Rigel May Get $1.245B in Drug License Pact

SOUTH SAN FRANCISCO, Calif. (TheStreet) -- Rigel Pharmaceuticals(RIGL) could receive $1.245 billion in a license agreement for its rheumatoid arthritis drug with AstraZeneca(AZN).

The agreement is for Rigel's R788, which is known chemically as fostamatinib disodium.

AstraZeneca will make an upfront payment to Rigel of $100 million, with up to an additional $345 million payable if certain milestones are achieved. Rigel also will be eligible to receive up to an additional $800 million of specified sales-related milestone payments as well as "significant stepped double-digit royalties on net sales worldwide," the companies said in a statement Tuesday.

In July, Rigel said R788 significantly improved the symptoms of rheumatoid arthritis patients in a phase II study compared with a placebo, but as in previous studies of the drug high blood pressure emerged as a leading side effect.

Based on the data, Rigel said then it would seek out a corporate partner to co-develop and help finance phase III studies of R788.

AstraZeneca said Tuesday it would design a global phase III program for the drug, which it anticipates will begin in the second half of 2010. Its goal is to file a new drug application with the Food and Drug Administration and the European Medicines Agency in 2013.

-- Reported by Joseph Woelfel in New York.

Follow TheStreet.com on Twitter and become a fan on Facebook.

>To order reprints of this article, click here: Reprints