Rigel shares rise on positive arthritis study

SOUTH SAN FRANCISCO - Shares of Rigel Pharmaceuticals Inc. continued climbing Friday, a day after the drug developer said its experimental rheumatoid arthritis treatment successfully reduced patients' symptoms.

The company announced results of a midstage clinical trial of the drug showing patients treated with drug candidate R788, or fostamatinib disodium, had lower scores on two disease scales compared with patients who received a placebo.

On Friday, Boenning & Scattergood analyst Derek Jellinek raised the company's rating to "Outperform" from "Neutral," with a price target of $20. Jellinek said the company's results suggest the drug is as effective as the blockbuster arthritis drugs already on the market, including Abbott's Humira, but with faster onset and added convenience.

Humira, Johnson & Johnson's Remicade and similar drugs are injected, whereas Rigel's treatment would be taken orally.

"Encouragingly, the compound's tolerability and safety profile, the cause of much consternation, appears manageable," wrote Jellinek, in a note to investors.

While the company will likely have to raise more capital to continue development of the drug, Jellinek said he expects shares to rise as the company seeks a partner to begin late-stage testing of the drug next year.

Shares of Rigel Pharmaceuticals Inc. rose 59 cents, or 4.4 percent, to $13.75 in midday trading.

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