Greetings, and welcome to Rigel Pharmaceuticals Financial Conference Call for the Second Quarter 2025. [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.

Welcome to our second quarter 2025 financial results and business update conference call. The financial press release for the second quarter of 2025 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, 2024, and subsequent filings with the SEC, including our Q2 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'd like to turn the call over to our President and Chief Executive Officer, Raul Rodriguez. Raul?

Thank you, Ray, and thank you, everyone, for joining us today. Also with me today are Dave Santos, our Chief Commercial Officer; Lisa Rojkjaer, our Chief Medical Officer; and Dean Schorno, our Chief Financial Officer. Beginning on Slide 4, I will provide an overview of Rigel's accomplishments across the business and our financial results for the second quarter of 2025. Let me start by saying that this was a really great quarter for Rigel. We continue to make significant progress on the execution of our corporate strategy. For those not familiar with Rigel, our focus is on growing our hematology and oncology business through commercial execution, advancing our pipeline, product in-licensing and acquisition and financial discipline. With this in mind, in the second quarter, we achieved net product sales of more than $58 million, an increase of 76% year-over- year and our best quarter ever. This all-time high was driven by our growing commercial portfolio and increased sales across all our commercial products. Dave will provide a more detailed update on our 3 products and their second quarter contributions later on in the call. Total revenue for the second quarter was $101.7 million, including $42.7 million in contract revenues from collaborations. As I discussed during our May call, we notified Lilly that we would not exercise our right to share in future development expenses for ocadusertib, Rigel's RIPK1 inhibitor previously known as R552. As a result, we recognized $40 million in noncash revenue in the second quarter. Dean will discuss the accounting of this in his remarks. Now let's talk about our development opportunities. We are excited about the potential of our development pipeline and our ability to fund the clinical development of R289 and olutasidenib. R289, our novel and selective dual IRAK1/4 inhibitor is currently being evaluated in a…

Thank you, Raul. On Slide 7, you'll see our 3 commercial products, TAVALISSE, GAVRETO and REZLIDHIA. Moving to Slide 8. We are thrilled to report another excellent quarter from our commercial portfolio, marked by strong year-over- year growth and an all-time high in revenues in the second quarter of 2025. You can see on the slide how our quarterly and annual net product sales have increased since 2021. We have grown each quarter's sales over the previous year, and that growth continues. In the second quarter of 2024, we reported $33.5 million. And now for the second quarter of 2025, we generated $58.9 million. Our second quarter results reflect accelerated demand through improved patient affordability in 2025, augmented by favorable gross to net dynamics, which drove a 76% increase year-over-year. Our commercial team has been dedicated to execution, driving continued momentum for TAVALISSE, raising awareness for GAVRETO after a successful transition into our portfolio and improving demand for REZLIDHIA. Slide 9 shows a summary of our commercial performance by product. First, on TAVALISSE. I'm pleased to report another record quarter in which we generated $40.1 million in net product sales, an increase of 52% compared to the second quarter of 2024. This growth was driven by continued strong new patient demand with another consecutive quarterly record high and increased carryover demand from new patients that started therapy in prior quarters. For GAVRETO, we delivered $11.8 million in net product sales in Q2. As a reminder, in the second quarter of 2024, we recorded $1.9 million of revenue as GIVRETTO just became commercially available from Rigel in late June of 2024. On a sequential basis, we saw 32% revenue growth versus the first quarter of 2025 as we continue to see an increase in new patients and carryover demand. We are…

Thanks, Dave. I will now provide an overview of our pipeline progress and plans for the remainder of the year. I'm on Slide 12. Our hematology and oncology pipeline strategy is focused on the clinical development of R289, our novel dual IRAK1 and IRAK4 inhibitor in lower-risk myelodysplastic syndrome, or MDS, and the expansion of olutasidenib beyond relapsed or refractory IDH1 mutated AML into other cancers with IDH1 mutations such as recurrent glioma. Beginning with R289, our Phase 1b study in patients with relapsed or refractory lower-risk MDS is progressing well and enrollment in the dose escalation part of the study was completed in July. We plan to share updated dose escalation data later this year. We remain on track to initiate the dose expansion part of the study in the second half of the year, which will be a randomized comparison of 2 doses of R289 in order to select the recommended Phase 2 dose for future studies. For olutasidenib, we believe it has potential in several cancers where mutated IDH1 plays a role. Regarding our partners, olutasidenib is being evaluated as maintenance therapy in IDH1 mutation-positive glioma by the CONNECT Cancer Consortium and an IDH1 mutation-positive AML and low and high-risk MDS by MD Anderson. We remain open to additional opportunities or collaborations to evaluate olutasidenib in IDH1 mutated cancers. Rigel also remains focused on evaluating potential acquisition and in-licensing opportunities that strategically fit our hematology and oncology portfolio and infrastructure. We're focused on evaluating differentiated assets in hematology, oncology or related areas that are late-stage programs. Now, I'll spend a few moments on R289, our dual IRAK1 and IRAK4 inhibitor. On Slide 14, I'd like to spend a few minutes reviewing the value proposition of R289 in lower-risk MDS. There are about 12,000 previously treated lower-risk MDS…

Thank you, Lisa. I'm on Slide 22. Before I review our financial results for the quarter, I want to provide a brief update on our collaboration with Lilly and the related impact to our financial statements during the quarter. The RIPK1 inhibitor programs are progressing well, and we're excited about the program's potential. Ocadusertib, the non-CNS penetrant RIPK1 inhibitor, previously referred to as R552, is currently being studied in an adaptive Phase 2a/2b clinical trial in up to 380 patients with active moderate to severe rheumatoid arthritis. Enrollment in the Phase 2a study is ongoing. The preclinical CNS penetrant RIPK1 inhibitor program is also progressing toward lead candidate nomination. As Raul mentioned, we notified Lilly that we will not exercise our opt-in right related to the development and commercialization of olutasidenib. As a result, we recognized $40 million in collaboration revenue in the second quarter. This is noncash and related to the release of the remaining cost share liability that was on our balance sheet. Note that under the terms of our collaboration agreement, Rigel will continue to be entitled to receive milestone and tiered royalty payments on future net sales. Moving on to our financials. I'm on Slide #24. We reported net product sales of $58.9 million for the second quarter, a growth of 76% year-over-year, including TAVALISSE net product sales of $40.1 million, a growth of 52% year-over-year. GAVRETO net product sales of $11.8 million. As a reminder, GAVRETO became commercially available from Rigel in late June of 2024, and we reported $1.9 million of revenue for the second quarter of 2024. Lastly, we reported REZLIDHIA net product sales of $7 million, a growth of 36% year-over-year. Our net product sales were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $20.7 million.…

Thank you, Dean. And moving on to Slide 26. To reiterate, we have made significant advancements over the last several years in expanding our hematology and oncology business. We have consistently delivered meaningful top line growth, enabling us to fund our business and strategic priorities. We have now raised our net product sales expectations for 2025 and now expect to generate 45% to 52% year-over-year growth, an increase from the roughly 30% growth that we delivered in the prior 4 years. Moving on to Slide 27. For the remainder of the year, we continue to focus on increasing sales of our 3 commercial products and delivering on our revenue guidance. We are committed to advancing our Phase 1b clinical study evaluating R289 for the treatment of patients with lower-risk MDS. We plan to share updated data by year-end and potentially initiate the dose expansion phase of the study in the third quarter. For olutasidenib, we plan to continue progress to initiate a Rigel-sponsored Phase 2 study in recurrent glioma while supporting our strategic collaborations with the CONNECT organization as well as MD Anderson. We will also continue to look for opportunities to expand our product portfolio through in-license and/or acquisition of synergistic late-stage assets. With our anticipated strong revenue growth and continued financial discipline, Rigel is well positioned for the near term and for the long term. In closing on Slide 28, Rigel has delivered a strong first half of 2025, and we are focused on continuing that momentum throughout the remainder of the year. Our proven strategy has built Rigel into a profitable, growing and sustainable business. And with that, I'd like to thank you for your interest, and we will now open the call to your questions. Back to you, operator.

[Operator Instructions] And your first question comes from Pantginis with H.C. Wainwright.

So it really -- I mean, great growth, your nice blocking and tackling on GAVRETO and REZLIDHIA, excuse me, for the pronunciation I just. With regard to TAVALISSE it looks like it saw a very nice inflection, obviously, with regard to the 52% growth. You mentioned, obviously, it's due to new patient demand and increase of carryover. Just curious, can you split up the percentages contribution to this growth here?

Dave, can you comment on that? Thank you. Joe, thank you for the question.

Yes. Joe, great question. And I will say that particularly in the first half of the year, we did have more new patient starts than ever before. So, our percentage of our growth due to new patient starts was higher. And I think you heard me say in my prepared remarks that, that was accelerated by improved patient affordability in 2025.

No, that's great. And just curious, like what level of surprise if that -- and I'm sort of playing devil's advocate, surprised did you have about that growth and the affordability versus a potential bear case out there that TAVALISSE has reached a level of steady state?

Well, listen, we have been planning to continue to grow TAVALISSE. As you know, we've remained focused on new patient growth. And what did happen this year, as you know, is the coverage gap was eliminated in 2025 due to the Inflation Reduction Act. And we knew that, this could potentially help us this year because, as you know, Part D drugs or oral drugs, what happened in the past is patients would enter into that coverage gap, particularly at the beginning of the year, and it would be difficult for them to access product. And this year, with a $2,000 annual out of pocket cap for patients and their ability to potentially even smooth those payments out through the year, they have a much easier ability to access a drug like TAVALISSE, an oral agent. And I think we were prepared to ensure that patients -- that we were ready to address this change at the beginning of the year. And so, I will say that, we've always been focused on new patient starts. Is it potentially a little more benefit from improved affordability than we had anticipated? I'm not sure I would say that, but I think the team executed extremely well. And because we have a portfolio of oral therapies, I think the entire portfolio benefited from improved affordability in 2025. And that also helped us improve our gross to net dynamics.

So really, it's a confluence of those -- so it's a confluence of those things, Joe. And I think we were well aware of this coming in and well prepared to it. So, it required both of those things to know it's coming, to know what you're going to do about it. And we executed, I'd say, very well in the first half of the year. Many of those patients carry over into subsequent quarters. And what used to be a difficult Q1 in the past, this IRA has helped that. And needless to say, more patients are getting drugs that perhaps in the past couldn't have gotten them because of the change. So that's a good thing overall.

And your next question comes from Yigal Nochomovitz with Citigroup.

Congrats on a nice progress commercially and on the pipeline. I'm curious about the comment regarding the 32% CAGR, which you noted from '21 to '24 and then the apparent inflection higher, substantially higher, 45% to 52%. Is the statement that this is the expectation sort of for the business on a go-forward basis, not only this year, but into '26 and beyond? Is it -- are we on a new sort of trajectory here? Or how would you frame that inflection point in terms of thinking about the longer-term performance of the business?

Yes, I can take that, but I'll also ask Dave to comment on that. This has been a fantastic start to the year. And I think things have happened dynamics. David just explained a few of them that occurred earlier in this year that I think gave us a boost. But the underlying business has been growing quite nicely, 32% year-on-year in TAVALISSE specifically, a strong performer throughout those years, even though it's been on the market already. So really a confluence of various things drove this increase in sales this year. We haven't given guidance beyond this year other than to say we continue to expect growth in the business, and we continue to have confidence that the product provide meaningful value to these patients. And now we can give -- make sure that more of them benefit from these products being that they're oral in particular. And so we're very, very enthusiastic about what's to come. And I think a good -- great first half of the year, our best ever, and we expect the dynamics to not change dramatically going forward.

Yes, Raul, I would just add that we've got a growing business, obviously. We have been laser-focused on ensuring patients have the opportunity to try TAVALISSE, REZLIDHIA or GAVRETO, depending on what the clinician -- which type of patient the clinician has. And we do everything possible to make sure we're efficient in that targeting. And I think what you're seeing is our ability to grow revenues with very little incremental costs on a 3-product portfolio. And that's exactly what we're executing on. Looking at our impactable opportunities, targeting those and with laser-like focus and going out and getting it. So yes, we definitely plan to continue to grow new patient starts and demand as we move forward.

You also note the leverage in the business. You have a stable, good quality commercial organization that really has delivered in the past. And now you add additional products to it, and you see the economic benefit of that.

Okay. And then I had a few more specific questions on glioma and the oluta development. What more can you say with respect to the Phase 2 design? How would you do that study? What would be the right comparator arm. And then regarding the work you're doing with this CONNECT and the TarGet-D trial, if that looks good, how -- what would you do with that data? Is that something you could then use for submission in pediatric? Or would you need to then pursue another company- sponsored study to take that pediatric segment to market?

I'll ask Lisa to comment on those 2.

Yes. Thanks, Raul. And thanks for the question, Yigal. So, regarding our plans for glioma, we will be disclosing more about the design of the study in recurrent glioma probably later this year once we're not yet in the position to do that, but stay tuned. And for the CONNECT study, that's a very good question as well. There -- we still have to discuss a little bit more with CONNECT and potentially with the agency on a potential for looking at that to support a filing. We haven't done any of that yet. I don't anticipate that we would be doing an additional study in that same space.

And your next question comes from Farzin Haque with Jefferies.

This is Amin on for Farzin. Congrats on the quarter. A couple of questions from us. Well, based on what you're seeing so far in 3Q in numbers of bottles shipped and the IRA impact, how does that shape your thinking around the guidance going forward? And are there any anticipated headwinds or tailwinds specifically around TAVALISSE sales and GAVRETO ramp-up at this point? And I have a follow-on.

Thank you, Farzin. I'll ask Dave to comment on that.

Yes. So, we just grew -- if you take the 6 months that we just completed and you look at the 6 months prior to that, or the back half of 2024, we just grew 20% revenues -- in revenues. And in our guidance, at the midpoint of our guidance, we're still projecting double- digit growth in our revenues. And at the top end, it's about 15%. So, we are expecting growth to continue. And when I said that about improved affordability dynamics in the first half of the year, as I said in my earlier remarks, the coverage gap was really an issue at the beginning of the year, when patients hadn't been on medications and they were restarting the clock, and that was the time the donut hole experience was more. So, we do expect that as we move into the second half of the year, there are fewer patients that kind of fall into that. So, we're -- I don't think the impact of that will be as strong in the second half of the year. I hope that helps.

Yes, very helpful. And how much impact are you seeing on the gross to net for the 3 drugs with the Part D?

So we haven't been specific on the gross to net. I will say that from a gross to net consideration, there's a variety of factors. There's the -- we made some distribution channel changes we talked about in the back half of last year. So that's had an effect and a favorable effect. The mix also impacts gross to net, and there's some favorability, as Dave said, with respect to the IRA adjustments. And then on a go-forward basis, the mix and some of the programs we do will have an impact on gross to net. So, we haven't been specific on the individual products, but we expect to see some favorable gross to net as we've seen in the last couple of quarters persist.

[Operator Instructions] And your next question comes from Kristen Kluska with Cantor Fitzgerald.

This is [ Ion ] on Kristen's line. I understand that the primary goal in treating lower-risk MDS is to reduce or eliminate transfusion dependence. What have you heard from physicians on the degree of transfusion reduction or independence that is actually considered clinically meaningful in this setting?

Yes, I could take that. I mean, you know that as I mentioned in my prepared remarks, the approvals of luspatercept and imetelstat were based on a transfusion 8-week transfusion independence rate of around 38% to 40% for both agents. So, there's around 60% of patients are still not benefiting. So, I think that, there's still room for improvement in this area. And with hypomethylating agents that were approved around 25 years ago, it's really not much better. So, lots of room to improve. So, I don't know that the physicians are I think anything above this is people would be looking forward to. And also, considering those agents, there are also associated toxicities and a bit of an inconvenience with the route of administration. So, I think aside from the activity there, there's also room for improvement in administration.

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

Well, thank you. I'd like to be -- I'm grateful for your attendance to this call and your interest in Rigel. I think this first half of the year, we really have delivered well and are extremely proud on what we've been able to accomplish, both in the commercial business, the financial position of the company much stronger today and stronger than, I believe, it's ever been and really good advancements also in terms of our product portfolio. So for that, I'd like to thank the employees of Rigel and their dedication to what we're trying to accomplish here. This was a substantial step forward this first half of the year, and we look forward to continuing that. Take care.

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