Rigel Rises on Narrower Q4 Loss - Analyst Blog

Shares of  Rigel Pharmaceuticals, Inc. (RIGL), which had gained 6% immediately after the announcement of fourth quarter 2013 results, jumped a further 10.8% in the subsequent trading session. Overall, Rigel Pharma shares are up 17.5% since the earnings release on Mar 4, before the commencement of trading on that day.

Rigel Pharma's fourth-quarter 2013 loss of 19 cents per share was narrower than the Zacks Consensus Estimate of a loss of 24 cents as well as the year-ago loss of 30 cents per share. Top line improvement and lower operating costs were responsible for the narrower loss.

Rigel Pharma generated revenues of $5.8 million in the fourth quarter of 2013, beating the Zacks Consensus Estimate of $2 million. Revenues comprised solely contract revenues. These came from AstraZeneca (AZN) as a result of the company's continued development of the candidate R256 for asthma. The company did not generate any revenues in the year-ago quarter.

Research and development (R&D) expenses came in at $18 million in the fourth quarter of 2013, down 8.7% year over year. R&D expenses dropped due to the completion of the phase II study on asthma candidate R343 in Aug 2013. In addition, stock-based and bonus compensation expenses fell too. General and administrative expenses decreased 20.6% year over year to $4.6 million in the reported quarter.

AstraZenecahas returned Rigel Pharma the rights to the pipeline candidate, fostamatinib. AstraZeneca came to this decision following the below par results of the candidate in the rheumatoid arthritis indication. Rigel Pharma intends to continue developing fostamatinib for treating patients suffering from immune thrombocytopenic purpura (ITP).

The company intends to commence a phase III study on the candidate in mid-2014 for ITP and a phase II study for IgA nephropathy in the first half of 2014.

Another candidate, R348, is currently in a phase II study for the treatment of dry eye. Results are expected in the second half of this year. We expect investor focus to remain on the company's pipeline development efforts going forward.

Annual Results

Rigel Pharma reported a 2013 loss (excluding restructuring costs) of $1.00 per share, narrower than the Zacks Consensus Estimate of a loss of $1.05 and the 2012 loss of $1.32 per share.

Full year revenues were $7.2 million, beating the Zacks Consensus Estimate of $3 million. Revenues in 2012 were $2.3 million.

Rigel Pharma currently carries a Zacks Rank #3 (Hold). Investors looking for better-ranked stocks in the medical sector may consider companies like Gilead Sciences Inc. (GILD) and Alkermes (ALKS). Both have a Zacks Rank #1 (Strong Buy).