Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is grabbing headlines at the end of this week in the biotechnology space with news that the company’s website was displaying a positive development related update.

On further inspection, however, and subsequent to a secondary update from the company, the development proved inaccurate (or at least that’s what management is saying) and this has added a large degree of uncertainty as to where things go from here from a market capitalization perspective into the equation.

So, what happened?

Well, as is generally always the case with publicly traded healthcare companies, Rigel operates and maintains its own website but maintains an external host to oversee and control its investor relations site.

It is on this investor relations site that there seems to be some kind of mistake.

Specifically, on Thursday, the investor relations website displayed information stating that the company’s NDA for a drug called fostamatinib, which is Rigel’s lead development asset and one that the company is trying to get approved in a target indication of the treatment of adult patients with chronic immune thrombocytopenia (ITP), had been approved by the US Food and Drug Administration (FDA).

A drug approval is a major catalyst, if not the primary catalyst, at this end of the biotechnology sector and, as would generally be expected on the back of such a catalyst coming in as positive, Rigel picked up a considerable run in its market capitalization on the news.

Almost immediately, however, certain red flags were raised.

For news like this to hit press by way of an investor relations website ahead of any press releases or FDA announcement is unusual, or even unheard-of.

That was red flag one.

Red flag two came from the fact that the PD UFA date for this drug isn’t scheduled until April 17, 2018, on next Tuesday, meaning that if the FDA had approved the drug it would’ve done so five days early which, while not unheard-of, is unusual.

And these red flags proved valid pretty quickly.

Shortly after the news filtered through to markets, Rigel management released a statement suggesting that inaccurate information had been displayed due to an error by the external host of its investor relations website.

In other words, the company told markets that the approval hadn’t actually been valid and that we would, in fact, have to wait until next Tuesday to glean any real insight into the FDA’s interpretation of the data put in front of it as part of the NDA in question.

So how did all this look on the charts?

The company opened the session on Thursday in and around $3.30 a share and, by midafternoon on the same day, was trading for $4.21 – a close to 30% increase during the session. By the close of play on Thursday, Rigel shares had dipped from these highs to trade at $3.91, representing a nearly 20% premium on the day.

This premium comes despite the company having reported that the FDA approval was invalid and that the news was inaccurate.

So where do we go from here?

Well, this is where things get interesting.

That the company has invalidated the approval doesn’t seem to have done much to dampen sentiment, suggesting that markets still firmly believe there is a good chance that this drug will pick up approval when the actual readout hits press on Tuesday.

Chances are, then, that we will see a continuation of the upward momentum heading into the close of play this week and, further, as the bell rings for a fresh week of trading on Monday next week.

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