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Rigel Pharmaceuticals (NASDAQ:RIGL)
Q4 2018 Earnings Conference Call
Feb. 28, 2019 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

See all our earnings call transcripts.

Prepared Remarks:

Operator

Good afternoon, and welcome to Rigel Pharmaceuticals financial conference call for the fourth-quarter and year-end of 2018. [Operator instructions] I would like to remind you that this call is being recorded for replay purposes on Rigel's website. [Operator instructions] And now I would like to turn the conference over to our first speaker, Dolly Vance, who is Rigel's executive vice president, corporate affairs and general counsel.

Dolly Vance -- Executive Vice President, Corporate Affairs and General Counsel

Welcome to our financial results and business update conference call. The financial press release for the fourth quarter and full year of 2018 was issued a short while ago and can be viewed, along with the accompanying slides for this presentation, in the news and events section of our investor relations page on our website, www.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 regulatory and product development. 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 in our most recent annual report on Form 10-K on file 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. At this time, I would like to turn the call over to our CEO, Raul Rodriguez.

Raul Rodriguez -- Chief Executive Officer

Thank you, Dolly, and thank you for joining us on our fourth-quarter and full-year 2018 financial call. Also joining me on the call today are Eldon Mayer, our chief commercial officer; Anne Marie Duliege, our chief medical officer; and Dean Schorno, our chief financial officer. Reviewing today's agenda on Slide 6. We will provide you with updates on a number of key Rigel objectives, including the launch of TAVALISSE, with which we have been very pleased, the progress that has been made by our clinical and regulatory team, and Dean will give an overview of the financials.

I will then make some concluding remarks and then open the call to your questions. On Slide 8. I can say that 2018 was Rigel's most successful year ever. We accomplished very significant milestones and took Rigel to a much more advanced stage as a company.

Our first product, TAVALISSE, was approved by the U.S. FDA for the treatment of adult chronic immune thrombocytopenia, or ITP. This was a tremendous accomplishment and one we've been striving toward for many years. This enabled us to provide TAVALISSE to ITP patients across the U.S.

It was the first novel classic drug SYK inhibitors to be approved. TAVALISSE was also the first new treatment for chronic ITP to be approved in nearly a decade. We then built a new but very experienced commercial organization, which in turn introduced TAVALISSE to treating healthcare providers and generated nearly 14 million in net product sales in just seven months on the market. While the U.S.

market for chronic ITP is the largest, there's substantial opportunity outside the U.S. as well. So, in parallel with our U.S. efforts, we've put in place major collaborations for commercializing fostamatinib in the largest ex U.S.

market. In addition, we filed a marketing authorization application in Europe, or MAA, advancing our plan to bring fostamatinib to patients outside the U.S. as well. In furthering the fostamatinib opportunity, we presented very good results from our Phase 2 study of fostamatinib in autoimmune hemolytic anemia, or AIHA, a highly synergistic indication with ITP.

We also initiated a Phase 1 study for our IRAK-1/4 inhibitor program, which has potential in a wide range of indications. And finally, we ended the year with a very strong cash position, with over 128 million in cash. This was then supplemented by an additional 30 million from our Grifols collaboration, which we concluded in January. I'd say that's an excellent year.

On Slide 9 now. All of this has positioned us very well for 2019 and beyond. On Slide 9, you see our key objective for the year, and I'll tell you -- we'll tell you a little bit more on this call on each of these. Most importantly, we will continue to grow sales of TAVALISSE in the U.S., focusing on new patients, continuity of therapy for existing patients and assuring access to TAVALISSE for appropriate patients.

In collaboration with our two current ex U.S. partners Kissei and Grifols, we will work to make fostamatinib available in the EU and in Japan, Asia, and then in other geographies. We will advance fostamatinib into a Phase 3 study for the treatment of autoimmune hemolytic anemia, and then we will broaden our pipeline with new indications, new molecules, and we have much more planned. On Slide 10.

I'd like to tell you a little bit about how we plan to make fostamatinib available across the globe. Just to remind you, we estimate that the global market for chronic ITP treatments exceed 1.8 billion, with 1 billion in the U.S. and about 800 million outside of the U.S. Europe is the second largest market after the U.S., and Japan, Asia is the third largest.

Last year and continuing into this year, we worked diligently to identify and select partners that we think have the expertise and the experience in this area and, importantly, have demonstrated an excitement and a strong desire to bring fostamatinib to patients in their market. We think we accomplished this with our partners Kissei in Japan, Asia and Grifols in Europe and Turkey. In this slide, Grifols, as an example, has substantial expertise in blood disorders and is one of the largest providers of IVIG, which is used to treat ITP in the rescue situation and, therefore, is very complementary to fostamatinib, a chronic drug. They have the expertise in this area already and have a very experienced commercial team with relationships with treating physicians.

Grifols also has a pan-European capability, with infrastructure across all the major countries in Europe. We think, like with Kissei, Grifols is an excellent partner for this opportunity. Because of this, we signed a collaboration early and in the review process, and this gives Grifols the time to prepare for the commercial launch in Europe and positions us well for market entry, potentially, in 2020. I will now turn the call over to Eldon for a commercial update.

Eldon?

Eldon Mayer -- Chief Commercial Officer

Thanks, Raul. I'm pleased to provide you with an update today on the launch progress of TAVALISSE. Slide 12. Just seven months in the market, the launch continues to go very well and the execution of our strategies have led to a very favorable performance as demonstrated with multiple key performance indicators.

Total bottle shipped from our 3PL to specialty distributors in those seven months of 2018 were 1,794, and quarterly bottles shipped grew from 649 in Q3 to 903 in Q4. This demand resulted in gross sales of almost 17 million in 2018, with approximately eight and a half million of that in Q4. And response to TAVALISSE continues to be positive from physicians, payers and patients. Physician awareness, familiarity and usage continues to grow.

We continue to see strong reimbursement, with a prior authorization approval rate of approximately 90% and the patient refill rate or persistence rate is approximately 45% at four months. Now on Slide 13. A recent ITP claims analysis we conducted in September of 2018 revealed that the ITP market is showing modest yet steady growth. This indicates the addressable market for TAVALISSE is now approximately 18,700, which is slightly larger than our prior estimates.

Our strategies continue to focus on penetrating the market, encouraging usage of TAVALISSE across all lines of therapy, including early lines where the largest and less heavily treated portions of patients exist. Slide 14. As you may recall from our market analysis prior to launch, we believe the chronic adult ITP market offered good opportunity for TAVALISSE use across all lines of post-steroid therapy. This is based on a number of factors, including the fact that ITP is a heterogeneous disease with no standard paradigm in the post-steroid setting, which leads to great variability in how clinicians select therapies for their patients.

As can be seen in the slide showing use of various therapies before TAVALISSE launch, no single treatment dominated any line of therapy. All therapies were used across all lines. And because there's so much heterogeneity and no finite treatment paradigm and that TAVALISSE delivers a therapy with an entirely different mechanism of action, this product is in an optimal position to be custom-fit into each physician's particular treatment approach relative to each patient need. In short, TAVALISSE can have a role across many lines, which optimizes the market opportunity.

On to Slide 15. Here, again, prior to TAVALISSE launch, we have some examples of treatment patterns for patients that received four lines of therapy following steroids. It should be noted, of course, that there are many more treatment approaches beyond what is listed here. But importantly, this slide demonstrates some of the variability in treatment sequences that physicians use to treat chronic adult ITP.

Slide 16. Now after our launch into the market, our thesis about TAVALISSE use in the ITP market is being realized. Based on our claim's analysis four months post launch, we see physicians prescribing TAVALISSE in many different treatment patterns. This slide shows just some examples of this where TAVALISSE has been integrated into various treatment sequences.

Just to point out two examples here, on the far left of the slide, you can see how TAVALISSE is now being used after rituximab, and on the far right, you can see TAVALISSE being used after two of the TPO agents. Slide 17. Now I'd like to provide some real-world examples of three actual cases we received from hematologists, oncologists in both the community and academic settings of how one of their patients had responded to TAVALISSE after receiving one or even multiple prior treatments. On the left, you see the case summary of a highly refractory patient that had gone through multiple lines of therapy.

This 68-year-old man presented in the ER with a low platelet of 10,000. He remained highly refractory through seven courses of treatment, during which his platelet count actually went down to zero. TAVALISSE was initiated, and one month later, his platelet count rose to 200,000, and his most recent platelet count was 296,000. This patient experienced some diarrhea while on TAVALISSE, which was then treated by the physician.

This patient continues on TAVALISSE and is doing well. In the middle of the slide, you see a 17-year-old refractory -- treatment-refractory male patient with many comorbidities and a platelet count of 15,000. He experienced a transient response to other therapies and had aversion to needles, which led to discontinuation of these other therapies. After initiating TAVALISSE, there were no treatment-related side effects, and platelet count rose to about 100,000. On the right side of the slide, we see another example of how other physicians are utilizing TAVALISSE in early lines of therapy, such as this 63-year-old man who had an insufficient response to steroids.

The patient continued to be symptomatic and, in addition, the physician required a higher platelet count for a surgical procedure. He was placed on TAVALISSE, and the latest platelet count was 135,000. Slide 18. TAVALISSE awareness, familiarity and attributes are also resonating well with physicians.

We conducted a quantitative survey in October of 2018, just four months after launch, with 150 hematologists and oncologists and found an unprompted awareness level of 26%. This is a 20-point increase over the prelaunch awareness level of 6% in January of 2018. Additionally, clinicians' familiarity with TAVALISSE had increased to 43% over the same period and, importantly, physicians positively perceived TAVALISSE attributes relative to other therapies. They see it as easier to administer than inject it or infuse treatments; no significant difference in safety, tolerability and access; and also, no difference with durability of response.

These are all significant findings, but still leave much room for -- much opportunity for the future, since these data were assessed after just four months on the market, and we expect these positive trends and perceptions to grow with continued physician experience and engagement. And finally, on Slide 19, there are some of our plans for continuing momentum through 2019. Our forward-looking objectives are threefold: No. 1, increase access and adoption with a larger number of physicians; No.

2, support physicians and patients with using TAVALISSE; No. 3, continue to move TAVALISSE into early lines of therapy where the largest portions of patients exist. Our key strategic imperatives include: communicate the TAVALISSE value proposition and increase patient identification; continue to generate and share evidence to reinforce the clinical, utility and tolerability of TAVALISSE; educate the physician community about the role of SYK inhibition; support clinicians with patient management, including important office staff, such as nurses and physician assistants; and finally, further enhance payer and patient support with access to TAVALISSE. We strengthened our team with five more sales reps, and we'll be making some further additions to our customer-facing team in the near future, which will allow us to further engage with clinicians, payers and patients.

We will also build on patient awareness and education efforts through various channels, now that the physician community has some familiarity with TAVALISSE. And finally, we expect additional supportive publications on TAVALISSE's clinical utility over the next year. So in conclusion, seven months end, launch continues to go very well. We are pleased with the execution of our strategies and have confidence in continuing this favorable performance moving forward.

And with that, I will turn it over to Anne Marie.

Anne Marie Duliege -- Chief Medical Officer

Thank you, Eldon. I would like to review all of the exciting things we're doing with fostamatinib and how we're supporting the efforts of our commercial team with the TAVALISSE launch in the U.S., while also working to make fostamatinib available to patients globally and explore its utility. I will begin on Slide 21. In December of last year, we presented data from our ongoing extension study of TAVALISSE in chronic ITP at the American Society of Hematology in an oral presentation.

I will highlight these in just a moment, but overall, the receptivity to our data at the conference was very encouraging. It was a great opportunity to meet with physicians face-to-face and help educate them on our product and its novel mechanism of action.Along with presentations at major medical conferences, our support for the commercial team includes leveraging our database and relationship with key opinion leaders to draft manuscript for publication in peer-reviewed journals. Most recently, a manuscript authored by Dr. Jim Bussel from Cornell, analyzing the long-term data for fostamatinib in chronic ITP, was accepted for publication in the American Journal of Hematology.

We're also in the midst of planning for real-world data collection as part of our post-marketing strategy. Collectively, this information will function as a tool for our sales force to further educate and drive interest within the physician's community. As we have previously mentioned, in October of last year, our marketing authorization application for fostamatinib in ITP was validated by the European medicine agency, which began the EMA review process. The first milestone is day 120 questions, which we have received and are in the process of responding to.

While we cannot comment on specific questions, I can say that there were no surprises in any types of question that we received. Based on the timetable for this process, we expect to have a response from the EMA by the end of this year. Along with the expansion of fostamatinib globally, we are in the early stage of launching our Phase 3 program in autoimmune hemolytic anemia. We're currently working a CRO and recruiting sites to participate in the study and expect to enroll the first patients in the coming month.

Importantly, there is still a significant effort -- a lot of work being done by our research team on other indications, in which a SYK inhibitor, such as fostamatinib, are worth exploring. As we progress in this research, we'll be happy to provide updates. Now I will turn to Slide 22, which was the oral presentation we gave at ASH last December on the open-label extension to the Phase 3 trial program, which provided an overview on the long-term data on 146 chronic ITP patients with exposure to fostamatinib. This is the extension from our FIT Phase 3 trial, which was the basis for the TAVALISSE NDA that was approved by the FDA last year.

We've talked about efficacy and response rate previously, so today, I wanted to highlight some of the additional data that we have collected. These data provide insight into how long fostamatinib patients respond to a therapy, the need for rescue therapy and the incidence of bleeding. On slide 23, we provide a 36-month chart to show the duration of response we have seen in patients in this study. Some patients have dropped from the study, but also because of the staggered start time, there are patients who are still on treatment as of the data collect date, March 2018, but who have not yet been exposed to fostamatinib for 36 months.

Therefore, the latter months are not a complete representation of the status of the 146 patients in the study. Well, the main takeaway is we're seeing long-term response and some patients are staying for -- on drug for at least three years. The orange line provides the median platelet counts for patients who met the definition of overall response, which was achieving platelet counts of 50,000 in the first 12 weeks of treatment. And there were 44% of the patients treated with fostamatinib, who met the definition of overall response.

These patients demonstrated a quick response, which, for some, was sustained over time. What is also notable are the other patients who are still on treatment. These are patients who were not overall responders based on the Phase 3 platelet count criteria. However, we can make the assumption that they derived some form of benefit of staying on treatment, whether this is modest platelet -- increase in platelet count or some form of clinical benefit.

On Slide 24, we provide an overview of the exposure-adjusted incidence of rescue therapy for placebo patients versus fostamatinib patients. As you can see, there is a reduction in the incidence of rescue therapy for fostamatinib responders when compared to placebo patients. Even the other patients, those who have not achieved an overall response, demonstrated a lower need for rescue therapy. Similarly, Slide 25 shows the exposure-adjusted incidence of hemorrhagic events and of serious adverse events of hemorrhagic events.

We see that patients on fostamatinib had a reduction in the number and severity of bleeding events compared to placebo, both in the overall responder group and also with other patients on drug. Moving to Slide 26. We have an overview of the adverse events over the long-term use of the product. As you can see, the profile remains relatively unchanged from the randomized study, which is the middle column, with 29 patient-years of exposures versus the randomized plus the extension study, which is on the right side, collected information on 163 patient-years of exposure.

This would indicate that most events happen early on and that there is no accumulation issues with fostamatinib. On conclusion -- in conclusion on Slide 27, 44% of patients had an overall response to fostamatinib. Responders had increased platelet counts, reduced use of rescue medications and reduced frequency of bleeding episodes. Some of the patients, who were not overall responders, continued treatment for an extended period of time.

Fostamatinib was well tolerated for an extended period of time. No new safety signals and no cumulative toxicity was detected during the long-term treatment with fostamatinib. Finally, on Slide 28, I will provide an update on the progress of autoimmune hemolytic anemia pivotal Phase 3 trial. Our top priority in 2019 is to begin enrollment for this upcoming trial.

Efforts toward this objective are already taking place. We're working with a CRO and are in discussion with trial sites in the U.S., Europe, Canada and Australia. We anticipate that enrollment of our first patients will be in the first half of this year, so within the next four months. This will be an 80-person trial, 40 patients on drug and 40 patents on placebo, and we expect enrollment to take about a year.

Once the final patient is in the trial, we anticipate that the data will read out within six to 12 months later. With that, I will turn the call over to Dean.

Dean Schorno -- Chief Financial Officer

Thank you, Anne Marie. Starting on Slide 30. Here is some of the highlights from the quarter. For the fourth quarter of 2018, 903 bottles were shipped to our specialty distributors, resulting in $8.5 million of gross product sales.

869 of those bottles were shipped to patients and clinics, while 34 of those bottles remain in our distribution channel at the end of the fourth quarter. For the full year of 2018, we began with our launch on May 29. 1,794 bottles were shipped to our specialty distributors, resulting in $16.9 million of gross product sales. As of December 31, a total of 238 bottles were made in our distribution channels.

For the fourth quarter of 2018, we reported net product sales from TAVALISSE of $7.3 million, which was recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $1.2 million, a gross-to-net adjustment. For the full-year 2018, we reported net product sales from TAVALISSE of $13.9 million, which again was recorded net of estimated discounts, chargebacks, rebates, returns, co-pay assistance and other allowances of $3 million. Let me note that our gross-to-net adjustment for the fourth quarter was approximately 15% of gross product sales. For the full year of 2018, our gross-to-net adjustment was approximately 18% of gross product sales.

While we are continuing to gain experience with both private and private public payers and we may see some fluctuations during the first quarter of 2019, we currently expect our gross-to-net adjustment will remain around 18% during 2019. Before we move on from product sales, let me review our expectations for the first quarter of 2019. While we do not plan to provide guidance for 2019 full year, as we're still only two quarters into our launch phase, we do anticipate a moderation of growth in the first quarter, as patients work through their typical first-quarter reimbursement issues, such as the resetting of co-pays and the Medicare donut hole. As a result, we can see mid-single-digit growth in net product sales in the first quarter of 2019 as compared to the fourth quarter of 2018.

Once we work through these first-quarter effects, we expect the sequential growth rates to be higher. Progressing on to the next slide. In addition to our net product sales, we reported contract revenues from collaborations of $30.6 million relating to the $33 million upfront payment from Kissei for both the fourth quarter and the full year of 2018. We expect the remaining deferred portion of approximately $2.4 million to be recognized over the next 18 months.

Our cost of product sales was approximately $188,000 and $287,000 for the fourth quarter and full year of 2018, respectively, or about 2.6% and 2.1% of net product sales for the fourth quarter and the full year of 2018, respectively. For the fourth quarter of 2018, we reported total costs and expenses of $35.3 million compared to $26.2 million in the fourth quarter of 2017. For the full year of 2018, we reported total costs and expenses of $117.2 million compared to $84.1 million for the full year of 2017. This increase was primarily due to the personnel costs for our commercial and medical affairs teams, as well as third-party costs related to our commercial launch of TAVALISSE.

Let me also note that we saw a quarter-over-quarter increase in total costs and expenses, $6.1 million, when comparing the third quarter of 2018 to the fourth quarter of 2018. This quarter-over-quarter increase was similar to the increase that we saw last year in these same periods and was primarily due to the timing of expenditures related to various clinical and commercial activities, along with year-end personnel-related costs. Also, as we saw last year, we expect total costs and expenses in the first quarter of 2019 to be less than the fourth quarter of 2018 levels. For the fourth quarter of 2018, we reported a net income of $3.2 million, or $0.02 per share, compared to a net loss of $25.9 million, or $0.18 per share, in the fourth quarter of 2017.

For the full year of 2018, we reported a net loss of $70.5 million, or $0.44 per share, compared to a net loss of $78 million, or $0.62 per share, in the fourth quarter of 2017. Moving on to Slide 32. We ended the fourth quarter of 2018 with cash and short-term investments of approximately $128.5 million. During January of 2019, we entered into a collaboration and license agreement with Grifols S.A.

to commercialize fostamatinib in Europe. We received a $30 million upfront cash payment, with a potential for $297.5 million in related -- impairments related to regulatory and commercial milestone, which, importantly, includes a $17.5 million milestone payment along with a $2.5 million creditable advance royalty payment to be paid upon EMA approval of fostamatinib, which is anticipated before the end of 2019. Incrementally, we will receive stepped double-digit royalty payments based on tiered net sales, which may reach 30% of net sales. Let me spend a minute to review the potential accounting for the $30 million upfront cash payment from Grifols.

If after the second anniversary of the agreement fostamatinib has not been approved by the EMA for the treatment of ITP in Europe, Grifols will have the option, during a 6-month time frame, to terminate the entire agreement, which would terminate all of their rights in ITP, autoimmune hemolytic anemia and all other indications. In this limited circumstance, we will pay Grifols $25 million and regain all rights to fostamatinib in Europe and other Grifols territories. It is also relevant to note we have certain ongoing commitments, which will result in a deferral of approximately 10% of the $30 million upfront payment. Within this context, we expect to recognize as contract revenues approximately 90% of $5 million of the upfront payment during the first quarter of 2019 and would expect to recognize as contract revenues approximately 90% of the remaining $25 million of the upfront payment upon EMA approval.

We'd expect to recognize the deferred portion of these payments in 2020 and beyond. Let me now turn to our cash position. Given our strong year-end cash position of $128.5 million, the $30 million upfront payment we received from Grifols in January of 2019, the potential $20 million payment upon EMA approval and our expectation of continued growth in TAVALISSE sales, we expect our cash runway will now extend into the second half of 2020 and provide for our continued commercial launch, along with the expansion of certain clinical programs. I'll now turn the call back to Raul.

Raul Rodriguez -- Chief Executive Officer

Thank you, Dean. Good year. Before we open the call to your questions, I'd like to summarize some of our key priorities for 2019. We will continue to build on our early success with TAVALISSE in the U.S., making TAVALISSE available to more patients.

We will expand the availability globally of TAVALISSE, and we hope to gain approval in Europe in ITP and potentially launch in 2020 with our partner Grifols in Europe. We will initiate enrollment of our global Phase 3 trial for autoimmune hemolytic anemia. And finally, we will broaden our portfolio of opportunities with fostamatinib indications, our IRAK molecule, new molecules and partnerships. I think this will be our best year ever.

So, with that, let me turn the call over to your questions. 

Operator

[Operator instructions] Our first question comes from Anupam Rama of JP Morgan. Your line is open.

Anupam Rama -- J.P. Morgan -- Analyst

Hi, guys. Thanks for taking the question and congrats on all the progress. On the call, you guys talked a lot about TAVALISSE awareness metrics. I'm wondering if I could ask questions a little bit frankly in terms of how the top decile account penetration is tracking relative to your expectations and then how you're thinking about penetration into some of the other tiered accounts of focus?

Eldon Mayer -- Chief Commercial Officer

Sure. And let me just characterize those awareness levels from a broad survey. However, -- yes, I don't have the specific decile numbers in front of me, but I can tell you with a great degree of confidence that we've seen good adoption over all the decile -- deciles that there are, which was actually quite -- we're very pleased to see that because we know that, as I'm sure you do, that a lot of the higher volume prescribers and the upper deciles can be more difficult to access and, therefore, more difficult to penetrate. So we have seen good adoption across all the deciles, which we think is very encouraging.

I'd say that's due to a number of factors, the value proposition, as I've said before, which is resonating, the unmet need in the marketplace. Doctors are -- it's been a lot of time, as I'm sure you know that, since ours has been a new product. But I have to give the credit to the customer-facing team. We've had -- we were able to get a very experienced sales force that has a lot of experience and, therefore, some good relationships and access with accounts.

So, I think that basic block and tackle of that would be the primary -- not the only, but the primary thing. It's still very early, of course, right? So, these are figures based on seven months of launch. And it just takes time to get the levels of access, which, with the bigger accounts, can be, of course, limited to get the level of frequency required to change prescribing behavior and really communicate the benefits of the product. But with that, office -- access in the office can be difficult.

We attend many regional conferences, and that's an area we're going to be stepping up more and more. So, we do access physicians there because they go there to learn, of course, about new medical information and engage with their colleagues. Additionally, we're having a larger and larger presence at the larger conferences. So, at ASH, for example, we sponsored two CME symposia that were very well attended and well received.

But another area, and I'll just mention and then I'll turn it back, but -- is we've been -- we've had some great success with our peer-to-peer speaker bureau. We launched the bureau right after launch, and we were able to conduct about 100 programs last year. And so again, I think that bodes well for the future. We do plan on expanding our bureau and doing more programs.

And the last thing I will mention is, as I mentioned, we did expand our sales force, so we think that will help as well, as well as incrementally we'll be adding some additional members of the customer-facing team, marketing, account management to further increase access. So, I hope that answers your questions.

Anupam Rama -- J.P. Morgan -- Analyst

Thanks so much for taking the question.

Operator

Our next question comes from the line of Eun Yang with Jefferies. Your line is open.

Unknown speaker

This is Sue Zhie filling in for Eun. I have two questions, if I may. The first one is, if you guys have seen any off-label uses of TAVALISSE in wAIHA so far? And then second question is, can you guys provide some updates on TAVALISSE for IgA nephropathy, if the partner Kissei going to be doing additional trial in Asia to get approval in Asia?

Eldon Mayer -- Chief Commercial Officer

Yes, this is Eldon. I'll take the first one. We have not seen any off-label use in hemolytic anemia as of yet. We do have visibility into -- good visibility into about 60% of our demand, and we have not yet seen that.

There is 40% of our demand in the so-called IOD channel that we don't have that level of visibility. But based on what we've seen, we haven't seen that as of yet.

Raul Rodriguez -- Chief Executive Officer

I could answer the second question on IgA nephropathy relative to our partners. As you know, we received the results from our Phase 2 study of IgA nephropathy and decided not to proceed ourselves in the U.S. for a variety of reasons such as size of the trials required after interacting with the FDA. However, our partner in Asia, Kissei, is interested in this area, and the opportunity there is maybe a bit larger, given the higher -- substantially higher prevalence of IgA nephropathy in Asia.

And they might proceed with that. They haven't made a decision as to that as yet, but the opportunity there is much more substantive than in the U.S., relatively speaking.

Operator

Our next question comes from the line of Do Kim with BMO Capital Markets. Your line is open.

Do Kim -- BMO Capital Markets -- Analyst

First question on your European partnership. When does Grifols take over responsibility of TAVALISSE in Europe? Are they involved in the EMA interactions for the ITP filing? Or do they just start with the reimbursement negotiations after approval?

Raul Rodriguez -- Chief Executive Officer

The latter. So, when we put together the partnerships with Grifols in Europe, we really allocated the responsibility for the party best positioned to do that amount of work. In the case of filing the MAA and then moving it forward toward approval, we are really better positioned to do that given that we had just accomplished successfully that with the U.S. FDA, and we're best positioned to execute on that.

And so, we are responsible for the regulatory interactions leading to an approval for ITP in Europe. They will be responsible then for all the pricing engagements in Europe in getting the price derived most likely in 2020 in the various countries. As you know, that requires some infrastructure and capabilities in the various countries of Europe. We will do what we're best at, and they will definitely do what's best for them.

Importantly, we were able to sign the ideal early enough that they have almost a full year to prepare for the launch in Europe. And that's a real advantage because it allows them to think about the launch plan and how they're going to position the product in that territory. And when the approval does come in Europe, they'll be well-positioned to execute on it and have a faster uptake as a result.

Do Kim -- BMO Capital Markets -- Analyst

Great, great. That's helpful. And a question on the addition in sales reps. Are you adding more sales people because there were gaps in coverage? Do you anticipate expanding more in your sales force? And do you think you can give some indication of what operating expenses will be for 2019?

Eldon Mayer -- Chief Commercial Officer

So yes, I'll take the one on the sales force. We -- yes, there was a little bit of proverbial white space that -- areas that were not covered before with the expansion. So, there was some of that, I would say, roughly 20% in the expansion, 25%. But more -- additionally, it was to provide a more manageable size of a territory for some of the folks that we did have that were covering a very dense area in terms of number of accounts and number of patients treated and number of prescribers.

So, this will enable those folks and the folks around them that were affected by this small expansion to spend less time driving and traveling and more time interacting with our customers. So -- and there's a fatigue factor as well with the larger territories. So, it was a little bit of the covering territories, but mostly just for getting a more efficient territory and increasing our reach and frequency with doing that.

Dean Schorno -- Chief Financial Officer

And then with respect to operating expense in 2019, so we don't plan to give full-year guidance, but I can give you a little bit more clarity from what I said in our prepared comments. So we did see an uptick in operating expense from Q3 to Q4 of '18 of $6.1 million. Last year, we saw a drop in the Q1 of about $1.5 million. So we'd expect to see that drop again going into 2019.

It could be a little bit larger than the million and a half, say, $2 million. We then expect that to continue for a few quarters before we see a bit of an uptick in Q4. So hopefully, I gave you some direction of from where we're out today, where we'll be going into 2019.

Do Kim -- BMO Capital Markets -- Analyst

That's very helpful. Congrats on the progress.

Operator

Our next question comes from the line of Joe Pantginis with Wainwright. Your line is open.

Joe Pantginis -- H.C. Wainwright and Company -- Analyst

Hey, guys. Good afternoon. Nice to see the increased traction of TAVALISSE. I wanted to preface my question -- well, the topic is the reorder rates, and I preface my question by saying, obviously, you're still in the early days of the launch and building experience for the drug, but especially, with the commentary and the prepared remarks, a lot of heterogeneity as to the different lines and the types of patients being used in.

So, with that introduction, sorry for the length, just curious for the reasons for the lack of reorders at this point with regard to combinations of efficacy, side effects, what have you. Just curious about the kind of data you might have.

Eldon Mayer -- Chief Commercial Officer

Sure, Joe, this is probably all that you could tell. Yes, I mean, we're -- again, as I said, I don't want to be repetitive, but it is very early still, of course, in the launch, and we're tracking -- when you say reorders, I assuming you mean with prescribers. And that's something that we're tracking very closely. There is a caveat I did want to provide that there are -- such as with the -- I mentioned this, with the the so-called IOD portion of our business.

So, we can provide some directional updates here. But that's a segment of our business that we do not have full visibility in. So -- and that represents 40%. So, we can say though that we've seen growth in our prescriber base.

But a lot of our prescribers started with one to two patients on therapy, and we do expect that as they become more comfortable with the product, this will increase over time. But it takes time for them to evaluate how patient is responding. And so, we think that will be a key driver of sales volume going forward. We actually are pleased that so far, we have about 15%, roughly, of physicians that have multiple patients on drug, and there's a subset that are even more productive.

So, we do expect that to grow. As physicians gain more experience, we think they'll be using it more across all lines, moving it gradually into early lines where there are larger patient population that have been less heavily treated. So, I hope that addresses your question. I don't know if that's specifically what you were asking.

But...

Joe Pantginis -- H.C. Wainwright and Company -- Analyst

No, it really does help a lot, and I was just curious, like, if there were specifics that you're not seeing a particular reorder from a physician based on, say, an adverse events profile or just lack of efficacy as an example.

Eldon Mayer -- Chief Commercial Officer

No. I don't -- there are no signals there, Joe, that concern us, but as we stated before, I mean, the product is being used across all lines, including earlier lines, but of course, initially, we are saying the majority of our patients in later lines. And we also know that there -- with many rare disease products, there is a -- can be a pent-up demand phenomenon, right, where you have a significant quantity of patients that had exhausted treatment options and are typically very, very refractory as an example of the one that I provided earlier. And so, there are a number of physicians who did have a patient that was very refractory, did not respond.

And so, this is an area where our sales force will go back in and talk about the benefits of the product and what are the right patient candidates. So, some of that is very normal with launches in this type of market, so again, not anything concerning for us.

Joe Pantginis -- H.C. Wainwright and Company -- Analyst

Got it. No, I appreciate the added details. Thanks a lot.

Operator

Our next question comes from the line of Allison Bratzel with Piper Jaffray. Your line is open.

Allison Bratzel -- Piper Jaffray -- Analyst

Hi. Thanks for taking the question. Kind of a follow-up, actually, on the last question. The label recommends a three-month trial before discontinuation of patients don't have a sufficient response.

So I guess, now that you're several months into launch, how does that look in practice? Are docs actually waiting three months before discontinuing? Or should we expect to see more churn as sort of the first wave of patients hits the three-month mark?

Eldon Mayer -- Chief Commercial Officer

OK. Good question. So first of all, let me just restate that we have a 45% refill rate or persistence rate, which we actually believe is very strong, given what I just mentioned that the majority of the patients are more refractory. So we expect that, again, given how early it is in launch, as physicians gain more experience with the drug and learn how to use the drug better and so how are they dose modifying.

For example, how are they managing AEs, such as diarrhea. And as we get better at supporting them with that, we think that -- and additionally, as we move the product up line into earlier-line patients that we believe are more likely to stay on therapy that we'll see that improve. Having said all that as background, yes, when we launched the product, one of our key messages was a rapid response, and that is seen, but there were some physician, we believe and we heard anecdotally, who did discontinue before giving them the full three months and maybe did not dose-escalate. So this goes back to what I said before about physicians learning how best to use this drug and for us to support them.

So, this is an area of normal learnings in the early stage of launch. We have a great opportunity for us to go back with those physicians and support them and making sure they understand how best to use this drug. And so, we think that that is an opportunity going forward. There wasn't a significant portion of our patients, and I don't have any numbers for you, but yes, we did see a little bit of that, but I don't think it's anything that is concerning.

I think it's also, actually, an opportunity for us going forward and the patients to get the right treatment, of course.

Raul Rodriguez -- Chief Executive Officer

We're very happy with that 45% in the fourth month. I think that's a very good indicator of patients clearly having a benefit because they wouldn't stay on that long if they didn't derive a benefit and, clearly, the AEs were not encountered if they were going to encounter any. And that's, obviously, not a deterrent and, obviously, the reimbursement is not an issue. So we're very happy with that 45%.

And I think as doctors get more experience, we expect that to creep upwards, which is fantastic. Also, as Eldon mentioned, as we get used in earlier lines of therapy more, we expect that response rates and other to help improve that as well. So we're looking forward to sharing that with you as we progress.

Allison Bratzel -- Piper Jaffray -- Analyst

Thank you.

Operator

[Operator instructions] Our next question comes from the line of Yigal Nochomovitz from Citi. Your line is open.

Samantha Semenkow -- Citi -- Analyst

Hi. This is Samantha on for Yigal. Again, just a follow-up on some of the earlier questions. You mentioned that you have about 15% of prescribers that have multiple patients on drug.

I assume that's more than two patients. I was wondering if you could just provide a little bit -- do you have any insight into the trends throughout the whole launch? Or is that just a snapshot of that one survey that you did in October?

Eldon Mayer -- Chief Commercial Officer

Yes, OK. That percentage is not from our survey. That is specifically from the demand trends that we have visibility to into -- in the specialty pharmacy channel, so which is 60% -- represents 60% of our demand. And again, the remaining 40% in the IOD channel, we see bottles shipped to those accounts, but we don't know how many prescribers and how productive they are.

So that's just a caveat for that. But that's -- no, that's an overall number for 2018. So again, these are of the many, many metrics that we are very closely monitoring and analyzing. That is one of them.

So I think it's too early to comment on any trends there. Again, we think it's encouraging. I can say early in Q1, we're very encouraged with the trends we're seeing overall as well.

Samantha Semenkow -- Citi -- Analyst

That's helpful. And just switching gears a little bit. I'm curious for your thoughts on which of your partnered programs you think has perhaps the most long-term potential value for Rigel? And what are the catalysts that we will see over the next one to three years that will help the market begin to recognize that value?

Raul Rodriguez -- Chief Executive Officer

It's a very good question. I think all our children are very good children. All our partnerships, I think, are very good partnerships, and we're very happy with all of them for different reasons. The two we put in place most recently, with Kissei for Asia, Japan commercialization of fostamatinib; and with Grifols for commercialization of fostamatinib in Europe and Turkey, I think those are partnerships that really allow the product to be used in the very large ex U.S.

market. And in the case of Grifols, the opportunity is really proximate. We hope we can get approval for this product at the end of this calendar year 2019 and the product will be in patients in 2020 with Grifols. So the immediacy of that is really outstanding.

And as Dean mentioned, the royalty rates are important and attractive for that partnership. So they're excited about it, as are we. Our partners at Kissei are actually equally excited. They are working with the PMDA and discussing how best to advance toward an approval in Japan first and then the other Asian countries.

And they're very enthusiastic about that. Again, it's close to the finish, not as close perhaps as Grifols there. And that's fantastic because of that. Our earlier collaborations are making very good progress, broadly speaking, from Aclaris and AstraZeneca now in the clinic.

They're all at clinical stages -- various clinical stages and different ones will progress at different rates. But we're very pleased with all of those at this point.

Samantha Semenkow -- Citi -- Analyst

Thanks for taking the question. 

Questions and Answers:

Operator

I'm showing no further questions. I will now turn the call over to Raul for closing remarks.

Raul Rodriguez -- Chief Executive Officer

Thank you. I'd like to thank you for your -- for listening in and your questions. Most importantly, I would like to thank you for your support as we moved this product forward and then gotten to an approval and now to patients. And the reason I say that, we hear from patients on a weekly and monthly basis and their doctors about the product and how it's benefiting those patients.

And I assure you that this is a product that is very valued by those patients, whose lives are made better and their ITP improved because of your support and having allowed us to do this. So, thank you for that, and I appreciate and will keep you abreast of our other advances throughout the year. Take care.

Operator

[Operator signoff]

Duration: 54 minutes

Call Participants:

Dolly Vance -- Executive Vice President, Corporate Affairs and General Counsel

Raul Rodriguez -- Chief Executive Officer

Eldon Mayer -- Chief Commercial Officer

Anne Marie Duliege -- Chief Medical Officer

Dean Schorno -- Chief Financial Officer

Anupam Rama -- J.P. Morgan -- Analyst

Do Kim -- BMO Capital Markets -- Analyst

Joe Pantginis -- H.C. Wainwright and Company -- Analyst

Allison Bratzel -- Piper Jaffray -- Analyst

Samantha Semenkow -- Citi -- Analyst

More RIGL analysis

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