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 REZLIDHIA, coupled with the addition of GAVRETO, reflects our successful efforts to expand our hematology and oncology portfolio. We look to continue to grow our existing portfolio and to expand it with new products in the future. On the development side, our IRAK1 and 4 inhibitor R289 continues to progress in a phase 1b trial in lower-risk MDS, with enrollment of the fourth dose group nearing completion. We remain on track to share preliminary data from this study by the end of this year. Our strategic collaborations with MD Anderson Cancer Center and CONNECT will enable us to explore REZLIDHIA in a broad range of IDH1 mutant cancers in a cost and time-efficient manner. These programs continue to progress, and we're excited to share with you today that our first trial with MD Anderson, evaluating REZLIDHIA in patients with AML, has opened for enrollment. Lisa will share more details on this shortly. In summary, in the second quarter, we saw record sales of our commercial products, and combined with our cost-effective approach to clinical development, as well as continued financial discipline, we approached net income break-even. This is great progress. Now with that, I'll turn the call over to Dave to provide a commercial update. Dave?

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 REZLIDHIA contributed the majority of that growth, reaching a new high of $31.6 million in net product sales in Q2. The early GAVRETO sales of nearly $2 million added incrementally to our strong portfolio growth. The right side of the slide shows how we've generated robust portfolio revenue growth over the past three and a half years. We have grown each quarter's sales over the previous year, and that growth is significantly accelerating. Just a year ago, our total portfolio sales were just under $24 million in Q2, and we are now reporting $33.5 million in net product sales. That's nearly $10 million in incremental sales, representing 40% growth. We're on track to deliver a record year of net product sales in 2024, as our portfolio sales continue to expand in the second half. Our commercial team is focused on execution and driving continued momentum for the three products now in our portfolio. Moving to slide 8, I'll first discuss our performance for TAVALISSE in the second quarter. On slide 9, you'll see our FDA-approved indication, which is for adult patients with chronic immune thrombocytopenia, or CITP, who had an insufficient response to a previous treatment. Moving to slide 10, I'm pleased to report another record-breaking quarterly performance for TAVALISSE. We…

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…

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 REZLIDHIA to our specialty distributors. 424 bottles of REZLIDHIA were shipped to patients and clinics, while 23 bottles decreased the levels remaining in our distribution channels at the end of the quarter. In the last week of the second quarter, we shipped 220 bottles of GAVRETO to our specialty distributors. As Dave mentioned, GAVRETO is available in 60-count and 90-count bottles. For reporting purposes, we'll report the number of 60-count equivalent bottles. We reported net product sales from TAVALISSE at $26.4 million in the second quarter, a growth of 24% compared to $21.3 million in the same period in 2023. We reported net product sales of REZLIDHIA of $5.2 million in the second quarter, a growth of 102% compared to $2.6 million in the same period in 2023. And finally, we reported net product sales from GAVRETO of $1.9 million in the second quarter. Our net product sales from TAVALISSE, REZLIDHIA, and GAVRETO were recorded net of estimate discounts, chargebacks, rebates, returns, copay assistance, and other allowances of $15.5 million. For the second quarter of 2024, our growth to net adjustment for TAVALISSE, REZLIDHIA, and GAVRETO was approximately 34%, 23%, and 23% of gross product sales, respectively. Before we move on from net product sales, let me review our expectations for the third quarter. We're pleased with the strength of our business and expect to see continued strength in our year-over-year net product sales growth rate. For the third quarter, we expect our growth to net adjustment for TAVALISSE, REZLIDHIA, and GAVRETO to be approximately 35%, 23%, and 26% of gross product sales, respectively. On to the next slide. In addition to net product sales, our contract revenues from collaborations were $3.4 million in the second quarter. Contract revenues from collaborations consisted of $2.2 million from Kissei, $1.1 million from Grifols, and $100,000 from Medison. Moving on to cost and expenses, our cost of product sales was approximately $2.8 million for the second quarter of 2024. Total cost and expenses were $36.4 million, compared to $32.2 million in the same period for 2023. The increase in cost and expenses was partly due to higher cost of product sales, driven primarily by higher amortization of intangibles and royalties. Increased personnel-related costs and increased research and development costs due to the progress of our clinical activities, including our R289, IRAP1-4 inhibitor program. We ended the quarter with cash, cash equivalents, and short-term investments of $49.1 million. We look to maintain our focused and disciplined financial approach into the future. With that, I'd like to turn the call back over to Raul. Raul?

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 REZLIDHIA, and we added a third product GAVRETO to our commercial portfolio. As we look into the second half of 2024, we are focused on continuing this sales momentum, positioning us for meaningful growth on the top line. We will also continue to evaluate additional in-licensing deals and acquisition, as we did with REZLIDHIA and GAVRETO, both great acquisitions to Rigel's product portfolio that utilize our sales and medical affairs organizations and expertise. Our development pipeline continues to progress with R289 and lower-risk MDS. We expect to generate preliminary data for our phase 1b trial by the end of the year. We are also tremendously excited about that we have opened our, for enrollment, the first trial with our strategic collaborator MD Anderson Cancer Center. To generate additional data on olutasidenib in patients with AML. We look forward to activating additional olutasidenib clinical trials with our strategic collaborators, and to evaluate other opportunities for expanding the development of all our products. Finally, financial discipline remains key to our corporate strategy. As our top line grows, we are approaching financial break-even. This enables us to reinvest in our business, advance current and new pipeline programs, and pursue opportunities to expand our portfolio. With that, I thank you for your interest in our progress in the second quarter, and we will now open the call to your questions. Operator?

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, REZLIDHIA and GAVRETO really contributed tremendously. Again, new product launches, so it's a little more difficult to forecast those, but I think giving guidance is something we evaluate on a regular basis, and we'll continue to do so. And in the future, I certainly see us doing it. I can't be specific on terms of the timing, though.

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 REZLIDHIA in AML, MDS, and other areas.

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.

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