Rigel Pharmaceuticals, Inc. (RIGL) Earnings Call Transcript & Summary

Welcome, everyone, to the 40th Annual JPMorgan Healthcare Conference. My name is Tessa Romero, I'm one the senior biotech analysts here at JPMorgan. I'm pleased to welcome our next presenting company, Rigel Pharmaceuticals. And presenting on behalf of the company, we have CEO, Raul Rodriguez. Before I'd -- I'd like to hand it over to Raul to start his presentation.

Thank you, Tessa. I appreciate it, and thank you, everyone, for attending the conference. It's nice to be able to present to you this day. First, let me start with an important forward-looking statement that pertains to this presentation. You can review this statement on our website as well as our filings at the SEC. Let me start on Slide 3. In 2021, we made important progress across all the key value drivers for Rigel, that you see here on this slide. And what this does, is set us up with what we believe will be a transformative year for us in 2022. I'll take you through each of these in this presentation today. First of all, let me begin with growing sales in ITP. In Q4 of '21, last quarter, we shipped the largest number of bottles to patients and clinics, in any quarter, since launch. And I don't doubt that we have been even higher number, had we not still been influenced by the pandemic. Importantly, we are able -- we have very useful data for us to share with clinicians and to allow us to share that data more fully, we expanded the size of our field force to allow us to do that. I'll tell you a little bit about that. Outside the U.S., also good progress. In -- our Japanese partner, Kissei, announced Phase III results in their Phase III study in ITP and Japanese subjects, showing a positive results, setting us up for regulatory filings in Japan in the near future. In warm autoimmune hemolytic anemia, we completed enrollment of our Phase III trial, FORWARD study, and we now expect to have topline data in the middle of 2022. This will be a monumental announcement for us, having a Phase III readout in an important indication like this, will be a very exciting time for us. Our goal in this area, is to be the first product to market for the treatment of warm autoimmune hemolytic anemia. And I think we're well on our way towards that. In COVID-19, we put together a comprehensive clinical program for the treatment of COVID-19. Our own Phase III study is progressing well with about 231 patients, as of last week. In addition, our colleagues at NIH and [ HLBI ], conducted a very nice [ Phase III ] study, showing substantial benefit for fostamatinib in the treatment of hospitalized COVID patients, and this was then published in the clinical of infectious disease. In addition to those activities, we also advanced our pipeline programs with IRAK1/4. We are now preparing to launch a Phase Ib/II study in low-risk MDS. In addition, last year, we put a partnership in place with [indiscernible] for our RIP1 kinase program. And that collaboration is now working on launching a Phase II study in psoriasis, with our systemic RIP1 program as well as progress with our CMS program. I'll tell you more about each of those. As you see, all of these value drivers are substantial market opportunities for us, and we're delighted to have made good progress across all of these. Let me take a minute to remind you what the approved indication is for TAVALISSE. TAVALISSE is a kinase inhibitor, indicated for the treatment of thrombocytopenia in adult patients with chronic immune thrombocytopenia, chronic ITP, who have had an insufficient response to 8 previous treatment. This indication allow us to work what we think is the area of greatest need in ITP. On this slide, Slide 5, you see there are about 81,000 patients in the U.S. adult patients -- in the U.S. with chronic ITP. Some of them are watchful, waiting. About 20,000 of them are treated with first-line only, that is primarily steroids. And it's beyond that -- in second line beyond, where the interesting area is, and that's where we compete. That's about 24,000 patients in the second line later, now clustered towards second and third line, as you see on this slide on the left. As patients go through their disease process, Phase frequently splits from one modality to another , first line to second line, second line to third line, et cetera. And in each of those points, is an entry point where TAVALISSE might be useful in the treatment of ITP. And our objective is to educate doctors, provide sufficient information, so that they are able to use our product in each of those key points. Clinicians tell us that there is a substantial need, and they expect a surge in patients, once things normalize, due to this pandemic. And we have continued to publish and collect evidence. And I'll share with you in a second, some really compelling evidence because what we've been told, on Slide 6, and what we've seen is that when doctors are aware of our data, it changes their prescribing habits. Specifically, this data here on Slide 6. As you see, if you use fostamatinib and TAVALISSE earlier in the line of therapy, the better the results are for your patients, including 78% response rates in second line for 50,000 platelets and 94% response rates at 30,000 platelets and attractive numbers in other lines as well. That's very compelling data. In addition, once a patient achieves a response, as you see on the right, the durability of that response is quite good. What we have found is that awareness of this data is really not where it needs to be as yet, and our objective is to raise that because if we are able to do that, we should be able to drive or provide the information that underlies the use of TAVALISSE in earlier lines of therapy, which as I mentioned earlier, is the more sizable populations. In order to tell that story better and more frequently, we expanded the size of our sales force, as you see here on Slide 7, in Q3 of last year, going from 39 to 55 territories, allowing us to significantly reach more prescribers and the same prescribers with higher cadence, now allows us to what we're seeing is more and more interactions going live in this area. Last quarter, we had a substantially higher number of interactions with clinicians, and the substantial majority of those were actually live. And what we understand, that is actually what clinicians prefer. We recruited some top-notch Hem/Onc talent last year, over 10 years in Hem/Onc sales, 9 years in the same geography and many years working in hematology as well. So a very good team to help us tell this compelling story more and more frequently. I think, this will drive sales, what's this pandemic subsides in the near future, throughout 2022 and beyond. Outside of the U.S., as you see on Slide 8, we use the partnering strategy. Attractive market outside the U.S., maybe about $900 million. Europe, the largest of those. Our partner there is [ Grifols ]. We have gotten the product approved in Europe, and it has now been launched in the U.K., Germany, France, Italy, Spain and Norway, with a phased rollout in the Czech Republic, Denmark, Finland and Sweden. So very pleased with the progress that we've seen in these other countries. In Canada and Israel, our partner is [ Medison ]. There, we had approval in Israel and approval in [ now ] commercial availability in Canada. Our partner, Kissei, handles Japan and other countries in Asia. And as I mentioned, they recorded positive Phase III results in their study of adult ITP patients in Japan. They're working now on filing for approval in Japan as the next step. So very pleased with the collaborations there. Let me move on to a second key value [ track ], warm autoimmune hemolytic anemia. As you see on Slide [ 9 ], about 45,000 patients have warm autoimmune hemolytic anemia in the U.S., similar to the ITP market because the two markets are very similar, steroids are used and then some second-line therapy, including Rituxan. But importantly, there is no approved therapy in warm autoimmune hemolytic anemia. So our objective is to be the first therapy approved here. And the Phase III study will allow us to do that. We are the most advanced, in terms of a clinical study of a product, in this area and allowing us to what we call the first-mover advantage. Keep in mind, it's the same doctors who treat ITP, also treat warm autoimmune hemolytic anemia. And today, as we discuss TAVALISSE ITP with our clinicians, it's those same clinicians that will be using it with warm autoimmune hemolytic anemia. Their knowledge of the product, how to use it, their confidence in working, are all translatable to this second indication. These two indications are an excellent 1, 2 punch, in terms of TAVALISSE and what it's able to do. And importantly, it's obvious, the infrastructure that we use, is exactly the same infrastructure that we've created for ITP, that is sales and revenue generated in warm autoimmune hemolytic anemia, will fundamentally drive down to the bottom line as we grow the business. We conducted a Phase II clinical trial in warm autoimmune hemolytic anemia, of about 26 patients. And what we saw is about a 44% response rate. So a very nice response rate. And you see on Slide 10 on the left, the responses, generally, occurred early and were held throughout the course of the study, which is exactly what we like to see in Phase III. And you've taken that data from Phase II and looked at what would be a durable response, that is 3 consecutive visits, with hemoglobin greater than 10, in a delta of 2 from baseline, you would have gotten a 27% response rate. That's an endpoint that is similar to what we are using in Phase III. Another point to make, and this is the safety profile of fostamatinib. We have studied fostamatinib in over 4,800 patients across various disease programs. So we have a very substantial safety database and knowledge of the product. So there really shouldn't be many surprises in that area, either in the Phase III study. Here's, on Slide 11, what the Phase III study looks like. It's a 90-patient study, adult patients with warm autoimmune hemolytic anemia, randomized 1:1, fostamatinib versus placebo. The primary endpoint is an increase -- is hemoglobin over 10 grams per deciliter, with an increase of 2 grams per deciliter from baseline, on 3 consecutive available visits. This is a very high bar, and we like that because the high bar means there, the chances of placebo responders are less than substantial, and that helps statistics. For FDA, that's an excellent primary endpoint. For clinical practice, perhaps the secondary endpoints are more important, number of responses -- hemoglobin responses in a visit, number of hemoglobin responses greater than 2 from baseline, change in hemoglobin value and use of rescue meditations, are probably more useful. So we'll focus on that as well, when we share the information with clinicians. Moving on to Slide 12, our COVID efforts. We have substantial data at a product like fostamatinib, SYK inhibition may have very strong scientific rationale for the treatment of COVID, ARDS or hyperimmune response. We put together, working with our colleagues in NIH, a Phase [ III ] study and conducted there, showing very strong responses and as improvements in outcomes, lessening of use of ICUs, exiting the hospital earlier, improvement in biomarkers with fostamatinib over a placebo. And currently, there are three ongoing studies, one led by us. I'll share a little bit about that. Another Phase III study, led by NIH at [indiscernible] and study by Imperial College London, that's a small -- that's a Phase II study. We believe that there is a need for therapeutics, even with vaccines, and as new variants come about, especially in the -- for products that work, that are agnostic to the variant and work against any variant. And the fact that fostamatinib is already available commercially, is certainly a big help, since access can be improved substantially by that. So when the pandemic hit us, about 2 years ago, soon after that, our scientists came and said to us, "look, these patients that are dying from COVID, are not dying from the virus. They basically, when they get to the hospital, there's very little virus left. In fact, what they have is an autoimmune disease." Their only immune system is so active and so hyper responsive that it is starting to destroy their own lung tissue. And in fact, SYK inhibition, by two different mechanisms, may have a benefit in treating COVID ARDS. The first is a classic autoimmune response, which you see on the left of Slide 13, that is in heavy immune complexes. These are recognized by Fc receptors in a variety of cell types, signaling through SYK kinase, causing release of inflammatory cytokines. But what differentiates in the form of fostamatinib even more, is on the right side of this slide. You have these damage-associated -- pathogen-associated molecular patterns, [indiscernible] that are recognized by C lectin receptors in neutrophils, primarily in other type cell types. These also signal through SYK kinase, resulting in a process called [ mitosis ], which results in and other cytotoxicities. This is what you see, when a patient comes in to a hospital, unable to breathe, a cytokine storm as well as mitosis and beginning of microthrombi in . And if we're able to address both of these processes, we are able to have a substantial benefit in these patients, and that is precisely what we showed in that small Phase II study with NIH. We did that study. We launched a Rigel-led Phase III study and then subsequently, our colleagues at NIH launched the [ Active 4 ] host tissue study, which is a larger Phase III study. Our own Phase III study is about 308 patients, fostamatinib versus placebo. And we modified the endpoint, the new primary endpoint is days on oxygen, through day 29. Why this is a useful endpoint, is that oxygen use through day 29, has been found to be very indicative of therapeutic benefit in COVID-19. In addition, it's what the FDA prefers to use now and is similar to what we're using -- is being used in the Phase III with NIH study. And in addition, some consistency across that by using this specific endpoint, where we had looked at a Phase II study at NIH, based on this endpoint, the results were quite compelling. So this is a very good endpoint that the FDA agreed to and our partners at DoD also were highly supportive of this new endpoint. The Department of Defense is funding this Phase III study for the most part, and they're very excited about the possibility of fostamatinib in the treatment of hospitalized COVID patients with ARDS. The endpoint also allows us to add more patients in different places in the ordinal scale, 6 is on that ordinal scale. So it has a help there, perhaps also in recruitment. Currently, this study is about 231 patients of 308. We have about 70 patients to go. We are hoping that we can get this enrolled quickly. Our goal is to have this data by the middle of 2022. As I mentioned, our colleagues at NIH are also conducting a Phase III study.This is even larger Phase III study, with 300 patients in each arm. It's -- the [ Active 4 ] host tissue platform has 4 different drugs that are being studied, including fostamatinib. And they will be compared to a placebo-controlled. Also, the input here is oxygen-free days through day 28, very similar to our Phase III study, so we can cross some comparisons. Beyond COVID, fostamatinib and SYK inhibition may have a benefit in ARDS, beyond COVID. It works in a way that is independent of the variant of COVID and independent of even -- whether it's COVID or any other virus. So another virus were to emerge or even the seasonal flu, we will have a drug within fostamatinib that I think will help these patients, who are suffering from destruction of lung tissues, caused by their own immune system. So we're excited about that opportunity to follow, post the COVID area. Let me move on Slide 18 to our IRAK1/4 program. So our molecule is R289, which is a [ per-drug ] of 835, which are dual inhibitors of IRAK1 and 4. Now IRAK1/4 are very useful because they work in two different -- inhibiting two different signaling pathways. They're really fundamental to inflammatory processes in our immune diseases, as you see in this picture on the right. The toll-like receptor in IL-1 families of inflammatory signaling, is what IRAK1/4 inhibits. And we think that provides a very useful tool for treating these difficult inflammatory autoimmune and perhaps chemo conditions as well. We are targeting low-risk MDS as the first 2-month indication with our product. Low-risk MDS, fundamentally, is an inflammatory process of the bone marrow. And we hope to alleviate the bone marrow deficiencies and cytopenias, caused by these MDS syndromes, starting with low-risk MDS. We think that's a very good entry point for this product. Now, one of the things that -- and we'll start that study in Q1, and we'll share a bit more information on this study in our quarterly call in March, summarizing our year-end performance. Interesting. So what differentiated IRAK1/4 inhibitor from an IRAK4. It's here on this slide. With IRAK1/4, you get more profound inhibition of downstream inflammatory cytokines and just inhibiting IRAK4. This is a published IRAK4 inhibitor that we compare it to. We think this is very useful, especially if you really want to diminish that signal. It's also, if you wanted to diminish it less, you just give less of the product, that you get less as an inhibition downstream. We find that that's a very useful tool to use in a broad range of indications. This other piece of data is very compelling as well. This is a study in [indiscernible] in normal . What you do is that we challenge these volunteers with LPS, which causes a cytokine storm in these patients and an increase of inflammatory cytokines like TNF, [indiscernible]. And what we showed, what we were able to show, is with our IRAK1/4 molecule, we're able to diminish that tremendously. And as you would expect, if we're able to do this on a chronic basis, you should be able to have a benefit in these inflammatory conditions, including low-risk MDS. Moving on to Slide 21, our RIP1 inhibitor program. Last year, we put a very nice collaboration with [indiscernible] on our RIP1 program, and as our goal is -- our goal as a team is to be their best in class, which we think we have the best molecule in class, and not to be the first in class in this area. RIP1 inhibition has demonstrated a lot of the characteristics that make us and very excited about our 552, our lead, systemic RIP1 inhibitor. We and they are currently planning our first-phase use. This will be in psoriasis, and we expect this to begin in the first half of '22. This is the only place we're interested in, though. We're also interested in other areas such as RA or IBD and other places. And so we'll be looking at those other areas and sharing information with you on those areas as well, as we make decisions, where else we're going to study the systemic RIP inhibitor. In addition, the collaboration has a CNS program. And this CNS program will be led by Lilly, and they will have the molecule that we will provide to them, to move forward into studying diseases such as ALS and Alzheimer's. To summarize, on a cash basis, we ended the year with about $125 million in cash. And I think, overall, we're pleased with where we ended, in terms of our cash position. So let me summarize on Slide 23. What '22 will look like. So we look to continue to accelerate sales in ITP, globally, in the U.S., using the expanded salesforce and what I shared with you very compelling data on durability and first -- early line use that helps us make a very compelling story, and we'll continue to support our partners outside of the U.S., as they make progress in making that product available to patients across the world. We will -- and we expect to have Phase III data in warm autoimmune hemolytic anemia at midyear, and we'll submit regulatory filings to allow us to get the approval for this product in the U.S. In COVID-19, we'll complete our Phase III study, also in midyear, and we expect to submit an EUA, if the data is positive. In our pipeline programs with 289, we expect to start the Phase Ib/II study in low-risk MDS in Q1 and with our partner, Lilly, to start our Phase II study in psoriasis in the first half of the year. So I think, this will be a fundamental and transformative year for Rigel in 2022. It's rare that a small company has one Phase III readouts. We have two Phase III readouts coming at midyear. That is amazing. And as this pandemic subsides, I think we'll have what is necessary, in terms of people and in terms of data, to drive the sales in ITP in the U.S. So I'm really excited about the opportunities ahead of us and the year ahead of us. Thank you very much for your attention.

Thank you so much, all, for participating in the conference. We really appreciate having you. And I hope everyone has a great rest of the conference and a great rest of the week.