Earnings Call Transcript - RIGL Q3 2020

Operator, Operator

Greetings, and welcome to the Rigel Pharmaceuticals Financial Conference Call for the Third Quarter 2020. 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, Executive Vice President, Corporate Affairs and General Counsel

Thank you. Welcome to our third quarter 2020 financial results and business update conference call. The financial press release for the third 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 Annual Report on Form 10-K for the year ended December 31, 2019, and subsequent filings with the SEC, including our Q3 quarterly report on Form 10-Q. 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 for joining us on our third quarter 2020 financial and business update call. Also joining me today are Wolfgang Dummer, our Chief Medical Officer; and Dean Schorno, our CFO. I also have the pleasure of introducing Dave Santos, our new Chief Commercial Officer who joined Rigel in August. Dave has significant commercial experience and has been involved in the successful launch and marketing of several pharmaceutical products, and we look forward to benefiting from his vast experience. Beginning on Slide 5, I would like to highlight the success we are having across all of our key value drivers as a result of the continued execution by the entire larger team. While we still face headwinds due to COVID-19, we are continuing to make very good progress. We continued to grow TAVALISSE sales and have set a new high in this quarter. We are successfully positioning TAVALISSE as an attractive option for ITP patients and enhancing our supporting database with new studies. We’ve now launched a new observational study called FORTE focused on second line patients that Dave will touch on during his presentation. And our partner Grifols has commercialized the product in Germany and the UK with a phased rollout plan for the rest of Europe. I’m very pleased with our ability to advance our Phase 3 trial in warm autoimmune hemolytic anemia, or AIHA. Our product is the furthest along in clinical development for AIHA. And our goal is to be the first approved product for this indication. Actually, I think during this year, we have expanded on our lead due to the diverse geographic spread of our sites, as well as our oral administration, which facilitates patient trial participation. You may have seen we announced our intention to launch Phase 3 trials in hospitalized COVID-19 patients this quarter. This will be the third trial launch for fostamatinib in COVID-19, including one sponsored by the National Heart, Lung, and Blood Institute, NHLBI part of the NIH and one with Imperial College London, both of those trials are enrolling patients as we speak. We are excited about the potential to play a role in aiding those affected by COVID-19 and based on our own preclinical data and research from well-regarded institutions. We believe that there is a significant rationale to explore fostamatinib in this disease. Wolfgang will provide more details around both the AIHA trial and our new COVID-19 program in a few minutes. In addition, I’d like to mention that we continue to develop our earlier stage assets. This includes our programs in the inhibition of both IRAK 1/4 and RIP1 pathways. These are two very important immune signaling pathways that impact a wide range of diseases and provide substantial opportunities. We continue to make progress in our discussions to secure a co-development/co-promotion agreement for one or both of these assets and we believe that we will have a partnership near year-end. I will now pass the call over to Dave who will provide a commercial update. Dave?

Dave Santos, Chief Commercial Officer

Thank you, Raul. It’s been great to join Rigel. It’s such an exciting time as we work together to execute on our key value drivers. I’ve now been with Rigel for a full quarter and have been so impressed by the commitment of the commercial team and my colleagues across Rigel to continue making a meaningful difference for patients with chronic ITP, particularly as we deal with the impact of the global pandemic. I want to express my sincere thanks to our entire team for their hard work and persistence during the third quarter, as we continue to grow sales and build awareness of TAVALISSE for the treatment of ITP. On Slide 7, you will see our FDA approved indication, which is for adult patients with chronic immune thrombocytopenia or ITP who’ve had an insufficient response to a previous treatment. I would like to begin my discussion on Slide 8. We are continuing to grow TAVALISSE sales in the U.S. In fact, in the third quarter, we surpassed the $100 million milestone in total net sales since launch. And we are excited about the growth trajectory we have created during the second and third quarters of 2020, particularly as we have faced the unique challenges of this year. We are beginning to see patients and physicians truly realize the compelling value proposition that TAVALISSE brings to the $1.1 billion U.S. ITP market as a differentiated targeted therapy with a novel mechanism of action, addressing the underlying cause of the disease, which is platelet destruction and often overlooked aspect of our product. In the third quarter, we continue to gain momentum growing sales to $16.3 million, a 39% increase over the third quarter last year. That growth has been the result of new patients starting TAVALISSE therapy, as well as continued improvement in our persistency rate, which now shows that 55% of patients are receiving their four-month refill. We are also making progress, expanding our global access for ITP patients with collaboration agreements in the EU, Asia, Canada, and Israel. The third quarter saw the initial rollout of the product in Germany and the UK. And as I said before, even though we have already crossed the $100 million net sales mark, we are just at the beginning of our journey to provide patients with a differentiated treatment for ITP. We’re positioned to take advantage of the significant opportunity ahead. Having launched our new messaging, highlighting higher response rates in earlier line therapy, we have also begun our efforts to compile a broader base of qualitative data with the recent initiation of our new observational study FORTE, which will provide real-world evidence for the use of TAVALISSE in earlier lines. That is why we are so enthusiastic about the potential of TAVALISSE. Moving to Slide 9. As you may know, there are approximately 81,000 adult patients in the U.S. who have chronic ITP. In the light blue, this chart depicts more than 37,000 patients being actively treated on an annual basis with either steroids or later line therapy. And it is when they switch that they become a candidate for TAVALISSE. In addition, in the dark blue, the chart depicts nearly 44,000 patients in a group we refer to as watchful waiting, because their disease is being monitored and they’re not actively being treated. However, a portion of these patients during the year will also need to switch from watchful waiting to active treatment. And when that happens TAVALISSE can become their therapy. So we have many opportunities to impact patients who need a new therapy throughout the continuum of chronic ITP treatment. Since launch we’ve made good progress with patients who are switching in the later lines, just as we had anticipated, and that’s because these patients are hard to treat, have limited options, and there is a much higher perceived need by both patients and clinicians. We have patient case studies that provide compelling evidence to use TAVALISSE in these late line patients, showing durable responses in some of the patients who failed multiple therapies. So for patients who have yet to try TAVALISSE, this could be a great option. That said, the greater opportunity to impact patients is in the earlier lines, either when they’re switching off steroids or moving to the third line setting. In fact, these early line patients represent approximately 75% of the post-steroid market. It’s certainly a more challenging sale as clinicians have developed habits with other options. And that’s why it’s so important for us to demonstrate to physicians that TAVALISSE can be as effective as the other post-steroid treatments they’ve used historically, and importantly, that the responses they get can be durable. To do this, we’re leveraging the data from our post-hoc analysis that you see on Slide 10. These bar graphs are from a new promotional piece we launched in Q3 based on the British Journal of Haematology article that was published in July. The left bar graph on this slide depicts response rates at both the 50,000 and 30,000 platelet count levels in each line of therapy. And it shows the 78% overall response rate in second line compared to the responses seen in later lines. The higher response rates have been a key message for us to deliver to clinicians. Additionally, although the response rates varied by line of therapy, the right bar graph shows that once the response was achieved, it was maintained irrespective of line of therapy. This durability of response is meaningful to clinicians and patients when choosing therapy. To augment this existing data, we’ve also recently launched an observational trial in up to 45 second line patients to collect additional evidence in the real-world setting. So with our existing and future data in earlier line patients, we’re confident we can capture more of the significant opportunity ahead in ITP. On Slide 11, I’ll briefly highlight our expanding virtual commercial efforts. While we have great data to share out of the British Journal of Haematology publication, our challenge has been getting messages out to clinicians with limited access during COVID. Our sales team has made excellent progress in creating virtual opportunities to impact clinicians. This graph shows how we have continued to increase our effectiveness in both scheduling and executing virtual interactions with our customers. While the pandemic has certainly challenged our ability to see customers, strong execution with these virtual interactions has helped even the playing field of reach and frequency for smaller sales teams with larger geographies like ours. Although it’s still early in using the data from the publication in our virtual efforts with clinicians, we are confident that it will add to our story of the unique MOA of TAVALISSE on platelet destruction and provide a strong reason to use TAVALISSE in earlier line patients who are switching from steroids or to a third line therapy. We are doing everything possible to ensure that physicians understand the benefits of TAVALISSE and that it stays top of mind for clinicians when they see patients in any line of therapy who are switching treatment. I am confident we will continue to add more patients to the TAVALISSE journey. Finally, turning to Slide 12. We are now well on our way to expanding the impact of fostamatinib beyond the U.S. market. Our partner Grifols launched TAVLESSE in Germany and the UK. And we expect to hear from Health Canada on our new drug submission in early 2021, and from the Israel Ministry of Health in the second quarter, enabling us to begin commercial efforts in two markets. The Phase 3 study in Japan is also ongoing with Kissei. I look forward to providing quarterly business updates to you as we continue to broaden our impact with TAVALISSE in the future. Thanks for your attention. And now I will turn the call over to Wolfgang.

Wolfgang Dummer, Chief Medical Officer

Thank you, Dave. I’ll begin on Slide 14 with a recap of our warm autoimmune hemolytic anemia Phase 3 pivotal trial and our progress over the past few months. This is a very exciting opportunity for us and maybe even greater than ITP, given the lack of an FDA approved therapy and our potential to be first to market. As you know, our trial sites had temporarily paused patient enrollment during the lockdown, just like most clinical trials worldwide. In recent months, we began to see sites reopen and screening activity has picked up. As of today, we have 57 patients randomized, which is approximately 63% of our target of 90 patients. And note that in October, we enrolled seven patients, which is close to the pre-pandemic pace of eight to nine patients a month. On another positive note, our trial sites have developed procedures and routines to deal with the pandemic and are better prepared to safely enroll and conduct clinical trials than they were earlier this year. Also, we believe the oral administration of TAVALISSE provides an advantage over other trials, as it allows for outpatient visits and does not require in-hospital treatment, which makes things easier. We are also leveraging FDA guidance on how to conduct clinical trials during the pandemic and take advantage of local labs or remote study visits to keep the patients as safe as possible while participating in our trials. Of course, COVID-19 is not over yet. So we are unable to reliably predict enrollment completion at this point. With over 90 sites established in 22 countries, we believe we are well positioned to keep or even expand the lead for TAVALISSE to become the first drug approved for this indication. Switching gears on Slide 16 to our efforts in COVID-19. As we elaborated on previous calls, there is strong scientific rationale for SYK inhibition in COVID-19 patients to inhibit hyperinflammatory cytokines, hypercoagulation and thrombosis, as well as mitosis. There have been recent published reports, which we have shared with you before, from MIT and Harvard and the University of Amsterdam proposing TAVALISSE as a highly suitable drug to treat COVID-19. We also have in-house preclinical data from a mouse model of acute respiratory distress syndrome in which TAVALISSE performed well. As a commercial product with a well-established safety database of more than 4,500 patients treated in clinical trials, TAVALISSE is readily available and could be quickly adopted as a treatment for COVID-19. As a result of all of this, we have now taken TAVALISSE into the clinic for COVID-19. We have shared with you before two investigator-initiated trials at the NIH and Imperial College of London. We are also pleased to announce our Rigel-sponsored Phase 3 trial in COVID-19 that will start later this quarter. On Slide 17, I’ll remind you where TAVALISSE fits in the course of COVID-19. TAVALISSE is an immune modulator that can treat an over-reactive immune system. Typically, the immune system overreacts in about 20% of patients after about one week, when they develop more serious symptoms and need to be hospitalized. TAVALISSE could prevent the progression of mild disease to severe disease that puts patients on ventilators and ultimately can lead to death. If we are successful, then we would have a well-tolerated, widely available treatment option that could ameliorate much of the fear of this disease, even before effective vaccines become available. At this point, we do not know for sure when safe and effective vaccines will be approved and become available on a large scale. Slide 18, you may have seen this before, the only thing I want to reemphasize is that TAVALISSE mechanistically could interfere with disease pathogenesis on multiple levels, not just one. It can inhibit excessive cytokine production and prevent hypercoagulation with macro and micro thrombi, and it can inhibit a process called mitosis, which is accused of playing a major role in COVID-19. That makes TAVALISSE a really unique candidate for effective treatment of COVID-19 complications. On Slide 19, you can see a schematic of our Rigel-sponsored Phase 3 clinical trial. We plan to select hospitalized patients with mild disease who have certain risk factors to develop more severe disease. We expect to randomize approximately 308 patients one-to-one to either fostamatinib plus standard of care or placebo plus standard of care. The primary outcome measure is prevention of progression to severe disease, measured with an ordinal scale. If positive, this trial could be the basis for approval of fostamatinib to treat COVID-19. Slide 20 shows you the Phase 2 trial design conducted by the National Heart, Lung, and Blood Institute at NIH in collaboration with Inova Health System. This study focuses on more severe patients who may be on mechanical ventilation or otherwise in critical condition, which complements our Rigel-sponsored trial. NIH has very powerful translational research tools that can generate valuable new mechanistic data on fostamatinib in COVID-19. For example, they have established capabilities that can directly study the effect of fostamatinib on various aspects of the disease. The trial randomized the first patient on October 9 and has already enrolled nine patients, reflecting the great enthusiasm that the NIH and Inova Health teams have for their study. Just to remind you, there is a third fostamatinib trial ongoing in the UK, which has enrolled five patients. This is a Phase 2 study sponsored by Imperial College of London studying fostamatinib and ruxolitinib on top of standard of care in patients with COVID-19 pneumonia. So in summary, we have a multi-pronged approach to COVID-19 and we’re excited by the possibility of coming up with a safe and effective treatment that is desperately needed. With that, I’d like to turn the call back over to Raul.

Raul Rodriguez, CEO

Thank you, Wolfgang. Before Dean reviews our financials for the quarter, I wanted to take a quick look at our pipeline. As you know, we are focusing on the inhibition of immune signaling pathways. The graphics on Slide 22 provide a simplified view of that process for each of our three main targets. Starting on the left side of the screen, we have had and are having success with SYK inhibition in ITP. Our goal now is to create further attractive opportunities with SYK inhibition in other indications. These include warm autoimmune hemolytic anemia and COVID-19, which we’ve discussed with you today, but also acute respiratory distress syndrome and pneumonia, similar to COVID-19 but stemming from other origins than COVID-19. Going forward, our plan is to replicate this success with our two earlier stage programs that target IRAK 1/4 and the RIP1 pathways. There’s been a great deal of interest in the industry in targeting the IRAK4 pathway. We have the only molecule in the clinic that inhibits both IRAK1 and IRAK4 kinases. Our research has demonstrated that inhibiting both of these can achieve a much more robust response, providing what we think is a key differentiator over IRAK4 alone. This allows us to block both innate and adaptive immune responses and to have a broad, robust effect on chronic inflammation. We believe this could represent potentially many disease areas, as shown on the slide. Our RIP1 program is also very exciting and there has been a great deal of interest in this area in our industry. RIP1 inhibition has the potential to treat multiple inflammatory diseases mediated by the Th2 and TNF pathways, including psoriasis, psoriatic arthritis, ankylosing spondylitis, inflammatory bowel disease, and rheumatoid arthritis. To give you an idea of the potential of this space, there are numerous drugs that generate billions of dollars in revenue annually that block TNF and/or Th2 pathways. If our molecules show benefit in these patients with these indications, the opportunity is tremendous. The convenience of our oral administration may also prove to be very attractive. In addition, there’s a broader opportunity with RIP inhibition; while our Phase 1 product is systemic, we are also exploring in central nervous system molecules that can cross the blood-brain barrier to potentially treat a variety of neurodegenerative diseases, including Alzheimer’s and ALS. We have done a significant amount of work on these molecules and plan to select a lead candidate to take into the clinic. We are very excited about these opportunities and look forward to exploring them further. So with that, I’ll turn the call over to Dean.

Dean Schorno, CFO

Thank you, Raul. Turning to Slide 24, for the third quarter of 2020, we shipped 1,727 bottles to our specialty distributors. 1,625 of those bottles were shipped to patient clinics, while 102 bottles remained in our distribution channels at the end of the quarter. As of September 30, a total of 810 bottles remained in those distribution channels. We reported net product sales of TAVALISSE of $16.3 million, a 39% increase compared to the third quarter of 2019. Our net product sales were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance, and other allowances of $4.1 million, our gross to net adjustment, which is approximately 19.8% of gross product sales. Before we move on from net product sales, let me comment briefly on our expectations for the fourth quarter. While we’re pleased with the continued growth of TAVALISSE since we started the pandemic, the impact of COVID-19 on our business is expected to persist. Within this uncertain environment, we expect to see our sequential growth impacted in the fourth quarter of 2020. Once the significant impact and global restrictions are behind us and the future begins to normalize, we expect to see continued strength and growth in our business. On to the next slide. In addition to net product sales, Rigel’s contract revenues from collaborations were $2.1 million for the three months ended September 30, 2020, which relates to a milestone payment under our collaboration agreement with Daiichi. Moving on to costs and expenses. Our cost of product sales was approximately $140,000 for the third quarter of 2020. Total costs and expenses were $32.2 million for the third quarter of 2020 versus $32.9 million in the third quarter of 2019. The small decrease in total costs and expenses was primarily due to reduced or delayed commercial activities resulting from the COVID pandemic, offset by increases in personnel-related and consulting costs. As we look towards the fourth quarter of 2020, we expect our total costs and expenses to increase compared to the third quarter, as we continue to increase our commercial activities and further our research and development pipeline, inclusive of the COVID-19 efforts that our team has discussed. We ended the quarter with cash and short-term investments of approximately $72.8 million. With that, I’d like to turn the call back over to Raul.

Raul Rodriguez, CEO

Thank you, Dean. Looking at Slide 26, you will see that we are focusing on our four key value drivers. We’re well positioned to advance or capitalize on each of these opportunities. While our sales force is operating in a very unique environment, our creativity and flexibility have enabled us to implement a virtual approach. We are providing the team with the resources that they need to educate patients and physicians on the benefit of TAVALISSE, including its use in earlier lines of treatment. And as you’ve heard here, more support is coming. This work will also aid Grifols’ effort in Germany and the UK and other European markets as they continue to roll out the product. We continue to make good progress on our warm autoimmune hemolytic anemia trial as we enroll the third of our Phase 3, having the wide breadth and reach of our clinical sites and an oral agent is an advantage during these times. The advance of our COVID-19 program is also very exciting. With our Phase 3 trial set to launch, we will be one step closer to potentially helping patients that are suffering from the hyperactive immune response and destruction caused by this virus. Finally, as we continue to meet our objectives, we mentioned we continue to make progress in our discussions to secure the co-development co-promotion agreement and believe that we will have a partnership near year-end. With all of that, I’d like to turn the call over to your questions.

Operator, Operator

Our first question comes from Yigal Nochomovitz of Citi. Please go ahead with your question.

Carly Kenselaar, Analyst

Great. Hi, this is Carly on for Yigal. Can you hear me okay?

Raul Rodriguez, CEO

Yes.

Carly Kenselaar, Analyst

Okay, great. The first question we had was on the Phase 3 trial in COVID-19 patients that you announced today. Can you clarify if the decision to start that study was made based on any emerging data from the ongoing investigator-sponsored trials? If not, can you just provide some color on why you decided to take the step to start the Phase 3 before seeing any of the data from the ISP? Thank you.

Raul Rodriguez, CEO

Thank you, Carly. I’ll ask Wolfgang to come in on that.

Wolfgang Dummer, Chief Medical Officer

Yes. So as you heard in my presentation, there are pretty compelling data for fostamatinib in a mouse model of acute respiratory distress syndrome, which we have shared with you in a previous earnings call. And so we have pretty good preclinical confidence that the drug may work in COVID-19. In addition, there’ve been some reports from other animal models that strongly suggest a very strong rationale for fostamatinib in COVID-19. That has led us to start this multi-pronged approach. We were approached by the NIH and the Imperial College of London who were very enthusiastic about taking TAVALISSE into COVID-19, and those studies have started. This is how you do it these days. We have started conversations with the agency and the FDA, and are working the plan to launch a Phase 3 study later this quarter.

Carly Kenselaar, Analyst

Okay, great. That’s helpful.

Raul Rodriguez, CEO

If I could just – go ahead, Carly.

Carly Kenselaar, Analyst

No, sure, sure. Go ahead.

Raul Rodriguez, CEO

What I was going to add to that is, these calls are supportive, but if we want to, at some point, get a label to include this. We have to do a larger trial than the 60-patient trial we’re working on at NIH. This allows us to potentially do that larger trial, and I think we’ll be in a solid position to do so sometime as early as next year.

Carly Kenselaar, Analyst

Okay, great. That’s helpful. And then we had a follow-up. Can you just provide any further details on how quickly you expect the study will be able to enroll, when we might expect to see some data, and also how much you estimate it will cost to conduct the trial?

Wolfgang Dummer, Chief Medical Officer

Yes. I can take this. So it starts with the NIH. So we told you in the call that NIH has enrolled nine of 60 patients in their study. So it’s fair to assume the study should be enrolled and have data in the first half of 2021. That’s going to be the first robust placebo-controlled data set. If it looks very compelling, we will certainly seek initial conversations with the FDA as to what it takes to get this commercially available and get the drug to patients quickly. Regarding our own studies or Phase 3, I told you we target to initiate that later this quarter. We are working with an experienced CRO to execute this study, and we plan to have a large number of sites to enroll in the United States, as well as in several places in Latin America. So I’m confident that we can complete the trial in an expedient fashion. Raul, do you want to add to that?

Raul Rodriguez, CEO

Yes. There are a lot of stuff we’ve discussed, disclosed the dollar numbers associated with it. But keep in mind – keep this in mind, our exclusivity period for TAVALISSE, fostamatinib, goes to 2032. So quite a long time, if we feel it’s useful to invest in this area further, in the product further, given that it is commercially available already, and we can leverage that with more ease. Also everywhere, we were always planning and launching an additional study, we were working on several alternative indications before COVID. COVID came about and this is the perfect indication, not perfectly, but a very good indication to pursue with this product. The mechanistic fit, as Wolfgang said, is really excellent. There’s tremendous interest in novel mechanisms that are well-suited to the disease process in terms of a hyperactive immune system. In addition, given that we have the product already available, we could provide substantial amounts of material. Should there be a positive outcome? That is one of the key features of this product, which makes us so excited about it. We think that’s a very useful investment for us. The fact you can execute a pivotal trial such as, which we discussed today and get the results relatively quickly, I think is very helpful. Keep in mind that COVID-19 pneumonia, hyperactive immune system is our key focus here. However, if we have good results here, this will allow us to launch subsequent studies in other areas and other pneumonias treating acute respiratory distress syndrome from different sources than COVID-19, which happen frequently. Those are continuing issues in the healthcare system. It sets us up nicely for doing that subsequent study, so it’s a pretty exciting opportunity in terms of it. And like I said, we’re delighted to be able to launch these trials very shortly.

Carly Kenselaar, Analyst

That’s super helpful. Thanks very much for taking our questions.

Operator, Operator

Thank you. Our next question comes from the line of Eun Yang of Jefferies. Please go ahead with your question.

Unidentified Analyst, Analyst

Hi, this is Nalin on for Eun. So just have two questions. Number one is for the TAVALISSE opportunity in Europe. So Grifols commented this morning that in the first three months of launch, over 90% of the target customers have been contacted, but only around 50 patients are currently on TAVALISSE. So could you please elaborate on the number of target customers, roughly, how many patients – how many percent of the more than 50 patients represents? And what are the key factors preventing patients from starting TAVALISSE? That’s the first question. And the second question is on wAIHA. So a CRM manufacturer has commented that a CRN may be able to offer deeper response compared to TAVALISSE. Could you please comment on what criteria would define deep response in wAIHA and approximately what percent of the 44% of patients who had a response in Phase 2 were deep responders. Would you quantify the depth of response in Phase 3? Thank you very much.

Raul Rodriguez, CEO

Sure. Thank you, Nalin. I will take those in sequence, maybe the first on TAVLESSE in Europe. We’re delighted with the performance of our partner Grifols in Europe and their uptake and execution of the launch in the UK and Germany. There’s still a lot of work to do in Europe. The European market is very attractive, maybe second only to the U.S. market in ITP. We’re delighted that they’ve put so much effort and thought into the launch of the product and they’ve contacted quite a number of targets. They’re better positioned to comment on the penetration there since it’s really a mirror area. We hesitate to say what we know what they shared with us given that they haven’t shared more information than that. The market is very attractive, very similar to the U.S. in terms of structure and what products are used. We think they’re off to a very good start. It’s very early still, they’ve only been on the market in those two countries for a short period of time. So there’s still a lot of opportunity left. And maybe I’ll ask Dave to make any further comments on that.

Dave Santos, Chief Commercial Officer

I think you covered most of it, Raul, but I guess I would just say that those numbers are quite impressive and show their commitment to really getting the word out about TAVLESSE to their clinicians in the EU. I think the success they are having in terms of receptivity to the messages around TAVLESSE for ITP patients in both Germany and the UK is great. As Raul said, I think it’s important for them to share the specifics on their 90% hit of targets, as well as the 50 patients that they’ve already got on product.

Raul Rodriguez, CEO

And your second question, we are very pleased with TAVALISSE’s SYK inhibition in AIHA. We conducted a Phase 2 trial that showed a good response of 44% to 48%, which is very attractive. Based on that, we’ve launched our Phase 3 efforts and we’re approaching over 60% enrollment, which we’re very happy with. As Wolfgang mentioned, seven patients were enrolled most recently in a month, which is a nice performance in terms of enrollment. It’s hard for me to comment on other people’s products simply because I don’t have any data. They haven’t generated any data as yet. When they do, we will be able to do so. I can’t say that we think there’s a tremendous opportunity there and we are the first and foremost product in development. We have a good Phase 2 trial already generating data that we think is very encouraging. Eagerly waiting to finish this trial enrollment and get this product to these patients. They currently have nothing and that makes a tremendous opportunity. We think we will be the first product approved for this indication. That gives us a tremendous opportunity to discuss the – and set the stage for this indication. The doctors who treat ITP and those who treat AIHA overlap perfectly. The heavy lifting required to get the knowledge base on SYK inhibition is being done now well ahead of the launch in AIHA. We have a clinical lead over everybody else, and we believe we’ve expanded on it this year, providing a strong basis for our message moving forward. I think we’re in pretty good shape for that competition.

Unidentified Analyst, Analyst

Thank you very much.

Raul Rodriguez, CEO

Thank you.

Operator, Operator

Thank you. Our next question comes from the line of Joe Pantginis of H.C. Wainwright. Please go ahead with your question.

Joe Pantginis, Analyst

Hey guys. Good evening. Thanks for taking the question. It’s nice to see the continually improving commercial profile of TAVALISSE, but obviously you continue to mention the COVID-19 headwinds. So that’s what I wanted to focus on. When you talk about the mix of new patients and improvements in persistency, what’s driving those new patients coming on?

Raul Rodriguez, CEO

Sure, Joe. Could you repeat the first part of your question? I didn’t understand the two different groups.

Joe Pantginis, Analyst

Sure. So you talked about new patients as well as improvements in the persistency of the patients already on the drugs. I wanted to ask about the mix that you’re seeing between those two categories.

Dave Santos, Chief Commercial Officer

Sure. First, I want to express how impressed I am with the commitment of the team here at Rigel. The ability for us to look at our data, target our prescribers, and execute against that has been incredible. Both the new patients and keeping those already started have been contributing to our growth. However, we have seen more difficulty getting new patients on. Once we finally open up, we can get this message spread and have expanded our reach, which we think will accelerate new patient acquisition. The persistency has helped us drive our growth; we are at 55% on four-month refills, which is just one point in time. The earlier we get patients on therapy, the better that gets, because those are better prognosis patients. Those who tend to respond and that keeps them on therapy beyond the four-month point, and well beyond that. So both those factors are driving growth, and we believe it will improve as access opens up.

Raul Rodriguez, CEO

Thank you, Joe.

Operator, Operator

Thank you. Our next question comes from the line of Do Kim of BMO. Please go ahead with your questions.

Do Kim, Analyst

Good afternoon. Thanks for taking my questions. First, on the European ITP market, I was just wondering if you could share your thoughts on the treatment landscape there. Any differences on how Europe would treat or use TAVALISSE versus how U.S. doctors would.

Raul Rodriguez, CEO

Sure. Thank you, Do. For your question, I’ll also ask my colleagues to comment as well, Dave and Wolfgang is helpful. As I mentioned in my response to an earlier question, I don’t think there’s much difference in the overall treatment landscape in Europe. It resembles the U.S. landscape very closely; patients with ITP are initially put on steroids as the most common form. IVIg is generally used as a rescue medication there, as it is here in the U.S. Our partner Grifols, as you may know, is one of the foremost providers of IVIg, which makes this a great fit. After steroids, they move on to the second line, and the choices are similar to the U.S. TAVALISSE is available for that line, as well as TPO agents and Rituxan. Different doctors view those agents differently and select them in varying orders. There are some differences from country to country. For example, in Germany there’s more TPO use and less Rituxan use, while in France, it’s the opposite. But overall, they’re not that different in terms of what’s available to them. It’s really a global market. That’s an important aspect to think about how we position the product as it facilitates positioning product for our partner. So maybe Wolfgang can add anything from his perspective.

Wolfgang Dummer, Chief Medical Officer

Raul, I think you summarized it well. I mean, I don’t see major differences in treatment algorithms for ITP in Europe versus the U.S. and TAVALISSE or TAVLESSE in Europe should get good adoption.

Dave Santos, Chief Commercial Officer

What I saw during that meeting is their tremendous ability to partner and interact with our commercial medical development team and with us. Importantly, they now have our earlier line data. They’re out of the gate quickly with this story that TAVLESSE is an option immediately after steroids with a 78% response rate, and I think that’s crucial.

Do Kim, Analyst

I thought that was a time when splenectomy was more common in Europe than in the U.S. Is that the case anymore, and do they move more towards therapeutic options ahead of splenectomy?

Raul Rodriguez, CEO

I think Do, that is the general trend in both the U.S. and Europe. Patients prefer not to undergo splenectomy, given the uncertainty of that outcome.

Dave Santos, Chief Commercial Officer

Yes, and to add very quickly from a treatment standpoint, remember that the international consensus guidelines apply there as well as here, because that’s an international working group. I do think that’s important to note as well.

Do Kim, Analyst

Great. Thanks. That’s very helpful. I just had a question on the Phase 3 study in COVID patients. Could you share your thoughts on the expectation for the standard of care arm? How will you be thinking about what the potential benefit of fostamatinib would be in terms of how you powered the study and the number of patients you plan to enroll?

Raul Rodriguez, CEO

Wolfgang, would you like to comment?

Wolfgang Dummer, Chief Medical Officer

Sure. Yes, we are very much aware of the changing landscape, but also about the drugs that are being tested in varying degrees of success. In the U.S., we do expect patients to be on remdesivir, and probably more severe patients will also be on dexamethasone because it has worked in more severe patients. It has some effects in severe patients. But our patients are more on the milder side if it’s in the Phase 3. So that’s one thing. We are stratifying patients by their use of remdesivir and dexamethasone. So, they will not end up with an imbalance of patients all on dexamethasone or remdesivir in one arm. We have insurance policies in place for that. Additionally, we plan to go to places outside of the United States where remdesivir won’t be as widely available. Both drugs provide modest treatment effects in my view. Assuming, for example, a 30% progression rates, we think we have adequate power to demonstrate statistical significance for fostamatinib over standard of care, regardless of the background therapies.

Do Kim, Analyst

No, that’s very helpful. Thank you for taking my questions.

Raul Rodriguez, CEO

Thank you, Do.

Operator, Operator

Thank you. Our next question comes from the line of Kristen Kluska of Cantor Fitzgerald. Please go ahead with your question.

Kristen Kluska, Analyst

Hi, good afternoon, everybody. Thanks so much for taking my question. Regarding the updates that you had to Canada, Japan, and Israel for chronic ITP, first, could you please remind us about how you view the market opportunities across these regions? And then second, do you know if your partners, including Grifols, intend to collect any data from the physicians and users related to the line of usage?

Raul Rodriguez, CEO

Great, thanks. Thank you, Kristen. I’ll comment on that; maybe Dave can add anything further. The U.S. market is by far the largest market for ITP. I think it’s about $1.1 billion, and outside the U.S., it’s about $900 million. Europe is the lion’s share of that $900 million, perhaps $400 million to $500 million. Canada, Japan, and Israel are smaller segments, but still attractive. Japan is a large one. Our partner Kissei is doing a Phase 3 study as required. I expect them to do well in the market, which is attractive in Japan, similar to the U.S. but slightly smaller than the European market. Canada and Israel are also attractive markets, especially given proximity and experience we’ve had there with trials for ITP and AIHA. We had good collaboration in those countries. Any further comments, Dave?

Dave Santos, Chief Commercial Officer

Not on the market, Raul, but I think you’ve covered that well. But on the line of therapy question, all I can say is that from what I’ve seen with our partner Grifols, they are very interested to learn and share information. The goal is to gain adoption of fostamatinib worldwide. If we can gather information that helps us with line usage, that will be beneficial across partnerships as we work to advance TAVALISSE to earlier lines of therapy.

Wolfgang Dummer, Chief Medical Officer

The FORTE study that Dave described in his presentation is also very useful since it will provide a rich data source for use in second line patients. That’ll help enhance our discussions of our product with doctors and patients.

Kristen Kluska, Analyst

Great. Thank you so much for that. One quick follow-up, just during this COVID-19 pandemic, over the last eight months, are you seeing or hearing of any shifts in terms of how physicians are viewing their lines of therapy? Are you noting any changes?

Raul Rodriguez, CEO

Thank you. Dave, would you like to comment on that?

Dave Santos, Chief Commercial Officer

Yes, absolutely. It’s a great question. Patients and clinicians are concerned about the need for infusion therapy during COVID. We’re fortunately an oral medication during this time. I believe it helps both now and into the future. It’s more convenient for patients and part of adapting to their lifestyle, especially with a product like TAVALISSE. Anecdotally, physicians are doing more telehealth visits when possible. They are receptive to agents like TAVALISSE that allow patients to do things at home.

Kristen Kluska, Analyst

Great. Thank you.

Raul Rodriguez, CEO

Thank you, Kristen.

Operator, Operator

Thank you. Our next question comes from the line of Tessa Romero of JPMorgan. Please go ahead with your question.

Tessa Romero, Analyst

Good afternoon, guys. Thank you for taking the question. Hope all is well. Just a few from me. So on the Phase 3 warm AIHA trial, are you able to provide any additional granularity on how you were thinking about timelines for full enrollment for the study? Is it a matter of finding the patients? Are there patients in queue that just need to be dosed? And then my second question, if I could, we noticed a few ASH abstracts up yesterday for fostamatinib; any new analyses or updates we should be monitoring for the conference next month? Thanks so much, guys.

Raul Rodriguez, CEO

Thank you, Tessa. Wolfgang, would you like to address enrollment timelines for Phase 3?

Wolfgang Dummer, Chief Medical Officer

Yes, the message I’d like to send is that things are going quite well. Before March, we had a very good momentum with about eight to nine patients a month. Then we had a shutdown over several months, where nobody got enrolled, and now the sites are reopening. We’ve seen screening activity translate to clinical and good results, meaning that we are optimistic. The COVID outbreaks in Europe and places could interfere with our plans so we’re cautious about making any promises. I say we’re optimistic but we have to respect the pandemic.

Raul Rodriguez, CEO

We look forward to providing further updates as we progress. It’s good to be at over 60% enrollment in this and to have so many sites open in 22 countries really helps. We will continue to look forward to keeping you updated. Regarding ASH, we have a few abstracts discussing some of the data and different cuts, and I think people will find useful. We’ll share more leading up to the conference next month. I believe there are at least four of them to watch closely, covering AIHA disorders, Phase 3 updates with more detail in AIHA, and TAVALISSE in long-term ITP patients.

Tessa Romero, Analyst

Great. Thank you so much for taking my question.

Raul Rodriguez, CEO

Thank you, Tessa.

Operator, Operator

There are no further questions at this time. I would like to turn the floor back over to Mr. Raul Rodriguez for closing comments, please go ahead.

Raul Rodriguez, CEO

Thank you so much. I’d like to thank you for your interest in Rigel and your participation in the call. It’s an exciting time for Rigel as we wrap up this year. I think we’ve accomplished a great deal this year and made tremendous progress despite all the difficulties imposed upon us. Even with those difficulties, we saw some opportunities such as in this COVID area. That’s I think we’re really excited about. We look forward to sharing with you our plans for next year in a future call. And with that, I’d like to thank you. Have a good day.

Operator, Operator

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