Greetings and welcome to Rigel Pharmaceutical's Financial Conference Call for the Third 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 third quarter 2024 financial results and business update conference call. The financial press release for the third quarter 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 our Q3 quarterly report on form 10-Q on filed 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 4 with an overview of Rigel's business and our third quarter results. In the first three quarters of the year, we made significant progress in our strategy to grow our hematology and oncology business. Our corporate strategy is focused on three main objectives; one, expanding our commercial portfolio and increasing product sales. Two, advancing and growing our pipeline through strategic collaborations and importantly, internal pipeline development and three, maintaining financial discipline. I will now summarize each of these. Firstly, in the third quarter we generated strong growth across our commercial portfolio with a total net sales of 38.9 million. This was up 44% compared to the third quarter of 2023. This robust revenue growth was driven by the addition of GAVRETO, which generated 7.1 million in net product sales for the first – for its full third quarter – first full quarter with Rigel, as we transitioned the majority of patients and prescribers into our network. In addition, we saw continued year-over-year growth for TAVALISSE and REZLIDHIA with both achieving another record quarter for bottles shipped to patients and clinics. We continue to expand our product presence outside the US as well this quarter, with a new Kissei agreement to develop and commercialize REZLIDHIA in Japan, the Republic of Korea and Taiwan. This agreement included a 10 million upfront dollar payment that we received in Q3 and the potential for up to 152 million in future development, regulatory and commercial milestone payments. Secondly, regarding our job to grow our pipeline, we continue to advance the development of R289 our dual IRAK1/4 inhibitor…

Thank you, Raul. We are very pleased with the strong growth in revenues in Q3. Moving to Slide 6. You see how our quarterly and annual sales have evolved since 2021. We have grown each quarter's sales over the previous year, and that growth continues particularly from last year to this year. We started the first quarter of 2023 with $23.8 million, and are now reporting $38.9 million in the third quarter of 2024. That's an incremental 15.1 million, representing 63% growth in quarterly revenue over seven quarters. That growth has been driven by our strong commercial execution, in consistently building quarterly demand for TAVALISSE and driving broader awareness of REZLIDHIA through the first two years of its launch. The addition of GAVRETO and our ability to successfully transition it to our portfolio, has also significantly expanded our top line. Compared to the third quarter of 2023, we generated 44% growth in the third quarter of 2024. As you can see, we're well on our way to delivering a record year of net product sales. Our commercial team is focused on execution, driving continued momentum for TAVALISSE, improving both institutional and community demand for REZLIDHIA and successfully transitioning all GAVRETTO patients and accounts to Rigel label product. My sincere thanks to the entire team for all their hard work to grow our business in 2024. Moving to Slide 7. I'll first discuss our performance with TAVALISSE in the third quarter. On Slide 8, 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 9. I'm pleased to report another strong quarter for TAVALISSE with 2,797 bottles shipped to patients and clinics in the third quarter, a 16% increase versus the third quarter…

Thanks Dave. Moving to slide 19. I'd like to begin by highlighting a series of abstracts that will be presented at posters at the upcoming ASH annual meeting in December. As Raul mentioned initial data from the dose escalation part of our phase 1b study of R 289 and patients with relapsed or refractory lower risk M DS will be presented during the poster session on Monday December 9th. Updated results using a data cutoff date of October 25th will be shared at the meeting. Additionally, a number of presentations related to olutasidenib in patients with IDH1 mutated AML and MDS are planned. Moving to slide 20, we continue to execute on our strategy to expand our hematology and oncology pipeline. First, we're making meaningful progress advancing olutasidenib into new clinical indications alongside our partners MD Anderson and the Connect Cancer Consortium. 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. One clinical trial is now active under MD Anderson collaboration. And we're continuing to advance a lucid and glioma with connect R289 is our novel dual IRAK1-4 inhibitor that is currently being evaluated in a phase one B study in patients with relapse refractory lower risk MDS. Enrollment in the fifth dose level is ongoing. We expect that the DLT observation period will be completed within December. We also remain focused on evaluating potential opportunities to in license 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 and oncology…

Thank you, Lisa. I'm on slide number 28. During the third quarter, we shipped 2,793 bottles of TAVALISSE to our specialty distributors. 2,797 bottles of TAVALISSE were shipped to patients and clinics, while four bottles decrease the levels remaining in our distribution channels at the end of the quarter. We shipped 429 bottles of REZLIDHIA to our specialty distributors. 444 bottles of REZLIDHIA were shipped to patients and clinics, while 15 bottles decreased the levels remaining in our distribution channels at the end of the quarter. We shipped 752 bottles of GAVRETO to our specialty distributors, 717 bottles of GAVRETO were shipped to patients and clinics, while 35 bottles increased the levels remaining in their distribution channels at the end of the quarter. We reported net product sales from TAVALISSE of $26.3 million in the third quarter, a growth of 8% compared to $24.5 million in the same period in 2023. We reported net product sales of REZLIDHIA of $5.5 million in the third quarter, a growth of 107% compared to $2.7 million in the same period in 2023. And finally, we reported net product sales from GAVRETO of $7.1 million in the third quarter, the first full quarter of GAVRETO sales. Our net product sales from TAVALISSE, REZLIDHIA and GAVRETO were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $17.4 million. For the third quarter of 2024, our gross to net adjustment for TAVALISSE, REZLIDHIA and GAVRETO was approximately 36%, 22% and 15% of gross product sales respectively. We'd like to highlight that during the fourth quarter we made certain changes to our distribution channel arrangements for TAVALISSE that will result in continued high-quality access or reducing our distribution costs and favorably impacted our gross-to-net adjustment into the future. While this change is…

Thank you, Dean. And moving on to slide 30, please, this is really an exciting time for Rigel. During the first three quarters of 2024, we delivered on our goals that we set earlier in the year. First, we generated strong growth in our commercial business. We've achieved another record demand quarter for TAVALISSE and REZLIDHIA and grew our net product sales year-over-year. We expanded our portfolio with the addition of GAVRETO our third commercial product which generated $7.1 million in net product sales in its first full quarter with us. We leveraged our commercial capabilities to transition the product to us and are now focused on maximizing its potential. And we're well on our way to deliver another record quarter of revenues for calendar year 2024. Second, we made significant advancements in our development pipeline. We continue to progress R289 and we are incredibly excited to present additional safety and efficacy data from our Phase 1b study in lower-risk MDS, at the ASH meeting next month. Our strategic collaborations with MD Anderson and CONNECT continue to advance and we now have the first trial with MD Anderson underway. And lastly, as we made great strides in these areas, we continue to focus on maintaining financial discipline. All of these efforts have enabled us to generate positive net income for the three quarters and year-to-date. Now on Slide 31 and as we think about the future for Rigel and our progress in 2024 and how it positions us to deliver continued growth in, 2025 and beyond. Our corporate strategy remains focused on our major objectives, executing and expanding our commercial portfolio to generate topline growth, advancing and growing our development pipeline and operating in a financially disciplined manner. Becoming a profitable company will allow us to be self-sustaining and importantly to reinvest in our own development pipeline. And we will outline our internal development plans for R289 and in 2025. We've made significant progress in 2024 and remain focused on continuing this momentum, as we close out the year and head into 2025. Again, I'd like to thank you for your interest in Rigel. And with that, we will now open the call to your questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Joe Pantginis with H.C. Wainwright. Please proceed with your question.

Hey, everybody. Good afternoon. Thanks for taking the questions. Nice to see the approved products progress. So, two questions if you don't mind. So first, I was hoping to see if you can provide any more color with regard to Tavalisse and the balance or mix between refills and new prescriptions.

Would you provide some commentary on that?

Sure. Thanks for the question, Joe. As you know, Tavalisse is a product that patients take and will continue taking as long as their platelets are controlled and are elevated and you know sometimes that takes a while. So I will say that the majority of our business is carry over. Once we have patients on board, they will tend to stay on therapy and that is the majority of our business. And because we've grown new patient starts, over the last couple of years, I think we're seeing that growth and carryover go along with that. So that's what I meant to say or that's what I was referring to when I said both our growth is both from new patients starting as well as carryover but the majority is carryover.

Got it. Appreciate that clarification and color. And then the second question that, I have I want to make sure if I heard correctly. So, nice to see the early traction with GAVRETO. And if I heard you correctly, you said that several top centers have not -- have still not placed orders. I was just curious is this really just based on logistics or how would you characterize it?

First of all what I said in my prepared comments just to be clear, as I said there's a handful of top centers that we haven't seen direct orders from. And so, you know we had expected to see that and we haven't. So we're trying to understand that a little bit. But the good thing about our data is we have a significant portion through the specialty pharmacy network. So what we could be seeing is patients are in the specialty pharmacy network when they transition to the to the RTO network versus the institution buying the drug and then filling it there. But overall, actually what I said in my prepared marks was that 45% of our business was through the distribution channel to direct accounts in Q3. When we just looked at this for October it's up to 50-50. So I think this is improving and we -- it is more like what we expected more of our business coming through the direct channel. Hope that helps Joe.

It certainly does. Thanks for the color.

Thank you, Joe.

Thank you. Our next question comes from the line of Yigal Nochomovitz with Citi. Please proceed with your question.

Hi team. This is Ashiq on Yigal. Thanks for taking my question and I appreciate all the updates here. I just had a follow-up on the last question on the GAVRETO for relaunch. How much of a stocking benefit was there the sort of initial phase of the -- of the launch at least with you guys. And on the sort of reported sales, seven million looks like it's at least on a similar run rate for the quarter compared to what the prior entity did with it last year. So how should we think about the growth trajectory from here? We should be thinking about it in a more aggressive way or maybe more modestly from here given the given the sort of restart that. Thanks.

Dave, you want to take that?

Sure. Thanks for the question. First of all, remember that at the end of Q2, right at the very end, we filled some orders to our distributors and that was what I would refer to as stocking. It was about $1.9 million in sales. This quarter we sold 717 bottles or we shipped 717 bottles, and we had just a slight more 750-odd bottles sold. So there were another maybe 30-some bottles built up in the channel. So I would just say that the majority is demand that we saw in -- the overwhelming majority of what we saw in Q3 is true demand, patient demand, account demand. And what I will say is that, obviously, we started the quarter with some level of shipments going out to patients and clinics. We ended the quarter with a much higher level of shipments going out to patients and clinics as more people transitioned over. So I can't really comment any more than that, but we would expect to see some continued demand growth as we move forward.

And translated specifically into bottle counts. We had 228 bottles of increase in our distribution channel or inventory that Dave described in Q2, and that was essentially the full amount of revenue. And then we had an incremental build of that inventory of 35 bottles. The remainder of the bottles in Q3 were from shipments to patients and clinics.

Understood. Thank you very much.

Thank you.

Thank you. Our next – I’m sorry – [Operator Instructions] Our next question comes from the line of Kalpit Patel with B. Riley Securities. Please proceed with your question. Q – Kalpit Patel: Yes. Hi. Good afternoon. Thanks for taking the question. For the proof-of-concept data in lower-risk MDS, I guess, first, to the extent that you can share here, the Grade 3/4 adverse events that are listed in the abstract, was there any indication that these were dose-dependent or generally occurring in doses of 500 milligrams or higher?

Yes. Thanks for the question. I think that that will be shared in more detail in December.

At the ASH meeting in the poster presentation. Q – Kalpit Patel: Right. Okay. Got it. And how much more data should we expect then at ASH in terms of maybe the number of patients and the number of cohorts and things like that?

Right. So for the abstract, we used a data cutoff date of July 15, and we're updating that to October 25. So it's going to be about another three months or so of data. So you'll see data on the patients from the fourth dose level and a little bit beyond that. Q – Kalpit Patel: Okay. Got it. Thank you very much.

Thank you, Kalpit.

Thank you. Our next question comes from the line of Farzin Haque with Jefferies. Please proceed with your question. Q – Farzin Haque: Hi. Good afternoon. Thank you for taking my question. To start off with the four, with R289 in the low-risk MDS patients, how should we think about the bar for success? And what would you need to see in Phase 1b to advance the program forward?

I'll let Lisa comment. Let me just preface this by saying that we're really excited about this data. This data -- this molecule was a molecule discovered here at Rigel. We own full rights to it. We think definitely the most advanced IRAK1 and 4 inhibitor that there is available. We are excited to study it here in low-risk MDS, where we see a very good mechanism to indication. And we're really interested to try here, and we're delighted to present the data that you saw in the abstract and substantially much more detail in the poster to come. In terms of the bar, Lisa, maybe do you want to comment on that?

Yes. I think that if we look at the treatment landscape in lower-risk MDS, obviously, we've got the kind of the first-line agents, patients if they're eligible for having ESAs, they will have ESAs followed by luspatercept. These are transfusion-dependent patients I'm talking about now and imetelstat. And there's really nothing afterwards until HMAs. So that's kind of quite a gap. And in terms of efficacy, HMAs in terms of improving transfusion or reducing transfusion requirements, they have about a 20% transfusion independence associated with them. So, that's pretty low on one end. And then our study is unique in that it's enrolling patients that have previously received HMAS as well as [indiscernible] et cetera. So, I would say and you know you know that the response rates for first line it's around 40%. But like I said you know our study is unique in that we are including relapsed/refractory patients that weren't included in those first line settings. So, I don't know that I would put a number on it right now. I think we're very encouraged by what we're seeing based on the preliminary safety and efficacy data thus far. Q – Farzin Haque: That's helpful. And then for GAVRETO, I was just curious for the new safety signal related to the risk of severe and fatal infection, how rate limiting do you expect it to be for uptake? Does [indiscernible] the competitive program have the same issue?

Lisa, do you want to comment on that?

I would say that from yeah -- and then maybe Dave can comment. So from the clinical perspective this really isn't a something new. You know looking at the AERO study we were aware that infections were reported. This is in the label already. In the safety section, we know that mechanistically there's a rationale for why this is happening. We know that in addition to RT inhibition that these increased risk of infections may stem from the off target inhibition of JAK1 and JAK2, which are not the primary you know targets but nonetheless there is some off target activity there. And we know also in terms -- most of the infections were pneumonias which are very common in this patient population. About 80% of patients get pneumonia with lung cancer and receiving treatment for lung cancer. So this is a situation that oncologists are very familiar with managing.

If you want to comment on what you've heard from Simpson [ph].

Sure patient safety is paramount and I'm very you know proud to say that we sent the DHCP to more than 10,000 health care providers that said we haven't received any calls to our medical information line regarding that update. And as Lisa said you know this is non-small cell lung cancer. These are oncologists who treat very sick patients all the time. You have two IRAK inhibitors on the market with the significant warnings and precautions on both and different sets of warnings and precautions. So, we don't see any at this point we don't see any you know changes in how we look at the opportunity for GAVRETO moving forward in the red fusion positive not small cell cancer space. Q – Farzin Haque: That's helpful. Thank you so much.

Thank you. Our next question again comes from Kalpit Patel from B. Riley Securities. Please proceed with your question.

Yeah. Thanks for taking the follow-up. I just had one more on the lower MDF program. There was another agent Curis' IRAK inhibitor that was started in an investigator sponsored study but then later withdrawn for the same indication. So I guess if you had to highlight a few differentiated factors with R289 versus the others what would they be?

It's hard to comment on other people's. I would say ours is an IRAK1 and 4 inhibitor. I believe theirs was an IRAK4 inhibitor. That is a significant difference. I think Lisa highlighted in one of the slides where we showed that inhibiting both 1 and 4 provides a more profound inhibition of inflammatory cytokines presumably in the bone marrow in this case. So that is an important difference between those two. And as I said earlier I don't believe there's another IRAK1 and 4 inhibitor in development and certainly not in more advanced development available. So, we this is the first to work on a 14 and that rationale the more profound cytokine inhibition was one of the reasons we liked 1 and 4 over 4. And Lisa any other comments?

No, I think that pretty well summarizes it.

Okay. Wonderful. Thank you again.

Thank you Kalpit.

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 and thank you everyone for joining on the call today and your continued interest in Rigel. I can't say it's a very exciting time for the company having data to share an exciting product and more coming I think is really a great place to be. The year has gone very well for us in terms of commercial growth in addition to the portfolio and advancements in our development. And we look forward to telling you more about that in the in the 2025. So, with that I'd like to also just always thank our employees for their continued commitment to our cause and improving the lives of patients and look forward to updating you further in other calls. Take care.

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