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Greetings and welcome to Rigel Pharmaceutical's Financial Conference Call for the Second Quarter 2024. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce our first speaker, Ray Furey, Rigel's Executive Vice President, General Counsel, and Corporate Secretary. Thank you, Mr. Furey. You may begin.

Welcome to our second quarter 2024 financial results and business update conference call. The financial press release for the second quarter of 2024 was issued a short while ago and can be viewed along with the slides for this presentation in the news and events section of our investor relations site on Rigel.com. As a reminder, during today's call, we may make forward-looking statements regarding our financial outlook and our plans and timing for regulatory and product development. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent annual report on form 10-K for the year ended December 31st, 2023, and subsequent filings with the SEC including quarter two quarterly report on form 10-Q on file with the SEC. Any forward-looking statements are made only as of today's date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. At this time, I'd like to turn the call over to our President and Chief Executive Officer, Raul Rodriguez. Raul.

Thank you, Ray, and thank you, everyone, for joining today. Also with me today are Dave Santos, our Chief Commercial Officer; Lisa Rojkjaer, our Chief Medical Officer; and Dean Schorno, our Chief Financial Officer. I'll begin on slide four. I'm thrilled to introduce you to GAVRETO, the latest addition to Rigel's product portfolio. GAVRETO is an FDA-approved therapy for the treatment of red fusion positive metastatic non-small cell lung cancer and advanced or metastatic thyroid cancer that we acquired earlier this year. GAVRETO has become commercially available from Rigel on June 27th. Our patient services, field teams, and distributors work diligently to ensure a smooth transition, enabling us to provide current annually prescribed patients and their providers this important treatment option without any interruption. The addition of GAVRETO to our growing commercial portfolio, now made up of three products, supports top-line growth and leverages our existing commercial and medical affairs expertise and capabilities. Moving on to slide five. In the second quarter, we made meaningful progress towards growing the commercial side of our business. We had $33.5 million of net product sales during the quarter, an increase of 40%, over $23.9 million in the second quarter of 2023. The continued record performance of TAVALISSE and RE

Thanks, Raul. I echo Raul's excitement to be able to bring GAVRETO to cancer patients as our third marketed, targeted therapy in our commercial portfolio. The successful transition to Rigel was an important step, and we're pleased that we were able to make GAVRETO available earlier than anticipated. On the left side of slide seven, you see how our products have contributed to our growth over the last 18 months, starting at $23.8 million at the beginning of 2023, to now $33.5 million in Q2 of ‘24. TAVALISSE and RE

Thanks Dave. Moving to slide 22, we outline our strategy to continue expanding our hematology and oncology pipeline. First, we're focused on advancing our IDH1 inhibitor olutasidenib into new clinical indications. We believe olutasidenib has potential in several cancers where mutated IDH1 plays a role, such as additional AML segments, myelodysplastic syndrome, or MDS, and glioma, either as monotherapy or in combination. To further evaluate olutasidenib in these indications, we've entered into strategic development collaborations with the MD Anderson Cancer Center and the CONNECT Cancer Consortium. We're also advancing our R289, our novel IRAK1-4 inhibitor, in patients with lower-risk MDS. Enrollment continues to progress in our phase 1b trial, and we expect to have preliminary data from the first part of this trial later this year. We also remain focused on evaluating potential opportunities to enlicense or acquire products that would be a strategic fit for our portfolio. We're looking for differentiated products in hematology, oncology, or related areas. Products that are late-stage, possibly with registrational data, soon to have registrational data, or more advanced, and products that can leverage our hematology-oncology infrastructure. As demonstrated with our acquisitions of olutasidenib and pralsetinib, our goal is to continue to find assets that align with our organization, pipeline, and ability to execute. To start off on slide 23, we're very pleased to have a development collaboration with the MD Anderson Cancer Center, internationally renowned for cancer care and academic research, to advance olutasidenib more broadly into AML, MDS, and beyond. Through this partnership, olutasidenib will be evaluated in combination with other agents in newly diagnosed IDH1-mutated AML patients for the first time, as well as in other myeloid disorders. We also plan to evaluate olutasidenib as a monotherapy in lower-risk MDS and CCUS, a condition associated with an increased risk of developing MDS, and as post-transplant maintenance therapy. That's four clinical trials on the horizon, with up to $15 million paid over five years. We expect these trials to position us to conduct a subsequent registrational trial or trials. And I'm excited to share that, as Raul mentioned, the first trial under our research collaboration is now open for enrollment. On slide 24, you'll see that this is a phase 1b open-label trial that will evaluate the safety and efficacy of a triple combination regimen of IV or oral decitabine, venetoclax, and olutasidenib in patients with IDH1-mutated AML. The focus of the phase 1b part will be to find a recommended combination dose of decitabine and venetoclax that can be given in combination with olutasidenib to AML patients in phase 2. The primary objective in phase 2 is to determine the complete remission rate in newly diagnosed and relapsed refractory patients. As this study will include an oral formulation of decitabine, it has the potential to lead to an all-oral AML combination regimen, which would be an exciting development for patients that are ineligible for intensive chemotherapy. We and MD Anderson are very excited to kick off this trial and look forward to sharing updates as the study progresses. Moving to slide 25, another important development collaboration we have is with the CONNECT Consortium to conduct a phase 2 trial in patients with IDH1-mutated glioma. Gliomas account for around 30% of CNS tumors in children, adolescents, and young adults, with approximately one-third of these being high-grade gliomas, translating to approximately 800 to 1,000 new cases each year in the U.S. High-grade gliomas are a leading cause of cancer-related death in adolescents and young adults. Despite available therapies, the five-year survival of this population is less than 10%. IDH1 mutations are found in up to 36% of high-grade gliomas in adolescents and young adults. Based on results from a phase 1b clinical trial where olutasidenib was evaluated in patients with relapsed or refractory IDH1-mutated glioma, we believe that olutasidenib has potential in this indication, and olutasidenib will be included in CONNECT's Target D trial, a molecularly-guided phase 2 umbrella clinical trial for high-grade glioma. The goal of this study is to determine whether the combination of olutasidenib and temozolomide, followed by olutasidenib monotherapy, can prolong the progression-free survival of patients diagnosed with an IDH1-mutated high-grade glioma when given after radiotherapy. We anticipate that this trial will be activated in the second half of this year. We, along with CONNECT, are excited about olutasidenib's potential to provide a much-needed new treatment option to this underserved patient population. Next, I'd like to update you on progress from our own clinical development program in lower-risk MDS with our novel dual IRAK1-4 inhibitor R289. Lower-risk MDS is another area of high unmet need in a primarily elderly patient population facing progressive cytopenias, particularly anemia, resulting in transfusion dependency, an increased risk of infections, and a risk of progression to acute leukemia. Treatment options for these mostly transfusion-dependent patients are limited. In second and later lines of therapy, durable responses are difficult to attain, and toxicity becomes more of an issue. We believe that R289 has the potential to address the unmet needs in this patient population by targeting inflammatory signaling. Dysregulation of the immune and inflammatory signaling pathways is associated with MDS, with chronic stimulation of both the toll-like and IL-1 receptor pathways involving IRAK1 and IRAK4, leading to a pro-inflammatory marrow environment and cytopenias. IRAK1 and 4 activation independent of this pathway may also lead to persistent inhibition of hematopoietic cell differentiation. Co-targeting both IRAK1 and 4 may fully suppress inflammation and restore hematopoiesis in MDS. Clinically, IRAK4 inhibitors in MDS and AML have thus far only shown modest activity supporting this concept. In preclinical and healthy volunteer studies, R835, a dual IRAK1/4 inhibitor, suppressed pro-inflammatory cytokine production. R289 is an oral prodrug that is rapidly converted to R835 in the gut that is now being evaluated in lower-risk MDS. Slide 27 shows the design of our ongoing open-label phase 1b study of R289 in patients with relapsed refractory lower-risk MDS, which has a dose escalation phase with a standard 3 plus 3 design and a dose expansion cohort for confirmatory safety. The primary endpoints for this trial are safety and selection of the recommended dose for expansion, and secondary endpoints include response rates and PK. Based on emerging data from the study, we've recently included two additional cohorts with twice-daily dosing regimens for a total now of five dose levels. The study continues to progress well, and enrollment in the fourth dose level of 250 milligrams twice-daily is nearing completion. We anticipate that we will present preliminary data from the first part of this trial later this year. Lastly, on slide 28, our RIPK1 inhibitor programs are progressing well with our partner Lilly. RIPK1 is implicated in a broad range of inflammatory cellular processes and plays a key role in tumor necrosis factor signaling. Ocadusertib, our non-CNS penetrant RIPK1 inhibitor, previously referred to as R552, is currently being studied in an adaptive phase 2a, 2b clinical trial in up to 380 patients with active moderate to severe rheumatoid arthritis. Phase 2a enrollment of approximately 100 patients is advancing well with preliminary analysis of the phase 2a results anticipated within the first half of 2025. Our preclinical CNS penetrant RIPK1 inhibitor program is also progressing toward lead candidate nomination. We're excited about the progress of our programs and their broad potential in rheumatoid arthritis and other immune and CNS diseases. Now I'll pass the call to Dean to discuss our financial results for the quarter.

Thank you, Lisa. I'm on slide number 30. During the second quarter, we shipped 2,722 bottles of TAVALISSE to our specialty distributors. 2,672 bottles of TAVALISSE were shipped to patients and clinics, while 50 bottles increased the levels remaining in our distribution channels at the end of the quarter. During the second quarter, we shipped 401 bottles of RE

Thank you, Dean. To conclude, this was a very good quarter for Rigel. We've made significant progress across all areas of our hematology-oncology business, including commercial product sales and portfolio, our development pipeline, and our financial position. For each of these areas, I will summarize the quarter and share our outlook. First, we are delighted with the growth of our commercial business. We achieved record sales for both TAVALISSE and RE

Thank you. [Operator Instructions] Our first question comes from Yigal Nochomovitz with Citi. Please state your question.

Hi, great. Thank you for taking the question. I just had a few. On the IRAK1/4 dose escalation, you mentioned that you added dose levels four and five, twice daily dosing, and there was some emerging data that led to those new cohorts. Could you expand a bit on the reasons for those new cohorts?

Go ahead, Lisa.

Thanks for the question. As you know, the focus for this study is really to be able to determine the optimal dose for phase 2 expansion, and it's based, we're evaluating safety, PK, preliminary efficacy, and we want to be sure that we thoroughly explore all potential combinations or options in terms of once daily and twice daily dosing. So you'll be hopefully seeing the data at the end of the year.

Okay, thanks. And then for the MD Anderson collaboration, I noticed that several years ago, actually, also through MD Anderson, there was an investigator-sponsored study. It was featured at ASCO with ibuprofen, venetoclax, and azacitidine, which showed around a 67% response rate. Just curious just broadly speaking with this study, what is the goal in terms of what you want to see to be competitive with this triple combination both in the newly diagnosed and relapsed refractory once you get that far?

Yeah, again, thanks for the question. Well, as you know, olutasidenib and ivosidenib are different combinations. Olutasidenib is also a selective IDH1 inhibitor that has a different size and potentially different binding properties than ivosidenib, and so we're evaluating it in its own right. I mean, we're encouraged by the preliminary data that have been presented before, but we also have seen potentially higher efficacy in some of the patient populations in our HEIM-101 study, so we'd like to continue to evaluate olutasidenib also in this setting and also particularly potentially with an oral decitabine regimen. As I mentioned, that could lead to a novel oral triplet therapy, which would be really nice for something, nice to have for particularly these elderly patients that are not eligible for intensive therapies.

Okay, thanks. And then just one more on the commercial picture. I'm just curious, Dean and Raul, are you planning, now that you have a fairly established commercial portfolio, is there a point where you'd be-- and you're getting to break even, which is great, is there a point where you would start to feel comfortable with providing some sort of revenue guidance for the company in the coming years?

Thanks for the question. The business is solidifying, and a couple new additions to the business, RE

Okay, thank you.

No, one thing you mentioned there that I think is important to highlight is that, really we're at a point where we're reaching financial break-even, that is net income break-even or close to it. That's a really great achievement for the business. It allows us to, in the future, generate cash, and that cash we hope to deploy to generating additional clinical trials for Aluda [ph] and R289, in particular, where we see great opportunities, and we'd like to share that with you in our investor base in the future, but not that distant a future.

Thanks, Raul.

Thank you. And our next question comes from Kristen Kluska with Cantor. Please state your question.

Hi, good afternoon. Congrats on a great quarter here. So, for TAVALISSE quarter over quarter, you continue to attribute some of the growth to new patient starts. Can you give us a sense of what the key drivers for these new patient starts? Are they patients that aren't responding to other treatments? Is it physicians are treating some patients with TAVALISSE, getting comfortable prescribing others? And are you seeing earlier line usage in that mix as well?

Dave, would you tackle that?

Sure. Kristen, thanks for the question. As we talked about last quarter, I didn't give you the numbers, but clearly I showed that our new patient starts were increasing, and on a quarterly basis, if you look at the slides from last quarter. That is what we're focused on. We are focused on growing both our breadth of prescribers, in other words, folks who still, after all these years, haven't tried TAVALISSE yet, yet they see ITP patients, and then secondly, our depth within prescribers. I think if you look at our business, we're getting both. New prescribers still make up a pretty significant number of our new patient starts. And in terms of line of therapy, the second part of your question, I shared that a couple quarters ago about how we, in IRAK data were getting more earlier line patients. We continue to look at that. It's a subset of patients that are out there, but it continues to look very good for earlier line patients. I think what you're seeing is both of these things. New patients keep coming in. Their carryover keeps coming in month after month, quarter after quarter, and our sales keep growing. That's what we're going to continue doing. I can tell you, I've now been here for four years. This is something we've been focused on, especially during the last couple of years. I think that's when you've seen our growth, particularly post the COVID timeframe.

Okay. Thanks for that. You've clearly built a sales force that can work on all three drugs, but how should we think about how you're going to balance financial discipline with potential new indications or strategies? Should we expect more deals similar to what you did with Forma and Blueprint that are more sparing to the balance sheet initially and gives you time to really generate the sales there? Thanks again.

Thank you, Kristen. I appreciate the question. These two products have really contributed tremendously to our portfolio, and their effect is that they provide incremental sales, but importantly, because they leverage the current existing organization, a good deal of the sales post cost of goods does drop down to the bottom line once the product is in our portfolio and fully launched. That's a tremendous value in terms of the financial impact they have. We look to continue to do additional deals going forward. I can't give you specific timeframes for a deal, other than to say it will be in HEMOC. That's what we're focused on. It'll be a product that leverages our current capabilities, and it'll be a product that will be near term onto the market because that's where we get the most value, a lot like these two products. I think we are constantly evaluating out there what is available and where we can use our capabilities to add value to products that we may bring in later. I think they provide tremendous growth opportunity. Incremental to that will be in the longer, longer term as we do additional trials in other areas. We hope to have the same organization sell R289 or other indications for RE

Raul, I just might add that through this time we've also focused efforts both in the community and institutional segments. So we've got different teams out there. But I just want to point out because I think your questions are really good one, Kristen. Twenty months ago, we had one product. For the last year and a half, we've had two, and we've really learned a lot about managing a couple of different products in the portfolio. I think we put all of that to great use in these last four months. I mean, over four months, they just learned about this less than five months ago. Here we are booking sales in June what we think is a very strong transition with our third product. I think our team-- what I want to really talk about here is just our team's ability to execute on different priorities has really, really matured and solidified over time. That's why we have confidence that we can bring in even a more complex product portfolio that our team will execute on.

Thanks so much.

[Operator Instructions] Our next question comes from Farzin Haque with Jefferies. Please state your question.

There's a storm on the East Coast.

We'll move on to the next question. And our next question comes from Joe Pantginis with H.C. Wainwright. Please state your question.

Everybody, good afternoon. Thanks for taking the question. And, yeah, it's coming down real hard right now. So some breaking news that I want to ask about and the impact on olutasidenib. So before the market closed today, the FDA approved voracitinib for glioma. So I wanted to ask with regard to potential impact on your study plans as well as potential differentiation.

Sure, I'll ask Lisa and maybe Dave to comment on that question.

Yeah, thanks for the question, Joe. So, yeah, so voracitinib, as you mentioned, got approved in patients with grade 2 glioma as in patients that have only received surgery. As you know, voracitinib, it's a dual IDH1-2 inhibitor. They've positioned it currently very early in treatment. We are already, through our collaboration with CONNECT, we have an ongoing, it's going to be a global study, positioned in the maintenance setting following radiotherapy. So patients would have received surgery, radiation, and then they're going to receive temozolomide in combination with olutasidenib for a year and then a second year looking at a PFS primary endpoint. And aside from that, we're also looking at other potential settings, potentially a bit later in line than the voracitinib. From our perspective, it hasn't really interfered with our evaluation.

Yeah, and I would just say, Joe, that voracitinib's data and voracitinib's approval are really great for us. I mean, it proves that IDH plays a key role in gliomas, and these are very difficult to treat patients and tumors. This is exactly why the World Health Organization changed to, when you look at grade 3 and grade 4 gliomas, IDH mutations are key to that. And I think this is proof in principle that IDH inhibitors work, and that's why we're really excited about to have olutasidenib in our portfolio.

And needless to say, Joe, I think there's opportunities beyond the voracitinib approval and label that I think we're exploring, and there are obviously differences between that molecule and our molecule that I think, as we explore that further, we'll highlight for you.

Great. Thank you, guys.

Thank you. And there are no further questions at this time. I would like to turn the floor back over to Mr. Raul Rodriguez for closing comments.

Well, thank you, everyone. In closing, I'd like to thank you for joining us on this call and for your continued interest in Rigel and our progress. And as always, I'd like to thank our employees for their continued commitment to improving the lives of patients, as every single day counts, and every single day, we have to make their lives better as well. So thank you for that, and look forward to updating you on our future progress on other calls. Have a great day, everyone.