Rigel Pharmaceuticals reports net loss of $22.3 million for fourth quarter 2014

Rigel Pharmaceuticals, Inc. (Nasdaq: RIGL) today reported financial results for the fourth quarter and year ended December 31, 2014. For the fourth quarter of 2014, Rigel reported a net loss of $22.3 million, or $0.25 per share, compared to a net loss of $16.9 million, or $0.19 per share, in the fourth quarter of 2013. Weighted average shares outstanding for the fourth quarters of 2014 and 2013 were 87.8 million and 87.4 million, respectively.

Contract revenues from collaborations of $8.3 million and $5.8 million in the fourth quarters of 2014 and 2013, respectively, were comprised of non-refundable payments earned from AstraZeneca AB (AZ) as a result of its continued development of R256 in asthma.

Rigel reported total costs and expenses of $30.6 million in the fourth quarter of 2014, compared to $22.7 million in the fourth quarter of 2013. The increase in costs and expenses was primarily due to a charge related to the loss on executing a sublease during the quarter, as well as an increase in stock-based compensation expense and severance costs related to the retirement of Rigel's former chief executive officer, partially offset by the decrease in research and development costs. The loss on the sublease is determined based on the present value of the excess of Rigel's future remaining payments to its landlord through January 2018 associated with the applicable subleased space over its contractual sublease income from its subtenant over the term of the sublease agreement Rigel executed in December 2014. The research and development costs in the fourth quarter of 2013 were comprised of certain non-recurring development costs related to the transfer of fostamatinib raw materials from AZ. Research and development costs decreased in 2014 due to the completion of a Phase 2 clinical study with R348 in dry eye and the discontinuation of a Phase 1 clinical study with R118, Rigel's indirect AMPK activator program.

For the year ended December 31, 2014, Rigel reported contract revenues from collaborations of $8.3 million and a net loss of $90.9 million, or $1.04 per basic and diluted share, compared to contract revenues from collaborations of $7.2 million and a net loss of $89.0 million, or $1.02 per basic and diluted share, in 2013. Contract revenues from collaborations in 2014 and 2013 included $8.3 million and $5.8 million, respectively, of non-refundable payments earned from AZ, and a non-refundable payment of $1.4 million in 2013 from Daiichi Sankyo related to their investigational new drug application filing for an oncology compound.

As of December 31, 2014, Rigel had cash, cash equivalents and short-term investments of $143.2 million, compared to $212.0 million as of December 31, 2013. In December 2014, Rigel entered into an agreement with an unrelated third party to sublease a portion of Rigel's research and office space under which it expects to receive over $14.0 million of sublease income and reimbursement from the subtenant's share of facilities operating expenses through January 2018. Rigel expects to end 2015 with cash and investments in excess of $100.0 million, which is expected to be sufficient to fund operations into the first quarter of 2017.

In January 2015, Rigel issued a press release providing an overview of its product pipeline and near term clinical study plans. The fostamatinib Phase 3 clinical program for the treatment of immune thrombocytopenic purpura (ITP), called fostamatinib for immune thrombocytopenia (FIT), is actively enrolling patients in the United States and Europe. The program consists of two identical studies that together will include more than 90 sites and 150 patients. Rigel expects to separately report top line results of the studies with the first study reporting in the first quarter of 2016 and the other study in the second quarter of 2016. Additionally, in February 2015, Rigel announced the collaboration agreement with Bristol-Myers Squibb (BMS) for the discovery, development and commercialization of cancer immunotherapies based on Rigel's extensive portfolio of small molecule transforming growth factor (TGF) beta receptor kinase inhibitors. BMS will pay $30.0 million upfront and Rigel will be eligible to receive development and regulatory milestones that could total more than $309.0 million for a successful compound approved in multiple indications.

"The upfront payment of $30.0 million we expect to receive from the recently executed BMS deal will extend our current runway into the first quarter of 2017," said Raul R. Rodriguez, president and chief executive officer of Rigel. "We are on track to meet our financial goal of having at least twelve months of cash following the first readout of our ITP Phase 3 clinical studies, which is expected in the first quarter of 2016," he added.