must be treated indefinitely in order to delay disease progression and reduce its debilitating symptoms. This makes RA one of the most lucrative indications in the pharmaceutical industry, estimated at more than $10 billion annually.
The field of RA
therapy saw great advances in the past decade, with multiple new drugs
that managed to treat the disease itself and not just its symptoms. The
most important and widely used agents for RA are TNF-inhibitors. These
are biologic drugs that bind and neutralize the effect of one of the
most important factors responsible for the disease- tumor necrosis
factor (TNF). There are currently three marketed TNF-inhibitors:
Wyeth’s (WYE) and Amgen’s (AMGN) Enbrel, Johnson and Johnson’s (JNJ) Remicade and Abbott Laboratories’ (ABT) Humira. The three drugs generate annual sales of $5B, $4B and $3B, respectively, most of which are derived from the RA market.
Despite their ability
to induce long lasting responses in approximately two thirds of
patients, TNF inhibitors have three main issues. The first issue, which
is still controversial due to contradicting evidence from different
studies, has to do with potential side effects. These side effects
include increased risk for severe infections and cancer, but even if
there is an effect, it is regarded by many as insignificant.
