UPDATE: Piper Jaffray Downgrades Rigel Pharmaceuticals on the Return of Fostamatinib

In a report published on Tuesday, Piper Jaffray analyst Ian Somaiya downgraded Rigel Pharmaceuticals RIGL to Neutral and lowered the price target from $9.00 to $6.00.

In the report, Piper Jaffray stated, "Loss of commercial partner and reduced commercial potential moves us to sidelines. We continue to see fostamatinib as an approvable drug. However, we believe AZ's decision to return rights reflects the competitive nature of the RA market and the challenges fostamatinib would likely face gaining sufficient share to justify the ~$300mn in remaining milestone payments and 25-30% royalty on sales. While fostamatinib showed statistical significance in ACR20 reductions compared to placebo in both doses in OSKIRA-2, only the 100mg BID dose showed significance in OSKIRA-3 (Exhibit 1). Importantly, on a placebo adjusted basis, we believe fostamatinib came up short, with adjusted ACR20 scores of ~10-15% compared to 20%+ for Pfizer's Xeljanz, a likely driver of AZ's decision in our opinion. From a safety perspective, fostamatinib was well tolerated with no new safety signals emerging, one positive sign given lingering concerns for potential hypertension and CV events."

Rigel Pharmaceuticals closed on Monday at $4.53.