Aug 2, 2016
Executives
Dolly Vance - EVP, Corporate Affairs & General Counsel Raul Rodriguez - CEO Ryan Maynard - CFO Anne-Marie Duliege - CMO
Analysts
Eun Yang - Jefferies Josh Schimmer - Piper Jaffray Anupam Rama - JPMorgan
Operator
Good afternoon, and welcome to Rigel Pharmaceutical's Earnings Conference Call for the Second Quarter 2016. [Operator Instructions].
And now, I will turn this conference over to our first speaker, Dolly Vance, who is Rigel's Executive Vice President, Corporate Affairs and General Counsel.
Dolly Vance
Hello and welcome to our quarterly earnings conference call. The financial press release for the second quarter of 2016 was issued a short while ago, and can be viewed under the news section of our website at 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 risk 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 in 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 this call over to our CEO, Raul Rodriguez.
Raul Rodriguez
Good afternoon. In addition to myself and Dolly, Ryan Maynard, our CFO; and Anne Marie Duliege, our Chief Medical Officer; are participating on this call.
Our plan for this call is to provide an update on Rigel's fostamatinib program in Immune thrombocytopenia or ITP. More specifically we will discuss why think that fostamatinib is a compelling product opportunity for Rigel and what we are doing to prepare for our US launch.
The top line results of the first two identical Phase 3 studies are expected later this month. When this data comes in we will issue a press release and host a conference, a webcast.
The second study is following only 2 to 3 months later so we will announce those results in October or November. We expect to submit the NDA package to the FDA by the end of the first quarter of 2017.
Our goal is transform Rigel into a profitable bio-tech company with a focused specialized commercial organization with an initial focus on patients with auto-immune hemolytic diseases and their health care providers. During the last few months we have spoken to patients, physicians, peers and other healthcare providers about their experiences with ITP and were currently available for treatments.
Universally, there is agreement that there is a need for new treatment options. There is a great deal of interest in the potential of fostamatinib with its unique mechanism of action which targets the underlying disease process, the destruction of platelets.
I will share more thoughts about fostamatinib and ITP in a few minutes but first I would like to ask Ryan to report on our second quarter financial results. Ryan?
Ryan Maynard
Thank you, Raul. For the second quarter of 2016, we reported a net loss of $13.5 million or $0.15 per share compared to a net loss of $13.9 million or $0.16 per share in the second quarter or 2015.
Revenues of $8.6 million were comprised of $4.8 million from the amortization of the $30 million upfront payment we received from Bristol-Myers Squibb as well as $3.7 million that we received this quarter related to our license agreement with BerGenBio. We reported total cost and expenses of $22.2 million in this quarter compared to $19.2 million in the second quarter of last year.
The increase in costs this quarter were primarily due to the increase in research & development cost related to fostamatinib as we complete the phase 3 IT programs and continue the phase 2 immune hemolytic anemia and IgA nephropathy. As of June 30 2016, we had cash and investments of $94.9 million which we expect to be sufficient to fund our operations into the third quarter of 2017.
Therefore, we can project that we can have about a year of cash after both of the phase 3 data announcement. This will put us in a good position as we evaluate financing opportunities after we have delivered the phase 3 results for both pivotal trials.
At this time I would like to turn the call over to Anne-Marie Duliege, Rigel's Chief Medical Officer.
Anne-Marie Duliege
Thank you Ryan. As Raul said we have been learning more about the patient perspectives on living with ITP as well as understanding the decisions that must be made by physicians when caring for these patients.
The medical specialist to treat patients with ITP are hematologists or hemato-oncologists. They are the same group who treat auto-immune hemolytic anemia and other indications we are currently studying for fostamatinib.
These physicians know that treating chronic persistent ITP's challenging. The most severe patient may fail to respond to some or even al of the available therapies.
The success of any patient response to therapy is not always predictable. Some patients may be unaware of significant drops in their platelet count.
And during these episodes of significant drop in platelet count, patients are at risk of bleeding either due to treatment favor or treatment interruption. This disease places a significant burden on the patient's quality of life including severe fatigue.
The existing therapies have limitations including lack of efficacy in some patients or they may be inconvenient to use, making patients compliance a challenge in the long term. As a reminder the platelet count in a normal healthy adult is generally above 150,000 platelets for micro leader but platelets with ITP can have platelet counts for below 30,000 which is a generally accepted threshold for action.
People whose platelet count fall below 30,000 are considered at risk for spontaneous or trauma induced hemorrhage. This level was used as a threshold for entry in our phase 3 ITP program.
As you know there are two identical studies for Rigel for fostamatinib phase 3 study program. They are designed to provide pivotal results that if positive will be the basis for an NDA submission.
Each study enrolled approximately 75 adult patients with persistent or chronic ITP who have failed at least one prior treatment and have platelet counts below 30,000 below base line. The subject were randomized in a 2:2:1 ratio receiving fostamatinib or matching placebo to be taken orally twice a day for a period of 24 weeks.
Subjects were asked to return to the clinics regularly to bring the study to blood rose to molecule platelet level. The primary end point for both studies is the achievement of stable platelet count equal to greater than 50,000 over several blood runs performance from midpoint to end of the study.
The secondary end-point includes at least 50,000 platelet counts at mid-point and at final visits. An increase in platelet count of at least 20,000 above base lines in those patients with severe thrombocytopenia defined at least 15,000 at base line.
In the next few weeks we will receive the results of the first study including the primary end point and the subset analysis that may provide qualitative insight into which sub-group of ITP patients could be expected to benefit most from fostamatinib therapy. We remain confident that fostamatinib will attain statistical significance versus placebo in which case we intend to prepare and submit an NDA dossier supporting the utility of fostamatinib as a new treatment modality.
I look forward to sharing more information with you soon and now, I will turn the call back to Raul.
Raul Rodriguez
Thank you Anne-Marie. I would like to spend a few minutes telling you why we think fostamatinib may be a very useful treatment in ITP.
Fostamatinib is a unique oral sick inhibitor developed by Rigel's R&D efforts. SYK Kinase is a key player in the immune process that leads to platelet destruction in ITP.
As such, fostamatinib may address the underlying disease process, the auto-immune destruction of platelets in ITP. Fostamatinib has a well-defined safety profile based on more than 5000 patient years of clinical experience across multiple auto-immune indications.
It has a manageable safety profile which may make it suitable for long term maintenance, therapy and chronic ITP. ITP's a highly heterogeneous disease and as Anne-Marie said there is little certainty which treatment will work with these with which patients.
Rigel's phase 2 study in ITP fostamatinib was shown to work in other phases where other treatments had previously failed including patients with failed steroids, rituximab, [indiscernible] and splenectomy. The phase 2 study also demonstrated 2 important things about fostamatinib.
The ability to attain a rapid horizon platelets and a sustained response in platelet counts in patients with a subset of ITP patients. The rapid response provides early feedback as to whether fostamatinib may be a viable treatment for that patients ITP.
For more than 7 years now, 2 patients from that phase 2 study have successful maintained attractive platelet counts by taking fostamatinib daily. We hope to add to that experience with our long term extension study that is part of phase 3 program.
Fostamtinib is also a convenient oral formulation which may help patients adhere to the treatment regimen. We hope that by helping patients maintain a long term regimen we potentially create a sustained management of this disease.
If the phase 3 results confirm what we think about fostamatinib, fostamatinib may likely be the treatment of choice for refractory ITP patients since they have very few or very limited options. We think it's an attractive medical and commercial opportunity for Rigel.
With that in mind we are working at the best approach to building a commercial enterprise which will launch this product for ITP and subsequently for auto-immune hemolytic anemia. Approximately 900 heam and heamongs [ph] in the US treat most of the patients suffering from ITP.
We believe we can build our own highly focused marketing and sales organization to address this audience. We estimate building a sales force of about 30 individuals as well as additional management and marketing staff.
This organization will be focused exclusively on fostamatinib and ITP at launch and will provide the most comprehensive information about this product and he management of this disease. In addition, we will make significant efforts to engage with patients directly.
To help them manage the disease and understand the treatment options. We will also work with patient support groups to further this engagement.
We believe that fostamatinib opportunity is not limited to ITP. Its mechanism will lend itself to discussing other auto-immune diseases.
We are conducting a proof of concept phase 2 in study in auto-immune hemolytic anemia with fostamatinib. Auto-immune hemolytic anemia is also a rare serious blood disorder where the immune system produces antibodies that result in the destruction of the body's own red blood cells.
These patients are anemic and have symptoms such as fatigue, rapid heartbeat or enlarged spleen. Currently there are no treatment options approved for auto-immune hemolytic anemia.
So, we believe that there is a major medical need in this area. I would expect results from our phase 2 study in early 2017.
Up further point, we believe that auto-immune hemolytic anemia is highly synergistic with ITP in that the same physician specialist, heam and heamong [ph] treat ITP also treat patients with auto-immune hemolytic anemia. In addition, we are conducting a phase 2 study of fostamatinib in IgA Nephropathy.
IgA Nephropathy is also an auto-immune disease and effects the functioning of the kidneys which many of these patients eventually require in dialysis or kidney transplant. We are conducting a placebo controlled 2 sequential dose covert study, looking at the proteinuria as the primary endpoint.
We expect results from the first dose, the 100mg BIT dose from the study by year end. We expect a signal that we are in the right track with this readout.
That the more robust readout will likely come from the second cohort, a 150mg BIT dose group which we are currently enrolling. Before closing, I would like to say a few words about our financials, partnerships and our next clinical candidate.
As Ryan mentioned our financial position remains strong. Our current cash position is expected to carry us for 12 months after the phase 3 results have been reported.
Our current primary system making excellent progress and we look forward to updating you on each of these as they events. For fostamatinib outside of the US, we will be seeking collaboration partners with significant presence in Europe or Asia with capabilities to capitalize on ITP, auto-immune hemolytic anemia and IgA Nephropathy opportunities.
We are also seeking partners for some of our earlier clinical stage projects. And finally, we expect our next clinical candidate to come from our Iraq program.
We are excited about this candidate because like fostamatinib it may offer multiple therapeutic opportunities in immunology and possibly oncology. I will close by saying we are clear of our focus in the coming months.
With data from the phase 3 ITP program, we will first prepare the NDA submission, Rigel's first by the way for fostamatinib and ITP and subsequent regulatory process. Second, we will build a commercial organization for the potential launch of fostamatinib in the US in ITP and third, we will grow the pipeline beyond fostamatinib and ITP i.e.
fostamatinib and auto-immune hemolytic anemia and IgA Nephropathy in our next clinical candidate from our Iraq program. Now let's open the call up for your questions.
Operator
We will open the lines now for Q&A. [Operator Instructions] and our first question comes from the line of Eun Yang with Jefferies.
Your line is now open.
Eun Yang
Thank you. For fostamatinib, the first of phase 3 study; how many patients from phase 1 actually have enrolled in the open-labelled extension study and those who chose not to involved in the extension, what was the reason?
Thank you.
Anne-Marie Duliege
Just to clarify, are you asking how many patients?
Eun Yang
Yes, 75 patients in first phase 3, I wonder how many patients have been moving openly with studies.
Anne-Marie Duliege
Yes, so a subset of these patients have been involved in the follow up study. We have not provided these numbers publicly but would do monitor all their responses well and you know in the long term extension studies, all of these patients receive fostamatinib.
It's an open label study.
Raul Rodriguez
We will disclose those numbers later on when we have the results from the study.
Eun Yang
Okay. Then how about the reasons why they will not go over into your clinical extension studies?
What were the reasons for the patients who chose not to?
Raul Rodriguez
We didn't take a survey of them to ask that specific question, but we do ask them to all patients. Some patients clearly have other things that they want to do with their lives and come in every other week so I think that must be a possibility but I think, we do have a subsequent number in the long term extension study.
Anne-Marie Duliege
It's clearly the majority of patients that have moved into the patients that have moved Eun into the phase 2 expansion or in the long term extension program.
Eun Yang
Great. Thank you and then hemolytic anemia so, I think initially expecting the stage 1 data by end of this year.
There is a slight delay. Can you give us how many patients have enrolled out of the 70 you are targeting in stage 1?
Raul Rodriguez
We haven't disclosed those numbers. We will do so at the end of the year so you have some sense of that.
What we would like to do is because that is an open label study we don't want to piece meal information from that study. We would like to make sure we have enough patients in that open label and have those patients going through their treatment so we can say something definitive about that indication.
So, we anticipate that being early of next year.
Eun Yang
Sure. And my last question is IgA Nephropathy and initially I think the first quarter data was expected in the first quarter but I don't think you mentioned how and when we might expect the data so I just want to make sure they still in fourth quarter?
Raul Rodriguez
We are expecting the data for the first cohort, the 100mg dose group, by the end of the year.
Eun Yang
Okay. Thank you.
Raul Rodriguez
Sure. Thank you Eun.
Operator
Thank you. And the next question comes from Josh Schimmer with Piper Jaffray.
Your line is now open.
Josh Schimmer
Hey thanks for taking my question. Thinking ahead to the auto-immune hemolytic anemia, I was wondering if you have had any preliminary discussions with the FDA or some thoughts as to what registration program might look like and whether you would need placebo control trial or and it's the first golden based points because the FDA tends to be receptive to open labels i.e.
just curious about the path forward there.
Raul Rodriguez
It's a good question. We have not had the discussion with the FDA in terms of what a pivotal program would look like for auto-immune hemolytic anemia.
And we are really looking for this proof of concept trial to provide the basis for that discussion next year. So, we will have that discussion and we will propose hopefully, that a very expedited way forward with that.
And given the tremendous medical need in that area, hopefully they are willing to be agreeable about that.
Josh Schimmer
All right. Thanks very much.
Raul Rodriguez
Sure.
Operator
Thank you. And the next question comes from Anupam Rama with JP Morgan.
Your line is now open.
Unidentified Analyst
Hi, this is Hugo on the call for Anupam. Just one question, in terms of base line characteristics what is you expectation for patient population enrolled in a phase 3?
So [indiscernible] and also how do you think this would impact the label?
Anne-Marie Duliege
Great. So, we haven't yet disclosed nor have we looked entirely at the base line characteristics of the patient population but we will provide this information when we disclose the results.
Remember the entry criteria our patients were failed at least one regimen and have low platelet counts obviously.
Unidentified Analyst
Thank you.
Operator
Thank you. And the next question comes Joakim [ph] from BMO Capital Markets.
Your line is now open.
Unidentified Analyst
Hi, thanks for taking my question. My first question is I was wondering if you have started discussions with insurance providers or done any feedback the reimbursement requirement for ITP.
Also if you could describe the type of patient mix you are expecting in terms of the distribution between Medicare and Medicate and private care?
Raul Rodriguez
Thank you and welcome as well. We have not had discussions with insurance providers as yet.
It's a little premature. We are going to get the data in this month of the next couple of months and then we will be in a position to do more market research in terms of reimbursement questions, pricing etcetera.
Then after that I think some time probably more like next year might be the time to do that. And we will have those discussions.
I think they will be very useful discussions because they are very important and clearly the reimbursement environment is a continual change so we will be prepared for that so I think it is a little early yet to have done that beyond some of the market research we have done to basically confirm that this is an area that we are able to price with some degree of flexibility. Your second question in terms of the profile of the patients we expect to have in this trial.
As Anne-Marie said they needed to have failed just one prior therapy. Almost always that is at least a steroid and we expect patients to have failed other things as well within the trial for sure but we don't know exactly that until underline the data later this month.
We will provide the background when we release the results later this month.
Unidentified Analyst
Okay. Thank you.
Also, do you think you will have an opportunity to request priority review when you file your NDA and do you think you will be dependent on the degree of benefit that you will see in the phase 3 study?
Anne-Marie Duliege
No, the answer is no to both. We have no situation of priority review and we will review to tell of the data somewhat independently of how significant its effects are.
Unidentified Analyst
Okay. Thank you very much.
Raul Rodriguez
Thank you.
Operator
Thank you. [Operator Instructions] And our next question comes from Eun Yang with Jefferies.
Your line is now open.
Eun Yang
Thanks for the follow up question. So, you have about $15 million from the offering agreement.
Are you planning to exercise in the coming months?
Ryan Maynard
Hi Eun, this is Ryan. We do have $15 million left on the ATM we have with Kantar.
And as you know we didn't draw on that last quarter. We haven't used it in July or we probably intend to use before the phase 3 data.
And that's pretty much the focus and the guidance we can give.
Eun Yang
Okay. Thank you.
Operator
Thank you. At this time I am showing no further questions.
I would like to turn the call back over to Mr. Rodriguez for closing remarks.
Raul Rodriguez
Thank you. And I appreciate your questions.
We appreciate your continued interest in Rigel and what we are doing here and we look forward to keeping you up to date on our progress and obviously we will see you at the end of this month.
Operator
Ladies and gentlemen thank you for your participation in today's conference. This does conclude the program.
You may all disconnect. Everyone have a great day.