Rigel Pharmaceuticals Inc (RIGL) 2015 Q3 法說會逐字稿

Good afternoon and welcome to Rigel Pharmaceuticals' Third Quarter 2015 Earnings Conference Call. (Operator Instructions) I would like to remind you that this call is being recorded for replay purposes on Rigel's website.

And now, I will turn this call over to our first speaker, Dolly Vance, Rigel's Executive Vice President, Corporate Affairs and General Counsel.

Hello and welcome to our quarterly earnings conference call. The third quarter 2015 financial press release was issued a short while ago and can be viewed on the News section of our website, www.rigel.com.

As a reminder, during today's call, we will make forward-looking statements regarding our financial outlook, the progress, timely execution, and timing of the reporting data from our clinical trials, the progress of our clinical programs, and our transition into a commercial state company. 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 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.

Thank you, Dolly, and thank you for joining us today. We had a very good quarter at Rigel. We've made significant progress in enrolling our fostamatinib Phase III trials in ITP and in other clinical areas for the product. So we'd like to share those with you today. I will then turn the call over to Ryan Maynard, our CFO, who joins us for a financial update.

We are driving the enrollment of our Phase III clinical trials in ITP. One of the studies is already more than 75% enrolled, and we are expecting to have top line data from that study in the middle of 2016, and data from the second study shortly thereafter. In the meantime, teams here at Rigel are preparing the NDA application that will follow.

As you may know, in September, the FDA granted our request for orphan drug designation for fostamatinib for the treatment of ITP. This designation is for molecules that are in clinical development for the treatment of diseases affecting fewer than 200,000 patients in the U.S. This designation may provide numerous benefits to Rigel.

Also in the third quarter, we signed a license agreement with Aclaris Therapeutics for certain Rigel JAK inhibitors for the use in dermatology. This new partnership advances an opportunity outside of Rigel's areas of focus and provides useful revenue to the company. Aclaris will explore the potential of JAK inhibition as a treatment for alopecia areata and other skin disorders. They're an excellent company, and we look forward to their progress.

I will now ask Ryan to review their third quarter financial results for you. Then, I will return to share additional updates and allow time for questions.

Thank you, Raul, and good afternoon, everyone. For the third quarter ended September 30, 2015, Rigel reported a net loss of $6.7 million or $0.08 a share, compared to net loss of $20.9 million or $0.24 per share in the second quarter of 2014. Contract revenues from collaborations were $13 million this quarter, and this was primarily the $8 million upfront payment from Aclaris that we received in the third quarter. Revenues this quarter also included $4.8 million from the continued amortization of the upfront payment from Bristol-Myers Squibb. There were no contract revenues from collaborations in the third quarter of 2014.

We reported third quarter 2015 expenses of $19.8 million compared to $21.0 million in the same quarter of 2014. This decrease was primarily due to savings in our facilities costs, offset by an increase in our development costs related to the Phase III trials with fostamatinib.

In August, we entered into a controlled equity offering sales agreement with Cantor, where we may sell, through Cantor, up to an aggregate of $30 million in shares of our common stock. As of today, we have not made any stock sales under this agreement.

As of September 30, 2015, we had cash, cash equivalents and short-term investments of $134.4 million compared to $143.2 million at the end of 2014. We expect to end this year with cash and investments in excess of $115 million, which translates into a net burn for the year of less than $30 million. Our current cash takes us into Q2 of 2017.

Now I will turn the call back over to Raul.

Thank you, Ryan, for that update. During our last call, I spoke about our plans for fostamatinib in addition to ITP. This is the fostamatinib life cycle management strategy. The next important project we have in the works with fostamatinib is aimed at treating autoimmune hemolytic anemia, a blood disorder for which there is no approved treatment options. Our experience with fostamatinib for ITP, also a blood disorder, provides a synergistic connection for branching into autoimmune hemolytic anemia. This is an area where patients are largely underserved, and where we may have an opportunity to make a significant impact on their lives. Given this synergy, our substantial safety experience with fostamatinib and the large medical need in this disorder, we believe we can quickly move into this indication for fostamatinib. Our team is currently working with clinicians to design a proof-of-concept Phase II study for this indication, and we expect to open enrollment for this trial in early 2016.

We continue to enroll patients in our Phase II IgA nephropathy study. We have not focused this study substantially. Our objective is to enroll approximately 25 patients and to demonstrate a directional benefit for fostamatinib in IgA nephropathy. As you may know, the prevalence of IgA nephropathy is substantially higher in Asian countries, approximately five times higher than that in the U.S. or Europe. We have now opened up centers in Asia to advance enrollment in the trial. With a positive signal from this more focused Phase II study, we hope to establish a partnership for the Asian markets. This will then better position us to execute on a larger clinical trial for this disease.

As you may know from previous calls, that Rigel collaborators are planning clinical studies to independently evaluate fostamatinib's potential in Waldenstrom's, graft-versus-host disease, and ovarian cancer. We will share updates on these projects and additional ones as they become available.

So in summary, we have made very good progress this quarter in advancing our key objectives: Enrolling the fostamatinib ITP Phase III program, setting up the upcoming Phase II proof-of-concept trial for autoimmune hemolytic anemia, and focusing our IgA nephropathy Phase II trial. In addition, we extended our cash runway. In all, a very good quarter.

So with that, I'd like to open it up for your questions.

(Operator Instructions) And our first question comes from the line of Yuko Oku from JP Morgan. Your line is now open.

Hi, I'm on the call for Anupam Rama. I was just wondering when you'll make your update for the combination strategy with the immuno-oncology agent?

As you know, we're focusing on several immuno-oncology programs. And in addition to fostamatinib, we are working on an IRAK inhibitor program. And what we like about the various approaches that we have, IRAK and SYK inhibition with fostamatinib, is that it allows us to combine several of these assets and allows us the optionality of doing so. And as we make decisions in terms of how we are going to proceed clinically with those, we're going to come back and give you some updates, most likely in the first half of next year.

Okay, thank you.

And our next question is from the line of Eun Yang from Jefferies. Your line is now open.

So the patient enrollment in ITP trial is essentially going really well; over 75% patients have already enrolled in one study. You mentioned that second trial, the enrollment completion is going to be shortly after mid-2016. So question to you is, are you still on track to file NDA by end of 2016?

Thank you, Eun. Yes. We're happy with the enrollment in the ITP trial. Seventy-five percent is a good achievement, and we're beyond that now also. So we kind of can see the completion line at some point in the near, very near future; so we're very happy with that.

The second one is trailing that. There is likely to be two separate announcements for two trials. One and then the other given that there is a gap between the two. And I think, at this point, we'll have to come back to you exactly when we would file the NDA, but it will probably be within six months of that. So it's either towards the end of the year or early next year.

Okay. So this first trial in which over 75% of patients have been enrolled, is that enrollment completion is, like, by year-end or by early next year? Is that something --

I think a best guess would be early next year, very early next year.

Okay. All right. And then the second indication for autoimmune hemolytic anemia, 25 patient in Asian countries. So first of all, what's the kind of -- what's the endpoint that you are looking at? And once you're starting first quarter, when do you think we would see the data?

So the autoimmune hemolytic anemia trial, we think will start -- we will begin enrolling in early '16, early next year. And we're aiming for about 20 or so patients in that proof-of-concept study. And it's hard to forecast exactly the timing on that, given that we really haven't enrolled a patient yet. But we are looking at a relatively modest number in 20 patients. So hopefully we could do that rather quickly. But we don't yet have a good estimate on the exact read out of that.

But then, in the past, you mentioned that there are some medical centers where they see a lot of autoimmune hemolytic patients, anemia patients, that you can actually enroll the patients pretty quickly. So I'm kind of wondering why you decided to go to Asian countries? I mean I understand the number of the patients but --

Two different indications. So autoimmune hemolytic anemia, there are a very good number of patients here in the U.S. and some centers that have a high number of patients in that area. And there is the one that we're going to initiate in the early part of next year. This is autoimmune hemolytic anemia. In IgA nephropathy is where we went and opened up Asian centers. That's a trial that's already underway.

Oh, I see. I'm sorry, I misheard.

Yes. So that trial in IgA nephropathy, it's going to be targeting about 25 patients. We're already well underway towards that goal. And we hope to have those patients done in the first part of next year, but we will give you a better estimate in terms of the read-out as early next year, as we get to early next year.

Okay, thanks. And the last question is on Bristol-Myers Squibb collaboration. Where do you think you are in the process of now you -- but -- that BMY in the process of nominating an IND candidate?

Well, we have a good-sized team at BMS and a team here at Rigel working on that and profiling the molecules that we gave them as part of that collaboration. And it's really in their hands when they decide to do that. So I hate to speak on their behalf when that will happen. We're looking forward to that happening and there's a lot of activity around that, but I can't give you a clear guidance just yet.

Okay. So just one more, if I could. So the autoimmune hemolytic anemia, you are looking at the increases in hemoglobin levels?

Yes. Increases in hemoglobin levels will probably be the primary endpoint of that. And it's an area there's such a tremendous medical need there that I think, what I hope is that with this proof-of-concept, it will be an open label phase to that study. We'll be able to see benefit in those patients by having that very objective measure, hemoglobin levels, measured. And we'd be able to determine that we're having a benefit. And then, after that, very quickly move into a larger clinical program, obviously in consultation with the FDA in how best to proceed quickly in autoimmune hemolytic anemia.

Okay. Thank you.

(Operator Instructions) And I'm not showing any further questions in the queue. I will now turn the call over to Mr. Rodriguez for final remarks.

Well, thank you, all, for your time today. I think it's been a good quarter for Rigel. We look forward to keeping you informed of our progress and some very exciting announcements next year. So until then, have a good holiday season.