Rigel Pharmaceuticals reports net loss of $22.3M for first-quarter 2010

Rigel Pharmaceuticals, Inc. (Nasdaq: RIGL) today reported financial results for the first quarter ended March 31, 2010.

For the first quarter of 2010, Rigel reported a net loss of $22.3 million, or $0.43 per share, compared to a net loss of $29.9 million, or $0.82 per share, in the first quarter of 2009. Weighted average shares outstanding for the first quarters of 2010 and 2009 were 52.0 million and 36.7 million, respectively.

Contract revenue in the first quarter of 2010 was $3.3 million. This was an amortization of the $100.0 million upfront payment from AstraZeneca AB (AZ) pursuant to the exclusive worldwide license agreement for R788 and other oral Syk inhibitors. Rigel is recognizing the upfront payment ratably over the six-month transition period from the effective date of March 26, 2010. As of March 31, 2010, $96.7 million of the upfront payment has been deferred. Rigel expects this deferred amount will be fully recognized as revenue by September 2010. There was no contract revenue reported in the first quarter of 2009.

Rigel reported total operating expenses of $25.6 million in the first quarter of 2010, compared to $30.3 million in the first quarter of 2009. The decrease in operating expenses was primarily due to the completion of two Phase 2b clinical trials (TASKi2 and TASKi3) in July 2009, partially offset by an increase in stock-based compensation expense and certain one-time investment banking fees associated with the closing of our transaction with AZ. Stock-based compensation expense increased from $2.3 million in the first quarter of 2009 to $5.2 million in the first quarter of 2010. This increase was primarily due to an additional full quarter of stock-based compensation expense amortization in the first quarter of 2010 related to options granted in late March of 2009, which were fully recognized as of the end of the first quarter of 2010, as well as a full quarter of amortization in the first quarter of 2010 related to options granted in early January 2010.  

As of March 31, 2010, Rigel had cash, cash equivalents and available for sale securities of $109.5 million, compared to $133.3 million as of December 31, 2009. In April 2010, Rigel received the upfront payment of $100.0 million in connection with the effectiveness of the worldwide license agreement with AZ. Rigel expects to end 2010 with approximately $170.0 million in cash, cash equivalents and available for sale securities.

"The transition of the R788 technology and expertise from Rigel to AstraZeneca is proceeding smoothly," said James M. Gower, chairman and chief executive officer of Rigel. "In the meantime, as we anticipate AstraZeneca beginning Phase 3 trials for R788 later this year, Rigel's R&D teams are readying the next wave of product candidates to enter clinical trials, including an oral JAK3 inhibitor with potential in transplant and other small molecule therapeutics aimed at inflammatory/autoimmune disorders," he added.