Rigel Pharmaceuticals (RIGL) Q3 2026 earnings review
Rigel's new cancer drug starts fast, but older medicines stall
Rigel Pharmaceuticals, a maker of cancer and blood-disorder medicines, got a fast start from its newest drug just as its older portfolio stalled. Chief executive Raul Rodriguez said Veppanu brought in $6.6 million in its first six weeks, while sales of the three existing medicines grew 3% by our math. Higher clinical trial and launch bills cut profit in half to $13 million.
| Older drug sales (excluding Veppanu) | $65.7M +2.5% from a year ago by our math |
|---|---|
| Veppanu launch sales (first 6 weeks) | $6.6M launched mid-August 2026 |
| Operating margin | 21% 41% a year ago |
| Full-year revenue outlook (ex-Veppanu) | Raised $2.5M older drugs cut $2.5M, partner revenue raised $5M |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because Veppanu's strong first six weeks offset a clear slowdown in the older drugs. Rigel trimmed the top of its full-year sales plan for existing medicines by $5 million, and only a $5 million raise in partner payments kept the total revenue outlook moving up.
The question now is whether Veppanu can grow fast enough to cover rising trial and marketing costs while Tavalisse cools off. Either early refills build into steady breast-cancer market share, or rival pills cap the drug after initial clinic stocking. Fourth-quarter Veppanu sales and December's R289 trial data will settle it.
🐂 Bull Case
New Breast Cancer Drug Delivered Fast Early Sales
Rigel paid $70 million in the second quarter to license Veppanu, an oral pill for advanced breast cancer that degrades estrogen receptors. Management wants the drug to become its largest seller, though rival pills already hold most of the market and run on longer survival data.
"In the first six weeks of launch we shipped VEPPANU to more than 100 patients and clinics and have already seen many refills," chief executive Raul Rodriguez said. The drug became available in mid-August and brought in $6.6 million by the end of September.
Early refills matter because initial shipments often reflect clinics stocking their shelves rather than patients staying on treatment. A $6.6 million start in half a quarter shows doctors are prescribing the pill right away, which helps offset slower growth in the older blood-disorder portfolio.
What to watch: fourth-quarter Veppanu sales, which will arrive in January or in the annual report. A full quarter of sales above the initial rate would show patient demand is growing past early clinic stocking.
Partner Payments Offset Slower Drug Sales
Rigel relies on foreign partners such as Grifols in Europe and Kissei in Asia to sell its medicines outside the United States. Those partners pay Rigel royalties on their sales, buy drug supplies, and make one-time payments when regulators approve a drug.
Partner revenue jumped 59% from a year ago to $8.6 million in the third quarter, led by $3.8 million from Grifols and $3.2 million from Kissei. That strength allowed the biotechnology company to raise its full-year partner revenue forecast by $5 million, to about $35 million, lifting the middle of its total revenue plan by $2.5 million.
What to watch: fourth-quarter partner revenue, which by our math needs to reach $10.8 million to hit the new full-year target. Reaching that mark without a one-time regulatory payment would mean foreign royalties and supply orders are rising on their own.
Phase 1b Blood Disorder Data Arrives in December
R289 is Rigel's experimental drug for lower-risk myelodysplastic syndrome (MDS), a bone-marrow disorder that leaves patients dependent on regular blood transfusions. Rodriguez aims to use R289 to build a major new revenue stream for the next decade, though early testing included only a small group of heavily treated patients.
The company announced that medical conference organisers selected R289 for an oral presentation at the American Society of Hematology meeting in December. Rigel will share initial effectiveness results from the dose-expansion group and still plans to finish enrollment and pick a dose for the next trial stage by year-end.
What to watch: the percentage of patients in the December presentation who stop needing blood transfusions. Matching or beating the one-third rate seen in earlier dose testing would support moving the drug into a larger trial next year.
🐻 Bear Case
Older Drugs Stalled and Forced an Outlook Cut
Before launching Veppanu, Rigel ran on three drugs: Tavalisse for a platelet disorder, Rezlidhia for leukemia, and Gavreto for lung and thyroid cancers. Management held its full-year sales target for those three medicines steady through the first half of the year and pointed to normal second-half seasonal gains.
Instead, combined sales of the three older drugs grew 2.5% from a year ago to $65.7 million by our math, down from 14% growth in the second quarter. Rigel cut the top end of its full-year sales plan for these drugs by $5 million.
- Tavalisse sales: $46.0 million, up 3% from a year ago but down from $47.4 million last quarter
- Gavreto sales: $9.8 million, down 11% from a year ago and down from $10.7 million last quarter
- Rezlidhia sales: $9.9 million, up 20% from a year ago
The slowdown matters because Tavalisse still brings in nearly two-thirds of all drug sales, and its sequential drop shows how much second-quarter sales leaned on favourable discount and inventory shifts. Shifting the sales team's time toward the Veppanu launch may also be hurting the older brands.
What to watch: fourth-quarter sales of the three older drugs, which by our math must grow 6.8% from a year ago to hit the middle of the lowered plan. A sequential drop in Tavalisse would show new competition is taking share.
Trial and Launch Spending Cut Operating Margin in Half
Rigel has pitched itself as a self-funding biotechnology business that pays for its own clinical trials out of commercial profits. Bringing Veppanu into the fold added royalty obligations, supply commitments, clinical trial cost-sharing, and marketing bills all at once.
Total costs and expenses rose 55% from a year ago to $63.8 million, cutting operating margin nearly in half from 40.9% to 21.1% by our math. "The increase in costs and expenses was primarily driven by higher research and development costs related to the R289 and vepdegestrant clinical programs," the company said, alongside launch marketing and higher product costs.
- Research and development (cost of running clinical trials): 22.6% of revenue, up 12.0 percentage points from a year ago
- Cost of product sales (manufacturing and royalties): 13.3% of revenue, up 6.5 percentage points
- Selling, general and administrative (sales force and overhead): 42.9% of revenue, up 1.3 percentage points
The margin squeeze matters because third-quarter expenses only included half a quarter of Veppanu commercial costs and royalty payments. As Veppanu sales and trial bills run for a full quarter, operating profit will face heavier pressure unless revenue grows faster.
What to watch: fourth-quarter research and development and cost of product sales as a share of revenue. A further jump in those two cost lines would test Rigel's ability to stay profitable in 2027 while running larger trials.
Risks this quarter didn't answer
Two standing concerns about how Rigel reports its commercial business received no new detail in the third-quarter release.
- Veppanu excluded from the outlook: Rigel still leaves its new breast cancer drug out of its full-year revenue forecast, so investors have no official target to measure fourth-quarter demand against until the 2027 plan arrives.
- Discounts and distributor inventory: the release gave no numbers on price rebates, reserve releases, or distributor stocking by drug; the quarterly filing's revenue footnote will show how much reserve changes moved third-quarter sales.
👓 Other Themes
Partner Knight Launched Tavalisse in South America
Rigel's Latin American partner, Knight Therapeutics, won regulatory approval for Tavalisse in Colombia in September and began selling the platelet drug in Brazil in October. Those steps expand Tavalisse's reach abroad and will feed future supply orders and royalty payments inside Rigel's partner revenue line.
💲 Other KPIs
Cash reserves ticked up by $4.0 million from the second quarter after dropping by $59.6 million in the first half of the year to pay the $70 million upfront fee for Veppanu. Generating cash during the launch quarter steadies the balance sheet alongside the company's revolving credit line.
The diluted share count rose 6.7% from a year ago and 4.4% from last quarter, continuing a steady climb over the past four quarters. Rigel does not buy back shares, and employee stock-based compensation rose 44% from a year ago to $4.9 million, which spreads net income across more shares.
Rigel recorded a $4.2 million tax expense, or 24.3% of pretax profit by our math, compared with a $0.3 million tax benefit a year ago. After releasing its tax valuation allowance at the end of 2025, the drugmaker now books a standard accounting tax rate that cuts reported net income.
🔮 Guidance
Raised. Rigel lifted the bottom of its full-year revenue plan by $5 million, moving the middle of the range up $2.5 million to 15% growth over last year's revenue excluding a one-off accounting gain. By our math, that leaves $80.7 million, or 15.6% growth, for the fourth quarter before counting any Veppanu sales. It is the second raise this year, both driven by partner payments.
Cut. The biotechnology group trimmed the top of its older-drug sales forecast by $5 million after holding the range flat for three quarters, putting the middle of the plan at 11% full-year growth. By our math, that leaves $69.9 million for the fourth quarter, or 6.8% growth from a year ago, up from 2.5% in the third quarter against a tough comparison.
Raised. Management increased its partner revenue forecast by $5 million, following a $7.5 million raise last quarter. By our math, the new target leaves $10.8 million for the fourth quarter, more than double the $4.1 million booked in the fourth quarter of 2025.
Unchanged. The company said it will "continue to anticipate it will report positive net income for the full year 2026, while funding existing and new clinical development programs". With $39.1 million of net income already banked in the first nine months, the target remains easily achievable.
❓ Key Questions
How much of Veppanu's $6.6 million came from clinic stocking?
Veppanu generated $6.6 million in six weeks, and Rodriguez noted both clinic shipments and patient refills. Knowing the split between initial distributor or clinic inventory and actual patient prescriptions will show the true demand rate heading into the fourth quarter.
Did shifting sales reps to Veppanu hurt Tavalisse and Gavreto?
Sales of Tavalisse and Gavreto both fell from the second quarter, forcing a $5 million cut to the top of the older-drug sales outlook. Investors need to know whether sales force reallocation, price discounts, or rival drugs caused the slowdown.
When will management include Veppanu in its revenue outlook?
Rigel still excludes Veppanu from its 2026 revenue forecast despite booking $6.6 million in the third quarter. Will management include the breast cancer drug when it issues its 2027 revenue plan early next year?
Does the fourth-quarter partner revenue plan rely on a milestone?
By our math, the raised $35 million partner revenue forecast leaves $10.8 million for the fourth quarter, up from $8.6 million in the third. Management did not say whether that step-up comes from regular drug supply orders or a one-time regulatory payment.