Rigel Pharmaceuticals, Inc. (RIGL) Q2 2023 Earnings Call Transcript

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Q2 2023 Earnings Conference Call August 1, 2023 4:30 PM ET

Company Participants

Ray Furey - EVP, General Counsel and Corporate Secretary.

Raul Rodriguez - President and CEO

Dave Santos - EVP and Chief Commercial Officer

Dean Schorno - EVP and Chief Financial Officer

Conference Call Participants

Yigal Nochomovitz - Citigroup, Inc.

Kristen Kluska - Cantor Fitzgerald & Co.

Joseph Pantginis - H.C. Wainwright & Co.

Eun Yang - Jefferies & Company

Allison Bratzel - Piper Sandler & Co.

Kalpit Patel - B. Riley Securities

Operator

Greetings, and welcome to the Rigel Pharmaceuticals Financial Conference Call for the Second Quarter of 2023. At this time, all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] 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

Welcome to our second quarter 2023 financial results and business update conference call. The financial press release for the second quarter of 2023 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 31, 2022, and subsequent filings with the SEC including our second quarter 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

Thank you, Ray, and thank you everyone, for joining today. Also with me today are Dave Santos, our Chief Commercial Officer; and Dean Schorno, our Chief Financial Officer.

Now beginning on Slide 4. We are pleased with the progress we’ve made in the first half of 2023 as we continue to build our hematology/oncology company with our commercially available products in our development programs. In the second quarter, we continued to see year-over-year growth and demand for our first approved product, TAVALISSE, for adult product ITP.

We are also pleased with the progress that we've made on the launch of our second approved product, REZLIDHIA for adult relapsed or refractory IDH positive AML. As we navigate the launch, the core focus of our commercial and medical affairs team has been driving awareness for REZLIDHIA and establishing relationships with new doctors.

A few key highlights on these initiatives in the quarter, include robust engagement with the medical community at the 2023 ASCO annual meeting. The presentation of promising data in the Post-Venetoclax treated patients at the European Hematology Association 2023 Congress, and a second publication in Blood Advances, examining the preclinical and clinical development of REZLIDHIA and its role in the treatment landscape. These are important data that we recently published and presented. Dave will touch on these items a little bit later in this presentation.

Looking at our development and expansion initiatives, we've made progress in the enrollment of our Phase 1b Study of R289, our IRAK1/4 inhibitor in lower-risk MDS. And we are evaluating opportunities to expand our hematology/oncology business further with clinical development for our already approved products into new indications.

Additionally, our RIPK1 program has advanced with our partner Eli Lilly, and continues to progress with the initiation of a Phase 2a trial in patients with rheumatoid arthritis in the second quarter of 2023. I will provide further updates on our progress and strategies for these efforts later on in today's presentations.

With that, I'll turn the call over to Dave for an overview of the quarter. To you, David.

Dave Santos

Thank you, Raul. Now I'd like to take a few minutes to discuss our continued growth of TAVALISSE, during another record quarter and our progress with REZ -- with the REZLIDHIA launch in the first half of 2023.

On Slide 6, you'll see our FDA approved indication for TAVALISSE, which is for adult patients with chronic immune thrombocytopenia or CITP, who've had an insufficient response to a previous treatment.

Moving to Slide 7, I'm pleased that we achieved another new quarterly all-time high with TAVALISSE in Q2, shipping 2,265 bottles to patients in clinics representing 10% growth over Q2 of 2022. We have now achieved three consecutive record highs for the number of bottles shipped to patients and clinics in a quarter since launch.

We continue to grow our demand through consistent flow of new patients starting TAVALISSE. And for Q2, we achieved net sales of $21.3 million, $2.8 million more than the same quarter last year, representing a 15% year-over-year increase. We are pleased with how we have grown our TAVALISSE business during the first half of 2023, and look forward to carrying this momentum into the second half of the year.

We will continue to focus on targeted clinicians to identify appropriate patients who can benefit from TAVALISSE to grow our new patient starts beyond the record levels we saw in 2022. I'm grateful to the entire team for continuing our growth with TAVALISSE and ITP, while we launch REZLIDHIA.

Moving to Slide 8, I wanted to review the opportunity we have with TAVALISSE in chronic ITP and provide an update on our progress in moving to earlier lines of therapy. First on the left, recall that we estimate there are more than 80,000 patients with ITP and more than half of them are actively treated. While most of the patients are on steroids as their first line therapy, there is still more than 24,000 patients who are eligible to be treated after steroids and three quarters of those patients are in the second or third line.

On the right, you will see how the portion of second and third line new patients on TAVALISSE has grown since 2021. For three consecutive quarters, more than 70% of the new TAVALISSE patients that we capture through our hub have been either second or third line. We are very pleased to see this consistency of earlier usage in patients on TAVALISSE over the past three quarters. As more patients are being treated with TAVALISSE earlier in their course of treatment, we expect our refill bottles to continue to grow due to the improved persistency we should see from those patients.

On Slide 9, we believe the reason we have been successful in getting more of our TAVALISSE patients earlier in the treatment continuum is that our efficacy message is hitting home. Clinicians are impressed that the earlier they use TAVALISSE, the better their results. And when they do use TAVALISSE, they can count on clinically meaningful and durable increases in platelet counts over time. These messages are resonating and our business is continuing to grow. We'll continue to promote the benefits of using TAVALISSE earlier after steroids and how the durable predictable platelet increases are meaningful to patients who live with chronic ITP each day.

On Slide 10, a reminder that in April, our partner Kissei announced the launch of TAVALISSE for the treatment of chronic ITP in Japan. We remain committed to continuing to impact CITP patients around the globe with the expansion of TAVALISSE's commercial footprint through our partners.

Moving to slide 11, I'll take a few minutes to discuss our continued progress launching REZLIDHIA in the first half of 2023. On slide 12 you'll see our FDA approved indication for REZLIDHIA, which is for adult patients with relapsed or refractory acute myeloid leukemia with the susceptible IDH1 mutation as detected by an FDA-approved test.

As an introduction on Slide 13, there continues to be an unmet need for efficacious targeted treatments in relapsed or refractory AML, and in particular, agents that provide longer durations of response and an acceptable balance of efficacy and toxicity are needed. We continue to strongly believe that REZLIDHIA addresses exactly those needs.

Moving to Slide 14, and our view of the currently eligible patient population for REZLIDHIA. The American Cancer Society estimates that more than 20,000 patients will be diagnosed with AML in 2023, and of those patients, our research showed that whether patients are treated with intensive therapy or not, most are refractory to treatment or relapse within 2 years. Specifically with 6% to 9% of patients having the IDH1 mutation, we believe we have a near-term opportunity to impact the lives of around 1,000 new mutant IDH1 patients in the relapsed or refractory setting each year.

Slide 15 shows our continued early launch progress in bringing REZLIDHIA to those 1,000 mutant IDH1 relapsed or refractory AML patients. We sold a total of 200 bottles of REZLIDHIA in the second quarter, representing 77% growth over Q1. 187 of those bottles were shipped directly to patients and clinics, and our demand grew second quarter net product sales to $2.6 million with our total launch-to-date sales now at $4.9 million. We continue to remain focused on growing awareness of REZLIDHIA through our field teams and other activities.

Moving to Slide 16, we made solid progress in Q2 on growing that awareness through both promotional activities and scientific publications. First on the left, we had a strong presence at the ASCO annual meeting in early June. It was the first major conference opportunity for Rigel to promote both TAVALISSE and REZLIDHIA, and we officially launched our REZLIDHIA transform your expectations durable remission is possible campaign there. To go along with that, we have updated both our HCP and patient websites with our campaign and visitors to REZLIDHIA.com have a wealth of information and resources at their fingertips.

On the right side of this slide, you will see the significant progress we have made on the scientific front in Q2. First in May, there was an excellent [ph] olutasidenib review article published in Blood Advances discussing the positioning of REZLIDHIA in the mutant IDH1 AML treatment landscape. In the conclusion, the author's "recommend olutasidenib in Venetoclax plus HMA failures given the available data".

The data they were referring to was also presented this quarter at the European Hematology Association 2023 Hybrid Congress held in Frankfort during June. That poster focuses on this very clinically relevant population of patients who were previously treated with Venetoclax. The conclusions were very consistent with our previously reported results. The authors wrote that olutasidenib induce durable remissions and that the observed activity is clinically meaningful and represent a therapeutic advance in the treatment of this molecularly defined poor prognosis patient population with relapsed or refractory mutant IDP1 AML.

Our commercial and medical affairs team members have had several recent discussions with key academic leukemia specialists since that data was presented in June, and they have expressed the same sentiments as the authors. They view the data as promising and interest in olutasidenib continues to grow. Overall, we made significant progress during Q2. And importantly, some key drivers to the olutasidenib story, such as the compelling activity in post-Venetoclax patients just began at the end of the quarter.

In addition to those key drivers in late Q2, on Slide 17, we have other activities planned for the second half of this year that we expect will enable us to continue building momentum with REZLIDHIA. First on the left. We now have the institutional team we announced last quarter in place. Recall that a significant portion of our AML business is concentrated in academic institutions and the leukemia treaters in these key leukemia centers influence how the community treats AML.

We hired eight institutional business managers across the country who will be accountable for leading REZLIDHIA promotional activities with these top leukemia treaters and facilitating formulary placement at key leukemia centers. They have impressive experience. On average, the member -- members of this team have more than 19 years of heme/onc experience with 14 of that calling on hospitals. They're also experienced in other key commercial functions, including sales management, market access, marketing, KOL development and key account management. I want to warmly welcome them to the REZLIDHIA team.

I'm looking forward to reporting on their accomplishments as we move forward. In addition to the institutional team, we continue to schedule and complete more peer-to-peer speaker programs, improve our presence at key leukemia and hematology conferences, and we'll be utilizing timely non-personal promotion through innovative channels during the second half of the year. And of course, we will continue to maximize access for patients through our hub and other patient and HCP resources.

On the scientific side, we're planning additional publications from the Phase 2 trial, highlighting more key mutant IDH1 relapsed or refractory patients, along with the post-Venetoclax population, as well as providing more olutasidenib evidence from populations outside of our pivotal cohort. In addition, we'll be working to generate supportive data in difficult to treat mutant IDH1 relapsed and refractory patients to bolster our current story.

And finally, our medical affairs team will continue to provide relevant information and education for HCPs involved in AML treatment and gather insights from the KOLs to determine our understand -- to deepen our understanding of where else we may need to develop olutasidenib. Overall, we're looking forward to building additional momentum with all of these initiatives as we move through the second half of 2023.

And finally on Slide 18, after our experience during the first 6 months of the launch, we believe now more than ever that REZLIDHIA has the potential to address many key patient and HCP needs in relapsed refractory AML. It's a promising treatment targeting mutant IDH1 that has shown impressive durable responses, if patients who fail previous therapies.

Overall, we continue to see exciting potential to become a market leading treatment in mutant IDH1 relapsed refractory AML and are looking forward to continuing to execute our launch plan. My thanks to the entire team for all their efforts during the first half of 2023 with REZLIDHIA, and I look forward to providing you with additional launch updates in the future. Thanks for your attention.

And I'll now turn the call back over to Raul to provide a brief update on our development progress. Raul?

Raul Rodriguez

Thank you, Dave. I will now summarize our development programs. Moving on to Slide 20. Thank you. We outlined our ongoing development programs. We are focusing on growing our heme/onc business with our internal development plans. We believe both fostamatinib and olutasidenib has potentially other diseases beyond their already approved indications, and we're currently evaluating several options. In addition, we are evaluating potential in license opportunities similar to the approach we took with REZLIDHIA.

Our ongoing Phase 1b study of R289, IRAK1/4 inhibitor in patients with lower-risk MDS continues to progress well. We have completed enrollment in the targeted number of patients in the second cohort of the trial and expect to begin enrollment in the third cohort in the near future. I will touch more on this program in a minute.

More opportunistically, our partner Eli Lilly is advancing R552, our RIPK1 inhibitor with the initiation of their Phase 2a study in rheumatoid arthritis. As a reminder, this study will enroll approximately 100 patients with moderate to severely active rheumatoid arthritis. And the analysis is expected at the end of 2024.

Moving on to Slide 21, I wanted to spend a few moments discussing the treatment landscape for lower-risk MDS and how we think about our IRAK1/4 inhibitor, R289 and how it could address an unmet need for background. MDS is a disorder of hematopoietic stem cells resulted in dysplasia and ineffective hematopoiesis in the bone marrow.

For patients with lower-risk MDS risk include autoimmune abnormalities, cytopenias progression to AML and death. Patients undergo treatment via blood transfusions or Erythropoiesis-Stimulating Agents or ESAs for anemia in the first line setting, followed by Lenalidomide, Luspatercept, HMA's and immunosuppressive therapies in the second line setting. But durable responses in this setting are not common. Subsets of patients show limited hematologic responses, and these agents results in significant adverse effects.

Loss of response following second line therapy represents a poor prognosis for patients, associated with significant morbidity and cytopenias. So there remains a significant unmet need for lower-risk MDS patients who are refractory or resistant to current therapies. And we believe R289 has potential to address this need in this underserved patient population.

On Slide 22, you see our ongoing open-label Phase 1b study of R289. As mentioned, we have completed enrolling the targeted number of patients in the second cohort of the trial and expect to begin enrollment of the third cohort in the near future.

Moving on to Slide 23. We continue to evaluate fostamatinib and olutasidenib and additional indications beyond their approved indications. Working with KOLs, regulators, we are evaluating these programs across multiple indications, lines of therapy and treatment regimens as well as conducting market research to help inform our plans moving forward. We look forward to providing additional updates on this initiative -- these initiatives later on in 2023.

Regarding our business development efforts related to the in--licensing of new assets, we are continually evaluating assets that are synergistic with our existing heme/onc infrastructure and that are complementary or adjacent to our already approved products.

We are focused on programs that are in late stage clinical development, in review for potential approval, or in the early stages of commercial launch. With our development capabilities and commercial infrastructure, we have the potential to grow our business from internal programs as well as being the potential commercial partner for in-licensed or acquired heme/onc products.

With that, let me turn the call over to Dean for a financial update.

Dean Schorno

Thank you, Raul. I'm on slide 25. For the second quarter of 2023, we shipped 2,191 bottles of TAVALISSE to our specialty distributors, resulting in $30.2 million of gross product sales. 2,265 bottles of TAVALISSE were shipped to patients and clinics, while 74 bottles decreased the levels remaining in their distribution channels at the end of the quarter.

For the second quarter of 2023, we shipped 200 bottles of REZLIDHIA to our specialty distributors, resulting in $3.2 million in gross product sales. When 187 bottles of REZLIDHIA were shipped to patients and clinics or 13 bottles increased the levels remaining in our distribution channels at the end of the quarter. We reported net product sales from TAVALISSE of $21.3 million in the second quarter of 2023, a 15% increase compared to the same period 2022.

We reported net product sales from REZLIDHIA of $2.6 million in the second quarter of 2023. Our net product sales from TAVALISSE and REZLIDHIA were recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $9.6 million. For the second quarter of 2023, our gross to net adjustment for TAVALISSE and REZLIDHIA was approximately 29.5% and 20.7% of gross product sales, respectively.

Before we move on from net product sales, let me review our expectations for the third quarter of 2023. We are pleased with the strength of our business in the second quarter, and expected to see continued strength in our year-over-year total net product sales growth rate as bottle shipped to patients and clinics continues to grow across our business. Incrementally, we expect a gross to net adjustment third quarter of 2023 to be approximate 31% for TAVALISSE and approximately 21% to 22% for REZLIDHIA.

On to the next slide. In addition to net product sales for the 3 months ended June 30, 2023, Rigel's contract revenues from collaborations were approximate $2 million, of which $1.2 million was from the delivery of drug supplies, an 800,000 was from royalties from our collaboration agreement with Grifols.

We also recognized $1 million in government contract revenue related to income recognized pursuant to the agreement with U.S Department of Defense to support our Phase 3 clinical trial of fostamatinib in high-risk hospitalized patients with COVID-19.

Moving on to cost and expenses, our cost of product sales was approximately $1.1 million for the second quarter of 2023. Total costs and expenses were $32.2 million in the second quarter of 2023 versus $42.8 million in the second quarter of 2022. The decrease in cost and expenses was primarily due to trial completion activities related to the Phase 3 clinical trial for warm autoimmune, hemolytic anemia and the Phase 3 clinical trial at high-risk hospitalized patients with COVID-19 as well as timing of activities related to our IRAK1/4 inhibitor program.

But we did see a significant drop in operating expense during the quarter. We're expecting operating expenses in the back half of the year to return to at least first quarter of 2023 levels, as we expect to both further our current clinical efforts and expect to ready for the initiation of new clinical studies as Raul described. We look forward to providing updates on these potential studies in upcoming quarters and will continue to provide operating expense updates along the way. We ended the quarter with cash, cash equivalents and short-term investments of $64.4 million.

With that, I'd like to turn the call back over to Raul. Raul?

Raul Rodriguez

Thank you, Dean. As we reviewed on this call, we had a productive first half of the year, and we're focused on our 2023 catalyst. In Q2, we just exceeded our quarterly high for demand bottles for TAVALISSE, and we look forward to continue to drive momentum for TAVALISSE sales in ITP, both in the U.S and globally with our partners.

We are executing on the launch of REZLIDHIA in relapsed refractory AML. And now with our academic institution focused sales team fully on board, and several recent REZLIDHIA publications and presentations, we are well-positioned to grow awareness for this product as a new treatment option. In addition, we are identifying ex U.S collaborators for this product.

We will evaluate new potential opportunities for both fostamatinib and olutasidenib continue to advance our R289 Phase 1b Study, and actively pursue business development product opportunities. So with that, let me and -- I want to thank you for your interest in the second quarter. And we will now open up the call to your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Thank you. Our first question is from Yigal Nochomovitz with Citi. Please proceed with your question.

Yigal Nochomovitz

Yes. Hi, Raul, and team. Thank you. I'm just trying to get a better understanding of how you're managing the business with respect to the path to profitability. I think this quarter was the closest to breakeven excluding some of the one-timers where you had net profit given collaboration or milestone. You mentioned that you're going to be potentially investing in new opportunities for fostamatinib, olutasidenib as well as in-licensing, but the top line obviously is growing too. And just -- and you mentioned the expense line might increase a little bit back to the 1Q '23 levels. So could you just talk about all that together? And how you're thinking about managing the business to get to the breakeven or beyond over the next coming years? Thanks.

Raul Rodriguez

Thank you, Yigal. Sure. Well, let me turn to Dean to give you an overview on how we're looking at this path towards breakeven and our investments further.

Dean Schorno

Hi, Yigal, and thanks for the question. So let me start with just the change in cash for the quarter which you highlighted a little bit in your question. So the cash increased by $5.6 million for the quarter. The basis of that increase in cash was really the strength of sales, which is offset by the operating expense. That operating expenses you highlight is a fairly low -- low-level of clinical spend. And that's simply a result of just timing of our activities. We -- as you look back a year, we wrapped up the warm autoimmune hemolytic anemia as well as the COVID Phase 3 efforts as well as there's some variability in our IRAK -- the timing of our IRAK spend. So that's -- that really resulted in about 100 -- the $32 million of operating expense for the quarter.

The net loss for the quarter is $6.6 million. $2.5 million of which was noncash, also contributed to strengthen cash. And then finally we had a -- about an $8.5 million pickup in accounts receivable. So we had a slightly high accounts receivable balance in Q1, and that normalized in Q2. So all said, we are at about $5.6 million of increase. As you highlight in your question, getting to profitability and a path to profitability is important to us. And this quarter highlights the potential for that path to profitability.

We do expect in the back half, as I said in my prepared comments, to get back to Q1 like operating expense levels, but we do expect that the revenues to continue to grow, we expect to continue to manage operating expense very effectively as we have. And that will ultimately, we believe lead us to profitability. All that said, we haven't given top line guidance, and therefore can't be specific on when will cross over. But again, I'll reiterate that the -- its certainly is the focus of the business to get to that profitability.

Raul Rodriguez

Thanks, Dean. The only thing I'd like to add further is that it's an important priority for us. But it also is important to fund the new opportunities that both our internal as well as things we might in-license, because that continues to be a priority for both of those things. We like the business, we like the growth of the business. We want it to grow and be even greater and bigger in the future.

Yigal Nochomovitz

Okay. Thank you very much.

Raul Rodriguez

Thank you, Yigal.

Operator

Thank you. Our next question is from Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Kristen Kluska

Hi, everyone. Thanks for taking my questions. I found it really helpful to understand a little bit more about what you're seeing in terms of new patients. So thanks for sharing now with us. So I wanted to see if you could talk about what the compliances you're seeing amongst the different lines of treatment. And also if the responses are pretty much in line with your own analysis, since you've been tracking this for a couple quarters now.

Raul Rodriguez

Yes, thank you for asking that question. We're excited to share some of that information. Dave?

Dave Santos

Thanks, Kristen. I will say that it's we don't have an ability to kind of take the patients that are on therapy in the second and third and determine response rates, if that was your question. But I will comment on kind of what we've looked at in terms of persistency. And it is still early, but what we've looked at is a patient who started in Q4 of last year when we saw this higher percentage of third and fourth line patients. And we compared it to patients who started in Q4 of '21 and Q4 of 2020.

And if you look at their persistency at 4 months and beyond versus the persistency of patients who were in '21 or '20, it is trending higher. And so, we do think this is a positive trend. Again, this has only been happening for three quarters. So it's going to take some time for this to reflect in a larger number of refills. But certainly we believe our business is going in the right direction.

Kristen Kluska

Okay. Thank you for that. And then you mentioned for REZLIDHIA that you're looking at potentially populations outside of what was evaluated in the pivotal cohort. Can you please just elaborate a little bit more on that?

Raul Rodriguez

Let me make a couple comments on that certainly. So, IDH positive patients in AML, there's numerous opportunities within IDH positive AML patients that we are looking at. Earlier line, for example, in certain sub segments we think are interesting to study further. Some already in the relapsed refractory area where we want more data. But we're also looking in areas outside of AML where there's been shown to have some opportunities for IDH positive, a product that is an IDH positive mutant product such as REZLIDHIA. Dave?

Dave Santos

Yes, I would just say that all of the patients in the Phase 2 if you consider outside of the pivotal cohort, I mean, some key populations that are really important to clinicians out there include patients who were enrolled with MDS versus AML. Patients who were enrolled treatment naive, and patients who were on combination therapy versus a single agent. Because as you know in our pivotal cohort, it was just mono therapy, and it was all relapsed refractory AML. So those are the populations that clinicians have expressed interest in. Some of the data has been presented, the combination data, but we're looking to make sure that the other cohorts that data is out there as well for clinicians to learn from.

Raul Rodriguez

And just to highlight, we did publish the post-Venetoclax data at the EHA meeting, which was very helpful. It was a question we frequently get. How do patients who have been through Venetoclax perform with your product? And the answer was very affirmative in that presentation.

Kristen Kluska

Okay, thanks. And last question for me. I know you made it very clear that you're looking at a couple different options on the table here in terms of next opportunities, but one that comes up pretty consistently for us is GVHD. So I know you shared some promising data earlier this year. Just wondering what the next steps are for following up with those patients in that program, in particular, I know you haven't officially declared it as a next candidate, just one that you may consider. Thanks, again.

Raul Rodriguez

Sure. It's a very attractive opportunity. The data that our colleagues at Duke were able to present and publish, I think is very compelling data. It's a segment there's -- so continues to be important medical need and where fostamatinib may have a very good benefit. It takes a -- we're in the middle of evaluating that opportunity, but alongside other opportunities for olutasidenib, for example and weighing one against the others as well. So we'll have to make some decisions, and not of course, do everything. But GVHD is a very attractive one. And like I said, later this year, we'll come back to you and discuss how we're going forward with GVHD or other areas.

Operator

Thank you. Our next question is from Joe Pantginis with H.C. Wainwright. Please proceed with your question.

Joseph Pantginis

Hey, guys. Good afternoon. Thanks for all the details today. So first, Raul, I'm just wondering if you could share maybe the maturity levels of your discussions to potentially in-license?

Raul Rodriguez

Yes, I really cannot actually because I've learned I've been in business development for a long, long time. And until the contract is signed, the contracts not signed, all sorts of things happen. But needless to say, importantly, that we're looking for heme/onc opportunities in late stage either with data or at registration, or just launched as opportunities that we are very interested in, we're particularly interested in opportunities that are a good fit with the [indiscernible] physicians we call on. But if they're in a slightly adjacent area, say transplant, that actually may be a good opportunity as well.

So we're looking at those types of opportunities a lot like with REZLIDHIA, something that we could slot into our portfolio with really only needing a minor increase perhaps in infrastructure, but fully leveraging the infrastructure we have currently in place. And we'd like to have these in place so that we can obviously launch them successfully, just like we're doing with REZLIDHIA in the not that distant future.

So we're looking at those type of opportunities. I can't be more specific in terms of what they are, or certainly not the timing of that. Because it's just challenging until the contracts are done to announce anything in advance like that. But we're excited about the continued effort to look at that. We think that we have a superb heme/onc commercial capability, broadly speaking, and we'd like to leverage that for other companies and other products. So if there's a company out there listening in that has a late stage heme/onc opportunity, we'd be delighted to speak to you about it. We have a compelling reason why we should be your partner of choice to commercialize here in the U.S. So I'll add an advertisement there, Joe? Apologies.

Joseph Pantginis

No, absolutely. No, totally fair enough. Thank you. And then, look, I think the chart regarding the breakout in TAVALISSE population by quarter is extremely valuable. So I think, obviously, your goal is to continue to expand the population into earlier lines. Right now it appears on the chart that you're little over 30% in the second line population. So I guess, what would you define as your key inflection steps to be able to grow those percentage numbers?

Raul Rodriguez

I will ask Dave to comment on that, but let me before he does that, let me say we're delighted with the progress we've made here. Recall, quite a while ago when we launched this product, we were predominantly used in that later line, fourth plus. And now you see the evolution, it's really satisfying to see the range of patients that could benefit from TAVALISSE and hopefully they benefit profoundly.

Dave Santos

Yes. So, Joe, let me just make sure I understand your question. So 75% of the post-steroid market is in second and third line. We've got approximately 70% based on our -- these are internal numbers of patients that we know of, and we have their backgrounds and we know what line of therapy they're on. So it represents a subset, but we've got about 70% or up to 75% of patients in second and third line.

I think what you're saying is, the second line is relatively smaller than the third line, and are we going to be able to reverse that? And I think the answer is, yes, we think over time, that we'll continue to get more second line use, as you know that is much more challenging because clinicians have been very used to using [indiscernible] in that space for a long time. And I think, frankly, that the fact that a third of our patients that we are monitoring here are on TAVALISSE in the second line setting shows that we are making progress.

I think that the key is -- for us is to get usage, where we can get it, meet clinician where they are with their patient. And when they see these results, they tend to move it up. And that's what our most loyal TAVALISSE prescribers tell us that, he really liked the drug. It's kind of you give the patient the dose they take it, their platelets go up over time, and they're very happy to move it up. And they see post-steroid patients as a great opportunity for TAVALISSE. And that's how we've gotten where we are. I mean, it's -- we do have a great team out there that's committed to talking about TAVALISSE each and every day.

And I think once you saw that things had opened up post-COVID, our promotional efforts have been successful at getting more patients earlier in their treatment continuum. So I don't have a specific number we're trying to get to. We're not trying to necessarily get to that same proportion that 11,400 patients in the second line would represent. But yes, we're trying to grow our second line use, but we're also trying to make sure both second and third line are the predominant part of our business.

Joseph Pantginis

That's very helpful. And luckily we're not testing my short-term memory now. So that's good. But if I'm thinking long-term, Dave, if I heard you correctly, I mean, even going back a couple of years ago, I think you've now translated your initial wish list to actual data supporting what you wanted to do, being able to have patients get used to the drug, coming out of COVID had to be used to the drugs, seeing the refill rates based on the platelet data and what have you. So these are real data to look at versus the original wish list you had. So I appreciate it.

Raul Rodriguez

Absolutely. We're happy to see these results and provide them to you.

Joseph Pantginis

Thanks guys.

Dave Santos

Thanks, Joe.

Operator

Thank you. Our next question is from Eun Yang with Jefferies. Please proceed with your question.

Eun Yang

Thank you. So you showed us a number of [indiscernible] of TAVALISSE shipped to or sold per quarter. But can you actually talk about how many patients were on TAVALISSE at the end of the quarter? And then also based on the TAVALISSE patients by line of therapy, for second line, it's a little over 30% of TAVALISSE use. So based on the number of eligible patients, is it fair to assume that currently you have about mid-single-digit percentage penetration in second line -- about -- and about 15% in third line? Thank you.

Dave Santos

I'm not sure I'm quite following your math there, Eun, but I will say that first of all, from a new patient perspective, we have more new patients last year -- clearly more new patients last year than we've ever had in the history of the brand and we're continuing that trend this year. So we don't share specific patient numbers. But we're very happy with our progress, our consistent progress in having new patients on the brand. And yes, I mean, this is our book of business. Our best estimate based on the patients we do capture, what their line of therapy is, but to project this over the entire market is, it's not something I would necessarily do right now. This is our own internal data that we're sharing. And we're very happy with the trend as opposed to necessarily the specific percentages there. But the trend is clear and that's why we wanted to share it with you.

Raul Rodriguez

And it's been over several quarters, which is why we didn't show it earlier. We wanted to make sure it was somewhat consistent and you see that it begins to approach that. And [indiscernible] some caveats, this is a subset of patients that go through R1 [ph], our hub. And so it's not all patients out there, we can't capture all patients out there. But the trend, I think, is clear, hopefully, continue to grow though and opportunity in further growth in the second line.

Eun Yang

Thank you.

Raul Rodriguez

Thank you, Eun.

Operator

Thank you. Our next question is from Allison Bratzel with Piper Sandler. Please proceed with your question.

Allison Bratzel

Thank you. Thanks for all the detail on today's call, and thanks for taking my question. Maybe first one on the pipeline just for R289 and lower-risk MDS and that initial readout slated for this year. Just considering that update should include the first few dose cohorts, could you kind of frame what you would view as a successful read out there. And then just second, following up on a prior question and prior discussion about cash burn and breakeven point, could you help us maybe understand what's gating to providing revenue guidance, at least on the TAVALISSE front now that it's in your [indiscernible] launch? How should we be thinking about that, the potential for that heading into next year and going forward? Thanks.

Raul Rodriguez

Okay. I will ask Dean to answer the second, let me try to answer the first one. So the low-risk MDS Phase 1b Study is ongoing and we've dosed -- completed enrollment of the required number and dose Cohort 1 and Cohort 2. And these two lower dose cohorts are still we think might be too low in terms of seeing any remarkable responses in terms of efficacy. They're primarily safety doses, there's some chance we'll see some benefit in some of the -- some of hematologic improvements.

But more likely we want to see safety out of these first two cohorts. And so far, so good. And we're going to discuss with FDA to allow us to go into Cohort 3 and Cohort 4, where we think we're more likely to see some efficacious signals -- efficacy signals, and hopefully continued safety. So I think we hope to share this information at a meeting on the lower cohorts, since we've already had them enrolled in and we'll have further data on those by the end of the year. The other cohorts if we can get to enrolling those, you do need to wait a number of months, maybe up to 6 months for showing some efficacy signals in the higher dose groups. So that might not be and certainly not this year, and I think it'll be more likely next year in terms of the timing of that. Dean on in terms of guidance.

Dean Schorno

Sure. In terms of guidance, we've -- it's important to note that as we look at our top line, we've got TAVALISSE which to your point is growing consistently in a quarter-over-quarter consistent growth pattern. So we agree with you there that there's a potential to provide guidance with respect to that, that singular number. With respect to the rest of the top lines, we look at AML, still early in the launch phase, and we've talked about a lot of activities that are going to create momentum in that phase. We've got the royalty revenues, and then we've got the collaboration revenue. The collaboration, revenues, they can be periodic.

Certainly over time, we've highlighted some of the large payments that we expect. But all of those elements, all factor into that top line guidance. And we don't plan to at least in the near-term provide a top line until we really see some of that specificity and clarity as it relates to REZLIDHIA. So that's on the top line. With respect to the path to breakeven, obviously, the top line is critical there and as Raul suggested also, as he described the possibilities with respect to further development of fostamatinib as well as olutasidenib, as we as we really finalize with those final plans are with advisors and the different work we're doing, we will be able to provide more clarity and what the operating expense looks like into the future as we really finalize our plans with respect to the incremental studies we plan to do.

Allison Bratzel

Great. Thank you.

Raul Rodriguez

Thank you, Allison.

Operator

Thank you. Our next question is from Kalpit Patel with B. Riley Securities. Please proceed with your question.

Kalpit Patel

Yes. Hey, good afternoon. Thanks for taking the question. One more on R289. I know you just mentioned that the focus there is just on safety for the first two cohorts. But would you plan on showing any sort of biomarker data. Hemoglobin tends to increase early on with some of these competing agents. It just might be useful to see any sort of evidence of preliminary clinical activity, even if there's a trend.

Raul Rodriguez

Yes. It's just too early, we haven't actually analyzed all the data yet. And so we do want to share the information on the first two cohorts. So I can't make a comment because I don't know what we'll see there. But we certainly will share some of that as we get it. But like I said, I think really we'll just need to wait till next year to see Cohort 3, Cohort 4 data that, that'll be more compelling data.

Kalpit Patel

Okay. And then for your plan to potentially in-license additional heme/onc assets, could you give us a little more color on how you might be thinking about financing or structuring such transactions, given your current balance sheet.

Raul Rodriguez

Yes. There's a number of options on the table for doing so. And so we're looking at a range of different possibilities for that. The important thing is that this be a late stage opportunity that is not requiring any substantive clinical type of investment. And so therefore, it's a quick tightening to get to an approval, and therefore to the market. And because we hope that this [indiscernible] going to expect that this product be highly synergistic that is fully leveraging our current commercial capability that is not required to build more, or any of substance, that it'll be accretive very quickly after launch.

So those are important aspects to the product, but many products in heme/onc tends to be a multi niche category where there are many products in smaller category like a 1,000 patients like with REZLIDHIA. That's what we're looking for to do that. And therefore we're hoping that will help the economics of the thing. But we haven't gotten far enough to be able to articulate that though, when we do announce a product, we certainly will discuss with you how we hope to finance such an acquisition.

Kalpit Patel

Okay, got it. And one last question on REZLIDHIA. Do you anticipate to make any milestone payments to [indiscernible] related to the acquisition in the next 12 months, maybe commercial related milestones?

Raul Rodriguez

We certainly have royalty payments that we will do make, and happy to make them. But I don't think there's anything of substance and certainly we'll look at it, but I don't recall anything of substance in the near-term.

Kalpit Patel

Okay, thank you.

Raul Rodriguez

Great.

Operator

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

Raul Rodriguez

Thank you, operator for your help today. In closing, I'd like to thank everyone for joining us on the call and your continued interest in Rigel and what we're doing. But I'd also like to take a moment to thank our employees for their continued commitment to improving the lives of patients, some with diseases as awful as AML because everyday does count and they certainly keep that in their minds as they work very diligently and moving these products and projects forward. So thank you for that. I look forward to keeping you updating on future calls. Have a good afternoon or evening.

Operator

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