June 4 (Bloomberg) -- Rigel Pharmaceuticals Inc. fell to its lowest price ever after AstraZeneca Plc dropped development of the partners’ experimental rheumatoid arthritis injection because it showed mixed results in studies.
Rigel declined 18 percent to $3.71 at the close in New York, the lowest price since shares of the South San Francisco, California-based company began trading in November 2000.
Rights to the drug, fostamatinib, will be returned to Rigel, London-based AstraZeneca said today in a statement. AstraZeneca paid Rigel $100 million for access to the compound, and it could have been worth more with future milestone and royalty payments. Rigel has no product revenue of its own.
“The results of the late-stage trials did not measure up to the promising results we saw earlier in development,” Briggs Morrison, executive vice president of AstraZeneca’s global medicines development, said in the statement.
The arthritis drug failed to show a benefit versus Abbott Laboratories’ Humira in a mid-stage trial and had mixed results in two late-stage studies, AstraZeneca said. The U.K. drugmaker will take a $140 million pretax impairment charge in the second quarter.
Rigel discovers and develops traditional pharmaceuticals for the treatment of inflammatory and immune-system diseases such as rheumatoid arthritis.
AstraZeneca fell less than 1 percent to 3,343 pence in London. The stock had gained 29 percent in the past 12 months.
AstraZeneca has other experimental rheumatoid arthritis medicines in the second of three stages of human testing usually required for regulatory approval, Morrison said. The company reiterated its forecast for core operating costs for the year to show “a slight increase” from 2012 on a constant currency basis.
Analysts were skeptical about the drug’s chances after earlier trial data was mixed, Fabian Wenner, an analyst with Kepler Cheuvreux, said in an interview.
“It means that there’s one more dead drug leaving the pipeline,” he said.