San Francisco-based pharmaceutical company Rigel Pharmaceuticals has reported a net loss of $33.4 million, or $0.91 per share, for the fourth quarter of 2008, compared to a net loss of $19 million, or $0.61 per share, for the same period of 2007. Weighted average shares outstanding for the fourth quarters of 2008 and 2007 were 36.6 million and 31.1 million, respectively.
There were no contract revenues from collaborations reported in the fourth quarter of 2008 compared to $8 million reported in the fourth quarter of 2007. Revenue in the fourth quarter of 2007 included a $3 million milestone payment from Merck Serono for licensing rights in Japan for R763 and a $5 million milestone payment from Pfizer for the initiation of its Phase 1 clinical trial for R343.
Rigel reported total operating expenses of $34 million in the fourth quarter of 2008, compared to $28.3 million in the fourth quarter of 2007. The increase in operating expenses was primarily due to increases in clinical development and stock-based compensation expenses, offset by a reversal of bonus expense during the fourth quarter of 2008. The increase in clinical development expenses was primarily due to the costs associated with the Phase 2b clinical trials of R788 in rheumatoid arthritis (TASKi2 and TASKi3).
Stock-based compensation expenses increased from $2.6 million in the fourth quarter of 2007 to $6 million in the fourth quarter of 2008, primarily due to the higher valuation of options granted in the first quarter of 2008. Based on the company's decision not to pay bonuses for 2008, approximately $3 million of previously recorded bonus expense was reversed in the fourth quarter of 2008. Bonus expense recognized in the fourth quarter of 2007 was approximately $5.1 million.
In the fourth quarter of 2008, Rigel recorded a Federal refundable credit of $89,000, which was calculated based on fixed assets placed into service from April 1, 2008 to December 31, 2008, in accordance with the provisions of the Housing and Economic Recovery Act of 2008.
For the twelve months ended December 31, 2008, Rigel reported a net loss of $132.3 million, or $3.67 per share, compared to a net loss of $74.3 million, or $2.57 per share, for the same period of 2007. Rigel recorded no contract revenue from collaborations during 2008, compared with $12.6 million for the same period in 2007.
As of December 31, 2008, Rigel had cash, cash equivalents and available for sale securities of $134.5 million, compared to $160.4 million as of September 30, 2008 and $108.3 million as of December 31, 2007. In February 2008, Rigel completed a public offering raising aggregate net proceeds of approximately $127.5 million. The company expects that its current capital resources will be enough for it to maintain its current development priorities through the second quarter of 2010.
James Gower, Chairman and CEO of Rigel, said: "We look forward to announcing study results for our two Phase 2b trials, TASKi2 and TASKi3, for patients with rheumatoid arthritis in July and August of 2009, respectively. Our recently announced company restructuring, as well as a decision to forgo bonuses, were key measures taken at the beginning of 2009 to conserve cash and focus on our active clinical and preclinical programs."
