Shares of Rigel Pharmaceuticals (NASDAQ: RIGL) climbed over 17% today after the company announced second-quarter and first-half 2018 earnings results. The pharma company reported $1.8 million in net product sales of Tavalisse, the portfolio's first approved product, during the most recent quarter. That may not seem like much, but not when you consider that the chronic immune thrombocytopenia (ITP) treatment only launched on May 29.
Rigel Pharmaceuticals has poured money into sales and marketing activity to support a commercial launch -- and it appears to be working. With some forecasts expecting Tavalisse to generate peak sales of $350 million per year with the currently approved indications, investors are optimistic that the fast start is a sign of things to come.
As of 12:01 p.m. EDT, the stock had settled to a 13.8% gain.
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While the second quarter of 2018 marked the transition from a development-stage company to a commercial-stage company for Rigel Pharmaceuticals, it wasn't cheap. The company reported $52.6 million in operating expenses in the first half of the year -- a 34% increase from the previous year -- thanks to increased spending on selling and marketing activities. That resulted in a net loss of $49.9 million during the first six months of 2018.
The hope is that the business will close the gap between hemorrhaging cash and profitability as Tavalisse sales ramp up in the coming quarters and years. Considering Rigel Pharmaceuticals exited June with $135 million in cash, cash equivalents, and short-term investments, there's a sufficient financial cushion to make it through the remainder of the year. Management thinks the business can hum along into the fourth quarter of 2019 before needing more funds.
Either way, if net product sales impress in the second half of 2018, then it might be possible for the company to raise capital at more favorable rates in 2019.
Tavalisse appears to be on a good trajectory for commercial success, but it's important to remember that it's still very early. After all, the ITP treatment has only been on the market since the end of May, and investors only know of its performance for a period of 33 days. Continued success in the second half of 2018 could be enough to lift Rigel Pharmaceuticals stock higher, which would be a welcome change considering shares have gained just 8% in the last three years. That said, there's not much for investors to do except wait for results to trickle in.
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