Q2 2023 Rigel Pharmaceuticals Inc Earnings Call
Participants
David A. Santos; Executive VP & Chief Commercial Officer; Rigel Pharmaceuticals, Inc.
Dean L. Schorno; Executive VP & CFO; Rigel Pharmaceuticals, Inc.
Raul R. Rodriguez; President, CEO & Director; Rigel Pharmaceuticals, Inc.
Raymond J. Furey; Executive VP, General Counsel & Corporate Secretary; Rigel Pharmaceuticals, Inc.
Allison Marie Bratzel; VP and Senior Research Analyst; Piper Sandler & Co., Research Division
Eun Kyung Yang; MD & Senior Equity Research Analyst; Jefferies LLC, Research Division
Joseph Pantginis; Director of Research & MD of Equity Research; H.C. Wainwright & Co, LLC, Research Division
Kalpit R. Patel; Senior Biotech Analyst; B. Riley Securities, Inc., Research Division
Kristen Brianne Kluska; Analyst; Cantor Fitzgerald & Co., Research Division
Yigal Dov Nochomovitz; Director; Citigroup Inc., Research Division
Presentation
Operator
Greetings, and welcome to the Rigel Pharmaceuticals Financial Conference Call for the Second Quarter of 2023. (Operator Instructions) 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. Thank you, Mr. Furey, you may begin.
Raymond J. Furey
Welcome to our second quarter 2023 financial results and business update conference call. The financial press release for the second quarter of 2023 was issued a short while ago and can be viewed along with the slides for this presentation in the News and Events section of our Investor Relations site on 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 annual report on Form 10-K for the year ended December 31, 2022, and the subsequent filings with the SEC, including our second quarter 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 President and Chief Executive Raul Rodriguez. Raul?
Raul R. Rodriguez
Thank you, Ray, and thank you, everyone, for joining today. Also with me today are Dave Santos, our Chief Commercial Officer; and Dean Schorno, our Chief Financial Officer.
Now beginning on Slide 4. We are pleased with the progress we've made in the first half of 2023 as we continue to build our hematology oncology company with our commercially available products and our development programs. In the second quarter, we continued to see year-over-year growth in demand for our first approved product, TAVALISSE, for adult chronic ITP. We're also pleased with the progress that we've made on the launch of our second approved product, REZLIDHIA, for adult relapsed or refractory IDH positive AML. As we navigate the launch, the core focus of our commercial and medical affairs team has been driving awareness for REZLIDHIA and establishing relationships with new doctors.
A few key highlights on these initiatives from the quarter include robust engagement with the medical community at the 2023 ASCO Annual Meeting, the presentation of promising data in the post-Venetoclax treated patients at the European Hematology Association 2023 Congress, and a second publication of blood advances, examining the preclinical and clinical development of REZLIDHIA and its role in the treatment landscape. These are important data that we recently published and presented. Dave will touch on these items a little bit later in this presentation.
Looking at our development and expansion initiatives, we made progress in the enrollment of our Phase Ib study of R289, our IRAK-1/4 inhibitor in lower-risk MDS, and we are evaluating opportunities to expand our hematology/oncology business further with clinical development for our already approved products into new indications. Additionally, our RIPK1 program has advanced with our partner, Eli Lilly, and continues to progress with the initiation of a Phase IIa trial in patients with rheumatoid arthritis in the second quarter of 2023. I will provide further updates on our progress and strategies for these efforts later on in today's presentation.
With that, I'll turn the call over to Dave for an overview of the quarter. For you, Dave.
David A. Santos
Thank you, Raul.
Now I'd like to take a few minutes to discuss our continued growth of TAVALISSE during another record quarter and our progress with REZLIDHIA launch in the first half of 2023. On Slide 6, you'll see our FDA-approved indication for TAVALISSE, which is for adult patients with chronic immune thrombocytopenia or CITP, who had an insufficient response to a previous treatment.
Moving to Slide 7. I am pleased that we achieved another new quarterly all-time high with TAVALISSE in Q2, shipping 2,265 bottles to patients in clinics, representing 10% growth over Q2 of 2022. We have now achieved 3 consecutive record highs for the number of bottles shipped to patients at clinics in a quarter since launch. We continue to grow our demand through a consistent flow of new patients starting TAVALISSE. And for Q2, we achieved net sales of $21.3 million, $2.8 million more than the same quarter last year, representing a 15% year-over-year increase. We are pleased with how we have grown our TAVALISSE business during the first half of 2023 and look forward to carrying this momentum into the second half of the year. We will continue to focus on targeted clinicians to identify appropriate patients who can benefit from TAVALISSE to grow our new patient starts beyond the record levels we saw in 2022. I'm grateful to the entire team for continuing our growth with TAVALISSE in ITP while we launch REZLIDHIA.
Moving to Slide 8. I wanted to review the opportunity we have with TAVALISSE in chronic ITP and provide an update on our progress in moving to earlier lines of therapy. First, on the left, recall that we estimate there are more than 80,000 patients with ITP and more than half of them are actively treated. While most of the patients are on steroids as their first-line therapy, there is still more than 24,000 patients who are eligible to be treated after steroids and 3/4 of those patients are in the second or third line. On the right, you will see how the portion of second- and third-line new patients on TAVALISSE has grown since 2021. For 3 consecutive quarters, more than 70% of the new TAVALISSE patients that we captured through our hub have been either second or third line. We are very pleased to see this consistency of earlier usage in patients on TAVALISSE over the past 3 quarters. As more patients are being treated with TAVALISSE earlier in their course of treatment, we expect our refill bottles to continue to grow due to the improved persistency we should see from those patients.
On Slide 9, we believe the reason we have been successful in getting more of our TAVALISSE patients earlier in the treatment continuum is that our efficacy message is hitting home. Clinicians are impressed that the earlier they use TAVALISSE, the better their results. And when they do use TAVALISSE, they can count on clinically meaningful and durable increases in platelet counts over time. These messages are resonating, and our business is continuing to grow. We'll continue to promote the benefits of using TAVALISSE earlier after steroids and how the durable, predictable platelet increases are meaningful to patients who live with chronic ITP each day.
On Slide 10, a reminder that in April, our partner Kissei, announced the launch of TAVALISSE for the treatment of chronic ITP in Japan. We remain committed to continuing to impact CITP patients around the globe with the expansion of TAVALISSE's commercial footprint through our partners.
Moving to Slide 11. I'll take a few minutes to discuss our continued progress launching REZLIDHIA in the first half of 2023. On Slide 12, you'll see our FDA-approved indication for REZLIDHIA, which is for adult patients with relapsed or refractory acute myeloid leukemia with the susceptible IDH1 mutation as detected by an FDA-approved test. As an introduction on Slide 13, there continues to be an unmet need for efficacious targeted treatments in relapsed or refractory AML, and in particular, agents that provide longer durations of response and an acceptable balance of efficacy and toxicity are needed. We continue to strongly believe that REZLIDHIA addresses exactly those needs.
Moving to Slide 14 and our view of the currently eligible patient population for REZLIDHIA. The American Cancer Society estimates that more than 20,000 patients will be diagnosed with AML in 2023. And of those patients, our research showed that whether patients are treated with intensive therapy or not, most are refractory to treatment or relapsed within 2 years. Specifically, with 6% to 9% of patients having the IDH1 mutation, we believe we have a near-term opportunity to impact the lives of around 1,000 new mutant IDH1 patients in the relapsed or refractory setting each year.
Slide 15 shows our continued early launch progress in bringing REZLIDHIA to those 1,000 mutant IDH1 relapsed or refractory AML patients. We sold a total of 200 bottles of REZLIDHIA in the second quarter, representing 77% growth over Q1. 187 of those bottles were shipped directly to patients at clinics, and our demand grew second quarter net product sales to $2.6 million, with our total launch-to-date sales now at $4.9 million. We continue to remain focused on growing awareness of REZLIDHIA through our field teams and other activities.
Moving to Slide 16. We made solid progress in Q2 on growing that awareness through both promotional activities and scientific publications. First, on the left, we had a strong presence at the ASCO Annual Meeting in early June. It was the first major conference opportunity for Rigel to promote both TAVALISSE and REZLIDHIA, and we officially launched our REZLIDHIA Transform Your Expectations, Durable Remission is Possible campaign there. To go along with that, we have updated both our HCP and patient websites with our campaign and visitors to rezlidhia.com have a wealth of information and resources at their fingertips.
On the right side of this slide, you will see the significant progress we have made on the scientific front in Q2. First, in May, there was an excellent olutasidenib review article published in Blood Advances, discussing the positioning of REZLIDHIA in the mutant IDH1 AML treatment landscape. In the conclusion, the authors "recommend olutasidenib in venetoclax plus HMA failures, given the available data." The data they were referring to was also presented this quarter at the European Hematology Association 2023 Hybrid Congress held in Frankfurt during June. That poster focuses on this very clinically relevant population of patients who were previously treated with venetoclax.
The conclusions were very consistent with our previously reported results. The authors wrote that olutasidenib induced durable remissions and that the observed activity is clinically meaningful and represent a therapeutic advance in the treatment of this molecularly-defined poor prognosis patient population with relapsed or refractory mutant IDH1 AML. Our commercial and medical affairs team members have had several recent discussions with key academic leukemia specialists since that data was presented in June, and they have expressed the same sentiments as the authors. They view the data as promising and interest in olutasidenib continues to grow.
Overall, we made significant progress during Q2, and importantly, some key drivers to the olutasidenib story such as the compelling activity in post-venetoclax patients just began at the end of the quarter. In addition to those key drivers in late Q2 on Slide 17, we have other activities planned for the second half of this year that we expect will enable us to continue building momentum with REZLIDHIA. First, on the left, we now have the institutional team we announced last quarter in place. Recall that a significant portion of our AML business is concentrated in academic institutions and the leukemia treaters in these key leukemia centers influence how the community treats AML. We hired 8 institutional business managers across the country who will be accountable for leading REZLIDHIA promotional activities with these top leukemia treaters and facilitating formulary placement at key leukemia centers. They have impressive experience. On average, the members of this team have more than 19 years of heme/onc experience with 14 of that calling on hospitals. They are also experienced in other key commercial functions, including sales management, market access, marketing, KOL development and key account management. I want to warmly welcome them to the REZLIDHIA team. I'm looking forward to reporting on their accomplishments as we move forward.
In addition to the institutional team, we continue to schedule and complete more peer-to-peer speaker programs, improve our presence at key leukemia and hematology conferences and will be utilizing timely nonpersonal promotion through innovative channels during the second half of the year. And of course, we will continue to maximize access for patients through our hub and other patient and HCP resources. On the scientific side, we are planning additional publications from the Phase II trial, highlighting more key mutant IDH1 relapsed/refractory patients along with the post-venetoclax population as well as providing more olutasidenib evidence from populations outside of our pivotal cohort. In addition, we'll be working to generate supportive data in difficult-to-treat mutant IDH1 relapsed and refractory patients to bolster our current story.
And finally, our medical affairs team will continue to provide relevant information and education for HCPs involved in AML treatment and gather insights from the KOLs to deepen our understanding of where else we may need to develop olutasidenib.
Overall, we're looking forward to building additional momentum with all of these initiatives as we move through the second half of 2023. And finally, on Slide 18. After our experience during the first 6 months of launch, we believe now more than ever that REZLIDHIA has the potential to address many key patient and HCP needs in relapsed/refractory AML. It's a promising treatment targeting mutant IDH1 that has shown impressive durable responses in patients who failed previous therapies. Overall, we continue to see exciting potential to become a market-leading treatment in mutant IDH1 relapsed/refractory AML and are looking forward to continuing to execute our launch plan. My thanks to the entire team for all their efforts during the first half of 2023 with REZLIDHIA, and I look forward to providing you with additional launch updates in the future. Thanks for your attention, and I'll now turn the call back over to Raul to provide a brief update on our development progress. Raul?
Raul R. Rodriguez
Thank you, Dave. I will now summarize our development programs. Coming on to Slide 20. Thank you. We outlined our ongoing development programs. We are focusing on growing our Heme/Onc business with our internal development plans. We believe both fostamatinib and olutasidenib has potential in other diseases beyond their already approved indications, and we are currently evaluating several options. In addition, we are evaluating potential in-license opportunities similar to the approach we took with REZLIDHIA. Our ongoing Phase Ib study of R289, our IRAK1/4 inhibitor in patients with lower-risk MDS continues to progress well. We have completed enrollment in the targeted number of patients in the second cohort of the trial and expect to begin enrollment in the third cohort in the near future. I will touch more on this program in a minute.
More opportunistically, our partner, Eli Lilly, is advancing R552 our RIPK1 inhibitor with the initiation of their Phase IIa study in rheumatoid arthritis. As a reminder, this study will enroll approximately 100 patients with moderate to severely active rheumatoid arthritis, and the analysis is expected at the end of 2024.
Moving on to Slide 21. I wanted to spend a few moments discussing the treatment landscape for lower risk MDS and how we think about our IRAK1/4 inhibitor R289, and how it could address an unmet need. For background, MDS is a disorder of hematopoietic stem cells resulting in dysplasia and ineffective hematopoiesis in the bone marrow. For patients with lower-risk MDS, risks include autoimmune abnormalities, cytopenias, progression to AML and death. Patients undergo treatment via blood transfusions or erythropoiesis-stimulating agents, or ESAs, for anemia in the first-line setting, while lenalidomide, luspatercept, HMAs and immunosuppressive therapies in the second line setting. But durable responses in this setting are not common. subsets of patients show limited hematologic responses, and these agents result in significant adverse events. Loss of response following second-line therapy represents a poor prognosis for patients associated with significant morbidity and cytopenias. So there remains a significant unmet need for lower-risk MDS patients who are refractory or resistant to current therapies. And we believe R289 has potential to address this need in this underserved patient population.
On Slide 22, you see our ongoing open-label Phase Ib study of R289. As mentioned, we have completed enrolling the targeted number of patients in the second cohort of the trial and expect to begin enrollment of the third cohort in the near future.
Moving on to Slide 23. We continue to evaluate fostamatinib and olutasidenib in additional indications beyond their approved indications. Working with KOLs, regulators, we are evaluating these programs across multiple indications, lines of therapy and treatment regimens as well as conducting market research to help inform our plans moving forward. We look forward to providing additional updates on these initiatives later on in 2023.
Regarding our business development efforts related to the in-licensing of new assets, we are continually evaluating assets that are synergistic with our existing heme/onc infrastructure and that are complementary or adjacent to or already approved products. We are focused on programs that are in late-stage clinical development and review for potential approval or in the early stages of commercial launch. With our development capabilities and commercial infrastructure, we have the potential to grow our business from internal programs as well as being the potential commercial partner for in-licensed or acquired heme/onc products.
With that, let me turn the call over to Dean for a financial update.
Dean L. Schorno
Thank you, Raul. I'm on Slide 25. For the second quarter of 2023, we shipped 2,191 bottles of TAVALISSE to our specialty distributors, resulting in $30.2 million of gross product sales. 2,265 bottles of TAVALISSE were shipped to patients at clinics, while 74 bottles decreased the levels remaining in our distribution channels at the end of the quarter. For the second quarter of 2023, we shipped 200 bottles of REZLIDHIA to our specialty distributors, resulting in $3.2 million of gross product sales. 187 bottles of REZLIDHIA were shipped to patients at clinics, while 13 bottles increased the levels remaining in our distribution channels at the end of the quarter.
We reported net product sales from TAVALISSE of $21.3 million in the second quarter of 2023, a 15% increase compared to the same period in 2022. We reported net product sales from REZLIDHIA of $2.6 million in the second quarter of 2023. Our net product sales from TAVALISSE and REZLIDHIA were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $9.6 million. For the second quarter of 2023, our gross to net adjustment for TAVALISSE and REZLIDHIA was approximately 29.5% and 20.7% of gross product sales, respectively.
Before we move on from net product sales, let me review our expectations for the third quarter of 2023. We are pleased with the strength of our business in the second quarter and expect to see continued strength in our year-over-year total net product sales growth rate as bottles shipped to patients at clinics continues to grow across our business. Incrementally, we expect the gross to net adjustment in the third quarter of 2023 to be approximate 31% for TAVALISSE and approximately 21% to 22% for REZLIDHIA.
On to the next slide. In addition to net product sales for the 3 months ended June 30, 2023, Rigel's contract revenues from collaborations were approximately $2 million, of which $1.2 million was from the delivery of drug supplies and $800,000 was from royalties from our collaboration agreement with Grifols. We also recognized $1 million in government contract revenue related to income recognized pursuant to the agreement with the U.S. Department of Defense to support our Phase III clinical trial of fostamatinib in high-risk hospitalized patients with COVID-19.
Moving on to costs and expenses. Our cost of product sales was approximately $1.1 million for the second quarter of 2023. Total cost and expenses were $32.2 million in the second quarter of 2023 versus $42.8 million in the second quarter of 2022. The decrease in costs and expenses was primarily due to trial completion activities related to the Phase III clinical trial for warm autoimmune hemolytic anemia and the Phase III clinical trial at high-risk hospitalized patients with COVID-19 as well as timing of activities related to our IRAK1/4 inhibitor program. While we did see a significant drop in operating expense during the quarter, we're expecting operating expenses in the back half of the year to return to at least first quarter of 2023 levels as we expect to both further our current clinical efforts and expect to ready for the initiation of new clinical studies, as Raul described. We look forward to providing updates on these potential studies in upcoming quarters, and we'll continue to provide operating expense updates along the way. We ended the quarter with cash, cash equivalents and short-term investments of $64.4 million.
With that, I'd like to turn the call back over to Raul. Raul?
Raul R. Rodriguez
Thank you, Dean. As we reviewed on this call, we had a productive first half of the year, and we are focused on our 2023 catalyst. In Q2, we just exceeded our quarterly high for demand bottles for TAVALISSE, and we look forward to continue to drive momentum for TAVALISSE sales in ITP both in the U.S. and globally with our partners. We are executing on the launch of REZLIDHIA in relapsed/refractory AML. And now with our academic institution focused sales team fully on board and several recent REZLIDHIA publications and presentations, we are well positioned to grow awareness for this product as a new treatment option. In addition, we are identifying ex U.S. collaborators for this product. We will evaluate new potential opportunities for both fostamatinib and olutasidenib, continue to advance our R289 Phase Ib study and actively pursue business development product opportunities.
So with that, I want to thank you for your interest in the second quarter, and we will now open up the call to your questions. Operator?
Question and Answer Session
Operator
We'll now be conducting a question-and-answer session. (Operator Instructions) Our first question is from Yigal Nochomovitz with Citi.
Yigal Dov Nochomovitz
I'm just trying to get a better understanding of how you're managing the business with respect to the path to profitability. I think this quarter was the closest to breakeven, excluding some of the one-timers where you had net profit given collaboration or a milestone. You mentioned that you're going to be potentially investing in new opportunities for fostamatinib and olutasidenib as well as in-licensing. But the top line, obviously, is growing too. And you mentioned that the expense line might increase a little bit back to the 1Q '23 levels. So could you just talk about all that together and how you're thinking about managing the business to get to breakeven or beyond over the next coming years?
Raul R. Rodriguez
So well, let me turn to Dean to give you an overview on how we're looking at this path towards breakeven and our investments further.
Dean L. Schorno
Thanks for the question. So let me start with just the change in cash for the quarter, which you highlighted a little bit in your question. So the cash increased by $5.6 million for the quarter. The basis of that increase in cash was really the strength of sales, which is offset by the operating expense. That operating expense, as you highlight, is a fairly low level of clinical spend. And that's simply a result of just timing of our activities. As you look back a year, we wrapped up the warm autoimmune hemolytic anemia as well as the COVID Phase III efforts as well as there's some variability in our IRAK, the timing of our IRAK spend. So that really resulted in about the $32 million of operating expense for the quarter. The net loss for the quarter is $6.6 million, $2.5 million of which was noncash, also contributed to strength in cash. And then finally, we had about an $8.5 million pickup in accounts receivables. So we had a slightly high accounts receivable balance in Q1, and that normalized in Q2. So all said, we're at about $5.6 million of increase. As you highlighted in your question, getting to profitability and the path to profitability is important to us. And this quarter highlights the potential for that path to profitability. We do expect in the back half, as I said in my prepared comments, to get back to Q1 like operating expense levels. But we do expect that the revenues to continue to grow. We expect to continue to manage operating expense very effectively as we have, and that will ultimately, we believe, lead us to profitability. All that said, we haven't given top line guidance and therefore, we can't be specific on when we'll cross over. But again, I'll reiterate that it certainly is a focus of the business to get to that profitability.
Raul R. Rodriguez
Thanks, Dean. The only thing I'd like to add further is that it's an important priority for us, but it also is important to fund the new opportunities that both our internal as well as things we might in-license because that continues to be a priority for both of those things. We like the business. We like the growth of the business. We wanted to grow and be even greater and bigger in the future.
Operator
Our next question is from Kristen Kluska with Cantor Fitzgerald.
Kristen Brianne Kluska
I found it really helpful to understand a little bit more about what you're seeing in terms of new patients. So thanks for sharing that with us. So I wanted to see if you could talk about what the compliances you're seeing amongst the different lines of treatment. And also the responses are pretty much in line with your own analysis since you've been tracking this for a couple of quarters now.
Raul R. Rodriguez
Yes. Thank you for asking that question. We're excited to share some of that information. Dave?
David A. Santos
Thanks, Kristen. I will say that we don't have an ability to kind of take the patients that are on therapy in the second and third and determined response rates, if that was your question. But I will comment on kind of what we've looked at in terms of persistency. And it is still early. But what we've looked at is the patient who started in Q4 of last year when we saw this higher percentage of third- and fourth-line patients. And we compared it to patients who started in Q4 of '21 and Q4 of 2020. And if you look at their persistency at 4 months and beyond versus the persistency of patients who were in '21 or '20, it is trending higher. And so we do think this is a positive trend. Again, this has only been happening for 3 quarters. So it's going to take some time for this to reflect in a larger number of refills, but certainly, we believe our business is going in the right direction.
Kristen Brianne Kluska
Okay. And then you mentioned for REZLIDHIA that you're looking at potentially populations outside of what was evaluated in the pivotal cohort. Can you please just elaborate a little bit more on that?
Raul R. Rodriguez
Let me make a couple of comments on that, certainly. So IDH-positive patients in AML. There's numerous opportunities within IDH-positive AML patients that we're looking at. Earlier line, for example, in certain subsegments, we think are interesting to study further. So already in the relapsed/refractory area where we want more data. But we're also looking in areas outside of AML, where there's been shown to have some opportunities for IDH-positive, a product that is an IDH-positive mutant product such as REZLIDHIA. Dave?
David A. Santos
Yes, I would just say that all of the patients in the Phase II, if you consider outside of the pivotal cohort, I mean, some key populations that are really important to clinicians out there include patients who were enrolled with MDS versus AML, patients who were enrolled treatment-naive and patients who were on combination therapy versus a single agent because as you know, in our pivotal cohort, it was just monotherapy, and it was all relapsed/refractory AML. So those are the populations that clinicians have expressed interest in. Some of the data has been presented in the combination data, but we're looking to make sure that the other cohorts that data is out there as well for clinicians to learn from.
Raul R. Rodriguez
And just to highlight, we did publish the post-venetoclax data at the EHA meeting, which was very helpful. It was a question we frequently get. How do patients who had went through venetoclax perform with your product? And the answer was very affirmative in that presentation.
Kristen Brianne Kluska
Okay. And last question for me. I know you made it very clear that you're looking at a couple of different options on the table here in terms of next opportunities. But one that comes up pretty consistently for us is GvHD. So I know you shared some promising data earlier this year. Just wondering what the next steps are for following up with those patients in that program in particular. I know you haven't officially declared it as a next candidate just one that you may consider. Sure. It's a very attractive opportunity. The data that our colleagues at Duke were able to present and publish I think it's very compelling data. It's a segment there continues to be important medical need and where fostamatinib may have a very good benefit. We're in the middle of evaluating that opportunity alongside other opportunities for olutasidenib, for example, and weighing one against the others as well. So we'll have to make some decisions and not, of course, do everything. But GvHD is a very attractive one. And like I said, later this year, we'll come back to you and discuss how we're going forward with GvHD or other areas.
Operator
Our next question is from Joe Pantginis with H.C. Wainwright.
Joseph Pantginis
Thanks for all the details today. So first, Raul, I'm just wondering if you could share maybe the maturity levels of your discussions to potentially in-license.
Raul R. Rodriguez
Yes, I really cannot actually because I've learned, I've been in business development for a long, long time and until the contract is signed, the contract is not signed all sorts of things happen. But needless to say, importantly, that we're looking for heme/onc opportunities in late stage, either with data or at registration or just launch as opportunities that we are very interested in. We're particularly interested in opportunities that are a good fit with the audiences and physicians we call on, but if they're in a slightly adjacent area, say, transplant, that actually may be a good opportunity as well. So we're looking at those types of opportunities, a lot like with REZLIDHIA, something that we could slot into our portfolio with really only needing a minor increase perhaps in infrastructure, but fully leveraging the infrastructure we have currently in place. And we'd like to have these in place so that we can obviously launch them successfully just like we're doing with REZLIDHIA in the not-that-distant future. So we're looking at those types of opportunities. I can't be more specific in terms of what they are or certainly not the timing of that because it's just challenging until the contracts are done to announce anything in advance like that. But we're excited about the continued effort to look at that. We think that we have a superb heme/onc commercial capability, broadly speaking, and we'd like to leverage that for other companies and other products. So if there's a company out there listening in that has a late-stage heme/onc opportunity, we'd be delighted to speak to you about it. We have a compelling reason why we should be your partner of choice to commercialize here in the U.S.
So I'll add an advertisement there, Joe, apologies.
Joseph Pantginis
Absolutely. No, probably fair enough. And then, look, I think the chart regarding the breakout in TAVALISSE population by quarter is extremely valuable. So I think, obviously, your goal is to continue to expand the population into earlier lines. Right now, it appears on the chart that you're a little over 30% in the second-line population. So I guess what would you define as your key inflection steps to be able to grow those percentage numbers?
Raul R. Rodriguez
I'll ask Dave to comment on that. Before he does that, let me say, we're delighted with the progress we've made here. Recall quite a while ago when we launched this product, we were predominantly used in that later line, [FORTE Plus]. And now you see the evolution. It's really satisfying to see the range of patients that could benefit from TAVALISSE. And hopefully, they benefit profoundly.
David A. Santos
Yes. So Joe, let me just make sure I understand your question. So 75% of steroid market is in second and third line. These are internal numbers of patients that we know of and we have their backgrounds, and we know what line of therapy they're on. So it represents a subset. But we've got about 70% or up to 75% of patients in second and third line. I think what you're saying is -- the second line is relatively smaller than the third line and are we going to be able to reverse that? And I think the answer is, yes, we think over time that we'll continue to get more second-line use. As you know, that is much more challenging because clinicians have been very used to using Rituxan, TPOs in that space for a long time. And I think, frankly, the fact that 1/3 of our patients that we are monitoring here are on TAVALISSE in the second-line setting shows that we are making progress. I think that the key for us is to get usage where we can get it, meet the clinician where they are with their patients. And when they see these results, they tend to move it up. And that's what our most loyal TAVALISSE prescribers tell us that they really like the drug. It's kind of, you give the patient at the dose, they take it, their platelets go up over time, and they're very happy to move it up and they see post-steroid patients as a great opportunity for TAVALISSE. And that's how we've gotten where we are. I mean, we do have a great team out there that's committed to talking about TAVALISSE each and every day. And I think once you saw that things had opened up post COVID, our promotional efforts have been successful at getting more patients earlier in their treatment continuum. So I don't have a specific number we're trying to get to. We're not trying to necessarily get to that same proportion that 11,400 patients in the second line would represent. But yes, we're trying to grow our second line use, but we're also trying to make sure both second and third line are the predominant part of our business.
Joseph Pantginis
No, that's very helpful. And luckily, we're not testing my short-term memory now, so that's good. But if I'm thinking long term, Dave, if I heard you correctly, I mean even going back a couple of years ago, I think you've now translated your initial wish list to actual data supporting what you wanted to do, being able to have patients get used to the drug coming out of COVID, have being used to the drug, seeing the refill rates based on the platelet data and what have you. So these are real data to look at versus the original wish list you have. So I appreciate it.
David A. Santos
Absolutely. We're happy to see these results and provide them to you.
Operator
Our next question is from Eun Yang with Jefferies.
Eun Kyung Yang
So you showed us a number of bottles of TAVALISSE shipped or sold per quarter, but can you actually talk about how many patients were on TAVALISSE at the end of the quarter? And then also based on the TAVALISSE patients by line of therapy, for second line, it's a little over 30% of TAVALISSE use. So based on the number of eligible patients, is it fair to assume that currently, you have about mid-single-digit percentage penetration in second line and about 15% in third line?
Raul R. Rodriguez
I'm not sure I'm quite following your math, Eun. But I will say that first of all, from a new patient perspective, we have more new patients last year, clearly more new patients last year than we've ever had in the history of the brand, and we're continuing that trend this year. So we don't share specific patient numbers, but we are very happy with our progress, our consistent progress in having new patients on the brand. And yes, I mean, this is our book of business, our best estimate based on the patients we do capture what their line of therapy is. But to project this over the entire market is not something I would necessarily do right now. This is our own internal data that we're sharing and we're very happy with the trend as opposed to necessarily the specific percentages there. But the trend is clear, and that's why we wanted to share it with you.
David A. Santos
And it's been over several quarters, which is why we shared earlier, we wanted to make sure it was somewhat consistent and you see that it begins to approach that. And then some caveats. This is a subset of patients that go through our hub. And so it's not all patients out there, we can't capture all patients out there. But the trend, I think, is clear. Hopefully, continue to grow, though, an opportunity in further growth in the second line.
Operator
Our next question is from Allison Bratzel with Piper Sandler.
Allison Marie Bratzel
Thanks for all the detail on today's call. Maybe first one on the pipeline, just for R289 in lower-risk MDS and that initial readout slated for this year, just considering that update should include the first few dose cohorts. Could you kind of frame what you would view as a successful readout there?
And then just second, following up on a prior question and prior discussion about cash burn and breakeven point. Could you help us maybe understand what's gating to providing revenue guidance at least on the TAVALISSE front now that it's in your 5 years of launch, how should we be thinking about that, the potential for that heading into next year and going forward?
Raul R. Rodriguez
Okay. I'll ask Dean to answer the second. Let me try to answer the first one. So the low-risk MDS Phase Ib study is ongoing, and we've completed enrollment of the required number in dose cohort 1 and cohort 2. And these 2 lower dose cohorts are still, we think, might be too low in terms of seeing any remarkable responses in terms of efficacy. They're primarily safety doses. There's some chance we'll see some benefit in some of the hematologic improvements, but more likely, we want to see safety out of these first 2 cohorts. And so far, so good, and we're going to discuss with FDA to allow us to go into Cohort 3 and Cohort 4, where we think we're more likely to see some efficacy signals and hopefully continued safety. So I think we hope to share this information at a meeting on the lower cohorts since we've already had them enrolled, and we'll have further data on those by the end of the year. The other cohorts, if we can get to enrolling those, you do need to wait a number of months, maybe up to 6 months for showing some efficacy signals in the higher dose groups. So that might not be certainly not this year and I think it will be more likely next year in terms of the timing of that. Dean, on terms of guidance.
Dean L. Schorno
Sure. In terms of guidance, it's important to note that as we look at our top line, we've got TAVALISSE, which, to your point, is growing consistently in a quarter-over-quarter consistent growth pattern. So we agree with you there that there is a potential to provide guidance with respect to that singular number. With respect to the rest of the top, we look at AML, still early in the launch phase, and we've talked about a lot of activities that are going to create the momentum in that phase. We've got the royalty revenues and then we've got the collaboration revenues. The collaboration revenues can be periodic. Certainly, over time, we've highlighted some of the large payments that we expect. But all of those elements all factor into that top line guidance. And we don't plan to at least in the near term, provide the top line so we really see some of that specificity and clarity as it relates to REZLIDHIA. So that's on the top line.
With respect to the path to breakeven, obviously, the top line is critical there. And as Raul suggested also as he described the possibilities with respect to further development of fostamatinib and olutasidenib, as we really finalize what those final plans are with advisers and the different work we're doing, we'll be able to provide more clarity on what the operating expense looks like into the future as we really finalize our plans with respect to the incremental studies that we plan to do.
Operator
Our next question is from Kalpit Patel with B. Riley Securities.
Kalpit R. Patel
One more on R289. I know you just mentioned that the focus there is just on safety for the first 2 cohorts. But would you plan on showing any sort of biomarker data? I know hemoglobin tends to increase early on with some of these competing agents. It just might be useful to see any sort of evidence of preliminary clinical activity even if there is a trend.
Raul R. Rodriguez
Yes. It's just too early. We haven't actually analyzed all the data yet. And so we do want to share the information on the first 2 cohorts. So I can't make a comment because I don't know what we'll see there. But we certainly will share some of that as we get it. But like I said, I think really, we'll just need to wait until next year to see Cohort 3, Cohort 4 data. That will be more compelling data.
Kalpit R. Patel
Okay. And then for your plan to potentially in-license additional Heme/Onc assets, could you give us a little more color on how you might be thinking about financing or structuring such transactions given your current balance sheet?
Raul R. Rodriguez
Yes. There's a number of options on the table for doing so. And so we're looking at a range of different possibilities for that. The important thing is that this be a late-stage opportunity that is not requiring any substantive clinical type of investment. And so therefore, it's a quick timing to get to an approval and therefore, to the market. And because we hope that this would expect that this product be highly synergistic, that is fully leveraging our current commercial capability that is not requiring to build more or any of substance that it will be accretive very quickly after launch. So those are important aspects to the product, but many products in heme/onc, heme/onc tends to be a multi-niche category, where there are many products in smaller category, like 1,000 patients like with REZLIDHIA. That's what we're looking for to do that. And therefore, we're hoping that, that will help the economics of the thing. But we haven't gotten fire enough to be able to articulate that. But when we do announce a product, we certainly will discuss with you how we hope to finance such an acquisition.
Kalpit R. Patel
Okay. Got it. And one last question on REZLIDHIA. Do you anticipate to make any milestone payments to Forma or [Nova now] related to the acquisition in the next 12 months, maybe commercial-related milestones?
Raul R. Rodriguez
We certainly have royalty payments that we will make and happy to make them. But I don't think there's anything of substance. And certainly, we'll look at it, but I don't recall anything of substance in the near term.
Operator
There are no further questions at this time. I'd like to hand the floor back over to Mr. Raul Rodriguez for closing comments.
Raul R. Rodriguez
Thank you, operator, for your help today. In closing, I'd like to thank everyone for joining us on the call and your continued interest in Rigel and what we're doing. But I'd also like to take a moment to thank our employees for their continued commitment to improving the lives of patients, some with diseases as awful as AML because every day does count and they certainly keep that in their minds as they work very diligently on moving these products and projects forward. So thank you for that and look forward to keeping you updated on future calls. Have a good afternoon or evening.
Operator
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
