Shares of Rigel> ( RIGL) fell Tuesday after the small drug maker announced plans to cut its workforce and delay partnership plans for a key rheumatoid arthritis drug until more data can be collected. Rigel, based in South San Francisco, said it was eliminating 36 jobs, or about 20% of the company's workforce, in order to preserve cash and re-focus on its most important clinical development programs. The company also said efforts to seek a partner for R788, an experimental pill for rheumatoid arthritis, would be put on hold until ongoing phase IIb studies are completed in July and August. "We have decided that postponing the partnership for R788, pending the forthcoming clinical trial results, will better position us to secure an optimal partnership arrangement for R788," said James Gower, Rigel's chairman and CEO, in a statement. Rigel shares fell 9.3% to close at $6.50. Last October, Rigel shares dipped when data from a phase IIa study of R788 in rheumatoid arthritis patients revealed some safety concerns as well as geographic disparities that, overall, raised the risk profile of the drug. At that time, some analysts questioned whether Rigel would be forced to delay a promised partnership deal for the drug until more data could be collected. There's been excitement over R788 because it is one of the few experimental rheumatoid arthritis drugs in development that can be taken by patients in a convenient pill form. All current treatments for the disease require patients to take injections. Incyte> ( INCY) and Pfizer> ( PFE), are also working on oral drugs for rheumatoid arthritis.
Rigel said it had $134.5 million in cash at the end of 2008, which the company believes is sufficient to last through the middle of 2010.