Greetings, and welcome to Rigel Pharmaceuticals Financial Conference Call for the Third Quarter of 2023. At this time, all participants are in 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 third quarter 2023 financial results and business update conference call. The financial press release for the third quarter 2023 was issued a short while ago and can be viewed along with the slides of 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 31, 2022, and subsequent filings with the SEC, including our third quarter 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 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; and Dean Schorno, our Chief Financial Officer. Let me begin on slide 4. The third quarter was an important one for Rigel, one in which we made meaningful progress on growing the sales of our commercial products. This growth, coupled with tight financial discipline allowed us to make important progress on our plans to reach financial breakeven. We review the components of this during today's presentation. Regarding product sales. In the third quarter, we delivered a robust performance for our first approved product, TAVALISSE, for adult chronic ITP. Demand bottles shipped to patients and clinics reached a new quarterly record since launch. We grew net product sales by 15% quarter-over-quarter and 27% year-over-year. We are pleased with the continued momentum that our team is generating for TAVALISSE. For our second approved product, REZLIDHIA for adult relapsed or refractory mutant IDH1 positive AML, we saw continued growth in bottles shipped to patients in clinics in the third quarter as we increased awareness of the product through our new institutional sales team. Just last week, we announced several poster presentations at the ASH meeting, which include new supportive data on REZLIDHIA in various mutant IDH1 relapsed or refractory AML patient populations. We look forward to engaging with the medical community at the ASH meeting to further raise awareness and highlight our products. Shifting to our development programs. Here, we're extremely focused and cost-efficient in our efforts. With R289, our IRAK1/4 inhibitor in Phase 1b for lower-risk MDS, we are currently enrolling in the third cohort, and we expect initial results from all dose groups in mid-2024. We continue to evaluate clinical development options to expand our pipeline, particularly with olutasidenib. We believe olutasidenib has potential in a variety of settings in AML and in additional cancers where mutant IDH1 plays a role. We plan to be modest. We plan that modest focused investments in our heme/onc opportunities will be funded from our own internal business. I will touch on this more later in the presentation. In addition, we continue to assess in-license opportunities for late-stage hematology oncology products to broaden our pipeline that are synergistic and further leverage our in-house capabilities. In summary, this past quarter was important, as we made good progress on our plan to reach financial breakeven. This is based on strong growth from our commercial business and a financial expense discipline. Now let us review this in more detail, starting with Dave on our commercial business. Dave?

Thank you, Raul. Now I'd like to take a few minutes to discuss our continued growth of TAVALISSE during another sequential record quarter and our progress with the REZLIDHIA launch in the first nine months of 2023. On Slide 6, you'll see the FDA-approved indication for TAVALISSE, which is for adult patients with chronic immune thrombocytopenia or CIDP, who've had an insufficient response to a previous treatment. Moving to Slide 7. I'm excited to report that we achieved yet another back-to-back new quarterly all-time high with TAVALISSE in Q3, shipping 2,412 bottles to patients and clinics, resulting in an impressive 19% growth over Q3 of 2022. We achieved our fourth consecutive record high for the number of bottles shipped to patients and clinics in a quarter since launch, and our demand is continuing to grow with more new patients starting TAVALISSE For Q3, we produced TAVALISSE net sales of $24.5 million, $5.3 million above the same quarter last year, representing more than 27% year-over-year growth. We were very excited to achieve this record high quarter in TAVALISSE net sales. Our achievement of sequential quarterly records demonstrates that our continued focus on bringing more new patients to TAVALISSE and consistently improving our refill business is driving strong growth. We are pleased with how we have expanded our TAVALISSE business during 2023 and look forward to maintaining this momentum as we close out the year. We will stay focused on targeting clinicians to identify appropriate patients who can benefit from TAVALISSE to continue growing our new patient starts. And Slide 8 provides a little more detail on how our new patient starts have been trending over the last three years. As you'll recall, in 2020, during the pandemic, we were challenged growing new patient starts. Then with our sales force expansion and…

Thank you, Dave. I will now summarize our expansion plans for olutasidenib and provide updates on our other development programs. Beginning on Slide 18. We like the growth of our commercial business, and we want to expand our business even further. There are two ways of accomplishing these. First, there is the potential to grow our current products with new supportive data and particularly, with new indications. In addition, there is the potential for in-licensing of new products. Based on an in-depth review, we believe that olutasidenib has potential in numerous cancers where mutant IDH1 plays a role. We see additional segments in AML, Glioma and MDS is promising indications for olutasidenib. Fostamatinib also has potential in other heme/onc indications, and we will provide additional data through investigator-sponsored trials rather than through our own trials, as we think this is the best use of our resources. Any investments in new development opportunities will be focused and cost-efficient and can be funded by our own operations. As part of this, we expect to work with academic centers and government partners on these strategic efforts. Moving on to the right side of this slide. The in-licensing of REZLIDHIA was a success and provided Rigel with an approved product that is highly synergistic with our heme/onc capabilities. We look to replicate this as we continue to evaluate the in-licensing of new assets that are also synergistic with our existing infrastructure. We are looking for heme/onc and related assets that are in late-stage clinical development and review for potential approval or in the early stages of their commercial launch and that are complementary or adjacent to the areas where we already have approved products. Moving on to slide 19. As Dave mentioned, generating and providing additional data benefits our product sales and helps us…

Thank you, Raul. I'm on Slide 24. For the third quarter of 2023, we shipped 2,551 bottles with TAVALISSE to our specialty distributors, resulting in $35.2 million of gross product sales. 2,412 bottles of TAVALISSE were shipped to patients and clinics, while 139 bottles increased the levels remaining in our distribution channels at the end of the quarter. For the third quarter of 2023, we shipped 210 bottles of REZLIDHIA to our specialty distributors, resulting in $3.4 million of gross product sales. 221 bottles of REZLIDHIA were shipped to patients and clinics, while 11 bottles decreased the levels remaining in our distribution channels at the end of the quarter. We reported net product sales from TAVALISSE of $24.5 million in the third quarter of 2023, a 27% increase compared to the same period in 2022. We reported net product sales from REZLIDHIA of $2.7 million in the third quarter of 2023. Our net product sales from TAVALISSE and REZLIDHIA were recorded net of estimated discounts, charge backs, rebates, returns, co-pay assistance and other allowances of $11.5 million. So the third quarter of 2023, our gross to net adjustment for TAVALISSE and REZLIDHIA was approximately 30.5% and 21% of gross product sales, respectively. Before we move on from net product sales, let me review our expectations for the fourth quarter of 2023. We continue to be pleased with the strength of our business in the third quarter and expect to see continued strength in our bottle ship to patients and clinics for the remainder of the year. Incrementally, I would highlight that we saw a 139 bottle increase in the levels remaining in our distribution channels at the end of the quarter for TAVALISSE. These inventory levels are variable and outside of our control. Incrementally, we expect our gross to net…

Thank you, Dean. We are proud of the progress we have made so far in 2023 with TAVALISSE sales delivering another strong quarter marked by continued growth. We are executing on our launch of REZLIDHIA and driving awareness through our sales teams and engagements with the medical community at conferences, including the upcoming ASH meeting in December. Continued growth of our products coupled with diligent financial discipline have resulted in a particularly good quarter, and we have made important progress towards our goal of reaching financial breakeven. This is an important objective which I believe will set right apart how since it will allow us to grow and run our company with our own operation -- from our own operations and our own cash. We are creating a self-sustaining company. With that, thank you for your interest in our progress in this quarter, and we will now open the call to your questions.

Thank you. [Operator Instructions] One moment please for the first question. The first question comes from the line of Eun Yang with Jefferies. Please proceed with your question. Q – Unidentified Analyst: Hi, this is Alan [ph] on for Eun. Thank you so much for taking our questions. So for the first question on TAVALISSE, could you please remind us on the market exclusivity expiration for TAVALISSE in the US, Europe and Japan. And then for REZLIDHIA, with the quarterly sales run rate of about $3 million do you expect gradual increases in sales? Or would there be an inflection point? And how big do you expect the product to product sales to be? Thank you very much.

I'll ask Ray to answer the first question on TAVALISSE exclusivity in the US and elsewhere.

Yes. We have a composition of matter patent for TAVALISSE that is with PTA and PTE is expected to run until September of 2031. I'd have to check and get back to you on exclusivity in Japan and elsewhere

I think it's comparable or similar

It is comparable. I don't have the exact dates.

On REZLIDHIA, Dave, do you want to comment on our view?

Yes. From a standpoint of REZLIDHIA, we are still earlier in the launch. You have to remember that clinicians have been using on IDH1 inhibitor for five years now. And so that's something that I think will take some time. But the other piece that I want to make sure, I bring up here is that one part of TAVALISSE has been new patients, and the other part is the refills you get to carry over. That's going to be the same thing with REZLIDHIA. Those new patients that we get because it has a duration of response, which is quite long for leukemia patients, we expect we'll have a good carryover business as we move into next year. So these patients starts will help grow our business by themselves. But every time we have a new patient start and they do well on REZLIDHIA remember that the composite complete remission is upward more than 40%, they're going to stay on the product. We try to keep people on the product for at least six months before they judge whether it's had a response or not and then because there are late responses. And then obviously, if patients are responding, they'll continue. So that's why we're still very early in this. We're early in the third full quarter of launch. And so we haven't really seen the benefit of that carryover with the patients that we started already I hope that helps put some color around why we expect REZLIDHIA sales to grow. Q –Unidentified Analyst: Got it. Thank you very much. If I may ask one follow-up on TAVALISSE. Currently, what percent of the uses in second-line ITP? And what would you need in order to further capture the second-line market? Thank you very much.

So the data we have by line of therapy comes from our RIGEL ONECARE database and as I showed you -- we showed last quarter, about 70% of our patients are in second and third line, about 30% of that is in second line. And that stayed pretty consistent this quarter, so that's why we didn't really provide any update on that. But we're really quite happy that in a market where Rituxan and TPOs are used very readily and have been for a long time, that 70% of patients at least in our database are getting TAVALISSE either second or third line. So we'll continue to, of course, try to move patients up but really, I think the key is continuing to grow new patient starts, and that's what we've been doing. So hopefully, that answers your question. Q –Unidentified Analyst: Thank you so much.

Thank you.

Thank you. The next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Hi. This is Rick Miller [ph] on for Kristen. Thanks for taking our questions. Given the commercial strategy, sort of dovetailing TAVALISSE with REZLIDHIA, the institutional sales force focus there. Do you have any commentary on how the approach at ASH this year may differ from your approach in the past or how you're thinking about approaching the sort of educational aspects of the conference, given the new institutional sales force approach?

Good question, Rick. Thank you. Dave, do you want to comment?

Yes, I will say – we are bringing our entire institutional team to ASH because we do think it's an important opportunity for them to interact with their customers. The fact is most important hematology treaters attend ASH. And so it's a very specific audience, especially AML treaters. And so we will be deploying our team there.

Rick, a year ago, we got the product approved just days before the ASH meeting. And it's remarkable, we were able to be ready and have information in there on the booth on REZLIDHIA. And since then, we create in the middle of this year, we created the institutional business team to help us penetrate the academic centers. So we're very, very much different in terms of preparedness this year than a year ago. And so it should be an exciting meeting for us being able to interact with many of those academic centers, but also lots of community-based clinicians for both of these products. Very, very different. We have data also being presented that I think is very compelling. And earlier this year at EHA and in other places, we published data supporting the use of REZLIDHIA. So we really have a very different, I guess, approach data and individuals to share this information at this ASH meeting relative to a year ago.

Great. And maybe just one follow-up with the ASH abstracts, specifically the MDS analysis. Can you talk a little bit about how you're thinking about the IDH1 positive prevalence in the MDS population and how this relates to what you're seeing in AML. Thank you and looking forward to seeing the team in San Diego.

Yes, I'll comment. Dave, do you want to comment as well. MDS is an attractive opportunity. We've seen IDH1 inhibitors work in this area. So it provides some exciting opportunities. Just to remind you, in the Phase 2 study done by our colleagues in pharma, it included patients with MDS. So we have some idea on that opportunity already with, I think, 22 patients

In the abstract presented at [indiscernible]. And just, Rick, could you just repeat the first part of your question? I just want to make sure I got that right.

Yes, more around prevalence and just sort of market size in the MDS population versus AML.

I don't have those specifics right here with me, but it is a smaller population than the AML population.

Yes, just smaller, but I think the percentage of IDH positive is a bit higher than in AML. So -- but it's still a smaller population on the whole.

Great. Okay. Thank you, very much.

Thank you, Rick

Next question is from the line of Yigal Nochomovitz with Citi. Please proceed with your question. Q – Unidentified Analyst: Hi, team. This is Carly [ph] on for Yigal. Thanks for taking our question. We had a few follow-ups on REZLIDHIA. First, wondering if you can comment on the contribution from new versus existing patients during the third quarter and approximately what percent share of the market you believe you have within the incident patient population? And then second, of the different label expansion opportunities that you outlined, just curious if there's one that you would maybe highlight as the highest priority and when we might get more details on your future plans there? Thank you.

Dave, do you want to comment on REZLIDHIA contribution, new versus established patients and share of incident population?

Yes. So if you're looking at our total bottle shift in Q3. Obviously, the majority of those were carryover from previous. I'd have to -- let me say here. It's probably generally, maybe two-thirds to three quarters carryover and about a quarter to one-third is new. And again, that always depends on when you get those new patients. We got our new patients, a lot of them, as I said, in September. So that's why I think that number is like the -- or is the way it is. So I hope that makes sense but the majority this quarter was carryover. And again, a lot of that is because our new patients really -- because it is kind of lumpy, showed up in September. Coming on your second question in terms of share of those, if you do this, you're talking about maybe 250 patients a quarter, you heard from our first quarter on launch, we were around 30 patients. So we think we're probably in that double-digit share of incident new patients.

And on the label expansion priority, all three of those that I mentioned, and there are others, in fact, in other segments of AML, in Glioma and MDS are attractive and different one to the other. AML, we know the product works and has shown a benefit in the relapsed or refractory setting. Obviously, other opportunities within that patient's maintenance in first-line are things that we're thinking about. In addition, Glioma is a sizable, sizable opportunity, and just so poorly, poorly treated today. That is a very exciting opportunity, a larger opportunity perhaps. And MDS, while smaller, as we mentioned just a minute ago, an area with significant medical need as well, both in low-risk and high-risk MDS. So there really is a highly varied array of different opportunities for olutasidenib. And clearly, we are going to focus on a subset of those and do so in a focused, efficient cost-wise manner, perhaps in some cases, with academic and government partners.

Okay. Great. That's helpful. Thank you very much.

Thank you. The next question is from the line of Joe Pantginis with H.C. Wainwright. Please proceed with your question.

Hey, everybody. Good afternoon. Thanks for taking the questions. So I was curious, first, I wanted to go back to TAVALISSE patient populations? And I guess I'll ask the question, but I don't know if you have this level of granularity in the data you collect. So in the second line or moving to second-line patients, do you have data that show, for example, patients that are -- that you're replacing TPOs or say you're prescribing TAVALISSE in lieu of TPOs. Do you have that level of granularity that or say RITUXAN?

Dave.

Well, just to be clear, where our data comes from is rock. We actually -- because we have those histories, we know what line of therapy that is. So we don't -- but we don't have is kind of what they would have intended to use. So we're mixing two kind of different things there. The data that we are sharing in terms of 30% of those patients that are going through rock, our second line but we don't know what they would have used had they not chosen TAVALISSE. Does that make sense?

Yes. It does.

So from our ATU, I think those clinicians who do use it second line, those are clinicians who've had experience with TAVALISSE like how TAVALISSE works and they just -- they tend to move it up because it's very predictable. So that's probably the best way I can say it. I don't want to jump to any conclusions about where our second line business is coming from in terms of what product they would have chosen.

No, that's completely fair. I appreciate that. And then with regard to REZLIDHIA, obviously, the launch continues to be impressive. And I guess I wanted to touch upon any potential real-world safety signals, for example, with regard to differentiation syndrome since it is one of the warnings on the label. Is there anything to discuss there and the fact that physicians are becoming much more adept at handling that?

No, I wouldn't say we have anything that indicates. Look, this is a class effect. It's a black box warning across the class, both with FLT3 inhibitors as well as IDH1 inhibitors 90H2. So, it's a class effect in that. We have not heard anything or have reason to believe that our differentiation syndrome would be a differentiator for REZLIDHIA. That said, we do believe that it is a different toxicity profile and we do believe that the lack of any reference to needing to do cardiac monitoring in our label is a differentiator for certain patients who might have cardiac comorbidities. So, that continues to be something that we will look into and potentially, hopefully, in the future with real-world evidence helping to show that.

Great. Appreciate the color. Thank you very much.

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

Thank you. This quarter was a really very good one. We grew our products very nicely and we're happy with that. We made progress on our financial goals as well. So, we're very pleased where we are. So with that, I'd like to close by thanking every one of you for your continued interest and support of Rigel. And as always, I'd like to thank our employees for their commitment to improving the lives of patients. They work hard every single day. And with that, I look forward to updating you on future calls. Have a great day.

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