Conference Transcript - RIGL 2026-06-03

Tash Kapadia, Analyst — Investment Banking Team, Jefferies

Good morning, everyone, and welcome to the Jefferies Global Healthcare Investment Banking Conference. My name is Tash Kapadia, and I'm with the Jefferies Investment Banking Team, and it is my great pleasure to introduce Raul Rodriguez, CEO of Regal.

Raul Rodriguez, CEO

Thank you so much, and thank you for the invitation to speak at the conference. Thank you to Jefferies, always well-organized. Thank you for the weather. Thank you for the Knicks, all of that. Great job. So please read this important forward-looking statements.

Tash Kapadia, Analyst — Investment Banking Team, Jefferies

They're also available on our website for you to review.

Raul Rodriguez, CEO

Let me start by saying I'd like to take you on this presentation and share with you Rigel's transformational growth strategy. This growth strategy has four interlocking strategic objectives. Grow our commercial business. Enlicense and acquire other new products to continue to grow the commercial business even faster. advanced our internal development pipeline that within it has what I think are truly transformational large commercial opportunities I'll share that with you couple that with financial discipline such that we're able to do this ourselves that is growing the commercial business adding the products to it making sure that those are commercialized in an efficient manner generating substantial cash that allows us to advance our own pipeline is the strategy of the company this is a strategy we've had in place over since 2020 I'll show you the results in 2020 we were a single product company Tavalis in ITP only we had a limited development pipeline and we were consuming cash fast forward five years to 2025. In 2025 we had three commercial products, four indications. R289, our product in low-risk MDS, having some very early but very positive signs of efficacy and safety. And we were profitable. Since 2024, Q3F24, where we turned profitable, we've generated in the next five quarters over a hundred million in cash. A dramatic turnaround from five years earlier. A very different company at the end of 2025 relative to 2020 breathtaking what's more breathtaking is a transformation we're undergoing now in 2030 our objective is to have at least four commercial products and I'll tell you about the new edition in a minute continue to do a further in licensing and acquisition our two eight nine our product and low-risk MDS should be at about hitting the market? Other indications to follow with that molecule in those programs. Again, a very different company in 2030 than we are today. It's only about three and a half years from now, but I think we've already made great progress in moving towards that model of a company. Successively, the company has transformed itself with this strategy, and I'll share with you each of these interlocking objectives and how we're doing against each of these in this presentation. Here's what the sales have looked like historically. Coming out of COVID, no one knew what the world would look like. What it looked like is pretty dramatically positive. 35% CAGR growth from 2020 to 2025, 22 to 25. We're guiding for continued growth in the base business. And now with the addition of the new product that we announced our in-license a couple weeks ago, substantially more growth going into the future potential. As our own products hit the market, we expect a substantial inflection, as this graph implies. Let me start by telling you about growing the commercial business. The commercial business consists of three current-based products, Tavalis, our own initially discovered product, Fostamatib. It's indicated for the treatment of adult chronic ITP in the U.S., and we sell it via partnerships outside the U.S. I'll skip to Reslydia. It's indicated for the treatment of mutant IDH1 AML in the second line and beyond. We unlicensed that product in 2022. And then more recently, Gavredo. We unlicensed in 2024, and it's indicated for red fusion positive non-small cell lung cancer and thyroid cancer. All three of the products, as you see here, are doing nicely. In Q1, we grew Tavalis 31%. That's pretty remarkable, given that the product now is entering its ninth year of life. ResLydia, 31% as well. We think there's room for improvement even beyond this, and this is a product for growth for us. And we're doing some additional studies in various different areas that might elucidate that potential. And Gavretto, a very stable product we acquired. It's contributed nicely to the portfolio of the molecule, though the growth, as you see there, is much more modest. outside of the US we use partnerships to sell these products with Tavalis we did partnerships with Griffles in Europe where it's available across the continent in Asia with Kise who has approvals in Japan and then now other Asian countries and then more recently we conducted a deal with Knight pharmaceuticals where they have Latin American rights the product is now approved and launched in Mexico and now approved in Brazil and other countries to come as well brazilidia we partnered with kisei in asia japan and they're moving that program forward and we've also integrated an agreement with dr ready to sell it throughout latin america so in the future the products will be available in all of those geographies as we move forward with approvals there the revenue is nice it comes in it's increasing in revenue as more and more countries approve the product and the product is launched let me tell you about in licensing and business development where we've been very busy so our goals here in business development we've been very clear for the last couple years we're looking for differentiated products in hematology oncology and related areas in 22 we did reslydia 24 we did gabretto and then in 26 we announced that we've been licensed bepanu from pfizer arvenous and i'll tell you much more about that product, it's indicated and approved for the treatment of second line or beyond ER positive HER2 negative ESR1 mutant metastatic breast cancer patients. We needed these acids to be late stage. That is, we wanted them to launch in 26, 27, and 28. If it's closer to 2030, that's when our own products should be hitting the market, and that'll be the focus then. So this asset launching in mid-26 obviously meets that criteria. We also needed it to be synergistic with our current capabilities and infrastructure. That is, we didn't want to grow the organization very much in order to sell that asset. If we needed to do that, it means it's more expensive for us. We wanted something that leverages our organization very well. So if you have something that's launching soon that's a sizable product that leverages our organization very well it means that that product is accretive rapidly and that's what we're trying to get at rapid cash accretion with this so in turn we can generate more cash in turn we could grow the business further and develop additional indications for our larger opportunities coming in the pipeline But Vepanu achieves all of those objectives, and I'll take you through why we believe that and why we're so excited about this commercial opportunity. Vepanu has potential to truly transform our portfolio. Unlike ResLydia and unlike Gavretta, when we acquired those products, those products were secondary to Tavalis, our larger product. This is different. this is our largest potential product and this will be the key commercial focus of our commercial medical affairs and the rest of the organization this is our first call our most important call and the driver of growth for the company in the near future it's very different than those earlier ones in that regard is the first and only FDA approved protec I'll tell you more about that because that is incredibly exciting with this new technology that now comes to bear in this market and we're the first to bring it to patients incredibly proud of that in addition to the unique and novel mechanism of action we think it has potential to be an important new therapy in the second and third line ER positive HER2 negative ESR1 mutant metastatic breast cancer market we have the proven capability to launch products we've launched one in 22 we've launched one in 24 we're ready to launch this in 26 we've done this before repeatedly in fact one of the most compelling arguments to Pfizer and Arvinas as to why Rigel is that we know how to launch products in Hemonc we've done it we've done it successfully we've done it repeatedly we've done it recently the people in that room in front of them said I did that and that was compelling to them because their key is to get this product to patients and I thank them substantially for all the work they did to getting the product to this point and for entrusting us to take the product from here and make it available to the patient the last step in order to fulfill the promise of it has potential to be our largest product and I think I won't be more specific than that but you'll see given the market size the data underlying this product why we believe strongly in that. Here are the terms of the deal that we did with Arvinus and Pfizer. A $70 million up front, $15 million in near-term transition-related activities as technologies and capabilities are transferred from them to us. And then we have some additional milestones, regulatory $60 million, commercial milestones, which are, you know, well in the future, $260 million, Tiered royalties starting in the mid-teens and going to the mid-20s. And Pfizer and Arbenas were smart enough, I think, to say, we'll complete the trials that we're currently undergoing. That's the most efficient way to get data out. And you pay some of the cost of that. So we're contributing up to $40 million over the next four years for the continuation and termination of those trials. Obviously, they'll provide us with the information. The information is ours. And this includes information on combination studies, which we think might be very valuable as we commercialize Bepanu. This mechanism is so cool. This is a first of the ProTACs that are coming. There are numerous other products in development that are ProTACs. What a ProTAC is, is a molecule that has two ends, hetero-bifunctional molecule. One end ties to the target protein you want to get rid of. In this case, the estrogen receptor. The other end of the molecule binds with ubiquitin E3 ligase, a structural molecule in the cell. That targeting then brings both the ER receptor, in this case, or the protein you want to get rid of, and the E3 ligase in close proximity to each other. Because of that, there's what's called a tagging or ubiquitinization of the target protein you want to get rid of, the ER receptor in this case. After that is polyubicurtonated, it is then taken to the proteasome for degradation and destruction. The molecule Vepteg is then released back into the cell to do this all over again. Effectively, it's kind of like the rumba of the cell. It goes around cleaning ER receptor molecules that are doing damage in the cell and doing this repeatedly. One molecule Vepteg in the cell could do this many times, as opposed to other mechanisms that inhibit where they're just more limited in what they can do. It's a great technology. It has tremendous potential. Incredibly proud to be the first company to bring this to market. So let me tell you a little bit about why we got so excited about this molecule. So first a little bit about the market. Breast cancer is a very, very large market, as you all may know. There's about 170,000 cases of metastatic breast cancer in the U.S. About 120 of those are ER-positive, HER2-negative, 70%. Of those, about 40% of those, or about 47,000 or so, are ESR1-mutated patients, 47,000 currently. Only 60% are diagnosed, though. That rate is increasing. As diagnosis of this and genotyping increases, so do the number of patients that are diagnosed. so currently that's at about 28,000 and those that are treated is about 20,000 that number is going to grow as diagnosis increases and more more available agents are available in this category this this mutation the ESR mutation occurs because of prior exposure to endocrine therapy and CDK4 6 inhibitors that are used in the early lines of therapy so approximately 20,000 today. We project that it will grow nicely. This is well over a billion dollar opportunity. A sizable opportunity and I think this product will compete successfully within that opportunity. Let me tell you a little bit more detail about that. So, a very dynamic market setting. One point that I want to make sure you take away from this is that primarily these patients are treated in the community setting. In community hematocenters. 80% of them. And that's where our focus is commercially with our current drugs. So we're well positioned to address that oncology community. As you see here, there's still substantial numbers of patients that are being treated with chemotherapy. But tremendous growth with the current oral surge as these increased. More so in the second line, as you see here, than in the third line. I think this product will compete successfully in the chemotherapy segments you see here. both second and third line, against Fluvestrin, an older SIRD, that's exactly what we compared the drug to in the clinical trial that led to a registration. I'll show you that data. This product is substantially better than Fluvestrin, per the data that I'll show you in a second. And I think it has benefits that compete successfully with the other oral SIRDs that are available now, and in the second and third line will be available in that category coming. And here's why. Proven efficacy. We had significant improvement in progression-free survival in these patients over flubestrant. We had five months versus their 2.1 months. That's a delta of 2.9 months. That's better than just about anything in this market. That is a nice improvement in efficacy over that standard of care. Most impressive here is also the safety profile, where we've had low incidence of GI toxicities. Diarrhea is very common here, not with this drug, and that separates it from the others. The discontinuation rate, only 3%. The dose reduction rate, only 2%. This is a drug that is very well tolerated. I dare to say the best tolerated drug in this category. as a result of that as the KOL that discussed this drug and this data in our conference call a couple weeks ago Dr. Erica Hamilton said this is a drug that really would combine well with others and that's an opportunity for Rigel and it's an opportunity for clinicians to consider that as they treat these patients that's an exciting opportunity with this drug it works and plays well with others once patients are on it they generally don't get off of it because of diarrhea which is a big problem with others very different because of because of that and the study we did that was done by our colleagues at our venus and pfizer was in patients that were very much true to life all of them had cdk4-6 inhibitors on board as an example as is you know as is typical in this market so very much real world setting to the u.s market so i think that'll help us craft this argument well with clinicians and we are ready to launch this it says here august september but i think we'll be ready to launch as early as august and so we're delighted by that our manufacturing is is working on getting this transition done so that we can do that we are waiting currently for hartscott rodino clearance and that's the thing that should come in the next two weeks we don't expect the problem there and then the whole system will grind into gear to get us get it done CMC our distribution system network is already in place we'll leverage that we'll leverage our relationships with payers and GPOs and other academic and community providers we're training our sales our medical affairs teams we're training everyone in the company to help launch this product. We've done this before. We know what to do here, and we are doing exactly that for this opportunity. It's a larger opportunity, and the excitement amongst the company is incredible for doing so. We were just at the ASCO meeting this weekend. There was a lot of interest in this and a lot of good discussion on the medical side, particularly where we have ability to discuss this more fully with clinicians. So we're excited about the interest amongst the community of doctors we've already spoken to and their interest in learning a good deal more we're able to provide that to them in the short term so this is going to be fantastic i i just can't wait for this this is this is great you'll hear more about this in the coming weeks so with that let me shift there over to our internal pipeline because i think the opportunity there is incredibly exciting and incredibly large our focus is r289 our iraq internally discovered IRAC 1 and 4 inhibitor, which is currently in a Phase 1B study for patients with relapse refractory lower-risk MDS. And what we're excited about this is because of this. This is the treatment landscape. Now, low-risk MDS, as you may know, is a disease of inadequate hematopoiesis in the bone marrow. For some reason, these patients aren't able to produce adequate amounts of red blood cells. And it's largely due, in many cases, to a cytokine storm that's occurring in the bone marrow. This elevated cytokine storm in the bone marrow crowds out normal hematopoiesis. So these patients are anemic, and they require transfusions on a regular basis, as often as every other week, in order to survive. Failing those transfusions, they go on to ESAs. That's common. Failing that, they go on to Luspatercept is the most largest drug in this category. It's on a run rate of over $2 billion. It's a successful drug, and it's largely used in this post-ESA market, a very successful drug. However, Luspatercept only provides 38% response rates. That is, 62% of patients who get to it don't have a benefit. There's substantial room for improvement there. Failing loose spattersept, they go on to HMAs. HMAs, only 18% or 20% response rate. That is, 80% of the patients on HMAs do not see a benefit. Tremendous opportunity for improvement here. So what we've done is conduct, we think that we are possible in all of these segments. Post-HMA, post-leuse spattersept, certainly. There's really nothing there. and the hurdle is just 18%, we think we can beat that. In the middle here, post-Luce-Patercept, pre-HMA, that's a very large market. Like I said, 60% of Luce-Patercept patients do not succeed. It's an over-a-billion-dollar market opportunity in that segment. And pre-Luce-Patercept is also a multi-billion-dollar market. As I said, Luce-Patercept itself is $2 billion and only provides 38% response rates. So there's significant opportunities across the spectrum here. We're conducting a study. Let me just go through a couple of slides. A couple of key data points here. 12,000 patients with lower-risk MDS that were previously treated. The mechanism of dysregulated inflammatory signaling in the bone marrow is what characterizes this. Our product addresses that by inhibiting the toll-like and IL-1 family of signaling. And we have plenty of animal data to demonstrate this. And we've also done a human clinical trial where you take normal healthy volunteers, you give them an LPS protein challenge, you create a cytokine storm in their body. This is done in a hospital, so everyone's safe. And then we're able to show that with this molecule or its active in acetyl moiety, we're able to reduce that substantially in a dose-dependent manner. We have FastTrack, we have orphan drug designation, and we have really promising early data that I'll share with you. So, this is the study that we've in the middle of conducting. We completed the dose escalation part of the study and reported that data at the ASH meeting just passed, and I'll share with that with you in a second. We are currently enrolling the dose expansion phase. We've taken two doses, 500 milligram QD and 500 milligram BID, and enrolling up to 20 patients in each of those to compare those two doses to select one to move forward into a registrational program. That enrollment is going on plan, and our plan is to have that data from the dose expansion phase at the end of the year, most likely at the ASH meeting. In addition, once we have that dose selected, which will be in the second half, we will do a little study in the pre-Lucepatercept area to see how well we do there as well, because we also like to explore that opportunity. So this is very exciting. It's very exciting because of the results that I'll show you in the first part of the study. And here's what this showed. I apologize for the very small and very data-dense slide. This is on our website, so you can look at it in more detail. But I'll summarize for you. We studied in this study very refractory patients at the extreme right on that landscape slide. And what we saw is that it was well-tolerated. The incidence of grade 3, 4 cytopenias and infections was low, and above 500 milligram QD doses in patients that were transfusion dependent, 18 of those, we saw six responders, 33% respondents rate in those patients. Just to remind you, in a less patient, less refractory patient population, the HMAs provide only 18 or 20 percent response rates. This is better in a more refractory patients. In Luspatercept itself, only 40 percent in a very early patient population. So we're excited about this 33 percent, given the nature of the patients that we've studied. It gives us hope and really excitement about moving earlier and showing even better data into the future. So here's what's next. Complete enrollment of that dose expansion phase. Select the recommended phase two dose for future studies, including a registrational one. Share this top-line data at the end of this year. Like I said, likely ash. And start this exploratory cohort of earlier patients to see how well we do there. and discuss with FDA what the registrational path is likely to be. We'd like to initiate the registrational study in 2027. In addition, later this year we'll also share with you what other areas this mechanism might be useful in hematology and oncology and our trials that we're going to be starting in those areas as well. So it's not just low-risk MDS in a panel of different segments. It's also additional indications where this mechanism may have utility. So a couple words in the last few minutes on financial discipline. We've done very well in growing the business over time. As you see here, Q1s are always challenging. Every Q1 is always a difficult one. But we usually grow out of it very nicely. We expect to this year as well. Nice contract revenue as well coming from our business. And we're profitable last quarter, Q1. Not surprised that we had to pay $3 million in taxes, as you see there that we didn't last year. But barring that, really a great quarter, last quarter, profitable, and we're delighted by that. And here's our guidance that was prior to this tech in license. We'll give updates on this on a regular basis going forward. And so we're in a great place financially, a very strong place. We used our cash on hand. We'll use our cash on hand to conclude this transaction and pay that upfront payment. I mean, it's a testament to the financial strength of the company where you can bring in a major product, perhaps your largest product, that's going to drive sales in the near term substantially, and just do it out of cash. That's a fantastic place to be as a company. So, to conclude, a few things. We're going to continue to grow our commercial business. First amongst those, and it's not on the slide, is launch Bepa Nu successfully in August, most likely. We're well positioned to do that. We're working hard on that. Typical launch is about a 12-month process. We have three months. But we've done this before. So we can do this and do it successfully. You know, the in-license of F&U really a major step forward as an accomplishment for us for this year. But we'll continue to look at different things for the future. Maintaining financial discipline is key, even through the launch, so that we generate substantial revenue or cash from this in-license and the overall business. And importantly, continue to advance the R289 program in low-risk MDS second half of this year, provide the data this second half of the year, and then initiate other clinical studies in other areas where the mechanism is fit, all of which should be transformational in size. that is much larger than anything we have on hand so with that I'd like to thank you for for your interest in Rigel it's a great place it's a great first half of the year for us and we're looking forward to more in the second half thank you so much