Rigel Pharmaceuticals - Earnings Call - Q1 2025

Executive Summary

• RIGL delivered Q1 2025 total revenue of $53.3M and diluted EPS of $0.63, materially above Wall Street consensus; revenue beat by ~$9.5M and EPS beat by ~$0.50, driven by strong net product sales and collaboration revenue strength. EPS est: $0.134*; revenue est: $43.87M*.
• Net product sales rose 68% year over year to $43.6M, with TAVALISSE $28.5M (+35% YoY), REZLIDHIA $6.1M (+25% YoY), and GAVRETO $9.0M; total collaboration revenue was $9.8M (Grifols $4.7M, Kissei $4.6M including a $3.0M milestone).
• 2025 guidance maintained: total revenue $200–$210M (excludes ~$40M non-cash revenue expected in Q2 from Lilly collaboration accounting), net product sales $185–$192M, and collaboration revenue $15–$18M; company expects positive full-year net income.
• Management emphasized commercial execution across all three brands and advancing R289 and olutasidenib programs; non-cash ~$40M collaboration revenue expected in Q2 following decision not to opt-in to ocadusertib development costs with Lilly.

What Went Well and What Went Wrong

What Went Well

• Commercial momentum: Net product sales +68% YoY; “strong start to the year” and “growing, profitable company” with $11.4M net income in Q1.
• Product performance: TAVALISSE achieved $28.5M (+35% YoY) with record quarterly patient demand; GAVRETO $9.0M sequential +11% vs Q4; REZLIDHIA $6.1M (+25% YoY).
• External partners/regulatory: $3.0M milestone recognized on Korea TAVALISSE approval; continued ex-U.S. expansion and partner contributions (Grifols, Medison).

What Went Wrong

• Sequential decline in net product sales vs Q4 due to expected Q1 inventory drawdown across channels, typical seasonality; management flagged resetting dynamics early in Q1.
• Costs and expenses rose to $40.6M (from $36.5M a year ago), primarily personnel and higher R&D for R289/olutasidenib, and higher royalties/amortization tied to sales growth.
• Potential tariff exposure: management noted uncertainty from global trade tensions affecting third-party manufacturers, not ready to quantify impact (expected modest).

Transcript

Operator (participant)

Greetings and welcome to Rigel Pharmaceuticals' financial conference call for the first quarter, 2025. At this time, all participants are in a listen-only mode. A brief 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 is now my pleasure to introduce our first speaker, Ray Furey, Rigel's Executive Vice President, General Counsel, and Corporate Secretary. Thank you, Mr. Furey. You may begin.

Ray Furey (EVP, General Counsel, and Corporate Secretary)

Welcome to our first quarter 2025 financial results and business update conference call. The financial press release for the first quarter 2025 was issued a short while ago and can be viewed along with the slides for this presentation in the news and events section of our investor relations site on rigel.com. As a reminder, during today's call, we may make forward-looking statements regarding our financial outlook and our plans and timing for regulatory and product development. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent annual report on Form 10-K for the year ended December 31st, 2024, and subsequent filings with the SEC, including our quarter one 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 President and Chief Executive Officer, Raul Rodriguez. Raul.

Raul Rodriguez (President and CEO)

Thank you, Ray, and thank you, everyone, for joining today. Also with us today are Dave Santos, our Chief Commercial Officer; Lisa Rojkjaer, our Chief Medical Officer; and Dean Schorno, our Chief Financial Officer. Now, beginning on slide four, we will provide an overview of Rigel's business and our results for the first quarter of 2025. I want to start the call today by highlighting our strong start to the year. Today, for the first quarter of 2025, we reported year-over-year net product sales growth of 68% from our expanding commercial portfolio. In addition, we increased collaboration revenue from our ex-U.S. marketing partners. With total revenue of $53.3 million for the quarter and continued financial discipline, we were able to generate $11.4 million in net income this quarter.

Now, this is a time when the general business environment is challenging, especially for the biotech market, but highlights the robustness of our corporate strategy and, consequently, our unique position. Rigel is a growing, profitable company with important clinical opportunities at hand that we are able to fund ourselves. On this call, the team will provide you with greater details on our position and this quarter's results. Dave will provide an overview update on the strength of our growing commercial business that now includes three commercial products after the acquisition of our latest product, GAVRETO. Lisa will provide updates on the advancement of our development pipeline, including R289, our novel and selective dual IRAK1 and IRAK4 inhibitor. R289 is currently being evaluated in a phase Ib clinical study in patients with relapsed or refractory lower risk MDS.

She will also highlight our plans to expand olutasidenib with the planned initiation of a phase II study in recurrent glioma. Beyond these Rigel-led development programs, we also remain committed to evaluating new opportunities to expand our hematology and oncology portfolio through business development, as we did with REZLIDIA and GAVRETO. In 2025, we will continue to focus on commercial growth while maintaining that financial discipline that has contributed to the results today and updates today. We continue to anticipate total 2025 revenue of $200-$210 million and to report net positive net income for the full year 2025 while advancing and expanding our development pipeline. This is a testament to the strength of our business and the execution of our corporate strategy to grow our hematology and oncology business.

Now, before I turn the call over to Dave, I want to take a moment to discuss our RIP Kinase 1 inhibitor program that is partnered with Lilly. Last week, we notified Lilly that we will not exercise our right to share in future development expenses for our gadocitinib, known previously as Rigel's R552. This incremental development cost share, which we believe could be substantial and near-term, could have resulted in slightly higher royalty rates for Rigel on future net sales. While we continue to be very excited about the potential of our gadocitinib, we have concluded that it is optimal for us to invest in our own internal pipeline assets, such as R289 and olutasidenib. Dean will tell you a bit more about the financial impact of this in his remarks. Now, with that, I'll turn the call over to Dave to provide a commercial update. Dave?

Dave Santos (Chief Commercial Officer)

Thank you, Raul. On slide six, you'll see our three commercial products: TAVALISSE, GAVRETO, and REZLIDIA. Moving to slide seven, we are pleased with the strong year-over-year growth in revenues in the first quarter of 2025. You can see how our quarterly and annual sales have increased since 2021 in the chart. We have grown each quarter's sales over the previous year, and that growth continues. In the first quarter of 2024, we reported $26 million, and now for the first quarter of 2025, we generated $43.6 million, representing a 68% increase. Our year-over-year growth was driven by the addition of GAVRETO to our portfolio last year, as well as growth in both TAVALISSE and REZLIDIA. Our commercial team has been dedicated to execution, driving continued momentum for TAVALISSE, raising awareness for GAVRETO after a successful transition into our portfolio, and improving both institutional and community demand for REZLIDIA.

My sincere thanks to the entire team for all their hard work. Slide eight shows a summary of our commercial performance by product. First, on TAVALISSE, I'm pleased to report another strong quarter in which we generated $28.5 million in net product sales, an increase of 35% compared to the first quarter of 2024. This growth was driven by continued strong patient demand, with another consecutive quarterly record high. For GAVRETO, we delivered $9 million in net product sales in Q1. As a reminder, GAVRETO became commercially available from Rigel in late June 2024. Lastly, for REZLIDIA, we reported $6.1 million in net product sales, an increase of 25% compared to the prior year period. Moving to slide nine, I'll provide more color on our commercial performance. TAVALISSE continues to grow steadily as the foundation of our portfolio, consistently hitting new record quarterly highs in patient demand.

That steady growth has been driven by new patients starting on TAVALISSE each quarter and the subsequent increased carryover that it's generated. We expect this trend to continue throughout 2025. In addition, in the first quarter, we completed a successful streamlining of our distribution network to improve efficiency and be consistent across the entire portfolio. GAVRETO continued to grow nicely under our ownership. In the first quarter of 2025, the third full quarter of GAVRETO being in the portfolio, we generated $9 million in revenue, approximately 15% year-over-year growth compared to the first quarter of 2024, as reported by the previous owner of the product. On a sequential basis, we saw 11% revenue growth versus Q4 of 2024, driven by additional carryover from existing patients as well as new patients. The seamless transition into our portfolio has provided a solid platform for growth that we will continue to build on.

We are confident we can continue to grow GAVRETO as we begin more targeted efforts on expanding our base of prescribers, particularly since the use of RET inhibitors in non-small cell lung cancer should continue to expand in the frontline setting, consistent with the updated guidelines I discussed last quarter. Overall, we believe that RET inhibitor use will continue to grow beyond 2025, and GAVRETO will grow in turn. For REZLIDIA, we continue to drive new patient starts as we raise awareness for the product, and especially as clinicians become more aware of REZLIDIA's efficacy in post-venetoclax patients. They believe that activity is clinically meaningful, as these patients are very difficult to treat with other therapies. We are also focused on educating healthcare professionals on the benefits of patients remaining on therapy, consistent with data that was presented at the ASH meeting in December.

The analysis showed that while some patients with mutant IDH1 relapsed or refractory AML achieve responses very quickly, sometimes within one to two months of treatment, other patients who continue treatment with REZLIDIA require up to six months to achieve CRH and even up to 10 months for an overall response. This data supports the prescribing information that suggests treating patients for at least six months to allow time for clinical response in patients without disease progression or unacceptable toxicities. We believe we still have a significant opportunity to grow REZLIDIA's use in mutant IDH1 relapsed or refractory acute myeloid leukemia, and we are focused on building on the scientific data currently available in this important population of AML patients. Finally, moving to slide 10, we continue to work on expanding access to our products in markets outside of the U.S.

TAVALISSE is commercially available in Japan, in Europe under the brand name TAVALISSE, and in Canada and Israel via our partners Kyowa Kirin, Grifols, and Medison. In addition, our partners continue to pursue regulatory approvals for TAVALISSE in new markets. Late last year, Knight Therapeutics announced it had received regulatory approval for TAVALISSE in Mexico, and in January, Kyowa Kirin announced regulatory approval for TAVALISSE in the Republic of Korea. For REZLIDIA, in 2024, we expanded our relationship with Kyowa Kirin to include Japan, the Republic of Korea, and Taiwan for all potential indications, and we entered into an exclusive license agreement with Dr. Reddy's for all potential indications throughout Dr. Reddy's territory, which includes Latin America and other territories. We are pleased that access to our products is expanding outside the U.S., and we continue to explore other opportunities for partnerships outside the U.S.

to bring our products to other patients and markets around the globe. I will now pass the call over to Lisa to provide an update on our development pipeline. Lisa.

Lisa Rojkjaer (Chief Medical Officer)

Thanks, Dave. I will now provide an overview of our pipeline progress and plans for the remainder of the year. I'm on slide 12. From our development pipeline, we're particularly excited by the progress in the clinical development of R289, our novel dual IRAK1 and IRAK4 inhibitor in lower risk myelodysplastic syndrome, or MDS, and olutasidenib in mutant IDH1 recurrent glioma. Beginning with R289, our phase Ib study in patients with relapsed refractory lower risk MDS is progressing well, and we're currently enrolling dose level six. We look forward to providing updated data from this study in the second half of this year.

From a regulatory perspective, the granting of both fast-track designation for the treatment of patients with previously treated transfusion-dependent lower risk MDS and orphan drug designation for MDS is an acknowledgment by the FDA of both the unmet medical need of the lower risk MDS patient population and the potential of R289. Furthermore, as part of Rigel-sponsored development programs and alongside our partners, MD Anderson and the Connect Cancer Consortium, olutasidenib is being evaluated in new indications. We believe olutasidenib has potential in several cancers where mutated IDH1 plays a role, such as glioma, additional AML segments, and MDS, either as monotherapy or in combination. We expect to initiate a Rigel-sponsored phase II study to evaluate olutasidenib in recurrent glioma later this year.

In addition, all four clinical trials under our MD Anderson collaboration are now open for enrollment, as is the Connect Target D study evaluating the combination of olutasidenib with temozolomide as maintenance therapy in adolescents and young adults with IDH1 mutated high-grade glioma. Consistent with our strategy and evidenced by our acquisitions of olutasidenib and pravocitinib, we remain focused on evaluating potential opportunities to expand our portfolio by in-licensing or acquiring products that would be a strategic fit for our hematology and oncology focus. Now we'll spend a few moments on our R289 program. I'm now on slide 14, which presents an overview of the value proposition of R289 and lower risk MDS. There are about 12,000 previously treated lower risk MDS patients in the U.S.

With recent development efforts in lower risk MDS focusing primarily on first-line therapies, there's a high unmet need for next-line therapies, particularly for previously treated transfusion-dependent patients. Dysregulation of inflammatory signaling is key to the pathogenesis of lower risk MDS, and IRAK1 and IRAK4 mediate this process. Blocking both IRAK1 and IRAK4 may suppress marrow inflammation and leukemic stem and progenitor cell function and restore hematopoiesis. R835, the active moiety of R289, blocks toll-like receptor and IL-1 receptor signaling in vitro and was active in various preclinical models of inflammation. Clinical proof of concept of this anti-inflammatory effect came from a healthy volunteer study in which R835 markedly suppressed LPS-induced cytokine release compared to placebo. As a reminder, R289, which is being currently evaluated in the clinic, is the oral prodrug that is rapidly converted to R835 in the gut.

As I mentioned, R289 has both FDA fast-track and orphan drug designations, giving the molecule an expedited regulatory pathway, potential priority review, and seven years of market exclusivity upon approval. Both of these designations underscore the agency's interest in this rare disease and their willingness to collaborate with Rigel in the development of R289. In addition, R289 has thus far demonstrated a promising preliminary clinical profile in a phase Ib study. The initial dose escalation data that were recently presented at the ASH annual meeting demonstrated promising preliminary safety and clinical activity in elderly, heavily pretreated patients with relapsed or refractory lower risk MDS. On slide 15, we outline the treatment landscape for lower risk MDS. MDS is a clonal disorder of hematopoietic stem cells leading to dysplasia and ineffective hematopoiesis. The main consequences for patients are anemia and transfusion dependence, which adversely impact their quality of life.

In addition, infections, iron overload from transfusions, and subsequent organ dysfunction all negatively impact the patient. Aside from transfusions, initial therapies include erythropoiesis stimulating agents, or ESAs, if patients are eligible, and luspatercept. Emetostat was also approved last year for ESA failure, high transfusion burden, lower risk MDS. With eight-week transfusion independence rates approaching 40% with luspatercept and emetostat, many patients require an alternative treatment option. Although hypomethylating agents, or HMAs, are approved, the percentage of patients achieving transfusion independence is low. Therefore, there's a high unmet need for safe, effective treatment options following failure of approved therapies, particularly for previously treated transfusion-dependent patients. On slide 16, you'll see the design of our ongoing open-label dose escalation, dose expansion, phase I b study in relapsed refractory lower risk MDS patients with either symptomatic anemia or transfusion dependence.

Primary endpoints are safety and selection of the recommended phase II dose, and secondary endpoints include transfusion independence, hematologic improvement, response rates, and PK. Enrollment is ongoing into dose level six in the dose escalation part of the study, evaluating a dose of 500 mg twice daily. Once enrollment of this cohort is complete, the plan is to select two doses to be compared head-to-head in the dose expansion part of the study to optimize selection of the recommended phase II dose for further evaluation. In addition, once the recommended phase II dose has been determined, an exploratory cohort of first-line lower risk MDS patients will be opened to evaluate R289 at that dose in an earlier line of therapy. Initial data from the study was presented at ASH in late 2024. On slide 17, you'll see the initial safety data that was presented.

To put the safety data into context, this was an elderly, heavily pretreated patient population with a median age of 76, more than 70% of whom had received either luspatercept or an HMA. Almost three-quarters had a high transfusion burden, meaning they frequently received red cell transfusions before they enrolled in the study. In this population, R289 was generally well tolerated, with low-grade nausea, diarrhea, fatigue, chills, and pruritus being most frequently reported overall. Nausea and diarrhea were also two of the most frequently reported related adverse events that are indicated in the table on the slide. Overall, the most frequently reported grade three or four adverse events were anemia, decreased platelet count, pneumonia, and increased ALT, occurring in only two patients each. Thus far, what we're not seeing is a high incidence of cytopenias and infections, which is encouraging. On slide 18, we show the preliminary efficacy data.

The swimmer plot shows each patient and the red cell transfusions by dose group, starting with the lowest dose group, 250 mg daily, on top. Per the IWG 2018 criteria, the transfusion history for each patient was collected for 16 weeks prior to R289 administration to establish the baseline transfusion frequency for each patient, shown to the left of day zero, which is indicated by the red arrow. Eighteen patients were evaluable for efficacy, meaning that they had received one or more R289 doses and had at least one efficacy assessment. Red blood cell transfusion independence lasting eight weeks or longer was achieved by three patients, one receiving 500 mg daily and two receiving 750 mg daily. Red blood cell transfusion independence lasted for more than six months in two patients, and one patient also achieved a marrow complete response. The median duration of transfusion independence was 29 weeks.

In addition, one high transfusion burden patient receiving 500 mg daily achieved a minor HIE response with a 64% reduction in red cell transfusions compared to baseline. Looking at PK, we noticed that at R289 doses of 500 mg once daily and higher, R835 plasma concentrations reached or exceeded those correlating with 50% or 90% LPS-induced cytokine inhibition that was previously observed in healthy volunteers. What's interesting is that at these doses, i.e., 500 mg and 750 mg once daily, 40% or 4 out of 10 evaluable transfusion-dependent patients achieved transfusion independence. Moving to slide 19, you see the summary of the responding patients. A few things to highlight here. The majority of responding patients were high transfusion burden at baseline and had received a variety of prior therapies, including luspatercept, hypomethylating agents, and even some experimental therapies.

Both patients achieving durable transfusion independence lasting more than six months, patients four and 10, were high transfusion burden at baseline and had received HMAs. Beneath the table, we see the hemoglobin levels over time for the three patients that became transfusion-free. Although patient 10 in the middle eventually lost their response following a drug interruption and dose reduction, on the background of transfusion independence, peak hemoglobin increases ranging from 2.3 g -5.6 g per deciliter compared to baseline were observed, indicating that R289 has the potential to correct anemia, providing support for its evaluation earlier in treatment. In summary, the initial data is encouraging, showing R289 is generally well tolerated with promising signs of preliminary activity in heavily pretreated transfusion-dependent patients. We look forward to sharing additional data from the study in the second half of this year. Now we'll shift focus to olutasidenib, our IDH1 inhibitor.

Beginning on slide 21, glioma is an area that is incredibly challenging, where there's not been much advancement in therapeutic options. Diffuse gliomas are the most common primary brain tumor in adults, affecting approximately 20,000 in the U.S. each year. IDH1 mutations occur in about 70% of patients with grade two and three glioma and are found in up to almost 35% of adolescent and young adult patients. Unfortunately, most of the disease recurs, and there is no standard of care therapy for relapsed patients. The recent approval of vorasidenib, an IDH1 and IDH2 inhibitor in grade two low-grade gliomas, has highlighted the potential for IDH inhibitors in glioma. Olutasidenib was previously evaluated in a phase Ib study in 26 patients, which was previously published in the journal Neuro-Oncology.

Two patients with high-grade glioma achieved partial responses and both with enhancing tumors, and 10 patients achieved stable disease for a disease control rate of 48%. This clinical proof of concept supports further evaluation of olutasidenib in glioma. Moving to slide 22, we outline our development approach in glioma. Last year, we entered a collaboration with the Global Neuro-Oncology Consortium Connect. In Connect's TarGeT trial, a molecularly guided phase II umbrella clinical trial for high-grade glioma, the Rigel-sponsored arm of the study, TARGET-D, will evaluate a post-radiotherapy maintenance regimen of olutasidenib in combination with temozolomide, followed by olutasidenib monotherapy in newly diagnosed patients between 12 and 39 years of age with IDH1 mutation positive high-grade glioma. This study is open for enrollment. In addition, we're on track to initiate a phase II clinical study in recurrent glioma later this year.

We think this is an important opportunity as there is a significant unmet need in this patient population. We, along with Connect, are excited about olutasidenib's potential to provide a much-needed new treatment option to this underserved patient population, and we look forward to the data generation from the Connect study in addition to our planned study in recurrent glioma. On slide 23, you'll see another important collaboration, our strategic alliance with the MD Anderson Cancer Center to advance olutasidenib more broadly into AML, MDS, and beyond. All four studies included in this collaboration are open for enrollment, and we look forward to sharing updates from this collaboration in the future. Turning to our partnered program. On slide 25, as Raul mentioned, we're very excited about the Lilly collaboration for gadocitinib and the CNS penetrant program.

The RIPK1 inhibitor programs are progressing well with our partner Lilly, and we're very pleased with the program's potential. RIPK1 is implicated in a broad range of inflammatory cellular processes and plays a key role in TNF signaling. Gadocitinib, the non-CNS penetrant RIPK1 inhibitor, previously referred to as R552, is currently being studied in an adaptive phase IIa, IIb clinical trial in up to 380 patients with active, moderate to severe rheumatoid arthritis. Phase IIa enrollment is advancing well. The preclinical CNS penetrant RIPK1 inhibitor program is also progressing toward lead candidate nomination. Moving to slide 26, we outline several upcoming milestones for our development programs in 2025. For our ongoing R289 program in lower risk MDS, we expect to complete the dose escalation part of the phase Ib study. We then plan to initiate the dose expansion phase later this year.

Also, during the year, we plan to seek Health Authority input on the registrational path for R289, and we're anticipating presenting updated dose escalation data in the second half of the year. For olutasidenib, we plan to initiate a phase II clinical study in recurrent glioma by year-end. We'll provide you with more details about that study later this year. In addition, we'll continue to support the four MD Anderson studies and the Connect study. We're excited about the potential of our development programs and look forward to providing updates in the future. Now I'll pass the call to Dean to discuss our financial results for the quarter. Dean?

Dean Schorno (CFO)

Thank you, Lisa.

On slide number 28, we reported net product sales of $43.6 million for the first quarter, growth of 68% year-over-year, including TAVALISSE net product sales of $28.5 million, a growth of 35% year-over-year, GAVRETO net product sales of $9 million. As a reminder, GAVRETO became available from Rigel in June of 2024, and we reported REZELDIA net product sales of $6.1 million, a growth of 25% year-over-year. Our net product sales from TAVALISSE, GAVRETO, and REZLIDIA were recorded net of estimated discounts, chargebacks, rebates, returns, copay assistance, and other allowances of $16.6 million. As anticipated, we saw a sequential decrease in net product sales from the fourth quarter of 2024. Consistent with our remarks on our fourth quarter earnings call and what we've seen in past first quarters, our revenues were impacted by drawdown in inventory levels across our distribution channels.

We also reported $9.8 million in contract revenues from our collaborators for the first quarter, primarily driven by contributions from Grifols, Kyowa Kirin, which included the $3 million milestone payment, and Medison, bringing our total revenues for the first quarter to $53.3 million. Finally, I'd like to take a moment to discuss the reporting impact from our notification to Lilly that we will not exercise our opt-in right related to the development and commercialization of gadocitinib for the treatment of non-CNS diseases. As a result of this notification, in the second quarter, we expect to recognize approximately $40 million in collaboration revenue. This is non-cash and related to the release of the remaining cost share liability currently on our balance sheet. Under the terms of our collaboration agreement, Rigel will continue to be entitled to receive milestone and tiered royalty payments on future net sales.

Moving on to the next slide, and down the income statement to costs and expenses. Our cost of product sales were approximately $4.4 million for the first quarter of 2025. Total costs and expenses were $40.6 million compared to $36.5 million for the same period of 2024. The increase in costs and expenses was mainly due to increased personnel-related costs and higher R&D costs driven by the timing of clinical activities related to R289 and olutasidenib. In addition, cost of product sales increased driven by increased product sales, higher royalties, and amortization of intangible assets. These increases were partially offset by decreased stock-based compensation expense. We reported net income of $11.4 million for the first quarter compared to a net loss of $8.2 million in the same period in 2024.

We ended the quarter with cash, cash equivalents, and short-term investments of $77.1 million, similar to the $77.3 million as of the end of 2024. Before I discuss our financial outlook for 2025, I wanted to spend a moment discussing potential tariffs to Rigel as a result of global trade tensions. Rigel uses a group of typical third-party contract manufacturers for API and finished goods manufacturing, some of which are located outside the U.S. Given the uncertainty, we're not prepared to provide an expected impact of potential tariffs today. We do expect any impact to be modest and note that our IP is domiciled in the U.S. Turning to our financial outlook for 2025, we continue to anticipate total revenue in the range of approximately $200 million-$210 million.

This includes our unchanged expectation of approximately $185 million-$192 million in net product sales and $15 million-$18 million of contract revenues from collaborations. In addition, we continue to anticipate reporting positive net income for the full year of 2025 while funding existing and new clinical development programs. Please note that our 2025 revenue guidance excludes the approximately $40 million in non-cash collaboration revenue that's expected to be recognized in the second quarter related to our Lilly agreement. To wrap up my section, we look forward to continued financial discipline for the remainder of 2025 and beyond. With that, I'd like to turn the call back over to Raul.

Raul Rodriguez (President and CEO)

Thank you, Dean. Moving on to slide 30, we made significant strides over the past three years to expand our commercial portfolio via unlicensing or acquiring assets that fit our commercial capabilities and portfolio focus.

We have a proven track record of delivering top-line growth, as evidenced by the 32% compound annual growth rate, or CAGR, in revenue growth from 2021 to 2024. This revenue growth enables us to fund our business and our strategic priorities, including to continue expanding our hematology and oncology business. We are confident in our expectation of approximately $185 million-$192 million in net product sales this year. Turning to slide 31, for the remainder of 2025, our priorities are clear: grow our commercial business, advance our development pipeline, identify new pipeline opportunities, and continue to maintain financial discipline. We anticipate growing our net product sales in 2025 by approximately 30% year-over-year. We remain focused on advancing our phase Ib clinical study evaluating R289 for the treatment of patients with lower risk MDS.

We are on track to publish updated data at a medical meeting late this year and initiate the dose expansion phase of this study by year-end. For olutasidenib, we plan to initiate a new Rigel-sponsored phase II study in recurrent glioma while continuing to support our strategic collaborations with both MD Anderson and the Connect Cancer Consortium. With our anticipated strong revenue growth and financial discipline in 2025, we will continue to invest in our development programs, but also expect to report positive net income for the full year. Finally, on slide 32, our successful execution of our corporate strategy has resulted in Rigel being uniquely positioned in building a leading hematology and oncology business in a profitable and sustainable manner. I would like to thank you for your interest, and we will now open the call to your questions. Operator?

Operator (participant)

Thank you.

If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, to ask a question, press star one on your telephone keypad. Stand by while we pull for questions. Our first question comes from Kalpit Patel with B. Riley Securities. Please state your question.

Kalpit Patel (Senior Biotech Research Analyst)

Yeah, hey, good afternoon, and thanks for taking the question. I had one on the Target-D program that you have ongoing in high-grade glioma. I guess you have two different plans here for glioma.

You have that study running, and then you also have the planned company-sponsored phase II trial in recurrent glioma. Can you help us clarify the objectives and perhaps the design differences between the two? Longer term, what signal do you want to see in the Target-D program to justify moving forward in one program or the other?

Raul Rodriguez (President and CEO)

I'll ask Lisa to take a shot at it. I think just to start that there's two different studies here, two different patient populations. The Target-D program, which we're delighted, it's an umbrella study that was already underway, which allows us to add our product to that one. Logistically, it facilitates the start and initiation of that study. It's a bit different of population than what we're contemplating in our own clinical study. Maybe you can give us a bit more color, Lisa.

Lisa Rojkjaer (Chief Medical Officer)

Yeah, sure.

Thanks for the question, Kalpit. Yeah, as Raul mentioned, we're supporting the Connect umbrella study. Our arm is looking at the combination of, as I mentioned, olutasidenib with temozolomide as maintenance. In the maintenance setting, these will be targeting patients that are post-surgery and radiotherapy. It is temozolomide and olutasidenib for one year, followed by one more year of olutasidenib monotherapy maintenance. This is going to be focused on patients with grade three astrocytoma, looking for an impact on progression-free survival. We're happy to be working with Connect on this one. It's a unique population. These are adolescents and young adults. We're looking to kind of help expand the sites also because they're a pediatric organization, potentially into more adult sites. We think it complements our strategy nicely with our plans to go into recurrent glioma.

Now, we're not discussing any of the details about our plans yet, but we will be sharing more about that later on in the year.

Kalpit Patel (Senior Biotech Research Analyst)

Okay, wonderful. And then one quick question on the patent litigation that you resolved with Anora or TAVALISSE. I guess, are there any other antifilers that investors need to be aware of?

Ray Furey (EVP, General Counsel, and Corporate Secretary)

No, there's no antifilers that we are aware of.

Kalpit Patel (Senior Biotech Research Analyst)

Okay, perfect. Thank you very much for taking the question.

Ray Furey (EVP, General Counsel, and Corporate Secretary)

Thank you, Kalpit.

Operator (participant)

And your next question comes from Joe Pantginis with H.C. Wainwright. Please state your question.

Joe Pantginis (Managing Director of Equity Research)

Hey, guys. Good afternoon. Thanks for taking the question. First, when you're looking at your product sales, and it's nice to see your core revenue from TAVALISSE continuing to expand, GAVRETO increased. You saw a little bit of increase from REZLIDIA, a little bit down from TAVALISSE.

I guess any commentary with regard to typical first quarter resets? Are you seeing what you expected? What I'm getting at here is the turbulence in the environment right now and, I'll put in quotes, "drama" around people trying to understand what might be happening with regard to Medicare changes as well.

Raul Rodriguez (President and CEO)

Yeah, David, maybe you could comment, and I know Dean has a comment on that as well.

Dave Santos (Chief Commercial Officer)

Sure. Thanks for the question, Joe. Actually, for Q1, we're quite pleased with our progress on all three brands. We grew demand for all three brands. I think we're right where we want to be, which is why we're sticking with our guidance. I think our signs for Q1, obviously, we did go into it kind of prepared for the changes, particularly with respect to the Inflation Reduction Act.

I think we did a really, the team did a terrific job making sure that patients understood the changes and all of the factors that would enable them to have medications at the beginning of the year. I think we pulled that through quite successfully, and our demand continued to grow.

Dean Schorno (CFO)

Yeah, I think Dave has that right. We are pleased with the demand side of the equation, and we did see the expected drawdown in inventory resulting in still a 68% year-over-year growth. A strong quarter for us.

Joe Pantginis (Managing Director of Equity Research)

Great. Thanks for the info.

Dave Santos (Chief Commercial Officer)

Thank you, Joe.

Operator (participant)

Another reminder to the audience to ask a question at this time. Press star one on your telephone keypad. You can press star two to remove yourself from the question queue. Your next question comes from Farzin Haque with Jefferies. Please state your question.

Farzin Haque (SVP and Biotechnology Equity Research Analyst)

Hi, thank you for taking my question. I had a couple. I guess I'll start with R289. Are you saying more on how you're setting expectations for the split doses that you're exploring post-S, like with the dose level five and six? And then just to clarify, for advancing to the recommended phase II dose, would you need regulatory feedback on dose escalation data set?

Raul Rodriguez (President and CEO)

Yeah, I'll ask Lisa to comment on that.

Lisa Rojkjaer (Chief Medical Officer)

Yeah, thank you for the question. So in terms of we don't really have any expectations. I'm not sure I understand the question. We had switched I'll provide an answer, and you can tell me if I've answered it satisfactorily.

We switched some time ago from once daily to twice daily dosing because we thought that biologically, it makes more sense to maintain a tonic suppression of inflammation as opposed to having this once daily like peak and trough and peak and trough in terms of from that aspect. That is why we switched to explore the BID dosing. We're progressing up. We had some preliminary data on the 250 BID. We've now completed enrollment of the 500, 250, and now into the 500 BID. As I mentioned, we're going to be updating data at ASH, share that with you later on this year. I think we'll share some PK data as well that I think will contribute to what I mentioned in terms of it may be better to kind of have that more prolonged exposure as opposed to the up and down.

With respect to the you mentioned the alignment or how to select the doses. As you're aware, the FDA has encouraged companies now to align with Project Optimus to ensure more robust dose selection early before advancing into phase II. Consistent with that, we will be seeking input from the FDA, aligning with them on the two doses for comparison in the dose escalation part of the study, and we'll be doing that mid-year.

Farzin Haque (SVP and Biotechnology Equity Research Analyst)

Got it. That makes sense. For follow-up on the earlier question on the antifiling, Anora is one example, and they cannot enter the market. I think it mentioned prior to 2Q 2032. If there are additional antifilers in the future, could they have an earlier market entry, or is that 2Q 2032 pretty much when you should see a new entry?

Raul Rodriguez (President and CEO)

Yeah, you can get second antifilers, and they would need to defeat the patents, which in order to enter the market earlier than the current last list of patents, which would be July of 27th, 2032. There is a possibility of an antifiler, but once there is one entrant already where there is a settlement, it is a disincentive to second filers and tertiary filers. It is technically possible that there could be a second filer.

Farzin Haque (SVP and Biotechnology Equity Research Analyst)

Got it.

Dave Santos (Chief Commercial Officer)

We have not seen one as yet.

Raul Rodriguez (President and CEO)

No, we have not. There is no, we have no notice of a second filer.

Farzin Haque (SVP and Biotechnology Equity Research Analyst)

Got it. Thank you.

Dave Santos (Chief Commercial Officer)

Sure.

Raul Rodriguez (President and CEO)

Thank you, Farzin.

Operator (participant)

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

Raul Rodriguez (President and CEO)

Thank you.

I'd like to thank everyone for joining us on the call today. It was the start of a very strong year. First quarter was an excellent quarter for us. We're very happy with what we were able to accomplish in this quarter. It sets us up very well for a very strong calendar year. For that, I'd like to thank you for your continued interest in Rigel. I'd like to also thank our employees for their commitment to Rigel and our values, particularly our commitment to improving the lives of patients. We will keep you updated on future calls as the year progresses. With that, have a good day.

Operator (participant)

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