(Updates stock price)Rigel Pharmaceuticals ( RIGL) said Thursday that its oral medicine, 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 these new R788 data, the South San Francisco-based drugmaker said it will seek out a corporate partner to co-develop and help finance phase III studies of R788 beginning in the first half of next year. Rigel's R788 is one of two oral drugs in mid- and late-stage clinical trials as a treatment for rheumatoid arthritis, or RA, a progressive disease in which a patient's own immune system attacks the bones and cartilage in the body's joints. The current RA treatment market totals about $14 billion in sales worldwide, with the bulk of that coming from a class of injectable drugs known as "TNF-alpha inhibitors." Rigel and Pfizer ( PFE) are locked in a race to develop the first oral pill for RA that could compete, perhaps even supplant, the current dominance of these TNF-alpha inhibitor drugs -- mainly Johnson & Johnson's ( JNJ) Remicade; Enbrel, which is sold by Amgen ( AMGN) and Wyeth ( WYE); and Abbott Labs' ( ABT) Humira. Rigel's phase II study, known as Taski2, enrolled 457 patients with RA who were treated with one of two doses of R788 or a placebo for six months. Of the patients treated with 100 mg of R788 twice a day, 66% demonstrated a so-called ACR20 score, which means their RA symptoms improved by 20%. By comparison, only 35% of patients treated with a placebo improved enough to score an ACR20 response.