Earnings Call Transcript - RIGL Q2 2021

Operator, Operator

Greetings, and welcome to Rigel Pharmaceuticals’ Financial Conference Call for the Second Quarter of 2021. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce our first speaker, Dolly Vance, who is Rigel’s Executive Vice President, Corporate Affairs and General Counsel. Thank you, Ms. Vance. You may begin.

Dolly Vance, EVP, Corporate Affairs and General Counsel

Welcome to our second quarter 2021 financial results and business update conference call. The financial press release for the second quarter was issued a short while ago and can be viewed along with the accompanying slides for this presentation in the News & Events section of our Investor Relations page on our website, www.rigel.com. As a reminder, during today’s call, we may make forward-looking statements regarding our financial outlook and our plans and timing for regulatory and product development. These statements are subject to 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, 2020 and subsequent filings with the SEC, including our Q2 quarterly report on Form 10-Q on file with the SEC. Any forward-looking statements are made only as of today’s date, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. At this time, I would like to turn the call over to our CEO, Raul Rodriguez.

Raul Rodriguez, CEO

Thank you, Dolly, and thank you, everyone, for joining us on our second quarter 2021 conference call. Also joining me today are Wolfgang Dummer, our Chief Medical Officer; Dave Santos, our Chief Commercial Officer; and Dean Schorno, our CFO. Now beginning on slide five. During the second quarter, Rigel continued to make good progress across all of our key value drivers, as you see on this page. While some of the headwinds of the pandemic began to subside, the opportunity to address the pandemic remains very real and very near term. We'll discuss this during our call. In ITP, we had very good growth relative to last year, as well as a substantial improvement over Q1 with a 38% increase in net sales. Dave and Dean will describe our net sales trend in more detail. Dave will also describe how we're increasing the size of our sales force to better address our heme and Hem-onc customers in ITP and to prepare for the potential opportunity in warm autoimmune hemolytic anemia, or AIHA. We made important progress in warm AIHA. We have now enrolled 80 of our targeted 90 patients in this trial. We added eight patients in the last three months. This enrollment progress puts us closer to our goal to be the first approved product for the treatment of warm AIHA with the potential to capture a substantial share of this significant market opportunity. We have also made excellent progress in our COVID program with fostamatinib, which has the potential to provide a much-needed therapy for hospitalized COVID patients. In Q2, we reported positive top-line results from our Phase II clinical trial conducted in collaboration with NIH and Inova. Wolfgang will provide a brief overview of these exciting and potentially impactful results with an update on our other COVID clinical trials. In late May, we filed the EUA with the U.S. FDA and are awaiting their decision. Our own Phase III trial in hospitalized COVID patients has enrolled very quickly, reaching over 150 patients, nearly half the targeted 308 patients, with 90 patients enrolling in just the last two months. We are delighted to be included in the NIH-sponsored ACTIV-4 host tissue study in hospitalized patients with COVID-19 and see that the first patient has already enrolled. On our earlier programs, we received FDA feedback on our low-risk MDS study which we have incorporated into our Phase I/II study protocol. We look forward to starting this with our R289 which is a prodrug of our R835 molecule. With our RIP1 inhibitor program, we have two efforts moving forward with our partner Lilly. We are working on entering a Phase II clinical study with R552, a systemic molecule. We're also advancing our CNS penetrant molecule which is in preclinical studies and has potential in indications such as Alzheimer's and ALS. In all, we had a very good quarter across all of our key value drivers. While we're still navigating through some of the COVID headwinds in some areas, we hope these will subside during the second half of the year. The opportunity to address what is a substantial need in COVID remains, and we are committed to the patients who are suffering and the clinicians who are treating them as well. Today, we'll start with Dave's discussion on our commercial progress and expansion, then followed by Wolfgang's update on our clinical programs and then Dean's financial update. Dave, to you.

Dave Santos, Chief Commercial Officer

Thank you, Raul. And good afternoon. I'm happy to say that I'm on the line from the road today as I attend our summer sales meeting. It has been terrific to spend time in person with the highly talented members of our commercial team, and I can report they're all quite enthused about being together with one another and their customers. That will be a theme of my presentation this afternoon as our return to field continues, and we're able to make an even greater impact on our customers and their patients. Before I begin, I would like to thank the entire commercial team for their commitment and hard work throughout the quarter to continue expanding our impact with TAVALISSE. I am very proud of our return to growth in Q2. I would now like to move on to slide seven, where you will see that our FDA-approved indication is for adult patients with chronic immune thrombocytopenia, or cITP, who have had an insufficient response to a previous treatment. Moving to slide eight. We produced Q2 net product sales of $17.1 million, a 14% increase over the same quarter last year. We also achieved our highest quarterly volume to date of 1,905 bottles. While some of that bottle volume was a return to normal inventory levels in our distributors during Q2, we were very happy to see positive trends in bottles shipped to patients and clinics as the quarter progressed. The graph on the left depicts our quarterly bottles shipped to patients and clinics since 2019, allowing you to compare our 2021 demand volume to last year and 2019. You will see that our demand from patients and clinics has grown in every quarter versus the prior year. In Q2, we delivered 6% sequential growth over Q1 and 12% year-over-year growth compared to Q2 of 2020. We are very encouraged by this upward momentum in demand and believe it will continue to grow as clinics reopen and we can increase our in-person engagements with customers. And why we believe that is depicted in slide nine. On the left side, you will see the progression of our sales force interactions through the first two quarters of this year. The blue bars represent the virtual interactions and the orange bars represent our in-person interactions. We have seen significant growth in overall interactions throughout this year, and the biggest driver for this is the increase in in-person interactions in Q2 where we nearly tripled the number compared to Q1. In fact, as you can see from the dark blue line, our percentage of in-person calls has grown significantly since Q1. In Q2, it was great to see that half of our interactions were in-person. Importantly, we have significantly accelerated our in-person interactions without seeing any significant reduction in virtual interactions. Our team is doing a great job leveraging every opportunity available to make in-person sales calls, hold live speaker programs and attend live conferences where they can see their customers. All of these interactions are contributing to broader reach among clinicians and the resulting stronger demand for TAVALISSE. To build on this trend, as shown on slide 10, we made the strategic decision in Q2 to expand the size of our commercial organization to extend our reach to more customers and accelerate awareness among prescribers, particularly as we have more opportunities to see them in person. We're expanding 40%, from 39 to 55 territories, giving us the capacity to call on the majority of prescribers who treat ITP and reduce travel time for our team, allowing them to call on their customers more frequently. Through market research, we continue to see physicians respond positively to the efficacy messages we have developed with TAVALISSE. But with our previous sales force size, as well as the constraints caused by the pandemic, we were not able to reach as many clinicians as we had hoped. We believe that our sales force expansion will significantly improve awareness, and get TAVALISSE top of mind for clinicians when they see a patient and are ready to start or switch therapies for ITP. You will see on the bottom of this slide that we've already made strong progress in recruiting and hiring our new team members, and we expect that all territories will be operational by the end of next month. Lastly, on slide 11, I want to highlight the outstanding tools we have for our sales force to spread our efficacy message, particularly in earlier lines. First, on the left, as you may recall, we have been actively promoting our post-hoc analysis highlighting high response rates in earlier lines. We expect that as our teams make more in-person calls, the awareness and memorability of this data will continue to increase. Secondly, we will be implementing well-researched and effective messaging based on our five-year data showing meaningful platelet increases that are highly durable over time. In fact, 70% of patients sustained clinical benefit over time to platelet counts of 30,000 or higher, and this was seen for some patients beyond four years. We believe this will augment our existing efficacy messages nicely and look forward to seeing more and more clinicians respond with new patients on TAVALISSE. In summary, we are seeing demand for TAVALISSE increase as we engage more customers with our compelling efficacy messages. By implementing our expansion with talented and experienced sales team members and equipping them with more powerful messaging on the efficacy of TAVALISSE, we are well poised to accelerate growth as we move into the fall and final quarter of the year. Thanks for your attention, and I will now turn the call over to Wolfgang.

Wolfgang Dummer, Chief Medical Officer

Thank you, Dave. Let me start with warm autoimmune hemolytic anemia. Slide 13 gives you a brief update on our ongoing Phase III study. Despite some continued disruption due to COVID-19, we continue to steadily randomize patients into the trial. As Raul mentioned, as of today, we have 80 patients randomized of our target of approximately 90. 53 of those patients have already reached 24 weeks, and the vast majority of those have rolled over into the extension study as well. As we are in the final stages of enrollment, we are looking forward to the upcoming pivotal 24-week data readout. With no therapies near FDA approval, a significant unmet medical need remains, and the opportunity is large. Fostamatinib is in the advanced stages of Phase III development and would be the first to market in this indication. As a reminder, fostamatinib has FDA fast track and orphan drug designation. Let's now switch gears to our COVID program for fostamatinib, slide 15. A little over a year ago, we began to explore the potential of fostamatinib as a treatment for COVID-19. It started with external research from the University of Amsterdam, MIT, and Harvard, which provided compelling experimental evidence that fostamatinib might be beneficial in COVID-19 disease. This has raised strong interest by external clinical institutions, such as the NIH, NHLBI, and the Imperial College of London, to take fostamatinib into COVID-19 patients. We've shared with you the positive outcome from the NIH-sponsored Phase II in April. Based on that data, we have filed for an emergency use authorization late May, which is currently under review. We also have a Rigel-sponsored Phase III study ongoing, which is progressing well. An update on that later. Furthermore, the NIH has chosen fostamatinib as one arm in a large randomized Phase III trial called ACTIV-4 to provide additional data on fostamatinib in severe hospitalized patients. As we can all see with new virus variants evolving and vaccination rates plateauing, there remains a clear need for options to treat COVID-19 disease and improve outcomes for hospitalized patients. Slide 16 shows you the various patient populations covered with our clinical program. The recent data from the NIH included patients with 5, 6, or 7-rating on the widely used 8-point ordinal scale, which are the most severe patients. This is of special interest because these patients are presumably the hardest to treat. The newly initiated ACTIV-4 Host Tissue Phase III study covers a similar patient population. The Imperial College of London study in our Phase III clinical trial will include milder patients with scores in the 3, 4, and 5 range, and we'll investigate if fostamatinib can prevent progression of mild patients to severe disease. These clinical trials are evaluating fostamatinib in a wide range of COVID-19 patient populations. Let me remind you of the key takeaways from the recently completed Phase II NIH study on slide 17. The study enrolled 59 patients randomized 1:1 to fostamatinib plus standard of care versus placebo plus standard of care. The primary endpoint was safety as measured by the incidence of serious adverse events. To fully appreciate the primary outcome, you need to remember that the first question in the study was, is it safe to add fostamatinib on top of standard of care, such as dexamethasone and remdesivir? Given fostamatinib's favorable safety profile, the hypothesis was that the rate of serious adverse events in both groups would be about the same or similar, which would have met the safety goals already. However, the incidence of serious adverse events turned out to be cut in half in the fostamatinib group compared to standard of care alone. Given that several of the serious adverse events in the standard of care group were COVID-relevant hypoxemia events, this improved safety outcome is already a good surrogate for efficacy. There were three deaths in this trial. All three occurred in the standard of care alone group. There were no deaths in the fostamatinib group. It is also worth noting that there were four patients, two in each arm, who entered the study intubated and on mechanical ventilation. The two patients in the placebo group both deceased, while the two patients on ventilation in the fostamatinib group could be extubated and survived. That is quite remarkable given the high likelihood of death once the patient needs to be intubated and mechanically ventilated. There were multiple other secondary efficacy endpoints in the study, and I can tell you that they all consistently favored fostamatinib, such as improvement in ordinary scale, days on oxygen, as well as number of days in the intensive care unit. The clinical findings were also consistent with improvement in objective lab measures such as NETosis, C-reactive protein, Ferritin, or D-Dimer. We see significant improvements in these biomarkers, which are well accepted as relevant to indicate inflammation and blood clotting in COVID-19 patients. All these effects are in addition to remdesivir and dexamethasone, which is remarkable. On slide 18, you see more detail on our Rigel-led Phase III study. The study includes hospitalized patients with mild disease who have certain risk factors to develop more severe disease. If positive, this trial could be the basis for potential label extension for fostamatinib to treat patients with COVID-19. The study is conducted at approximately 30 sites in the U.S. and South America, where COVID continues to be a big issue. The study is enrolling rapidly, and as of now, we have over 150 patients enrolled. We currently expect to complete enrollment before the end of the year. On slide 19, you can see an overview of the NIH ACTIV-4 trial. As we announced in late June, fostamatinib was selected for the study. The trial is evaluating four different treatments, including fostamatinib in hospitalized patients with COVID-19. The patient population is similar to the NIH Phase II study that I showed you earlier and will enroll approximately 300 patients in each arm. The master protocol is designed to be flexible to allow for stopping and adding new therapies based on pre-planned utility analysis in each arm. The trial will be run at more than 50 sites and is currently recruiting patients. The first patient treated was announced by the NIH on July 22. In summary, on slide 20, we have the completed NIH Phase II study with the data submitted to a peer-reviewed journal. Rigel submitted an EUA in late May, and we are awaiting a decision from the FDA. Our Phase III study continues to enroll patients and has already enrolled over 150 patients to date. The NIH ACTIV-4 host tissue study has started and is recruiting patients, and the Imperial College of London medicine investigator-sponsored Phase II study is ongoing and has enrolled about 125 patients so far. These studies will generate a lot more data, which will be incredibly valuable for exploring fostamatinib in influenza or other non-COVID-related acute respiratory distress syndromes. Now let's turn to our pipeline programs, IRAK1/4 and RIP1, slide 22. The IRAK1 and 4 pathways are promising targets in inflammation-driven autoimmune diseases, as well as certain Hem/Onc conditions like low-risk MDS. R835 is a dual inhibitor of both IRAK1 and 4, which in preclinical study showed more complete suppression of inflammation compared to a selective inhibitor of IRAK4 only. As discussed previously, we believe the IRAK1/4 pathways are ideal targets for treatment of low risk MDS, which is caused by inflammation in the bone marrow that leads to bone marrow deficiency and cytopenia. Slide 23. With R835, we have generated initial proof-of-concept data with an LPS challenge in healthy human volunteers. There was profound inhibition of LPS-induced inflammatory cytokine production, such as IL-6, TNF alpha, or IL-8. Moreover, R835 was well tolerated in the single-ascending dose and multiple ascending dose study and had a linear PK profile and proportional exposure. Slide 24. In order to improve oral bioavailability and clinical exposure levels, we used our previous expertise with TAVALISSE and created a pro-drug of R835 called R289. We have now completed single ascending dose and multiple ascending dose Phase I studies with the new molecule. As expected, R289 was well tolerated in healthy volunteers, and the PK/PD, target plasma drug exposure levels and safety results were comparable to our Phase I results with R835. We presented the data to the FDA in a pre-IND package and received positive feedback on our proposed Phase I study design for low-risk MDS. So what's next? We are incorporating the FDA feedback into our clinical development program and plan to move into the clinic with this Phase I/II study in low-risk MDS. Additionally, we are continuing to explore indications in other immune diseases, such as palmoplantar pustulosis, hidradenitis suppurativa, and others. We are very excited about our progress with IRAK. Slide 25. We also wanted to update you on a new research collaboration with the MD Anderson Cancer Center with the goal to evaluate R289 and R835 in cell cultures and animal models of MDS and chronic myelomonocytic leukemia. This translational research will add further to the body of data generated to date for our IRAK program. We're very excited to be working with Dr. Guillermo Garcia-Manero's team at MD Anderson, as they are recognized leaders in hematologic cancer research. We look forward to exploring opportunities for clinical collaborations as well. I'll conclude with slide 26. Another very important value driver for Rigel is our RIP1 inhibitor program that we have partnered with Lilly. The first candidate, R552, is an oral systemic RIP1 inhibitor for inflammatory conditions. We're working closely with Lilly on planning for the first Phase II study in an autoimmune indication. In addition, here at Rigel, we are working on selecting a RIP1 inhibitor candidate that can cross the blood-brain barrier. Lilly will then lead the clinical development of the brain-penetrating RIP1 inhibitors in CNS diseases. We're very excited about the broad potential for RIP1 inhibitors in numerous indications, and Lilly is the ideal partner to have with their significant expertise in developing therapies for autoimmune and CNS diseases. With that, I'd like to turn to Dean for a finance update. Dean?

Dean Schorno, CFO

Thank you, Wolfgang. I'm on slide 28. For the second quarter of 2021, we shipped 1,905 bottles to our specialty distributors, resulting in $22.1 million of gross product sales. 1,693 of those bottles were shipped to patients and clinics, while 961 bottles remained in our distribution channels at the end of the quarter. We reported net product sales from TAVALISSE of $17.1 million, a 14% increase compared to the second quarter of 2020. Our net product sales from TAVALISSE were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance, and other allowances of $5 million. Our gross-to-net adjustment was approximately 22.6% of gross product sales. Before we move on from net product sales, let me review our expectations for the third quarter of 2021. We expect to see continued growth in the third quarter in bottles shipped to patients and clinics, similar to what we saw in the second quarter. Once our sales force expansion is completed towards the end of the third quarter, and assuming that access to physicians and patients continues to expand, we expect to see an acceleration of sales in the fourth quarter. Incrementally, we currently expect our gross-to-net adjustment to be approximately 23% or 24% in the third quarter of 2021. Moving on to the next slide. In addition to net product sales, Rigel's contract revenues from collaborations were $3.7 million for the three months ended June 30, 2021, which consisted of revenues recognized from our deferred revenues of $3.3 million from our license agreement with Lilly and $400,000 related to the performance of certain research and development services pursuant to our collaboration with Grifols. Government contract revenues of $5.5 million were related to income we recognized pursuant to our agreement with the U.S. Department of Defense for our ongoing Phase III clinical trial of fostamatinib in COVID-19. Moving on to costs and expenses. Our cost of product sales was approximately $129,000 for the second quarter of 2021. Total costs and expenses were $39.3 million in the second quarter of 2021 versus $33.4 million in the second quarter of 2020. The net increase in costs was primarily due to increases in personnel-related costs, stock-based compensation expenses, and research and development costs related to our various ongoing clinical studies. Given our sales force expansion and certain preparations for potential EUA, we expect total costs and expenses for the remainder of the year to increase. As we gain clarity on the timing of a potential EUA approval, we'll provide appropriate updates. Finally, we ended the quarter with cash, cash equivalents, and short-term investments of $153.4 million. With that, I'd like to turn the call back over to Raul.

Raul Rodriguez, CEO

Thank you, Dean. I am very proud of the progress in the last quarter, and we have some exciting milestones that we're working towards in the second half of the year. In ITP, we look forward to accelerating our in-person interaction with our expanded sales team, and reaching more prescribers as the clinics open to patients. These interactions provide the opportunity to educate on earlier-line use and, as Dave pointed out, on the important durability of our products, keeping TAVALISSE top of mind as clinicians help patients make decisions about starting new therapies. In AIHA, we expect to complete enrollment in our Phase III clinical trial later this year; we are getting close. Fostamatinib has the potential to meaningfully improve care in this rare disease and provide a new therapy for patients suffering from warm AIHA. Currently, there are no approved therapies for this indication, giving Rigel the opportunity to be first to market and a leader in the space. In COVID-19, fostamatinib has the potential to address some of the most damaging complications of this disease. We look forward to a decision on our EUA application and completing enrollment of our Phase III clinical trial, which, as we mentioned, is enrolling rapidly. We are very encouraged by our results to date and are working diligently to bring this therapy to patients. In addition to our programs with TAVALISSE or fostamatinib, we are excited about the potential of our earlier stage programs, IRAK1/4 and RIP1. We look forward to supporting Lilly in the development of our RIP1 program as we advance R552 into Phase II trials and we select the brain-penetrating candidate for our CNS indications. Our wholly-owned IRAK4 molecule, R289, has tremendous potential in Hem/Onc and autoimmune diseases, and we are currently planning on the first of these trials in low-risk MDS. We have numerous exciting milestones to look forward to, including some in the very near future. With that, let's open up the call to your questions.

Operator, Operator

Thank you. Our first question today is from Yigal Nochomovitz of Citigroup. Please proceed with your question.

Yigal Nochomovitz, Analyst

Hi, great. Thank you very much for taking the questions. And Hi Raul, and team. I'm curious what the FDA receptivity has been to the EUA discussions based on your favorable Phase II data in the 60-patient trial, as well as the ongoing Phase III that's enrolling 200 patients. Obviously, those enrollment figures are several orders of magnitude less than the Phase III enrollment for the trials that supported the EUAs for the mRNA vaccine. So just curious how you're thinking about that discrepancy. Thank you.

Raul Rodriguez, CEO

Yes. I'll let Wolfgang comment on FDA reaction expectations. I'll also add some color commentary after that. Wolfgang?

Wolfgang Dummer, Chief Medical Officer

Yeah. So interesting question. We have worked very closely with the FDA and inquired whether it makes sense to submit an EUA. They did welcome that, so we submitted the EUA. I cannot exactly tell you how the FDA is currently thinking because we're not getting constant updates from them. So I can only give you my personal opinion. And you are correct, other EUA-approved drugs had much larger sample sizes. So our data set is relatively small with 60 patients, but it's double-blind and placebo-controlled. The safety and the clinical efficacy data look from an efficacy standpoint very strong and very favorable. If you do your homework and compare effect sizes with some of the EUA-approved compounds, fostamatinib looks very favorable. But in essence, your question still remains a review issue at this point.

Raul Rodriguez, CEO

Okay. Keep in mind the EUA is intended to be that, an emergency use and temporary until your own larger data comes forward, and that is coming in the not-too-distant future. So I think this is appropriate for an EUA type of review. Again, it doesn't mean we'll get a yes or certainly, we'll get a no as yet, but it's still being reviewed by the FDA.

Yigal Nochomovitz, Analyst

Okay. Thanks, Raul. And then I just had a bit of a housekeeping question regarding the Phase II ICL/MATIS trial. I just noticed that in your prior slides, the eligibility for that trial was points 3 and 4 on the 8-point ordinal scale. But I got - I think that shifted, did it not? That in today's slides, the MATIS trial shows eligibility spanning points 4 and 5 on that 8-point ordinal scale. So am I correct? Was there a change in the enrollment criteria for this one?

Raul Rodriguez, CEO

I'll let Wolfgang answer that, but I think the answer is clear. Go ahead, Wolfgang?

Wolfgang Dummer, Chief Medical Officer

Yeah, it's a very, very sharp observation. No, there was no change in enrollment criteria; they are just the same. But it's a little bit of an odd effect on the scale because the Imperial College of London uses a slightly different scale. We used to think it's equivalent of five, but now it has shifted one. But it's simply due to the use of a slightly different scale that they are using.

Raul Rodriguez, CEO

So this is an accurate representation.

Yigal Nochomovitz, Analyst

Okay. Got it. And then just the last question I had on the IRAK1/4. What is the thinking behind the need to do a prodrug formulation of R835 versus not? Thank you.

Raul Rodriguez, CEO

Sure. Wolfgang?

Wolfgang Dummer, Chief Medical Officer

Yeah. So as you know, we've shown you a lot of data with 835, which is a great molecule. We had preclinical experiments done with 835 as well as the Phase I with healthy human volunteers. It turns out that 289, which is a prodrug and releases 835, has much better bioavailability and less variability in patients. So it's a clearly better compound to administer 835 to the patient, but the active metabolite is still 835. All the data that we have generated with 835 are still relevant. But it's a drug administration advantage for 289.

Raul Rodriguez, CEO

And we were waiting to hear also from the FDA on the 289. They were in agreement to give us the green light to proceed with this low-risk MDS study with 289.

Yigal Nochomovitz, Analyst

Got it, Thank you, Raul and the whole team.

Operator, Operator

The next question is from Chris Raymond with Piper Sandler. Please proceed with your question.

Nicole Gabreski, Analyst

Hi, this is Nicole Gabreski on behalf of Chris. Congrats on the quarter. And thanks for taking the question. I guess maybe one on TAVALISSE. So we're starting to hear more about potential commercial headwinds now with the Delta variant surging. I guess for your TAVALISSE growth expectations throughout the remainder of the year, does that take into account any potential COVID impacts? Or is it still too early on that front?

Raul Rodriguez, CEO

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

Dave Santos, Chief Commercial Officer

Hi, Nicole, this is Dave. From a standpoint of COVID Delta variant kind of affecting our ability moving forward, I think we've been at least very - through the very rough storm of 2020. When things were locked down and it was very difficult to go anywhere, as you know. When you compare that to kind of where we are now, where, yes, you do have a Delta variant, but things aren't locked down, and people are continuing to get out. We believe it can't get any worse than what it had been in 2020, particularly before the vaccinations were out there. We think that we have a great opportunity ahead of us to increase the noise level for TAVALISSE. It is an unknown still, obviously, in terms of how much everything will open up. But if the last quarter is any kind of marker for that, we did see a lot more in-person interactions. We were able to make more impactful calls both in sales calls and speaker programs, particularly in seeing people at conferences. By the way, ASH this year is a hybrid model. But there will be, at least at this point, a live conference in December for ASH, which I think is part of our planning as well. We want to be prepared for that. I hope that helps.

Nicole Gabreski, Analyst

Yes, that's definitely helpful. And then I guess maybe just...

Raul Rodriguez, CEO

I actually have one other thing. The folks we are bringing on in this expansion because as I told you, we're already on our way with the expansion of the folks that we've already hired or who've accepted offers. We have an average of 14 years of Hem/Onc experience, which I think is going to help us a lot in seeing clinicians either virtually or live. Remember with our previous sales force size of 39, when we brought people on, they usually were calling on more customers than they used to in their previous or larger geographies than they used to in their previous roles at an oncology company. This really helps us, as I said, to see more customers and see them more frequently, and hopefully be familiar with those customers even with the new people coming in.

Nicole Gabreski, Analyst

Okay. That's very helpful. Thank you. And then maybe just a quick second question on your ongoing COVID studies. I just wanted to ask if patients are being screened for viral strains? And I guess I'm just kind of curious if there might be any differences in response to fostamatinib treatment that could be dependent on COVID strains? Just especially now with the Delta variant becoming dominant. So any thoughts or color here would be great.

Raul Rodriguez, CEO

Sure. Wolfgang, if you would comment on that.

Wolfgang Dummer, Chief Medical Officer

Yeah. The answer is no. There is no screening for the variant at this time. But I would be optimistic that the mechanism of action for fostamatinib in COVID-19 is independent of the strain because the pathophysiology continues to be respiratory distress and respiratory problems in this patient, as well as a tendency to get blood clotting in larger vessels, as well as in the smaller vessels, which leads to renal failure and other organ damage. These should be inhibited with fostamatinib independent of what kind of variant we are dealing with.

Nicole Gabreski, Analyst

Okay. Also very helpful. Thank you very much.

Raul Rodriguez, CEO

Thank you, Nicole.

Operator, Operator

The next question is from Gary Mattan of BMO Capital Markets. Please proceed with your question.

Gary Mattan, Analyst

Hi. This is filling in for Gary Mattan. Thanks for taking my question. So my first question for TAVALISSE in COVID-19. Has there been any more progress with potential partners or discussions with regulatory authorities for ex-U.S. in terms of COVID? And secondly, how do you view the opportunity now, especially with the increase in hospitalizations from the Delta variant? Thanks.

Raul Rodriguez, CEO

Maybe I'll take a stab at the first of those. Wolfgang, you take the latter. Outside the U.S., the opportunity is substantial, as you may imagine. I think we're more advanced in the U.S. simply because we've been on the market. We are a well-known entity here, and we have a significant safety database with our product here in the U.S. That's been our main and first focus, but the opportunity with our partners exists. We're certainly discussing it with them, and would move forward in those other territories as well to provide the product. Fortunately, in the U.S., the regulatory authorities move relatively quickly compared to other countries. So it is the first priority for us. Wolfgang?

Wolfgang Dummer, Chief Medical Officer

Yeah. Your second part of the question was around increasing hospitalizations. Yes, indeed, there was a concern. Depending on how you look at it, we thought maybe case numbers would go down. It turns out we have a new variant, which is very contagious. It appears that only certain areas in the United States have very high vaccination rates, while other areas have very small vaccination rates. This is where the cases go up. I firmly believe that this issue is going to continue to stick around for quite a while with the Delta variant, and nobody can predict with certainty what comes after that. We've already heard about the Lambda variant in South America. There remains a need for something that treats the disease effectively. Even though we have some vaccinations available now, a lot of people are still unvaccinated and getting sick. They need treatment, and we hope to be able to provide that.

Operator, Operator

The next question is from Eun Yang of Jefferies. Please proceed with your question.

Unidentified Analyst, Analyst

Hi. This is Nalin for Eun. I have two questions, please. Number one, for wAIHA, would it be reasonable to assume enrollment completion by around mid-4Q '21 based on the most recent enrollment rates of around 2 to 3 patients per month?

Raul Rodriguez, CEO

I can take a stab at that. It's hard to project. In the past, we've had months where we had more than 2 to 3 a month and months where we had less than 2 to 3 a month. It really depends on a lot of factors, mainly COVID-driven. It's hard to predict exactly when it will enroll. But we think later this year is the answer. Keep in mind that many of our sites are in the U.S. and Europe. The preponderance are European, and I do note that in Europe, there are higher vaccination rates now than in the U.S. We expect that will help with recruitment and patients going out there and seeing their doctors more frequently. While it's hard to predict the exact months, we know it's in the not-too-distant future. We only have approximately 10 more patients to go. It's just not that many.

Unidentified Analyst, Analyst

Got it. Thank you. For the second question, for Phase III and COVID-19, could you please provide a more defined timeline for data readout before year-end '21? It looks like it took about 7 months to enroll 50% of the patients. So we're probably expecting accelerated enrollment. How many percent of the sites have been activated so far?

Raul Rodriguez, CEO

Yeah. On the COVID side, we've actually enrolled very quickly. In the last two months, we enrolled 90 patients. That's about 1.5 patients a day. We started slowly at the beginning, but there's been a real acceleration, particularly in Latin America, Brazil, and Argentina. Unfortunately, the pandemic is very active in those countries, which has helped enrollment tremendously in terms of contributing patients. We expect to have enrollment completed as Wolfgang said, by the end of this calendar year. The exact month is, again, a bit difficult to pin down because we don't know the trajectory of the pandemic in reverse of what I said earlier on AIHA. It certainly is not subsiding in the countries, especially in Brazil and Argentina, where we're seeing an increasing trend in the U.S. as well. We think that will help maintain a brisk rate of enrollment; we’ve enrolled 90 in two months, so that gives you a sense of the pace.

Unidentified Analyst, Analyst

Got it. If I may ask one more question, please. A lot of the patients may come from South America. Would the standard of care in those countries be different from in the U.S., and how are you thinking about how that would affect the results? Thank you.

Raul Rodriguez, CEO

I'll let Wolfgang comment. Many other products that have applied for EUA approvals have done trials primarily outside of the U.S. regarding this pandemic. I think that bodes well for us. Wolfgang, do you want to comment on standard of care between U.S. and Latin America?

Wolfgang Dummer, Chief Medical Officer

Yes, I would say dexamethasone, as you know, is widely used, and that is affordable and available everywhere in the world. It's also widely used in Latin America, where we're conducting our study. There might be some less use of remdesivir, which is not as widely available in South America. But we're stratifying for that, so we shouldn't have an imbalance in our treatment arms where all of the remdesivir patients are in one arm and all of the placebo are in the other arm. There will be equal percentages. Also, if you look at the stand-alone remdesivir data in hospitalized patients, the effect is quite modest at best. Therefore, I do not believe that a patient receiving remdesivir versus one not receiving it is dramatically different. So I have little concern about this potential issue.

Unidentified Analyst, Analyst

Thank you very much.

Operator, Operator

The next question is from Kristen Kluska of Cantor Fitzgerald. Please proceed with your question.

Kristen Kluska, Analyst

Hi, good afternoon, everyone. Thanks for taking the questions. The first is on TAVALISSE. You've collected a lot of post-hoc analysis data outside of just the earlier line response rates. At ISTH, you showed a nice correlation with platelet counts along with reduced bleeding events and rescue therapy. I know in the past, you've also had some data about the side effect profile lessening over time. I wanted to ask how you believe this will help you achieve not just earlier line usage but also prolonged usage as well. Speaking specifically about the new sales reps in the new territories, especially since they'll be going out with this message for the first time versus when you initially launched.

Raul Rodriguez, CEO

Absolutely. Kristen, thank you for the question. That's a very good one. I'll ask Dave to comment on that in terms of his thinking in terms of the various data that he outlined today for you, and the new reps and what they'll use as a lead item as they introduce themselves to clinicians. Dave?

Dave Santos, Chief Commercial Officer

Thanks for the question, Kristen. I think it is a great one because it's exactly why we are expanding, and it's exactly what we've seen in our research as we talk to clinicians in different forums, both in advisory boards and more traditional market research. The things that really appeal to them are mechanism because it is different; it goes right to the cause of low platelets in patients and of course, the safety and efficacy. What we've focused on now is making that efficacy message stronger. Our post-hoc analysis on the early-line data is, while it has been out since the beginning of 2020, we have not been able to reach as many clinicians as we would like. Once they hear that data, they're quite surprised that our efficacy rates are that high in earlier lines. We can also add this durable benefit for the majority of patients either getting over 50,000 platelet level or getting over 30,000, which many think is clinically meaningful. When you add that 70% of patients can reach that clinically meaningful level of 30,000 and have a durable benefit over time, it really does resonate. We're using both these tools. The BJH publication as well as the five-year efficacy and safety analysis to get out there strong in terms of when they see a patient they want to start post-steroids or switch. They really have an opportunity with TAVALISSE. We hear repeatedly that when docs hear about it and try it, they have a good experience. This drug is well-established, used a lot in other areas, and is very safe, and in ITP, very effective. Currently, we're talking about it internally in meetings, as it's easy for them to prescribe. It can be administered twice daily, allowing them to observe their patients continuously building their platelet counts and sustaining responses over time. This is precisely what the new reps will be doing: re-launching our existing information with the early line data, and we recently trained our entire sales force on the five-year efficacy and safety analysis with the durability of benefits. I believe that message will resonate when it's out there. It will also be in our speaker programs, which is a big part of our strategy as we work to share these impactful messages.

Kristen Kluska, Analyst

Great. Thank you. And just a quick follow-up on that. Can you talk a little bit more about the new 16 territories? Specifically, what criteria went into choosing these? I think the slide mentions some are smaller territories. How are you thinking about things like competitive positioning?

Dave Santos, Chief Commercial Officer

No. We chose the 16 territories based on the number of prescribers in the territory as well as the opportunities in terms of cITP claims that are there in the territory. It's a mix of potential as well as the prescribers. We balanced all of the territories across the 55 as best as we could. Many of our existing territories, of the 39, were simply very large geographies that made it challenging to achieve the frequency we desired to have on some of the key prescribers in those territories. By reducing the size of some of these large geographies significantly with this sales force expansion, we're aiming for a greater reach.

Operator, Operator

The next question is from Joe Pantginis of H.C. Wainwright. Please proceed with your question.

Joe Pantginis, Analyst

Hey guys, good afternoon. I have two quick logistical questions on COVID and then one on ITP. So on the COVID front, I was just curious regarding ACTIV-4 and when you look at the ordinal scale, if there's any difference regarding the primary endpoint. When you discuss ACTIV-4 in your slides, it's between 5 and 7, but the endpoint calls for requiring supplemental oxygen by day 28. On the other hand, something like ACTIV-5 has a primary endpoint of survival without ventilation at day 28, even though you're covering the three numbers there. I was just curious if there are differences.

Raul Rodriguez, CEO

Yes. Wolfgang, if you would take that. I could also add to it.

Wolfgang Dummer, Chief Medical Officer

Yes. Regarding the population, indeed, you're correct that ACTIV-4 is using a different scale than NIH. There are also other criteria, like certain degree of respiratory failure. The patients enrolled here require oxygen supplementation. Hence, they’re quite similar populations. The end point utilizing supplemental oxygen is a primary endpoint that has been increasingly used in NIH studies and others, which was chosen based on its reliability and clinical significance.

Joe Pantginis, Analyst

Got it. And regarding Phase III, could you provide any approximate proportion between the two regions of enrolled patients?

Wolfgang Dummer, Chief Medical Officer

Yes. The majority of our enrollment is coming from South America, primarily due to the incidence of disease there, and we do still receive patients from our U.S. sites.

Joe Pantginis, Analyst

Got it. My ITP question. It still might be a little early to ask this, but it's positive to hear about the sales force expansion and increased face-to-face meetings. Do you have any anecdotes or feedback from the field now regarding physician or nurse receptivity to the earlier-stage data?

Raul Rodriguez, CEO

Dave, do you want to take a stab at this question?

Dave Santos, Chief Commercial Officer

Sure. It's a timely question, as I am currently here with the team, and we're discussing various promotional items. Our reps have shared that when they can present to a doctor, they find them to be enthusiastic about TAVALISSE. We've seen this sentiment in our research forums as well. Doctors find TAVALISSE very easy to prescribe and have positive experiences once they give it a try. There are around 24,000 patients post-steroids, and even a fraction of them looking for new therapies allows for significant potential. We need to ensure that TAVALISSE is top of mind for clinicians when they see those patients. Thus, the sales force expansion and meeting frequency are invaluable to us.

Raul Rodriguez, CEO

Thank you, Joe.

Operator, Operator

That's all the time we have for questions today. I would like to turn the floor back over to Mr. Raul Rodriguez for closing comments.

Raul Rodriguez, CEO

Thank you, everyone. Thank you for your questions; I greatly appreciate it. I would like to take this opportunity to thank our employees. This has been a challenging time for all of us, and they've done an incredible job in exploring the potential use of fostamatinib, TAVALISSE, and AIHA in COVID, and educating doctors about the use in ITP. All of that work, difficult to do during these conditions, has been persevered through, showing commitment and dedication. I think we've made significant progress this past quarter, and we have some incredible milestones on the horizon that will demonstrate the utility of our products. Thank you for your participation and interest in Rigel. We look forward to providing further updates in the near term. Take care.