Rigel Pharmaceuticals (RIGL) Q1 2026 earnings review
Solid Commercial Growth Overshadowed by Pipeline Setback and Rising Costs
Rigel delivered steady 26% YoY growth in net product sales, proving the continued market penetration of TAVALISSE and REZLIDHIA. However, the top-line success did not translate to the bottom line—Net Income fell 24% YoY to $8.7M as operating expenses outpaced revenue growth. The most significant development is external: Eli Lilly fully terminated its collaboration for ocadusertib, stripping Rigel of all future milestone and royalty upside from this program. With 2026 guidance pointing to ~12% full-year product sales growth, Rigel is shifting into a decelerating growth phase where financial discipline will be heavily tested.
🐂 Bull Case
TAVALISSE and REZLIDHIA demonstrated resilient YoY growth of 31% each, absorbing expected Q1 seasonality effectively. A strong cash position of $146.7M provides ample runway.
Management successfully transitioned from a rigid $40M term loan to a new revolving credit facility, paying down the principal and drawing only $8M. This lowers immediate debt burdens and unlocks capital flexibility.
🐻 Bear Case
The complete termination of the ocadusertib collaboration by Eli Lilly permanently removes a major pillar of Rigel's future milestone and royalty narrative, leaving the internal R289 program to bear the full weight of pipeline expectations.
Total costs and expenses surged nearly 16% YoY to $46.9M. With product sales guided to decelerate in the coming quarters, unchecked R&D and SG&A growth will severely threaten full-year profitability targets.
⚖️ Verdict: ⚪
Neutral. The commercial foundation is stable, but the loss of the Lilly partnership and the deceleration of GAVRETO are meaningful structural headwinds. Rigel must rely entirely on its own execution of the R289 pipeline asset to drive future valuation.
Key Themes
Eli Lilly Terminates Ocadusertib Collaboration
A severe blow to the pipeline narrative: Eli Lilly has formally notified Rigel it is terminating the collaboration agreement for the RIPK1 inhibitor ocadusertib, effective June 15, 2026. Previously, Rigel had opted out of co-funding to preserve capital, trading it for downstream royalties. The total termination wipes this asset off Rigel's future earnings map entirely.
GAVRETO Growth is Decelerating
GAVRETO is losing momentum. The drug posted $9.6M in Q1 net sales, representing anemic 7% YoY growth. More concerning is the sequential trajectory: sales have consistently declined from a peak of $11.8M in 25Q2. What was initially touted as a seamless, high-growth integration is now showing signs of market saturation or competitive pressure.
Operating Expenses Outpacing Revenue
Rigel's path to sustained profitability is being challenged by expense growth. Total costs and expenses rose 15.7% YoY to $46.9M, while total revenues grew only 10.2%. The primary driver was a 38% YoY surge in R&D costs (to $11.7M) associated with the R289 program's dose expansion phase.
TAVALISSE and REZLIDHIA Maintain Strong YoY Momentum
Despite typical Q1 inventory drawdowns and seasonality, both cornerstone products remain stable growth drivers. TAVALISSE sales reached $37.3M (+31% YoY), and REZLIDHIA hit $8.0M (+31% YoY). A recent publication using matching-adjusted indirect comparison (MAIC) suggested REZLIDHIA may offer more durable remissions than ivosidenib, providing a strong narrative for the commercial team.
R289 Program Approaching Major Data Catalysts
With the Lilly program dead, all pipeline focus shifts to R289 (IRAK1/4 inhibitor for lower-risk MDS). Management confirmed they are on track to complete enrollment for the Phase 1b dose expansion and select a Phase 2 dose in H2 2026. Preliminary data from this expansion phase is slated for the end of 2026—this will be the most critical binary event for the stock this year.
Other KPIs
Decelerating significantly from $9.8 million in 25Q1. Last year's figure was padded by a $3.0M regulatory milestone in Korea. Current quarter revenues rely purely on routine drug supply deliveries and base royalties from partners like Grifols and Kissei.
Down slightly from $155.0M at the end of 2025. The balance sheet remains highly defensive, aided by the transition to a new MidCap Financial revolving credit facility that replaced the rigid $40M term loan. This capital structure provides a healthy runway to self-fund the R289 data readout.
Guidance
Decelerating. With the midpoint at $260M, this implies full-year growth of approximately 12% over 2025's $232M baseline. Given that Q1 just delivered 26% YoY growth, the guidance signals that management expects product sales growth to slow materially in the remaining three quarters.
Reversing. While total revenue was $294.3M in 2025, that included a one-time $40M non-cash accounting benefit from the Lilly collaboration. Adjusting for that, the midpoint ($282.5M) implies healthy operational top-line growth, heavily reliant on the commercial product portfolio.
Stable. Management reaffirmed expectations to remain profitable for the full year. However, with Q1 net income shrinking to $8.7M amid rising R&D costs, achieving this will require strict SG&A discipline as R289 clinical trials expand.
Key Questions
GAVRETO Stagnation
GAVRETO net sales grew only 7% YoY and have declined sequentially for three straight quarters. What specific competitive or market access dynamics are driving this deceleration, and what is the strategic plan to reverse it?
Ocadusertib Post-Mortem
With Eli Lilly terminating the ocadusertib agreement entirely, does Rigel retain full rights to the asset? If so, will the company seek a new partner, or is the RIPK1 program officially being shelved to preserve capital?
Margin Squeeze Mitigation
R&D and SG&A expenses significantly outpaced revenue growth in Q1. How should we model the R&D burn rate for the remainder of the year as the R289 dose expansion concludes?