UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM        TO        

Commission File Number 0-29889

Rigel Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	94-3248524
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
organization)

1180 Veterans Blvd.
South San Francisco, CA	94080
(Address of principal executive offices)	(Zip Code)

(650) 624-1100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, par value $0.001 per share	RIGL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

As of October 28, 2022, there were 172,836,336 shares of the registrant’s Common Stock outstanding.

RIGEL PHARMACEUTICALS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022

INDEX

		Page
PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Condensed Balance Sheets (Unaudited) — September 30, 2022 and December 31, 2021	3
	Condensed Statements of Operations (Unaudited) — three and nine months ended September 30, 2022 and 2021	4
	Condensed Statements of Comprehensive Income (Loss) (Unaudited) — three and nine months ended September 30, 2022 and 2021	5
	Condensed Statements of Stockholders’ Equity (Deficit) (Unaudited) — three and nine months ended September 30, 2022 and 2021	6
	Condensed Statements of Cash Flows (Unaudited) — nine months ended September 30, 2022 and 2021	7
	Notes to Condensed Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48
PART II	OTHER INFORMATION	49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	97
Item 3.	Defaults Upon Senior Securities	97
Item 4.	Mine Safety Disclosures	97
Item 5.	Other Information	97
Item 6.	Exhibits	98
Signatures		100

2

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

RIGEL PHARMACEUTICALS, INC.

CONDENSED BALANCE SHEETS

(In thousands)

	September 30,		December 31,
	2022		2021(1)
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	29,866	$	18,890
Short-term investments		51,776		106,077
Accounts receivable, net		15,525		15,472
Inventories		7,116		6,616
Prepaid and other current assets		6,157		7,412
Total current assets		110,440		154,467
Property and equipment, net		1,694		2,184
Operating lease right-of-use asset		2,991		9,703
Other assets		484		974
	$	115,609	$	167,328
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,721	$	3,795
Accrued compensation		8,773		10,690
Accrued research and development		7,574		10,384
Other accrued liabilities		17,602		12,691
Lease liabilities, current portion		3,314		9,892
Deferred revenue		1,369		2,596
Other long-term liabilities, current portion		5,912		13,506
Total current liabilities		47,265		63,554
Long-term portion of lease liabilities		—		759
Loans payable, net of discount		39,468		19,914
Other long-term liabilities		48,710		52,727
Commitments
Stockholders’ equity (deficit):
Preferred stock		—		—
Common stock		173		172
Additional paid-in capital		1,364,139		1,354,190
Accumulated other comprehensive loss		(286)		(102)
Accumulated deficit		(1,383,860)		(1,323,886)
Total stockholders’ equity (deficit)		(19,834)		30,374
	$	115,609	$	167,328

(1) The balance sheet as of December 31, 2021 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (SEC) on March 1, 2022.

See Accompanying Notes to Condensed Financial Statements

3

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Product sales, net	$	19,188	$	16,012	$	53,935	$	45,441
Contract revenues from collaborations		722		4,531		12,529		73,886
Government contract		2,500		1,000		2,500		9,500
Total revenues		22,410		21,543		68,964		128,827
Costs and expenses:
Cost of product sales		250		151		1,407		596
Research and development		14,666		18,300		44,907		51,933
Selling, general and administrative		25,897		22,877		80,279		67,376
Total costs and expenses		40,813		41,328		126,593		119,905
Income (loss) from operations		(18,403)		(19,785)		(57,629)		8,922
Interest income		192		14		255		31
Interest expense		(826)		(1,317)		(2,600)		(3,561)
Income (loss) before income taxes		(19,037)		(21,088)		(59,974)		5,392
Provision for (benefit from) income taxes		—		(136)		—		665
Net income (loss)	$	(19,037)	$	(20,952)	$	(59,974)	$	4,727
Net income (loss) per share
Basic	$	(0.11)	$	(0.12)	$	(0.35)	$	0.03
Diluted	$	(0.11)	$	(0.12)	$	(0.35)	$	0.03
Weighted average shares used in computing net income (loss) per share
Basic		172,836		170,886		172,256		170,297
Diluted		172,836		170,886		172,256		176,452

See Accompanying Notes to Condensed Financial Statements

4

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	(19,037)	$	(20,952)	$	(59,974)	$	4,727
Other comprehensive income (loss):
Net unrealized gain (loss) on short-term investments		152		1		(184)		12
Comprehensive income (loss)	$	(18,885)	$	(20,951)	$	(60,158)	$	4,739

See Accompanying Notes to Condensed Financial Statements

5

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share amounts)

(unaudited)

						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Loss		Deficit		Equity (Deficit)
Balance as of January 1, 2022	171,602,226	$	172	$	1,354,190	$	(102)	$	(1,323,886)	$	30,374
Net loss	—		—		—		—		(27,445)		(27,445)
Net unrealized loss on short-term investments	—		—		—		(314)		—		(314)
Issuance of common stock upon exercise of options	420,521		—		940		—		—		940
Issuance of common stock upon vesting of restricted stock units	22,500		—		—		—		—		—
Stock-based compensation expense	—		—		3,243		—		—		3,243
Balance as of March 31, 2022	172,045,247	$	172	$	1,358,373	$	(416)	$	(1,351,331)	$	6,798
Net loss	—		—		—		—		(13,492)		(13,492)
Net unrealized loss on short-term investments	—		—		—		(22)		—		(22)
Issuance of common stock upon exercise of options and participation in Purchase Plan	609,839		1		598		—		—		599
Issuance of common stock upon vesting of restricted stock units	181,250		—		—		—		—		—
Stock-based compensation expense	—		—		2,440		—		—		2,440
Balance as of June 30, 2022	172,836,336	$	173	$	1,361,411	$	(438)	$	(1,364,823)	$	(3,677)
Net loss	—		—		—		—		(19,037)		(19,037)
Net unrealized gain on short-term investments	—		—		—		152		—		152
Stock-based compensation expense	—		—		2,728		—		—		2,728
Balance as of September 30, 2022	172,836,336	$	173	$	1,364,139	$	(286)	$	(1,383,860)	$	(19,834)

						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Loss		Deficit		Equity
Balance as of January 1, 2021	169,316,782	$	169	$	1,339,833	$	(4)	$	(1,305,972)	$	34,026
Net income	—		—		—		—		39,500		39,500
Net unrealized gain on short-term investments	—		—		—		3		—		3
Issuance of common stock upon exercise of options	813,854		1		2,096		—		—		2,097
Stock-based compensation expense	—		—		2,672		—		—		2,672
Balance as of March 31, 2021	170,130,636	$	170	$	1,344,601	$	(1)	$	(1,266,472)	$	78,298
Net loss	—		—		—		—		(13,821)		(13,821)
Net unrealized gain on short-term investments	—		—		—		8		—		8
Issuance of common stock upon exercise of options and participation in Purchase Plan	711,847		1		1,318		—		—		1,319
Stock-based compensation expense	—		—		2,306		—		—		2,306
Balance as of June 30, 2021	170,842,483	$	171	$	1,348,225	$	7	$	(1,280,293)	$	68,110
Net loss	—		—		—		—		(20,952)		(20,952)
Net unrealized gain on short-term investments	—		—		—		1		—		1
Issuance of common stock upon exercise of options	127,265		—		274		—		—		274
Stock-based compensation expense	—		—		2,237		—		—		2,237
Balance as of September 30, 2021	170,969,748	$	171	$	1,350,736	$	8	$	(1,301,245)	$	49,670

See Accompanying Notes to Condensed Financial Statements

6

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Nine Months Ended September 30,
	2022		2021
Operating activities
Net income (loss)	$	(59,974)		4,727
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation expense		8,305		7,147
Gain on disposal of assets		(465)		—
Depreciation and amortization		714		758
Non-cash interest expense		682		2,314
Net amortization and accretion of discount on short-term investments and term loan		116		171
Changes in assets and liabilities:
Accounts receivable, net		(53)		982
Inventories		(394)		(5,325)
Prepaid and other current assets		1,255		8,113
Other assets		490		(111)
Right-of-use assets		6,712		6,071
Accounts payable		(999)		(656)
Accrued compensation		(1,917)		(131)
Accrued research and development		(2,810)		4,586
Other accrued liabilities		4,911		2,563
Lease liability		(7,337)		(6,384)
Deferred revenue		(1,227)		139
Other current and long-term liabilities		142		—
Net cash provided by (used in) operating activities		(51,849)		24,964
Investing activities
Purchases of short-term investments		(26,049)		(117,076)
Maturities of short-term investments		80,062		31,200
Proceeds from disposal of assets		543		—
Capital expenditures		(377)		(648)
Net cash provided by (used in) investing activities		54,179		(86,524)
Financing activities
Cost share advance from collaboration partner		—		57,900
Cost share payments to a collaboration partner		(12,435)		—
Net proceeds from issuances of common stock upon exercise of options and participation in Purchase Plan		1,539		3,690
Net proceeds from term loan financing		19,542		—
Net cash provided by financing activities		8,646		61,590
Net increase in cash and cash equivalents		10,976		30
Cash and cash equivalents at beginning of period		18,890		30,373
Cash and cash equivalents at end of period	$	29,866	$	30,403
Supplemental disclosure of cash flow information
Interest paid	$	1,549	$	1,094

See Accompanying Notes to Condensed Financial Statements

7

Rigel Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

In this report, “Rigel,” “we,” “us” and “our” refer to Rigel Pharmaceuticals, Inc.

1. Organization and Summary of Significant Accounting Policies

Description of Business

We are a biotechnology company dedicated to discovering, developing and providing novel small molecule drugs that significantly improve the lives of patients with hematologic disorders, cancer and rare immune diseases. Our pioneering research focuses on signaling pathways that are critical to disease mechanisms. Our first product approved by the US Food and Drug Administration (FDA) is TAVALISSE® (fostamatinib disodium hexahydrate) tablets, the only approved oral spleen tyrosine kinase (SYK) inhibitor, for the treatment of adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment. The product is also commercially available in Europe, United Kingdom (UK) (TAVLESSE) and Canada (TAVALISSE) for the treatment of chronic ITP in adult patients.

Our portfolio also includes olutasidenib, an oral, small molecule inhibitor of mutated isocitrate dehydrogenase-1 (mIDH1) being investigated for the treatment of acute myeloid leukemia (AML) and other malignancies. We in-licensed olutasidenib from Forma Therapeutics, Inc. (Forma) with exclusive, worldwide rights to develop, manufacture, and commercialize the investigational drug.

We conducted a Phase 3 clinical trial evaluating fostamatinib for the treatment of warm autoimmune hemolytic anemia (wAIHA), and recently announced that we do not expect to file a supplemental New Drug Application (sNDA) for this indication at this time considering the top-line data results and the guidance received from the FDA. We recently announced the completion of the FOCUS Phase 3 clinical trial of fostamatinib for the treatment of hospitalized high-risk patients with COVID-19. Fostamatinib is also currently being studied in a National Institute of Health (NIH)/National Heart, Lung, and Blood Institute (NHLBI) sponsored Accelerating COVID-19 Therapeutic Inventions and Vaccines (ACTIV-4) Phase 3 trial (ACTIV-4 Host Tissue Trial) for the treatment of COVID-19 in hospitalized patients.

Our other clinical programs include our interleukin receptor-associated kinase (IRAK) inhibitor program and a receptor-interacting serine/threonine-protein kinase (RIPK1) inhibitor program in clinical development with partner Eli Lilly and Company (Lilly). In addition, we have product candidates in clinical development with partners BerGenBio ASA (BerGenBio) and Daiichi Sankyo (Daiichi).

Basis of Presentation

Our accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (US GAAP), for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933, as amended (Securities Act). Accordingly, they do not include all the information and notes required by US GAAP for complete financial statements. These unaudited condensed financial statements include only normal and recurring adjustments that we believe are necessary to fairly state our financial position and the results of our operations and cash flows. Interim-period results are not necessarily indicative of results of operations or cash flows for a full-year or any subsequent interim period. The balance sheet as of December 31, 2021 has been derived from audited financial statements at that date but does not include all disclosures required by US GAAP for complete financial statements. Because certain disclosures required by US GAAP for complete financial statements are not included herein, these interim unaudited condensed financial statements and the notes accompanying them should be read in conjunction with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our

8

estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from these estimates.

Significant Accounting Policies

Our significant accounting policies are described in “Note 1 – Description of Business and Summary of Significant Accounting Policies” to our “Notes to Financial Statements” contained in “Part II, Item 8, Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to these accounting policies, except for our accounting associated with our in-license agreement with Forma as discussed in detail in “Note 4 – Sponsored Research and License Agreements”.

Liquidity

As of September 30, 2022, we had approximately $81.6 million in cash, cash equivalents and short-term investments. Since inception, we have financed our operations primarily through sales of equity securities, debt financing, contract payments under our collaboration agreements and from product sales.

Based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of this Form 10-Q.

Recently Issued Accounting Standards

No new accounting guidance adopted during the period. Recently issued accounting guidance is not applicable or did not have, or is not expected to have, a material impact to us.

2. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period and the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive securities include stock options, restricted stock units and shares issuable under our Employee Stock Purchase Plan (Purchase Plan). The dilutive effect of these potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities.

The following table sets forth the computation of basic and diluted earnings per share (in thousands except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
EPS Numerator:
Net income (loss)	$	(19,037)	$	(20,952)	$	(59,974)	$	4,727
EPS Denominator—Basic and Diluted:
Weighted-average common shares outstanding		172,836		170,886		172,256		170,297
EPS Denominator—Diluted:
Weighted-average common shares outstanding		172,836		170,886		172,256		170,297
Dilutive effect of stock options, restricted stock units and shares under Purchase Plan		—		—		—		6,155
Weighted-average shares outstanding and common stock equivalents		172,836		170,886		172,256		176,452
Net income (loss) per share
Basic	$	(0.11)	$	(0.12)	$	(0.35)	$	0.03
Diluted	$	(0.11)	$	(0.12)	$	(0.35)	$	0.03

9

The potential shares of common stock that were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive are as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Outstanding stock options		32,687		30,490		32,687		9,450
Restricted stock units		1,174		234		1,174		4
Purchase Plan		398		313		398		—
Total		34,259		31,037		34,259		9,454

3. Revenues

Revenues disaggregated by category were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Product sales:
Gross product sales	$	26,977	$	20,546	$	76,022		58,692
Discounts and allowances		(7,789)		(4,534)		(22,087)		(13,251)
Total product sales, net		19,188		16,012		53,935		45,441
Revenues from collaborations:
License revenues		—		2,431		2,545		70,354
Development milestones		—		1,875		5,000		1,875
Research and development services and others		722		225		4,984		1,657
Total revenues from collaborations		722		4,531		12,529		73,886
Government contract		2,500		1,000		2,500		9,500
Total revenues	$	22,410	$	21,543	$	68,964	$	128,827

Our net product sales include sales of TAVALISSE in the US, net of chargebacks, discounts and fees, government and other rebates and returns. The following tables summarize the activities in chargebacks, discounts and fees, government and other rebates and returns that were accounted for within other accrued liabilities, for each of the periods presented (in thousands):

	Chargebacks,		Government
	Discounts and		and Other
	Fees		Rebates		Returns		Total
Balance as of January 1, 2022	$	3,404	$	2,494	$	2,017	$	7,915
Provision related to current period sales		14,475		4,130		1,045		19,650
Credit or payments made during the period		(11,920)		(4,257)		(199)		(16,376)
Balance as of September 30, 2022	$	5,959	$	2,367	$	2,863	$	11,189

	Chargebacks,	Government
	Discounts and	and Other
	Fees	Rebates	Returns	Total
Balance as of January 1, 2021	$