Rigel Pharmaceuticals Inc Q4 FY2025 Earnings Call

Greetings, and welcome to the Rigel Pharmaceuticals Financial Conference Call for the Fourth Quarter and Full Year 2025. The operator provided instructions. As a reminder, this conference is being recorded. It is now my pleasure to introduce our first speaker, Ray Furey, Rigel's Executive Vice President, General Counsel and Corporate Secretary. Thank you, Mr. Furey, you may begin.

Welcome to our fourth quarter and full year 2025 financial results and business update conference call. The financial press release for the fourth quarter and full year 2025 was issued a short while ago and can be viewed along with the slides for this presentation in the News and Events section of our Investor Relations site on rigel.com. As a reminder, during today's call, we may make forward-looking statements regarding our financial outlook and our plans and timing for regulatory and product development. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent annual report on Form 10-K for the year ended December 31, 2025, on file with the SEC. Any forward-looking statements are made only as of today's date, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. At this time, I'd like to turn the call over to our President and Chief Executive Officer, Raul Rodriguez. Raul?

Thank you, Ray, and thank you all for joining us today. Also with me are Dave Santos, our Chief Commercial Officer; Lisa Rojkjaer, our Chief Medical Officer; and Dean Schorno, our Chief Financial Officer. On today's call, I will provide an overview of Rigel's business, our accomplishments for the fourth quarter and full year 2025 as well as our strategic initiatives to drive growth. Beginning on Slide 4. I will outline Rigel's transformational growth strategy in hematology and oncology. For those of you less familiar with Rigel, our strategy is built around four core strategic objectives: grow our commercial business, expand our portfolio through in-licensing or acquisition, advance our clinical development pipeline and maintain financial discipline. These four pillars are interlocking and collectively drive Rigel's long-term growth. Today, I will highlight how we've executed on this strategy since 2020, building Rigel into the profitable company we are today and how this framework positions us for continued growth in the years ahead. Moving on to Slide 5. Let me begin by outlining the transformation at Rigel over the last five years. In 2020, Rigel was a single product company. TAVALISSE was our only approved product indicated for the treatment of adult chronic ITP. Our development pipeline was limited, and the company was operating with negative cash flows. Now at the end of 2025 and entering into 2026, we are fundamentally a different company. We now have three commercial products, TAVALISSE, REZLIDHIA and GAVRETO, approved for four different indications. Our development pipeline is led by R289, a dual IRAK1/4 inhibitor discovered at Rigel. R289 is currently being evaluated in patients with lower-risk MDS, a potentially large commercial opportunity with significant unmet need. R289 offers a novel mechanism, attenuating the hyperinflammatory signal present in lower-risk MDS and so may offer a new approach to lower-risk MDS and potentially other diseases. Later in this presentation, Lisa will speak to the encouraging results from our Phase Ib study that were presented at the ASH meeting in December. And our financial position is fundamentally different today. Rigel is profitable and has been since the third quarter of 2024. Since then, we have increased our cash position by more than $100 million. This progress reflects disciplined capital allocation, thoughtful portfolio expansion and consistent execution across operations. Now looking ahead to 2030, we plan again to be a fundamentally different company. We are building on the commercial momentum of our three commercial products while selectively pursuing late-stage in-licensing and acquisition opportunities to further expand our commercial portfolio. At the same time, we will continue to advance R289 in lower-risk MDS and potentially additional indications. These indications will be areas of significant unmet need and large commercial opportunities that again would be transformational for Rigel. As illustrated on Slide 6, Rigel has delivered strong net product sales growth since emerging from the COVID pandemic. Based on the midpoint of our 2026 net product sales guidance of $260 million, we are achieving a compound annual growth rate of approximately 35% since 2022. This performance reflects strong commercial execution and successful portfolio expansion. What is even more compelling is the opportunity ahead, driven by the growth of our current products, additional in-licensed or acquired products and particularly R289 in lower-risk MDS and other indications. These programs represent potentially billion-dollar opportunities that will expand our commercial portfolio in the 2030s and beyond. This strategy creates a clear roadmap for sustained growth and long-term shareholder value creation. Before I turn the call over to the rest of the team to discuss our other strategic objectives, I want to briefly highlight our approach to in-licensing and business development. Moving to Slide 8. We have a proven track record in business development, demonstrated by our acquisitions of REZLIDHIA and GAVRETO. Leveraging our existing commercial infrastructure, we efficiently incorporated both products into our portfolio with limited integration costs and operating expenses. As a result, a significant portion of those products' revenue have contributed to our profitability and cash generation. As we evaluate future opportunities, we are focused on differentiated assets in hematology, oncology or closely related areas. We are seeking late-stage assets that have completed registrational trials, are NDA-ready or under review or are already commercially available. These late-stage assets are targeted opportunities that would be launched within the next three years, ideally no later than 2028, after which we will begin to shift our focus to the potential launch of R289 in lower-risk MDS and other potential indications. Consistent with our prior transactions, we are prioritizing assets that leverage our existing commercial infrastructure, which will enable operational efficiency and thus be rapidly accretive and drive sustained cash generation for the company. And with that, I will turn the call over to Dave to discuss our strategic priority of growing our commercial business. Dave?

Thank you, Raul. On Slide 10, you'll see our three commercial products, TAVALISSE, GAVRETO and REZLIDHIA. Moving to Slide 11. We are thrilled to report full year results for 2025 and how our net sales have consistently grown over the last five years. In 2021, TAVALISSE was the only product in our portfolio, and we generated $63 million in net sales. In 2022, we continued to grow TAVALISSE and brought REZLIDHIA into our portfolio, launching the product in December. In 2023, the addition of REZLIDHIA and continued growth of TAVALISSE propelled us over the $100 million annual sales threshold. Then in 2024, we continued to grow those sales and added our third brand, GAVRETO, to our portfolio. And in 2025, we exceeded our expectations, delivering $232 million in net product sales, an increase of $87 million or 60% compared to 2024. This outstanding year-over-year growth was primarily driven by increased demand across our portfolio, which included the one-time favorable effect from increased patient affordability during the year and favorable gross-to-net dynamics, partially offset by lower inventory levels. To summarize, our strategy of focusing on both product and portfolio growth over the last four years has nearly quadrupled our net sales. And over just the last two years, that growth has accelerated as we've more than doubled sales. Our strategy to grow our commercial business is working, and I want to thank the entire organization for collaborating as one Rigel team to create such outstanding results. Slide 12 shows a summary of our fourth quarter commercial performance by product. For the fourth quarter, we generated a record $65.4 million, an increase of $18.9 million or 41% compared to the fourth quarter of 2024. First on TAVALISSE, I'm pleased to report another record quarter in which we generated $45.6 million in net product sales, an increase of 47% compared to the fourth quarter of 2024. TAVALISSE was approved in 2018 and is our cornerstone product, now reaching $45 million in quarterly sales, a true achievement for the team. For GAVRETO, we delivered $10.2 million in net product sales, an increase of 27% compared to the fourth quarter of 2024. GAVRETO became commercially available from Rigel in mid-2024. Following the successful integration of this product, we were able to maintain the sales level that was generated in the prior company's hands, and we have now grown it to be a stable contributing product in our portfolio. And for REZLIDHIA, we reported $9.6 million in net product sales, an increase of 29% compared to the prior year period. Since in-licensing this product in 2022, it's grown to nearly $10 million a quarter, substantial growth from a year ago, and we believe there is more growth coming. We have confidence that there is significant opportunity for REZLIDHIA because we believe it has important differentiators in the IDH1-mutated relapsed or refractory AML patient population, namely our compelling data demonstrating durable responses and our consistent efficacy results in the challenging-to-treat post-venetoclax setting. Finally, on Slide 13, we generated $4.4 million in revenues from collaborations in the fourth quarter, driven by the availability of TAVALISSE in global markets. TAVALISSE is commercially available in Europe under the brand name TAVLESSE, in Japan, South Korea and other parts of Asia, and in Canada and Israel via our partners Grifols, Kissei and Medison. Our partners continue to pursue regulatory approvals for TAVALISSE in new markets. And we continue to work on expanding access to our products in markets outside of the U.S. For REZLIDHIA, in 2024, we expanded our relationship with Kissei to include several countries in Asia for all potential indications, and we entered into an exclusive license agreement with Dr. Reddy's for all potential indications throughout Dr. Reddy's territory. These partners are now in the process of advancing REZLIDHIA in preparation for future potential regulatory submissions. We are pleased that access to our products is expanding outside the U.S. I'll now pass the call over to Lisa to provide an update on the advancement of our development pipeline. Lisa?

Thanks, Dave. I will now provide an update on our progress over the last quarter and plans for the year ahead. I'm on Slide 15. Our current hematology and oncology focus areas are the clinical development of R289, our potent and selective dual IRAK1 and IRAK4 inhibitor, and our strategic collaborations with academic partners to evaluate olutasidenib in clinical settings beyond relapsed/refractory IDH1-mutated AML. Our Phase Ib study of R289 in patients with relapsed or refractory lower-risk myelodysplastic syndrome, or MDS, is progressing well and updated data from the dose escalation part of the study was recently presented in an oral session at ASH. I'll provide an update on that study as well as our planned next steps for R289 shortly. For olutasidenib, we have a number of strategic collaborations to study olutasidenib in additional therapeutic areas. Through our collaboration with MD Anderson, olutasidenib is being evaluated in five clinical studies as monotherapy or combination therapy in patients with a variety of IDH1 mutation-positive hematologic malignancies, including AML, higher- and lower-risk MDS, chronic myelomonocytic leukemia, or CMML, and as post-transplant maintenance therapy. In addition, a study of olutasidenib in combination with co-targeted therapy in patients with relapsed or refractory AML with additional signaling pathway mutations is underway. Our second collaboration with the CONNECT Cancer Consortium and the Phase II TarGeT-D study is evaluating olutasidenib in combination with temozolomide followed by olutasidenib monotherapy as maintenance treatment in newly diagnosed pediatric and young adult patients with IDH1 mutation-positive high-grade glioma. The first patient was enrolled in the study in October. Lastly, we're also partnering with the National Institutes of Health and National Cancer Institute's MyeloMATCH Precision Medicine Trial Initiative. The planned study will evaluate olutasidenib in first-line IDH1-mutated AML and MDS. We're excited about olutasidenib's potential to provide a new treatment option in these underserved patient populations and look forward to seeing the data that these studies generate in the future. Now I'll discuss R289, our novel dual IRAK1 and IRAK4 inhibitor. Let's start with the treatment landscape for lower-risk MDS. I'm now on Slide 17. MDS is a clonal disorder of hematopoietic stem cells, leading to dysplasia and ineffective hematopoiesis. The main consequences for patients are anemia and transfusion dependence, which adversely impact their quality of life. In addition, infections, iron overload from transfusions and subsequent organ dysfunction all negatively impact the patient. Therapies used in the upfront setting include erythropoiesis-stimulating agents, or ESAs, if patients are eligible, or luspatercept. Luspatercept and more recently, imetelstat, are also approved for ESA-failure transfusion-dependent patients. Finally, while hypomethylating agents or HMAs are also approved, the percentage of patients achieving transfusion independence is low. With eight-week transfusion independence rates approaching 40% with luspatercept and imetelstat, there is still a need for safe, effective therapies for transfusion-dependent lower-risk MDS patients that are relapsed/refractory to or ineligible for ESAs. On Slide 18, you'll see the value proposition of R289 in lower-risk MDS. There are about 12,000 previously treated lower-risk MDS patients in the U.S. And as mentioned on the previous slide, there's a high unmet need for therapies in this disease area, particularly for transfusion-dependent patients. Dysregulation of inflammatory signaling is key to the pathogenesis of lower-risk MDS and IRAK1 and IRAK4 mediate this process. Blocking both IRAK1 and IRAK4 may suppress marrow inflammation and leukemic stem progenitor cell function and restore normal hematopoiesis. R835, the active moiety of R289, blocks toll-like receptor and IL-1 receptor signaling in vitro and was active in various preclinical models of inflammation. Clinical proof of concept of this anti-inflammatory effect came from a healthy volunteer study in which R835 markedly suppressed LPS-induced cytokine release compared to placebo. As a reminder, R289, which is currently being evaluated in the clinic, is the oral prodrug that is rapidly converted to R835 in the gut. R289 has Fast Track designation for the treatment of patients with previously treated transfusion-dependent lower-risk MDS and orphan drug designation for MDS from the FDA, giving the molecule an expedited regulatory pathway, potential priority review and seven years of market exclusivity upon approval. Both of these designations underscore the agency's interest in this rare disease, the unmet need of the patient population and the FDA's willingness to collaborate with Rigel in the development of R289. R289 has thus far demonstrated a promising clinical profile in our Phase Ib study with encouraging safety and preliminary efficacy data that were highlighted recently at ASH in December. On Slide 19, I'd like to quickly review the design of our multicenter open-label Phase Ib study in patients with relapsed/refractory lower-risk MDS, which aims to evaluate the safety, tolerability, PK and preliminary efficacy of R289 in this patient population as well as select a dose for future studies. The dose escalation phase evaluated six different R289 dosing regimens administered once or twice daily using a modified 3+3 design. In the dose expansion part of the study, up to 40 transfusion-dependent relapsed/refractory lower-risk MDS patients will be randomized to receive R289 doses of either 500 milligrams once or twice daily in order to select the recommended Phase II dose for future clinical studies. The first dose expansion patient was dosed in October. We anticipate that we will have sufficient data to make a decision on the recommended Phase II dose in the second half of this year. Once we've selected the dose, we will evaluate R289 in a cohort of less heavily pretreated patients who are relapsed/refractory to or ineligible for ESAs. Now I'd like to walk you through updated safety and efficacy results from the Phase Ib study with the data cutoff date of October 28 that were presented at ASH. On Slide 21, you will see the characteristics of the 33 patients enrolled in the dose escalation part of the study. The median age was 75 and the patients were heavily pretreated with a median of three prior therapies with around 70% having received prior luspatercept and HMAs. In addition, the majority of the patients had a high baseline transfusion burden. These characteristics are really representative of the lower-risk MDS population with the highest unmet medical need. Moving to Slide 22, we'll review the safety findings. Overall, R289 was generally well tolerated with a low incidence of Grade 3 or 4 cytopenias and infections. There was one dose-limiting toxicity reported, a Grade 3/4 AST/ALT increase at the 750-milligram daily dose level and no evidence of dose-dependent toxicity across the other dose groups. On Slide 23, the swimmer plot shows an overview of transfusion events by dose group, starting with the lowest dose group, 250 milligrams daily at the top. Red cell transfusions occurring over the 16 weeks prior to start of R289 are shown to the left of the colored bars, establishing the baseline transfusion frequency for each patient. All patients were transfusion dependent, except for two. The median time on therapy was 5.5 months, ranging from 0.9 months to nearly 28 months of treatment. To be evaluable for hematologic response assessment, patients must have been treated for at least 16 weeks. No response has occurred at 250 milligrams once or twice daily. Of 18 evaluable patients receiving dose levels of 500 milligrams daily or higher, six patients, or 33%, achieved red cell transfusion independence, or RBC-TI, lasting for eight weeks or longer. In four patients, RBC-TI lasted for more than 16 weeks and for three patients for more than six months. The median duration of RBC-TI was around 23 weeks, ranging from 9 weeks up to more than 24 months. Also, the median time to onset of RBC-TI was about two months, which is also encouraging. While this is a small data set, we're encouraged by these results given the highly refractory nature of these patients. Slide 24 presents a summary of the patients achieving RBC-TI. All patients had received two or more prior therapies, some had received experimental therapies and five of the six had received prior HMAs. For these patients, peak hemoglobin increases ranging from 2.9 to 6.1 grams per deciliter were also observed, indicating the potential of R289 to improve anemia. In summary, R289 was generally well tolerated with an encouraging safety profile and promising preliminary efficacy in an elderly, heavily pretreated lower-risk MDS patient population. On Slide 25, I will review the next steps for R289. We aim to complete enrollment of the dose expansion phase of the study and selection of the recommended Phase II dose for future studies in the second half of this year. We anticipate sharing topline data from the dose expansion phase by the end of the year. Once the recommended Phase II dose has been selected, we will evaluate R289 in a cohort of less heavily pretreated patients who are relapsed/refractory to or ineligible for ESAs in the same study. In addition, upon completion of the Phase Ib study, we plan to follow up with the FDA to discuss a potential registration study. With its mechanism of action, we believe that R289 has potential in other indications where the pro-inflammatory cascade plays a role, and we'll provide more details as our plans progress. Now turning to our partnered program with Eli Lilly. On Slide 27, I'd like to provide a short update on ocadusertib, the non-CNS penetrant RIPK1 inhibitor previously referred to as R552 that is being evaluated in an adaptive Phase IIa/IIb clinical trial in up to 380 patients with active moderate to severe rheumatoid arthritis. During the fourth quarter, enrollment in the Phase IIa part of the study was completed, and the trial is ongoing. Now I'll pass the call to Dean to discuss our financials. Dean?

Thank you, Lisa. I'm on Slide 29. We reported net product sales of $65.4 million for the fourth quarter, a growth of 41% year-over-year, including TAVALISSE net product sales of $45.6 million, a growth of 47% year-over-year, GAVRETO net product sales of $10.2 million, a growth of 27% year-over-year. Lastly, we reported REZLIDHIA net product sales of $9.6 million, a growth of 29% year-over-year. Our net product sales were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $19 million. We also reported $4.4 million in contract revenues for the fourth quarter, primarily consisting of $3.4 million of revenue from Grifols related to the delivery of drug supplies and earned royalties, $300,000 of revenue from Kissei related to the delivery of drug supplies, $300,000 in government contract revenues and $200,000 of revenue from Medison related to earned royalties. This brings our total revenue for the fourth quarter to $69.8 million. Moving to Slide 30. For the fourth quarter of 2025, our cost of product sales was approximately $6 million. Total costs and expenses were $46.6 million compared to $40.9 million for the same period in 2024. The increase in costs and expenses was mainly due to increased research and development costs, driven by the timing of clinical activities related to R289 and olutasidenib and higher personnel-related costs. Fourth quarter results include a nonrecurring income tax benefit driven by the release of the valuation allowance on our deferred tax asset. For reference, the valuation allowance is recorded against deferred tax assets when it's more likely than not that those assets will not be realized. Given our track record of profitability, projected operating income and positive outlook, we concluded that a release of the valuation allowance was appropriate as of December 31, 2025. While this release impacts reported GAAP net income and earnings per share, it does not affect our cash position or our day-to-day operating performance. In this context, for the fourth quarter, income before income taxes was $22.7 million compared to $15.2 million for the same period of 2024. Benefit from income taxes was $245.4 million in the fourth quarter, which was primarily driven by $245.9 million of noncash deferred income tax benefit, partially offset by state tax expenses. We reported net income of $268.1 million for the fourth quarter compared to $14.3 million for the same period in 2024. For the full year, cost of product sales was $19.6 million. Total costs and expenses were $168.8 million compared to $155.1 million for the full year of 2024. The increase in cost and expenses was primarily due to increased research and development costs, driven by the timing of clinical activities related to R289 and olutasidenib, higher personnel-related costs and higher cost of product sales. Income before income taxes was $121.8 million for the year compared to $18.4 million for the full year of 2024. Benefit from income taxes was $245.2 million for the year, which was primarily driven by $245.9 million of noncash deferred income tax benefit, partially offset by state tax expenses. We reported net income of $367 million for the full year compared to $17.5 million for the full year of 2024. We ended the year with cash, cash equivalents and short-term investments of $155 million compared to $77.3 million as of the end of 2024. Now for our financial outlook for 2026. We expect total revenue in the range of approximately $275 million to $290 million, comprised of approximately $255 million to $265 million in net product sales and $20 million to $25 million of contract revenues. We also anticipate reporting positive net income for the full year while funding existing and new clinical development programs. In closing, 2025 was a year of significant revenue growth and continued financial discipline for Rigel. We'll continue to work towards the key components of our growth strategy as we look to deliver on our financial guidance for 2026. With that, I'd like to turn the call back over to Raul.

Thank you, Dean. Moving on to Slide 31 as we wrap up. Our key strategic objectives for 2026 are clear: grow our commercial business, pursue in-license opportunities to further expand our portfolio and thus enhance cash generation, advance our development pipeline, particularly R289 and maintain financial discipline as we deliver another year of top line growth and positive net income. We are especially excited about our opportunity for R289. This year includes several anticipated milestones in lower-risk MDS, including dose expansion phase data expected at the end of the year. In addition, we are evaluating additional opportunities for R289, and we look forward to sharing further updates later in the year. In closing, the focused execution against our four strategic objectives has driven transformational growth since 2020 and culminated in a record performance in 2025. We believe this momentum positions us well for a strong 2026 as reflected in our financial guidance and for continued value creation the rest of this decade. With that, I will turn the call over to the operator for questions. Operator, we're now ready for questions.

The operator provided instructions. Our first question comes from the line of Joe Pantginis with H.C. Wainwright.

So first on the approved product growth. When you're looking at TAVALISSE, what do you feel the incremental growth drivers can be here right now since this is a relatively mature product? And then for GAVRETO, the way you described it, obviously, was a stable contributing product. I guess I would ask my question this way: how are the reintroduction efforts going to be able to look towards potential growth for GAVRETO?

Thank you, Joe. I'll ask Dave to comment on those two questions.

Yes. Thanks for the question, Joe. Obviously, last year was an incredible year of growth with TAVALISSE. It was our single largest year of growth ever. And as I said, demand was a driver of our growth for all of our products last year. But I will say that that was helped by a one-time favorable effect from increased affordability, which means that the elimination of the coverage gap happened last year. With that came an ability for patients with Medicare Part D to have improved affordability to move on to TAVALISSE. So that helped certainly last year, but that was a one-time effect. We won't see that kind of effect happening in future years. But we're going to do what we've always done with TAVALISSE, which is continue to grow new patient starts. It's a market of more than 14,000 patients in the second-line and later setting. There are a number of treatment options out there, but many doctors treat ITP. Our goal is to make sure we reach them with the message that TAVALISSE is an outstanding alternative for patients. They can take this drug and it can keep their platelet levels where a clinician and the patient want them to be so they can go on living their life. What we try to do is spread that message as far and wide as possible. We did some things last year that were very effective at spreading that message, such as piloting a virtual sales team because that's both efficient and effective in generating reach beyond the field team, and we saw good results with that. Those are the kinds of things we're going to focus on in 2026 and beyond to continue to grow new patient starts with TAVALISSE. We think that's really important. And then with GAVRETO, as I said, in the prior company's hands this was about a $28 million to $30 million product, and we generated over $40 million last year. We think that's great. A big part of our growth was having GAVRETO for the full year versus just half a year in 2024. Obviously, we won't have that timing advantage in 2026, but it shows how our strategy of in-licensing and acquisition is working. We'll continue some very targeted efforts there. We believe there are great opportunities with GAVRETO and will keep working to grow portfolio sales year-over-year.

Our next question comes from Yigal Nochomovitz with Citi.

I just had a few. I'm curious on your decision with regard to the dosing, the 500 QD versus 500 BID, pros and cons as far as which you would be more comfortable taking forward? What's your sense as to which would be more likely based on everything you know today? And then anything you can say with respect to business development in terms of getting closer to another asset? I know you obviously are looking at things all the time, and there's a lot to digest in terms of what the right fit is for your business. So if you could just comment as far as how that's going, please?

Thank you, Yigal. I'll ask Lisa to comment on the dose, and I'll take the business development question.

Thanks, Raul. Thanks for the question, Yigal. At the time we selected the doses for comparison in dose expansion, we wanted to be compliant with the FDA's Project Optimus. So we are doing the most robust dose selection possible. We compared the lowest effective dose, which was 500 milligrams daily, with the highest safe dose at that time, which was 500 milligrams twice daily. We don't really have a preference yet; we'll see what unfolds with the data. One could think that with BID dosing you may have more tonic suppression of inflammation instead of peaks and troughs, so that's one factor in favor of the BID potentially. But since both doses were active, as you saw with the ASH data, we're going to wait for the full data to decide.

Yigal, on your second question, we are looking at a great number of opportunities in hematology and oncology. We're in a fortunate place that many opportunities out there are of a size that would be appropriate for us. We're evaluating a multitude of opportunities on a constant basis. The difficulty is projecting exactly when one will fall into place and we get to a yes and sign the deal. But when you have enough opportunities in flight, one eventually does fall into place. We succeeded in acquiring GAVRETO in 2024 and REZLIDHIA in 2022. '26 is a year we hope to accomplish another transaction. If not, we will make a big effort to get it done. We're looking for late-stage opportunities that are about ready to launch, that are NDA-ready or NDA-filed or already approved, where a company of our size and scale could add value to the launch of the product. There are a number of things that look attractive to us, and we're continuously working toward that. We'll announce anything concrete when we have a press release.

Our next question comes from Ashleigh Acker with Piper Sandler.

So I just had one on R289. We know you're launching the exploratory study in post-ESA or treatment-naive MDS. We know that this represents a significant earlier-line population. Can you remind us what the strategic rationale is for exploring this population now rather than waiting for a registrational trial? And also, what kind of benefit are you aiming to show in this population? Anything you can frame in terms of response rates or durability would be helpful to have us thinking about this.

Thanks for the question, Ashleigh. The reason we're going to do that is that the treatment landscape slide I discussed shows that we started in a more heavily pretreated, high transfusion burden population compared to other agents on the market, such as luspatercept and imetelstat, which generated data in a population that were more or less post-ESA or ineligible for ESA transfusion-dependent patients. We're very encouraged by the data we're seeing thus far given the refractory nature of the patients. We're optimistic that as we move the drug into an earlier line of therapy, activity may be even better. That's why, once we get the recommended Phase II dose, we plan to open a cohort of less heavily pretreated patients to evaluate R289 in that population and get preliminary data.

On your second question, as Lisa said, the currently approved products have limitations. Luspatercept and imetelstat show roughly 38% to 40% response rates in fairly early patients; HMAs are about 18% to 20%. That leaves significant room for improvement. Having an agent like R289 with a very different mechanism, we think, will be beneficial to patients with low-risk MDS, including very refractory patients. As you heard from Lisa, about 33% of evaluable patients at doses 500 milligrams and above achieved transfusion independence in this small data set. That's a promising early result in a highly refractory population. We're optimistic the benefit could be broader, especially if we move the drug earlier in the treatment course.

Our next question comes from the line of Farzin Haque with Jefferies.

I have a couple. For R289, where are you at with enrollment in the dose expansion phase? Have there been any challenges in finding patients? And then can you clarify how much follow-up you would need before you meet with the regulators for the path forward?

Thanks for the question, Farzin. Enrollment is progressing. As I mentioned, we are aiming to select the recommended Phase II dose in the second half of the year, and we're on track to do that. In terms of follow-up, to be eligible for evaluation of red cell transfusion independence, patients should have been treated for at least 16 weeks before we can make that determination. Dose selection will be a combined look at PK, safety and efficacy data in terms of recommended Phase II dose selection.

Got it. And then quickly on the net product sales guidance, it seems a bit conservative given the growth we saw in 2025. Are there any specific inventory shifts or competitive headwinds or conservative market access assumptions that are factored into this outlook?

Yes, that's a good question, Farzin, and I'll be happy to take that. Listen, as I said, we're thrilled we grew $87 million to $232 million last year. That was driven by demand growth across all the brands and was helped by a one-time favorable effect from improved patient affordability and favorable gross-to-net dynamics. We also had GAVRETO for the full year versus half a year in 2024. So moving to 2026, we're still expecting double-digit growth, which is a strong expectation given we are working off a much higher base with all three brands and we don't have that one-time favorable effect of improved affordability. It will be difficult to replicate the same gross-to-net improvement again in 2026. We still believe we can continue to drive new patient starts with TAVALISSE after its single largest year of growth and realize the outstanding opportunity with REZLIDHIA. Those are challenges, but we think we have the ability to meet them. So I would say we're setting high expectations after a remarkable year, and we'll work every day to try to achieve those expectations.

I agree with Dave. The one-time effects of last year elevated our revenue to a different level. This year we're maintaining and building on that level. It will be incremental, double-digit growth rather than the 60% jump we saw last year. The patient affordability change helped a lot last year, and it's still beneficial now. Reaching profitability and generating cash allows us to invest in opportunities like R289, which we believe could be transformational.

Our next question comes from Kristen Kluska with Cantor Fitzgerald.

Most have been asked but maybe I could just ask one on the sales force. Given the big jump that you've seen in revenue in the last year or so, are there plans to ramp up the sales force further? Or do you feel most physicians have a good sense of your products and you have enough touch points?

Great question, Kristen. We consistently evaluate the impactability of all our brands and where we have the most opportunity to grow. Our sales force has been pivotal in spreading the word about TAVALISSE and REZLIDHIA and in communicating that GAVRETO is available through Rigel. We focus the team where the opportunity is. We're constantly assessing promotional effectiveness and have improved data-driven targeting over the last several years. We've incorporated innovative tools to better target where the business is. We believe we're right-sized and are calling on the right clinicians. Access to clinicians is challenging and getting harder, so we aim to be more impactful with the resources we have rather than expanding the sales organization at this point.

There are no further questions at this time. I'd like to pass the call back over to Mr. Raul Rodriguez.

Thank you very much, operator. Everyone, thank you for joining us on the call today and for your continued interest in Rigel. I'd also like to take the opportunity to thank our employees for their ongoing dedication. Their innovation, integrity and steadfast commitment to patients has driven our evolution as a company and has expanded access to important therapies for those living with hematology and oncology conditions. 2025 was a tremendous year for Rigel, marked by strong growth in our commercial portfolio, advancement of our development pipeline and a solid financial position. These traits put us in a favorable and very select position within the biotech industry, and we look forward to updating you on our continued progress. Thank you, and have a good evening.

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