Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Q4 2022 Earnings Conference Call March 7, 2023 4:30 PM ET Company Participants Ray Furey - EVP, General Counsel and Corporate Secretary. Raul Rodriguez - President and CEO Dave Santos - EVP and Chief Commercial Officer Wolfgang Dummer - EVP and Chief Medical Officer Dean Schorno - EVP and Chief Financial Officer Conference Call Participants Carly Kenselaar - Citi Eun Yang - Jefferies Do Kim - Piper Sandler Kristen Kluska - Cantor Fitzgerald Gary Nachman - BMO Capita ...

| --- | --- | --- | |--------------------------------|-------|-------| | | | | | | | | | Q4 & YE 2022 Financial Results | | | | Presentation March 7, 2023 | | | | | | | Forward-Looking Statements Any statements contained in this presentation that are not statements of historical fact may be deemed to be forward-looking statements and as such are intended to be covered by the safe harbor for "forward-looking statements" provided by the PSLRA. Forward-looking statements can be identified by words such as "pla ...

Here's the structured report outline based on your provided content and requirements: PART I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Rigel Pharmaceuticals is a biotechnology company focused on developing novel therapies for hematologic disorders and cancer, with commercial products TAVALISSE and REZLIDHIA, and a pipeline of clinical programs - **Rigel Pharmaceuticals** is a biotechnology company focused on hematologic disorders and cancer, with a strategy to expand its commercial business in the US and globally through partnerships[16](index=16&type=chunk)[42](index=42&type=chunk) - The company's commercial products include **TAVALISSE (fostamatinib)** for chronic ITP and **REZLIDHIA (olutasidenib)** for relapsed or refractory (R/R) acute myeloid leukemia (AML) with a susceptible IDH1 mutation[17](index=17&type=chunk)[18](index=18&type=chunk)[43](index=43&type=chunk) - Key development programs include an **IRAK1/4 inhibitor (R289)** for low-risk MDS, fostamatinib in **COVID-19** (Phase 3 did not meet statistical significance), and partnered **RIPK1 inhibitors** with **Eli Lilly and Company**[19](index=19&type=chunk)[27](index=27&type=chunk)[30](index=30&type=chunk)[33](index=33&type=chunk) [Overview](index=7&type=section&id=Overview) Rigel Pharmaceuticals is a biotechnology company dedicated to discovering, developing, and providing novel therapies for hematologic disorders and cancer, focusing on critical signaling pathways - **Rigel Pharmaceuticals** is a biotechnology company dedicated to discovering, developing, and providing novel therapies for hematologic disorders and cancer, focusing on critical signaling pathways[16](index=16&type=chunk) - **TAVALISSE (fostamatinib)** is the only approved oral spleen tyrosine kinase (SYK) inhibitor for **chronic immune thrombocytopenia (ITP)** in adults, commercially available in the US, Europe, UK, Canada, and Israel[17](index=17&type=chunk) - **REZLIDHIA (olutasidenib)** was **FDA**-approved in **December 2022** for adult patients with **relapsed or refractory (R/R) acute myeloid leukemia (AML)** with a susceptible **IDH1 mutation**, with commercialization beginning in **December 2022**[18](index=18&type=chunk) - **fostamatinib's** Phase 3 trial for **warm autoimmune hemolytic anemia (wAIHA)** did not lead to an sNDA filing due to top-line data and **FDA** guidance, and its FOCUS Phase 3 trial for hospitalized **COVID-19** patients was completed but did not meet statistical significance in the primary endpoint[18](index=18&type=chunk) - Other clinical programs include an **IRAK inhibitor (R289)** and a **RIPK1 inhibitor** program partnered with **Eli Lilly and Company**, along with product candidates with **BerGenBio ASA** and **Daiichi Sankyo**[19](index=19&type=chunk) [Business Updates](index=7&type=section&id=Business%20Updates) Rigel's business updates include **TAVALISSE** sales growth, **REZLIDHIA** FDA approval and launch, **R289** Phase 1b initiation, and **fostamatinib** trial results for **COVID-19** and **wAIHA** TAVALISSE Net Product Sales (2021-2022) | Year | Net Product Sales (Millions USD) | Change YoY | Primary Drivers | | :--- | :------------------------------- | :--------- | :-------------- | | **2022** | **$75.8 million** | +20% | Increased quantities sold, price per bottle. Offset by higher revenue reserves (rebates). | | **2021** | **$63.0 million** | - | - | - **REZLIDHIA (olutasidenib)** received **FDA** approval on **December 1, 2022**, for **R/R AML** with a susceptible **IDH1 mutation**, with commercialization starting on **December 22, 2022**, generating **$0.9 million** in net product sales in **2022**[22](index=22&type=chunk)[24](index=24&type=chunk) - **Rigel** in-licensed **olutasidenib** from **Forma Therapeutics, Inc.** for an upfront fee of **$2.0 million**, with potential milestone payments up to **$67.5 million** (development/regulatory) and **$165.5 million** (commercial), plus tiered royalties[25](index=25&type=chunk)[26](index=26&type=chunk) - **Rigel** dosed the first patient in a Phase 1b trial of **R289**, an **IRAK1/4 inhibitor**, for low-risk **Myelodysplastic Syndromes (MDS)** in **December 2022**, aiming to assess tolerability and preliminary efficacy[27](index=27&type=chunk) - The FOCUS Phase 3 clinical trial of **fostamatinib** for hospitalized **COVID-19** patients completed enrollment in **July 2022**, but top-line results in **November 2022** did not meet statistical significance (**p=0.0603**) for the primary efficacy endpoint[30](index=30&type=chunk) - The **FORWARD study**, a Phase 3 trial of **fostamatinib** in **warm autoimmune hemolytic anemia (wAIHA)**, did not demonstrate statistical significance in its primary efficacy endpoint, leading **Rigel** not to file a supplemental New Drug Application (sNDA) for this indication[32](index=32&type=chunk) - **Rigel** has a global exclusive license and collaboration agreement with **Eli Lilly and Company** for **RIPK1 inhibitors** (**R552** for non-CNS diseases and other **RIPK1 inhibitors** for CNS diseases), with **Lilly** advancing **R552** into a Phase 2a trial for rheumatoid arthritis in **H1 2023**[33](index=33&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk) - **Rigel** filed a patent infringement lawsuit against **Annora Pharma Private Limited** in **July 2022** regarding a generic version of **TAVALISSE**, following **Annora's Abbreviated New Drug Application (ANDA)** submission[38](index=38&type=chunk) - The **COVID-19** pandemic has adversely impacted **Rigel's** business, including reduced patient-doctor interactions and sales force visits, but the company did not experience significant supply chain disruptions[39](index=39&type=chunk)[40](index=40&type=chunk) [Strategy](index=14&type=section&id=Strategy) Rigel's strategy focuses on expanding its commercial presence in hematology-oncology and growing its development pipeline through internal efforts and partnerships - **Rigel's** goal is to be a successful commercial-stage biopharmaceutical company by expanding its commercial business in the US and globally through partnerships, focusing on hematology-oncology[42](index=42&type=chunk) - Key value drivers include growing **TAVALISSE** sales in the global **ITP** market (estimated over **$2.0 billion**), expanding the hematology-oncology portfolio with **REZLIDHIA** for **R/R AML** (targeting ~**1,000 patients** in a US market of ~**20,000 cases**), and expanding the development pipeline[43](index=43&type=chunk) [Commercial Products](index=15&type=section&id=Commercial%20Products) Rigel's commercial products include **TAVALISSE (fostamatinib)** for **chronic ITP** and **REZLIDHIA (olutasidenib)** for **R/R AML** with **mIDH1** [TAVALISSE/Fostamatinib in ITP](index=15&type=section&id=TAVALISSE%2FFostamatinib%20in%20ITP) **TAVALISSE (fostamatinib)** is an oral **SYK inhibitor** approved for **chronic ITP**, demonstrating stable platelet responses and facing competition from existing and generic therapies - **Chronic ITP** affects an estimated **81,300 adult patients** in the US, characterized by immune system attack on blood platelets, leading to bruising, bleeding, and fatigue[44](index=44&type=chunk) - **fostamatinib**, an oral **SYK inhibitor**, blocks the activation of **SYK** inside immune cells, interrupting platelet destruction in **ITP**[45](index=45&type=chunk) - **TAVALISSE** was **FDA**-approved in **April 2018** for **chronic ITP**, and subsequently received marketing authorization in Europe (**January 2020**) and approval in Japan (**December 2022**)[48](index=48&type=chunk)[67](index=67&type=chunk) - A post-hoc analysis of Phase 3 data showed a **78% response rate** when **TAVALISSE** was used as a second-line therapy in **chronic ITP**[49](index=49&type=chunk)[50](index=50&type=chunk) - **Rigel's** commercial efforts for **TAVALISSE** in the US target hematologists and hematologist-oncologists, supported by a fully integrated commercial team and patient support programs like **Rigel OneCare (ROC)**[52](index=52&type=chunk) - **TAVALISSE** faces competition from existing **ITP** therapies like corticosteroids, **TPO-RAs (PROMACTA, Nplate, DOPTELET)**, and immunosuppressants, with potential future competition from generic versions, including an **ANDA** filed by **Annora Pharma**[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) [Fostamatinib in Global Markets](index=19&type=section&id=Fostamatinib%20in%20Global%20Markets) Rigel has established global partnerships for **fostamatinib** commercialization, involving upfront payments, milestones, and royalties, with key achievements in Japan and Israel - **Rigel** partnered with **Grifols** for exclusive commercialization rights of **fostamatinib** in Europe, UK, Turkey, Middle East, North Africa, and Russia, receiving a **$30.0 million** upfront payment and potential milestones up to **$297.5 million**, plus tiered royalties[62](index=62&type=chunk)[63](index=63

! The first patients have been dosed in an open-label, Phase 1b clinical trial of study in lowrisk MDS4. The primary endpoint for this trial is safety with key secondary endpoints including preliminary efficacy Dual Inhibition of IRAK1 and IRAK4 Provides Stronger Suppression of Inflammatory Cytokines Compared to IRAK4-selective Inhibitor2 Proof-of-Mechanism First-In-Human study enrolled 82 adults to characterize the safety, PK, PD of R835 IL6 25 1R835 is an investigational compound not approved by the FDA. ...

Financial Data and Key Metrics Changes - The company reported total revenue of $22.4 million for Q3 2022, which includes net product sales from TAVALISSE of $19.2 million, reflecting a 20% increase compared to the same quarter last year [55][53] - The gross to net adjustment for TAVALISSE was approximately 28.9% for Q3 2022, with expectations for a 30% adjustment in Q4 2022 [53][54] - The company ended the quarter with cash, cash equivalents, and short-term investments of $81.6 million [57] Business Line Data and Key Metrics Changes - TAVALISSE achieved the highest quarterly net product sales since its launch, with 2,026 bottles shipped, representing nearly 19% growth year-over-year [40][41] - The company is excited about the potential of olutasidenib, which is nearing approval with a PDUFA date set for February 15, 2023 [9][60] - The Phase 2 registrational study of olutasidenib showed a 35% composite endpoint achievement, with over 90% of responders achieving complete remission [22][28] Market Data and Key Metrics Changes - The company noted that the market for AML treatments is significant, with over 20,000 new diagnoses expected in 2022 [14] - The company is focusing on the IDH1 mutation, which is present in 6% to 9% of AML patients, indicating a well-defined patient population for olutasidenib [16][32] Company Strategy and Development Direction - The company aims to expand its hematology-oncology portfolio with olutasidenib and is preparing for its launch [9][38] - The company is also exploring partnerships to create value, including collaborations for fostamatinib in COVID-19 and the RIP1 inhibitor program with Eli Lilly [12][50] - The company is committed to increasing awareness of TAVALISSE among prescribing clinicians to drive new patient starts [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming launch of olutasidenib and its potential to positively impact the lives of patients with relapsed refractory IDH1 positive AML [35][60] - The company anticipates a significant decrease in operating expenses in 2023 due to completed Phase 3 studies and workforce reductions [57][92] - Management highlighted the importance of the upcoming ASH conference for increasing awareness of Rigel's hem-onc pipeline [42] Other Important Information - The company is exploring options for fostamatinib in COVID-19 but does not plan to commercialize it independently [12] - The company is preparing for a Phase 2 study of the RIP1 inhibitor R552 in collaboration with Eli Lilly, expected to start in the first half of 2023 [50] Q&A Session Summary Question: What drives the better durability seen with olutasidenib compared to TIBSOVO? - Management acknowledged the significant increase in duration of CR + CRh response and noted that better initial responses may contribute to longer-term outcomes [65][66][70] Question: What were the headwinds for TAVALISSE in Q3? - Management indicated that while there was flat growth compared to Q2, year-over-year growth was strong, driven by new patient starts [72][74] Question: What is the expected milestone payment from Kissei for TAVALISSE in Japan? - Management expects a $20 million milestone payment upon approval, likely in Q1 of next year [86][88] Question: What is the current size of the sales force and any potential changes? - The sales force remains at 54 territories, with no changes anticipated due to the focus on higher-tier targets [99][101] Question: Are there any concerns regarding QTC prolongation with olutasidenib? - Management confirmed no evidence of QTC prolongation with olutasidenib and noted that differentiation syndrome was managed effectively [105][106]

| --- | --- | --- | |------------------------------|-------|-------| | | | | | | | | | Q3 2022 Financial Results | | | | Presentation November 3,2022 | | | | | | | 1 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955 ("PSLRA") relating to, among other things, the development and commercialization of olutasidenib; the timing of launch of olutasidenib; the progress of the RIPK1 inhibitor program in collabo ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed financial statements and accompanying notes for the period [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets%20(Unaudited)%20%E2%80%94%20September%2030%2C%202022%20and%20December%2031%2C%202021) Key Balance Sheet Metrics | Metric | Sep 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Total Assets | $115,609 | $167,328 | | Total Current Assets | $110,440 | $154,467 | | Cash and cash equivalents | $29,866 | $18,890 | | Short-term investments | $51,776 | $106,077 | | Total Stockholders' Equity (Deficit) | $(19,834) | $30,374 | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations%20(Unaudited)%20%E2%80%94%20three%20and%20nine%20months%20ended%20September%2030%2C%202022%20and%202021) Key Operations Metrics | Metric | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $22,410 | $21,543 | $68,964 | $128,827 | | Total Costs and Expenses | $40,813 | $41,328 | $126,593 | $119,905 | | Income (loss) from operations | $(18,403) | $(19,785) | $(57,629) | $8,922 | | Net income (loss) | $(19,037) | $(20,952) | $(59,974) | $4,727 | | Basic Net income (loss) per share | $(0.11) | $(0.12) | $(0.35) | $0.03 | | Diluted Net income (loss) per share | $(0.11) | $(0.12) | $(0.35) | $0.03 | [Condensed Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)%20%E2%80%94%20three%20and%20nine%20months%20ended%20September%2030%2C%202022%20and%202021) Key Comprehensive Income (Loss) Metrics | Metric | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(19,037) | $(20,952) | $(59,974) | $4,727 | | Net unrealized gain (loss) on short term investments | $152 | $1 | $(184) | $12 | | Comprehensive income (loss) | $(18,885) | $(20,951) | $(60,158) | $4,739 | [Condensed Statements of Stockholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20(Unaudited)%20%E2%80%94%20three%20and%20nine%20months%20ended%20September%2030%2C%202022%20and%202021) Key Stockholders' Equity Metrics | Metric | Balance as of Jan 1, 2022 (in thousands) | Balance as of Sep 30, 2022 (in thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity (Deficit) | $30,374 | $(19,834) | | Net loss (9 months) | — | $(59,974) | | Stock-based compensation expense (9 months) | — | $8,305 | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20(Unaudited)%20%E2%80%94%20nine%20months%20ended%20September%2030%2C%202022%20and%202021) Key Cash Flow Metrics | Cash Flow Activity | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(51,849) | $24,964 | | Net cash provided by (used in) investing activities | $54,179 | $(86,524) | | Net cash provided by financing activities | $8,646 | $61,590 | | Net increase in cash and cash equivalents | $10,976 | $30 | | Cash and cash equivalents at end of period | $29,866 | $30,403 | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) [1. Organization and Summary of Significant Accounting Policies](index=11&type=section&id=1.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Rigel Pharmaceuticals is a biotechnology company focused on discovering, developing, and providing novel small molecule drugs for hematologic disorders, cancer, and rare immune diseases[19](index=19&type=chunk) - TAVALISSE® (fostamatinib) is the company's first FDA-approved oral SYK inhibitor for chronic ITP in adult patients, also commercially available in Europe, UK, and Canada[19](index=19&type=chunk) - The portfolio includes olutasidenib (mIDH1 inhibitor for AML), fostamatinib in wAIHA (sNDA not expected), fostamatinib in COVID-19 (Phase 3 completed), and partnered IRAK and RIPK1 inhibitor programs[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - As of September 30, 2022, the company had approximately **$81.6 million** in cash, cash equivalents, and short-term investments, which are believed to be sufficient to fund expenses for at least the next 12 months[28](index=28&type=chunk)[29](index=29&type=chunk) [2. Net Income (Loss) Per Share](index=13&type=section&id=2.%20Net%20Income%20(Loss)%20Per%20Share) Net Income (Loss) Per Share Calculation | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) (in thousands) | $(19,037) | $(20,952) | $(59,974) | $4,727 | | Weighted-average common shares outstanding (in thousands) | 172,836 | 170,886 | 172,256 | 170,297 | | Dilutive effect of stock options, restricted stock units and shares under Purchase Plan (in thousands) | — | — | — | 6,155 | | Weighted-average shares outstanding and common stock equivalents (in thousands) | 172,836 | 170,886 | 172,256 | 176,452 | - Potential common stock shares excluded from diluted EPS computation due to being antidilutive for the nine months ended September 30, 2022, totaled **34,259 thousand** (stock options, restricted stock units, and Purchase Plan shares)[34](index=34&type=chunk) [3. Revenues](index=15&type=section&id=3.%20Revenues) Revenue by Category | Category | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $19,188 | $16,012 | $53,935 | $45,441 | | Contract revenues from collaborations | $722 | $4,531 | $12,529 | $73,886 | | Government contract | $2,500 | $1,000 | $2,500 | $9,500 | | **Total revenues** | **$22,410** | **$21,543** | **$68,964** | **$128,827** | - Net product sales increased by **20%** for the three months and **19%** for the nine months ended September 30, 2022, primarily due to increased quantities sold and higher price per bottle of TAVALISSE, partially offset by increased revenue reserves[201](index=201&type=chunk)[203](index=203&type=chunk) Revenue by Major Customer | Customer | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | McKesson Specialty Care Distribution Corporation | 44% | 35% | 38% | 17% | | Cardinal Healthcare | 27% | 18% | 22% | * | | ASD Healthcare and Oncology Supply | 25% | 25% | 21% | 15% | | Lilly | * | 12% | * | 56% | | Kissei | * | * | 11% | * | [4. Sponsored Research and License Agreements and Government Contract](index=17&type=section&id=4.%20Sponsored%20Research%20and%20License%20Agreements%20and%20Government%20Contract) - Total future contingent payments from existing collaboration agreements could exceed **$1.3 billion** if all potential product candidates achieve payment triggering events[41](index=41&type=chunk)[247](index=247&type=chunk) - The global exclusive license agreement with Lilly for RIPK1 inhibitors includes a **$125.0 million** upfront payment (received April 2021) and potential milestones up to **$330.0 million** for non-CNS products and **$255.0 million** for CNS products[46](index=46&type=chunk) - Rigel is committed to co-fund 20% of R552 development costs in the US, Europe, and Japan, up to a maximum of **$65.0 million** through April 1, 2024, with an outstanding financing liability to Lilly of **$48.9 million** as of September 30, 2022[44](index=44&type=chunk)[48](index=48&type=chunk) - The Grifols license agreement for fostamatinib in Europe and Turkey includes a **$30.0 million** upfront payment, potential milestones up to **$297.5 million**, and tiered double-digit royalties up to **30%** of net sales[52](index=52&type=chunk) - The Kissei license agreement for fostamatinib in Japan/Asia includes a **$33.0 million** upfront payment, potential milestones up to **$147.0 million**, and product transfer price payments in the mid- to upper twenty percent range[59](index=59&type=chunk) - A **$5.0 million** non-refundable milestone payment was received from Kissei in Q2 2022 following the NDA submission for fostamatinib in chronic ITP in Japan[65](index=65&type=chunk) - The Medison agreements for fostamatinib in Canada/Israel include a **$5.0 million** upfront payment for Canada, potential milestones of approximately **$35.0 million**, and royalties starting at **30%** of net sales[66](index=66&type=chunk) - A commercial license agreement with Knight for fostamatinib in Latin America, entered in May 2022, included a **$2.0 million** upfront payment and potential milestones up to **$20.0 million**, plus tiered royalties[67](index=67&type=chunk)[69](index=69&type=chunk) - Rigel was awarded up to **$16.5 million** by the US Department of Defense to support its Phase 3 clinical trial for fostamatinib in hospitalized COVID-19 patients, with **$2.5 million** recognized as revenue for the nine months ended September 30, 2022[71](index=71&type=chunk) - In July 2022, Rigel in-licensed olutasidenib from Forma Therapeutics, paying a **$2.0 million** upfront fee (expensed as IPR&D) and with potential for up to **$67.5 million** in development/regulatory milestones and **$165.5 million** in commercial milestones[72](index=72&type=chunk)[75](index=75&type=chunk) - A **$2.5 million** near-term regulatory milestone for olutasidenib was met in October 2022 and will be recorded as R&D expense in Q4 2022[76](index=76&type=chunk) [5. Stock-Based Compensation](index=29&type=section&id=5.%20Stock-Based%20Compensation) Stock-Based Compensation Expense | Category | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Selling, general and administrative | $2,119 | $1,800 | $6,791 | $5,625 | | Research and development | $588 | $402 | $1,514 | $1,522 | | **Total stock-based compensation expense** | **$2,707** | **$2,202** | **$8,305** | **$7,147** | - An incremental stock-based compensation expense of approximately **$0.8 million** was recorded in Q1 2022 due to the extension of the exercise period for stock options granted to two former Board of Directors[77](index=77&type=chunk) - As of September 30, 2022, approximately **$15.8 million** of unrecognized stock-based compensation is expected to be recognized over a remaining weighted-average period of **2.75 years**[82](index=82&type=chunk) [6. Inventories](index=31&type=section&id=6.%20Inventories) Inventory Breakdown | Category | Sep 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Raw materials | $4,555 | $5,142 | | Work in process | $1,244 | $162 | | Finished goods | $1,317 | $1,312 | | **Total** | **$7,116** | **$6,616** | [7. Cash, Cash Equivalents and Short-Term Investments](index=33&type=section&id=7.%20Cash%2C%20Cash%20Equivalents%20and%20Short-Term%20Investments) Cash and Investments | Category | Sep 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $29,866 | $18,890 | | Short-term investments | $51,776 | $106,077 | | **Total** | **$81,642** | **$124,967** | - As of September 30, 2022, cash equivalents and short-term investments had gross unrealized losses of **$290 thousand**, primarily due to interest rate increases, which were determined to be temporary[88](index=88&type=chunk) [8. Fair Value](index=34&type=section&id=8.%20Fair%20Value) Fair Value of Financial Instruments | Category | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Money market funds | $8,084 | $— | $— | $8,084 | | US treasury bills | $— | $17,160 | $— | $17,160 | | Government-sponsored enterprise securities | $— | $23,898 | $— | $23,898 | | Corporate bonds and commercial paper | $— | $28,795 | $— | $28,795 | | **Total** | **$8,084** | **$69,853** | **$—** | **$77,937** | [9. Debt](index=34&type=section&id=9.%20Debt) - Rigel has a **$60.0 million** term loan credit facility with MidCap Financial Trust, with an outstanding principal balance of **$40.0 million** as of September 30, 2022[91](index=91&type=chunk) - The maturity date for the term loans was extended to **September 1, 2026**, and the interest-only period was extended to **October 1, 2024**[96](index=96&type=chunk) - The interest rate benchmark was changed from LIBOR to SOFR plus an adjustment of **0.11448%**, subject to a **1.50%** floor, plus an applicable margin of **5.65%**[96](index=96&type=chunk) Future Principal Payments | Year | Principal Amount (in thousands) | | :--- | :--- | | Remainder of 2022 | $— | | 2023 | $— | | 2024 | $5,000 | | 2025 | $20,000 | | 2026 | $15,000 | | **Total Principal** | **$40,000** | [10. Leases](index=37&type=section&id=10.%20Leases) - The current operating lease for research and office space expires in January 2023, with a weighted-average remaining term of **0.33 years** as of September 30, 2022[102](index=102&type=chunk) Operating Lease Expense | Metric | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Fixed operating lease expense | $1,340 | $1,340 | $4,020 | $4,020 | | Variable operating lease expense | $211 | $259 | $602 | $651 | | **Total operating lease expense** | **$1,551** | **$1,599** | **$4,622** | **$4,671** | Future Minimum Lease Payments | Period | Operating Lease (in thousands) | Sublease Receipts (in thousands) | Net (in thousands) | | :--- | :--- | :--- | :--- | | Remainder of 2022 | $2,630 | $(1,183) | $1,447 | | 2023 | $877 | $(394) | $483 | | **Total minimum payments required** | **$3,507** | **$(1,577)** | **$1,930** | [11. Income Taxes](index=39&type=section&id=11.%20Income%20Taxes) - No provision for income taxes was recognized for the three and nine months ended September 30, 2022, due to pre-tax book losses and a full valuation allowance on deferred tax assets[108](index=108&type=chunk) Income Tax Provision | Metric | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Provision for (benefit from) income taxes | $— | $(136) | $— | $665 | [12. Subsequent Events](index=39&type=section&id=12.%20Subsequent%20Events) - A workforce reduction was announced on October 10, 2022, primarily affecting development and administration groups, with restructuring charges expected in Q4 2022[109](index=109&type=chunk) - A new sublease agreement was entered on October 28, 2022, for approximately 13,670 square feet of office space in South San Francisco, with future lease payments of approximately **$1.7 million**, expected to serve as the new headquarters[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, results of operations, and material cash requirements [Overview](index=40&type=section&id=Overview) - Rigel Pharmaceuticals is a biotechnology company focused on discovering, developing, and providing novel small molecule drugs for hematologic disorders, cancer, and rare immune diseases[114](index=114&type=chunk) - TAVALISSE® (fostamatinib) is the company's first FDA-approved oral SYK inhibitor for chronic ITP in adult patients, also commercially available in Europe, UK, and Canada[114](index=114&type=chunk) - The portfolio includes olutasidenib (mIDH1 inhibitor for AML), fostamatinib in wAIHA (sNDA not expected), fostamatinib in COVID-19 (Phase 3 completed), and partnered IRAK and RIPK1 inhibitor programs[115](index=115&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk) [Business Update](index=42&type=section&id=Business%20Update) - Net product sales of TAVALISSE for the nine months ended September 30, 2022, increased by **19% to $53.9 million**, driven by increased quantities sold and price, partially offset by higher revenue reserves[119](index=119&type=chunk) - Rigel in-licensed olutasidenib, an mIDH1 inhibitor for AML, from Forma Therapeutics in July 2022; an NDA has been submitted to the FDA with a PDUFA action date of **February 15, 2023**[122](index=122&type=chunk)[123](index=123&type=chunk) - The Phase 3 FORWARD study of fostamatinib in warm autoimmune hemolytic anemia (wAIHA) **did not meet its primary efficacy endpoint**, and Rigel does not expect to file a supplemental New Drug Application (sNDA) for this indication at this time[126](index=126&type=chunk) - The FOCUS Phase 3 clinical trial of fostamatinib for hospitalized high-risk COVID-19 patients completed enrollment and, as announced on November 1, 2022, approached but **did not meet statistical significance (p=0.0603)** in its primary efficacy endpoint[129](index=129&type=chunk) - Lilly continues to advance R552, a RIPK1 inhibitor, with an initial Phase 2 study in an immunologic disease indication anticipated to begin in the **first half of 2023**[134](index=134&type=chunk) - Rigel filed a patent infringement lawsuit against Annora Pharma Private Limited in July 2022 following Annora's submission of an Abbreviated New Drug Application (ANDA) for a generic version of TAVALISSE[135](index=135&type=chunk) - The COVID-19 pandemic continues to impact business operations, leading to reduced patient-doctor interactions and fewer sales visits, though virtual engagements are maintained[139](index=139&type=chunk) [Our Product Portfolio](index=47&type=section&id=Our%20Product%20Portfolio) Product Pipeline | Product/Program | Indication | Target | Pre-Clinical | Phase 1 | Phase 2 | Phase 3 | Approved | Partner | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Commercialized Products / Global Market Status** | | | | | | | | | | TAVALISSE (fostamatinib) | Adult Chronic ITP | SYK | | | | | ☒ | | | TAVLESSE (fostamatinib) - Europe | Adult Chronic ITP | SYK | | | | | ☒ | GRIFOLS | | TAVALISSE (fostamatinib) - Canada/Israel | Adult Chronic ITP | SYK | | | | | ☒ | MEDISON | | Fostamatinib - Asia | Adult Chronic ITP | SYK | | | | | ☒ | KISSEI | | Fostamatinib - Latin America | Adult Chronic ITP | SYK | | | | | ☒ | KNIGHT | | **In-Licensed Program** | | | | | | | | | | Olutasidenib | R/R AML | mIDH1 | | | | ☒ | | | | **Clinical Trials** | | | | | | | | | | TAVALISSE (fostamatinib) | Warm AIHA | SYK | | | | ☒ | | | | Fostamatinib | COVID-19 | SYK | | | | ☒ | | | | Fostamatinib - NIH/NHLBI (ACTIV-4) | COVID-19 | SYK | | | | ☒ | | | | R289 | LR-MDS | IRAK1/4 | | ☒ | | | | | | **Partnered Programs** | | | | | | | | | | RAIN-32 (milademetan) / DS-3032 | Liposarcoma | MDM2 | | | ☒ | ☒ | | Daiichi-Sankyo | | BGB3234 | NSCLC & COVID-19 | AXL | | ☒ | ☒ | | | BerGenBio | | R552 (systemic) | Immune Diseases | RIPK1 | | ☒ | | | | Lilly | | RIP1 Inhibitor (brain penetrating) | CNS Diseases | RIPK1 | | ☒ | | | | Lilly | [Commercial Product](index=49&type=section&id=Commercial%20Product) - TAVALISSE (fostamatinib) was approved by the FDA in April 2018 for the treatment of adult patients with chronic ITP who have had an insufficient response to a previous treatment[147](index=147&type=chunk) - Fostamatinib is an orally-available SYK inhibitor that blocks the activation of SYK inside immune cells, interrupting the destruction of platelets in ITP patients[144](index=144&type=chunk) - The company's commercial strategy for TAVALISSE in the US focuses on hematologists and hematologist-oncologists, supported by a fully integrated commercial team and the Rigel One Care (ROC) patient support program[150](index=150&type=chunk)[151](index=151&type=chunk) - TAVALISSE competes with existing ITP therapies including corticosteroids, TPO-RAs (PROMACTA, Nplate, DOPTELET), splenectomy, and immunosuppressants, offering a distinct mechanism of action[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Global commercialization of fostamatinib is managed through license agreements with Grifols (Europe/Turkey), Kissei (Japan/Asia), Medison (Canada/Israel), and Knight (Latin America)[157](index=157&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk) [In-licensed Program](index=56&type=section&id=In-licensed%20Program) - Olutasidenib is an oral, small molecule investigational drug designed to selectively bind to and inhibit mutated isocitrate dehydrogenase-1 (mIDH1) for the treatment of relapsed/refractory (R/R) acute myeloid leukemia (AML) and other malignancies[168](index=168&type=chunk) - Interim results from Forma's Phase 2 registrational trial for olutasidenib in mIDH1 R/R AML demonstrated a **35% composite complete remission (CR) or CR with partial hematologic recovery (CRh) rate** with a median duration of **25.9 months**[173](index=173&type=chunk) - An NDA for olutasidenib for the treatment of mIDH1 R/R AML has been submitted to the FDA, with a Prescription Drug User Fee Act (PDUFA) action date of **February 15, 2023**[172](index=172&type=chunk) [Clinical Stage Programs](index=56&type=section&id=Clinical%20Stage%20Programs) - The Phase 3 FORWARD study of fostamatinib in warm autoimmune hemolytic anemia (wAIHA) **did not demonstrate statistical significance** in its primary efficacy endpoint, leading Rigel not to expect to file an sNDA for this indication at this time[180](index=180&type=chunk) - The Rigel-led FOCUS Phase 3 clinical trial of fostamatinib for hospitalized high-risk COVID-19 patients completed enrollment and, as announced on November 1, 2022, approached but **did not meet statistical significance (p=0.0603)** in the primary efficacy endpoint[183](index=183&type=chunk) - Fostamatinib has been selected for the NIH ACTIV-4 Host Tissue Trial in hospitalized COVID-19 patients, a randomized, placebo-controlled Phase 3 trial[187](index=187&type=chunk) - Rigel is advancing R289, an oral IRAK1/4 inhibitor, with FDA clearance for a Phase 1b study in low-risk myelodysplastic syndromes (MDS) and exploration of indications in rare immune diseases[194](index=194&type=chunk) [Partnered Clinical Programs](index=62&type=section&id=Partnered%20Clinical%20Programs) - BerGenBio initiated a Phase 1b/2a trial evaluating bemcentinib (BGB324, an AXL inhibitor) in combination therapy for first-line non-small cell lung cancer (NSCLC) patients with STK11 mutations[195](index=195&type=chunk) - Rain Therapeutics Inc (Rain) completed enrollment for its Phase 3 study of milademetan (DS-3032, an MDM2 inhibitor) in liposarcoma and commenced a second clinical trial for RAIN-32 in MDM2-amplified advanced solid tumors[197](index=197&type=chunk) - The agreement with AstraZeneca AB (AZ) for the JAK inhibitor AZ-D0449 was terminated in December 2021, with full rights returned to Rigel[198](index=198&type=chunk) [Research/Preclinical Programs](index=64&type=section&id=Research/Preclinical%20Programs) - Rigel is conducting proprietary research in inflammation/immunology, immuno-oncology, and cancers, focusing on identifying new product candidates and expanding the clinical utility of existing compounds[199](index=199&type=chunk) [Commercialization and Sponsored Research and License Agreements](index=64&type=section&id=Commercialization%20and%20Sponsored%20Research%20and%20License%20Agreements) - For detailed discussions of commercialization and sponsored research and license agreements, refer to Note 4 – Sponsored Research and License Agreements and Government Contract in Part I, Item 1[200](index=200&type=chunk) [Results of Operations](index=64&type=section&id=Results%20of%20Operations) [Revenues](index=64&type=section&id=Three%20months%20ended%20September%2030%2C%202022%20and%202021) Revenue Breakdown | Category | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | Aggregate Change (in thousands) | | :--- | :--- | :--- | :--- | | Product sales, net | $19,188 | $16,012 | $3,176 | | Contract revenues from collaborations | $722 | $4,531 | $(3,809) | | Government contract | $2,500 | $1,000 | $1,500 | | **Total revenues** | **$22,410** | **$21,543** | **$867** | - Net product sales of TAVALISSE increased by **20%** for the three months ended September 30, 2022, primarily due to increased quantities sold and price, partially offset by higher revenue reserves from new PBM contracts and government program rebates[201](index=201&type=chunk)[203](index=203&type=chunk) - Contract revenues from collaborations decreased significantly for the three months ended September 30, 2022, primarily due to lower revenue from the Lilly license agreement compared to the prior year[204](index=204&type=chunk) [Cost of Product Sales](index=66&type=section&id=Cost%20of%20Product%20Sales) Cost of Product Sales | Period | 2022 (in thousands) | 2021 (in thousands) | Aggregate Change (in thousands) | | :--- | :--- | :--- | :--- | | 3 Months Ended Sep 30 | $250 | $151 | $99 | | 9 Months Ended Sep 30 | $1,407 | $596 | $811 | - Cost of product sales for TAVALISSE remains lower than anticipated due to manufacturing and related costs prior to FDA approval being charged to research and development expense, not capitalized[208](index=208&type=chunk) - The increase in cost of product sales for the nine months ended September 30, 2022, was primarily due to the delivery of drug supply to collaborative partners Grifols and Kissei[210](index=210&type=chunk) [Research and Development Expense](index=68&type=section&id=Research%20and%20Development%20Expense) Research and Development Expense | Period | 2022 (in thousands) | 2021 (in thousands) | Aggregate Change (in thousands) | | :--- | :--- | :--- | :--- | | 3 Months Ended Sep 30 | $14,666 | $18,300 | $(3,634) | | 9 Months Ended Sep 30 | $44,907 | $51,933 | $(7,026) | - The decrease in R&D expense for the three months ended September 30, 2022, was mainly due to lower costs in COVID-19 (**$1.8M**), AIHA (**$0.9M**), and IRAK1/4 inhibitor programs (**$1.2M**), and personnel-related costs (**$0.8M**) from early-stage research restructuring, partially offset by a **$2.0 million** upfront payment for olutasidenib[211](index=211&type=chunk) - For the nine months, R&D expense decreased due to lower personnel-related costs (**$3.5M**), other R&D expenses (**$3.4M**), and reduced costs in COVID-19 (**$3.8M**) and AIHA (**$2.5M**) studies, partially offset by increased IRAK 1/4 program costs (**$3.0M**) and the Forma upfront payment (**$2.0M**)[212](index=212&type=chunk) - Rigel exited early-stage research in November 2021 and announced further workforce reduction in October 2022 to focus resources on mid-to-late-stage development and commercialization, expecting cost savings[216](index=216&type=chunk) [Selling, General and Administrative Expense](index=72&type=section&id=Selling%2C%20General%20and%20Administrative%20Expense) Selling, General and Administrative Expense | Period | 2022 (in thousands) | 2021 (in thousands) | Aggregate Change (in thousands) | | :--- | :--- | :--- | :--- | | 3 Months Ended Sep 30 | $25,897 | $22,877 | $3,020 | | 9 Months Ended Sep 30 | $80,279 | $67,376 | $12,903 | - The increase in SG&A expense for the three months ended September 30, 2022, was mainly due to higher personnel-related costs (**$1.6M**), recruitment fees, trainings, conferences, travel (**$0.7M**), commercial activities (**$0.2M**), and other SG&A costs (**$0.5M**)[228](index=228&type=chunk) - For the nine months, the increase was driven by personnel-related costs (**$5.9M**), commercial activities (**$3.8M**), trainings/travel (**$2.4M**), and stock-based compensation (**$1.2M**, including an incremental **$0.8M** charge)[229](index=229&type=chunk) - SG&A expense is expected to increase for the remainder of 2022 due to commercial expansion and potential olutasidenib launch, with some cost savings anticipated from recent workforce reductions in the administrative group[230](index=230&type=chunk)[231](index=231&type=chunk) [Interest Income and Interest Expense](index=74&type=section&id=Interest%20Income%20and%20Interest%20Expense) Interest Income and Expense | Metric | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Interest income | $192 | $14 | $255 | $31 | | Interest expense | $(826) | $(1,317) | $(2,600) | $(3,561) | - The decrease in interest expense for both periods was mainly due to the timing of accretion of interest on the outstanding financing liability, partially offset by higher interest on the term loan with MidCap due to increased outstanding balance[234](index=234&type=chunk) [Provision for Income Taxes](index=74&type=section&id=Provision%20for%20Income%20Taxes) Income Tax Provision | Metric | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Provision for (benefit from) income taxes | $— | $(136) | $— | $665 | - No provision for income taxes was recognized for the three and nine months ended September 30, 2022, due to pre-tax book losses and a full valuation allowance on deferred tax assets, considering cumulative and forecasted losses[235](index=235&type=chunk) [Critical Accounting Policies and Use of Estimates](index=74&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) - No material changes to critical accounting policies were reported, except for accounting associated with the in-license agreement with Forma, as detailed in Note 4[239](index=239&type=chunk) [Liquidity and Capital Resources](index=76&type=section&id=Liquidity%20and%20Capital%20Resources) [Liquidity](index=76&type=section&id=Liquidity) - As of September 30, 2022, cash, cash equivalents, and short-term investments totaled **$81.6 million**, a decrease from **$125.0 million** at December 31, 2021[241](index=241&type=chunk) Cash Flow Summary | Cash Flow Activity | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(51,849) | $24,964 | | Net cash provided by (used in) investing activities | $54,179 | $(86,524) | | Net cash provided by financing activities | $8,646 | $61,590 | | Net increase in cash and cash equivalents | $10,976 | $30 | - Net cash used in operating activities for the nine months ended September 30, 2022, was **$51.8 million**, a significant shift from **$25.0 million** provided in the prior year[242](index=242&type=chunk) - Net cash provided by investing activities for the nine months ended September 30, 2022, was **$54.2 million**, primarily due to net maturities of short-term investments[243](index=243&type=chunk) - Existing capital resources are believed to be sufficient to fund current and projected requirements for at least the next 12 months[245](index=245&type=chunk) [Capital Resources](index=78&type=section&id=Capital%20Resources) - Operations have been financed primarily through sales of equity securities, debt financing, TAVALISSE sales, and contract payments from collaboration agreements[246](index=246&type=chunk) - Total future contingent payments from existing collaboration agreements could exceed **$1.3 billion**[247](index=247&type=chunk) - An additional **$3.5 million** is expected from the **$16.5 million** US Department of Defense award for the COVID-19 clinical trial[248](index=248&type=chunk) - The company has a **$40.0 million** principal term loan outstanding with MidCap and the ability to access an additional **$20.0 million** through March 31, 2023[252](index=252&type=chunk) - Future funding requirements are significant and will depend on factors such as commercialization success, clinical trial progress, regulatory approvals, and collaboration achievements, with potential financing through equity, debt, or licensing arrangements[255](index=255&type=chunk) [Material Cash Requirements](index=82&type=section&id=Material%20Cash%20Requirements) - Rigel is responsible for funding R552 development costs up to **$65.0 million** through April 1, 2024, under the Lilly collaboration, with **$12.4 million** already billed and paid[261](index=261&type=chunk) - The Forma license agreement for olutasidenib includes potential development and regulatory milestone payments up to **$67.5 million** and commercial milestones up to **$165.5 million**, with a **$2.5 million** regulatory milestone met in October 2022[262](index=262&type=chunk) - Contractual commitment for facilities lease expiring January 2023 amounts to **$3.5 million**, with a new sublease agreement for approximately **$1.7 million** in future lease payments commencing November 2022[263](index=263&type=chunk) - The outstanding principal of the MidCap term loan is **$40.0 million**, with no principal payments due within 12 months; future interest and final fee payments amount to **$9.6 million**, with approximately **$3.0 million** payable within 12 months[267](index=267&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=84&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms no material changes to market risk disclosures, which primarily relate to interest rate sensitivities - No material changes to quantitative and qualitative disclosures about market risk were reported for the nine months ended September 30, 2022, compared to the Annual Report on Form 10-K[270](index=270&type=chunk) - Market risks primarily include interest rate sensitivities related to short-term investments and outstanding loans[270](index=270&type=chunk) [Item 4. Controls and Procedures](index=84&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and reports no material changes in internal control - The company's disclosure controls and procedures were effective as of September 30, 2022[271](index=271&type=chunk) - There were no changes in internal control over financial reporting that materially affected or are reasonably likely to materially affect internal control over financial reporting during the quarter ended September 30, 2022[272](index=272&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section details a patent infringement lawsuit filed against Annora Pharma regarding a generic version of TAVALISSE - Rigel filed a patent infringement lawsuit on July 25, 2022, against Annora Pharma and its affiliates for infringement of US Patent Nos 7,449,458; 8,263,122; 8,652,492; 8,771,648; and 8,951,504 related to TAVALISSE[274](index=274&type=chunk) - The lawsuit followed Annora's Paragraph IV certification in its ANDA, asserting that these patents would not be infringed, are invalid, and/or are unenforceable[274](index=274&type=chunk) - Rigel intends to vigorously enforce and defend its intellectual property related to TAVALISSE[274](index=274&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to the business, including dependence on TAVALISSE, competition, and financial sustainability - Rigel's prospects are highly dependent on the commercial success of its first commercial product, **TAVALISSE (fostamatinib)**[279](index=279&type=chunk) - The evolving effects of the **COVID-19 pandemic** continue to adversely impact commercialization efforts, supply chain, regulatory, clinical development, and other business operations[279](index=279&type=chunk)[287](index=287&type=chunk) - There is a high risk that drug discovery and development efforts may not generate successful product candidates, and **clinical trials may fail** to meet primary efficacy endpoints or achieve regulatory approval[279](index=279&type=chunk)[299](index=299&type=chunk)[303](index=303&type=chunk) - Products may face unfavorable pricing regulations, health technology assessments, third-party payor reimbursement practices, or labeling restrictions, which vary by country[279](index=279&type=chunk)[339](index=339&type=chunk)[496](index=496&type=chunk) - The approval of **generic versions of TAVALISSE** or competing products could significantly harm Rigel's business and financial condition[279](index=279&type=chunk)[324](index=324&type=chunk)[327](index=327&type=chunk) - Unforeseen safety issues with TAVALISSE post-approval could lead to changes in prescribing information, use limitations, or costly product liability litigation[279](index=279&type=chunk)[328](index=328&type=chunk) - Rigel's success is dependent on its **intellectual property rights** and those of third parties, which are complex and subject to challenges, including patent infringement lawsuits[284](index=284&type=chunk)[365](index=365&type=chunk)[367](index=367&type=chunk) - The company has a history of **operating losses** and requires additional capital to fund operations and research, with future profitability being uncertain[343](index=343&type=chunk)[358](index=358&type=chunk) - Indebtedness in the form of a term loan with MidCap could adversely affect financial condition and ability to respond to business changes, with potential limitations on accessing remaining credit facilities[345](index=345&type=chunk) - Delays in clinical testing, whether due to the COVID-19 pandemic, geopolitical conflicts, or other factors, could result in increased costs and prolonged product development timelines[438](index=438&type=chunk) - The transition away from **LIBOR** could affect the value of certain short-term investments and future borrowing costs, introducing financial uncertainty[522](index=522&type=chunk)[526](index=526&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=97&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds were reported[528](index=528&type=chunk) [Item 3. Defaults Upon Senior Securities](index=97&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[529](index=529&type=chunk) [Item 4. Mine Safety Disclosures](index=97&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that the disclosure requirements for mine safety are not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[530](index=530&type=chunk) [Item 5. Other Information](index=97&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report for the period - No other information was reported[531](index=531&type=chunk) [Item 6. Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference as part of the Quarterly Report - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, License and Transition Services Agreement with Forma Therapeutics, Third Amendment to Credit and Security Agreement with MidCap Financial Trust, and various certifications[534](index=534&type=chunk) [Signatures](index=100&type=section&id=Signatures) This section contains the official signatures of the company's certifying officers - The report was signed by Raul R Rodriguez (Chief Executive Officer) and Dean L Schorno (Chief Financial Officer) on November 3, 2022[542](index=542&type=chunk)

| --- | --- | --- | |----------------------------|-------|-------| | | | | | | | | | | | | | Q2 2022 Financial Results | | | | Presentation August 2,2022 | | | | | | | 1 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955 ("PSLRA") relating to, among other things, Rigel's licensing agreement with Forma Therapeutics Holdings, Inc. ("Forma Therapeutics") and the success thereof; Rigel's ability to successfu ...

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Q2 2022 Earnings Conference Call August 2, 2022 4:30 PM ET Company Participants Dolly Vance - Executive Vice President, Corporate Affairs and General Counsel Raul Rodriguez - President and Chief Executive Officer Dave Santos - Executive Vice President and Chief Commercial Officer Wolfgang Dummer - Executive Vice President and Chief Medical Officer Dean Schorno - Executive Vice President and Chief Financial Officer Jorge Cortes - Director, Georgia Cancer Center. Augu ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 0-29889 Rigel Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) Delaware 94-3248524 (Sta ...