Rigel(RIGL) - 2025 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements Rigel Pharmaceuticals' unaudited condensed consolidated financial statements for periods ending June 30, 2025, are presented, covering balance sheets, income statements, and cash flows Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $53,407 | $56,746 | | Total current assets | $175,393 | $135,103 | | Total assets | $206,736 | $163,976 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $86,636 | $63,299 | | Total liabilities | $124,802 | $160,688 | | Total stockholders' equity | $81,934 | $3,288 | Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $101,685 | $36,841 | $155,018 | $66,375 | | Income (loss) from operations | $61,103 | $447 | $73,876 | $(6,519) | | Net income (loss) | $59,613 | $(1,030) | $71,059 | $(9,277) | | Diluted EPS | $3.28 | $(0.06) | $3.91 | $(0.53) | Condensed Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $29,644 | $(4,711) | | Net cash (used in) provided by investing activities | $(33,828) | $11,242 | | Net cash provided by (used in) financing activities | $902 | $(3,264) | | Net (decrease) increase in cash | $(3,282) | $3,267 | Notes to Condensed Financial Statements Detailed notes cover accounting policies, revenue, collaborations, and debt, including the $40.0 million Lilly cost share release - The company's commercial portfolio includes three FDA-approved products: TAVALISSE® (fostamatinib), REZLIDHIA® (olutasidenib), and GAVRETO® (pralsetinib), which began commercialization in June 2024[20][21][22] - As of June 30, 2025, the company had $108.4 million in cash, cash equivalents, and short-term investments and believes these funds are sufficient to support operations for at least the next 12 months[28][29] Disaggregated Revenue (in thousands) | Revenue Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total product sales, net | $58,948 | $33,450 | $102,498 | $59,453 | | Revenues from collaborations | $42,737 | $3,391 | $52,520 | $6,922 | | Total revenues | $101,685 | $36,841 | $155,018 | $66,375 | - On April 30, 2025, Rigel notified Eli Lilly of its decision not to exercise its opt-in right for co-funding ocadusertib development, resulting in the recognition of $40.0 million in contract revenue in Q2 2025 from the released cost share liability[51] - The company acquired the US rights to GAVRETO from Blueprint in February 2024 for a purchase price of $15.0 million plus potential future milestones and royalties, accounted for as an asset acquisition[69][72] - As of June 30, 2025, the company had $60.0 million in principal outstanding from its credit facility with MidCap, maturing on September 1, 2027, with an interest-only period extending through October 1, 2025[99][100] Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes Q2 and H1 2025 financial results, detailing revenue growth, operating expenses, liquidity, and capital resources Business Updates This section details commercial performance of key products, showing significant sales growth, and outlines clinical pipeline progress Net Product Sales Growth - H1 2025 vs H1 2024 | Product | H1 2025 Net Sales (in millions) | H1 2024 Net Sales (in millions) | Increase ($ in millions) | Increase (%) | | :--- | :--- | :--- | :--- | :--- | | TAVALISSE | $68.5 million | $47.5 million | $21.1 million | 44% | | REZLIDHIA | $13.1 million | $10.0 million | $3.1 million | 31% | | GAVRETO | $20.8 million | $1.9 million | $18.9 million | 995% | - The Phase 1b study of R289, an oral IRAK 1/4 inhibitor for lower-risk MDS, completed enrollment in its dose escalation part in July 2025, with updated data and dose expansion planned for the second half of 2025[132][133] - Rigel opted out of future co-funding obligations for the ocadusertib program with Lilly, resulting in the release of a $40.0 million cost share liability, recognized as revenue in Q2 2025[139] Results of Operations Operations analysis shows significant Q2 and H1 2025 revenue increases from collaborations and product sales, alongside rising operating expenses Revenue Analysis (in thousands) | Revenue Type | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $58,948 | $33,450 | $25,498 | $102,498 | $59,453 | $43,045 | | Contract revenues | $42,737 | $3,391 | $39,346 | $52,520 | $6,922 | $45,598 | | Total revenues | $101,685 | $36,841 | $64,844 | $155,018 | $66,375 | $88,643 | - The substantial increase in contract revenues for Q2 and H1 2025 was primarily due to the $40.0 million non-cash revenue related to the release of the cost share liability from the Lilly collaboration[200] - Research and development expenses increased by $3.7 million (32%) in H1 2025 compared to H1 2024, mainly driven by higher clinical trial costs for the olutasidenib and IRAK 1/4 inhibitor programs[208] - Selling, general and administrative expenses increased slightly by $0.5 million (1%) in H1 2025 compared to H1 2024, with increased personnel costs largely offset by decreased consulting services and stock-based compensation expense[219] Liquidity and Capital Resources Rigel held $108.4 million in cash as of June 30, 2025, with sufficient liquidity for 12 months, driven by positive operating cash flow Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash from Operating activities | $29,644 | $(4,711) | | Net cash from Investing activities | $(33,828) | $11,242 | | Net cash from Financing activities | $902 | $(3,264) | - The company has a contractual manufacturing obligation for TAVALISSE that could potentially result in cancellation fees of approximately $22.5 million, with $3.0 million expected to be due in the remainder of 2025[243] - Future minimum principal payments on the outstanding $60.0 million loan are $7.5 million for the remainder of 2025, $30.0 million for 2026, and $22.5 million for 2027[103][249] Quantitative and Qualitative Disclosures About Market Risk No material changes occurred in the company's market risk disclosures, including interest rate sensitivities, since December 31, 2024 - There were no material changes to the company's market risk disclosures during the six months ended June 30, 2025[252] Controls and Procedures The CEO and CFO concluded disclosure controls were effective, with no material changes to internal control over financial reporting this quarter - The principal executive officer and principal financial officer concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[253] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[254] PART II OTHER INFORMATION Legal Proceedings Rigel settled patent litigation with Annora Pharma in March 2025, resolving disputes over a generic TAVALISSE version - The company settled patent litigation with Annora concerning a generic version of TAVALISSE, allowing Annora to sell its generic product in Q2 2032 or earlier under certain circumstances[259] Risk Factors This section outlines key risks, including product commercial success dependence, clinical failures, competition, regulatory challenges, and manufacturing reliance - The company's prospects are highly dependent on the commercial success of its three products: TAVALISSE, REZLIDHIA, and GAVRETO, with any diminishment adversely affecting the business[263][500] - 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 and delay or eliminate revenue generation[263][274] - The company faces risks from potential generic versions of its products, such as TAVALISSE, which could significantly decrease revenue, following a settlement allowing a generic version to market in Q2 2032 or earlier[328][329] - The business is subject to stringent and evolving privacy and information security laws (e.g., GDPR, CCPA), and failure to comply could result in significant fines, penalties, and reputational harm[287] - The company lacks its own manufacturing capabilities and relies on third-party manufacturers, exposing it to risks of supply disruption, quality control issues, and regulatory compliance failures[266][473] Other Information Items (Items 2-6) This section covers procedural items, including no unregistered equity sales, no defaults on senior securities, and no Rule 10b5-1 trading plan changes - The company reported no unregistered sales of equity securities, use of proceeds, or defaults upon senior securities for the period[551][552] - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[554]