Q4 2020 Rigel Pharmaceuticals Inc Earnings Call
Greetings and welcome to Rigel Pharmaceuticals Financial conference call for the fourth quarter and year end 2020.
At this time all participants are in a listen only mode.
On your question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It's on my pleasure to introduce our first speaker Dolly Vance, who is rigel as executive Vice President Corporate Affairs and General Counsel. Thank you Ms. Vance you may begin.
Yeah.
Welcome to our fourth quarter and year end 2000, Twenty's financial results and business update conference call.
The financial press release for the fourth quarter and year end was issued a short while ago line can be viewed along with the accompanying slides for this presentation and the news and events section of our Investor Relations page on our website Www Dot Rigel Dot 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 on par with the FTC.
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 on our fourth quarter and year end 2020 call.
Also joining me today are Dave <unk>, our chief commercial officer.
Wolfgang Dummer, our Chief Medical Officer.
It's still on Matsuda R Executive Vice President of research and being sure know our CFO.
Now starting on slide five let me tell you a little bit about <unk> and what we have accomplished and what we look to accomplish in the coming year and beyond.
We have four key value drivers at Rigel, and although 2020 was a difficult and challenging year, perhaps the most challenging we've had as an industry.
We continue to make very good progress across all of these drivers.
And in turn other opportunities emerged.
We will also tell you we will tell you about each of those our first priority is to continue to grow the use of our products have a lease in the treatment of chronic <unk>.
In early 2020, we pulled our sales organization from the field and moved our interactions to a mostly virtual basis. This did not stop our growth.
Our team grew sales to $61 7 billion in 2020 or 41% increase over 2019.
This is a very good result, given the backdrop of this pandemic and I have no doubt that we would have done much better had we been in the field and we look forward to going back into the field later in 2021.
Starting in 2020 and continuing into this year, we focused on supporting and educating on the early line use of <unk> product, we will tell you a bit more about this in a minute.
Outside of the US we made very good progress in 2020, we received approvals in both Europe and Canada.
Our partner Griffiths launched a product in the UK and Germany in 2020 and more country launches are planned for 2021.
I T. P is a tremendous opportunity on a global basis about a $2 billion market.
$1 1 billion of this in the us and $900 million outside of the us a very attractive and growing market.
Yeah.
The companion indication to ICP is warm autoimmune hemolytic anemia and here, we continued to make progress in 2020.
However, the second wave dependent Mick is having an impact on non or enrollment we.
We have 66 patients enrolled out of the 90 targeted.
Youll hear us to be the first product to be approved for the treatment of warm autoimmune hemolytic anemia and in fact, we continue to be the first and most advanced product in clinical development with a built in advantage of already being on the market.
We will tell you more about that in a second.
AIA tree is a tremendous opportunity of about a 1 billion dollar market in the us and we aim to be the first day gain approval and.
And to capture a substantial share of that market.
A year ago, we did not have a COVID-19 program.
And now a year into it we have a very comprehensive Covid program.
POS momentum has tremendous support pre clinically for its use in treating COVID-19, including publications from R. By numerous colleagues at M. I T.
I H, Harvard and the University of Amsterdam, All supporting this us we will tell you more about this during our presentation as it is very exciting.
This year the NIH launched a phase two study of Pos momentum in 60 hospitalized COVID-19 patients.
And the Imperial College of London also launch the Phase III study of <unk> in over 450 hospitalized COVID-19 patients.
In addition, we've now launched R. One phase III study a tremendous opportunity to address this public health crisis.
And lastly, our pipeline continues to make very good progress we have two phase one clinical programs are rip one and our Iraq <unk> four inhibitor programs Wolfgang will speak more about the Iraq program later in this presentation.
But before I pass the call over to day for a commercial update let me take a minute to highlight the details of our recently announced collaboration with Eli Lilly on a rip one program.
On slide six a little bit of background on the grip program.
There's been tremendous interest in reported nutrition.
As it has potential to treat multiple inflammatory diseases.
Mediated by TNF and the th two pathways. These include psoriasis psoriatic arthritis, ankylosing spondylitis IPD.
Our a and others.
To give you an idea of the potential of this space. There are numerous strengths that currently generate billions of dollars in revenue annually that work by blocking either TNF working on our th two pathways.
If our molecule work to show benefit in these patients with these indications the opportunity is tremendous.
And the convenience of Bora administration May also proved to be a very attractive feature.
In addition, there is a broader opportunity with reported inhibition.
While our phase one product is systemic we are also exploring.
Molecules that cross the blood brain barrier to potentially treat a variety of neuro degenerative diseases, including Alzheimer's and they owe us.
Given the size and breadth of these opportunities it was clear to us that we needed to find a partner to advance.
When we get back to who would be the ideal partner for this program.
Literally came to the top.
Lilly has a major focus on immune diseases, and a proven track record of developing and commercializing these worldwide.
In addition, Lilly has tremendous history and successes in the CNS fields, Inc. Drugs, such as Prozac, Zyprexa Cymbalta and recent advances in Alzheimer's.
In our discussion one discussions with them one thing that we and Lilly both share.
Is an appreciation of the tremendous opportunity of reported inhibitors.
And now we have the resources necessary to develop these molecules as rapidly as possible and then commercialize them.
All of this makes literally the ideal partner for this program.
Moving on to slide seven I'd like to highlight a few key aspects of this collaboration.
Lilly and Rigel will co develop and commercialize rigel as Rick one inhibitor 552, or five type two for all indications focusing on autoimmune and inflammatory diseases.
Lilly will lead the clinical development of the brain penetrating brick one inhibitors in CNS.
Yeah.
Roger will receive a 125 million upfront payment from Lilly and up to an additional $835 million in potential future milestones as well as tiered royalties on net sales.
Development costs for our five fab two will be shared between Lillian rigel subject to certain up dark provisions for rigel.
This partner has the potential to bring forward a new class of compounds in both immune and CNS indications, which address very large.
An important unmet medical needs.
We are very excited to US, Florida this opportunity in partnership with Lilly and with that I'd like to turn the call over to day for a commercial update.
Thank you Raul.
I'm glad to be with all of you today to review our commercial results as we close 2020.
I wanted to express my thanks to the entire commercial team for their commitment and persistence throughout the many challenges of the year on.
I'm very proud of the results the team achieved working together to grow top of lease.
On slide nine you'll see our FDA approved indication, which is for adult patients with chronic immune thrombocytopenia or <unk>, you've had an insufficient response to a previous treatment.
So I'd like to begin my discussion on slide 10.
We ended 2020 by continuing to grow <unk> sales in the us in the fourth quarter, we grew quarter over quarter net product sales by 9% to $17 $8 million, enabling us to reach total net sales of 61 7 million.
In 2020.
41% over our total 2000, net 2019 net sales of $43 $8 million.
Achieving that 41% growth during a year when COVID-19 significantly impacted our ability to see clinicians and increase awareness of toggle east required strong focus on both starting new patients and keeping existing patients on top of leaf.
In 2020 that focus resulted in our persistency growing to 56%.
As a reminder, persistency is defined as the percentage of patients on therapy at four buttons.
This growth in persistency was important in increasing our carryover or the percentage of our business each quarter. It is driven by patients who began therapy in or before the prior quarter.
And by the fourth quarter of 2020 R. Carryover had grown to approximately 75% of our business.
This strong carryover combined with steady new patient starts in the fourth quarter propelled our demand bottles shipped to patients and clinics to.
On 9% over Q3 of 2020, and a total of 30% over 2019.
6200 64 bottles.
This enabled us with the effects of increasing inventory of bottles remaining in the distribution channel and price to achieve net sales growth of 41% versus 2019 to 61 $7 million.
In 2021, we are continuing our focus on improving persistency, while growing the number of patients who begin therapy on top of a lease.
Moving to slide 11.
I'd just like to review how much opportunity we have to grow the number of patients on top of lease, particularly as we begin to move beyond the challenges of COVID-19.
We conducted quantitative market research in Q4 to refresh our look at the opportunity in the adult CIC market and better understand how COVID-19 has impacted treatment.
Especially in the post steroid setting.
In terms of the opportunity in the market our research revealed that clinicians believed they would act safely treat a higher percentage of ICP patients would be available therapies today and in fact applying their treatment rates to the 81300 <unk>.
Patients from claims data result in more than 44000 patients.
Could he actively treated in a year with approximately 24000 of them being treated after steroids.
Importantly, as we've stated in the past three quarters of the available patients in the post steroid setting or in the second and third line.
We are continuing our efforts to broaden awareness of total leases differentiated mechanism of action efficacy in earlier lines and durability of response in the virtual environment during Covid the increase use in these patients.
In addition.
<unk>, our research revealed some important factors to consider related to COVID-19 about the opportunity ahead.
Half of the Treaters indicated that COVID-19 presented challenges in both starting new patients on therapy and switching patients last year.
So we believe that the patient numbers in the graph to the left were reduced by the pandemic last year, resulting in fewer new patients available for total lease and other therapies.
Secondly, and very importantly, about a third of clinicians in our research indicated that they anticipate a surge of patients requiring new therapy as we return to normal.
This bodes well for an acceleration of new ICP patients once they are visiting their clinicians more freely.
And if we're able to improve probably awareness with more access to those clinicians we would expect our new patients on <unk> to accelerate as the patient numbers search.
We are poised to take advantage of the new patient search opportunity ahead with continued messaging of total leases higher response rates in earlier line and our continued efforts on the medical affair spread to both published and generate new evidence differentiating Teva lease in the treatment of it.
Pete.
This is why we are so enthusiastic about the potential of <unk>.
While we currently remain strategically focused on our I T P business.
We are capable and ready to leverage our talented sales marketing market access and business operations teams as new and exciting opportunities become available to us.
Wolfgang will now review two of these potential opportunities, namely AIA.
COVID-19.
Wolfgang.
Yes.
Thank you Dave.
Let me start on slide 13 by reminding you why auto immune hemolytic anemia is such an exciting opportunity for rigel.
As you know the market size and commercial opportunity for us in a H E is quite substantial and likely even larger than ATP. We.
We estimate that there are about 10 to 13 thousands candidate patients with this condition in the U S alone.
With no competing or FDA approved therapies, a significant unmet medical need remains and the opportunity is large.
Gross them up maybe it's the only product currently in phase III development and would be first to market in this indication.
The FDA has acknowledged this unmet need as well and granted fast track designation for the product in December after reviewing our encouraging phase two data in a G, which is really the first solid data in this indication.
Hey, Chi has many synergies with a T P, including the customer infrastructure, that's already in place because the physicians treating ATP or the same physicians, who will treat eiichi <unk>.
Therefore, a lot of awareness and familiarity with first time ethnic already exists and we'll be there right at launch in AG.
Slide 14.
Gives you a brief update on our phase III study in AIG.
As seen broadly across the industry with many other clinical programs. There what was on impact on our enrollment numbers with a second wave of COVID-19 pandemic in the last couple of them on.
Nevertheless, we continue to randomize patients into the trial.
As of today, we have 66 patients randomized about call it 90 patients.
In 39 of those patients have already reached week 24, and 100% book those have rolled over into the extension study.
While we were unable to reliably predict enrollment completion at this time due to the uncertain because of the pandemic. We remain confident that we are well positioned to keep or even expand the beef put tablets to become the first drug approved for this indication.
Yeah.
Let's move on to slide 16.
And on our plans with the post imatinib as a potential treatment option for COVID-19.
As we have mentioned before we see a strong scientific rationale for seeking inhibition and COVID-19 on not just one but multiple levels on the.
Oh the disease.
Gross them up and it can EBIT hyper inflammatory cytokines, and importantly can reduce hypo coagulation and thrombosis.
At this point I would like to give you a heads up on on upcoming peer reviewed publication. We are submitting the demonstrates a very low risk of thrombosis in a T. P patients treated with close them up on it.
As opposed to a widely published increased thrombosis risk with other OTT drugs.
That's great news for Costa months, moving a T P. But he could also be very beneficial for COVID-19 patients.
Finally, close them up and it can also inhibit tau suits.
Very relevant mechanism in a severe disease.
<unk> will elaborate on this further during his scientific portion of the presentation.
With that in mind, we launched <unk>, a comprehensive clinical program for Costa about COVID-19.
Very short time.
Tower leases now in three clinical trials in COVID-19.
We recently launched our <unk>.
Rachel sponsored phase III trial.
And you have seen our recent announcement that we were awarded 16 and a half million dollars from the department of defense to support a phase III efforts, which will pay for the lion's share of the external trial costs and really underscores the broad interest and enthusiasm about post Imatinib English health crisis.
In addition, we have two investigator sponsored trials, one with the NIH and the other with the Imperial College of London, I will get to those on the in a minute.
As you know travel leaves us a commercially available product with a well established safety database of more than 4800 patients treated in clinical trials.
It could be rapidly repurposed as a treatment for COVID-19.
Okay.
Even though they are slowly moving forward. The vaccination. We believe that we will continue to be a need for treatments for those who contract the virus well one of the various mutants that may Colo.
And finally, given that ER tablets.
The exclusivity per tablet is expected until 'twenty 32, we could leverage the day there was probably some COVID-19 to potentially expand development and he was in non COVID-19 related areas.
Yeah.
Slide 17.
This slide shows you the various patient populations covered with our clinical program.
The NIH study includes patients with a score of five six or seven rating on the widely used eight point ordinal scale, meaning they focus on the effect of post imatinib to accelerated recovery in the severe patients.
The Imperial College of London study as well as our phase III clinical trial include mild patients with a score of three or four and will investigate the progression of my patients to severe disease.
On the approach that could also be taken in an outpatient setting as a potential ex that.
Hence we are covering almost the entire spectrum of COVID-19 patients with us retired.
Slide 18.
Shows you the study at the National Heart lung and Blood Institute at the NIH.
With 57 of approximately 60 patients randomized enrollment is almost complete.
NIH is incorporated very powerful translational research tools that can generate valuable new mechanistic data on post imatinib in COVID-19.
For example, you have there.
They have established a mitosis.
That can directly studied he takes a fulsome update on that.
Picked up the disease.
We expect top line results from this study as early as April which is very exciting.
Yeah.
Slide 19 share.
It was you the other phase two I S. T that is ongoing.
The college of London also known as markets.
This is a three arm trial with post them up on the Roses book So let.
Jack inhibitor, plus standard of care compared to standard of care alone.
The first stage of the study will randomize 57 patients per arm for a total of 171 patients.
At that point on interim analysis will be conducted.
With the interim look at the substantive datasets, we hope to gain further understanding of the effects of post COVID-19.
That trial is also progressing well and is currently 106 patients enrolled.
Finally on slide 20.
We are excited to have initiated on own rigel phase III clinical trial. This.
This study includes hospitalized patients with mild disease, who have certain risk factors.
Develop more severe disease.
We will randomize approximately 300 patients one to one to either post imatinib plus standard of care or placebo plus standard of care.
The primary outcome measure is prevention of progression to severe disease as measured with the Orlando scheme.
If positive this trial could be the basis for a potential approval for some items to treat patients with COVID-19.
So in summary, we have a multi pronged approach to COVID-19, and we are excited by the possibility to come up with a safe and effective treatment.
Still desperately needed.
With that I'd like to turn the call over to Esteban, who will elaborate further on some distinct mechanisms of action that make us close them up on that the great candidates for treating COVID-19. It's.
It's the bump.
Thank you Wolfgang.
Glad to be here.
I'm delighted to talk about the scientific rationale for sublease from COVID-19.
I'll start on slide 22, with some insight into sick in this disease.
Numerous investigator from having covered two receptor system mediated by sick, which play a role from the activation of multiple cell types, resulting in cytokine release.
Zooming in on inflammation unexpected blood clotting.
And eventually lead to respiratory distress organ damage and thrombotic complications.
The two receptor systems are the prospects here.
On the right are the SITA lectin receptors or CEA loss, which are engaged by downs on par.
On that are released during the viral infections.
On the left are the FC receptors or SCR, which are engaged by immune complex sales consistent well bite on protocols bond by antibodies.
Well, it's a marquee name by inhibiting Sig has the potential to block these processes on the cleanup.
Much has been this caused about cytokine storms, but let us know on above net policies on withdrawal in Cogs.
On slide 23.
We believe.
Martinez.
In addition to addressing the cytokine storm.
Uniquely on specifically addressed the policies.
Moving on to slide 24, so what isn't it causes.
They told US it is a process where neutrophils are activated to religion net otherwise known as neutral deal extra cellular crops that are designed to crop on in mobilized pathogens.
This net consumer sales so they can dance chromatin figurs balance to secretly natus histones on to various degrading enzymes like Myeloperoxidase day on the last day.
On slide 25.
So how does this and they told US is related to COVID-19.
Well early in the characterization of the autopsies of COVID-19 patients.
It became clear that severe disease was associated with a large penetration on the new truck sales into the lung.
Soon after every.
Evidence of the told US It was reported not only in the alveoli highlighted here the Orange circle, but also on the micro vasculature.
<unk> R from by what form companion neutral pills net on platelets highlighted here by the Green Circle.
In fact, mark yourself on the policies could be detected in the stipulation on COVID-19 patients.
The amount of markers, such as central and a pistol on cell free DNA correlated with the severity of disease as shown on the right on this slide.
That is patients in the ICU or the red dots showed the highest level of net proceeds markers.
Moving to slide 26.
Wolfgang mentioned scientists around the world spreads high interest in treating COVID-19 with post marketing lead.
Adding to our two ongoing Isps.
Our colleagues at the NIH, we're particularly intrigued by the net proceeds angle on setup. This fascinating study to test it.
First day, India's net overseas by overlaying plasma from severely ill COVID-19 patients on neutral sales.
Net what detected using our green fluorescent protein shown in the middle panels on the left.
Then they showed that art for let's say the active component of cost per market profoundly EBIT net.
Doses, adding to the compelling rationale for moving for us to Martinez into COVID-19 shown by the ride micra micro meter panels on quantitative figure on the right.
Interestingly on slide 27.
As clinical observations of this new disease would've been reported last year.
It was not lost on us that there is.
Severe thrombotic complications in the extremities of Covid patients.
Striking resemblance to the observation and in order to seize called heparin induced thrombocytopenia or hit.
It turns out that the pathophysiology on it.
Involves the activation of both platelets or neutrophils.
By anti body.
For HIPAA and complexity this.
Is it similar to the activation of platelets on your truck builds in COVID-19.
On slide 28.
Speaking of platelet activation by immune complexes back.
Back in 2011.
Our collaborators published their innovation by post imatinib or such platelet activation on via FC receptors.
As shown here.
It is accretion on platelet aggregation induced by <unk> heparin antibody complexes.
Fortunately on those dependably blocked by <unk> six.
On slide 29.
We postulate Foster Martinez has the potential to inhibit thrombosis without affecting bleeding or hemostasis due to expense citic on product innovation or six dependent activation of bolt platelets or neutrophils.
Of note on slide.
<unk> 30.
In our clinical experience with post Imatinib in RTP phase III trials wheelchair low incidence of thrombotic events in patients treated with post imatinib with only one thromboembolic events that resolved spontaneously.
This is in contrast to similar studies, we felt at ITT treatments show in thromboembolic events in up to 9% of patients.
Now as Wolfgang mentioned, we have a comprehensive clinical program for a while.
The effect of pasta Martinez and COVID-19.
We are very excited about the potential to benefit patients with heavily on approved drug that was discovered in our labs.
We are also keenly interested in the continued exploration of the depth and breadth of inhibiting sick.
The investigators from the NIH study for example.
We'll be looking into inflammatory cytokine on the Turkish markets in their COVID-19 patients.
With that I will now turn back the call to Wolfgang but an update on R. Equally exciting Idec program also from our labs.
Okay.
Thank you estaban.
Let me provide a brief status update on Iraq.
On slide 32.
With the new partnership in place for our Rip one program and Eli Lilly leading.
The operational aspects of development. We are now fully focused on the further development of our <unk>.
Iraq, one four inhibitor.
We have solid preclinical data in various models that demonstrate the ability of <unk> hundred five two block key inflammatory cytokines in response to toll like receptors.
And IL one receptor signaling.
That opened the door to numerous clinical indications both in the immunology space as well as an email on.
Mining World with Rachel's development strategy.
Not only do we have animal data, but we have also generated some early human data in healthy volunteers.
Our molecule profoundly inhibiting inflammatory cytokines in response to an L. P S channel.
Challenge.
Slide 33 shows you the human data I was referring to on the previous slide which you can see us that placebo patients challenged with L. P. S produced the number of pro inflammatory cytokines, such as TNF TNF Alpha shown on the left and also <unk>.
Six <unk>.
Subjects, who were treated with R. A T pipe showed clear inhibition of this inflammatory response, demonstrating an early proof of concept in humans.
Slide 34.
As mentioned there is fairly strong rationale in the literature for a rule of Iraq inhibition from him on communications.
Low risk Mds is shown here is an example.
I won't go through the figure on the left in great detail.
I want to point out that in low risk Mds is considered to be on inflammatory condition of the bone marrow that can lead to all kinds of blood anomalies.
And that the various cytokines are elevated in these patients are inhibited by Iraq inhibition as you can see on the panel to the right.
Or TNF Alpha IL, six and IL 12.
As a consequence, we are evaluating.
One core program, both for Ria immunology indications, such as Palm Atlanta, Pustular, psoriasis or hidradenitis suppurativa as well as good fits in the hemo space on.
All indications that could be developed by Rigel alone.
With that I will hand, the call over to Dean show on the team.
Thank you Wolfgang I'm on slide 36 for the fourth quarter of 2020, we shipped 1899 bottles to our specialty distributors, resulting in $17.8 million of gross product sales 1725 of those bottles were shipped to patients had quite ex while 107.
84 bottles remained in our distribution channels at the end of the quarter as of December 31, a total of 984 bottles or range of our distribution channels. We reported net product sales from travel east of $17 $8 million or 28% increase compared to the fourth quarter of 2019, our net product.
Sales from <unk> were recorded net of estimated discounts charge backs rebates returns co pay assistance and other allowances of $4 $7 million.
Gross to net adjustment of approximately 28 million, 28%, our gross product sales for the full year, our gross to net adjustment was approximately 19, 3% of gross product sales.
Can we move on from net product sales, let me review our expectations for the first quarter of 2021 during the first two months of this quarter, we've seen a reduction in our daily shipments to patients and clinics as compared to the daily shipments to patients and clinics in the fourth quarter of 2020.
While we experienced a sequential reduction in bottles shipped to patients and clinics last year, resulting from the typical first quarter reimbursement issues confronting our industry such as the resetting of co pays and the Medicare Donut hole. This year's reduction impacted by additional factors such as physician and payer.
Access issues created by the COVID-19, pandemic increased levels of uninsured and underinsured patients and most recently inclement weather throughout much of the United States.
Last year, we do expect some recovery in our bottles shipped to patients at clinics in March but because of the decreased patient demand volume already seen in January and February and a possible reduction in the bottles remained in our distribution channels at the end of the first quarter, we expect our sequential net product sales to be down as compared to the fourth quarter of 2012.
Yes.
Incrementally we currently expect our gross to net adjustment to be approximately 24% in the first quarter of 2021 as.
As we move past the seasonality in first quarter and the various impacts caused by COVID-19.
Dissipate sequential net product sales growth to resume.
On to the next slides in addition to net product sales <unk> contract revenues from collaborations were $697000 for the three months ended December 31, 2020, which consisted of $500000 from referrals related to an option for commercialization in additional territories and 100 and.
$97000 and revenues earned from the performance of certain research and development services from Rogers collaboration agreement with Scripps holes moving on to costs and expenses our cost of product sales was approximately $321000 for the fourth quarter of 2020 total costs net expenses were 37.
$3 million in the fourth quarter of 2020 versus $32 $7 million in the fourth quarter of 2019.
The net increase in cost was primarily due to increases in research and development costs related to our various ongoing clinical studies.
As we look towards 2020, one we expect our total costs and expenses to increase by approximately 15% as compared to 2020 as we expect to expand our commercial activities as COVID-19 pandemic conditions normalize and also progress our clinical programs forward with that I'd like to turn the call back.
Over to Raul.
Thank you Dean and now onto slide 38.
Here's what we have to look we have to look forward to in 2021 I'm.
I'm sorry, here's what we are looking forward to in 2021, continuing to drive <unk> sales in the us, particularly once conditions normalize later this year.
Supporting our partner says they made <unk> available to patients.
Patients across the globe.
Completion of our phase III enrollment in AIA Chi as we continue to focus on being first to market.
Also top line results from our Covid study with the NIH continuing.
Enrollment in interim results from Imperial College of London, COVID-19 study.
As well as data from our own phase III Covid strength.
And a potential application for merchants, who use authorization that is supported by these data.
Lastly, advancing R. One inhibitor program with Lilly in both immune and CNS diseases, and our Iraq, One four program and he monk embraer immune diseases.
I think it's going to be a tremendous year.
With that why don't we open up the call to your questions.
Certainly without conducting a question and answer session, if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is on the question. Hugh You May Press Star two if he'd like true question from the queue for participants using speaker equipment may be necessary to pick up a hair.
Before pressing star one.
One moment, please while we poll for questions.
Our first question today is coming from Yigal <unk> from Citigroup. Your line is now live.
Hi, Raul and team. Thank you very much for taking the questions. Just had a question with respect to the powering for the Rigel phase III in COVID-19, obviously, it's a relatively small phase III, so I'm assuming.
You must be assuming a relatively large treatment delta with respect to progression to severe disease. So does that is that a correct statement and if so could you just comment on what that assumed treatment Delta is in this study.
I guess a question for me.
It is working.
Yeah. So good question we.
Her on the light and assumption over 30% roughly 30% progression rate in the placebo patients standard of care alone because as I told you. We have identified a number of risk factors that makes this these patients more susceptible to become severe pain.
<unk>.
If we show a difference of 15% to 16%, we have which I think is realistic we have 80% power to demonstrate.
Statistically significant results.
Okay, great. Thank you very much.
And then Raul just a question on on partnering could you comment on at all on your level of interest in partnering the Iraq program as well and then just one technical question on the Lilly deal.
Just wondering what would trigger U R. You to opt out of future development costs for 552.
Sure so.
Thank you for those questions should go on.
We had two programs both very attractive in both at roughly the same stage Rip and Iraq, and we looked at book and the opportunities with the Rip program, where very large.
TNF like opportunities th two pathway type opportunities that really require tremendous amounts of resources financially and organizationally and they were beyond our means to do those to make that program and fulfill the potential of rip inhibition keeping them like we have one of the leading programs in this area.
It's a real horse race a bit in a couple of other programs all with large pharma companies and ourselves and so partnering that one made a lot of sense, especially because there was tremendous interest in that program.
From large pharma companies, who very much like something has potential in that even as those hasn't even if it requires.
Hundreds on hundreds of billions of development expenses, perhaps even 2 billion I mean large numbers.
So partnering that was made a lot more sense.
We went ahead and did so.
I'll answer your second question first.
We really believe that this program has tremendous opportunity and like to co invest with Lilly as part of it and the.
And we have the ability to do so now these opportunities may be such that we don't want to have further investment at some point in the future and we have the ability to exit them.
At two different points.
And how the important things about these points are there.
I'll, let into the future and we get to see some of the cards play out.
And so be seeing some of these cards play out you can make a decision do we want to continue or do we not want to continue and it could be both financial.
Commercials as well as simply the data itself that we see in the phase II trials that tells us to opt out or stay in.
And we have the option and it's nice having that degree of latitude with us with the Rip program.
With Iraq, It's also Uh huh.
At similar stage, but the opportunities are much more.
Much more very tmall opportunities.
We're very interested in and rare immune opportunities, which we're very interested in and given that it has that type of opportunity at this point, we're going to make progress with the program ourselves, we're very well capitalized now so there isn't a need from a balance sheet perspective due to necessarily partner. This.
And I think we can make very good progress in this area with this molecules on the Iraq site on our own for now eventually we may partner and maybe at some point you never preclude such a pin it might be a different type of partnering than what we did with Lilly, perhaps a more geographic.
Our split ramps.
So eventually we probably would do that.
But for now I think we have bought the they're on the focus now that you know.
One partner is in good hands with wood and the other us as.
As ours alone. So we can devote our full measure of attention to the Iraq program and make advances there.
And build value and figure out where the best applications for this.
These compounds are hemo immune diseases on which one specifically.
Thank you very much.
Sure.
The next question today is coming from junior hang from Jefferies. Your line is that life.
Thank you so I have a question on a range of Citi.
Covid is study that youre running so a critical critical accounts without cause.
Study completion in October of 2021, so we expect here.
We expect interest at the day that this here.
Wolfgang if you would take a stab at that I think.
As a printer.
You put into clinical trials Dot Gov, obviously is an estimate but go ahead, both gagan all ex for the color.
Yeah of course, it's at this point it has to be on estimates.
We are right now in the process of opening a number of sites are up to 40.
In our in the U S as well as in some Latin American countries.
Countries as you know, it's very hard to predict how.
The pandemic is going to develop but we are I'm looking forward to picking picking up enrollment swiftly and we will make every attempt to enroll the study as quickly as possible and obviously we have a.
A 28 day primary endpoints so from the last patient in true data available in 28 days would would expect it to something like that the study would enroll sometime around summer to the fall of this year.
The current project stuff.
Great. Thank you and then he and I.
Just a quick point on that keep in mind that we are going to 40, some sites across the globe U S. Latin America, where the pandemic is still.
Very high levels.
Yeah.
Alright, and then B and I also scrubbing.
So COVID-19, you find a hunter you correctly the data could it be.
Already in April.
I mean God Covid later than a breath.
Oh, Yeah go ahead sorry.
Yeah go ahead.
Yeah.
I told you we have.
Ft seven patients.
Currently randomized we said we would to randomize approximately <unk> <unk>.
So now you can take a calendar into calculator.
In early March primary endpoint is at 28 days.
Takes you into April of course, there needs to be a database lock and who knows that there needs to be cleaned and all of your Sip type of things, that's why I'm pretty confident that data should be available in the April timeframe of course, you can always slip into me, but I'm optimistic we see data in the April timeframe.
Right and then on other sort of the NIH and starting with our sales team he kind of like looking at adverse events, but there are secondary endpoints and looking at a number of days in ICU hospitalization on things like that so.
Do we expect some clinical outcome data from that trial.
Yeah. As you say are the primary endpoint is indeed safety. So that's pretty straightforward incident or per a serious adverse events are in both treatment arms, but of course, we are going to look at the secondary endpoints, which are efficacy related as well as some of these translational aspects and I would say.
With 50 patients if we see trends pointing in the right direction, even if they don't hit statistically significant.
Statistical significance, but he can't trends in several end points of the point on six point on seven even though 0.1 P value that would be quite strong in particular, if there is corroborated by some excuse me of course, if there is any other inflammatory biomarkers. So so Y O y.
All the same because it's small and we cant expect the world out of it we could well see some trends in the totality of the data package is pointing in the right direction. There are some certainly something to consider and to talk about.
Yes. Thank you. So last question for both of the trials on time.
Let's see the added to standard of care.
Basically it's a competitive catalysts to placebo and the background of a standard of care does that mean that steadily. These on allowed us a standard of care in the divorce the trial.
Yes.
Steroids are committed with some episodes on us mostly us.
<unk> also ran basically a is certainly used widely that's allowed.
And we were we will stratify them for these factors. So it could mean that you know there's more patients for example.
In the U S who get to basically then in Latin America, but the balance between placebo and treatment on.
Should be similar and we will avoid we have taken measures to avoid that they'll imbalances in in these.
At ground to standard of care medications.
Great. Thank you very much.
Thank you Ian.
Thank you next question today is coming from do Kim from BMO capital markets. Your line is now live.
Hi, good afternoon, and thanks for taking my questions. Congrats on the Eli Lilly Gil.
I wanted to know if you have thought about if you do go on co commercialize RFID five two.
What kind of role do you see you having.
And the commercialization.
Sure.
A good deal of that decision will be based on.
What day, what indications are it's found to be useful and obviously in phase II and then subsequently in phase III and if rigel can add value to that effort beyond what really does and if it's a therapeutic area of interest to rigel at the time on this will be on numerous years from now on the current embodiment of.
Rigel, we're still he marked.
Focused company and Theres not a lot of opportunities.
Rip for him on.
So it would largely be in immunology and other inflammatory conditions.
There are many of those that are very large which I tend to think we wouldn't be able to add too much in terms of commercializing b on low lease capabilities, but in more niche indications on more rare immune indications will grip.
We also have some potential I think that's a little more challenging.
There, we might be able to add value and co commercialized. It really is hard to say at this point that we would or wouldn't do it simply because.
We really need to see cards play out in each of the various indications that the partnership will will try the product in and see if there's a benefit of the product and in various indications and the commitment from the partnership is to explore this in multiple indications too to figure that out.
Sure in the short and the <unk>.
Part of the collaboration.
Great I understand that.
For Dean.
And any thoughts to how you're going to take accounting for the upfront payment from Lilly and the Dod Award.
Yes, I do.
So from that from a Lilly accounting perspective, so there there will be a level of complexity with there. So I'd encourage I'd encourage you to look at the 8-K that we filed as well as vs. The future future Qs on this four for more detail, but but essentially once we have HSR clearance. We expect to then receive.
On the shortly thereafter, the $125 million of upfront.
We'll then recognized collaboration revenues a bit more than $60 million in the quarter, we get HSR clearance.
$125 million incrementally, we'd expect two to recognize two or $3 million of incremental revenue over the upcoming quarters as we deliver on certain of our CNS commitments with respect to the balance we will not recognize collaboration revenue nor have opera.
<unk> expense associated with the R. R 552, co development commitment that goes up to $65 million. So you won't see that piece of the transaction flow through our through our P&L again, there's there's incremental complexity that Joe you'll see in the Q, but that's a that's an over.
Of how the accounting will work from a Lilly perspective.
And then from a from a department of defense accounting perspective, sort of 16, and a half million dollars theres a variety of milestones that will be earned over the period of our phase three COVID-19 work will get paid the cash and we'll recognize the revenue over over that period of <unk>.
So it's gonna be over there over.
Over the upcoming multiple quarters that we'll see that $16 $5 million both flow into our cash flow in but also be recognized as revenue.
Okay. Thanks for that.
Sure.
Thank you Don.
Thank you. Our next question is coming from Chris Raymond from Piper Sandler Your line is now live.
Thanks for taking the question can you guys hear me okay.
Yes, okay, great how are you.
Hey, guys.
Above all the detail on slide 11 with respect to the market I guess I'm one of the questions that we've had for a while.
Wondering at what point would you be in a position to provided us a little bit more breakdown of the use of tablets by line.
And then maybe a second question.
Forte observational study in second line.
I think you initiate it recently and talked about enrollment, possibly this year I know you know, obviously COVID-19 has kind of thrown a wrench on a lot of things but.
When will we see data from.
From that study and just maybe contextualize that with the really impressive data that you guys had in the second line that was at Ash a couple of years ago. Thanks.
Sure So when I ask Dave to comment on the on the Houston or within line and maybe comment on that and then maybe Wolfgang if you can maybe comment on forte enrollment and when we might have some data from that trial.
Yep.
Sure.
Great question, Chris and I'm glad that you like the details were provided on the market and our research that was conducted in Q4.
In terms of by line of therapy, I think the hard part is right now.
We are still in what I believe to be launch phase. So I mean at the end of the day.
We got out there in 2018, and then we got a new data in second line in 2020, but we have not been able which is why we did the research last year really to kind of gauge what the effect of this data was on clinician says they heard it and what we saw us very.
Positive.
Clinicians do respond to this data so I think as we move forward and we get better uptake I think the shares would be kind of a very difficult to read right. Now I think it's more important to kind of think about how do we continue to grow our base of business and and look at that but I I search.
And we think from a standpoint of where the market is we know where the opportunity is it's across all lines, but obviously the bulk of it is in the second and third line and that's where we're perfectly positioned I think you know.
There's three drivers to our business right, it's getting patients on therapy, it's ensuring they stay on long and its increasing the number of prescribers, who use the product and then that last piece is what we haven't fully been able to capitalize on yet because of COVID-19.
And I think when we do we'll probably be able to speak more clearly about our uptake in different lines of therapy.
And Wolfgang did you want to answer that.
A question on Forte.
I could take a stab at that.
It.
It depends on because it certainly affected the enrollment and Forte I think is patients just don't want me to go into the clinic. So it has had that impact already and we could sensitive.
The fortunate thing is that this year, we're focusing primarily on the second line data as Dave mentioned as a key driver and we know that data.
Data is impactful it's also impactful in the in the sense that we have yet not meet for use of that data.
And there's still a lot of time that we need to devote to making us that data. In addition to that you have heard a little bit today on the thrombotic benefit of foster Magnum and that covers book Covid, but also I T P and the poster.
We mentioned previously at Ash on thrombotic incidents.
Incidents or lack thereof per cluster magnum and a new publication, that's coming in that area. So we actually have a good deal to talk about with doctors is limited as our interactions are rare.
Relative to the second line data in the thrombosis benefit with foster Matt in them and that's really the focus for the short term.
In the longer term, maybe next year, when we hope to have Forte data.
No.
That's when we'll begin getting new data on that but we have plenty to talk about between now and sometime next year, what kind of any other comment.
Yes, sorry.
It didn't kind of went on mute button earlier.
So we are in the process of activating sites the sites or through as you pointed out some of the sites or impacted by COVID-19 more than others, but generally they are very much interested and remember this is.
This is an observational study was 45 patients and we can certainly generate data streams based on less than 45 patients. So so so while we why are we you know need some time to get the whole paid us 45 patients in the cash.
Certainly have positions, where we look at 15 to 20 patients and if there's anything that's a meaningful then we have the option to take it to a scientific meeting and things like that.
Okay, if I could ask maybe a follow up.
On a commercial question on I guess in and in the interim as you're waiting for Forte data what you know.
If you could maybe sort of characterize the you know the key objections, I guess that you run into.
With docs, considering using heavily us in second line.
You know I mean, its not labeling obviously right. So what what is the what does the objection.
Sure David you want us to take et cetera.
Absolutely.
That's you know since I've been here I've been listening to a lot of docs.
Talk about top of leash and mostly it's just they're not there.
They're not us aware I mean, we have a different mechanism of action net really talk that really.
Addresses the underlying cause of platelet destruction and into once they hear that and then they kind of understand.
Our dosing and the ability to take it without regard to food and.
And the results that it can have over a long period of time with patients. They don't have many objectives.
Objections, it's really Chris about the habit.
Well up over many years of of going to other products.
Chaz rituximab or or T O R. As it you know, it's just simply hard to Greg and that's why I'm, so kind of looking forward to.
Unleashing our entire team out there.
When when things get back to normal to really talk about this because I have seen it in numerous interactions where clinicians become quite enthralled.
And these are virtual with the product and then when they give it a try I think they're seeing results that.
Quite impressive to them. So you know.
That's what we have a product that can compete it's just unfortunate that when we got the data in second line, which really gave us that efficacy that we werent able to reach as many docs with that with that message as we had hoped and we're doing the best we can in a virtual environment.
But that's why I'm excited I mean, if you if you think of our ability to get out there again when things open up and the fact that docs told us they haven't been able to switch patients or start to face. It I mean, that's why we're very excited about.
What will happen when we start to get back to normal.
Got it thank you very much.
Thank you Chris Thank.
Thank you as a reminder, that star one to be placed on the question queue. Our next question is coming from Kristen <unk> from Cantor Fitzgerald. Your line is now live.
Hi, everyone. Thanks for taking my questions. So I just wanted to follow up on the last point and looking at some of the patients you've treated for chronic IPP. So last month at Ash two months ago excuse me at Ash, you had a poster talking about sales.
Ft profile and some of the side effects improving after the first few months of usage. So I wanted to ask if you could discuss that a little bit further and if you think that's another key selling point based off of the experience you've had commercially so far.
Thank you Christian why don't I ask Pete to comment on that maybe Wolfgang if theres any subsequent comments.
Yes.
Yeah, I mean, it is part of our messaging to really talk about.
Each individual patient and how they can get started and the importance of sticking with the product to get through.
These periods of side effects.
And then I mean to that point, we just launched in March a new.
Program called <unk> together, it's a program for adults with that.
T P who are either interested in taking total east or who are already taking it and it partners with them throughout their entire treatment Journal journey.
With that either text or email us and helps them become more successful with their <unk> treatment and the beauty of it is Ah patients can enroll by scanning a QR code a texting.
Number to join or just visiting our website of tablet together and so these are the kinds of things you know we've been doing already in terms of educating clinicians and and Ah patients on how to best get started and we're improving that with programs like this one.
On a lease together, which we think can help not only starting to patients, but also patients who've been on product for a long time help them as well.
Yeah.
Great. Thank you and then as it relates to the ongoing COVID-19 trials are the three of them. You know obviously the landscape has changed quite a bit in terms of new mute on stream. So I guess just wondering across these trials, whether you think you'll have a diversified patient population.
Consider some of these changes that we've seen in the world.
Yeah, Wolfgang you wanted to take a stab at that.
Good question.
Yeah. So I think I heard you say the various screens. They don't know I'm coming into play yeah. So I gave you my personal opinion.
Regardless of the screen COVID-19 disease is basically mostly caused by the immune system rather than the virus itself. So so those patients who could really blame on the on a ventilator and later on die they die because of a hyperactive immune system.
Thrombosis and in mitosis and things like that rather than a specific virus.
So as soon as supposed to come up and it is addressing the immune response, the hyperactive immune response against the virus my prediction is it shouldn't matter.
Which variant disabilities diseases caused by an should still book.
Performs.
Thank you you know the good thing about doing the trials and the diverse countries. We're trying it is what we will see that diversity and will demonstrate exactly what Wolfgang just said.
Great. Thanks, everyone.
Thank you Kristen.
Thank you. Our next question is coming from Joseph <unk> from H C. Wainwright. Your line is that a lot.
Good afternoon, guys cause them on whaler on for Joe and Thank you for taking my questions.
On a couple of questions from COVID-19, it and like you know day time on doing some bolt.
I'm from both is that very interesting and I was wondering if you would be able to look at some of Arctic adventure in the upcoming and I shall be I.
Hi al.
What's going on do you want to comment on that.
Yeah. So the short answer is yes.
Thrombotic events would be reported most likely isn't as an adverse event, but we are targeting specifically.
On to see what the incidence of thrombotic events or.
With regards to the NIH trial I would just manage expectations are around that a little bit because you know why the thrombotic events. So clearly inc.
Kris in COVID-19 patients with us.
With 50 patients it may be difficult to demonstrate a difference in extra thrombosis thrombotic events in that study. However, we're also looking at certain thrombosis markers like <unk> like us to diagnose for example.
And of course as I said, we are collecting information on on extra thrombotic events and Bill took me reported out on that.
Got it thank you.
Is it like on lunch I had on a question like as they call. It. The 19 programmable. So do you anticipate any capacity constraints.
On a need for it he said and it's gonna be approved.
Or are you going to be true cingal.
You know one thing about I'll answer that one thing about being a commercial stage products is that you have the manufacturing process in place in the distribution system in place and if anything you've seen the value of a distribution system as recent as the troubles with the distribution of vaccine.
<unk>.
Have those in place we have the product available to hospitals.
Today, a doctor in the hospital wanted to US total lease he or she would just simply have to write it and it's likely that that hospital has total lease on their shelf if not we can send it to that hospital overnight to get it to them quickly that's the benefit of being a commercial stage company with those things exist we have.
On a substantial supply from material are able to make this product in relatively short order.
If we need to make more of it and so I think we're in very good shape in terms of potentially addressing the situation where there is a substantial need because we definitely would like to meet that is true.
On a period of time as possible.
Got it. Thank you. Thank you for that he mentioned and you could have kept marks are on the potential additional territory is that.
It can be open that's ongoing for us.
I was wondering what's out of your ongoing EBIT uplift for a vehicle for three four is set to open up additional territories.
Yeah. So our printer referrals is working hard on gaining approvals hum in individual countries specific to pricing et cetera.
A European situation a little different in the US you get approval for all of Europe, and then you go to each individual country to negotiate the terms.
This is exactly for that specific countries. They are in Germany, and that's fantastic because Germany as you may know us as the largest by population and certainly by pharmaceutical market size in Europe and they are also in the U K.
They will.
Later this year hopefully be available in the other major European countries U K.
France, Italy, and Spain, and other countries as well.
So they're working very hard on that day, so a weird time there as it is here in terms of this pandemic, but they've made very good progress on those things in and then the product will be more easily available in those other territories, followed by others other smaller territories.
Got it thank you very much.
Okay.
Thank you we reached end of our question and answer session I would like to turn the floor back over to ROE for any further or closing comments.
I'd like to.
Thank you and thank you for your questions I'd like to thank all of you for your.
To support high electric Thank you for your interest I think we've made very good progress in calendar year 2020 in early part of this year already and I think we have numerous attractive and exciting milestones coming in 2021. So we look forward to sharing those with you and briefing you on them and updating you on our progress as this.
Year progresses take care stay safe.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.