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

Hi. Good afternoon, everyone. Welcome to the Cantor Conference. I wanted to introduce Dean Schorno, who's the CFO of Rigel. Thanks so much for being at our conference.

Well, thanks, Kristen, for having us and the entire Cantor team for inviting us to your conference. And thanks to all of you for being here today and showing your interest in Rigel. So as I get started today, I'll be making some forward-looking statements. And just to remind you, I encourage you to take a look at our investor site at rigel.com, for more detail about the company, our corporate presentation deck as well as our SEC filings for more detail. So I'm really excited today to be here to talk about our hematology oncology-focused business. It's really an exciting time for Rigel. And there's a variety of ways that we look to grow the business, and it's exciting times to grow the business. Today, I'll talk about a couple of paths forward with respect to that growth. Our commercial execution as well as our development and expansion. From a commercial execution perspective, we have 2 approved products now. We have TAVALISSE in chronic ITP as well as REZLIDHIA for relapsed/refractory IDH1 positive AML. I'll go into some detail there. From a development and expansion perspective, we look to continue to develop our internal programs, which is an internally discovered IRAK1/4 program of Rigel as well as we're in the process of considering additional indications and studies associated with both fostamatinib and the olutasidenib franchises. Likewise, we think the time is right for some in-license opportunities for the company to leverage our late-stage development capabilities, as well as our commercial capabilities and really leverage that commercial organization. I'll talk about that a little bit. And then with respect to our partnered programs, we have a variety of partnered programs. We have a great collaboration with Lilly in both systemic and brain penetrant CNS disease opportunities as well as there's an ongoing NIH/NHLBI COVID-13 study. So let me first start with TAVALISSE. TAVALISSE was launched about 5 years ago and really a bedrock of the business. As you see here, the indication is TAVALISSE is a SYK kinase inhibitor, indicated for the treatment of adult patients with chronic ITP who have had an insufficient response to a prior therapy. That prior therapy is almost exclusively steroids. As we look to gain market share, there's about 81,000 patients who suffer from chronic ITP. At any given time, about 37,000 have fairly stable disease and their doctors are watching. They're a watchful waiting category. About 20,000 are in the first line, which is, again, most often a steroid -- often a high-dose steroid that's not a sustainable long-term therapy. And then there's about 24,000 patients in this second to fifth line. Those are the patients that are -- really have active disease post steroids entering the treatment category, and that's really the addressable market for TAVALISSE. Again, in this 81,000 patients, patients are cycling through each of these categories. So often, there are switches between these categories. The right side is an important slide, in that it shows really since the first part of '21 through our recent several quarters, the shift in our business from those late lines, the fourth and fifth lines where we really saw the majority of the use of TAVALISSE in the early days to really a progression and really been a goal of the company to move to the later lines of -- to the earlier lines of therapy, that second and third line. You now see we went from about 40% in early '21 that we're in those second and third lines to over 70% over the last several quarters. That really creates 2 major opportunities for our business. One is you see on the left here that 75% of the patients that are in active treatment are in those early lines. So there's a greater population for us to address. And also you see in the left here that the response rates associated with those early line therapies are higher than the fourth, fifth and beyond lines. And that's because the patients are typically earlier in their chronic ITP journey and a little bit less difficult to treat. You see in these early lines -- second and third lines, we can get patients' platelet counts above 30,000 platelets in 85%, 95% of the time. So really, really great response. With those responses, you then have the durability of the benefit that you see on the right side, which is very strong. From a performance perspective, we're really excited about the last quarters -- the last several quarters of performance. As we launched the product back in 2018, nice growth. We were then impacted by COVID as we pulled our reps out of the field. And as patients stopped, really slowed down their change in treatment patterns. As they have a chronic disease, they weren't switching treatments, which is really the opportunity for TAVALISSE. So for a couple of years, we saw flattish sales like the entirety of the ITP market. The last several quarters, we're seeing the growth that we expect, and we're seeing nice quarter-over-quarter demand growth. As we look outside the U.S. for TAVALISSE, we've really established a great collaboration base with Grifols in Europe and the Middle East; with Medison in Canada and Israel; with Knight in Latin America and with Kissei in Japan and Asia. Kissei recently announced their Phase III study in Japan, and they launched in April of this year. So Kissei is still on product as well as Grifols and Medison. Now let me move on to our newest commercial product. This is a product that in July of last year, we licensed from Forma Therapeutics. We had global rights. And we've -- when we licensed it, there's a PDUFA date in February. In working with Forma, we ultimately got approval from the FDA in December and leveraging our commercial sales force that I'll describe in a little bit more detail, we launched in December of last year. So we've essentially had 2 full quarters that we've reported with respect to REZLIDHIA, this in-license programs. Extremely excited about the opportunity here. REZLIDHIA's indicated in the -- for the treatment of adult patients with relapsed or refractory IDH1 positive AML. From an opportunity to help patients with AML, you all know that AML is just a terrible aggressive disease. It impacts about 20,000 patients in the U.S. annually. Unfortunately, about 11,500 of those patients will succumb to the disease. So there's a true need and an unmet need in this disease state. About 6% to 9% of those patients are IDH1 positive. And those are -- the genetic testing is efficient, effective and broad. So doctors and patients know of their IDH1 status, which is important and again, significant unmet need. As you look to the right here, those 20,000 patients are split between fit and unfit patients. The fit patients can undertake intensive chemotherapy. That's about 60% of patients. And then the unfit patients are treated with non-intensive therapy. You see then the majority of the patients will then relapse or be refractory. And those are the orange boxes. That's really the target population for REZLIDHIA. As we look at the clinical trial work that Forma did, really great work. They did a study -- a Phase II study, Cohort 1, which I'll focus on today, which was the foundation of that approval I described, was in the relapsed/refractory IDH1 positive population. But they looked at a variety of other populations also, both monotherapy with olutasidenib or REZLIDHIA alone as well as combination therapy with REZLIDHIA and azacitidine. With these other populations, we'll continue to report out and publish on this data along the way. But today, I'll focus on the Cohort 1 data. You see on the right-hand side, the primary endpoint of this study was CR and CRH rate as well as other secondary endpoints. Overall, response of -- duration of response transfusion independence as well as safety. So here's the summary of the clinical trial results -- outstanding results. So 35% were CR and CRH with a median duration of response of 25.9 months. This is really the -- as we worked with Forma on the in-license deal, this data was really important to us. So that the ability to impact this patient population, this difficult to treat patient population with a therapy that the study showed had a durable benefit of over 2 years was extremely important to us, as well as the patients who will receive the drug. And notable also in that 35% CR, CRH rate, 92% of those were CRs. So complete responders and the median duration of those -- of that population was 28.1 months. Those transfusion independence across all the subgroups and a well-characterized safety profile with no cardiac events that led to discontinuation. This again is the overview of the addressable population for Rigel and for REZLIDHIA. The 20,000 patients split across fit and unfit with the 6.9% -- 6% to 9% that will be relapsed and refractory resulting in 1,000 patients that suffer from this portion of the disease. As we went into the discussions and the considerations with Forma on the in-license, we did market research with KOLs and the health care professionals. And what we heard was when it efficacious targeted treatments, they want a longer duration of response as well as a balance of efficacy and toxicity. And as you see here, that Phase II study really checked the box. Promising treatment, benefit for those who have failed previous treatments, the CR rate and the durability benefit we've talked about. Incrementally, we saw an estimated 18-month survival of CR. CRH is of 78% and the well-characterized safety profile with no cardiac monitoring. The performance of REZLIDHIA through the first 2 full quarters has been very strong. We've had $4.9 million of cumulative net sales, and we're seeing nice increases across those couple of quarters. From a launch perspective, the latest ASCO was a great, great meeting for us, not only with respect to the entirety of the business, but specifically with respect to REZLIDHIA. We had in hand the publication of that Phase II data, which was published in January and had great conversations with not only the KOLs but the general treatment population. From a scientific perspective, a couple of other important scientific publications are out there. We had in hand at ASCO, a really nice article that I encourage you to read by, that was based on some work that Justin Watts, a prominent KOL in AML did. And he really looked across the olutasidenib data and published it from bench to bedside and really highlighted the benefits of olutasidenib and described his really favorable view of the drug REZLIDHIA. So really nice article. Again, I encourage you to take a peek at that. Another thing that's been recently presented was a poster at EHA. We get a lot of questions from physicians in the post-venetoclax population. So my patients failed venetoclax, will REZLIDHIA work? And what this poster shows is REZLIDHIA works well and comparable to the overall study in that post-ven population, important data. This illustrates really just our continued plan to have data publications and continue to increase the information associated with the benefits of REZLIDHIA. As we build momentum in the second half of '23, a variety of key things we're accomplishing. We -- prior to launching REZLIDHIA, the vast majority of our business was with community doctors in the ITP setting. So we had a 55-person sales force calling on those doctors. We evolved really starting July 1 to a place where we have 8 institutional business managers. We call them IBMs. And that group is focused on the academic centers and those doctors who are treating AML and really a specialized sales force. And as you see here, a very experienced sales force, 19 years of experience, 14 years of hospital experience. And that group is, again, dedicated to those institutions and AML, REZLIDHIA specifically. The rest of the sales force, about 49 people are focused on the community setting, both for ITP as well as AML. So we think we have a great team, a great balance to address these -- both of these markets. We also think it provides a nice foundation for potential other products as we move the business forward. Other key activities, speaker programs, attendance at conference and just really maximizing the access of the drug to patients. From a scientific activity perspective, I described the other -- the additional Phase II populations. We'll continue to analyze that data and present that data as time goes by. Incrementally, we'll look to establish some real-world evidence. So as physicians treat patients, we'll look to have mechanisms to be able to describe some of those experiences. Other key activities is we'll continue to work with the KOLs, HCPs and work on publications and studies into the future. Now let me transition over to our development programs. As we look at our development opportunities, there's really strategic opportunities and opportunistic opportunities. The opportunistic opportunities are really in the non Hem/Onc areas that we'll look to partner. And I'll be describing a little bit about our Lilly collaboration in a few slides here. From a strategic perspective, these are really the Hem/Onc focus, the Rigel strategic programs. We're evaluating a variety of opportunities in -- for fostamatinib and olutasidenib. We've described that we'll -- by the end of the year, we expect to provide clarity what those programs are. And I'll talk about -- a little bit about that, looking to in-licensing opportunities. And then we'll continue to roll the Phase Ib in IRAK1/4 and I'll describe that program. As we look across the drivers of the pipeline expansion, on the left side here are the development options that were -- and opportunities that we're exploring. In fostamatinib, there was a nice study done by Duke and it showed promising results in the GVHD population. We're considering whether we advance that program, in some way. Likewise, with olutasidenib, we saw those other 7 cohorts. There's lots of opportunity for advancing the olutasidenib program, whether it be front line combination therapy or difficult to treat populations. Again, with that whole suite of opportunity, we'll provide clarity between now and year-end on what our next steps are there. From an in-license perspective, I've described the efficiency, our ability to in-license a product, our ability to work to get that product approved and our ability to then launch the product successfully, all in a financially efficient way. And we'll look to do -- we'll look to do more that. We think there's opportunities in today's environment that we can really do this. So what are we looking for, differentiated assets in hematologic malignancies or transplant, late-stage programs, and again, synergistic to our capabilities at late-stage development and commercial capability that we've discussed. One of our internally developed programs is the IRAK1/4 program. IRAK1/4 as a molecule is more suppressive than of the -- a variety of cytokines than an IRAK4 alone program. We think that this asset is -- has great, great capabilities. We completed the Phase I work on it, and we're doing a Phase Ib study that I'll describe in just a second in lower-risk MDS. This is a detail of the mechanism of action. This is in our corporate slide deck that you can find on our investor side in rigel.com, along with some additional information, I encourage you to take a peek at that. From the current study that's ongoing, we've got an open-label Phase Ib study. It's a typical 3x3 dose range finding study. We completed the first 2 -- enrollment of the first 2 dose cohorts. And we'll start in the fall -- later this fall, the recruitment of that third cohort. What our primary endpoint is to look at safety, but then on top of that, we'll look at -- for preliminary efficacy from transfusion independence, remission, overall response. We'll look at PK and biomarkers also. We expect to see those secondary endpoints, more in the third and potentially fourth dose. So during '24, we expect to provide updates and look to see some data in this study. We're very excited about the opportunity here. Our RIPK1 inhibitor program with Lilly that I've described, we have R552 which is an immune disease molecule. It's a systemic program that we have with Lilly, and Lilly is moving forward, and they've started a Phase IIa program in RA. So in '24, sometime, we'll look to see some data there. And then incremental to that, there's a CNS penetrant program. We've provided a basket of molecules to Lilly. They will go ahead and they're working through their selection process and ultimately move that program forward. So we'll provide updates along the way as those programs progress. From a financial perspective, quite a bit of detail here. But when we break out here again on our investor side is we've got the bottle shift to patients and clinics. We have an inventory build for both TAVALISSE and REZLIDHIA. So with that, you're seeing consistent growth and a record quarter-over-quarter growth. Really excited about it. And it really provides a great foundation for the business as we look to see TAVALISSE and REZLIDHIA continue to grow. Run rate revenues in Q2 approaching $100 million, and excited about that baseline, that foundation for the business. We ended Q2 with $64 million of cash. While we haven't provided guidance with respect to -- when we hit the breakeven, we do expect, and we're -- it's a priority for us, and we expect to get there in the not-too-distant future, but we'll provide updates along the way. So what are the upcoming catalysts for the business, and we've really discussed most of these today. So driving that continued growth in ITP. Moving to those earlier lines of therapy. REZLIDHIA in relapsed/refractory AML, driving physician awareness and adoption, leveraging that IBM team I described, which will have benefit in the academic centers, but then will also have benefit in the community centers where the physician utilization across both academic and community, there will be sharing of information, which is exciting. And then we'll look to identify ex U.S. collaborators for olutasidenib as we did with TAVALISSE. We'll identify fostamatinib and olutasidenib development opportunities, continued enrollment of R289, pursue in-license programs and progress our partner programs. So again, I'd like to express my thanks for your interest in Rigel, and we're certainly always available for questions. Please feel free to reach out to us. And thanks again.