Rigel(RIGL) - 2025 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements Rigel Pharmaceuticals achieved net income in Q1 2025, driven by an 81% revenue increase to $53.3 million, improving assets and equity Condensed Balance Sheets As of March 31, 2025, total assets increased to $176.0 million, and stockholders' equity significantly improved to $18.6 million from $3.3 million Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $45,728 | $56,746 | | Total current assets | $146,563 | $135,103 | | Total assets | $175,972 | $163,976 | | Liabilities & Equity | | | | Total current liabilities | $66,629 | $63,299 | | Total liabilities | $157,405 | $160,688 | | Total stockholders' equity | $18,567 | $3,288 | Condensed Statements of Operations The company reported a net income of $11.4 million for Q1 2025, a significant turnaround from a loss, driven by 81% revenue growth Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Product sales, net | $43,550 | $26,003 | | Contract revenues from collaborations | $9,783 | $3,531 | | Total revenues | $53,333 | $29,534 | | Total costs and expenses | $40,560 | $36,500 | | Income (loss) from operations | $12,773 | ($6,966) | | Net income (loss) | $11,446 | ($8,247) | | Basic EPS | $0.64 | ($0.47) | | Diluted EPS | $0.63 | ($0.47) | Condensed Statements of Cash Flows Net cash used in operating activities significantly improved to -$0.9 million in Q1 2025, with overall cash decreasing by $11.0 million Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($893) | ($5,013) | | Net cash (used in) provided by investing activities | ($10,552) | $313 | | Net cash provided by (used in) financing activities | $484 | ($2,512) | | Net decrease in cash, cash equivalents and restricted cash | ($10,961) | ($7,212) | Notes to Condensed Financial Statements Notes detail Rigel's business, FDA-approved products, revenue recognition, and confirm $77.1 million cash sufficient for 12 months - The company has three FDA-approved products: TAVALISSE® for chronic immune thrombocytopenia (ITP), REZLIDHIA® for relapsed or refractory acute myeloid leukemia (AML) with an IDH1 mutation, and GAVRETO® for RET fusion-positive non-small cell lung cancer (NSCLC) and thyroid cancer[20][21][22] - As of March 31, 2025, the company had approximately $77.1 million in cash, cash equivalents, and short-term investments and believes these funds are sufficient for at least the next 12 months[28][29] - Total future contingent payments to Rigel from all existing collaboration agreements could amount to approximately $1.5 billion, contingent on partners achieving specific development, regulatory, and commercial milestones[41] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q1 2025 performance to robust product sales growth and advancing pipeline, with $77.1 million capital sufficient for 12 months Overview and Business Updates Rigel, a biotechnology firm, saw significant Q1 2025 sales growth for TAVALISSE, REZLIDHIA, and GAVRETO, while advancing its R289 program Q1 2025 Net Product Sales (in millions) | Product | Q1 2025 Net Sales | YoY Growth | | :--- | :--- | :--- | | TAVALISSE | $28.5 | 35% | | REZLIDHIA | $6.1 | 25% | | GAVRETO | $9.0 | N/A | - The R289 (IRAK 1/4 inhibitor) program is advancing in a Phase 1b study for lower-risk Myelodysplastic Syndrome (MDS), with ongoing enrollment in the sixth dose level[125] - The FDA has granted R289 Orphan Drug and Fast Track designations[126] - On April 30, 2025, Rigel notified its partner Lilly that it would not exercise its opt-in right for co-funding ocadusertib development, releasing a $40.0 million cost-share liability from Rigel's balance sheet[131][51] Our Product Portfolio Rigel's portfolio includes three commercial products and a clinical pipeline led by R289, with partnered programs like Ocadusertib Product Portfolio Summary | Product | Indication | Target | Stage | Partner | | :--- | :--- | :--- | :--- | :--- | | Commercialized Products | | | | | | TAVALISSE® (fostamatinib) | Adult Chronic ITP | SYK | Approved | - | | REZLIDHIA® (olutasidenib) | R/R AML | mIDH1 | Approved | - | | GAVRETO® (pralsetinib) | RET+ NSCLC & Advanced Thyroid Cancer | RET | Approved | - | | Clinical Trials | | | | | | R289 | Lower-risk MDS | IRAK1/4 | Phase 1b | - | | Partnered Programs | | | | | | Ocadusertib (systemic) | Rheumatoid Arthritis | RIPK1 | Phase 2 | Lilly | Results of Operations Q1 2025 total revenues surged to $53.3 million due to product and collaboration sales, while R&D increased and SG&A decreased Revenue Breakdown (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Product sales, net | $43,550 | $26,003 | $17,547 | | Contract revenues from collaborations | $9,783 | $3,531 | $6,252 | | Total revenues | $53,333 | $29,534 | $23,799 | - The increase in net product sales was driven by a 35% rise in TAVALISSE sales, a 25% rise in REZLIDHIA sales, and $9.0 million in new sales from GAVRETO[191] - Research and development expenses increased by $2.4 million YoY, primarily due to higher clinical trial costs for the ongoing IRAK 1/4 inhibitor program and olutasidenib development programs[196][197] - Selling, general and administrative expenses decreased by $0.7 million YoY, mainly because of a $2.0 million reduction in stock-based compensation expense related to performance-based awards[207][208] Liquidity and Capital Resources Rigel held $77.1 million in cash as of March 31, 2025, sufficient for 12 months, with a $60.0 million term loan and potential ATM offering - The company had $77.1 million in cash, cash equivalents, and short-term investments as of March 31, 2025, and believes this is sufficient to fund operations for at least the next 12 months[216][220] - Rigel has a fully funded $60.0 million term loan credit facility with MidCap, with principal payments of $15.0 million due within the next 12 months[224][234] - The company has an active at-the-market (ATM) offering agreement to sell up to $100.0 million of common stock, though no shares had been sold under this agreement as of March 31, 2025[223] - As of March 31, 2025, the company has a contractual manufacturing obligation for TAVALISSE that could result in cancellation fees of approximately $20.8 million[230] Quantitative and Qualitative Disclosures About Market Risk No material changes to market risk disclosures occurred in Q1 2025, with primary risks remaining interest rate sensitivities - There were no material changes to market risk disclosures during the three months ended March 31, 2025, with primary risks related to interest rate sensitivities[237] Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[239] - No changes occurred in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[240] PART II OTHER INFORMATION Legal Proceedings Rigel settled patent litigation with Annora Pharma in March 2025, licensing generic TAVALISSE sales from Q2 2032 - The company settled patent litigation with Annora Pharma in March 2025 regarding a generic version of TAVALISSE[244] - Under the settlement, Annora will have a license to sell its generic product starting in Q2 2032, or earlier under certain circumstances[244] Risk Factors The company faces significant risks including product dependency, clinical trial failures, generic competition, and regulatory challenges - The company's prospects are highly dependent on the commercial success of its existing products, and any diminishment could adversely affect the business[247] - There is a high risk that drug discovery and development efforts may not generate successful product candidates, and clinical trial failures could harm commercial prospects[247][257] - The business is subject to stringent healthcare regulations, privacy laws, and cybersecurity threats, with non-compliance potentially leading to significant fines and penalties[247][267] - Approval of generic versions of the company's products could significantly harm the business, as highlighted by the recent settlement of patent litigation with Annora[247][307][310]