As a reminder, this conference is being recorded. It is now my pleasure to introduce our first speaker, Ray Furey, Rigel's Executive Vice President, General Counsel, and Corporate Secretary. Thank you, Mr. Furey. You may begin.
Thank you. Welcome to our third quarter 2026 financial results conference call. The financial press release for the third quarter 2026 was issued earlier today and can be viewed along with the slides for this presentation in the news and events section of our investor relations site on rigel.com. As a reminder, during today's call, we may make forward-looking statements regarding our financial outlook and our plans and timing for commercial, regulatory, product development, and other business activities. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found on our most recent annual report on Form 10-K for the year ended December 31st, 2025, on file with the SEC, and subsequent filings with the SEC, including our Q3 quarterly report on Form 10-Q with the SEC.
Any forward-looking statements are made only as of today's date, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances, except as required by law. At this time, I would like to turn the call over to our President and Chief Executive Officer, Raul Rodriguez. Raul?
Thank you, Ray, and thank you all for joining us today. Also joining me on the call are Dave Santos, our Chief Commercial Officer, Dr. Alison Hannah, our Chief Medical Officer, and Dean Schorno, our Chief Financial Officer. Before we begin, I'd like to share a few key highlights from the quarter. We delivered over $72 million in net product sales, our highest ever, and another profitable quarter. This while taking important steps towards Rigel's next phase of growth. VEPPANU, Rigel's fourth commercial product, is now available in the U.S. with an encouraging start to its launch, and we continue to advance R289 towards its next stage of development. I'll start with an overview of this progress before the team takes you through the details. Moving to slide four.
VEPPANU became commercially available in the U.S. on August 13th and generated $6.6 million in net product sales through the end of the third quarter. Following the close of the global in-license agreement in June, our team moved quickly to initiate launch activities, leveraging our established commercial and medical infrastructure to engage physicians and build awareness ahead of commercial availability. Within just two months of closing the transaction, VEPPANU was successfully integrated into our existing distribution network and ready for commercial launch. During Q3, we shipped VEPPANU to over 100 patients and clinics. Encouragingly, the majority of the patients who received VEPPANU during the early weeks of launch had already refilled their prescriptions by quarter end. We also have strong payer coverage, with patients able to access VEPPANU through either formulary coverage or through the exception process.
In addition, we are seeing positive engagement with healthcare providers, with our efforts focused on high-decile prescribers. As the first and only FDA-approved PROTAC therapy, or proteolysis-targeting chimera, VEPPANU offers a new mechanism of action and an important treatment option for patients with ER-positive, HER2-negative, ESR1-mutated advanced or metastatic breast cancer. Our focus now is on building awareness of its differentiated mechanism and clinical data, then translating this into adoption through multifaceted campaigns. Dave will share more about our early launch experience and plans shortly. Overall, we are excited by VEPPANU's early launch performance and believe it has the potential to be Rigel's largest sales contributor. On slide five, we outline our transformational growth strategy. The VEPPANU launch is a clear example of this strategy in action. We identified a differentiated late-stage asset in oncology and leveraged our established infrastructure to rapidly integrate and launch the product.
We intend to build on that approach as we continue to grow our portfolio of four commercial products and evaluate additional in-license opportunities. At the same time, we are investing in our development pipeline, led by R289, our dual IRAK1 and IRAK4 inhibitor, which is currently being evaluated in a phase I-B clinical studies in patients with lower-risk MDS. We look forward to presenting updated data on this study at the ASH meeting in December. Financial discipline is what connects these strategic objectives. Our growing commercial business enables us to invest in opportunities with substantial long-term potential while maintaining our focus on profitability. We believe this combination of commercial execution, pipeline advancement, and financial discipline sets us apart and positions Rigel well for its next phase of growth. Slide six highlights our track record of commercial growth, and more importantly, the opportunities ahead for Rigel.
We grew our net product sales by a compound annual growth rate of approximately 35% annually since 2022. Looking into the future, we have two sequential engines of significant growth, VEPPANU and then R289. We are encouraged by VEPPANU's early performance and see significant potential in a large and growing market. Turning to R289, we continue to advance its development in patients with lower-risk MDS, a disease with significant unmet medical need. At the ASH meeting in December, we plan to present updated data from the phase I-B study, including preliminary efficacy data from the dose expansion phase. We also remain on track to complete enrollment and select the recommended phase II dose for future development by the end of 2026. We plan to initiate a registrational program in lower-risk MDS next year and believe that R289 has the potential to be a billion-dollar-plus commercial opportunity in this indication.
Together, VEPPANU and R289 offer significant commercial potential, and they are central to our plans to substantially expand Rigel's business over the coming years and drive long-term shareholder value. With that, I'll turn the call over to Dave to discuss our commercial performance and the latest on the VEPPANU launch. Dave?
Thank you, Raul. On slide eight, you'll see our four commercial products: VEPPANU, TAVALISSE, REZLIDHIA, and GAVRETO. Moving to slide nine, our net product sales were $72.3 million for the third quarter of 2026, an increase of 13% compared to the third quarter of 2025, primarily driven by the addition of VEPPANU during the third quarter. Year-to-date 2026, we reported $194.2 million in net product sales, an increase of 17% compared to the same period of 2025. As Raul mentioned, we're extremely excited that VEPPANU is commercially available, and we reported $6.6 million in net product sales for the third quarter, which reflects approximately six weeks of product availability. I'll talk more about VEPPANU in a few minutes. For TAVALISSE, we generated $46 million in net product sales, an increase of 3% compared to the third quarter of 2025.
Eight years after launch, TAVALISSE continues to be a strong and consistent contributor to our portfolio. For REZLIDHIA, we reported $9.9 million in net product sales, an increase of 20% compared to the prior year period. We continue to believe REZLIDHIA adoption will grow in the community setting and in the post-venetoclax patient population. Finally, for GAVRETO, we delivered $9.8 million in net product sales, a decrease of 11% compared to the third quarter of 2025. GAVRETO continues to be a stable, contributing product in our portfolio. Overall, we are very pleased with our third-quarter results. While VEPPANU is now our lead focus, we remain committed to supporting TAVALISSE, REZLIDHIA, and GAVRETO. Importantly, the engagement of our field team has had around VEPPANU is opening doors to more accounts, which also creates opportunities to support our other products where there are appropriate patients.
Moving to slide 10, we generated $8.6 million in revenues from collaborations in the third quarter, driven primarily by the availability of TAVALISSE in global markets. TAVALISSE is commercially available in key European countries under the brand name TAVLESSE, in Japan and South Korea, in Canada and Israel, and in Mexico through our partners, Grünenthal, Kissei, Medison, and Knight. Knight also announced regulatory approval of TAVALISSE in Colombia in September and the launch of TAVALISSE in Brazil in October. Our partners continue to pursue regulatory approvals for TAVALISSE in new markets, and we are pleased that access to TAVALISSE continues to spread outside the U.S. For REZLIDHIA, our partners Kissei Pharmaceutical and Dr. Reddy's Laboratories are advancing olutasidenib in their territories. I'll now turn to VEPPANU.
Before I get into the commercial launch, let me briefly remind you of the ER-positive, HER2-negative, ESR1-mutated advanced or metastatic patient opportunity, which you can see on slide 12. Of approximately 170,000 U.S. metastatic breast cancer patients, about 119,000 have ER-positive, HER2-negative disease. Prior endocrine and CDK4/6 therapy drives ESR1 resistance in about 40% of patients. Upon ctDNA testing, roughly 60%, corresponding to around 26,000 patients, are diagnosed with ESR1-mutated disease. Most of these patients are in the second or later line setting, resulting in about 20,000 patients with a critical unmet need in second line and later ER-positive, HER2-negative, ESR1-mutated metastatic breast cancer. This represents a U.S. market opportunity of $1 billion + . I am now on slide 13. Resistance driven by ESR1 mutations continues to be a challenge for metastatic breast cancer patients, and ER degradation is an important therapeutic strategy for addressing these mutations.
Oral SERDs degrade estrogen receptors by binding them and causing a conformational change, which indirectly results in degradation of estrogen receptors. In a preclinical study, the scale of ER degradation was 8%-68%. Proteolysis-targeting chimera, or PROTAC, is not a SERD, and is a very different mechanism to eliminate estrogen receptors. PROTAC is heterobifunctional, binding to the estrogen receptor on one end and the E3 ligase on the other, bringing them close together to initialize polyubiquitination, directly degrading the receptor through the proteasome. In addition, the PROTAC can then release and degrade multiple estrogen receptors until it is metabolized. This ability to recruit the E3 ligase, remove the estrogen receptor, and repeat the process differentiates PROTAC from SERD. In a preclinical study, the PROTAC VEPPANU degraded 79%-86% of estrogen receptors. This is why we believe VEPPANU represents an important therapeutic advance for ER-positive, HER2-negative, ESR1-mutated metastatic breast cancer.
As we continue to create awareness of VEPPANU as the first and only FDA-approved PROTAC, more clinicians will want to try it in their patients. Moving to slide 14, HCPs are interested in this new therapeutic option for their patients, and we are highly encouraged by the speed and breadth of uptake of VEPPANU during Q3. I will be providing some metrics today to provide color on the early days of the launch, given Q3 reflects only approximately six weeks of availability. Going forward, we will not provide this level of detail, given we will be reporting net product sales. We are very pleased that immediately after product became available in mid-August, we began shipping VEPPANU to patients and clinics. In the first six weeks of VEPPANU availability during Q3, we shipped VEPPANU to more than 100 patients and clinics.
Impressively, by the end of the quarter, the majority of patients who started in August had already received their first refill. In terms of prescribers, we have seen both breast cancer specialists at academic institutions and community oncologists across the country try VEPPANU. In fact, all six of our sales regions had a prescriber on day one of product availability, a second prescriber by the end of week one, and a third by the end of week two. Overall, to give an idea of our geographic adoption, 75% of our territories had prescribers during the first six weeks of product availability in Q3. Similarly, we had good adoption at direct ordering accounts across academic and community settings. All six regions had direct accounts ordered by the end of August, and nearly two-thirds of our territories had direct account orders by the end of Q3.
These early launch signals indicate that clinicians treating breast cancer have seen the value of having a new treatment option for their patients, and with increased awareness and experience, VEPPANU will grow. Moving to slide 15, we have also been encouraged by the early trends in patient access. Prior authorization approval, or PA approval, is an important metric in determining how well a drug can be accessed. During the third quarter, we were pleased to see that overall, our PA approval rate was estimated to be 88%. Of commercially insured patients, even at this very early stage, more than 80% of PAs were approved. In Medicare patients, that PA approval rate was even higher, above 90%.
Once patients receive approval, it is important that they get their fill quickly, and we are pleased to report that the median time to fill VEPPANU prescriptions through our specialty pharmacies was just four days. More than 80% of prescriptions were filled within two weeks, and more than one-third of patients got their VEPPANU within three days. We continue to provide services for both patients and providers through our RIGEL ONECARE® Patient Support Hub. This hub can assist with benefits verification and coverage support, prior authorizations, temporary drug supply for eligible patients, as well as copay and other assistance. These services, combined with our specialty pharmacy partners, are ensuring we maximize patient access to VEPPANU and minimize the time to fill approved VEPPANU prescriptions.
Moving to slide 16, as discussed earlier, it is important that we continue to raise awareness of VEPPANU among HCPs as the first and only FDA-approved PROTAC for their patients with ESR1-mutated metastatic breast cancer. We have made great early progress in creating awareness, and those efforts are continuing. Because VEPPANU's mechanism is so important, we have updated tools highlighting VEPPANU's novel mechanism of action, and our newest promotional materials highlight a new campaign to give ER-positive, HER2-negative, ESR1 metastatic breast cancer patients more progression-free time to live vividly. This is supported by our efficacy results from VERITAC-2 of a 2.4-fold increase in median PFS of five months for vepdegestrant versus 2.1 months for fulvestrant, as well as health-related quality of life patient-reported outcomes data that were reported.
We are implementing plans to ensure this new promotional campaign will rapidly reach more customers as we move forward in Q4 and into 2027. I am on slide 17. To that end, we will have a strong first-time presence at the most important breast cancer conference of the year, the San Antonio Breast Cancer Symposium in December. This will be Rigel's first opportunity to have a presence at this conference, and it will be strong. We have a large booth planned for the exhibit hall that prominently displays our new vepdegestrant campaign. In addition to our new HCP promotional campaign, including the newly launched website you see on the right, we will be activating numerous patient and caregiver-directed vepdegestrant education through several different channels.
Overall, we are highly encouraged by our early results and look forward to expanding awareness and adoption of VEPPANU as we move through our first full quarter of product availability and into 2027. With that, I'll turn the call over to Alison for an update on our development pipeline. Alison?
Thank you, Dave. On slide 19, you can see our three hematology and oncology focus areas. R289, our dual IRAK1 and IRAK4 inhibitor, is currently under evaluation in a phase I-B study for patients with relapsed or refractory lower-risk MDS, and I am pleased that we will present updated data from the study in an oral session at ASH in December, which will include preliminary efficacy data from the dose expansion phase of the study. In addition, we are continuing to evaluate other potential indications for R289 where the pro-inflammatory cascade plays a role. For vepdegestrant, studies are ongoing. Pfizer and Arvinas remain responsible for these studies. I'll touch more on this in a moment. Finally, for olutasidenib, we are focused on its evaluation through strategic collaborations with MD Anderson, the CONNECT Consortium, and MyeloMATCH.
Olutasidenib is being evaluated in IDH1-mutated AML and other hematologic malignancies, as well as in IDH1-mutated high-grade glioma. You can find more information on these collaborations in our corporate presentation that's available in the investors section of our rigel.com. On slide 20, you'll see more on the specific development for vepdegestrant. As I mentioned, there are several ongoing studies for which Pfizer and Arvinas remain responsible. Rigel will also contribute to these studies. These trials remain active, but are no longer enrolling, except for the hepatic impairment trial. VERITAC-2, the registrational phase III study, remains ongoing for time-to-event endpoints, such as overall survival. In addition, there are several combination studies that we expect will provide us additional safety and efficacy data. That data will be important as we consider our future development of vepdegestrant, which includes the potential for Rigel to initiate its own studies or new collaborations.
We have heard from thought leaders that because vepdegestrant is so tolerable, it has a great potential as a combination agent. They have also told us that its differentiated mechanism of action from oral SERDs could be very important, as oral SERDs are used earlier in breast cancer treatment. Thus, combination studies and studies in the post-SERD setting are of high interest and priority for vepdegestrant. Also for vepdegestrant, as Dave mentioned, we're looking forward to the upcoming San Antonio Breast Cancer Symposium. On slide 21 are the titles of the vepdegestrant abstracts that have been accepted, including post-SERD data and combination data, and includes an abstract that discusses the impact of ESR1 mutations in the ER-positive, HER2-negative metastatic breast cancer. We look forward to discussing the abstract data after the abstract embargo lifts later this month. Now let's move on to R289 and lower-risk MDS.
On slide 23, you can see the current treatment landscape for this indication. MDS is a clonal disorder of hematopoietic stem cells that leads to ineffective hematopoiesis, with consequences that include anemia, infections, iron overload, and organ dysfunction, and possible progression to acute myeloid leukemia. The primary goal of therapy is to reduce or eliminate transfusion dependence. In the first-line setting, patients typically receive erythropoiesis-stimulating agents, or ESAs, or luspatercept. If the patient has a 5q deletion, lenalidomide, if eligible. After ESA failure or for ESA-ineligible patients, luspatercept and imetelstat are approved. In the second-line setting, these treatments each have a response rate of approximately 38%-40%, respectively. For more aggressive disease, hypomethylating agents can be used with response rates of approximately 18%-20%. There remains a clear need for new treatments for previously treated transfusion-dependent patients who are relapsed or refractory to or ineligible for ESAs.
If the data for R289 plays out and it earns FDA approval, we see the potential for R289 to be an important therapy option for these patients. On slide 24, we summarize the value proposition for R289 in lower-risk MDS. There are approximately 12,200 previously treated lower-risk MDS patients in the United States, and effective therapies for transfusion-dependent patients in this setting are limited. As I mentioned, R289 offers dual targeting against IRAK1 and IRAK4 . Since dysregulated inflammatory signaling in the bone marrow is associated with MDS, co-targeting of IRAK1 and IRAK4 may suppress inflammation and LSPC function, restoring normal blood cell production. R289 blocks Toll-like receptors and IL-1 receptor signaling in vitro and has been active in preclinical models of inflammation. We established clinical proof of concept in a randomized controlled trial in healthy volunteers, where R835, the active moiety of R289, markedly suppressed LPS-induced cytokine release.
The FDA has granted R289 Fast Track designation for previously treated transfusion-dependent lower-risk MDS and Orphan Drug designation for MDS. The preliminary phase I-B study data presented at ASH in 2025 showed R289 had promising preliminary safety and efficacy in 33 elderly, heavily pre-treated patients with relapsed or refractory lower-risk MDS. You can see the design of our open-label, multicenter phase I-B study evaluating the safety, tolerability, pharmacokinetics, and preliminary efficacy of R289 in patients with relapsed or refractory lower-risk MDS on slide 25. The study is designed to select the recommended phase II dose for future studies. We expect to select the dose by the end of this year. We will then work with the FDA to align on the registrational path. We are targeting initiating a registration study in 2027.
We also plan to open the exploratory cohort of the phase I-B study, which will evaluate R289 in transfusion-dependent lower-risk MDS patients who are refractory to or ineligible for ESAs, but are otherwise naive to other MDS-directed therapy. This cohort will help us understand R289's potential in earlier lines of therapy. On the left side of slide 26 is this year's ASH R289 abstract data that was released yesterday, which is primarily related to safety, given the data of the timing cut for the submission. As of the July 16th data cutoff, 64 patients were enrolled in the study, 33 patients in dose escalation, 31 patients in dose expansion. The median number of prior therapies was three, with a range of one to eight. Most patients were exposed to commonly used MDS-targeted agents, including ESAs, luspatercept, imetelstat, hypomethylating agents, and lenalidomide.
20% had received a prior investigational agent, indicating this was a heavily pre-treated population, including some with end-stage disease. These patient characteristics are consistent with the patient characteristics that were presented at ASH in 2025. From a safety perspective, R289's profile remains consistent with what has been previously reported. Most common treatment-emergent adverse events were low-grade diarrhea, cough. In dose expansion, no treatment-emergent adverse events leading to discontinuation were observed. There were no dose-limiting toxicities. Overall, R289 continues to be well tolerated in this elderly, heavily pre-treated patient population with a high baseline transfusion burden. At the meeting, updated data from the study will be presented by Dr. Guillermo Garcia-Manero. The oral presentation will be included in the MDS session listed here on Saturday, December 12, and will include incremental study safety data and preliminary efficacy data from the dose expansion from a planned data cut in mid-November.
On slide 27, I'll quickly summarize the next steps for R289. We are on track to complete enrollment and select the R289 dose for future development by the end of the year. We'll present updated data from the study at ASH in December. Once the recommended phase II dose has been selected, we will evaluate R289 in a cohort of less heavily pre-treated patients who are relapsed or refractory to or ineligible for ESAs in the same study. We also plan to follow up with the FDA to discuss a potential registrational trial. Finally, we're continuing to evaluate other potential indications for R289 and plan to provide an update by the end of the year. Lastly, on slide 28, I want to highlight our key presentations at ASH. In addition to R289 data, we'll also have new data for fostamatinib in ITP and warm autoimmune hemolytic anemia.
We are looking forward to the meeting. With that, I'll pass the call to Dean to discuss our financial results. Dean?
Thank you, Alison. I'm on slide 30. We reported net product sales of $72.3 million for the third quarter, a growth of 13% year-over-year, including TAVALISSE net product sales of $46 million, an increase of 3% year-over-year, GAVRETO net product sales of $9.8 million, a decrease of 11% year-over-year, REZLIDHIA net product sales of $9.9 million, an increase of 20% year-over-year, and VEPPANU net product sales of $6.6 million, reflecting approximately six weeks of commercial availability. Our net product sales were recorded net of estimated discounts, chargebacks, rebates, returns, copay assistance, and other allowances of $21.3 million.
We also reported $8.6 million of contract revenues for the third quarter, primarily consisting of $3.8 million from Grifols related to earned royalties and delivery of drug supplies, $3.2 million from Kissei Pharmaceutical related to the delivery of drug supplies, and a total of $1.6 million from other parties related to delivery of drug supply and earned royalties. Our total revenues for the third quarter were $80.9 million. Moving to slide 31. For the third quarter of 2026, our cost of product sales was approximately $10.8 million, which includes amortization of intangible assets related to the VEPPANU transaction and royalties owed to Arvinas and Pfizer on VEPPANU net sales. Total cost and expenses were $63.8 million compared to $41 million for the same period of 2025.
The increase in cost and expenses was primarily due to higher research and development costs related to the R289 and vepdegestrant clinical programs, as well as higher cost of product sales, commercial-related expenses due to the commercial launch of VEPPANU, and personnel-related costs. Income before income taxes for the third quarter was $17.4 million compared to $27.6 million for the same period of 2025. We reported net income of $13.2 million for the third quarter compared to net income of $27.9 million in the same period of 2025. We ended the quarter with cash equivalents, and short-term investments of $99.3 million compared to $155 million as of the end of 2025.
Turning to our financial outlook for 2026, we have updated and narrowed our guidance and now expect total revenues in the range of approximately $290 million-$295 million from the previous range of $285 million- $295 million. This includes our expectation of approximately $255 million-$260 million in net product sales, excluding VEPPANU, from the previous range of approximately $255 million- $265 million. In addition, we now expect approximately $35 million in contract revenues from the previous expectation of approximately $30 million. We also continue to anticipate reporting positive net income for the full year while funding existing and new clinical development programs and supporting the commercial launch of VEPPANU. With that, I would like to turn the call back over to Raul. Raul?
Thank you, Dean. Turning to slide 32, I would like to close with a few thoughts. This is truly an exciting time at Rigel as we are successfully launching VEPPANU. We are encouraged by its strong early start and early demand. Our commercial team is executing well, building awareness, and driving adoption. Our strategy remains unchanged: grow our commercial portfolio, advance our development pipeline, evaluate potential in-license opportunities, and maintain financial discipline. 2026 has been a pivotal year for Rigel. We believe the opportunities we have, particularly for VEPPANU and R289, have the potential to further transform Rigel's business and create long-term shareholder value. With that, I will turn the call back to the operator for your questions. Operator?
Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If you would like to remove your question from the queue, you may press star two. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, for the first question. Our first questions come from the line of Joe Pantginis with H.C. Wainwright. Please proceed with your questions.
Hey, everybody. Good afternoon. Thanks for all the details today. So, two questions, if you don't mind. First, for R289, curious if you could provide at least, for today, it could change tomorrow, but any broad strokes about your views of a pivotal study design. What would you be looking to have the same type of randomization? I'm sorry, inclusion criteria, sizes, et cetera. Anything you'd like to share, number one. Then number two, with regard to TAVALISSE, eight years is a great run here. Nice to still see continued growth. Any areas that you still see growth potential in the U.S. versus potential to start to hit steady state? Of course, the ex-U.S. profile is still growing. Thanks.
Thank you, Joe. I'll ask Alison to comment on what a registrational trial would look like. We are still working on designing such a trial, so it's a little early, but maybe she'd like to make some comments.
So thank you. Thank you, Raul. We are aware of the historical literature for this disease. There's three trials that were conducted in a contemporaneous manner, so this would include MEDALIST for luspatercept, it would include IMerge for imetelstat, and it would also include the failed trial called MATTERHORN. So we are aware of these trials, where they succeeded and where they came up short. So we're taking that into consideration. As Raul mentioned, we are planning a meeting with the FDA at this time, but we're really not in a position to discuss more particulars regarding the trial design. Thank you.
What we do feel comfortable saying is that next year, we fully intend to launch such a registrational trial. As of now, we are very much on track to do so. Dave, maybe you want to comment on TAVALISSE performance?
Yeah, sure. Great question, Joe. First of all, I will say that in Q3, we did hit our highest demand bottle quarter ever in the history of the brand, so it is still growing. I think there are opportunities to grow. We can continue to get more patients out there who have ITP with our prescribers. The real thing is, Joe, we really believe we have so much more opportunity to grow with VEPPANU, and so that is what our focus is. That does not mean we do not continue to support TAVALISSE, but I think you will see less growth moving forward for that brand, which will be more than made up for with the growth of VEPPANU. I do want to recognize again that we just did, again, have another record demand quarter for TAVALISSE.
Absolutely. Very fair. Thanks a lot.
Thank you, Joe.
Thank you. Our next question is coming from the line of Yigal Nochomovitz with Citi. Please proceed with your questions.
Hi, this is Caroline on for Yigal. Thanks for taking our question. Can you help us understand how much of VEPPANU's $6.6 million in sales reflected initial channel inventory stocking versus underlying patient demand? And what are October trends looking like? Thank you.
Dave, you want to take a stab at that?
Yeah, thanks for the question, Caroline. I'll say first and foremost, the majority of the sales that we had in the first six weeks or the third quarter was demand-related. As I said, we had a number of patients go on therapy immediately that had already refilled by the end of the quarter. We had accounts order, and that speed and breadth of adoption, like I said, we were very pleased with. So, I can say very firmly that the bulk of our sales were demand-related as opposed to inventory stocking. In terms of how we're doing, of course, we believe we'll continue to grow VEPPANU as we're here in the fourth quarter. And as you know, when patients start, they get refills until they progress, and sometimes even beyond when they progress. So I won't make any specific comments on this quarter.
You'll have to wait until next year to hear those, but we expect it to grow.
Thank you. If I may, can you tell us what the focus will be on the ASH dose expansion data for R289? Because from the abstract, it's apparent that 500 mg BID is the preferred dose based on PK. What else will the expansion data reveal? Thanks.
This is Alison here. I'm happy to discuss, but frankly, the presentation, we are embargoed from talking about what the slide presentation will be on the December 12th. We provided, in order to support a comparison of both doses, we provided safety, we provided pharmacokinetics, and we also provided some cytokine data. But I'm really not at liberty to go into any more specifics. I'm afraid you'll have to join us on the December 12th when Dr. Guillermo Garcia-Manero will present a more comprehensive update and really the justification for the proposed dose moving forward.
We'll be there. Thank you.
Thank you, Caroline.
Thank you.
Thank you. Our next question is coming from the line of Farzin Haque with Jefferies. Please proceed with your questions.
Hi, this is James on for Farzin. Congrats on the quarter, and thanks for taking our question. Two from us. You lowered the upper end of guidance from $265 million- $260 million. Is there anything you're seeing in the underlying business, whether around patient starts, persistency, gross to net, or seasonality, that makes you more cautious on the upper end into Q4? Then the second question on R289, for the data at ASH, what RBC-TI rate in the randomized expansion would you consider a clear success? Is about 40% the internal bogey? And how much follow-up will you have on durability, and what is the benchmark of transfusion independence you're trying to beat?
Maybe I will ask Dave to mention how we are doing with the commercial business, excluding VEPPANU. I think he mentioned a little bit about TAVALISSE.
Yes, James, TAVALISSE hit its record demand in Q3. I will also say that from a REZLIDHIA perspective, you saw that we grew that year-over-year, but we also hit a record demand quarter, and it was actually 10% above, double-digit growth above second quarter. We are growing our business, and I think from a standpoint of our guidance, the only thing I would say is it does not include VEPPANU, and that is our growth driver. I think the health of our business, though, is very strong.
Keep in mind, the demand is the most important metric underlying those products, but we also have to consider gross to net adjustments, which is driven by patient type, and it is change in inventory is the other variable that also contribute to that. On R289, ASH data durability.
Yes, I am happy to comment. This is Alison here. What we have in our phase I-B study in the dose expansion, we have a unique population. We are very different from the population that was represented in the MEDALIST trial for luspatercept or the [inaudible] called IMerge. Those populations really had received only prior ESA, whereas if you look at the ASH abstract and you look at our priors, we have a very, very highly, heavily pretreated population who have gotten not just ESAs, but nearly all patients had luspatercept, a very large number had received a hypomethylating agent. In the abstract, it says 29% investigational. So, talking about a true end-stage population.
We are aware of the MEDALIST data, the IMerge data, but in terms of a target for what we would think would be worthy of future studies, what we're hoping to be able to show is a very well-tolerated agent, an oral agent that's true convenience for this elderly population. I think we have a median age of 75 for our patient dataset. We don't want to come up with a target at this point. We will show the data at ASH. We did actually talk last year at ASH what our durability was. We do believe we need to have durability and a good eight-week transfusion independence to make the case to hematologists that this is a product worthy for additional investigation.
We look forward to presenting this information.
Yes, that's very true.
Got it. Thanks for taking our question. I'll pass it to you.
Thank you. Our next questions come from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your questions.
Hi, thanks for taking the question. For VEPPANU, wanted to understand what has been the driving factor for utilization. Are these doctors with direct experience already, or is there a factor that they have been pointing out in particular for wanting to be some of the early adopters here, like durability and safety?
I am sorry, I did not get the last part of your question, Kristen.
Yeah, I wanted to know of the doctors that are using the product now, if they are ones that have had direct experience from a trial perspective, but then given that they are the first early adopters here, what has been the main driving factor you hear from them about why they want to be the first to give this a chance? Is it durability, safety, or another factor?
I think first of all, we've had both. We've had clinicians who had experience in the clinical trial, in one of the either the early phase I or II, could have been in VERITAC, could have been in later studies that were done. By and large, the majority of clinicians who've tried it have never used the product before, and they've become aware of it. Why are they interested in using it? Because it is a different kind of drug than an oral SERD. Number two, the tolerability of the agent is something that really appeals to this patient population and to clinicians. We just posted on our website some data that came from VERITAC-2 on patient-related outcomes, or patient-reported outcomes in quality of life.
I think when people see the whole picture here of very good efficacy, proven efficacy for vepdegestrant, and the tolerability of the agent, as well as a new mechanism, they're interested in trying it. I think, like I said, the best I always tell the team, I think, and what we're seeing is the best-selling part of this VEPPANU experience is physicians who finally try the drug, because they really like it when they try it.
Thanks so much. On R289, was hoping you could further elaborate on your strategy when it comes to FDA discussions potentially next year. I guess, how much of the open exploratory cohort data might you want to see, and how is that ultimately going to factor in how you guys are thinking about a potential registrational study?
I'm happy to comment. This is Alison. The post-ESA, what we call the exploratory cohort, provides us the ability to investigate R289 in a combination of patients who have only been exposed to an ESA, or for those patients in whom an ESA is not indicated, for example, they have high endogenous erythropoietin, there's no point in giving them an ESA, we will actually have some experience in a treatment-naive population. It's important data for us to obtain. When we have our discussions with the FDA, all of the data will be brought to bear. I would expect that most of the data that we'll be bringing to the FDA will be from the dose escalation and the dose expansion cohorts. We'll probably have very little data in that post-ESA population when we talk to the FDA.
That does not preclude us from starting a clinical trial in 2027. That is the plan.
Correct.
Thank you. Our next question is up to the line of Allison Bratzel with Piper Sandler. Please proceed with your questions.
Hi there. This is Peter on for Allison Bratzel. Thank you for taking my questions. Just wondering on VEPPANU, if you can comment on the sales split between academic and community oncologists thus far. Then when might you be in a position to provide more specific revenue guidance? Then one on R289. How will the ASH data inform your valuation of R289 and other potential indications, and any color on what those might be? Thank you.
Let me ask Dave to address the first, and then Alison Hannah the second.
Yeah. Our current breakdown, and again, we will give a little color because we are early in launch and it is important for you guys to realize what is going on. But I am not sure we will be able to give these kind of specifics as we move forward. But currently, our community business is actually the overwhelming majority of our business. It is about 70%-80% of our business if you consider HCPs who prescribe as well as accounts who order. So it is taking up very nicely in the community, which is a little bit different than you might expect for a launch of a new agent. But it is good news for us. I think we were really happy to see that.
I think we said that we would eventually see more community business, but we are almost at the split that we were talking about before, 80%, 20%.
It is the majority community.
Maybe Dean Schorno, you want to comment on guidance?
Yeah. With respect to guidance, as Dave said, we provided some color on some of the details during the quarter. We are just six weeks into our launch. As we think about guidance, we want to be in a position where we have got enough clarity of the business and the trends and trajectory. So after the first of the year, we will consider the appropriate time to provide that guidance where we believe we have got enough clarity of the business to produce a good guidance range.
I am happy to discuss your final question, which was, how will the ASH evaluation lead to our discussions, our internal discussions regarding other potential indications? IRAK1/4, the mechanism of action really could lend itself to a variety of other diseases, including both other hematological malignancies and even potentially autoimmune disorders. So we have these under active consideration at this time. We are not in the position to actually really prioritize where we would put the drug after we have moved it forward in lower-risk MDS, but we do think the agent has really great potential, and it is not restricted to just lower-risk MDS.
Thank you, Alison.
Thank you.
Thank you. There are no further questions at this time. I would now like to turn the floor back over to Mr. Raul Rodriguez for closing comments.
Thank you. Thank you, everyone, for joining us today. We are very pleased with the early results of the VEPPANU launch, and we are looking forward to presenting the updated data on the phase I-B study of R289 in lower-risk MDS at the oral session on Saturday afternoon, December 12th. We appreciate your continued interest and your support of Rigel. Have a good evening.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and enjoy the rest of your day.