Rigel reports net loss of $17.9 million for third quarter 2011

Rigel Pharmaceuticals, Inc. (Nasdaq: RIGL) today reported financial results for the third quarter and nine months ended September 30, 2011.

For the third quarter of 2011, Rigel reported a net loss of $17.9 million, or $0.25 per basic and diluted share, compared to a net income of $50.4 million, or $0.97 and $0.96 per basic and diluted share, respectively, in the same period of 2010. Basic weighted average shares outstanding for the third quarters of 2011 and 2010 were 71.2 million and 52.1 million, respectively. Diluted weighted average shares outstanding for the third quarters of 2011 and 2010 were 71.2 million and 52.8 million, respectively.

Contract revenue for the third quarter of 2011 was $4.4 million, which included a payment of $4.3 million received in the quarter from Merck Serono S.A. and the remaining $0.1 million related to the upfront payment Rigel received for out-licensing its oncology program in June 2011. The collaboration agreement between Rigel and Merck Serono was terminated in 2010 and the program has been returned in full to Rigel. Rigel does not expect to record any further revenue from Merck Serono pursuant to the terminated collaboration agreement. Contract revenue in the third quarter of 2010 was $72.3 million from AstraZeneca AB (AZ), which included amortization of the upfront payment for the exclusive worldwide license agreement for fostamatinib, as well as revenue Rigel earned under that agreement for the initiation of the Phase 3 clinical trial program for fostamatinib and the transfer of the fostamatinib open label extension study to AZ.

Rigel reported total operating expenses of $22.4 million in the third quarter of 2011, compared to $21.9 million in the same period of 2010. The slight increase in operating expenses was primarily due to the increase in research and development expenses related to Rigel's R343 program for asthma and its topical JAK3 inhibitor program for discoid lupus, partially offset by the completion of the transfer of the fostamatinib open label extension study to AZ in September 2010, and by a decrease in preclinical expenses for the oral JAK3 inhibitor program for transplant rejection.

For the nine months ended September 30, 2011, Rigel reported a net loss of $60.2 million, or $0.99 per basic and diluted share, compared to a net income of $55.1 million, or $1.06 and $1.05 per basic and diluted share, respectively, for the same period of 2010.

As of September 30, 2011, Rigel had cash, cash equivalents and available-for-sale securities of $265.7 million, compared to $177.3 million as of December 31, 2010. Rigel expects to end 2011 with more than $245.0 million in cash, cash equivalents and available-for-sale securities, which Rigel expects to be sufficient to fund operations into 2014.

"As outlined at our recent investor/analyst day, we expect to initiate two separate Phase 1 clinical trials this year with our oral and topical JAK3 compounds.  We anticipate following those trials in mid-2012 with the launch of a Phase 2 study in asthma with our inhaled syk inhibitor, R343," said James M. Gower, chairman and chief executive officer of Rigel.