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

Hello. Welcome to our fourth quarter and year end 2022 financial results and business update conference call. The financial press release for the fourth quarter and year end 2022 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, 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 Officer, Raul Rodriguez. Raul?

Thank you, Ray, and welcome to the team. 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. Now beginning on Slide 5. We are thrilled with the progress we've made in growing our hematology-oncology business in 2022. And we look forward to continuing this momentum in 2023. We are committed to driving sales growth for our first approved product, TAVALISSE and ITP. And in the fourth quarter, we achieved our highest quarterly net product sales to date. Alongside our international partners, we are focusing on making sure TAVALISSE is available for adult patients with chronic ITP across the globe. Our partner Kissei recently took an important step towards achieving this goal, with Japan's PMDA approval of TAVALISSE. We congratulate them on this achievement. In December 2022, our commercial business was transformed with the approval and launch of our second product REZLIDHIA for the treatment of relapsed or refractory acute myeloid leukemia. REZLIDHIA is an important treatment option for patients with relapsed or refractory AML, and we are keenly focused on the execution of the commercial launch. With two approved products, our robust sales team and a highly experienced marketing and operations team, we are in a strong position to drive sales for both TAVALISSE and REZLIDHIA. Beyond our commercial focus, we are committed to growing our business through internal development programs, partnered programs, and in licensed opportunities. Our IRAK1/4 R2 inhibitor R289 continues to progress in a Phase 1b study in patients with lower risk MDS. And we are pleased to report that we have completed enrollment in the first cohort of this study. Additionally, we continue to evaluate fostamatinib and olutasidenib for follow-on opportunities beyond their currently approved indications. Alongside our partner, Eli Lilly, we are advancing R552, a RIPK1 inhibitor, and we look forward to initiation of a Phase 2a study in rheumatoid arthritis in the first half of 2023. Our colleagues at NIH are also continuing to evaluate fostamatinib in COVID-19 in the active four Phase 3 clinical trial. Now moving on to Slide 6. I want to spend some time talking about the importance of the achievements we've garnered as we expanded our hematology-oncology portfolio with REZLIDHIA. In just a few short months, we've gone from announcing a license agreement with Forma Therapeutics to the FDA approval and then the launch of REZLIDHIA. Our ability to navigate this quick turnaround is a testament to our business development, commercial and medical affairs teams, as well as Rigel's commitment to patients in this space. While announcing the deal in August, our team began to work diligently to prepare for the commercialization of REZLIDHIA. And I am proud to say that despite the early approval in December, we were ready to execute on our critical priorities for launch. Shortly after the approval, we had the opportunity to engage and educate the medical community at the 2022 ASH meeting. We were able to share new longer-term data from the registrational Phase 2 study of REZLIDHIA in relapsed or refractory AML, highlighting its durable efficacy and well-characterized safety profile. Also in December, REZLIDHIA was made available in the U.S. by prescription and since then has been added to the NCCN guidelines for AML and highlighted in Blood Advances with the publication of the Phase 2 registrational study. While pleased with the success so far, we are focused on continuing the execution of the REZLIDHIA commercial launch. So with that, I'll turn the call over to Dave for an overview of the quarter. Dave?

Thank you, Raul. Now, I'd like to take a few minutes to discuss our progress with REZLIDHIA in the first three months of launch and then transition to our continued growth of TAVALISSE during a record Q4. On Slide 8, you will see our FDA approved indication, which is for adult patients with relapsed or refractory acute myeloid leukemia with a susceptible IDH1 mutation as detected by an FDA approved test. Moving to Slide 9, the American Cancer Society estimates that more than 20,000 patients will be diagnosed with AML in 2023. And unfortunately, about 11,300 patients will die from the disease this year. In terms of the eligible relapsed or refractory IDH1 positive AML patients, our research showed that up to 60% of fit patients progress in two years, and for unfit patients, most are refractory or relapse within two years. With 6% to 9% of patients IDH1 positive, that gives us a near-term opportunity to impact the lives of around 1,000 new mutant IDH1 patients in the relapsed or refractory AML setting each year. On Slide 10, we believe REZLIDHIA has the potential to address many key patient and HCP needs in the relapsed/refractory AML space. It is a promising new treatment targeting mutant IDH1 that has shown impressive durable responses in patients who have failed previous therapies. As more clinicians review the demographics of our relapsed refractory patient population in our pivotal cohort and combine that with a complete response rate of 32%, a CR, CRH rate of 35%, and especially the median duration of CR, CRH of longer than two years, they see the value of an agent like REZLIDHIA in their treatment armamentarium. Combining that efficacy with a well-characterized safety profile, without the requirement for cardiac monitoring, makes it even more compelling to adopt REZLIDHIA in their mutant IDH1 relapsed refractory AML patients. Overall, we continue to see exciting potential to become a market-leading treatment in mutant IDH1 relapsed or refractory AML and are looking forward to continuing to execute the launch plan. Moving to Slide 11, our commercial and medical affairs teams have done a great job executing our launch plans to quickly raise awareness among leukemia treaters, ensure quick product availability and access for patients, accelerate launch momentum through the publication of critically important third-party references, and continue educating our field team to hone our REZLIDHIA messaging. Immediately upon approval on December 1, our website was up, and within the first few days of launch, we had several marketing and patient access materials available online and through our field teams. This was perfect timing as our team was at the 64th Annual American Society of Hematology Meeting a week later on December 9, with our booth prominently announcing approval and team members interacting with important customers who were in attendance. Then on December 22, just over a week after ASH ended, our team worked closely together to have product available to stock our distribution network for the year-end. Finally, we were extremely pleased that over the holidays on December 30, our distribution network shipped out our first two bottles to an account for an AML patient. It was a meaningful way for us to end 2022. On Slide 12, you will see that we continued to make strong progress on the medical affairs front as we moved into the New Year. On January 13, we were delighted that the NCCN clinical practice guidelines for AML were updated to include olutasidenib as a recommended targeted therapy for relapsed or refractory disease with an IDH1 mutation. This quick unanimous decision by this recognized panel of experts is critically important for formulary and prescribing decisions by payers, GPOs, and other key accounts and prescribers. We will continue to highlight this important recommendation in our messaging. Also in January, we were pleased to confirm coverage through our first paid claims for REZLIDHIA patients. We continued to work with key payer and GPO accounts, as well as individual prescribers, to ensure that they have everything they need to minimize any reimbursement hurdles and maximize patient access to REZLIDHIA. Last month, our launch momentum continued with the February first online publication in Blood Advances of the data from our pivotal Phase 2 cohort titled "Olutasidenib Induces Durable Complete Remissions in Patients with Relapsed or Refractory IDH1 Mutated AML." The conclusion states that olutasidenib monotherapy induces durable remissions and transfusion independence among patients with relapsed or refractory mutant IDH1 AML with a well-characterized and manageable safety profile. The observed efficacy is clinically meaningful and represents a therapeutic advance in this molecularly defined patient population with a poor prognosis and limited treatment options. This publication, which will soon appear in print in a well-known and respected peer-reviewed journal, is another highly credible third-party reference for REZLIDHIA that will be important for years to come. Just a few weeks ago, our entire commercial and medical affairs team met in person for our annual meeting. We had a highly productive meeting and continued to build on the foundational knowledge established upon approval. Our team left that meeting more prepared than ever to continue spreading awareness of REZLIDHIA and accelerate uptake as we move into our next phase of launch. I look forward to providing updates as we continue our REZLIDHIA launch journey. Now, onto growing sales of TAVALISSE in ITP. I have a few brief comments on our TAVALISSE progress in Q4. On Slide 14, you will see our FDA approved indication, which is for adult patients with chronic immune thrombocytopenia or CITP, who've had an insufficient response to prior treatment. Moving to Slide 15, I am thrilled to announce that we had our best TAVALISSE quarter ever in Q4, shipping 21,096 bottles to patients and clinics, representing a 23% growth over Q4 of last year. This robust growth was driven by more new patients starting TAVALISSE. I am happy to report that we had more new patient starts in 2022 than in any other year since launch. For Q4, we achieved net sales of $21.9 million, representing a 25% increase or $4.3 million more than the same quarter last year. We are extremely pleased with how we ended 2022 and the solid year-over-year growth we are seeing in ITP sales. We will continue to focus on targeted clinicians to identify appropriate patients that can benefit from TAVALISSE, aiming to grow our new patient starts beyond the record levels we saw in 2022. Additionally, on Slide 16, I wanted to update you on how we are continuing to expand access for patients globally with TAVALISSE. In December, Kissei, our partner in Japan, announced PMDA approval for TAVALISSE for the treatment of chronic ITP. We expect to earn $20 million in a regulatory milestone with this approval. We remain committed to continuing to impact CITP patients around the globe with further expansion of TAVALISSE's commercial footprint through our partners. Thanks for your attention. And I will now turn the call over to Wolfgang to provide a brief update on our development progress. Wolfgang?

Thank you, Dave. I will briefly summarize our other programs. Moving to Slide 18, let me start with lower risk MDS. Our Phase 1b study evaluating R289, Rigel's IRAK 1/4 inhibitor in lower risk MDS has completed enrolling the first cohort and has now dose escalated to enroll patients into the next cohort. So far, the drug has been well tolerated, and no adverse events of concern have been seen. As you recall, the study uses a three-by-three dose escalation design to establish the maximally tolerated dose before expanding a dose level to additional patients to obtain further safety data, as well as preliminary efficacy information. We believe R289 may represent a promising new approach to treating patients with lower risk MDS, and we look forward to investigating R289 further in this study. On Slide 19, you can see the overview of our ongoing programs. As Raul mentioned, we are primarily focused on growing our hematology/oncology business, starting with our internal development programs. I just took you through the progress of R289 in lower risk MDS on the previous slide. We're also evaluating other opportunities for fostamatinib and olutasidenib, building on their regulatory success. This includes assessing ex-US partners to bring REZLIDHIA to AML patients around the globe. I also want to remind everyone that the Phase 2 clinical trial of odevacitinib includes additional cohorts beyond the registrational relapsed or refractory AML cohort, and we look forward to continued analysis and applications from this trial. Supplementing these internal development efforts, we continually evaluate potential new assets to in-license that can leverage our hematology/oncology capabilities. More optimistically, we continue to work with Eli Lilly to advance R552, our RIP kinase inhibitor towards a Phase 2 study in rheumatoid arthritis and with the NIH as they continue enrollment in the active four Phase 3 study evaluating fostamatinib as a treatment for COVID-19. That concludes my development summary, and I will turn the call over to Dean. Dean?

Thank you, Wolfgang. I'm on Slide 21. For the fourth quarter of 2022, we shipped 2,417 bottles of TAVALISSE for our specialty distributors, resulting in $31.5 million of gross product sales. Of those bottles, 2,196 were shipped to patients and clinics, while 221 bottles increased the levels remaining in our distribution channels at the end of the quarter. Following our commercial launch of REZLIDHIA on December 22, 2022, we shipped 64 bottles of REZLIDHIA to our specialty distributors, resulting in $1 million of gross product sales. Two bottles of REZLIDHIA were shipped to patients and clinics, while 62 bottles were placed in our distribution channels at the end of the quarter. We reported net product sales from TAVALISSE of $21.9 million in the fourth quarter of 2022, a 25% increase compared to the same period in 2021. We reported net product sales from REZLIDHIA of $900,000 in the fourth quarter of 2022. Our net product sales from TAVALISSE and REZLIDHIA were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance, and other allowances totaling $9.7 million. For the fourth quarter of 2022, our gross to net adjustment was approximately 30% and 15% of gross product sales respectively for TAVALISSE and REZLIDHIA. Before we move on from net product sales, let me review our expectations for the first quarter of 2023. Let me start with TAVALISSE. Despite the typical first-quarter reimbursement issues confronting our industry, such as the resetting of co-pays and the Medicare donut hole, we expect to see a small increase in bottles shipped to patients and clinics in the first quarter of this year compared to the fourth quarter of 2022. We expect growth in bottles shipped to patients and clinics throughout the year. For REZLIDHIA, and as you know, we are still only a couple of months into our launch. As Dave highlighted, we're encouraged by the initial interactions that our field team is having with physicians who treat patients with AML. With these interactions and as awareness of REZLIDHIA increases, we expect to see increasing penetration into this new market for Rigel as we add new patients, and as the year progresses. We look forward to providing more specific updates in the future as our launch progresses. Incrementally, we currently expect our gross to net adjustment for the first quarter of 2023 to be approximately 30% for TAVALISSE and approximately 15% for REZLIDHIA. Moving on to the next slide, in addition to net product sales, our contract revenues from collaborations were $26.5 million, and our government contract revenue was $2 million in the fourth quarter of 2022. Contract revenues from collaborations consisted of $20 million in revenue from Kissei related to a milestone payment earned upon Japan's PMDA approval of TAVALISSE for the treatment of chronic ITP, $5.7 million in non-cash revenue from their collaboration agreement with Medison, $600,000 in royalty revenue from Grifols, and $200,000 in revenue related to our license agreements with Lilly. Moving on to costs and expenses. Our cost of product sales was approximately $342,000 for the fourth quarter of 2022. Our cost of product sales for the quarter included a 15% royalty on our REZLIDHIA net product sales. Total costs and expenses were $49.2 million in the fourth quarter of 2022 versus $41.8 million for the same period in 2021. This expected increase in costs and expenses was primarily due to personnel-related costs and commercial expenses, along with higher research and development costs related to the IRAK1/4 inhibitor program. As we look towards 2023, we currently expect our total costs and expenses for the full year of 2023 to be approximately $160 million. Finally, we ended the quarter with cash, cash equivalents and short-term investments of $58.2 million. With that, I'd like to turn the call back over to Raul. Raul?

Thank you, Dean. As we wrap up this call, 2022 was a transformational year for Rigel, and we believe that positions us very well for a year of execution in 2023. Our commercial organization is focused on accelerating TAVALISSE sales with our expanded sales force and increasing interactions. For REZLIDHIA, we are continuing our commercial launch and prioritizing physician awareness and adoption, as well as identifying ex-U.S. collaborators. To supplement our commercial initiatives and business growth, we look forward to continued progress across our development and partnered programs while evaluating new external assets to leverage our hematology capabilities. We are very excited about this and about our commercial and clinical initiatives in 2023. On a final note, I'd like to take a moment to recognize that our CMO, Wolfgang's last day at Rigel will be March 31. Wolfgang, on behalf of our team, I'd like to thank you for your service and contributions to Rigel. We are currently conducting a search for a new CMO with hematology and oncology experience. With that, I'd like to thank you for your interest in our progress in the fourth quarter and throughout 2022. Operator, if we can open up the call for questions.

Thank you. Ladies and gentlemen, at this time, we'll be conducting a question-and-answer session. Our first question comes from the line of Yigal Nochomovitz with Citi. Please proceed with your question.

Hi team. This is Carly on for Yigal. Thanks so much for taking our questions. We have a few on REZLIDHIA. I guess first, can you talk a bit about how concentrated the prescriber base is here? And obviously, it's still very early, but are you able to comment on how many unique prescribers have actually written a script so far? Thanks.

Carly, thank you so much. I'll ask Dave to comment.

Carly, regarding the second part of your question, we won't be discussing that today since it's related to Q1 results, which we will cover on our Q1 call. Therefore, we won't provide specific information on prescribers. However, I can mention that we have identified around 1,000 AML prescribers that we are targeting. Approximately half of these align with our TAVALISSE targets, while the other half are leukemia specialists. Accessing these specialists has been somewhat more challenging for us, particularly since we've only been working on this since December. Nevertheless, we are making progress and are confident in our ability to enhance awareness within that group.

Okay, great. That's helpful. And then you disclosed that 64 bottles shipped during the fourth quarter. I guess can you just talk a bit about we should be thinking about inventory stocking dynamics during the first quarter and the second quarter of 2023?

Carly, I can take a stab at that and ask Dean or Dave to comment as well. So the 64 bottles shipped during the fourth quarter were all but two of those into the inventory. We have a better sense now, a couple of months beyond that in terms of stabilization? We don't really know yet. New institutions are ordering product, so it's still too early to say something definitively in terms of stabilization; but we do know that there has been usage from that inventory, although the dynamics are still a little bit unknown given how early it is for us. Any comments, Dave or Dean?

The only thing I would mention, Carly, is that we have a shipping partner that delivers directly to patients, along with distributors that supply our accounts. We have observed orders being fulfilled from our entire distribution network, including the distributors sending to hospitals and the shipping partner providing for patients.

And just one detail as we launch REZLIDHIA is that a TAVALISSE one-month supply is one bottle, while for REZLIDHIA, a two-week supply is one bottle. So as we need to translate those 64 bottles into 32 months of treatment.

Okay, got it. And then just our last question is, I think in the past you've talked a little bit about the potential frontline AML opportunity for REZLIDHIA. Can you talk about where you stand with that and thoughts on potential timing for a registrational study?

Thank you, Carly. REZLIDHIA has tremendous opportunities. We think that it's shown some of the best data in the IDH relapsed/refractory setting. And that gives us a molecule that I think has a lot of opportunity within it. So we are working diligently to understand where we'd like to go with it. We're looking at various segments of AML, and there are quite a number of segments that are potential opportunities, as well as some things outside of AML even, because there are opportunities there as well. These decisions involve a fair amount of interactions with KOLs, potential clinical investigators, and the FDA. So that effort is underway. Maybe I can speak a little bit about the timing or maybe Wolfgang could say a few things when we might be ready.

Yeah. I would say, this is definitely one of our considerations. I can't share with you specific details, but I can say that we are analyzing other cohorts from the first study, and both this patient population along with a population that has prior experience with therapies have shown very consistent efficacy numbers. I don't want to give you the actual numbers today because we are fully analyzing them, but I do think we have options, and the option that you just brought up is one of several.

Carly, the only thing to add in terms of timing is that later this year, for sure, we'll come back with what we'd like to do next.

Okay, perfect. Thank you so much for taking our questions.

Thank you, Carly.

Our next question comes from the line of Jan with Jefferies. Please proceed with your question.

Thank you very much. A couple of questions. So at the end of last year, you had about $58 million in cash and cash burn for this year seems to be running higher than that. So can you talk about how you fund the operations for this year and beyond? That's number one question. Second question is, now with the two products on the market, do you have some sense of when you would be able to reach profitability? And my last question is, you mentioned looking into evaluating other opportunities for fostamatinib. So can you talk about what the other opportunities you are considering? Thank you.

Thank you, Eun. Let me ask Dean to address the first two questions and maybe I'll address the third.

Sure. Hi, Eun. So I'll address both of your questions together here. We ended 2022 with $58 million in cash, as you noted. Incrementally in January, we received $20 million from Kissei, so we're comfortable with our current cash position in the business that we've discussed today. With respect to the path to profitability, it really is a priority for our business to achieve cash flow breakeven. As you've seen over the last year, we have made focused efforts on cost efficiencies and leverage as we established the hematology/oncology business that we described today. We are reducing our operating expense from about $176 million in 2022, down to what we expect to be approximately $160 million this year. I would note that over $10 million of the operating expenses I just described are non-cash, including stock compensation and depreciation. Looking forward to breakeven, we haven't provided guidance on our top line revenue yet, so we can't be specific on when we'll reach breakeven. However, we just reported fourth-quarter run rate results of about $90 million, which is almost exclusively driven by TAVALISSE, and we have the REZLIDHIA sales contributing to revenue. In addition, we continue to expect collaboration revenues from existing partners like Lilly, Kissei, and Grifols, as well as new partnership opportunities.

Thanks, Dean. It's worth noting, as Dean said in his comments, we’re seeing strong performance in TAVALISSE and so far, this quarter has been very positive. Usually, we see a downward trend in Q1, but this Q1, we'll be seeing our best quarter since launch. This is a very positive sign and a testament to the expansion and focus of our commercial team in increasing TAVALISSE sales despite Q1 headwinds. Regarding your third question about other opportunities for fostamatinib, as mentioned in our press release, we are considering opportunities in graft versus host disease. We haven't done thorough and final diligence on that yet, but the data seems quite compelling. So that's one thing we might consider with fostamatinib. We need to evaluate where to invest our clinical dollars considering both fostamatinib and olutasidenib, as there are substantial opportunities for both molecules. We will make those decisions and come back to you later this year with the registrational trials we want to pursue for these two drugs.

Can I ask you one quick follow-up? Are you thinking about revitalizing the warm autoimmune hemolytic anemia indication?

Yeah. We have had interactions with the FDA regarding this indication, and it seems that a de novo trial would be required again. It might be a little smaller than our prior trial, but possibly not substantially less than that. Given that and considering other opportunities we have in front of us with both fostamatinib and olutasidenib, we probably would prioritize those rather than warm autoimmune hemolytic anemia.

Thank you.

Thank you.

Our next question comes from the line of Do Kim with Piper Sandler. Please proceed with your question.

Hi. Thanks for taking my questions. I was hoping to get any initial feedback or sense of physician enthusiasm for REZLIDHIA and their willingness to use the drug? And if you've seen any kind of pushback by docs, having a preference for TIBSOVO for any reason? Anything anecdotal?

Dave?

I could give you a lot of anecdotes. I've actually just been out with customers as recently as yesterday, and at the end of the day, here's a couple of things for you. First of all, when people truly understand this data, and if you look at the Blood Advances publication, things are in there that we haven't even begun to talk about commercially yet, which is the survival data. If you look at the survival data of the responders, and you see what the CR and CRH responders do in terms of survival, that's not yet reached, and it's at 18 months. You have 78% of patients surviving. Those are the kinds of pieces that, as we take this publication and put it in a new piece and begin to talk to clinicians about it, which we have begun doing just very recently since it was published, people become much more convinced that there is something here. We have been out there with a response rate, which is clearly high at 32%, right? But the CR and CRH rate is at 35%. People can look at that and say, yeah, that's kind of what I get. But then when you go to the duration data, people have to recall and put that in context, which is these are relapsed/refractory patients. When you do that, and when we passionately talk about that, it can really have an impact. Yes, there are clinicians who say it's come to me too, the response rates look the same, but we have to dive into that duration. The two things that are really going to help in the Blood Advances publication are to be able to talk about survival and also the patients on the trial who were on venetoclax. These are two aspects that'll help augment our narrative. And lastly, we just got in January the NCCN Guidelines addition. We're going to continue to do that. If you look at our website now, we have links to both the NCCN guidelines announcement and the Blood Advances publication. So those are really two critical things that we believe will drive adoption. But so far, I would say, depending on the clinician and how much time we get with them, we can make progress. Among the top leukemia treaters in the country, remember that this is a Phase 2 study done at very few institutions in the US. So many doctors haven't had a chance to use this product. The approval came all of a sudden, and some clinicians were unaware that it was even filed, and then all of a sudden it was approved in December. So we feel strongly that the more we raise awareness, especially among key leukemia treaters, the more adoption we're going to get.

Thanks, Dave. That's great to hear. Another question for you, but on TAVALISSE. Congrats on accelerating these sales. Can you talk about what you're seeing as the driver of the sales growth? Is it getting the product on formularies? Is it your expanded sales force? Where is the estimated market share of TAVALISSE now? And have you gotten much penetration in the earlier lines?

If you look at our data and we look at it through our patients on TAVALISSE, we actually have a pretty good percentage of our patients on second line disease. Through Rigel OneCare, more than a quarter of our patients are currently in this space. We do believe we're making progress in earlier lines of therapy. In terms of what's driving new patients to the brand, it's all of the above. Our sales force has been doing a great job, and we have more folks out there who are very sharp in their messaging. They know that we are looking for new patients to start on TAVALISSE. Our website demonstrates many patient cases that we use frequently. I'm seeing a lot of customers over the weekend, which indicates we’re continuing to get interest in this drug and understanding that it can benefit patients. So overall, I really believe it's all of the above. Certainly, access hasn’t hurt; we had more commercial starts last year than we've had before, which we believe is due to efficiencies in our contracting efforts and also raising awareness of drug access. As Dean and Raul mentioned, we're looking at Q1 here, which usually slows down due to reimbursement hurdles, and our goal is to start new patients so we can overcome that. We believe we're making progress towards that as we sit here in the first part of March. So it's a combination of all these factors, and it takes time to see the impact.

Wonderful. Congrats on the progress, and thanks for taking my questions.

Thank you, Do.

Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Hi, good afternoon. Thanks for taking our questions. So we've received some inbound interest in the cGvHD program following the data you had earlier this year. So the question is, what factors are you considering as to whether you may look to conduct further studies in this patient population? And then, what do you view as the potential market opportunity?

I'll take a stab at that, and ask Wolfgang to comment as well. Thank you, Kristen. We're looking at the whole variety of things you consider when evaluating potential new indications for a drug. That includes patient populations, indications, current competitive landscapes, and anticipated competitive landscapes by the time you complete your study and file for approval, as well as the fit for pricing and similar factors. There's quite a number of things to consider when making that decision, along with interest from key opinion leaders and potential clinical investigators and FDA feedback on your proposed studies. So it's complicated, but we are actively evaluating that opportunity. Wolfgang, do you have anything else to add?

Maybe just since you have seen the paper and obviously read the paper, you compare the results with other compounds that are currently approved. You'll have seen that the numbers look quite good. The overall response rate over a year is high, competing well with currently available agents. We will need to work with FDA to determine what a registrational trial could look like, including sample size and study design, which will impact timelines and costs. But from a market opportunity perspective, we see significant potential here, and it could represent a sizable opportunity in the not-too-distant future.

I think that summarizes it well.

Okay. Thank you for that. I appreciate it. And then outside of the Eli Lilly partnership, what are the key things you're watching out for in 2023 related to some of your partnered programs including your ex-U.S. partners?

As you know, with regards to TAVALISSE, we made good progress, and the product is now available or soon to be available commercially in Japan. They received the approval at the very end of the year and are navigating the pricing process currently. We have good availability in Europe and in major countries in Europe, as well as in Canada and Israel. In terms of partnerships, we are making fantastic progress with TAVALISSE. We are engaged in discussions regarding olutasidenib, which we have global rights to, and the opportunities in ex-U.S. markets are attractive as well. We're discussing potential partnerships that might enhance clinical contributions, which are of great interest to us. Also, we have the IRAK program in which we hold global rights, and finding a partner can help us explore opportunities in hematologic indications, which we view as critical. We're also thrilled with the progress made with our Lilly kinase collaboration, with their program entering a Phase 2a study in rheumatoid arthritis. It's a significant indication with a need for new treatments, and we are excited about their testing of R552 and hopeful to produce meaningful data, establishing this product as an attractive option in rheumatoid arthritis. Additionally, we have a CNS program associated with that which we're expecting to move into preclinical development and ultimately humans in the near future. So we have robust progress across our current collaborations, our marketed products, and we are looking forward to establishing new partnerships.

Thank you.

Thank you, Kristen.

Our next question comes from the line of Gary Nachman with BMO Capital Markets. Please proceed with your question.

Thanks. Good afternoon. A few more for me on REZLIDHIA. So how easy is it for physicians to use a diagnostic test for an IDH1 mutation in AML patients? Is that common practice? No issues there in identifying these patients? Then what has access been like so far for REZLIDHIA? How much are you minimizing reimbursement hurdles? You mentioned that in your prepared remarks. Lastly, how is the sales force being allocated between REZLIDHIA and TAVALISSE? Maybe just a little bit more on that, and what else can you do to further penetrate the leukemia specialist for REZLIDHIA? You mentioned that there are some challenges there.

Sure. So, Dave, I'll ask you to take those points if you missed one.

I think that is not an issue at all, Gary. Clinicians can order it from any number of sources. They may have it in the institution, or they may get it through a third party. I think more than that, it's the results of what they do with the results. In academic settings, they may get results quicker. It's more applicable in the frontline. In those situations, they may need to wait to treat. That's the issue. But a lot of clinicians don't do that, which is why we believe we have an opportunity. Many clinicians in the community move forward with the regimen, and this leaves the relapsed/refractory space open for choosing an IDH1 inhibitor if they're IDH1 positive. While testing is not 100% across the board yet, we believe it's high. It's a high rate of testing, and I think especially in the relapsed refractory setting, we will continue to reinforce that olutasidenib is the drug of choice in IDH1 relapsed/refractory patients.

Okay, great. All that color was helpful. And then just on 289. So what will you be looking for in the overall Phase 1b data in low risk MDS patients? And when will that data be available? Are we going to see anything, any interim data or are you going to wait for all the cohorts? What have you learned from Cohort 1 moving into Cohort 2? And at what point would you consider licensing opportunities for this asset? Thank you.

I'll start with the first piece, then maybe you could address the rest, Wolfgang. Regarding the first dose cohort, we look primarily for safety at this stage of the life cycle of this compound. So far, the drug has been well tolerated, and there have been no adverse events of concern noted. Cohort 2 is approaching a slightly higher dose with a pharmacokinetic profile where we would expect some pharmacodynamic effects. That will be the next three patients, keeping in mind that all of these patients continue treatment, and this is an open-label study. As data evolve, we scrutinize Cohort 2, as it takes 28 days to identify safety or escalate to the next cohort; however, those patients also continue benefiting from treatment. We anticipate collecting data over a three-month period to determine whether a signal is present and if it is worth expanding. Generally, we'd want several patients over that timeline before discussing a partnership. Wolfgang, do you have any specifics to add?

In the lower dose group, we will have some data from those. Clearly, more safety-related information is likely to emerge as we escalate through the cohorts. It's probable we'll observe signs of efficacy as we get into the higher dose groups after three to six months of continued dosing. It's too early to say which cohorts should be expanded, as this decision will be data-driven based upon the results we observe. We view this as having exciting opportunities and a novel mechanism uniquely suited for treating inflammatory conditions like lower risk MDS.

Okay, great. Thank you.

Thank you.

Our next question comes from the line of Joe Pantginis with H.C. Wainwright. Please proceed with your question.

Hi, everybody. Good afternoon. Thanks for taking the question. So my first question, a little more macro. So I'd like to balance Dean's guidance for cost for 2023 of around $160 million if I heard you correctly, and your overall cost management and if we can infer that the commercial side of the business and the sales force is essentially right-sized at this particular moment in time?

Well, I think Dave can answer your query on rightsizing. He can elaborate on this aspect. As for the guidance on the $160 million, Dean?

Yes. We have all the necessary people and resources to drive both brands across our commercial teams covering a range of functions, from operations to market access to marketing and sales.

We've discussed for some time about our leverage and efficiency across the commercial organization, not just the sales team, but for the entire field team. We see this in our ability to launch REZLIDHIA successfully and the ongoing efforts Raul mentioned, contributing to the anticipated $160 million operating expense for 2023.

The $160 million represents an appropriate estimate for us. We went through a restructuring last year, letting go of some colleagues and positions that were no longer needed. This restructuring also imposed more rigor in managing costs, allowing us to focus on the necessary areas. We look forward to continuous top-line growth from our products and partnerships while achieving a stable or downward trend in expenses compared to last year. We're moving closer to hitting that breakeven point.

Okay. That's helpful. And then diving deeper into the TAVALISSE franchise. I guess, first, I didn't see it on the slides or hear the number. I'm sorry if I missed it; however, what is the current refill rate? Given this new achievement, it appears that the market is shifting post-COVID as you've described it. Therefore, could you share the refill rate and the competitive headwinds you're facing as you push into earlier lines, as well as any sort of blocking and tackling you can share about Grifols and other territories as they look to expand into different geographies?

We have not seen any changes in our persistency, and we are focused on acquiring new patients for TAVALISSE. The team continues to work with clinicians prescribing in their offices, ensuring that they know steps like raising the dose to 150 mg to optimize efficacy. We're doing all of that. But we haven't noticed any fluctuations in persistency. Growth has been due to more new patients joining the brand, and we would like to keep the persistency rate as it is, given the current state.

Post COVID, the team continues to push forward. It can still be challenging to gain access to some institutions, but there has been an increase in opportunities to interact with clinicians as well as in live conferences. This has proven to be a fantastic chance for our teams to engage with customers and elevate our presence in the market.

Thank you, guys.

Thank you, Joe.

Our next question comes from the line of Kalpit Patel with B. Riley. Please proceed with your question.

Good afternoon. This is Andy Fleasure on for Kalpit. Thank you for taking questions. Regarding the investigator-sponsored trial in GvHD that you just published data on, how do you perceive the competitiveness of these results compared to other emerging agents? And then as a follow-up, I know that you're still considering the development of this asset; is this something you think you would consider potentially developing in-house or maybe through a partnership? Thank you.

I think Wolfgang can assist with that from his perspective.

Comparing the overall response rates in the fostamatinib paper with approved compounds, the results look reasonably competitive based on the preliminary data. The sample size is limited, so we don't want to over-interpret, but we sense substantial investigational enthusiasm around the data. I would characterize them as quite competitive at this point, though it is still early for this patient population.

We conducted research since the study and have been polling clients. Clinicians are aware, and even though approved products exist, the NCCN guidelines encourage participation in clinical trials. While one compound has a category one recommendation, there's no clear preference for one agent over another. If we pursue this as a development area, it’s in a market space where no company has emerged as a clear leader.

Yes, we are exploring this as an opportunity, though have not yet made final decisions on whether to proceed with it in-house or partner for development.

Thanks. I appreciate the additional color.

Thank you, Andy.

No further questions in the queue. I'd like to hand the call back to Mr. Rodriguez for closing remarks.

Thank you, operator. Thank you for your questions and your interest in Rigel. It was a tremendous year in 2022, both challenging, but I think a year that was our best year in terms of where we started the year and where we ended the year. I think we really transformed the company with growth in TAVALISSE really getting substantial traction and the addition of REZLIDHIA to this highly complementary product, positioning us well really for this year in 2023 and we're executing on that. And that's our commitment to you that we will continue to grow both of these products, look for other opportunities within these two assets, that are exciting and transform the company and continue to look externally for opportunities. There are quite a number of things we have interest in. I believe 2023 will be a great year for us. Thank you for your commitment to us, and we aim to deliver.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.