In a strategic move to expand the reach of its cancer drug olutasidenib, Rigel (NASDAQ:RIGL) Pharmaceuticals Inc. has entered into a definitive agreement with Kissei Pharmaceutical Co., Ltd., granting the latter exclusive development and commercialization rights in select Asian markets. The deal, effective as of Tuesday, includes Japan, the Republic of Korea, and Taiwan.
Under the terms of the collaboration and license agreement, Rigel will receive an upfront payment of $10 million. Moreover, the agreement could yield up to $152.5 million in additional payments contingent on achieving specific development, regulatory, and sales milestones. Rigel is also set to receive tiered net sales-based payments ranging from the mid-twenties to the lower thirties percent, subject to customary adjustments.
The arrangement between the two companies will be overseen by a joint steering committee, with Kissei shouldering the responsibility and costs of developing olutasidenib within the specified territories. Rigel retains the right to conduct supporting development activities in these regions as part of its global commercialization efforts, excluding the territories covered by the Kissei agreement.
In addition to the licensing agreement, the parties have signed a supply agreement wherein Rigel is tasked with supplying Kissei with bulk drug product for olutasidenib. The financial terms of the supply arrangement include transfer price payments to Rigel for a defined period post-commercialization of olutasidenib.
This partnership follows a prior licensing agreement between Rigel and Forma Therapeutics, now part of Novo Nordisk (NYSE:NVO), which took place in August 2022. As part of the new agreement with Kissei, Forma is entitled to a share of the sublicensing revenue, beginning with $2.3 million upon Rigel’s receipt of the initial payment from Kissei.
The agreement is structured to continue until either party opts for termination under certain conditions, such as a material breach, bankruptcy, or safety concerns. Moreover, Kissei may terminate without cause following a set notice period after the four-year anniversary of the agreement or after the first commercial sale of olutasidenib.
Rigel's forward-looking statements caution that the anticipated payments and milestones are subject to various risks, including regulatory decisions, trial outcomes, market conditions, and the capabilities of its partners to secure marketing approvals. This news is based on a press release statement and the accompanying SEC filing by Rigel Pharmaceuticals .
In other recent news, Rigel Pharmaceuticals has made significant strides in its business operations. The company has inked a deal with Kissei Pharmaceutical Co., Ltd. to extend the reach of REZLIDHIA in Japan, Korea, and Taiwan, a move that aligns with Rigel's global expansion strategy.
As part of the agreement, Rigel will receive an upfront payment of $10 million, with the potential for additional milestone payments of up to $152.5 million. Kissei will take charge of the clinical development and regulatory processes to seek approval for REZLIDHIA in Japan.
In terms of earnings, Rigel reported a robust 40% increase in net product sales for the second quarter of 2024, totaling $33.5 million. This growth is largely attributed to strong sales of TAVALISSE and REZLIDHIA, as well as initial revenue from the newly launched cancer therapy, GAVRETO. The company's ongoing clinical trials and development programs, including the IRAK1 and 4 inhibitor R289 and the RIPK1 inhibitor programs in partnership with Lilly, are also progressing.
Looking ahead, Rigel anticipates continued growth in net product sales into the third quarter of 2024. The company's disciplined financial approach and operational efficiency have brought it close to achieving financial break-even. These are among the recent developments in Rigel's business operations.
InvestingPro Insights
In light of Rigel Pharmaceuticals' recent strategic collaboration with Kissei Pharmaceutical, current and potential investors may find the following InvestingPro Insights particularly relevant. According to InvestingPro data, Rigel has a market capitalization of $236.48 million, reflecting the scale of the business in the biopharmaceutical landscape. Despite not being profitable over the last twelve months, the company has experienced significant price returns, with a 38.56% increase over the last month and a 36.71% increase over the last three months, suggesting a positive market reaction to recent developments.
InvestingPro Tips reveal that analysts have revised their earnings estimates upwards for the upcoming period, indicating a potential shift in Rigel's financial trajectory. However, analysts also do not expect the company to be profitable this year, which aligns with the company's strategic focus on expanding its drug's reach rather than immediate profitability. Moreover, Rigel does not pay a dividend, which is common for companies in growth phases that are reinvesting earnings back into the business.
For those considering a deeper dive into Rigel's financial health and future prospects, InvestingPro offers additional tips, which can be found at https://www.investing.com/pro/RIGL. These insights could prove invaluable in making informed investment decisions, especially in the volatile biotech sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.