Greetings, and welcome to the Rigel Pharmaceuticals Financial Conference Call for the Second Quarter 2022. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce our first speaker Dolly Vance, who is Rigel's Executive Vice President, Corporate Affairs and General Counsel. Thank you, Ms. Vance. You may begin.

Welcome to our second quarter 2020 financial results and business update conference call. The financial press release for the second quarter was issued a short while ago and can be used along with the accompanying slides for this presentation in the News & Events section of our Investor Relations site on 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 risk and uncertainties that may cause actual results to differ from those forecasted. The description of these risks can be found in our most recent Annual Report on Form 10-K for the year ended December 31, 2021, 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 would like to turn the call over to our President and CEO, Raul Rodriguez. Raul?

Thank you, Dolly, and thank you, everyone, for joining today. Also with me today are Dave Santos, our Chief Commercial Officer; Dr. Wolfgang Dummer, our Chief Medical Officer; and Dean Schorno, our Chief Financial Officer. On Slide 5, we are also very pleased to have Dr. Jorge Cortes joining us today to provide a clinical perspective on our recently acquired pipeline addition olutasidenib. Dr. Cortes is an internationally recognized expert in leukemia and has led the development of numerous leukemia treatments. Beginning on Slide 6, I am pleased to report that we have made significant strides this quarter in growing our commercial hematology oncology business. I'll start with our first value driver on this slide, growing ITP sales. During the second quarter, Rigel achieved the highest quarterly net product sales for TAVALISSE in ITP since launch. This demonstrates the continued momentum we are driving through our commercial activities with hem/onc prescribers. As you may recall, last year, we undertook a sales force expansion to broaden our reach, improve efficiency and increase in-person interactions. These initiatives are yielding results, and we believe that we have all the components in place to drive continued growth in ITP sales. Additionally, in May, we entered into a collaboration agreement with Knight Therapeutics to commercialize fostamatinib in Latin America, including Mexico, Central and South America and the Caribbean. It will be great to be able to provide access to fostamatinib for patients suffering from ITP in these countries as well. In addition to our collaboration partner, Kisse, in April, we announced that Kisse had submitted its NDA in Japan for fostamatinib in ITP. We look forward to a potential approval in Q1 of 2023. A new value driver for Rigel is olutasidenib. We are very pleased to announce that we have entered into an exclusive worldwide licensing agreement with Forma Therapeutics for olutasidenib. Olutasidenib is a potential market-leading oral therapy for the treatment of relapsed or refractory acute myeloid leukemia or AML. This collaboration will broaden our near-term hem/onc portfolio and is highly synergistic with our current commercial infrastructure. I will talk more about this program right after I review the balance of the pipeline, and Dave will also provide details on the commercial opportunity. In June, we reported top line data for our pivotal Phase 3 FORWARD trial in warm AIHA. The trial missed the primary endpoint in the overall patient population. However, in a post-hoc analysis, response rates in Western countries favored fostamatinib over placebo. We are continuing to evaluate this data and plan to share our findings with the FDA to determine the best path forward for warm AIHA. With no currently approved therapies in this indication, we continue to believe that there is an opportunity for TAVALISSE to improve the outcomes for patients with this disease. We have also advanced our fostamatinib COVID-19 program. We have completed enrollment of our pivotal Phase 3 trial in July with 280 patients, which we believe sufficiently powers the study, and we expect to report top line data in Q4. Fostamatinib is also being evaluated in a Phase 3 trial sponsored by NIH/NHLBI as a potential treatment in high-risk patients hospitalized with COVID-19. These trials have the potential to show the benefit of fostamatinib as a treatment in patients with severe COVID-19. Lastly, turning to our earlier pipeline programs IRAK1/4 and Rip1. Due to everything we want to cover today, I will just give a short overview on the status of these programs. As we had shared with you before, we are evaluating R289, our IRAK1 and 4 dual inhibitor in low-risk MDS. We believe R289 has the potential to provide effective suppression of the inflammatory environment that causes low-risk MDS. Study startup activities are currently ongoing, and we are targeting the third quarter of this year for study initiation. We are also excited about the advancement of our RIP1 inhibitor, R552, being developed in collaboration with our partner, Eli Lilly, into Phase 2 development. We see a mechanistic clinical and scientific rationale for R552 in several large immune indications such as psoriasis, RA and IBD. The initial Phase 2 study is anticipated to start in Q2 of 2023. Additionally, we are completing our work on the RIP1 inhibitor that can cross the blood-brain barrier for the treatment of CNS diseases. Lilly will then lead the development of these RIP inhibitors. Moving on to the next slide, I would like to discuss our new collaboration with Forma Therapeutics for olutasidenib, Rigel's newest value driver. I would like to provide a brief overview of the transaction, and Dave will provide our commercial and strategic rationale and why we feel that olutasidenib has the potential to be a meaningful therapeutic option for patients with AML. Under the terms of the agreement, Rigel receives exclusive worldwide licensing rights to olutasidenib in all indications with an initial focus on relapsed or refractory IDH-positive AML patients. This includes the right to grant sublicenses in ex-U.S. territories. In exchange, Rigel will pay Forma a $2 million upfront payment. In addition, Forma will be eligible to receive an additional $17.5 million upon the achievement of certain near-term milestones. The deal also includes potential future development and commercial milestone payments, as well as tiered royalties on net sales of olutasidenib. Forma has submitted the new drug application to the U.S. FDA following positive results from a Phase 2 registrational trial with a PDUFA action date of February 2023, less than 7 months from now. The mid-cycle review with FDA has been completed. Based on that meeting, we were told that there are currently no plans for an advisory committee meeting. No major safety issues have been identified, and currently, no REMS program is likely to be required. If approved, olutasidenib will expand our hem/onc product portfolio and enable Rigel to detail two important therapies to our hem/onc physicians. Rigel will leverage our hem/onc capabilities to maximize the commercial potential of olutasidenib, which we believe can become an important and differentiated product in this space. Particularly given that AML is an aggressive and very difficult to treat disease. Results from the Phase 2 registrational study of olutasidenib as monotherapy demonstrated promising efficacy, including a 13.8 month median duration of response and a favorable tolerability profile. Rigel plans to initially focus on the commercialization of olutasidenib as a monotherapy in the mutant IDH1 positive relapsed or refractory AML setting. There is also the potential to explore olutasidenib in the first-line IDH-positive AML setting, as well as in combination, both of which were explored in the Phase 2 study. Beyond AML, olutasidenib has been explored as a monotherapy in glioma and cholangiocarcinoma. We look forward to advancing olutasidenib through the regulatory process and potentially bringing this important therapy to patients in need. With that, I will turn the call over to Dave for a commercial and therapeutic area overview. Dave?

Thank you, Raul. Now I'd like to take a few minutes just to highlight why we're so excited for the prospects of expanding our hem/onc portfolio with olutasidenib. Moving to Slide 9. Our collaboration with Forma aligns with our strategy of expanding our portfolio of hematological therapies while leveraging our existing commercial infrastructure. As Raul touched upon, in the past year, we made key strategic investments in our commercial organization to expand our sales force and sharpen our BD focus to prioritize late-stage development programs that would be a good strategic fit for us. As a result, we are well positioned to add olutasidenib to our product profile. On the left, we have strategically experienced business operations and marketing teams that can quickly gather insights and synthesize those into actionable plans that will ensure a strong launch, even with a shorter runway. In addition, we have a highly experienced and customer-focused patient access team that has everything in place to efficiently distribute olutasidenib and ensure patients have access to coverage, reimbursement, and assistance. Finally, we have a very oncology tenured field team already calling on the majority of hematologists and oncologists in the U.S., enabling us to realize cost efficiencies while potentially bringing two important products, olutasidenib and TAVALISSE, to the attention of our customers, a proposition we believe can increase the overall awareness and utility of both. In summary, we have the team in place to successfully launch olutasidenib, which is critical since we have a product that could be approved in just 6.5 months. On Slide 10, I wanted to share why AML was a very interesting disease for us to enter. As you may know, AML is an aggressive, highly complex malignancy and primarily a disease of older adults. In 2022, the American Cancer Society estimates that more than 20,000 patients will be diagnosed with AML. Unfortunately, 11,500 patients will die from AML this year. Even though we now have several new agents that have helped to transform the treatment of AML patients, there is still progress to be made. One of the biggest advances over the last 5 years has been that AML patients now undergo guideline-driven molecular and cytogenetic analysis for immediately actionable mutations or chromosomal abnormalities. Mutations in IDH1 are seen in around 6% to 16% of AML patients, and although this is a small population of AML patients, they are very well defined based on standard widespread testing that is done upon diagnosis and prior to the initiation of a new line of treatment. Thus, leukemia treating physicians are aware of their IDH1 positive patients. And within this well-defined patient population, about 60% of our patients are considered for intensive therapy with the goal of hopefully getting those patients to transplant if they have a complete remission. In both cases, there are a substantial number of patients who are refractory to their upfront treatment or relapse after getting a response. Moving to Slide 11, we believe the data from the Phase 2 registrational trial for olutasidenib in patients with relapsed or refractory IDH1-positive AML is compelling. If approved, it would be viewed by physicians as a meaningful treatment option for IDH1-positive AML patients. Despite having new treatments over the last 5 years, healthcare providers continue to perceive a significant unmet need since many patients still do not achieve remission. They can also suffer from unfavorable treatment profiles, particularly in later lines of therapy. Clinicians are continuing to look for new therapeutic options that can provide incremental survival improvements, longer duration of response and a better balance of efficacy and toxicity, especially since these are often older patients with other comorbid conditions. We believe olutasidenib can better meet clinicians' needs and has IDH1-positive AML market-leading potential with its long duration of response and the potential for patients to forgo cardiac monitoring as key differentiating factors compared to existing therapies. We see a significant opportunity for olutasidenib in patients with relapsed or refractory IDH1-positive AML and furthermore believe there is meaningful potential for olutasidenib to move into earlier therapy. Turning to Slide 12, we are extremely excited about the opportunity to bring olutasidenib to patients, and our launch planning is already well underway. Although we're just announcing the collaboration today, a small and highly dedicated team has been working on launch planning during diligence, and we will now expand that effort and put our planning into high gear. We already have a high-level strategic plan for launch, and we will spend time this quarter refining that strategy with additional customer insights. We will have a full tactical readiness plan by year-end, so we are ready to launch upon approval. Our team is up for the challenge of a short runway to potential launch, and we will be ready to go if and when an approval comes. I look forward to talking more with you about our plans as we move through the remainder of '22. Now I'll turn the call over to Dr. Cortes to talk about the findings from the olutasidenib registrational Phase 2 study.

Thank you very much. My name is Jorge Cortes. As mentioned, I am currently the Director of the Georgia Cancer Center and formerly MD Anderson in the Department of Leukemia, where I was the Deputy Chair and I was there for 23 years on faculty plus my training before that. I'll be very glad to discuss with you this drug olutasidenib and the role in patients with IDH1 mutated acute myeloid leukemia. I will start with the background on Slide 14. IDH1 mutations occur in somewhere around 8% to 12% of patients with acute myeloid leukemia; you can see depending on different sources and different patient populations, the range may expand a little bit more from somewhere to 6% to 16%. That’s about where we see this type of mutation. As already mentioned, olutasidenib is a very important and very selective inhibitor of IDH1 mutated. I will remind you how IDH1 mutations work in acute myeloid leukemia. It's very important because this is one of those mutations that are considered initiating mutations. There are some mutations that happen a little bit later after leukemia has been developed and some that are initiating mutations, and we think that IDH1 mutations are one of those. That's important because it gets to the root of the development of acute myeloid leukemia. Normally, as you all may remember from biochemistry, we have this Krebs cycle, which is the metabolism of normal cells. It goes to alpha-ketoglutarate and when IDH, which normally metabolizes alpha-ketoglutarate, when it is mutated, it transforms alpha-ketoglutarate into two hydroxyglutarate or 2HG. When that metabolite 2HG is usually not present in normal cells, in the normal cycle when it is formed, it has the potential to transform hematopoietic cells into leukemia cells through epigenetic mechanisms. 2HG becomes a marker, a biomarker of the mutation; it will go up when there is a mutation of IDH1. If you inhibit IDH1, the levels of 2HG will go down, which is a good thing because, again, that is what drives the development of the leukemia. Having olutasidenib, a very important, very active drug selective for IDH1 being available can reverse that malignant phenotype. So with the understanding of the potential of this drug on slide 15, we have from the very beginning, when I started being - I started getting involved with this drug from the very early stages of the development, and we quickly developed a very comprehensive plan for the development of olutasidenib, both as a single agent and in combination with other agents, knowing that sometimes in leukemia you need combinations for certain settings. The monotherapy includes refractory, relapse and other settings, including some exploration of the treatment-naive patients. Now for the purposes of this presentation, the data that is most mature is what you'll see in Slide 16, the refractory relapse patients, monotherapy, which is the primary indication that's going to be pursued again, because that's where most of the data is at the moment, and that's where we usually would start the development of a drug. So for this cohort, the primary endpoint was the achievement of what is called CR or CRH. I'll get to the definitions of that in a couple of minutes. And there are essentially the responses, but we have important secondary end points, the overall response rate, the duration of the remission, transfusion independence, the overall survival and, of course, the safety of the drug. Let me describe the results. On Slide 17, you can see the patient characteristics of those that are included in these evaluable cohorts being presented now. These are mostly older patients. The median age is 71. We do have some younger patients, but you can see at the upper end of the spectrum, we had patients way up into their 80s included in this study. Two-thirds of the patients are what we call novel AML, meaning this is a disease that happens for the first time, as opposed to the secondary AML, which is about a third of the patients, who is an AML that evolves from other malignancies, myelodysplastic syndrome most frequently, but it could be from other hematologic neoplasia, such as myeloproliferative neoplasms and others and a few that had treatment-related AML in patients that had other cancers, breast cancer, lymphoma, et cetera, you give them chemotherapy, and they developed the AML. Those were just a few. It’s most typical that this mutation happens in patients that have either no chromosomal abnormalities or very frequently extra chromosome 8. Those are what we call intermediate risk chromosomal abnormalities, and it represents the majority of these patient populations. But there's a bit over 20% that have a poor risk chromosomal abnormality. By definition, all the patients had an IDH1 mutation, the different variations of the IDH1 mutation. The most common is R132C, that's a little over half of the patients and then some of the others that you see on this slide. We also know that patients with acute myeloid leukemia do not always only have one mutation; the mutations in other genes could coexist with IDH1 mutations. The most frequent that we saw in these cohorts was NPM1 that occurred in almost 30% of the patients, but we saw mutations in other genes B3 and others, as you can see on this slide. We're talking about a refractory or relapsed patient population. Refractory means you gave them initial therapy. They did not respond at all. That is the largest cohort and it's a little over 40% of the patients. The others are relapsed; that means you gave them some initial therapy, they responded, but the disease is coming back. The worst-case scenario is that either the disease comes back quickly before 12 months. That is the highest risk, the patients that tend to have the worst prognosis. And that is the next largest cohort, 37%. There could also be patients that have had a response and relapse; you give them something else, responded again, they relapsed again. So two or more relapses that’s also pretty bad, 20% of the patients in this cohort are like that. The best case scenario is the patients who have a first relapse and the first remission lasted more than 12 months. That’s a smaller subset of these patients, only 11% of the patients. You can see actually that most of the patients had received, the median number of prior regimens was two. So they had received at least two prior therapies before they came to the studies; some had received as many as seven, and 11% had received actually a stem cell transplant. Let's jump to the response rate then. This is on Slide 18. The primary endpoint was CR plus CRH, and let me define that for those of you who may not be as familiar. CR means that the blast count, or leukemia cells, the normal is less than 5%; more than that would be leukemia. So CR means that the blast count has gone down below 5% and the platelets have recovered to at least 100,000 and the neutrophils to at least 1,000. That's a CR. If there is some recovery of the neutrophils and the platelets but not completely, so that the neutrophils are more than 500 but not quite more than 1,000 and the platelets are more than 50,000 but not quite more than 100,000, with the blast still less than 5%, that's a CRH. Here, you can see that 33% of the patients achieved the primary endpoint. Importantly, the great majority of these are the full CR, 30%. So only four of the 41 patients who responded are CRH. CRH is good, but certainly CR is the ultimate response. We also have some patients that have some recovery of the neutrophils and the platelets, but they do not quite make it to those ratios—the 500 and the 50 of the CRH. There are also additional 11% of patients who have this response. A couple of smaller categories, MLFS means morphologic leukemia free state; the blast count went down to less than 5% but there’s not really much recovery in the platelets or neutrophils. PR means the blast count went down but it did not go all the way down to less than 5%. Let's say, somebody started with 90% blast and it went down to 8%. While that's a partial response, it doesn't quite make it to the full criteria of less than 5%. If you take all of these together, almost half of the patients responded, 46% of the patients had at least one of these categories of response. But very importantly, what you see on Slide 19 is the duration of response. You want to see that these responses last for some time, not just happen one time and then immediately the patient relapses. As you can see here, the median duration has not yet been reached. At the time of this analysis, if you do a very conservative approach, what's called the sensitivity analysis, and say, well, because some of these patients went to a transplant, I'm going to end the response at the time they went to a transplant. I don't adjudicate to the drug something that was partially attributed to the transplant, then the median duration is 13.8, still a very, very good outcome. And again, it's not that they relapsed at that point; we just stopped counting because they went to a transplant. On Slide 20, also something very important. I mentioned that the primary endpoint was CR and CRH; this shows the survival of the patients according to the response that they had. The patients who had a CR or a CRH, the median survival has not yet been reached; by 18 months, 87% of patients are still alive, which is an outstanding outcome. Very importantly, some of these lesser responses that I mentioned—the CRIs, the morphologic leukemia-free state, they also have a survival benefit. These patients had a median survival of 15 months or more than a year compared to the patients who did not respond, who have a median survival of only four months. This means that even the lesser responses have value to the patients, adding to the survival probability significantly from four months to 15 months as the median. Let's talk now a little bit about the safety of olutasidenib. I am showing you here what is called treatment emergent adverse events, TEAE, and what that means is any toxicity that happens while the patient is taking the drug. We are not making assumptions that it was related or not related; we just say it happened, we report it. Anything that happened in 20% of patients or more, or that was Grade 3 or 4 in at least 10%, Grade 3 or 4 is the more severe instances of these adverse events. When you treat patients with leukemia, it's very typical with any treatment that their neutrophils go down, the platelets go down, the hemoglobin goes down. That's a fairly standard with chemotherapy. 100% of patients have these things. The great majority of the adverse events that you see here reported on this slide are anemia, thrombocytopenia, neutropenia. These are the only ones that reached any significance in terms of Grade 3 or Grade 4. And of course, the patients who drop their neutrophils very frequently have fever as well. Other than those, the only ones that stand out of any grade are some nausea in a little over a third of patients, constipation in a quarter of the patients, some fatigue in 20% of the patients. But none of these really make it to any Grade 3 or 4. These were mild side effects that are clearly manageable for these patients, maybe much better than what you would expect with chemotherapy, for example. Moving to Slide 22, I want to point out some of the adverse events of special interest. Some things are particularly important. First, QTc prolongation. With QTc, the QT is an interval in the electrocardiogram; you've seen those graphics of an electrocardiogram. You measure from one wave that is called the Q wave and the other wave called the T wave. You see the interval between those. If it gets very long, there is a risk of torsades, that can be fatal, and we see that sometimes. Fortunately, here, it happened very infrequently; less than 10% of patients had any QTc prolongation. Most importantly, the ones that we worry the most about, the Grade 3 and the Grade 4, the very long intervals happened in only one patient and was Grade 3. But even that did not lead to discontinuation of the drug. It was a very low rate and very manageable. Then we have liver abnormality; these were perhaps the adverse events other than the blood counts that we saw more frequently. You see any grade happened in anywhere between 27% for bilirubin to 42% with one of the transaminases AST. Fortunately, these were Grade 3 in a small percentage of patients. Overall, 20% of patients had any elevation of liver enzymes, but only 12% experienced Grade 3 or Grade 4; most of these are actually Grade 3. Very importantly, of these 32 patients, 25 of those 32 did not require any dose modification or if they had a dose modification, that was enough for the patient to continue on therapy. There were only seven patients who discontinued treatment. For recurrence, three others investigator did not want to re-challenge with dose adjustments or anything. So we don't know what would have happened there. Differentiation syndrome is something that we've learned happens with IDH inhibitors; it's part of a process of maturation, but it can come with symptoms that happen. Fortunately, it happened only 14% of these patients; about half of these were Grade 1 or Grade 2, with the others being Grade 3 or Grade 4, totaling 8%, however, only three patients discontinued treatment because of differentiation syndrome. The great majority of these are very - they can be managed well with treatment interruptions. Many drugs use corticosteroids or mild chemotherapy like hydroxyurea. A very manageable toxicity because of the low rate and the low intensity of these events. My conclusion is that with this interim analysis, we see that olutasidenib has a very high response rate, very high rates of CR/CRh, but very importantly, most of these are true CRs and durable remissions. Even with a very conservative analysis accounting for transplant, the median duration is more than a year in this very heavily pretreated patient population. This benefit extends even to patients that do not have the full CR or CRh; all the responses also have a survival benefit. This comes with a drug that's oral, that's very well tolerated, and most of these toxicities are very manageable, making it a very applicable, very welcome drug for the management of these patients with IDH1 mutation and acute myeloid leukemia. This is my presentation. Thank you for your attention, and I'll hand it over to our next speaker.

Thank you very much, Dr. Cortes for your thorough review of our data. We really appreciate all of your insights. I just have a few brief comments on TAVALISSE progress in Q2. We're actually quite excited about that as well. On Slide 25, you'll see our FDA-approved indication, which is for adult patients with chronic immune thrombocytopenia or cITP, who have had an insufficient response to a previous treatment. Moving to Slide 26, Q2 was the third quarter in a row that we achieved a high in bottles shipped to patients in clinics. We were happy with the growth trajectory we saw in Q1, and then it accelerated in Q2. Our 2,054 bottles shipped to patients and clinics represented a 21% growth over Q2 of last year and 12% over Q1 of this year. That was our highest sequential demand growth in two years. Our demand growth continued to be driven by the increase in patient starts we've been generating since Q4 of last year. We achieved net sales of $18.6 million, a 9% increase over the same quarter last year. On Slide 27, you see how our customer interactions have also continued to grow in Q2, particularly with respect to our in-person interactions. Our team grew our in-person interactions another 30% beyond Q1, and those made up more than three quarters of our total interactions with customers. So overall, in Q2, our double-digit demand growth over Q1 created a new quarterly high in net sales for TAVALISSE. We've been focused on leveraging every opportunity to impact customers with our key messages on TAVALISSE's efficacy and safety, along with our preferred status on key national formularies. These messages have been effective in raising awareness and reimbursement confidence among prescribers and have resulted in more new patients on TAVALISSE. Thanks for your attention, and I'll now turn the call over to Wolfgang to provide a brief update on our development progress. Wolfgang?

Thank you, Dave. I will provide the update on the other ongoing programs and start with our Phase 3 AIHA study. Slide 29, in June, we reported that the FORWARD Phase 3 study in warm AIHA did not meet its primary efficacy endpoint. Importantly, the safety profile was consistent with prior clinical experience and no new safety signals were discovered. Overall, we have shared our belief that the results were negatively impacted by a large placebo response rate, particularly in Eastern Europe. Since the top line announcement, we did a large number of additional analyses in order to understand the data in greater detail. We will discuss the previously shared data and all new reanalysis data in detail with the FDA this fall to determine the path forward in AIHA. We continue to believe the totality of this data may still allow for a positive overall benefit risk assessment for fostamatinib in AIHA. Shifting gears now to our COVID-19 program. Moving to Slide 31. We are still confident that fostamatinib can provide therapeutic benefits in COVID-19. Most importantly, based on the published positive clinical data from the NIH/NHLBI Phase 2 study in hospitalized patients with severe COVID. Given persistent resistance to vaccination in some places and the possibility of new virus variants, there will continue to be severely even hospitalized patients who need effective treatment options. We have two ongoing Phase 3 trials that will provide us with pivotal data. If approved in this indication, our lease would be available for immediate use for these patients. Slide 32. Due to the recent slow enrollment, we completed randomization into our pivotal Phase 3 study at 280 patients, which is 91% of our targeted enrollment. The original enrollment target was 308 patients, however, we determined that the trial would be sufficiently powered to return 80 patients to potentially provide a clinically meaningful result and determine the efficacy and safety of fostamatinib in COVID-19. As mentioned earlier this year, we updated the inclusion criteria for the trial to focus on more severe patients and change the primary endpoint to days on oxygen for a more sensitive measure and better comparisons to the NIH active trials. There are also multiple secondary endpoints to assess the important mortality risk, as well as improvement from severe disease and duration of hospitalization for ICU stay. The follow-up period is through the 60 days after the last dose. We expect to have top line data in the fourth quarter this year and plan to file an EUA if the data is positive. That concludes my development summary today, and I will turn the call over to Dean. Dean?

Thank you, Wolfgang. I'm on Slide 34. For the second quarter of 2022, we shipped 2,053 bottles to our specialty distributors, resulting in $26.4 million of gross product sales. 2,054 bottles were shipped to patients and clinics, while 924 bottles remained in our distribution channels at the end of the quarter. We reported net product sales from TAVALISSE of $18.6 million, a 9% increase compared to the same period in 2021. Our net product sales from TAVALISSE were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance, and other allowances of $7.9 million. Our gross to net adjustment is approximately 29.8% of gross product sales for the second quarter of 2022. Before we move on from net product sales, let me review our expectations for the third quarter of 2022. We are pleased with the continued strength of our bottles shipped to patients and clinics that Dave described. I expect growth to continue as access to physicians and new patient starts continue to expand. We also expect to receive a $2.5 million milestone payment during the third quarter, relating to the enrollment completion in the Phase 3 COVID-19 study, which is supported by the U.S. Department of Defense government grant. Incrementally, we currently expect our gross-to-net adjustment to be approximately 30% in the third quarter of 2022. On to the next slide. In addition to net product sales, Rigel's contract revenues from collaborations were approximately $11.3 million for the three months ended June 30, 2022, which consisted of $7.5 million from Kisse, which included the $5 million milestone for the NDA filing in Japan. $2 million related to our license agreement with Knight, $1.4 million from our collaboration agreement with Grifols, and $300,000 of our license agreement with Lilly. Moving on to costs and expenses, our cost of product sales was approximately $1 million for the second quarter of 2022. Approximately $900,000 of this related to the delivery of fostamatinib supply to our distribution partners. Total costs and expenses were $42.8 million in the second quarter of 2022 versus $39.3 million in the second quarter of 2021. The increase in costs and expenses was primarily due to increased commercial activities related to our sales force expansion and increased research and development costs for the development of our IRAK1/4 inhibitor program, partially offset by decreased research and development costs related to the Phase 3 clinical trial of fostamatinib for warm autoimmune hemolytic anemia and our ongoing Phase 3 clinical trial with fostamatinib in high-risk hospitalized patients with COVID-19. We ended the quarter with cash, cash equivalents, and short-term investments of $89.2 million. Finally, we announced today that we drew an additional $10 million on our MidCap Financial credit. Please note that this draw occurred during the third quarter. As a reminder, $20 million remains available to draw through March 31, 2023. We also extended the maturity terms. This credit facility is now interest-only through September 2024, with monthly principal amortization that extends 24 months through September of 2026. On to the next slide. Let me highlight for you some of the key terms of the agreement with Forma Therapeutics. Rigel will pay Forma a $2 million upfront payment with an additional $2.5 million for near-term regulatory milestone, $5 million upon approval, and $10 million upon the first commercial sale. While we've not finalized our review of the accounting treatment for these various payments, we currently expect the preapproval milestones to be treated as operating expenses in the period incurred. Incrementally, our collaboration agreement also includes additional regulatory and commercial milestone payments, as well as tiered royalties on net sales. Finally, incorporating the preapproval milestones noted above, large preparation activities that Dave highlighted, let me update you on our expectations for operating expenses through the end of the year. We expect to see a small incremental increase in operating expenses in the third and fourth quarters of this year as compared to the first two quarters of this year, as we continue to develop our launch plans and prepare for launch. We expect to see strong synergies and leverage, and we'll provide operating expense updates in the future. With that, I'd like to turn the call back over to Raul.

Thank you, Dean. To conclude, this quarter, we made significant advancements in growing and expanding our hem/onc focused business. First, we achieved the highest quarterly net product sales for TAVALISSE in ITP since launch and we are well positioned to maintain that momentum in upcoming quarters. Second, we are very excited about our strategic in-licensing of olutasidenib and potentially bringing a new and important treatment for patients with AML. Next year, you may see Rigel with two highly synergistic products, which may enable greater success of both and more fully leverage our commercial capabilities. We also remain committed and focused on advancing our other portfolio programs. We continue to analyze the Phase 3 AIHA trial data and look forward to discussing our filings with the FDA. We believe that fostamatinib has the potential to help patients with warm AIHA in a very meaningful way. With our Phase III COVID-19 trial having completed enrollment, we expect to report top line results in the fourth quarter of this year. And lastly, we continue to drive our two earlier clinical programs, R289, our IRAK1/4 inhibitor, while we expect to enter Phase I/II trials in Q3. With R552, our RIP inhibitor, we look forward to this program moving into Phase 2 clinical development, which we expect to happen in the first half of next year. With that, let me turn the call over to your questions. And if I may ask, since Dr. Cortes is with us, if you have questions for him, let's put those first in your call sequence.

Thank you. Our first question is from Eun Yang with Jefferies. Please proceed with your question.

Thank you. So for this AML opportunity, you guys are mentioning at least on the slide, the near-term opportunity is about 1,000 patients in the U.S. So what are you thinking about - how are you thinking about the pricing, number one. So - and how fast you can actually penetrate 1,000 patients once you launch the product upon approval? And the second question is for Dean. The $2 million upfront payment, is that going to be amortized? Or is it going to be booked at once? I guess like, you know, the regulatory milestone to be booked at once, but can you comment on upfront payment, how it's going to be booked in the income statement? Thank you.

Thank you, Eun. I appreciate that. Let me ask Dean to answer that one first, and then I'll ask Dave to answer your first two questions on pricing and how quickly you might be able to penetrate that relapsed refractory market in IDH-positive AML?

Yes. Hi, Eun. The upfront payments we expect, the pre-approval milestone payments that I described, we expect to be included in operating expenses. Therefore, the upfront $2 million, the $2.5 million of the near-term regulatory milestones, we expect those in the back half of this year. The guidance I gave with respect to operating expense and the small increase from Q1, Q2 levels are inclusive of that $2 million and $2.5 million cost. So that's built into the operating expense feedback that I provided.

Thanks. Dave?

I think - thanks for the question, Eun. I think from a pricing standpoint, obviously, we just did the transaction. So we're not going to release any information on price. If you look at targeted therapies in AML, that's probably a good target for you; I mean, they're all in a similar neighborhood. And so that is probably the best that I would say. There have been seven approvals of oral agents over the last 5 years. Particularly when you look at targeted agents in IDH1, IDH2, and LT3, especially even in the relapse setting, I think those are, sort of, the numbers that we've been looking at and we'll be discussing as we move forward. But certainly, no decision has been made on uptake. I guess the best thing I can tell you is that in the first quarter on launch with another IDH1 inhibitor, at that time when there was less information out there on IDH1, and less testing, less identification, today it's standard and widespread.

Thank you.

Thank you.

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

This is Carly on for Yigal. Thank you for taking my question. We have one for Dr. Cortes. Can you talk about how you think the efficacy and safety of olutasidenib compare to ivosidenib? And I guess assuming Lipsitz approved, how do you see it sort of being used alongside ivosidenib? Thanks.

Dr. Cortes, if you would. Hello? Dr. Cortes?

Can you hear me?

Yes, there you go.

Sorry. I was saying that you know, certainly ivosidenib is a very good drug, and we've been fortunate to have it for some time. It’s difficult to compare when you're looking at two different studies. If we look at the characteristics of the studies, which are essentially very similarly conducted in a similar patient population, I think that there are many reasons to believe why olutasidenib compares favorably to ivosidenib. Number one, in terms of the patient population that was in the study. The two are refractory relapse acute myeloid leukemia, but the characteristics of the patients are a little bit older in the olutasidenib study. They are a little bit more difficult to treat. For example, I mentioned these fully refractory patients; there were very few patients that had relapsed within 12 months, which is I mentioned the harder patient population; they were less than 10%. Here we have a third of the patients were like that. Many of the features are equal or worse with the olutasidenib. So we're starting with a worse - a more difficult patient population, and yet, the overall response rate looks similar, if not better. The response rate, the CR plus CRH was 30% with ivosidenib; it's 33% here. But most importantly, the CR rate which was 21% with ivosidenib is 30% with olutasidenib. The duration of remission which was about eight months with ivosidenib, it's 13.8 months with olutasidenib. There are differences between the studies, and you cannot make too much from that, but every item points to some benefit compared to what we have with ivosidenib. The QTC prolongation is very uncommon with olutasidenib, which is also very, very important, not that it's that common with ivosidenib, but it is more than we see with olutasidenib. Overall, I feel very good about the potential of these drugs because it is drug because it adds, it has many aspects that seem to suggest further improvement over what we already have with ivosidenib. If it was available today, I would use it quite a bit.

Okay. Great. That's very, very helpful. And then we just had a question for Rigel as well. You highlighted the synergies with the existing ITP sales force. Are you expecting to add sales reps in order to support the AML launch? I guess just curious how much we could expect OpEx to ramp as we go into 2023? Thanks so much.

Thanks, Carly. I'll ask Dave to answer that question and then Dean, in terms of the OpEx piece of it. Dave?

Yeah, Carly, great question. We're not going to be expanding our sales force at all for this. You know, ITP, we have its a much bigger patient population treated across the community. We've got significant coverage out there with our current team. So what we now have to do obviously, and by the way, in the relapsed/refractory setting with an oral therapy. This can be used in the community, and patients are being treated in the community. So that will be good. Additionally, we’ll have to pick up leukemia treaters in institutions, which we’re already calling on. But the answer is no additions to our sales force. I think they've got quite the capacity and after announcing this today, I'm pretty sure I could say without any fear of error, they're going to be tremendously excited to have something else in their bag.

Carly, with respect to operating expense, we expect limited clinical spend. So Dave described the significant leverage on the commercial side. So limited clinical spend. I'd just remind you also with respect to our overall operating expense. As we roll off, and we've just completed our Phase 3 study in AIHA, we're wrapping up the Phase 3 study in COVID. We expect to see some leverage, some savings into the future on clinical spend there too. So that's a bit of feedback on olutasidenib impact on operating expense.

Okay.

Thank you, Carly.

Thank you. Our next question is from Joe Pantginis with H.C. Wainwright. Please proceed with your question.

Hey, everybody. Good afternoon. Thanks for taking the question and interesting transaction, and thanks for the details. So first, for Dr. Cortes, I guess when you were talking about the slides regarding the AE profile, physicians such as yourself and at centers of excellence, you said, obviously, these are very manageable toxicity profiles. When you look at things such as the liver elevation and even things like the differentiation syndrome, how is the broader physician community in AML equipped to be able to treat these AEs?

Thank you. I think that by now, we are very well equipped. Liver toxicity is something that general oncology is involved with many other drugs that we use for solid tumors and other things and even higher incidences and severity than these – is what we see here. One other area that I manage a lot of patients is CML and some of the drugs that we use in CML have higher incidences of these things, and yet, liver toxicity specifically. I think physicians manage that well. The differentiation syndrome, it's a little bit more unique, not something that we've seen with many other cancer therapies. But number one, it's not that common, fortunately with olutasidenib. I think that little by little, they have become much more aware of this, and they can manage it well. I've seen them manage with some of the other drugs that we use in these hematologic malignancies. They become much more aware and alert than when we started seeing these things initially with an IDH2 inhibitor, which was the first one that it was approved; that was a bit more of a surprise even for us when we started developing the drugs. But over time, I think they've become very familiar and able to manage these and if not manage themselves at least call for help. So I feel comfortable with how they will be able to manage olutasidenib in the clinic.

Thank you for that very much. And then two TAVALISSE questions for the company, please. Regarding wAIHA, are you able to— I know it's ahead of your FDA interactions in the fall that you mentioned. But are you able to give us any additional information through TEAE regarding additional analysis that you've been conducting?

Yeah. Joe, thanks for that question. We've done a great deal of analysis on the data since we announced it, and we've worked hard on that. But at this point, what we prefer to do is to share that with the FDA first before sharing it more broadly. That would be the appropriate step we view as the next step to do and have those discussions and after that interaction be able to report to you and the investor community what FDA feedback is on that based on that analysis, rather than sharing an additional analysis and potentially having the FDA not view that favorably as a result. The timing is probably not that far out, by the way. We hope to meet with the FDA in the fall. After that, we would have some feedback from them and be able to share more.

No, totally fair. And then just quickly, I wanted to see if—how things are being maintained or improving regarding the current refill rate based on prior quarters; you've been hovering around the mid-50s?

Dave, do you want to comment on the persistency?

Yeah, persistency hasn't changed. We've - it takes a long time to move that curve. Obviously, we've been adding new patients. It's too early to assess whether those patients have longer persistency. But for right now, we're maintaining in the mid-50s.

Great. Thanks, guys. Thank you, Joe.

Thank you. Our next question comes from Gary Nachman with BMO Capital Markets. Please proceed with your question.

Hi, good afternoon. And congrats on the deal. First for Dr. Cortes, where do you see the most opportunity in additional indications for olutasidenib going forward? In particular, how important will combination therapy be over time? What's the timing of that data? At what point will physicians start to experiment with that? And how many more patients are out there beyond the 1,000 that could be good candidates over time?

Yes, thank you. First, regarding the opportunity, we are definitely considering frontline applications. This drug is initially used in refractory relapse as is typical in AML drug development, but it has significant potential for frontline use, both as a standalone treatment and in combinations to address different patient needs. For patients who are very unfit and unable to tolerate combination therapies where myelosuppression needs to be minimized, this drug presents a compelling option. Although myelosuppression is common, it is much less severe compared to traditional chemotherapy. A single agent could be quite beneficial for these patients. Additionally, a combination therapy could offer valuable benefits for those requiring enhanced responses or deeper remissions. There is a clear path to explore this further. I also like the rapid advancement of our development, but there was one of the arms, which is for patients that have measurable residual disease, or MRD. These are patients that have achieved remission, but you can find by these sensitive tests detectable cells. This is very well suited for that purpose because it is an oral agent. You would use it as a single agent by itself, you don’t have to worry about differentiation syndrome in that concept. This is a very well, very – it fits very well for that purpose. Both after some other sort of chemotherapy or after a stem cell transplant, if a patient that relapsed and you gave them whatever this drug or something else and then they went to a transplant, maintenance of the transplant usually becomes very valuable, if you have something that's effective, that you see that is safe, et cetera. So I think those are areas, some of the areas where it will fit well. Now can it grow more than those 1,000 patients? Yes, I think it can. Because number one, if you move it upfront. Number two, I think that as we have more of these treatment options that physicians identify as well tolerated and effective, et cetera, the testing for the mutation starts picking up. Although a lot of the patients are being assessed for mutations nowadays, it's not 100%. It can be a lot better than it is now. Physicians will start looking more and more for these mutations because they know that it could significantly impact the patients' treatment strategies.

Okay, great. That's very helpful. Then one for the company. I'm curious how competitive was the process for this drug? How did you evaluate the economics for the deal relative to the overall opportunity? I mean if you could try and quantify that for us at a high level, I think that would be helpful.

Sure. Dolly, why don't you comment on the IP; I'll answer the other questions.

Sure. On the composition of matter without any extensions, it is protected through September 2035. Then there's a number of very useful methods of treatment, as well as certain forms of the compound that also have protection through 2039.

Thank you, Dolly. We've been engaged with our colleagues in Forma for a bid on this drug. We looked at this and we thought it was a very attractive molecule with compelling data that could make it the leading agent in this category in AML. For that reason, we were very attracted to it. It is a constrained product; it's not a $1 billion product by any means, but it's a very exciting product for a company like Rigel, particularly our franchise that we're building in hem/onc with that foundation being ITP with TAVALISSE. This is a perfect add-on molecule to that. We have a commercial organization in place, boots on the ground now that can deliver value to this asset. It made it an attractive proposition for our colleagues at Forma as well, I believe. As a result, we found a way to mitigate some of the risks, minimize some of the payments upfront for us. We're particularly sensitive in the short term and allowed them to recapture some of the value of the tremendous work they did in filing the NDA and prosecuting that NDA with the FDA to this point. The economics makes sense as well for us. They're commensurate with that. There are opportunities here beyond relapsed/refractory AML, IDH positive AML. As Dr. Cortes said, in early therapy, either as a single agent or combination therapy, there are opportunities in glioma as well where some work has already been done. There are other things we could explore here, so it offers opportunities even beyond the initial potential indication where the PDUFA date is in February. Can we do more? Absolutely, we can do more here. Once we've laid a good foundation and we've leveraged that, I think we'll be in a position to continue to build in this area. This sets a precedent for what we might do going forward. No promises, and no promises on timing, of course, but it's a pretty exciting next step for us as a company.

Okay, great. Thank you.

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

Thank you for your questions and for the position that we made in terms of your time. I appreciate that. It's an exciting quarter. We accomplished some really important milestones this past quarter. Regaining momentum and growth in ITP sales, I think that is foundational to the company in terms of the hem/onc business. Overlay that in - on top of that, this in-license providing leverage with an existing organization. We're incredibly excited about those two events this quarter, and I think it bodes really well for this year and into next. Progress on some of our pipeline programs with fostamatinib, with FDA coming soon, with COVID data coming soon, and advancements into patients with our earlier two programs are two things we're very excited about. Thank you for your questions, and I look forward to providing you more information as it’s appropriate. Take care.

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