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Edited Transcript of RIGL earnings conference call or presentation 7-May-19 8:30pm GMT

Q1 2019 Rigel Pharmaceuticals Inc Earnings Call

South San Francisco Jun 3, 2019 (Thomson StreetEvents) -- Edited Transcript of Rigel Pharmaceuticals Inc earnings conference call or presentation Tuesday, May 7, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Anne-Marie S. Duliege

Rigel Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer

* Dean L. Schorno

Rigel Pharmaceuticals, Inc. - Executive VP & CFO

* Dolly A. Vance

Rigel Pharmaceuticals, Inc. - Executive VP of Corporate Affairs, General Counsel & Corporate Secretary

* Eldon C. Mayer

Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer

* Raul Rodriguez

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Conference Call Participants

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* Allison Marie Bratzel

Piper Jaffray Companies, Research Division - Research Analyst

* Kyung Yang

Jefferies LLC, Research Division - MD & Senior Equity Research Analyst

* Yigal Dov Nochomovitz

Citigroup Inc, Research Division - Director

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Presentation

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Operator [1]

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Good afternoon and welcome to Rigel Pharmaceuticals Financial Conference Call for the First Quarter of 2019. (Operator Instructions) I would like to remind you that this call is being recorded for replay purposes from Rigel's website. (Operator Instructions) And now I will turn this conference over to our first speaker, Dolly Vance, who is Rigel's Executive Vice President, Corporate Affairs and General Counsel.

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Dolly A. Vance, Rigel Pharmaceuticals, Inc. - Executive VP of Corporate Affairs, General Counsel & Corporate Secretary [2]

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Welcome to our financial results and business update conference call. The financial press release for the first quarter of 2019 was issued a short while ago and can be viewed, along with the accompanying slides for this presentation, in the news and events section of our Investor Relations page on our website at www.rigel.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 and 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 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. At this time, I would like to turn the call over to our CEO, Raul Rodriguez.

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Raul Rodriguez, [3]

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Thank you, Dolly, and thank you for joining us on our first quarter 2019 financial and business update call. Also joining me today on the call are Eldon Mayer, our Chief Commercial Officer; Anne-Marie Duliege, our Chief Medical Officer; and Dean Schorno, our Chief Financial Officer.

Reviewing today's agenda on Slide 6, we will provide you updates on a number of key Rigel objectives, including the progress we're making on the launch of TAVALISSE, the clinical and regulatory advances we've made, and Dean will provide an overview of the financials before I conclude the call.

Starting on Slide 8, on today's call we'd like to tell you about the large opportunities for TAVALISSE and our pipeline and how we're executing on these. In 2019 -- 2019 is a year of execution in a number of key areas. Growing TAVALISSE in the U.S., enrolling our Phase 3 AIHI trial, working towards commercialization in ex-U.S. markets, and continuing our pipeline development. We are gaining strong traction with TAVALISSE and we are seeing very good uptake in the $1 billion plus U.S. ITP market. This is driven by the differentiated value proposition of TAVALISSE including its novel mechanism of action.

Outside of the U.S., the opportunity is estimated at over $800 million and we have laid the groundwork to enter these markets. In early Q1, we announced a second ex-U.S. collaboration with Grifols for the EU Territories in Turkey. Grifols and Kissei, our partner in Japan, are well suited to make fostamatinib a success in their territories. They have strong relationships with key prescribers, a well-developed distribution infrastructure, and will make our product a priority in their portfolios.

Importantly, these collaborations cover the 2 largest markets for ITP outside of the U.S. On AIHA we have also made great progress. We have opened up a number of clinical trial sites which are now screening patients. We are positioned to potentially be the first approved therapy for AIHA, an indication where there is a significant unmet medical need. This market is even more attractive to Rigel given the synergies with our current ITP commercial capability.

Beyond these opportunities, we are working on additional indications for fostamatinib which leverage its unique mechanism of action. Additionally, we are working on new molecules to leverage our R&D capability and subsequently, our commercial organization.

Now moving over to the next slide, Eldon will discuss our commercial business in more detail, but I wanted to quickly provide some highlights of some encouraging trends we have seen this past quarter. For the quarter we shipped over 1,000 bottles of TAVALISSE. For the first time, we surpassed the millennial mark. Physicians are beginning to gain experience and familiarity with TAVALISSE as we are seeing an increased number of prescribers with multiple patients on drug and using the drug in earlier lines of therapy.

More than 45% of the patients that began TAVALISSE have remained on treatment into the fourth month. This is an important measure because the label recommends discontinuing after 3 months if the patients do not see a benefit.

I will now turn the call over to Eldon for a more detailed update on our commercial business.

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Eldon C. Mayer, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [4]

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Thank you, Raul. I'm pleased to provide you with an update today on the progress of the launch of TAVALISSE. We saw continued growth in the first quarter of 2019. The broad label value proposition, pricing and safety profile of TAVALISSE is gaining adoption with a wide range of physicians and we believe TAVALISSE is changing how doctors treat ITP.

Slide 11. After 3 full quarters, the TAVALISSE launch continues to go very well. We've executed on our strategy which has led to a solid performance in multiple key indicators. In the first quarter of 2019, net sales were $8.1 million, driven by a 13% increase in total bottles shipped from our 3PL to specialty distributors from the previous quarter. This is very encouraging given the variables that typically put pressure on sales of prescription products during the first quarter of the calendar year. Receptivity of TAVALISSE by the physician, payer and patient communities has been promising. Patient refill rate or persistence rate remains more than 45% at 4 months. The prescriber base continues to grow as well as the repeat prescriber rate which has increased over 20% in Q1. This is an important metric in which we expect to see continued growth.

Now I'd like to walk you through a couple of real-world examples of a physician's journey. These are physicians that are treating more than one of their patients with TAVALISSE and using it as an early line of therapy.

Slide 12. Shown here are 3 actual cases of patients under the same community HemOnc in a large group practice. On the far left of this slide, it shows how this physician typically treated ITP prior to TAVALISSE launch. And in the middle of the slide, we have 3 cases he treated over the course of time since launch from left to right. And on the far right, we have the physician's current approach after these experiences with TAVALISSE. As you can see, after steroid, this physician moved all 3 of his patients onto Rituximab, more commonly referred to by its brand name Rituxan. This approach aims to treat ITP by depleting the B cells and mediating the immune system. However, this physician began to use TAVALISSE which prevents platelet destruction by addressing the underlying pathophysiology. He first used our product in one of his patients and as he became more familiar with its use and his patient was having success, this physician prescribed TAVALISSE to additional patients and began moving it up into earlier lines of therapy.

Beginning with this physician's first TAVALISSE patient, a 64-year old female, she was treated with steroids followed by 2 courses of Rituximab. But the patient was not able to maintain a durable response. TAVALISSE was initiated and titrated up to 150 mg and her platelet count was maintained around 70,000 with no adverse events.

The next patient is a 74-year old male who went through multiple lines of therapy over several years. Beginning with steroid treatment, moving onto Rituximab and then treated with romiplostim commonly known as Nplate. After initiating TAVALISSE and titrating the dose to 150 mg, his platelet count rose to 112,000 with no adverse event. This physician's next patient was a 53-year old female who had been treated with steroids and then Rituximab, but without an adequate response. TAVALISSE was initiated and the patient is doing well after the first 2 months. This patient did experience diarrhea as a symptom, but that was managed with over the counter medication. As you can see, based on the physician's feedback, they believe that TAVALISSE should be used directly following steroids. The success this physician, like others, has seen with TAVALISSE underscores a potential shift in treatment approach in which TAVALISSE should be introduced earlier following steroids.

Slide 13. This slide highlights the TAVALISSE experience of a hematologist which is the other specialty that most commonly treats ITP patients. The first patient is a 72-year old male with cardiac disease, initially placed on steroids and IVIG, but discontinued due to adverse events and lack of efficacy. He was next placed on romiplostim but was discontinued due to injection site reactions. After initiating TAVALISSE, his platelet count has been maintained above 100,000.

The second patient is a 75-year old male with comorbidities of diabetes and A-fib. He received multiple lines of treatment prior to TAVALISSE including steroids, IVIG, Rituximab and romiplostim. Once TAVALISSE was initiated, the patient's platelets have risen to 65,000 with no adverse events. In our communications with this hematologist following these clinical experiences, he noted that in addition to using TAVALISSE after Rituximab, he would also consider using TAVALISSE immediately after steroids. These examples suggest a trend of TAVALISSE usage in patients with fewer prior treatments or earlier lines of therapy.

On a broader level, we have now accumulated several other datasets from a variety of sources which all support that over time, TAVALISSE is being used more in earlier lines of therapy.

Moving onto Slide 14. A lot of planning went into the launch of TAVALISSE. Since it came to market almost one year ago, our team has demonstrated solid execution to build the momentum we are currently seeing with TAVALISSE. As we move forward in 2019, we're focused on continuing that momentum through advancement of 4 core objectives in order to make sure physicians and patients understand the compelling valuation that TAVALISSE offers.

First, we're focused on increasing physician access to TAVALISSE and adoption in both the hematology and HemOnc community. To do this, we're dedicating resources to patient identification and increasing our HCP reach, advancing peer to peer education of TAVALISSE with ITP treating physicians, and further education on sick inhibition. Next, in order to support HCPs in achieving optimal duration of therapy, our strategy is twofold. First, we're focused on educating on optimal dosing, adverse event management and minimizing premature treatment discontinuation by keeping patients on drug for at least 12 weeks in order to provide enough time to gauge a response and by using TAVALISSE continuously as a long term treatment which differs from the current treatment paradigm where physicians sometimes use options for less than a year. And second, we're providing support with reimbursement, copays and insurance reauthorizations. Also important, we want to continue to move TAVALISSE up in the lines of therapy. Our approach here relies on generating more evidence to support clinical utility of TAVALISSE, enhance support for both payers and patients, and again, raising awareness about TAVALISSE through patient education efforts which will lead to more familiarity and experience with the product.

Lastly, to ensure patient access to TAVALISSE, we are focused on a number of initiatives for patients, payers and prescribers. We're publishing payer focused peer reviewed articles providing individual case experiences that reinforce the indication and value proposition of TAVALISSE as well as other initiatives. To that end, on the next slide I'd like to share one of the tools we've recently been provided thanks to the ongoing efforts of our team at Rigel, Slide 15.

There has been ongoing analysis of data which highlight the compelling valuation of TAVALISSE. Recently, we had a paper published in the American Journal of Hematology. The analysis was conducted in April, 2017, and describes all patients who were exposed to TAVALISSE during the Phase 3 placebo controlled and open label trial including patients who converted to TAVALISSE from placebo. This new publication has additional data to support the key messages that describe our value propositions. Importantly, the data demonstrates that TAVALISSE has durable efficacy with responses continuing past 28 months of treatment and the median duration of response is still ongoing at the time of this analysis. This paper also reinforces to clinicians that robust platelet responses seen in our placebo-controlled studies are consistent with the data in this long-term analysis. Additionally, the analysis supports the well described safety profile of TAVALISSE with no new or more frequent events with long term use of the product or any cumulative effect.

And finally, a very interesting finding seen in this new dataset is an incremental cohort of patients that did not meet the platelet criteria overall for a stable responder, but still achieved a meaningful clinical benefit from TAVALISSE. This suggested more patients may benefit from TAVALISSE in the real world setting than previously described. Our customer facing teams now have this publication and are educating their customers about this new dataset.

Overall, we continue to advance TAVALISSE as an important new treatment for adult chronic ITP. We are pleased with the trends we are seeing thus far in Q2 across all measures and look forward to providing future updates. I'll now turn the call over to Anne-Marie.

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Anne-Marie S. Duliege, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [5]

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Thank you, Eldon. Turning to Slide 17, we have now opened the initial sites for our Phase 3 clinical trial in warm autoimmune hemolytic anemia and are screening for participants. The trial will enroll a total of 80 patients. Given that this is a rare disease and based on our experience with the Phase 3 trial in ITP, we plan to enlist over 90 trial sites so that we can complete enrollment over the next 12 months. Conversations and interaction with physicians and our CRO have been extremely positive and we expect the first patient to enroll this month.

As mentioned on our last call, we have received the 120-day questions from the European Regulatory Authorities. Thanks to the efforts of our entire team, we submitted our responses to the EMA in a timely manner and were thorough in answering the questions and providing any additional materials that were needed. During this process, we have been very fortunate to have a team with a wealth of experience that is making sure that we stay on our planned timeline.

Regarding our collaboration, we are very happy with how our relationships with Grifols and Kissei are developing. Both companies are aligned with our vision of demonstrating long term potential and the clinical development plan. Just recently, we had the Grifols team in our office for 2 days of meetings to educate them and provide our experiences. It really was a great to spend time with them and see the excitement that they have in bringing fostamatinib to European markets, and how well they are utilizing their lead time to approval.

Kissei is currently focused on getting to market in Japan and is in discussions with the PMDA to determine the requirements for a bridging study. As they define the path forward, we expect that it will provide information as it is appropriate. As we begin our Phase 3 trial in autoimmune hemolytic anemia, I wanted to quickly remind you of our trial protocol which we describe on Slide 18.

As mentioned a minute ago, this will be an 80-patient trial consisting of two arms with 40 patients each. One arm will be receiving TAVALISSE and the other will get placebo. These patients must have a baseline [hemoglobin] count below 10gm/dL. The primary endpoint will be a durable hemolytic response by week 24 which is defined as the hemoglobin count greater than 10gm/dL and an increase platform at least 2gm/dL. Second, a responder cannot be attributable to rescue therapy. And three, it must meet the criteria for durability of response.

The first patient will be enrolled in the near term, so assuming that the trial will take 12 months to enroll and the study itself will last about 6 months, we are on the path to report top line results in the first half of 2021.

With that, I will now turn the call over to Dean.

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Dean L. Schorno, Rigel Pharmaceuticals, Inc. - Executive VP & CFO [6]

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Thank you, Anne-Marie. Looking at Slide 20, for the first quarter of 2019, 1,019 bottles were shipped to our specialty distributors, resulting in $9.9 million of gross product sales. 928 of those bottles were shipped to patients and clinics, while 91 of those bottles remained in our distribution channels at the end of the first quarter. As of March 31, a total of 329 bottles remained in our distribution channels. We reported net product sales from TAVALISSE of $8.1 million, which was recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $1.8 million, a gross-to-net adjustment.

The 10% quarter-over-quarter increase in net product sales of TAVALISSE reflects the continuing growth of our business since commercial launch in May, 2018. Progressing onto the next slide, in addition to our net product sales, we recognized contract revenues from collaborations of $4.6 million from the $30 million upfront payment that we received from Grifols in January of 2019. This represented approximately 90% of $5 million of the upfront payment and we would expect to recognize as contract revenues approximately 90% of the remaining $25 million of the upfront payment upon EMA approval. We would expect to recognize the deferred portion of these payments in 2020 and beyond.

As a reminder, if after the second anniversary of the agreement, fostamatinib has not been approved by the EMA for the treatment of ITP in Europe, Grifols will have the option during a 6-month timeframe to terminate the entire agreement which would terminate all of their rights to ITP, autoimmune hemolytic anemia and all other indications. In this limited circumstance, we will pay Grifols $25 million and regain all rights to Fostamatinib in Europe and other Grifols territories.

Moving on to costs and expenses, our cost of product sales was approximately $107,000 for the first quarter of 2019. For the first quarter of 2019, we reported total costs and expenses of $31 million comparted to $24.7 million in the first quarter of 2018. This increase was primarily due to the increases in personnel costs including our customer facing and medical affairs teams and third-party costs to support Rigel's commercialization of TAVALISSE.

Onto slide 22, we ended the first quarter of 2019 with cash and short-term investments of approximately $127.9 million. As we highlighted on our last call, we entered into a collaboration and license agreement with Grifols during January of 2019 to commercialize fostamatinib in Europe. We received a $30 million upfront cash payment, with the potential for $297.5 million in payments related to regulatory and commercial milestones, which importantly includes a $17.5 million milestone payment along with a $2.5 million creditable advance royalty payment to be paid upon EMA approval of fostamatinib, which we anticipate before the end of 2019. Incrementally, we will receive stepped double-digit royalty payments based on tiered net sales, which may reach 30% of net sales.

As we highlight on the table on this slide, the combination of upfront payments, potential milestones, and payments based on net sales from our collaboration agreements with Kissei and Grifols leaves the company in a strong cash position and positions us well for global expansion with these 2 tremendous collaboration partners. We currently expect our cash runway to extend into the second half of 2020 and provide for our continued commercial launch along with the expansion of our clinical programs.

I will now turn the call back to Raul.

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Raul Rodriguez, [7]

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Thank you, Dean. Going onto Slide 24, I'd like to take a few minutes to discuss our pipeline. We have extremely attractive opportunities in the near term with TAVALISSE in ITP and potentially AIHA. But a key driver of Rigel's incremental growth over the long term is our pipeline. What is often overlooked is the breadth and quality of our internally discovered pipeline. We have a valuable suite of assets consisting of 6 molecules currently in clinical trials. Two are being developed by Rigel which are fostamatinib and our IRAK inhibitor, RA35. And 4 are in trials with biopharmaceutical partners. ATI501, ATI502 is a JAK inhibitor partnered with Aclaris for autoimmune dermatological conditions. Bemcentinib is an AXL inhibitor partnered with BerGenBio for hematologic and solid tumors. DS3032 is an MDM2 inhibitor partnered with Daiichi Sankyo, also for hematologic and solid tumors. And ASN0449 is a second JAK inhibitor partnered with Astra Zeneca for allergic asthma.

These partnered assets are in mid clinical stage development and demonstrate the discovery capabilities and success we've had in finding novel molecules for the treatment of immune diseases and in hematology and oncology. We believe also that fostamatinib merits further clinical study given the important role that SYK signaling and its inhibition plays in immune-mediated diseases and in HemOnc conditions. Just as a reminder, we have a long window of opportunity with fostamatinib with expected exclusivity until at least 2031.

The number of clinical opportunities in Rigel's and our partner demonstrate the robustness of our pipeline. These pipeline assets and future ones will create significant options for Rigel as we move forward.

Now moving to Slide 25, we began 2019 with a focused list of priorities for the year. The key to our success is execution and I'm happy to say that we've made, continue to execute well across the board. Our commercial team is firing on all cylinders and is doing a great job of building awareness in use of TAVALISSE. The European Approval Process is progressing nicely and we are on track for a decision from EMA by the end of the year in ITP. And we are working closely with Grifols to ensure a smooth, potential commercial launch in Europe.

We have opened up several sites for our Phase 3 AIHA trial and we are looking to announce the first patient enrolled later this month. And finally, our research and clinical teams are making great progress and we have potential near term opportunities to move into clinical development. So thank you for taking the time to listen today and we will now open up the call to your questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Kyung Yang with Jefferies. Your line is now open.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [2]

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Thank you. Dean, I have a question for you. It seems like in the first quarter, the inventory level has increased compared to the end of last year. Can you talk about the reason for the increase? And also, with that, do you think there could be some inventory drawdown in the second quarter?

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Dean L. Schorno, Rigel Pharmaceuticals, Inc. - Executive VP & CFO [3]

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Hi, Kyung. Sure. So the inventory level did increase by 91 bottles in Q1 as you described. We do expect to see variability in that number. So as our business grows, we could see that number creep up. That said, we don't have visibility into where that number ultimately will normalize. I wouldn't expect it to go down significantly, but we will see some variation in that number over time.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [4]

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Okay. And then second question is on ITP market in general. As the (inaudible) mentioned it's about a billion-dollar market in the U.S. alone. And when you look at PROMACTA sales, last year the sales grew like 30% year-over-year. And I know that PROMACTA has other indications, but I would assume most of the sales are coming from ITP. So can you talk about what is driving such sales growth with PROMACTA?

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Raul Rodriguez, [5]

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This is Raul. How are you, Kyung? Eldon and I will tackle that one. PROMACTA has continued to increase. I think the primary driver of their growth is other indications, but even within ITP, we are seeing additional growth. And we think that's driven by more patients using the product. The product is maybe about 10 years old, so quite some ago that it was introduced. But surprisingly, it still continued to grow nicely. Nplate as you know as well, which has a more restricted indication only for ITP, also continues to grow. And so it's growing, what we saw, not just in price, but also in terms of volume. And so we believe that there is still potential in ITP as patients, even those have been on the market a while, continue to avail themselves of those products. So good potential growth and I think the billion-dollar market in the U.S. is a very attractive market. Growth there overall, those 2 are the major products there. Rituxan is a player, but also obviously now we're making inroads.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [6]

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Okay. Do you know what percent of PROMACTA sales are from ITP?

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Raul Rodriguez, [7]

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It's the vast majority, but I can get you the number more specifically, because we've purchased a couple of reports.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [8]

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Okay. Then the last question is, you mentioned that your current cash is sufficient into the second half of 2020. But between now and then, what other kind of potential milestones are there that you can expect from your partners?

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Eldon C. Mayer, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [9]

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Dean and I can answer that. We're expecting a milestone at the end of this year, towards the end of this year, when we have EMA approval for ITP, fostamatinib ITP. And that will be a meaningful milestone. I think it's $20 million. So that will be very useful. We're also, our other partners as I mentioned on the call, we have 4 other partners working on a range of different products and indications so some of those also have some milestones. But a little bit more difficult to predict because those are a little bit more out of our control, as you would appreciate.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [10]

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What would be the milestone payment upon Japanese approval?

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Eldon C. Mayer, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [11]

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I think the Japanese approval, as you know, the process for getting a Japanese approval will require a further clinical trial in Japan. And so our partner there, Kissei, is meeting with the PMDA as Anne-Marie mentioned. And they will highlight the timing on that. But it's a little bit further out than that and if there is a milestone there, it's a little bit smaller.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [12]

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Okay, but then your cash guidance does not include that $20 million that you may expect by the end of this year from European approval, correct?

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Dean L. Schorno, Rigel Pharmaceuticals, Inc. - Executive VP & CFO [13]

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We do expect that within the window of time we're talking about, Kyung, we do expect that $20 million and we do expect it later this year upon EMA approval. So it is included, yep.

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Operator [14]

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Thank you. Our next question comes from the line of Anupam Rama with JP Morgan. Your line is now open.

Tessa Romero: Hi, guys, this is Tessa filling in for Anupam tonight. Thank you for taking our questions and congratulations from us on all the progress. Curious on the most recent anecdotal feedback on the TAVALISSE profile that you have heard from the field, from physicians. What are you hearing specifically that's driving the momentum with respect to repeat prescribers? And then relatable, and maybe more generally, how has the overall rhetoric changed that you've heard about TAVALISSE differentiation since the launch a couple of quarters ago? And then my second question is just on gross to net. I think it was 18.8% this quarter. How should we be thinking about how this might trend in 2019? Thanks so much, guys.

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Eldon C. Mayer, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [15]

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Hi, this is Eldon. I would say, first of all I'd just like to remind that we have roughly 3/4 of data into the launch. So it is still very early and we continue to expand our reach in frequency and work on other educational efforts. So at this point, we're still raising awareness with the product and delivering the value proposition. I think the feedback that we have heard has not really changed. It's been pretty steady and I think it's been favorable overall on the value proposition that we have overall. I think we continue to hear positive feedback about the mechanism of action and that it's different than other therapies, particularly than the platelet growth factors that are out there, the TPOs. We continue to hear good feedback on the tolerability of the drug and doctors seem to be comfortable with that profile and the class of drug and how to manage that. I think that particularly as I mentioned, doctors are gradually moving it up in the lines of therapy. So I think that's based on positive clinical response and good tolerability overall. So I would say overall, still early, but not a lot of change, just continued positive feedback overall on the product. And I'll have Dean comment on looking forward.

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Dean L. Schorno, Rigel Pharmaceuticals, Inc. - Executive VP & CFO [16]

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On that, the gross to net, the 18.1% we saw this quarter, we expect to see in Q2 through Q4, gross to net to remain in that 18%, 19% range.

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Operator [17]

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Thank you. Our next question comes from the line of Ally Bratzel with Piper Jaffray. Your line is now open.

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Allison Marie Bratzel, Piper Jaffray Companies, Research Division - Research Analyst [18]

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Hi, thanks for taking the questions. So first, just on the drivers of TAVALISSE continuation, just hoping you could generally talk about what you're seeing there, maybe help us understand what share of discontinuations are actually stemming from lack of response versus GI side effects versus maybe issues with access. And then also on the dose, I think the last time we got an update was at your R&D Day and you indicated about a quarter of patients were on the higher dose. Has that changed sort of directionally? Do you expect that to continue trending upward as the launch progresses? Thanks. (technical audio difficulty)

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Operator [19]

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Participants, please stand by. And the speakers have joined.

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Eldon C. Mayer, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [20]

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Sorry about that, we had a little technical glitch. Ally, would you repeat your question? You were cut off in the middle of a sentence.

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Allison Marie Bratzel, Piper Jaffray Companies, Research Division - Research Analyst [21]

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Okay, yeah, thanks, guys. So the first question was on TAVALISSE discontinuations, if you guys could just generally talk about what you're seeing there and help us understand what share of discontinuations are stemming from a lack of response versus GI side effects versus maybe issues with access. And then on the dose, I think the last update we got was at your R&D Day when you said about a quarter of your patients were on the higher dose. Has that changed sort of directionally? Do you expect that to continue turning upward as the launch progresses? Thanks.

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Eldon C. Mayer, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [22]

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Sure. Okay. Hi, this is Eldon again, so I'll take those questions and then my colleagues, feel free to jump in. First thing is, on the discontinuations, let me just again reiterate. What we're seeing right now is at 4 months we have in the mid to high 40s which we are pleased with that overall. And so keep in mind that as you may know, when we launched this product, most of the patients that we were getting were highly refractory. And those patients are, although we had a mix of patients, mostly it was that. Those patients are relatively unlikely to respond to therapy. So when you look at that segment of patients, we have had some discontinuations over last year toward the end of the year, early into this year. As we move up into the lines of therapy gradually, we do expect that to improve over time. So although I don't want to give any numbers at this point, I can tell you that there has been a cohort of patients that discontinued. They do tend to discontinue in the first few months of therapy. Having said that, at the same time, as I mentioned on the call, one of the areas that we are working to educate physicians is with the optimal dosing. So we had had some cases where doctors prematurely discontinued with prior to escalating the dose and not giving the full 3 months to gauge a response. That's another area. Fortunately, we think that's something that we can again make some headway with. Additionally, there have been some AEs, but that's a very small number. But again, over time as physicians get more comfortable with this product and we continue to educate them about what AEs they can expect and how to manage them, we do expect that to get a little bit better. Lastly, with Medicare Part D, there is a significant portion of patients who although they are within the donut hole and they do rely upon copay assistance through foundations, that is limited and there are some cases where patients do run out of copay assistance. Although I can't give you any members on the split of all of those, probably a little bit more on the lack of efficacy, but a lot of the discontinuations have been due to Medicare and the limited copay assistance that's inherent in this market. Moving onto your second question on the doses, yes, we have seen a continual build in the proportion of patients that are on the 150 mg. So right now, it's about 60/40 100 to 150. We would probably expect to see some additional movement toward the 150 over time, but we'll just have to see where that stabilizes.

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Operator [23]

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(Operator Instructions) Our next question comes from the line of Yigal Nochomovitz with Citi. Your line is now open.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [24]

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Thank you. Hi. Thanks for taking the questions. I Just wanted to dig in a bit more on this phenomenon around the multiple prescriptions or multiple patients being prescribed by one physician. First off, could you provide us with the number, the subscriber base that you have currently? I don't know if you mentioned that specifically. How many docs are currently prescribing it as compared to prior quarters?

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Dean L. Schorno, Rigel Pharmaceuticals, Inc. - Executive VP & CFO [25]

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We did not mention that number and I can tell you that our prescriber base has continued to grow and we are seeing an increase in prescribers in multiple patients. At this point, we're not going to be sharing a specific number of prescribers, but we have seen, we have seen continued growth there due to greater awareness generated by a number of things, our promotion, educational forums, publications, etc.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [26]

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Got it. So then I guess what I'm trying to get at is, with the 15 -- I think it was 15% last quarter that were the sort of multiple prescribers, now it's 20%. Could you just talk a bit about how that's evolving and where you see that number going? And what percent of the scripts currently respond to this higher prescribing segment? And then for the docs that are still prescribing only one, is it just a matter of them waiting to see if that first patient responds before adding another patient that they're prescribing, or is there something else at play there? Thanks.

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Dean L. Schorno, Rigel Pharmaceuticals, Inc. - Executive VP & CFO [27]

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Sure. So I can tell you that the number of, with the physician experience overall, we've stated in the past that the majority of physicians had one patient on drug. And so there are certainly a number of those cases where they had prescribed a drug for a more refractory patient and perhaps did not respond. So that physician, our effort there is to continually go in and remind the physician that TAVALISSE is available and remind them of the benefits of the product. Then it's waiting for a patient, another patient to not respond to a therapy that they're on or a new patient that's coming off steroids that's not doing well. So that just takes time to do that. We're not going to provide specific numbers on your other questions, but I can tell you that we are, and it's with the prescriber base overall, we are seeing quarter-over-quarter a gradual build of pre-prescribers and prescribers using product on more than one patient. We're comfortable with the trend we're seeing there. We'll continue to monitor that over time.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [28]

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Okay. Then I just had a question on the AIHA Phase 3. It was interesting. It seems like the endpoint that you ended up agreeing to is actually quite a bit simpler than what I was anticipating. So I thought there was some discussion at one point in time around having multiple timepoints during the 24 weeks where you'd have to be above a certain hemoglobin threshold. But it seems like as far as I understand it, unless I'm missing something, it's just the week 24 that's the only criterion here.

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Anne-Marie S. Duliege, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [29]

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Let me clarify that. No, indeed, we are having an endpoint that has multiple timepoints during the 24-week trial that needs to be above the threshold of correction of anemia. This is a durable response and one single timepoint wouldn't make it.

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Eldon C. Mayer, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [30]

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It's what you thought previously, it hasn't changed.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [31]

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Okay, so there are multiples, but you haven't specified what those timepoints are at this point in time?

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Anne-Marie S. Duliege, Rigel Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [32]

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That's right. We're not providing the specifics of the endpoint at this time.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [33]

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Okay, understood. Thank you very much. Appreciate it.

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Operator [34]

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Thank you, and that does conclude today's question and answer session. I would now like to turn the call back over to Raul Rodriguez for the concluding statement.

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Raul Rodriguez, [35]

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Thank you for your questions and for listening in. It's been a really good quarter for us. We're very happy with the progress we've made across really all fronts. TAVALISSE in the U.S., I think very good progress there. And TAVALISSE or fostamatinib availability in Europe, very good progress there with Grifols and our own EMA filing progressing on that front. AIHA as well. We're delighted to start that trial. I think it's a very accretive indication to ITP so we're very happy there. And good progress in the early pipeline as well. And like I said, Dean said we have money to do what we plan to do and money into the second half of next year. So all in all, I think it's been a fantastic start of the year and look forward to further progress in upcoming quarters. Thank you again.

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Operator [36]

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Ladies and gentlemen, that does conclude today's conference. You may disconnect. Everyone, have a great day.