Rigel Pharmaceuticals Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2024

There are 10 speakers on the call.

Operator

Greetings, and welcome to the Rigel Pharmaceuticals Financial Conference Call for the 3rd Quarter 20 24. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce our first speaker, Ray Furey, Rigel's Executive Vice President, General Counsel and Corporate Secretary.

Operator

Thank you. Mr. Furey, you may begin.

Speaker 1

Hello. Welcome to our Q3 2024 financial results and business update conference call. The financial press release for the Q3 2024 was issued a short while ago

Speaker 2

and

Speaker 1

can be viewed along with the slides for this presentation in the News and Events section of our Investor Relations site on bridal.com. As a reminder, during today's call, we may make forward looking statements regarding our financial outlook and our plans and timing for regulatory product development. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent annual report on Form 10 ks for the year ended December 31, 2023 and subsequent filings with the SEC, including our Q3 quarterly report on Form 10 Q on file with the SEC. Any forward looking statements are made only as of today's date, and we undertake no obligation to update these forward looking statements to reflect subsequent events or circumstances.

Speaker 1

At this time, I'd like to turn the call over to our President and Chief Executive Officer, Raul Rodriguez. Raul? Thank you, Ray,

Speaker 3

and thank you, everyone, for joining today. Also with me today are Dave Santos, our Chief Commercial Officer Lisa Roincher, our Chief Medical Officer and Dean Chorno, our Chief Financial Officer. I will begin on Slide 4 with an overview of Rigel's business and our Q3 results. In the 1st 3 quarters of the year, we made significant progress in our strategy to grow our hematology and oncology business. Our corporate strategy is focused on 3 main objectives: 1, expanding our commercial portfolio and increasing product sales 2, advancing and growing our pipeline through strategic collaborations and importantly, internal pipeline development and 3, maintaining financial discipline.

Speaker 3

I will now summarize each of these. Firstly, in the Q3, we generated strong growth across our commercial portfolio with a total net sales of $38,900,000 This was up 44% compared to the Q3 of 2023. This robust revenue growth was driven by the addition of Gabretto, which generated $7,100,000 in net product sales for its full quarter with Rigel as we transitioned the majority of patients and prescribers into our network. In addition, we saw continued year over year growth for TAVALISSE and RESILITYA with both achieving another record quarter for bottles shipped to patients in clinics. We continue to expand our product presence outside the U.

Speaker 3

S. As well this quarter with a new Kissei agreement to develop and commercialize Resilidia in Japan, the Republic of Korea and Taiwan. This agreement included a $10,000,000 upfront payment that we received in Q3 and the potential for up to $152,000,000 in future development, regulatory and commercial milestone payments. Secondly, regarding our objective to grow our pipeline, we continue to advance the development of R289, our dual IRAK1 and 4 inhibitor in a Phase 1b study in lower risk MDS. Initial safety and efficacy data from that trial was published in an ASH abstract earlier this week and we look forward to sharing additional data from a more recent data cut at the ASH meeting in December.

Speaker 3

Also at ASH, we'll have additional data for olicitinib. Our strategic collaborations with MD Anderson and Connect are progressing well. These trials provide us with the opportunity to explore Reslydia in a broad range of IDH1 mutant cancers in a cost and time efficient manner. Our first trial with MD Anderson evaluating Reslydia in a combination with 2 other agents in patients with mutant IDH1 AML enrolled its first patient in September. And as we did with the Brasilia and Garvera earlier this year, we continue to evaluate opportunities to in license or acquire late stage hematology and or oncology assets to further expand our portfolio.

Speaker 3

In 2025, we will discuss our development plans for both R289 in lower risk MDS and nolasitinib. Lastly, as we executed on our strategy to grow our business, we're doing so in a financially disciplined manner. Our strong commercial execution and cost effective approach to clinical development has enabled us for the first time to generate positive Q3 and year to date net income. In summary, in the Q3, we made significant progress in growing our business while achieving net income breakeven. We are well positioned to continue to drive value as we head into 2025.

Speaker 3

And with that, I'll turn the call over to Dave to provide a commercial update. Dave?

Speaker 4

Thank you, Raul. We are very pleased with the strong growth in revenues in Q3. Moving to Slide 6, you see how our quarterly and annual sales have evolved since 2021. We have grown each quarter sales over the previous year and that growth continues, particularly from last year to this year. We started the Q1 of 2023 with $23,800,000 and are now reporting $38,900,000 in the Q3 of 2024.

Speaker 4

That's an incremental $15,100,000 representing 63% growth in quarterly revenue over 7 quarters. That growth has been driven by our strong commercial execution and consistently building quarterly demand for TAVALISSE and driving broader awareness of Reslidia through the 1st 2 years of its launch. The addition of Gevreto and our ability to successfully transition it to our portfolio has also significantly expanded our top line. Compared to the Q3 of 2023, we generated 44% growth in the Q3 of 2024. As you can see, we're well on our way to delivering a record year of net product sales.

Speaker 4

Our commercial team is focused on execution, driving continued momentum for TAVALISSE, improving both institutional and community demand for Reslidia and successfully transitioning all GIVEreto patients and accounts to Rigelabel product. My sincere thanks to the entire team for all their hard work to grow our business in 2024. Moving to Slide 7, I'll first discuss our performance with TAVALISSE in the Q3. On Slide 8, you'll see our FDA approved indication, which is for adult patients with chronic immune thrombocytopenia or CITP who've had an insufficient response to a previous treatment. Moving to Slide 9, I'm pleased to report another strong quarter for TAVALISSE with 2,797 bottles shipped to patients in clinics in the 3rd quarter, a 16% increase versus the Q3 of 2023 and our 8th consecutive quarterly record high.

Speaker 4

We sold 2,793 bottles to our distribution network, resulting in $26,300,000 in net product sales during the Q3, an 8% increase from the same period last year. We continue to grow TAVALISSE demand, both through refills from patients who stay on the product and new prescriptions for patients who are trying TAVALISSE for the very first time. Moving to Slide 10. Now I'd like to take a few minutes to discuss our growing Reslydia sales. On Slide 11, you'll see our FDA approved indication for ResLydia, which is for adult patients with relapsed or refractory acute myeloid leukemia with the susceptible IDH1 mutation as detected by an FDA approved test.

Speaker 4

Moving to Slide 12, we shipped a 444 bottles of Reslidia to patients and clinics in Q3, more than doubling the demand generated in the same period a year ago. We sold 429 bottles of Reslidia as our distribution channel reduced inventory by 15 bottles. This resulted in $5,500,000 in 3rd quarter net product sales, again, more than doubling compared to the prior year. We continue to stay focused on improving Reslytia adoption, both in institutions and the community by raising awareness of Reslytia's efficacy, particularly in patients who have failed upfront therapy with venetoclax. Moving to Slide 13, we are incredibly excited about our work to expand access to elutacitinib in markets outside the U.

Speaker 4

S. We're expanding our partnership with Kissei who currently markets and distributes TAVALISSE in Japan to include a license agreement to develop and commercialize Reslyvia in Japan, Korea and Taiwan. We believe Kissei is the right partner in these markets as we further our goal to make ResLydia accessible globally. And we're continuing to explore other opportunities for partnerships outside the U. S.

Speaker 4

To bring this beneficial product to AML patients in need in other markets around the globe. Moving to Slide 14, I'll now discuss our Q3 performance for Givrtta, the first full quarter in which Givrtta was available through Rigel. On Slide 15, I'll begin by reviewing the FDA approved indications for Givrtta, which include the treatment of adult patients with metastatic RET fusion positive non small cell lung cancer as well as adult and pediatric patients 12 years of age and older with advanced RET fusion positive thyroid cancer who require systemic therapy and who are radioactive iodine refractory. For the 1st full quarter with Gavreto in our portfolio, we shipped 7 17 bottles to patients in clinics and sold 752 bottles of Givretto. Please note that Givretto is available in bottles of either 60 or 90 count capsules.

Speaker 4

And for reporting purposes, we report the total number of 60 count equivalent bottles. This resulted in $7,100,000 in Givretto 3rd quarter net product sales. We have now sold a total of $9,000,000 of Givretto since transitioning it in late June. We are very happy that both the 1st full quarter of demand and net sales indicate that we are successfully transitioning over Givrado patients, prescribers and accounts to Rigel's distribution network. Moving to slide 17, I'd like to wrap up my comments with some early insights on what we saw during our 1st full quarter with Gavrato.

Speaker 4

We are incredibly pleased with the progress we've made to ensure both current patients taking Gavrato as well as those newly prescribed continue to have access without interruption and that prescribers can feel confident knowing that their patients can continue getting the therapy they need. Based on the 1st full quarter shipping Givretto to patients in clinics, we have seen an exceptionally smooth transition of patients through our hub, Rigel One Care and the specialty pharmacies in our network. And we have also seen solid ordering by many of the direct accounts we had expected to order through our specialty distributors. Our distributors have shipped 320 bottles to accounts, representing about 45% of our business. Specialty pharmacies shipped 3 97 bottles to patients, making up most of our business.

Speaker 4

We did expect that there would be more of our business coming through direct accounts and have noticed that a handful of expected top direct accounts still have not yet placed an order. In addition, in this specialty pharmacy data, we are seeing that the majority of patients are prescribed Givrado below the standard dose of 400 milligrams once a day, indicating we may have an opportunity to reinforce dosing and administration and particularly the starting dose of Givrtta. Overall, Givrtta, Reslidia and TAVALISSE have all contributed to our strong year over year revenue growth and we look forward to further expanding our impact on patients with our growing portfolio as we move forward to 2025. Thanks for your attention. And I will now turn the call over to Lisa to discuss our development progress.

Speaker 4

Lisa?

Speaker 5

Thanks, Dave. Moving to Slide 19, I'd like to begin by highlighting a series of abstracts that will be presented at posters at the upcoming ASH Annual Meeting in December. As Raul mentioned, initial data from the dose escalation part of our Phase 1b study of R289 in patients with relapsed or refractory lower risk MDS will be presented during the poster session on Monday, December 9. Updated results using a data cutoff date of October 25 will be shared at the meeting. Additionally, a number of presentations related to elutacitinib use in patients with IDH1 mutated AML and MDS are planned.

Speaker 5

Moving to Slide 20, we continue to execute on our strategy to expand our hematology and oncology pipeline. First, we're making meaningful progress advancing olitacitinib into new clinical indications alongside our partners MD Anderson and the Connect Cancer Consortium. We believe elutasitinib has potential in several cancers where mutated IDH1 plays a role such as additional AML segments, myelodysplastic syndrome or MDS and glioma either as monotherapy or in combination. One clinical trial is now active under MD Anderson collaboration and we're continuing to advance zolutasitinib in glioma with CONNECT. R289 is our novel dual IRAK1 and 4 inhibitor that is currently being evaluated in a Phase 1b study in patients with relapsedrefractorylowerrisk MDS.

Speaker 5

Enrollment in the 5th dose level is ongoing. We expect that the DLT observation period will be completed within December. We also remain focused on evaluating potential opportunities to in license or acquire products that would be a strategic fit for our portfolio. We're looking for differentiated products in hematology, oncology or related areas, products that are late stage, possibly with registrational data, soon to have registrational data or more advanced, and products that can leverage our hematology and oncology infrastructure. As demonstrated with our acquisitions of elutacentib and pralcitinib, our goal is to continue to find assets that align with our organization pipeline and ability to execute.

Speaker 5

Slide 21 provides an overview of our strategic alliance with the MD Anderson Cancer Center to advance lutacitinib more broadly into AML, MDS and beyond. We are very proud of this collaboration and have previously shared that in September, the first patient was dosed or was enrolled in a Phase 1btwo triplet therapy trial in IDH1 mutated AML evaluating alutacitinib decitabine and venetoclax. It is also planned to evaluate alutacitinib as a monotherapy in patients with IDH mutated CCUS and lower risk MDS in combination with an HMA and high risk MDS and as monotherapy as a post transplant maintenance therapy for patients with IDH1 mutated hematologic malignancies. We expect these trials to position us to conduct a subsequent registrational trial or trials. Moving to Slide 22, another important development collaboration we have is with the CNECT Global Neuro Oncology Consortium to conduct a Phase II trial in patients with IDH1 mutated high grade glioma.

Speaker 5

Gliomas account for around 30% of CNS tumors in children, adolescents, and young adults. Approximately a third of these are high grade gliomas, translating to approximately 800 to 1000 new cases each year in the U. S. High grade gliomas are a leading cause of cancer related death in adolescents and young adults. Despite available therapies, the 5 year survival of this population is less than 10%.

Speaker 5

Based on preliminary safety and efficacy results from a Phase IbII clinical trial evaluating alutacitinib in heavily pretreated patients with relapsed or refractory IDH1 mutated glioma, we believe that olutasitinib has potential in glioma treatment. A Phase 2 study of volutasitinib in combination with temozolomide called TARGET D will be included as a treatment arm in CONNECT's TARGET study, a molecularly guided Phase 2 umbrella clinical trial for high grade glioma. The goal of this study is to determine whether the combination of alutacitinib and temozolomide followed by alutacitinib monotherapy can prolong the progression free survival of patients with IDH1 mutated high grade glioma when given following radiotherapy. We, along with CONNECT, are excited about a lutacitinib's potential to provide a much needed new treatment option to this underserved patient population. We anticipate this trial will be activated by the end of this year.

Speaker 5

Next, I'd like to provide some background information on our clinical development program in lower risk MDS with our novel dual IRAK1four inhibitor, R289, which you will see on Slide 23. Lower risk MDS is an area of high unmet need in a primarily elderly patient population facing progressive cytopenias, particularly anemia, resulting in transfusion dependency and increased risk of infections and a risk of progression to acute leukemia. Transfusion burden is high with more than 80% of patients requiring red cell transfusions as supportive therapy. Long term survival rates are poor due to transfusion burden and its associated morbidities as well as a lack of curative therapies other than allogeneic stem cell transplantation, which a minority of patients are eligible for due to their advanced age and underlying health conditions. The primary goal of therapy is to reduce transfusion burden.

Speaker 5

Initial treatment options include ESAs if eligible and lenalidomide for DLL5q patients. For transfusion dependent patients, luspatercept and the medostat have recently been approved post ESAs or for ESA ineligible patients. In later lines of therapy, durable responses are difficult to attain and toxicity becomes more of an issue. There are no standard therapies for lower risk MDS patients with recurrent or refractory disease. In fact, hypomethylating agents were approved about 20 years ago, underscoring the need for new, safe, effective therapies for these patients.

Speaker 5

We believe that R289 has the potential to address the unmet needs in this patient population by targeting inflammatory signaling. Moving to Slide 24, I'd like to highlight why we're excited about R289. Dysregulation of the immune and inflammatory signaling pathways is associated with MDS with chronic stimulation of both the toll like and IL-one receptor pathways involving IRAK1 and IRAK4 leading to a pro inflammatory marrow involvement and marrow environment and cytopenias. IRAK1 and 4 activation independent of this pathway may also lead to persistent inhibition of hematopoietic cell differentiation. Co targeting both IRAK1 and 4 may fully suppress inflammation and restore hematopoiesis and MDS.

Speaker 5

Clinically, IRAK4 inhibitors in MDS and AML have thus far shown only modest activity supporting this concept. In preclinical and healthy volunteer studies, R835, a dual IRAK1four inhibitor, was previously shown to suppress pro inflammatory cytokine production. R289 is an oral prodrug that is rapidly converted to R835 in the gut that is currently being evaluated in lower risk MDS. Slide 25 shows the design of our ongoing open label Phase Ib study of R289 in patients with relapsedrefractory lower risk MDS, which has a dose escalation phase with a standard 3 plus 3 design and a dose expansion cohort for confirmatory safety. The primary endpoints for this trial are safety and selection of the recommended dose for expansion and secondary endpoints include hematologic improvement, response rates and PK.

Speaker 5

Based on emerging data from the study, we've recently included 2 additional cohorts with twice daily dosing regimens for a total of 5 dose levels. The study continues to progress well and enrollment in the 5th dose level, a split dose of 500 milligrams and 2 50 milligrams daily is nearing completion. We expect the DLT evaluation period of this dose level will be completed in December. We are encouraged by the preliminary safety and efficacy data from the study thus far in this elderly patient population with a high transfusion burden summarized in the recently published ASH abstract. Lastly, on Slide 26, our RipK1 inhibitor programs are progressing well with our partner Lilly.

Speaker 5

RipK1 is implicated in a broad range of inflammatory cellular processes and plays a key role in tumor necrosis factor signaling. Ocaducertib, our non CNS penetrant RIPK1 inhibitor previously referred to as R552 is currently being studied in an adapted Phase IIa2b clinical trial in up to 380 patients with active moderate to severe rheumatoid arthritis. Phase IIa enrollment of approximately 100 patients is advancing well with preliminary analysis of the Phase 2a results anticipated within the first half of twenty twenty five. Our preclinical CNS penetrant RYBK1 inhibitor program is also progressing toward lead candidate nomination. We're excited about the progress of our programs and their broad potential in rheumatoid arthritis and other immune and CNS diseases.

Speaker 5

Now I'll pass the call to Dean to discuss our financial results for the quarter.

Speaker 6

Thank you, Lisa. I'm on Slide number 28. During the Q3, we shipped 2,793 bottles of TAVALISSE to our specialty distributors. 2,797 bottles of TAVALISSE were shipped to patients at clinics, while 4 bottles decreased the levels remaining in our distribution channels at the end of the quarter. We shipped 429 bottles of RESLIDIA to our specialty distributors.

Speaker 6

444 bottles of RESLIDIA were shipped to patients at clinics while 15 bottles decreased the levels remaining in our distribution channels at the end of the quarter. We shipped 7.52 bottles of Gabretto to our specialty distributors. 7 17 bottles of Gabretto were shipped to patients at clinics, while 35 bottles increased the levels remaining in our distribution channels at the end of the quarter. We reported net product sales from TAVALISSE of $26,300,000 in the 3rd quarter, a growth of 8% compared to $24,500,000 in the same period in 2023. We reported net product sales from RASILIDIA of $5,500,000 in the 3rd quarter, a growth of 107% compared to $2,700,000 in the same period in 2023.

Speaker 6

And finally, we reported net product sales from Gavreto of $7,100,000 in the 3rd quarter, the 1st full quarter of Gavreto sales. Our net product sales from TAVALISSE, RESOLIDIA and Gabretto were recorded net of estimated discounts, chargebacks, rebates, returns, co pay assistance and other allowances of $17,400,000 For the Q3 of 2024, our gross to net adjustment for TAVALISSE, RESLIDIA and GABRETTO was approximately 36%, 22% and 15% of gross product sales, respectively. We'd like to highlight that during the Q4, we made certain changes to our distribution channel arrangements for TAVALISSE that will result in continued high quality access while reducing our distribution costs and favorably impacted our gross to net adjustment into the future. While this change is not expected to impact our bottle shipped to patients at clinics during the quarter, we may see a reduction in bottles remaining in our distribution channels at the end of the quarter as inventories normalize. Finally, for the Q4, we expect our gross to net adjustment for TAVALISSE, RESOLIDIA and GABRETTO to be approximately 35%, 21% and 22% of gross product sales respectively.

Speaker 6

Onto the next slide. In addition to net product sales, our contract revenues from collaborations were $16,400,000 in the 3rd quarter. Contract revenues from collaborations consisted of $13,000,000 from Kissei, dollars 3,300,000 from Grifols and $100,000 from Medison. The $13,000,000 in revenues from our Kissei collaboration includes $10,000,000 related to an upfront fee from sub licensing Reslydia and $3,000,000 for the delivery of drug supplies. Moving on to cost and expenses, our cost of product sales was approximately $8,000,000 for the Q3 of 2024.

Speaker 6

Total cost and expenses were $41,300,000 compared to $32,600,000 in the same period for 2023. The increase in cost and expenses was primarily due to higher cost of product sales driven primarily by increased product sales, a $2,300,000 sublicensing revenue fee paid to form a, increased royalties and the amortization of intangible assets. In addition, there was an increase in personnel related costs and commercial related expenses. This quarter we reported net income of $12,400,000 compared to a net loss of $5,700,000 in the same period in 2023. We ended the quarter with cash, cash equivalents and short term investments of $61,100,000 up from $49,100,000 as of the end of the second quarter.

Speaker 6

We look to maintain our focused and disciplined financial approach into the future. With that, I'd like to turn the call back over to Raul. Raul?

Speaker 3

Thank you, Dean. And moving on to Slide 30, please. This is really an exciting time for Rigel. During the 1st 3 quarters of 'twenty 4, we delivered on our goals that we set earlier in the year. First, we generated strong growth in our commercial business.

Speaker 3

We achieved another record demand quarter for TAVALISSE and RESLIDIA and grew our net product sales year over year. We expanded our portfolio with the addition of Gavreto, our 3rd commercial product, which generated $7,100,000 in net product sales in its 1st full quarter with us. We leveraged our commercial capabilities to transition the product to us and are now focused on maximizing its potential. And we're well on our way to deliver another record quarter of revenues for calendar year 2024. 2nd, we made significant advancements in our development pipeline.

Speaker 3

We continue to progress R289 and we are incredibly excited to present additional safety and efficacy data from our Phase 1b study in lower risk MDS at the ASH meeting next month. Our strategic collaborations with MD Anderson and Connect continue to advance and we now have the first trial with MD Anderson underway. And lastly, as we make great strides in these areas, we continue to focus on maintaining financial discipline. All of these efforts have enabled us to generate positive net income for the 3 quarters year to date. Now on Slide 31, as we think about the future for Rigel and our progress in 'twenty four and how it positions us to deliver continued growth in 'twenty five and beyond, our corporate strategy remains focused on our major objectives, executing and expanding our commercial portfolio to generate top line growth, advancing and growing our development pipeline and operating in a financially disciplined manner.

Speaker 3

Becoming a profitable company will allow us to be self sustaining and importantly to reinvest in our own development pipeline. And we will outline our internal development plans for R289 and oulutacitinib in 2025. We've made significant progress in 2024 and remain focused on continuing this momentum as we close out the year and head into 2025. Again, I'd like to thank you for your interest in Rigel. And with that, we will now open the call to your questions.

Speaker 3

Operator?

Operator

Thank you. Our first question comes from the line of Joe Pantginis with H. C. Wainwright. Please proceed with your question.

Speaker 7

Everybody, good afternoon. Thanks for taking the questions. Nice to see the approved products progress. So two questions, if you don't mind. So first, I was hoping to see if you can provide any more color with regard to TAVALISSE and the balance or mix between refills and new prescriptions?

Speaker 3

David, do you provide some commentary on that?

Speaker 4

Sure. Thanks for the question, Joe. As you know, TAVALISSE is a product that patients take and will continue taking as long as their platelets are controlled and are elevated. And, you know, sometimes that takes a while. So I will say that the majority of our business is carryover.

Speaker 4

Once we have patients on board, they will tend to stay on therapy. And that is the majority of our business. And because we've grown new patient starts, it over the last couple of years, I think we're seeing that growth in carryover go along with that. So that's what I meant to say. Or that's what I was referring to when I said both our growth is both from new patients starting as well as carryover, but the majority is carryover.

Speaker 7

Got it. Appreciate that clarification and color. And then the second question that I have, I want to make sure if I heard correctly. So nice to see the early traction with Gareto. And if I heard you correctly, it said that several top centers have not have still not placed orders.

Speaker 7

I was just curious, is this really just based on logistics or how would you characterize it?

Speaker 4

First of all, what I said in my prepared comments, just to be clear, as I said, there's a handful of top sellers that we haven't seen direct orders from. And so we had expected to see that and we haven't. So we're trying to understand that a little bit. But the good thing about our data is we have a significant portion through the specialty pharmacy network. So what we could be seeing is patients are in the specialty pharmacy network when they transition to the, to the Rydal network versus, the institution buying the drug and then filling it there.

Speaker 4

But, you know, overall, actually, what I said in my prepared remarks was that 45% of our business was through, the distribution channel to direct accounts in q3. When we just looked at this for October, it's up to 5050. So I think this is improving and we it is more of like what we expected, more of our business coming through the direct channel. Hope that helps, Joe.

Speaker 7

It certainly does. Thanks for the color.

Speaker 3

Thank you, Joe.

Operator

Thank you. Our next question comes from the line of Yigal Nochomovitz with Citi. Please proceed with your question.

Speaker 2

Hi, team. This is Ashik on for Yigal. Thanks for taking my question. I appreciate all the updates here. I just had a follow-up on the last question on the GAVRETO sort of relaunch.

Speaker 2

How much of a stocking benefit was there in the sort of initial phase of the launch, at least with you guys? And on the sort of reported sales, dollars 7,000,000 looks like it's on at least on a similar run rate for the quarter compared to what the prior entity did with it last year. So how should we think about the growth trajectory from here, if we should be thinking about it in a more aggressive way or maybe more modestly from here given the sort of restart? Thanks.

Speaker 3

Dave, do you want to take a second?

Speaker 4

Sure. Thanks for the question. First of all, remember that at the end of Q2, right at the very end, we filled some orders, to our distributors and that was what I would refer to as stocking. It was about $1,900,000 in sales. This quarter, we sold 7 17 bottles or we shipped 717 bottles.

Speaker 4

And we had just a slight more 750 odd bottles sold. So there were another maybe 30 some bottles built up in the channel. So I would just say the majority is demand that we saw in Q the overwhelming majority of what we saw in Q3 is true demand, patient demand, account demand. And what I will say is that obviously we started the quarter with some level of shipments going out to patients in clinics. We ended the quarter with a much higher level of shipments going out to patients in clinics as more people transitioned over.

Speaker 4

So, I can't really comment any more than that. But, you know, we would expect to see, some continued demand growth as we move forward.

Speaker 6

And translated specifically into bottle counts, we had 228 bottles of increase in our distribution channel, our inventory that Dave described in Q2. And that was essentially the full amount of revenue. And then we had an incremental build of that inventory of 35 bottles. The remainder of the bottles in Q3 were from shipments to patients and clinics.

Speaker 2

Understood. Thank you very

Speaker 3

much. Thank you.

Operator

Thank you. Our next question comes from the line of Kalkit Patel with B. Riley Securities. Please proceed with your question.

Speaker 8

Yes. Hey, good afternoon. Thanks for taking the questions. For the proof of concept data in lower risk MDS, I guess, first, to the extent that you can share here the grade 3, 4 adverse events that are listed in the abstract, was there any indication that these were dose dependent or generally occurring in doses of 500 milligrams or higher?

Speaker 5

Yes, thanks for the question.

Speaker 7

I

Speaker 5

think that will be shared in more detail in December.

Speaker 3

At the ASH meeting in the poster presentation.

Speaker 8

Right. Okay. Got it. And how much more data should we expect then at ASH in terms of maybe the number of patients and the number of cohorts and things like that?

Speaker 5

Right. So for the abstract, we used a data cutoff date of July 15th, and we're updating that to October 25th. So it's going to be about another 3 months or so of data. So you'll see data on the patients from the 4th dose level and a little bit beyond that.

Speaker 8

Okay, got it. Thank you very much.

Speaker 3

Thank you, Kelvin.

Operator

Thank you. Our next question comes from the line of Farzin Paku with Jefferies. Please proceed with your question.

Speaker 9

Hi, good afternoon. Thank you for taking my question. To start off with the 4 with R289 in the low risk MDS patients, how should we think about the bar for success? And what would you need to see in Phase 1b to advance the program forward?

Speaker 3

I'll let Lisa comment. Let me just preface this by saying that we're really excited about this data. This molecule was a molecule discovered here at Rigel. We own full rights to it. We think definitely the most advanced IRAK1 and 4 inhibitor that there is available.

Speaker 3

We are excited to study it here in low risk MDS where we see a very good mechanism to indication. And we're really interested to try it here and we're delighted to present the data that you saw in the abstract and substantially much more detail in the poster to come. In terms of the bar, Lisa, maybe do you want to comment on that?

Speaker 5

Yes. I think that if we look at the treatment landscape in lower risk MDS, obviously, we've got the kind of the first line agents, patients, if they're eligible for having ESAs, they will have ESAs followed by luspatercept, these are transfusion dependent patients I'm talking about now, and ometastat. And there's really nothing afterwards until HMAs. So that's kind of quite a gap. And in terms of efficacy, HMAs in terms of improving transfusion or reducing transfusion requirements, they have about a 20% transfusion independence associated with them.

Speaker 5

So that's pretty low on one end. And then our study is unique in that it's enrolling patients that have previously received HMAs as well as luspatercept, a metal stat, etcetera. So I would say and you know that the response rates for first line, it's around 40%. But like I said, our study is unique in that we are including relapsed refractory patients that weren't included in those first line settings. So I don't know that I would put a number on it right now.

Speaker 5

I think we're very encouraged by what we're seeing based on the preliminary safety and efficacy data thus far.

Speaker 9

That's helpful. And then for Gavrado, I was just curious for the new safety signal related to the risk of severe and fatal infection, how rate limiting do you expect it to be for uptake? Does RETeval, the competitive program have the same issue?

Speaker 3

So do you want to comment on that?

Speaker 5

I would say that from yes, and then maybe Dave can comment. So from the clinical perspective, this really isn't something new. Looking at the ARROW study, we were aware that infections were reported. This is in the label already in the safety section. We know that mechanistically there's a rationale for why this is happening.

Speaker 5

We know that in addition to RET inhibition that these increased risk of infections may stem from the off target inhibition of JAK1 and JAK2, which are not the primary targets, but nonetheless, there is some off target activity there. And we know also in terms most of the infections were pneumonias, which are very common in this patient population. About 80% of patients get pneumonias with lung cancer and receiving treatment for lung cancer. So this is a situation that oncologists are very familiar with managing.

Speaker 3

Dave, do you want to comment on what you've heard from since then?

Speaker 4

Sure. Patient safety is paramount, and I'm very proud to say that we sent the DHCP to more than 10,000 healthcare providers. That said, we haven't received any calls to our medical information line regarding that update. And as Lisa said, this is non small cell lung cancer. These are oncologists who treat very sick patients all the time.

Speaker 4

You have 2 RET inhibitors on the market with significant warnings and precautions on both and different sets of warnings and precautions. So we don't see any at this point, we don't see any, you know, changes in how we look at the opportunity for Givrado moving forward in the RET fusion positive non small cell lung cancer space.

Speaker 9

That's helpful. Thank you so much.

Operator

Thank you. Our next question again comes from Kaututh Patel with B. Riley Securities. Please proceed with your question.

Speaker 8

Yes. Thanks for taking the follow-up. I just had one more on the lower risk MDS program. There was another agent, Curis' IRAQ inhibitor that was started in an investigator sponsored study, but then later withdrawn for the same indication. So I guess if you had to highlight a few differentiated factors with R289 versus the others, what would they be?

Speaker 3

It's hard to comment on other people's. I would say ours is an IRAK1 and 4 inhibitor. I believe theirs was an IRAK4 inhibitor. That is a significant difference. I think Lisa highlighted in one of the slides where we showed that inhibiting both 1 and 4 provides a more profound inhibition of inflammatory cytokines, presumably in the bone marrow in this case.

Speaker 3

So that is an important difference between those 2. And as I said earlier, I don't believe there's another IRAK1 and 4 inhibitor in development, certainly not at more advanced development available. So we this is the first to work on a 14. And that rationale, the more profound cytokine inhibition was one of the reasons we liked 14 over 4. And Lisa, any other comments?

Speaker 5

No, I think that fairly pretty well summarizes it. Yes.

Speaker 8

Okay, wonderful. Thank you again.

Speaker 3

Thank you, Calvin.

Operator

Thank you. There are no further questions at this time. I would like to turn the floor back over to Mr. Raul Rodriguez for closing comments.

Speaker 3

Thank you and thank you everyone for joining on the call today and your continued interest in Rigel. I can't say it's a very exciting time for the company, Having data to share an exciting product and more coming, I think is really a great place to be. The year has gone very well for us in terms of commercial growth, addition to the portfolio and advancements in our development. And we look forward to telling you more about that in 2025. So with that, I'd like to also just always thank our employees for their continued commitment to our cause and improving the lives of patients and look forward to updating you further in other calls.

Speaker 3

Take care.

Operator

And this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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Earnings Conference Call
Rigel Pharmaceuticals Q3 2024
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