Rigel Pharmaceuticals, Inc. (Nasdaq: RIGL) today reported financial results for the third quarter and nine months ended September 30, 2010.
For the third quarter of 2010, Rigel reported net income of $50.4 million, or $0.97 and $0.96 per basic and diluted share, respectively, compared to a net loss of $26.7 million, or $0.70 per basic and diluted share, in the third quarter of 2009. Basic weighted average shares outstanding for the third quarters of 2010 and 2009 were 52.1 million and 38.1 million, respectively. Diluted weighted average shares outstanding for the third quarters of 2010 and 2009 were 52.8 million and 38.1 million, respectively.
Contract revenue in the third quarter of 2010 was $72.3 million. This consisted of $47.3 million related to amortization of the $100.0 million upfront payment received from AstraZeneca AB (AZ) pursuant to the exclusive worldwide license agreement for fostamatinib (formerly known as R788) and $25.0 million in milestones earned from AZ in connection with the initiation of the Phase 3 clinical trial program with fostamatinib in patients with RA as well as completing the transfer of the fostamatinib open label extension study to AZ. As of September 30, 2010, the $100.0 million upfront payment had been fully recognized as revenue. There was no contract revenue reported in the third quarter of 2009.
Rigel reported total operating expenses of $21.9 million in the third quarter of 2010, compared to $26.7 million in the third quarter of 2009. The decrease in operating expenses was primarily due to the elimination of certain costs related to fostamatinib as a result of a worldwide license agreement with AZ entered into March 2010 and the completion of the TASKi2 and TASKi3 clinical trials in July 2009.
For the nine months ended September 30, 2010, Rigel reported net income of $55.1 million, or $1.06 and $1.05 per basic and diluted share, respectively, compared to a net loss of $86.5 million or $2.32 per basic and diluted share for the same period of 2009.
As of September 30, 2010, Rigel had cash, cash equivalents and available for sale securities of $167.5 million, compared to $133.3 million as of December 31, 2009.
Rigel was recently notified by the Internal Revenue Service that the Company has been certified to receive a total cash grant of approximately $2.4 million related to the previously filed applications under the Qualifying Therapeutic Discovery Projects (Section 48D of the Internal Revenue Code). Of this amount, $2.1 million will be received in 2010 with the remainder to be received in 2011. Rigel is increasing the year-end cash expectation by the amount of the grant to be received in 2010 and therefore expects to end 2010 with approximately $172.0 million in cash, cash equivalents and available for sale securities.
"Our successful transition of fostamatinib development to AstraZenca has been substantiated by the recent initiation of three large global phase 3 clinical studies by our partner," said James M. Gower, Rigel's chairman and chief executive officer of Rigel. "As we look to the future, Rigel's R&D teams are focused on potentially putting four of our novel programs into the clinic over the next two years," he added.
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