Greetings, and welcome to Rigel Pharmaceuticals Financial Conference Call for the Third Quarter 2021. 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, Dolly Vance, who is Rigel’s Executive Vice President, Corporate Affairs and General Counsel. Thank you, Ms. Vance. You may begin.

Welcome to our third quarter 2021 financial results and business update conference call. The financial press release for the third quarter was issued a short while ago and can be viewed along with the accompanying slides for this presentation in the News & Events section of our Investor Relations page on our website, www.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 31, 2020 and subsequent filings with the SEC, including our Q3 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 would like to turn the call over to our CEO, Raul Rodriguez.

Thank you, Dolly, and thank you, everyone, for joining our third quarter 2021 conference call. Also with me today are Wolfgang Dummer, our Chief Medical Officer; Dave Santos, our Chief Commercial Officer; and Dean Schorno, our CFO. Now, beginning on slide 5. During the third quarter, we made significant progress that sets us up for success in each of our key value drivers, now and into 2022. On this call, we’ll tell you about growing ITP sales, advancing our clinical program in autoimmune hemolytic anemia, treating hospitalized COVID-19 patients, as well as preparing our earlier stage pipeline programs for mid-stage clinical trials. Today, let me start with our second key value driver, warm autoimmune hemolytic anemia or warm AIHA. Warm AIHA, in warm AIHA, we achieved an important milestone this quarter. I’m happy to announce that the pivotal Phase 3 forward trial is now fully enrolled. This brings us closer to delivering robust evidence for TAVALISSE as potentially new first-in-class medicine for the treatment of patients with warm AIHA. Dave will provide an overview of the opportunity in warm AIHA and Wolfgang will discuss what we expect to see from the forward trial and provide insights into why this is an important step forward for patients suffering from this disease. In the past quarter, we completed the expansion of our hem-onc commercial organization. We added 16 new sales reps, who are now fully trained, out in the field and are looking to make an impact, starting in this quarter. We have an incredibly capable and experienced organization, and now one with even greater reach. Dave will speak about the caliber of this team he’s assembled, and how this positions us to drive further awareness of TAVALISSE in ITP, and prepares us for a potential opportunity and warm autoimmune hemolytic anemia.…

Thanks very much, Raul. I’d like to now move to slide 7, where you’ll see our FDA approved indication, which is for adult patients with chronic immune thrombocytopenia, or cITP, who’ve had an insufficient response to a previous treatment. Moving to slide 8. We continued to grow demand for TAVALISSE in Q3, again, reaching over 1,700 total bottles shipped to patients and clinics. This represented 5% growth over our demand volume during Q3 of 2020. We were encouraged by the new patient starting therapy in Q3, and believe that will translate into higher demand volume as we move through this quarter. Despite growing demand, our total bottle volume decreased, resulting in net sales of $16 million for Q3. The reason for this volume decline is seen on slide 9. As you can see, our demand grew by 5% to 1,710 bottles, while total bottles decreased by 4% to 1,657 bottles. This decline was due to the impact of inventory, or bottles remaining in the distribution channel. Last year, we built up 102 bottles, and this year we declined by 53 bottles. While inventory impacted our total bottles and its sales, we remain confident that we can continue to grow demand through accelerating our awareness among prescribers, continuing to increase the number of new patients starting on TAVALISSE and maximizing the benefits to those patients by ensuring they get timely refills. To achieve those growth objectives, we continue to focus on expanding our reach to customers. Moving to slide 10. We are pleased to report that our interactions with customers continued a strong growth trend during Q3, even though there were persisting COVID challenges relative to Q2, based on the Delta surge. We saw more than a 30% increase in in-person interactions versus Q2 and virtual interactions still represented 40% of…

Thank you, Dave. As mentioned, enrollment for our Phase 3 AIHA trial has been completed. So, I’d like to take a moment to reorient everyone with the program and make clear why we are excited about the opportunity. Continuing with slide 15, warm autoimmune hemolytic anemia is a serious rare disorder with approximately 10,000 to 13,000 patients in the U.S., who are not responding adequately to steroids and need additional lines of therapy. Currently, there are no drugs approved by FDA to treat this disease. Right now, rituximab is often used off label as a second line treatment but profound B cell depletion for long periods of time is an issue and excludes the drug as a long-term disease management option. Splenectomy, another common treatment measure is an invasive procedure and irreversibly removes the spleen from patients with unknown long-term consequences for those patients. Hence an effective, well-tolerated immune modulator with long-term safety data that is approved and can be easily prescribed is clearly an unmet medical need. An indication of TAVALISSE for AIHA would be very synergistic to the already existing approval for ITP because the same physicians who prescribe ITP are also treating AIHA. That means, they are already familiar with TAVALISSE and aware of its safety and efficacy profile. The mechanism of action of TAVALISSE in warm AIHA is very similar to the MoA in ITP, and so the strong rationale that TAVALISSE should work in warm AIHA as well. Moreover, we do have encouraging Phase 2 data from a previous study that make us even more optimistic for a positive Phase 3 trial readout. Slide 16. This Phase 2 open label study included adults with warm AIHA who had hemoglobin levels of less than 10 grams per deciliter, and who had failed at least one prior…

Thank you, Wolfgang. I’m on Slide 26. For the third quarter of 2021, we shipped 1,657 bottles to our specialty distributors, resulting in $20.5 million of gross product sales. 1,710 of those bottles were shipped to patients and clinics, while 908 bottles remained in our distribution channels at the end of the quarter. We reported net product sales in TAVALISSE of $16 million, a 2% decrease compared to the third quarter of 2020. Our net product sales from TAVALISSE were recorded net of estimated discounts, chargebacks, rebates, returns, copay assistance and other allowances of $4.5 million. Our gross to net adjustment was approximately 22.1% of gross product sales. Let me briefly provide a bit more color around this year-over-year decrease in our net product sales. While we expect our channel inventory to generally track our sales growth, there are numerous factors that will create fluctuations that we’re likely to see from time to time, and we saw this quarter. As Dave pointed out, we saw a 5% year-over-year increase during the quarter in bottles shipped to patients and clinics while we saw a sequential decrease in our channel inventory. If you were to remove the effects of channel inventory fluctuation, we would have seen year-over-year net product sales growth of approximately 8%. This net revenue growth rate is higher than the demand growth rate, as a result of net price increases. Before we move on from net product sales, let me review our expectations for the fourth quarter. With our sales force expansion now complete, we expect to see growth in bottles shipped to patients and clinics in the fourth quarter. Incrementally, we expect our gross to net adjustment to be approximately 23% to 24% in the fourth quarter of 2021. Moving on to slide 27. In addition to net…

Thank you, Dean. In 2021, we set ourselves up for a number of exciting catalysts, and we believe 2022 will be a transformative year for the Company. I’m now on slide 28. Despite the challenges of the pandemic, we are regaining a good trajectory in growing ITP sales as access to physicians improves for both patients and our newly expanded field organization. Our enrollment in Phase 3 with warm autoimmune hemolytic anemia sets us up for data in mid-2022. If the data is positive, we will file for a new indication for TAVALISSE, a potentially new first-in-class medicine for the treatment of patients with warm autoimmune hemolytic anemia. In COVID-19, we made important steps forward this year that provided us with clinical data that illustrates the potential of TAVALISSE in treating hospitalized COVID patients. We expect pivotal data in 2022 from our Phase 3 trial and we will file an EUA, if the data is positive. And lastly, we are advancing two of our pipeline candidates into mid-stage trials. We are initiating a Phase 1b/2 study with a wholly-owned IRAK1/4 molecule, R289 in low-risk MDS. We’ll also be starting a Phase 2 study in an autoimmune indication with our RIP1 inhibitor with our partner, Lilly. As we look forward to 2022, we are very excited about these significant clinical milestones and the potential they have for transforming our business. Thank you again for your interest in this -- progress in this quarter. And we will now turn the call over to your questions.

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

Hi. This is Carly on for Yigal. Thanks so much for taking our question. We had two questions on AIHA. First, can you talk about the bar you need to meet on the primary endpoint of durable hemoglobin response rate compared to placebo for the Phase 3 trial to be positive? And then, second, is there any reason to expect differences in patient baseline characteristics between the Phase 2 study and the Phase 3?

Thank you, Carly. Wolfgang, would you like to take those? First question on the bar?

Yes. So, we looked at the Phase 2 data, and I told you that if you applied the primary endpoint criteria, we would have missed that in 27% of patients. So, we modeled according to that. And with 90 patients, we are in a position where the trial is still statistically significant, if there were three placebo patients who meet that bar. Now, that is as I told you quite unlikely because the goal is extremely high. So, this is very high bar, if the primary endpoint helps us in that respect, because the placebo response rate is expected to be very low. In particular, the plus 2 criterion as KOLs will tell you is extremely unlikely to be met by a placebo patient. So, I do think we are adequately powered to demonstrate that effect. Also, you’re asking how this may be compared to, -- how does the Phase 3 population compared to the Phase 2 population? I think, it gives a reason to additional optimism because the Phase 2 population was recruited in the United States only. There were very severe patients, so on average, they had AIHA for about six years and most of the patients had greater than one previous treatment. So, they were very treatment experienced. Now, our Phase 3 trial is global, in several countries, where, for example, the access to rituximab may not be as easy as it is in the U.S. So, we might get somewhat earlier patient than we had in Phase 2. So, I think the Phase 3 population might look even a little bit more promising than the Phase 2 dataset.

Great. That’s very helpful. And then, we just had one on ITP. I guess, putting aside sort of the negative impact from the inventory drawdown this quarter, it seemed like the growth in battles shipped to patients and clinics was a bit lighter than your prior expectations for a number closer to what was reported in the second quarter. So, just curious if you could provide any sort of additional perspective on what drove a bit of deceleration there?

I think, I’ll ask Dave to answer that. I think the bottles -- slight growth in demand this quarter over last quarter. But Dave, maybe you can comment.

Yes. Thanks very much, Carly, for the question. And, as we moved through Q3, we saw a nice positive trend in not only those demand bottles, but in new patient starts on TAVLESSE. And as Raul said, they were among the highest levels we’ve seen since the pandemic began, which includes last quarter. And we believe truly that our increased ability to engage customers this quarter contributed to that. And that’s why we are so encouraged by the new patients last quarter. And remember, when patients start in a quarter, you’re only going to get so many bottles out of them, depending on when they start, particularly those that start in the back half of the quarter. So, again, it’s hard because I, of course, just like everyone else would love to see more increased demand than we had over the 5%. But to us, the metric we’re watching is how many patients are starting on TAVALISSE. And that’s the metric that at least for us, during the pandemic, this is a positive quarter. So, we do expect that as we move forward and those patients stay on therapy, demand should grow and that sale should follow that. So, I hope that helps.

If I could add something as well to that. We expanded the size of the organization, the sales organization substantially this past quarter, adding 16 -- 40% increase in the number. And really, like I said, really fantastic people joining the Company. And really, what we find is that this is a promotion sensitive category that you really need to have a cadence in the volume of your message. And having these new reps on board and frankly, more opening up really will allow us to tell that story very effectively. So, we’re excited about that as well.

Our next question comes from Gary Nachman with BMO Capital Markets.

First on TAVALISSE for ITP. So, have the inventory levels normalized after the first three quarters here, so that sales should reflect the increased demand that you guys are expecting in the fourth quarter? I think, you said you expect higher bottles shipped. I just want to make sure that you don’t think -- so that means that inventory should be moving in the right direction for you into the next quarter. And then, maybe just talk about the new sales force and what sort of promotional efforts they’re going to be doing? Are they going to be talking about the five year platelet data? At what point you think that might be resonating with physicians? When should we really see an inflection in the volumes from that? And for warm AIHA since there’s a lot of overlap and synergies, would you expect to increase the size of the sales force for that indication, or you think with this newly increased sales force that would be sufficient? Thank you.

Thank you, Gary. I’ll ask my colleague, Dave, to comment on those in the sequence, ITP, normalized inventory next quarter, the new sales force, what are they focusing on and when we’ll seen an inflection, and warm autoimmune hemolytic anemia, do we expect an increase in sales force for that?

I guess, first of all on the inventory, I just like to remind everyone that if you look at our distribution channel, we hold inventory at both our distributors and at the specialty pharmacies. And you have to think of it as each of those entities maintaining dynamic inventory levels, based on what they’re shipping to patients and clinics. So, where we end the quarter is a point in time that can change up or down based on their inventories. And in Q4 and Q2 it was up, and in Q1 and Q3 it was down relative to demand. So, that’s why we tend to focus on demand more. We believe that if we continue to grow new prescribers, new patients and are successful at keeping them on therapy, our demand will grow and corresponding inventory throughout the channel will grow to supply that demand, ultimately growing our total bottles and our net sales. So, that’s kind of in a nutshell what happened. It’s the point in time it went down this quarter. But yes, of course, if we can continue to increase demand, we expect inventory levels to follow. Your second question on the new sales force, I guess, I’d first like to say that we were tremendously pleased at the job our sales management team did in recruiting, outstanding hem-onc experienced sales talent to the team. And as I said, they not only know hem, they knew the customers in their territory. So, we do think we’ll continue to grow interactions in Q4 and increase our reach to more prescribers as we move into ‘22, but it’ll take some time to leverage those opportunities fully into what we ultimately want, right, new prescribers, new patients and then ultimately accelerated demand growth. And I think there are lots of…

Our next question comes from Joe Pantginis with H.C. Wainwright.

Couple of questions. I guess, I’d like to focus first on a mechanistic question for TAVLESSE. During Wolfgang’s prepared comments obviously mentioned a late responder in the wAIHA Phase 2 study that could have increased the response rate. And I think also if you look at the ITP data in the past, there were also some potential late responders. So, I’m just curious if you can just remind us or discuss a little bit of the underlying MoA that could lead to some of these late responders?

Wolfgang, would you like to take that?

Yes. Sure. Thank you for your question. I will say, I personally don’t really think that the underlying MoA would be responsible for a late responder. I can tell you that there are some patients who get better from baseline, say they started 7.8 or 8. And then, they do improve but bounce around at like 9.5 and 9.7. And that is already an improvement. They just haven’t met that one threshold yet. And some of the patients still have a chance to meet that threshold, that sort of arbitrary threshold a little bit later. So, I think that’s the key reason why there might be some patients who respond later. It’s not that they have some sort of a different underlying mechanism of disease or something like that. It just takes a little longer for them to respond.

And I guess, I don’t want to belabor the questions on the decrease in bottles and inventory. So, I’m just curious, I’m going to approach it from this standpoint, either for the bottles or your overall business at Rigel. Number one, has any -- have any of the issues with regard to global supply chain issues impacted even the shipping of the bottles or what have you? And secondly, I know during Dave’s prepared comments -- I just wanted to see if there was any further color on one of the comments with regard to wanting to continue timely refills, and if that has any impact with regard to supply chains, or any of the bottles in inventory?

Thank you, Joe. Dave, do you want to comment on that?

Yes, Raul. From my standpoint, on the persistency piece that you’re asking about, I’ll take the second question first. Throughout the pandemic, we’ve been able to maintain that four months persistency in the mid-50s. So, I do think that that’s what we’re talking about. We want to make sure that patients get their refills on time, and that they stay on the product and get benefits as long as possible. So, that’s to your second question. But, there have been absolutely no issues with supply. And that’s not a driver of inventory issues in the third quarter. This is simply how -- again, you’re talking about specialty pharmacies, and you’re talking about our distributors, that all maintain dynamic inventory levels based on how much product they’re shipping out, so -- and frankly, kind of where we are in the quarter.

Got it. Nice to hear, and thanks for the color. Sorry. Go ahead, Raul.

No, just a comment. We have ample inventories in-house of our product and in the U.S. So, we don’t think that the global supply chain issues that you read about will have any meaningful impact on those levels in the U.S. for quite some time.

Our next question comes from Kristen Kluska with Cantor Fitzgerald.

Just to comment on ASH. This is really one of the first big conferences that you’ll be attending since you first presented some of these post-hoc analysis data two years ago at the conference. So, I was just wondering how this format change might help you in terms of your conversations and helping to further get the message out.

Thank you, Kristen. Good question. Dave?

Sure. Thanks for the question, Kristen. And that’s why we are really doing a lot of preparation for ASH and invested the resources to have a really nice booth there close to the entrance to ensure that the customers that are there, we’re able to engage them and tell them exactly that story, boast about our post-hoc analysis and the higher response rates in earlier lines. And secondly, that you not only have a chance for a response, particularly in earlier line patients, but it will be a durable response. And so, we will be out there talking about that message in the booth. And certainly, we’d get a lot of engagement planned with folks that we’ve already confirmed are going to be on-site. So, we’ll be attacking this from many different angles. And again, we do look at it as a great sign. That is the largest hematology conference, and it is being held live in Atlanta. So, we are investing the time, the resources and the people to make sure it’s worked fully. And we know, it’s likely not going to be where it was in 2019, but we’re going to be giving the effort to get the messages that we have out there. And we really will be talking about that five-year data, the BJH article and the lineup therapy responses as well as the numerous case studies that we have. All of those panels have been built in our booth, and our team is going to be prepared to drive that message.

Okay. Thank you for that. And as you begin to move the expanded sales force for TAVLESSE into the field, are you encountering any specific geographic regions where it’s easier to get face to face interactions with prescribers due to COVID-19? And then, going forward, how do you anticipate the ongoing case numbers might affect this strategy?

I appreciate the question. And there certainly are regional differences. I mean, we -- and it changes based on searches. And it can change rapidly in one direction or the other. So, we don’t -- we can’t control that but we -- again, that’s why I think it’s important for me to have shown you that not only our in-person interactions are going up, but our virtual interactions are remaining at about 40% of our total interaction. So, just like ASH, whether it’s virtual or whether it’s live, we’re going to do our best to send a message. But the more live, the better. And, obviously, that’s why we expanded. We do see that regardless of the pandemic, we’re going to see more patients treated. And I think that’s what we’re seeing now. And we need to get the message out there. So, I think our strategy is good, both in the near-term and the longer term for sure, as I mentioned before about potentially having a launch with warm autoimmune hemolytic anemia in the future.

[Operator Instructions] Our next question comes from Eun Yang with Jefferies.

Hi. This is Nalin [ph] on for Eun. Thank you very much for taking the questions. I have two questions, please. Number one, could you please comment on any off label use of TAVALISSE in COVID-19? And number two, aside from the COVID impacts? Why did enrollment take so long for Phase 3 for wAIHA? Given that there is no approved therapy out there, does it have anything to do with the entry criteria? Thank you very much.

Dave, maybe you want to comment on the first one and then Wolfgang and I can comment on the second.

Yes, Raul. And I appreciate the question. Obviously, with COVID-19, we do not have any approval or an EUA. So, there is little awareness, except those who are intimately familiar and have read the publication. So, we got very limited use of TAVALISSE or fostamatinib in COVID-19. That’s what I can share for now.

Just to add to that, the publication was available this quarter, which is very good. And obviously, we’re very restrictive in terms of what we can do based on that. And on the second question, maybe Wolfgang, aside from COVID-19, why did it take so long to enroll the Phase 3 study in the AIHA?

Well, first of all, again, we’re very happy to announce that we’re done with enrollment. So, that’s good news for today. I understand for sure your question, why did it take so long? Well, you have to really account for several factors. Initially, of course, you have to need to get the numbers of sites up. But then most importantly, last year, during the height of the pandemic, there was almost no study, not oncology related or COVID-19 related that could be enrolled at a regular pace. And that has to do with distance rules and private practices, and then patients are being scared. Why would I -- maybe I can wait, maybe I stay on steroids a little bit longer until I can get safely to the to the doctor’s office. I think that is really the key reason why it was just sluggish to find all these patients. I am personally glad that we came out of this crisis. And we got it over the finish line. And I’m looking forward to unblinding and get meaningful Phase 3 data. But, that’s -- I think that’s my most likely explanation.

I think, it was -- this was a very important indication for us. We -- just to note, to enroll 90 patients, we opened about 90 sites across the world, that’s how important it was for us. And we were very fortunate, many of our competitors put their trials on hold or stopped them entirely during this period. And we were able to enroll up, be it some months very few patients, but we continue to make progress and are the first to have a Phase 3 trial in warm autoimmune hemolytic anemia fully enrolled. In fact, the only trial that has some Phase 2 data that we think is really, really compelling. So, it really is -- it was an effort to get it done during these during these times. And it will be a tribute to the determination because there are patients out there and we know that they may during COVID not be seeking new treatments but they are out there. And once COVID subsides they will be in need of new treatments, and I think we will have one for them, now with an approval from the FDA, hopefully.

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

Thank you so much. I appreciate that. In closing, I’d like to thank everyone for joining us on this call and your continued interest in Rigel. I’d also like to thank our employees for their commitment to improving the lives of patients, a commitment that now stretches beyond hem-onc conditions and rare immune conditions, but also now includes COVID-19. We look forward to updating you on our progress on all these programs in future calls, and in other press releases throughout the next year. And thank you so much for your participation. Have a great day.

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.