Rigel Pharmaceuticals (NASDAQ:RIGL) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Summary
Rigel Pharmaceuticals reported a strong quarter with $54.9 million in net product sales, marking a 26% growth year-over-year, driven by products like Tavalisse and Res Lydia, which grew by 31% each.
The company is focusing on expanding access to its products outside the US and pursuing regulatory approvals in new markets, enhancing its strategic collaborations and licensing agreements.
Future outlook remains positive with expected total revenue for 2026 ranging from $275 to $290 million, alongside ambitions to maintain financial discipline and continue product momentum.
Operational highlights include a strategic focus on the clinical development of R289, a dual IRAC1 and IRAC4 inhibitor, with promising preliminary efficacy in lower risk MDS patients.
Management highlighted the termination of a collaboration with Lilly, which does not impact Rigel Pharmaceuticals' financial stability or revenue guidance, signaling a strategic refocusing on core areas.
Full Transcript
Dave
Which primarily affected January and February volumes. We observed improving demand in March which showed stronger volume across our product portfolio. Specifically on TAVALISSE, I'm pleased to report another strong quarter in which we generated $37.3 million in net product sales, an increase of 31% compared to the first quarter of 2025. This growth was driven by both stronger demand and a favorable gross to net versus last year. As a reminder, in 2025 we experienced a one time influx of patients due to the elimination of the coverage gap and improved affordability for Medicare patients. For Gavreto we delivered $9.6 million in net product sales, an increase of 7% compared to the first quarter of 2025. Gavreto has become a stable contributing product in our portfolio and for Rezlidya we reported $8 million in net product sales, an increase of 31% compared to the prior year period. We saw continued building of breadth and depth in academic accounts and remain focused on growing use in the community. With new Venetoclax based therapy data showing superiority to intensive therapy in the frontline setting, we expect that Rezlidya's consistent efficacy in the post Venetoclax setting to become even more relevant and improve adoption in the community. Overall, we have begun 2026 with significant 26% growth versus Q1 of 2025. With our continued focus on TAVALISSE, new patient starts and improved adoption of Resilydia, particularly in the community. Our commercial team looks forward to driving continued momentum for our products in 2026. My sincere thanks to the entire team for all their hard work moving to Slide 12. We generated $3.9 million in revenues from collaborations in the first quarter driven by the availability of TAVALISSE in global markets. TAVALISSE is commercially available in Europe under the brand name TAVALISSE, in Japan and South Korea and Asia, and in Canada and Israel via our partners Griffels, Kisei and Medisot. In addition, our partners continue to pursue regulatory approvals for TAVALISSE in new markets and we continue to work on expanding access to our products in markets outside of the US to for Rezlidya. In 2024 we expanded our relationship with Kisei to include several countries in Asia for all potential indications, and we entered into an exclusive license agreement with Dr. Reddy's for all potential indications throughout Dr. Reddy's territories. These partners are now in the process of advancing Rezlidya in preparation for future potentially potential regulatory submissions. We are pleased that access to our products is expanding outside the US and with that I'll now pass the call over to Lisa to provide an update on our development pipeline.
Lisa
Lisa thanks Dave. I'll now provide an update on our progress over the first quarter and plans for the remainder of the year. I'm on slide 14. Our hematology and Oncology pipeline focus is the clinical development of R289, our potent and selective dual IRAC1 and IRAC4 inhibitor and lower risk myelodysplastic syndrome or MDS, and the expansion of alutacitinib beyond relapsed or refractory IDH1 mutated AML. In collaboration with academic partners, our phase 1b study of R289 in patients with relapsed or refractory lower risk MDS is progressing well. Shortly I'll provide an update on the study as well as our planned next steps for R289. As far as aletecitinib development is concerned, our strategic collaborations continue to advance into additional therapeutic areas. M.D. anderson is evaluating alutacitinib in several IDH1 mutation positive indications including AML, MDS and CMML. In addition, alutacitinib is also being evaluated as a maintenance therapy and as a co targeted therapy in AML. The five MD Anderson studies are active and enrolling Connect phase 2 Target D study evaluating a lutacitinib in combination with temozolomide followed by aletacitinib monotherapy as maintenance treatment in newly diagnosed pediatric and young adult patients with IDH1 mutation. Positive high grade glioma is also active and enrolling patients. Lastly, we're partnering with the National Institutes of Health and National Cancer Institute's Myelomatch Precision Medicine Trial Trial Initiative. The planned study will evaluate alutacitinib in first line IDH1 mutated AML and MDS. We're excited about alutacitinib's potential to provide a new treatment option in these underserved patient populations and look forward to seeing the data that these studies generate in the future. Now I will discuss R289, our novel dual IRAC1 and IRAC4 inhibitors. I'm on slide 16. I'd like to remind you about the treatment landscape for lower risk mds. MDS is a clonal disorder of hematopoietic stem cells leading to dysplasia and ineffective hematopoiesis. The main consequences for patients are anemia and transfusion dependence which adversely impact their quality of life. In addition, infections, iron overload from transfusions and subsequent organ dysfunction all negatively impact the patient therapies used in the upfront setting include erythropoiesis stimulating agents or ESAs if patients are eligible or luspatercept. Louspatercept and imetelstat are also approved for ESA failure transfusion dependent lower risk MDS patients. Finally, hypomethylating agents or HMAs are also approved. However, the percentage of patients achieving transfusion independence is low and with 8 week transfusion independence rates approaching 40% with luspatercept and imetelstat. There is still a need for safe, effective therapies for previously treated transfusion dependent lower risk MDS patients that are relapsed, refractory to or ineligible for ESAs. On slide 17 is the value proposition of R289 and lower risk MDs which we believe can undress the unmet need of particularly for transfusion dependent patients. There are about 12,000 previously treated lower risk MDS patients in the US that could benefit from a novel therapy like R289. This regulation of inflammatory signaling is key to the pathogenesis of lower risk MDS and IRAC 1 and 4 mediate this process. Blocking both IRAC 1 and 4 may suppress marrow inflammation and leukemia stem and progenitor cell function and restore normal hematopoiesis. R835, the active moiety of R289 blocks toll like receptor and IL1 receptor signaling in vitro and was active in various preclinical models of inflammation. Clinical proof of concept of this anti inflammatory effect came from a healthy volunteer study in which R835 markedly suppressed LPS induced cytokine release compared to placebo. As a reminder, R289 which is currently being evaluated in the clinic is the oral prodrug that is rapid converted to R835 in the gut from the FDA. R289 has both fast track designation for the treatment of patients with previously treated transfusion dependent lower risk MDS and orphan drug designation for mds. Both designations underscore the Agency's interest in this rare disease, the unmet need of the patient population and the Agency's willingness to collaborate with Rigel in the development of R289. R289 has thus far demonstrated a promising clinical profile with both encouraging preliminary safety and efficacy in our phase 1b study which was presented at ASH this past December. Now on slide 18 you can see the design of our multicenter open label phase 1b study in patients with relapsed refractory lower risk MDs. The phase 1b study evaluates the safety, tolerability, PK or pharmacokinetics and preliminary efficacy of R289 in patients with lower risk MDS and is also designed to select a dose for future studies. The dose escalation phase evaluated six different R289 dosing regimens that are administered once or twice daily using a modified 3:3 design. In the dose expansion part of the study, which is currently enrolling up to 40 transfusion dependent relapsed refractory lower risk MDS patients are being randomized to rece R289 doses of either 500mg once or twice daily in order to select the recommended Phase 2 dose for future clinical studies. On slide 19 you'll see highlights from the dose escalation phase data that were presented at the ASH meeting in December. I encourage you to review the corporate presentation in the Investor section of our website, which includes the full data set. 33 patients were enrolled. The median age was 75 and the median number of prior therapies was 3, with around 70% of the patients having received prior luspatercept and HMAs. In addition, the majority of the patients had a high baseline transfusion burden. This elderly heavily pretreated patient population is truly representative of the low risk MDS patient population with the highest unmet medical need. Overall, R289 was generally well tolerated with a low incidence of grade 3 or 4 cytopenias and infections. There was one dose limiting toxicity reported, a grade 3, 4 AST ALT increase at the 750mg daily dose level, and no evidence of dose dependent toxicity across the other dose groups. The swimmer plot you see shows an overview of transfusion events by dose group starting with the lowest dose group, 250mg daily at the top, red cell transfusions occurring over 16 weeks prior to start of R289 are shown to the left of the colored bars establishing the baseline transfusion frequency for each patient. Of 18 evaluable patients receiving doses of 500 milligrams daily or higher, six patients, or 33% achieved Red Cell Transfusion Independence or RBC-TI lasting for eight weeks or longer. In four patients, RBC-TI lasted for more than 16 weeks and for three patients for more than six months. The median duration of RBC-TI was around 23 weeks, ranging from nine weeks to more than 24 months. Also, the median time to onset of RBC-TI was about two months. While this is a small data set, we're encouraged by these results given the highly refractory nature of these patients. In summary, R289 was generally well tolerated with an encouraging safety profile and promising preliminary efficacy in an elderly heavily pretreated transfusion dependent lower risk MDS patient population. The next steps for our R289 clinical development program are on slide 20. We plan to complete enrollment of the dose expansion phase of the study and select the recommended phase 2 dose for future studies in the second half of this year. We anticipate sharing an update on the study including top line data from the dose expansion phase by the end of 2026. Once the recommended Phase 2 dose has been selected, we will evaluate R289 in a cohort of less heavily pretreated patients who are relapsed, refractory 2 or ineligible for ESAs in the same study. Upon completion of the phase 1b study, we plan to follow up with the FDA to discuss a potential registration study which will potentially initiate in 2027. With its mechanism of action, we believe that R289 has potential and other indications where the pro inflammatory cascade plays a role and we'll provide more details as our plans progress. Now I'll pass the call to Dean to discuss our results for the quarter.
Dean
Dean thank you Lisa I'm on Slide 22. We reported net product sales of $54.9 million for the first quarter, a growth of 26% year over year, including TAVALISSE net product sales of $37.3 million, a growth of 31% year over year Gabretto net product sales of $9.6 million, a growth of 7% year over year. Lastly, we reported Rezlidya net product sales of $8 million, a growth of 31% year over year. Our net product sales were recorded net of estimated discounts, chargebacks, rebates, returns, copay assistance and other allowances of $20.5 million. We also reported $3.9 million in contract revenues for the first quarter, primarily consisting of $1.8 million of revenue from Griffels related to earned royalties, $1.8 million of revenues from TSAV related to the delivery of drug supplies and $300,000 of revenue from medicine related to delivery of drug supply and earned royalties. This brings our total revenue for the first quarter to $58.8 million. Moving to Slide 23 for the first quarter of 2026, our cost of product sales was approximately $4.6 million. Total cost and expenses were $46.9 million compared to $40.6 million for the same period of 2025. The increase in costs and expenses was primarily due to increased research and development costs driven by the timing of clinical activities related to R289 as well as increased commercial related expenses and personnel related costs. Income before income taxes was $11.7 million. We reported net income of $8.7 million for the first quarter compared to net income of $11.4 million in the same period in 2025. We ended the quarter with cash cash equivalents and short term investments of $146.7 million compared to $155 million as of the end of 2025. Turning to our financial outlook for 2026, we continue to expect total revenue in the range of approximately 275 to 290 million dollars. This includes our expectation of approximately $255 to 265 million dollars in net product sales and 20 to 25 million dollars of contract revenues. We also anticipate reporting positive net income for the full year while funding existing and new clinical development opportunities. Before I turn the call back over to Raul, I'd like to also describe two recent updates. In mid April we received notification from Lilly that they will terminate the collaboration with Rigel which included the development of ocaDesertive, previously R552. The RIP K1 asset was being evaluated in a phase two study in adult patients with moderately to severely active rheumatoid arthritis. The termination will become effective on June 15, 2026. As a reminder, the CNS portion of the collaboration was previously terminated in November of 2025. We expect to regain rights to the program upon termination. Let me remind you that our revenue guidance does not include any assumed revenues from Lilly Collaboration. In addition, the termination does not impact our ability to finance our operations. Finally, earlier today we restructured our debt agreement with Mid Cap Financial to replace our existing term loan credit facility with a revolving credit facility. Rigel repaid the remaining outstanding term loan balance of $40 million and now has a revolving credit facility for $40 million with an option to increase it to $60 million subject to customary conditions. We've drawn down $8 million on the new revolving credit facility. We believe this agreement provides us with a cost efficient source of flexible financing into the future. With that, I'd like to turn the call back over to Raoul.
Raul Rodriguez
Thank you Dean. Moving on to slide 24 to wrap up our key priorities for the remainder of 2026 are clear. Continue to grow our commercial business. Pursue in license opportunities to further expand our portfolio. Advance our development pipeline with the focus on R289 in lower risk MDs and potentially other indications and maintain financial discipline as we work to deliver yet another year of top line growth and positive net income. We are proud of the transformational growth that Rigel has achieved over the past several years. We are excited to continue executing on our four strategic objectives to drive long term value creation in the years ahead. With that I would like to turn the call over to your questions and operator. We are ready.
Operator
Thank you. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the start keys. One moment please while we pull four questions. Our first question comes from the comes from the line of IGAL with Citigroup. Please proceed with your question.
Caroline
Hi, this is Caroline and I'm for your gall. Thanks for taking our question and congrats on the quarter. Can you please talk about your plans for the RIPK1 inhibitor now and maybe comment on Lilly's rationale for terminating the agreement? Thanks.
Dave
Sure. Thank you. I could answer that question and thank you for asking that because it gives me a chance to thank our colleagues at Lilly for the collaborative spirit and diligence that they shared throughout our collaboration. We put the collaboration, let me put it though, in the framework of what Rigel is and how it fits within Rigel. Rigel is a hematology oncology focused company. We have a growing commercial business, we are profitable and we have a pipeline in hematology oncology with tremendous opportunities. We did this deal with RIPK1 with Lilly because the primary focus of RIPK1 is in immunology and CNS diseases and those we felt were best suited to a larger pharma company like Lilly that had interest in those areas and the resources to explore the opportunity there. For us though, it was really a financial upside that this provided and really not a strategic focus of ours. So it suited us well in terms of having a partnership. That was the rationale. Now getting it back. I think we'll assess what to do as a next step. It's not a key focus of this company and we'll decide what we do as a next step going forward in the near future. But again, thank you for the partnership and our colleagues at Lilly over these years.
Operator
Thanks. Thank you. Our next question comes from the line of Joe Panginis with HC Wainwright Please proceed with your questions everybody.
Joe Panginis
Good afternoon. Thanks for taking the question. So first I just wanted to check on your Riz Lydia comment. Obviously the blocking and tackling continues with the academic centers, but with regard to growing the community centers, obviously it's educating them. In the post Venn setting as you described. Are there any other drivers or key factors that are. I don't want to call it rate limiting steps, but things that you feel need additional work?
Dave
I think you've got it there. Joe, this is Dave, by the way. Sorry. I just wanted to reiterate that the post vent setting is really important to community clinicians because that is their standard of care in the frontline setting. And so helping them to become aware of our data in the post-venetoclax setting is compelling to them. So that's number one. I do think in terms of challenges in the community, you'll have to recognize that community physicians do not treat AML every day. And in fact they don't see IDH1 mutated AML very often at all, even less than the AML they see because IDH1 is a subset of that. And so force of habit is to go to something they know. And as you know, the other agent in the class has been out for a long time. And so it is a force of habit that we need to overcome. And the key is getting the right message to them at the right time. And that's when they have an IDH1 applicable patient. And that's what we've spent a lot of time trying to figure out. How do we help our field team get to accounts, community accounts in particular, at the right time with that message. And we've done a lot of work around that, not only using diagnostic data, but even like combing through medical data, patient journey data, to really understand when that patient may occur. So that's what we provide our field with, that's what they target with, and that's when they go and deliver the appropriate Rezlidya message. So those are the challenges we face. But you know, like you said, it's really simple if you can get them the compelling message at the right time when they're treating an IDH1 patient, the data itself is very compelling and can hopefully get them to use Rezlidya.
Joe Panginis
That's very helpful, thank you very much. And maybe on R289 and obviously this is looking forward into the future a little bit. So it's encouraging and nice that we're seeing rapid and rapid expansion into the dose expansion study, no pun intended. Again, Looking to get the RP2D and as we look towards data later this year, presumably Ash, I'll say, you know, what would you consider, how would you portray to the street? What would be the important benchmarks or signals you would want to see to then be able to go to the FDA for a potential registrational study design?
Lisa
Lisa, go ahead. If you would comment Lisa, and I can add a comment after that. Okay, sure. Thanks for the question, Joe. I think it's an excellent question. I think that you know, when you look at the current approved therapies, these are approved in patients that are transfusion dependent, either post ESA or ESA naive and we see that, you know, the eight week RBC-TI rates are only around 38 to 40%. Now we are enrolling a population of much more heavily pre treated. We've got patients that have received prior imetelstat and luspatercept and HMAs and thus far we're very pleased with the activity that we're seeing. So I think that when we consider the difference in the patient populations, I think, you know, if we can see more, if we see consistent safety is what we've seen thus far and you know, additional evidence of activity, I think we're going to be really pleased with that. In addition, you may recall that we saw data showing that R289 also improves anemia in the patients in our study, which is not always a given. So we were very pleased with that as well.
Raul Rodriguez
So Joe, suffice it to say I think there's several places we could slot in with this product and there are very large segments across the board. I think it's exciting to have a novel agent that's completely different than what's out there. That's a very important feature. An oral agent, easy to take on a more chronically basis. And I think one of several positions within that landscape that Lisa discussed I think would be transformational for us and we'll wait to see the data. The early data being, as Lisa said, very encouraging. But we look to see that in much larger numbers at the end of this year so we can make that final assessment as to how to proceed.
Joe Panginis
Great. Appreciate the color.
Operator
Thank you. Our next question comes from the line of Kristin Kluska with Cantor Fitzgerald. Please proceed with your question.
Aya
Hi, this is Aya and I'm Kristin's line. Thank you for taking the question. We on R289, what do you see as an acceptable safety profile here and how will that play into the dose selection for the phase two?
Lisa
Lisa? Yeah. Thanks. Thanks for the question. I think that what we're seeing thus far is very encouraging compared to the currently approved agents. And by that I mean we're with an elderly patient population, median age of 75, heavily pretreated. We're seeing a very low incidence of cytopenias and infections. And I think also as Raul mentioned, in combination with the fact that we have an oral agent, I think this is very, very encouraging. So we're very pleased with that and we hope that we continue to see that as we enroll more patients into the study.
Aya
Thank you for the question.
Operator
Thank you. Our next question comes from the line of Farzin Jeffries. Please proceed with your questions.
Amin
Hi, this is Amin, an for Farzin. Thank you for taking our questions. A couple of questions from us for Gavreto Revenue. It seems like that it's plateauing in one Q. What has been the feedback from the sales team and prescribers? Any color on new patient starts versus switches and what's the persistent rate so far? And then I have a follow up for 289
Dave
if you want to try to answer there. Gabretto Revenue plateau in any color? Yeah. Was it Amin? I'm sorry, I know you're on for Farison, but I didn't catch your name. I'm sorry. That's correct. Amin. Okay, sorry. Amin. Yeah, we don't on the calls generally provide details on specific new patient starts or persistency trends. But I'll just say it this way, what we got in Gavreto was an asset that you have a very targeted market with high awareness of using a targeted agent. And particularly over the last couple years, especially in lung cancer, there's been a large amount of data out there to clinicians that really reinforce the use of a targeted agent in lung cancer. And that's across EGFR or certainly in rett where it's shown in the NCCN guidelines that you should be using these. So these patients are routinely tested, much more so in the academic setting in the community. But when they do that, clinicians generally know that there are two available RET inhibitors and they choose either Gavreto or the other available RETT inhibitor. And you know, it's been our experience that just keeping the awareness out there for rep and the availability of Gevretto has helped to ensure our share in that marketplace. So I think what you're seeing is, you're right, we saw growth last year, but you have to understand some of our growth was or a significant part of our growth was having a full year versus a half a year of sales. And what you're seeing now is a product that's, you know, producing on the order of $10 million a quarter, which I think is a great thing for us. But we also want to make sure that we're not expending too much effort to try to grow incrementally on that when we have better opportunities, particularly with Rezlidya and TAVALISSE. So we're focused on the areas that we can grow and, excuse me, incremental revenue the most. And that's what we are doing with Tavalis and Reslince.
Amin
You got a 289 question as well? Yes, for 289. Just quickly, are there specific. Well, if you can actually comment on the patient baseline profile being enrolled right now relative to those escalation cohorts.
Lisa
So, as I mentioned, we anticipate providing an update on the study at the end of the year. So those results will, you know, hopefully we'll be able to do that and those results will be available later.
Dave
Yeah, we really can't comment so much on the study that's currently enrolling the expansion. What we can say is that the earlier study, the, the dose escalation phase was elderly, heavily pretreated, highly refractory type of patients. Whether that evolves or not, now that we have some data out there showing that it may have some benefit is something we don't know yet and haven't shared.
Operator
Thank you. No further questions at this time. I'd like to turn the floor back over to Mr. Raul Rodriguez for closing comments.
Raul Rodriguez
Thank you so much for that. I appreciate all the questions and for your continued interest in Rigel and what we're doing. Before we leave, I'd like to thank our employees for their dedication and commitment. 2026 is off to a solid start. We're pleased with the progress we've made across the businesses and we look forward to updating you on future calls. So thank you very much. Have a good evening.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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