Rigel Pharmaceuticals (RIGL) 10-Q 1 May 18 2018 Q1 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
	Mar. 31, 2018	Apr. 26, 2018
DOCUMENT AND ENTITY INFORMATION
Entity Registrant Name	RIGEL PHARMACEUTICALS INC
Entity Central Index Key	1,034,842
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		163,580,297
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands		Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents		$ 40,125	$ 38,290	[1]
Short-term investments		54,175	77,461	[1]
Prepaid and other current assets		2,320	1,682	[1]
Total current assets		96,620	117,433	[1]
Property and equipment, net		1,439	875	[1]
Other assets		754	803	[1]
Total assets		98,813	119,111	[1]
Current liabilities:
Accounts payable		2,623	2,636	[1]
Accrued compensation		4,746	7,059	[1]
Accrued research and development		5,872	5,028	[1]
Other accrued liabilities		5,549	3,330	[1]
Deferred liability - sublease, current portion	[1]		284
Total current liabilities		18,790	18,337	[1]
Long-term portion of deferred rent		178	90	[1]
Other long-term liabilities		38	38	[1]
Commitments				[1]
Stockholders' equity:
Preferred stock				[1]
Common stock		148	147	[1]
Additional paid-in capital		1,242,985	1,239,435	[1]
Accumulated other comprehensive loss		(87)	(82)	[1]
Accumulated deficit		(1,163,239)	(1,138,854)	[1]
Total stockholders' equity		79,807	100,646	[1]
Total liabilities and stockholders' equity		$ 98,813	$ 119,111	[1]
[1]	The balance sheet at December 31, 2017 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2017.

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CONDENSED STATEMENTS OF OPERATIONS
Contract revenues from collaborations		$ 3,584
Costs and expenses:
Research and development	$ 11,242	12,376
General and administrative	13,492	7,410
Total costs and expenses	24,734	19,786
Loss from operations	(24,734)	(16,202)
Interest income	349	156
Gain on disposal of assets		732
Net loss	$ (24,385)	$ (15,314)
Net loss per share, basic and diluted (in dollars per share)	$ (0.17)	$ (0.13)
Weighted average shares used in computing net loss per share, basic and diluted (in shares)	147,114	113,598

CONDENSED STATEMENTS OF COMPREH

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (24,385)	$ (15,314)
Other comprehensive income (loss):
Net unrealized loss on short-term investments	(5)	(11)
Comprehensive loss	$ (24,390)	$ (15,325)

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018		Mar. 31, 2017
Operating activities
Net loss	$ (24,385)		$ (15,314)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	1,540		955
Gain on disposal of assets			(732)
Loss on sublease			495
Depreciation and amortization	113		126
Net amortization of premium on short-term investment	(134)		(33)
Changes in assets and liabilities:
Prepaid and other current assets	(638)		65
Other assets	533		33
Accounts payable	(493)		(4,385)
Accrued compensation	(2,313)		(1,464)
Accrued research and development	844		349
Other accrued liabilities	2,184		439
Deferred rent and other long term liabilities	(645)		(1,296)
Net cash used in operating activities	(23,394)		(20,762)
Investing activities
Purchases of short-term investments	(5,235)		(33,385)
Maturities of short-term investments	28,650		32,544
Proceeds from disposal of assets			732
Capital expenditures	(197)		(41)
Net cash provided by (used in ) investing activities	23,218		(150)
Financing activities
Net proceeds from issuances of common stock upon exercise of options and participation in employee stock purchase plan	2,011		341
Proceeds from sale and issuance of common stock, net of offering costs			43,083
Net cash provided by financing activities	2,011		43,424
Net increase in cash and cash equivalents	1,835		22,512
Cash and cash equivalents at beginning of period	38,290	[1]	17,632
Cash and cash equivalents at end of period	$ 40,125		$ 40,144
[1]	The balance sheet at December 31, 2017 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2017.

Nature of Operations

Nature of Operations	3 Months Ended
	Mar. 31, 2018
Nature of Operations
Nature of Operations	1. Nature of Operations We were incorporated in the state of Delaware on June 14, 1996. We are a biotechnology company dedicated to discovering, developing and providing novel small molecule drugs that significantly improve the lives of patients with immune and hematologic disorders, cancer and rare diseases.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2018
Basis of Presentation
Basis of Presentation	2. Our accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP), for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933, as amended (Securities Act). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed financial statements include only normal and recurring adjustments that we believe are necessary to fairly state our financial position and the results of our operations and cash flows. Interim-period results are not necessarily indicative of results of operations or cash flows for a full-year or any subsequent interim period. The balance sheet at December 31, 2017 has been derived from audited financial statements at that date, but does not include all disclosures required by U.S. GAAP for complete financial statements. Because all of the disclosures required by U.S. GAAP for complete financial statements are not included herein, these interim unaudited condensed financial statements and the notes accompanying them should be read in conjunction with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from these estimates.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	3. Summary of Significant Accounting Policies Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09— Revenue from Contracts with Customers , which supersedes the revenue recognition requirements under ASC Topic 605, Revenue Recognition , and most industry-specific guidance under the ASC. To date, our revenues have been derived from license and collaboration agreements. The consideration we are eligible to receive under these agreements includes upfront payments, progress dependent contingent payments on events achieved by our collaboration partners, and royalties on net sales of products sold by such partners under the agreements. ASU No. 2014-09 differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments or contingent payments. Under our previous accounting policy, we recognized contingent payments as revenue in the period that the payment-triggering event occurred or is achieved. However, under the new accounting standard, it is possible to start to recognize contingent payments before the payment-triggering event is completely achieved, subject to management’s assessment of whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We adopted this new standard on January 1, 2018 using the modified retrospective approach. Because all of the performance obligations for our outstanding collaboration agreements had been completed prior to December 31, 2017, we did not record any adjustment on the opening balance of Accumulated Deficit as of January 1, 2018. Under this new guidance, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine whether arrangements are within the scope of this new guidance, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance performance obligation. The Company applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of this new guidance, we assess the goods or services promised within each contract and identify, as a performance obligation, and assess whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. In February 2016, the FASB issued ASU No. 2016-02— Leases , which is aimed at making leasing activities more transparent, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The guidance is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new standard on January 1, 2019. We are currently evaluating the potential impact of the adoption of ASU No. 2016-02 on our financial statements and cannot estimate the impact of adoption at this time. Contingencies In the first quarter of 2017, we entered into a consulting agreement with a third party, pursuant to which we may be required to pay amounts ranging from $1.5 million to $4.0 million if certain future milestone events occur. As of March 31, 2018, we concluded that certain future milestone events are probable of achievement. Accordingly, we recorded a contingent liability of $3.0 million as of March 31, 2018. Of this amount, $1.5 million was recognized as expense during the three months ended March 31, 2018 and was recorded as part of general and administrative expenses in the Statements of Operations.

Stock Award Plans

Stock Award Plans	3 Months Ended
	Mar. 31, 2018
Stock Award Plans
Stock Award Plans	4. We have four stock option plans, our 2011 Equity Incentive Plan (2011 Plan), 2000 Equity Incentive Plan (2000 Plan), 2000 Non-Employee Directors’ Stock Option Plan (Directors’ Plan) and the Inducement Plan, that provide for granting to our officers, directors and all other employees and consultants options to purchase shares of our common stock. We also have our Employee Stock Purchase Plan (Purchase Plan), wherein eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85% of the fair market value on the first day of the offering period or 85% of the fair market value on the purchase date. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model which considered our stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, volatility, expected term, risk-free interest rate and dividends. We estimate volatility over the expected term of the option using historical share price performance. For expected term, we take into consideration our historical data of options exercised, cancelled and expired. The risk-free rate is based on the U.S. Treasury constant maturity rate. We have not paid and do not expect to pay dividends in the foreseeable future. We use the straight-line attribution method over the requisite employee service period for the entire award in recognizing stock-based compensation expense. We account for forfeitures as they occur. We granted performance-based stock options to purchase shares of our common stock which will vest upon the achievement of certain corporate performance-based milestones. We determined the fair values of these performance-based stock options using the Black-Scholes option pricing model at the date of grant. For the portion of the performance-based stock options of which the performance condition is considered probable of achievement, we recognize stock-based compensation expense on the related estimated fair value of such options on a straight-line basis from the date of grant up to the date when we expect the performance condition will be achieved. For the performance conditions that are not considered probable of achievement at the grant date or upon quarterly re-evaluation, prior to the event actually occurring, we recognize the related stock-based compensation expense when the event occurs or when we can determine that the performance condition is probable of achievement. In those cases, we recognize the change in estimate at the time we determine the condition is probable of achievement (by recognizing stock-based compensation expense as cumulative catch-up adjustment as if we had estimated at the grant date that the performance condition would have been achieved) and recognize the remaining compensation cost up to the date when we expect the performance condition will be achieved, if any.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2018
Net Loss Per Share
Net Loss Per Share	5. Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period and the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive securities include stock options and shares issuable under our stock award plans. The dilutive effect of these potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities. We had securities which could potentially dilute basic loss per share, but were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive. These securities consist of the following (in thousands): Three Months Ended March 31, 2018 2017 Outstanding stock options 21,756 Purchase Plan Total 21,819

Stock-based Compensation

Stock-based Compensation	3 Months Ended
	Mar. 31, 2018
Stock-based Compensation
Stock-based Compensation	6. Total stock-based compensation expense related to all of our share-based payments that we recognized for the three months ended March 31, 2018 and 2017 were as follows (in thousands): Three Months Ended 2018 2017 General and administrative $ 940 $ 595 Research and development 600 360 Total stock-based compensation expense $ 1,540 $ 955 The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. We have segregated option awards into the following three homogenous groups for the purposes of determining fair values of options: officers and directors, all other employees, and consultants. We account for forfeitures as they occur. We determined weighted-average valuation assumptions separately for each of these groups as follows: · Volatility—We estimated volatility using our historical share price performance over the expected life of the option. We also considered other factors, such as implied volatility, our current clinical trials and other company activities that may affect the volatility of our stock in the future. We determined that at this time historical volatility is more indicative of our expected future stock performance than implied volatility. · Expected term—For options granted to consultants, we use the contractual term of the option, which is generally ten years, for the initial valuation of the option and the remaining contractual term of the option for the succeeding periods. We analyzed various historical data to determine the applicable expected term for each of the other option groups. This data included: (1) for exercised options, the term of the options from option grant date to exercise date; (2) for cancelled options, the term of the options from option grant date to cancellation date, excluding non-vested option forfeitures; and (3) for options that remained outstanding at the balance sheet date, the term of the options from option grant date to the end of the reporting period and the estimated remaining term of the options. The consideration and calculation of the above data gave us reasonable estimates of the expected term for each employee group. We also considered the vesting schedules of the options granted and factors surrounding exercise behavior of the option groups, our current market price and company activity that may affect our market price. In addition, we considered the optionee type (i.e., officers and directors or all other employees) and other factors that may affect the expected term of the options. · Risk-free interest rate—The risk-free interest rate is based on U.S. Treasury constant maturity rates with similar terms to the expected term of the options for each option group. · Dividend yield—The expected dividend yield is 0% as we have not paid and do not expect to pay dividends in the future. The following table summarizes the weighted-average assumptions relating to options granted pursuant to our equity incentive plans for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Risk-free interest rate % % Expected term (in years) Dividend yield % % Expected volatility % % The exercise price of stock options is at the market price of our common stock on the date immediately preceding the date of grant. Options become exercisable at varying dates and generally expire 10 years from the date of grant. We granted options to purchase 3,396,975 shares of common stock during the three months ended March 31, 2018 with a grant-date weighted-average fair value of $2.79 per share. As of March 31, 2018, we have 2,672,500 shares related to outstanding performance-based stock option awards with a grant date fair value of $5.7 million which will vest upon achievement of certain corporate performance-based milestones. Of this amount, 1,160,000 shares related to performance-based stock option awards wherein the achievement of the corresponding corporate-based milestones was probable. Accordingly, we recognized $1.6 million in stock-based compensation expense, of which $402,000 was recorded in the first quarter of 2018. As of March 31, 2018, there was approximately $4.2 million of unrecognized compensation cost related to these outstanding performance stock options. As of March 31, 2018, there was approximately $14.2 million of unrecognized stock-based compensation cost related to all unvested time-based and performance-based stock options granted under our equity incentive plans. At March 31, 2018, there were 10,544,883 shares of common stock available for future grant under our equity incentive plans and 652,891 options to purchase shares were exercised during the three months ended March 31, 2018. Employee Stock Purchase Plan Our Purchase Plan permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. The price at which the stock is purchased is equal to the lesser of 85% of the fair market value of the common stock on the first day of the offering or 85% of the fair market value of our common stock on the purchase date. The initial offering period commenced on the effective date of our initial public offering. The fair value of awards granted under our Purchase Plan is estimated on the date of grant using the Black-Scholes option pricing model, which uses weighted-average assumptions. Our Purchase Plan provides for a twenty-four month offering period comprised of four six-month purchase periods with a look-back option. A look-back option is a provision in our Purchase Plan under which eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85% of the fair market value on the first day of the offering period or 85% of the fair market value on the purchase date. Our Purchase Plan also includes a feature that provides for a new offering period to begin when the fair market value of our common stock on any purchase date during an offering period falls below the fair market value of our common stock on the first day of such offering period. This feature is called a “reset.” Participants are automatically enrolled in the new offering period. We had a “reset” on July 1, 2016 because the fair market value of our stock on June 30, 2016 was lower than the fair market value of our stock on January 5, 2015, the first day of the offering period. We applied modification accounting in accordance with ASC Topic No. 718, Stock Compensation, to determine the incremental fair value associated with this Purchase Plan “reset” and will recognize the related stock-based compensation expense according to FASB ASC Subtopic No. 718-50, Employee Share Purchase Plans . The total incremental fair value for this Purchase Plan “reset” was approximately $1.0 million and is being recognized as expense from July 1, 2016 to June 30, 2018. As of March 31, 2018, there were approximately 2,115,568 shares reserved for future issuance under the Purchase Plan. The following table summarizes the weighted-average assumptions related to our Purchase Plan for the three months ended March 31, 2018 and 2017. Expected volatilities for our Purchase Plan are based on the historical volatility of our stock. Expected term represents the weighted-average of the purchase periods within the offering period. The risk-free interest rate for periods within the expected term is based on U.S. Treasury constant maturity rates. Three Months Ended March 31, 2018 2017 Risk-free interest rate % % Expected term (in years) Dividend yield % % Expected volatility % %

Research and Development Accrua

Research and Development Accruals	3 Months Ended
	Mar. 31, 2018
Research and Development Accruals
Research and Development Accruals	7. Research and Development Accruals We have various contracts with third parties related to our research and development activities. Costs that are incurred but not billed to us as of the end of the period are accrued. We make estimates of the amounts incurred in each period based on the information available to us and our knowledge of the nature of the contractual activities generating such costs. Clinical trial contract expenses are accrued based on units of activity. Expenses related to other research and development contracts, such as research contracts, toxicology study contracts and manufacturing contracts are estimated to be incurred generally on a straight-line basis over the duration of the contracts. Raw materials and study materials purchased for us by third parties are expensed at the time of purchase.

Sponsored Research and License

Sponsored Research and License Agreements	3 Months Ended
	Mar. 31, 2018
Sponsored Research and License Agreements
Sponsored Research and License Agreements	8. We conduct research and development programs independently and in connection with our corporate collaborators. Currently, we are a party to collaboration agreements, but do not have ongoing performance obligations, with Bristol-Myers Squibb Company (BMS) for the discovery, development and commercialization of cancer immunotherapies based on our small molecule TGF beta receptor kinase inhibitors, Aclaris Therapeutics International Limited (Aclaris) for the development and commercialization of janus kinase (JAK) inhibitors for the treatment of alopecia areata and other dermatological conditions, AstraZeneca (AZ) for the development and commercialization of R256, an inhaled JAK inhibitor, BerGenBio AS (BerGenBio) for the development and commercialization of AXL inhibitors in oncology, and Daiichi Sankyo (Daiichi) to pursue research related to MDM2 inhibitors, a novel class of drug targets called ligases. Under these agreements, which we entered into in the ordinary course of business, we received or may be entitled to receive upfront cash payments, payments contingent upon specified events achieved by such partners and royalties on any net sales of products sold by such partners under the agreements. Total future contingent payments to us under all of these current agreements could exceed $532.4 million if all potential product candidates achieved all of the payment triggering events under all of our current agreements (based on a single product candidate under each agreement). Of this amount, up to $145.5 million relates to the achievement of development events, up to $345.6 million relates to the achievement of regulatory events and up to $41.3 million relates to the achievement of certain commercial or launch events. This estimated future contingent amount does not include any estimated royalties that could be due to us if the partners successfully commercialize any of the licensed products. Future events that may trigger payments to us under the agreements are based solely on our partners’ future efforts and achievements of specified development, regulatory and/or commercial events. In June 2011, we entered into an exclusive license agreement with BerGenBio for the development and commercialization of an oncology program. BerGenBio is responsible for all activities it wishes to perform under the license we granted to it. In February 2017, we received $3.3 million from BerGenBio as a result of BerGenBio advancing BGB324, an AXL kinase inhibitor licensed under the agreement, to a Phase 2 clinical study. All deliverables under the agreement had been previously delivered, as such, the above payments of $3.3 million was recognized as revenue in the first quarter of 2017.

Cash, Cash Equivalents and Shor

Cash, Cash Equivalents and Short-Term Investments	3 Months Ended
	Mar. 31, 2018
Cash, Cash Equivalents and Short-Term Investments
Cash, Cash Equivalents and Short-Term Investments	9. Cash, Cash Equivalents and Short-Term Investments Cash, cash equivalents and short-term investments consisted of the following (in thousands): March 31, December 31, 2018 2017 Cash $ 2,986 $ 582 Money market funds 4,686 2,795 U.S. treasury bills 6,729 6,726 Government-sponsored enterprise securities 6,179 7,826 Corporate bonds and commercial paper 73,720 97,822 $ 94,300 $ 115,751 Reported as: Cash and cash equivalents $ 40,125 $ 38,290 Short-term investments 54,175 77,461 $ 94,300 $ 115,751 Cash equivalents and short-term investments include the following securities with gross unrealized gains and losses (in thousands): Gross Gross Amortized Unrealized Unrealized March 31, 2018 Cost Gains Losses Fair Value U.S. treasury bills $ 6,741 $ — $ (12) $ 6,729 Government-sponsored enterprise securities 6,192 — (13) 6,179 Corporate bonds and commercial paper 73,782 1 (63) 73,720 Total $ 86,715 $ 1 $ (88) $ 86,628 Gross Gross Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. treasury bills $ 6,733 $ — $ (7) $ 6,726 Government-sponsored enterprise securities 7,835 — (9) 7,826 Corporate bonds and commercial paper 97,888 1 (67) 97,822 Total $ 112,456 $ 1 $ (83) $ 112,374 As of March 31, 2018, our cash equivalents and short-term investments, which have contractual maturities within one year, had a weighted-average time to maturity of approximately 85 days. We view our short-term investments portfolio as available for use in current operations. We have the ability to hold all investments as of March 31, 2018 through their respective maturity dates. At March 31, 2018, we had no investments that had been in a continuous unrealized loss position for more than 12 months. As of March 31, 2018, a total of 32 individual securities had been in an unrealized loss position for 12 months or less, and the losses were determined to be temporary. The gross unrealized losses above were caused by interest rate increases. No significant facts or circumstances have arisen to indicate that there has been any significant deterioration in the creditworthiness of the issuers of the securities held by us. Based on our review of these securities, including the assessment of the duration and severity of the unrealized losses and our ability and intent to hold the investments until maturity, there were no other-than-temporary impairments for these securities at March 31, 2018. The following table shows the fair value and gross unrealized losses of our investments in individual securities that are in an unrealized loss position, aggregated by investment category (in thousands): March 31, 2018 Fair Value Unrealized Losses U. S. treasury bills $ 6,729 $ (12) Government-sponsored enterprise securities 6,179 (13) Corporate bonds and commercial paper 35,513 (63) Total $ 48,421 $ (88)

Fair Value

Fair Value	3 Months Ended
	Mar. 31, 2018
Fair Value
Fair Value	10. Fair Value Under FASB ASC 820, Fair Value Measurements and Disclosures , fair value is defined as the price at which an asset could be exchanged or a liability transferred in a transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or parameters are not available, valuation models are applied. Assets and liabilities recorded at fair value in our financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets at the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The fair valued assets we hold that are generally included under this Level 1 are money market securities where fair value is based on publicly quoted prices. Level 2—Inputs, other than quoted prices included in Level 1, that are either directly or indirectly observable for the asset or liability through correlation with market data at the reporting date and for the duration of the instrument’s anticipated life. The fair valued assets we hold that are generally assessed under Level 2 included government-sponsored enterprise securities, U.S. treasury bills and corporate bonds and commercial paper. We utilize third party pricing services in developing fair value measurements where fair value is based on valuation methodologies such as models using observable market inputs, including benchmark yields, reported trades, broker/dealer quotes, bids, offers and other reference data. We use quotes from external pricing service providers and other on-line quotation systems to verify the fair value of investments provided by our third party pricing service providers. We review independent auditor’s reports from our third party pricing service providers particularly regarding the controls over pricing and valuation of financial instruments and ensure that our internal controls address certain control deficiencies, if any, and complementary user entity controls are in place. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the reporting date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. We do not have fair valued assets and liabilities classified under Level 3. Fair Value on a Recurring Basis Financial assets measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations (in thousands): Assets at Fair Value as of March 31, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 4,686 $ — $ — $ 4,686 U.S. treasury bills — 6,729 — 6,729 Government-sponsored enterprise securities — 6,179 — 6,179 Corporate bonds and commercial paper — 73,720 — 73,720 Total $ 4,686 $ 86,628 $ — $ 91,314 Assets at Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 2,795 $ — $ — $ 2,795 U.S. treasury bills — 6,726 — 6,726 Government-sponsored enterprise securities — 7,826 — 7,826 Corporate bonds and commercial paper — 97,822 — 97,822 Total $ 2,795 $ 112,374 $ — $ 115,169

Lease Agreements

Lease Agreements	3 Months Ended
	Mar. 31, 2018
Lease Agreements
Lease Agreements	11. We currently lease our research and office space under a noncancelable lease agreement with our landlord, HCP BTC, LLC (formerly known as Slough BTC, LLC) which was originally set to expire in 2018. The lease term provides for renewal option for up to two additional periods of five years each. In July 2017, we exercised our option to extend the term of our lease for another five years through January 2023 and modified the amount of monthly base rent during such renewal period. We reevaluated our lease classification and continue to classify our lease as an operating lease during the renewal period. In December 2014, we entered into a sublease agreement, which was amended in 2017, with an unrelated third party to occupy approximately 57,000 square feet of our research and office space. In February 2017, we entered into an amendment to the sublease agreement to increase the subleased research and office space for an additional 9,328 square feet under the same term of the sublease. Effective July 2017, the sublease agreement was amended primarily to extend the term of the sublease through January 2023 and modified the monthly base rent to equal the amount we will pay our landlord. Because the future sublease income under the extended sublease agreement is the same as the amount we will pay our landlord, we did not recognize any loss on sublease relative to this amendment. We expect to receive approximately $21.2 million in future sublease income (excluding our subtenant’s share of facilities operating expenses) through January 2023.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events
Subsequent Events	12. In April 2018, we completed an underwritten public offering in which we sold 16,000,000 shares of our common stock pursuant to an effective registration statement at a price to the public of $3.90 per share. We received net proceeds of approximately $58.4 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09— Revenue from Contracts with Customers , which supersedes the revenue recognition requirements under ASC Topic 605, Revenue Recognition , and most industry-specific guidance under the ASC. To date, our revenues have been derived from license and collaboration agreements. The consideration we are eligible to receive under these agreements includes upfront payments, progress dependent contingent payments on events achieved by our collaboration partners, and royalties on net sales of products sold by such partners under the agreements. ASU No. 2014-09 differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments or contingent payments. Under our previous accounting policy, we recognized contingent payments as revenue in the period that the payment-triggering event occurred or is achieved. However, under the new accounting standard, it is possible to start to recognize contingent payments before the payment-triggering event is completely achieved, subject to management’s assessment of whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We adopted this new standard on January 1, 2018 using the modified retrospective approach. Because all of the performance obligations for our outstanding collaboration agreements had been completed prior to December 31, 2017, we did not record any adjustment on the opening balance of Accumulated Deficit as of January 1, 2018. Under this new guidance, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine whether arrangements are within the scope of this new guidance, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance performance obligation. The Company applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of this new guidance, we assess the goods or services promised within each contract and identify, as a performance obligation, and assess whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. In February 2016, the FASB issued ASU No. 2016-02— Leases , which is aimed at making leasing activities more transparent, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The guidance is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We plan to adopt this new standard on January 1, 2019. We are currently evaluating the potential impact of the adoption of ASU No. 2016-02 on our financial statements and cannot estimate the impact of adoption at this time.
Contingencies	Contingencies In the first quarter of 2017, we entered into a consulting agreement with a third party, pursuant to which we may be required to pay amounts ranging from $1.5 million to $4.0 million if certain future milestone events occur. As of March 31, 2018, we concluded that certain future milestone events are probable of achievement. Accordingly, we recorded a contingent liability of $3.0 million as of March 31, 2018. Of this amount, $1.5 million was recognized as expense during the three months ended March 31, 2018 and was recorded as part of general and administrative expenses in the Statements of Operations.

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Net Loss Per Share
Schedule of antidilutive securities	These securities consist of the following (in thousands): Three Months Ended March 31, 2018 2017 Outstanding stock options 21,756 Purchase Plan Total 21,819

Stock-based Compensation (Table

Stock-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Stock-based Compensation
Schedule of stock-based compensation expense related to all of the entity's share-based payments	Total stock-based compensation expense related to all of our share-based payments that we recognized for the three months ended March 31, 2018 and 2017 were as follows (in thousands): Three Months Ended 2018 2017 General and administrative $ 940 $ 595 Research and development 600 360 Total stock-based compensation expense $ 1,540 $ 955
Summary of weighted-average assumptions relating to options granted pursuant to equity incentive plans	Three Months Ended March 31, 2018 2017 Risk-free interest rate % % Expected term (in years) Dividend yield % % Expected volatility % %
Summary of weighted-average assumptions used to calculate fair value of purchase rights granted under Employee Stock Purchase Plan	Three Months Ended March 31, 2018 2017 Risk-free interest rate % % Expected term (in years) Dividend yield % % Expected volatility % %

Cash, Cash Equivalents and Sh21

Cash, Cash Equivalents and Short-Term Investments (Tables)	3 Months Ended
	Mar. 31, 2018
Cash, Cash Equivalents and Short-Term Investments
Schedule of cash, cash equivalents and short-term investments	Cash, cash equivalents and short-term investments consisted of the following (in thousands): March 31, December 31, 2018 2017 Cash $ 2,986 $ 582 Money market funds 4,686 2,795 U.S. treasury bills 6,729 6,726 Government-sponsored enterprise securities 6,179 7,826 Corporate bonds and commercial paper 73,720 97,822 $ 94,300 $ 115,751 Reported as: Cash and cash equivalents $ 40,125 $ 38,290 Short-term investments 54,175 77,461 $ 94,300 $ 115,751
Schedule of cash equivalents and short-term investments including the securities with unrealized gains and losses	Cash equivalents and short-term investments include the following securities with gross unrealized gains and losses (in thousands): Gross Gross Amortized Unrealized Unrealized March 31, 2018 Cost Gains Losses Fair Value U.S. treasury bills $ 6,741 $ — $ (12) $ 6,729 Government-sponsored enterprise securities 6,192 — (13) 6,179 Corporate bonds and commercial paper 73,782 1 (63) 73,720 Total $ 86,715 $ 1 $ (88) $ 86,628 Gross Gross Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value U.S. treasury bills $ 6,733 $ — $ (7) $ 6,726 Government-sponsored enterprise securities 7,835 — (9) 7,826 Corporate bonds and commercial paper 97,888 1 (67) 97,822 Total $ 112,456 $ 1 $ (83) $ 112,374
Schedule of fair value and gross unrealized losses of the entity's investments in unrealized loss position	The following table shows the fair value and gross unrealized losses of our investments in individual securities that are in an unrealized loss position, aggregated by investment category (in thousands): March 31, 2018 Fair Value Unrealized Losses U. S. treasury bills $ 6,729 $ (12) Government-sponsored enterprise securities 6,179 (13) Corporate bonds and commercial paper 35,513 (63) Total $ 48,421 $ (88)

Fair Value (Tables)

Fair Value (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value
Schedule of financial assets measured at fair value on a recurring basis	Financial assets measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations (in thousands): Assets at Fair Value as of March 31, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 4,686 $ — $ — $ 4,686 U.S. treasury bills — 6,729 — 6,729 Government-sponsored enterprise securities — 6,179 — 6,179 Corporate bonds and commercial paper — 73,720 — 73,720 Total $ 4,686 $ 86,628 $ — $ 91,314 Assets at Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 2,795 $ — $ — $ 2,795 U.S. treasury bills — 6,726 — 6,726 Government-sponsored enterprise securities — 7,826 — 7,826 Corporate bonds and commercial paper — 97,822 — 97,822 Total $ 2,795 $ 112,374 $ — $ 115,169

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Contingencies (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Consulting agreement, contingent liability	$ 3
Consulting agreement, expense recognized	$ 1.5
Minimum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Consulting agreement, contingent liability		$ 1.5
Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Consulting agreement, contingent liability		$ 4

Stock Award Plans (Details)

Stock Award Plans (Details)	3 Months Ended
	Mar. 31, 2018plan
Stock Based Compensation
Number of stock option plans	4
Purchase Plan
Stock Based Compensation
Purchase price of common shares as a percentage of the fair market value on the first day of the offering period	85.00%
Purchase price of common shares as a percentage of the fair market value on the purchase date	85.00%

Net Loss Per Share (Details)

Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive securities excluded from the computation of diluted net loss per share
Total	21,079	21,819
Employee stock option
Antidilutive securities excluded from the computation of diluted net loss per share
Total	20,985	21,756
Purchase Plan
Antidilutive securities excluded from the computation of diluted net loss per share
Total	94	63

Stock-based Compensation (Detai

Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock-based compensation expense related to stock-based awards
Total stock-based compensation expense	$ 1,540	$ 955
General and administrative
Stock-based compensation expense related to stock-based awards
Total stock-based compensation expense	940	595
Research and development
Stock-based compensation expense related to stock-based awards
Total stock-based compensation expense	$ 600	$ 360

Stock-based Compensation - Opti

Stock-based Compensation - Options (Details)	3 Months Ended
	Mar. 31, 2018USD ($)item$ / sharesshares	Mar. 31, 2017USD ($)
Stock Based Compensation
Share-based compensation | $	$ 1,540,000	$ 955,000
Additional disclosures
Shares of common stock available for grant | shares	10,544,883
Employee stock option
Stock Based Compensation
Number of homogenous groups for purposes of determining fair values of options | item	3
Contractual term of the option	10 years
Weighted-average assumptions relating to options granted
Risk-free interest rate (as a percent)	2.70%	2.30%
Expected term (in years)	6 years 8 months 12 days	6 years 9 months 18 days
Dividend yield (as a percent)	0.00%	0.00%
Expected volatility (as a percent)	64.60%	62.90%
Additional disclosures
Options granted (in shares) | shares	3,396,975
Grant-date weighted-average fair value (in dollars per share) | $ / shares	$ 2.79
Total unrecognized compensation costs | $	$ 14,200,000
Options exercised during the period (in shares) | shares	652,891
Employee stock option | Consultant
Stock Based Compensation
Contractual term of the option	10 years
Employee stock option | Recipient of performance shares
Stock Based Compensation
Share-based compensation | $	$ 402,000
Additional disclosures
Options granted (in shares) | shares	2,672,500
Grant date fair value of performance stock options awards | $	$ 5,700,000
Total unrecognized compensation costs | $	$ 4,200,000
Employee stock option | Recipient of performance shares | Vesting upon achievement of corporate performance-based milestones
Additional disclosures
Options granted (in shares) | shares	1,160,000

Stock-based Compensation - Purc

Stock-based Compensation - Purchase Plan (Details) - Purchase Plan $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)itemshares	Mar. 31, 2017
Additional disclosures
Award offering period	24 months
Number of purchase periods per award offering period | item	4
Award purchase period	6 months
Purchase price expressed as a percentage of fair market value of common stock on the purchase date	85.00%
Purchase price expressed as a percentage of fair market value of common stock on the first day of the offering period	85.00%
Total incremental fair value for the Purchase Plan reset | $	$ 1
Shares reserved for future issuance | shares	2,115,568
Weighted-average assumptions relating to Purchase Plan
Risk-free interest rate (as a percent)	0.60%	0.50%
Expected term (in years)	2 years	1 year 6 months
Dividend yield (as a percent)	0.00%	0.00%
Expected volatility (as a percent)	63.80%	63.10%

Sponsored Research and Licens29

Sponsored Research and License Agreements (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Feb. 28, 2017	Mar. 31, 2017	Mar. 31, 2018
Collaborative arrangement
Collaborations
Maximum amount of contingent payments receivable			$ 532.4
Specified Development Events | Collaborative arrangement
Collaborations
Maximum amount of contingent payments receivable			145.5
Specified Regulatory Events | Collaborative arrangement
Collaborations
Maximum amount of contingent payments receivable			345.6
Specified Product Launch Events | Collaborative arrangement
Collaborations
Maximum amount of contingent payments receivable			$ 41.3
BerGenBio
Collaborations
Collaborative payment received	$ 3.3
Revenue recognized		$ 3.3

Cash, Cash Equivalents and Sh30

Cash, Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017		Mar. 31, 2017	Dec. 31, 2016
Cash, cash equivalent and short term investments
Cash and cash equivalents	$ 40,125	$ 38,290	[1]	$ 40,144	$ 17,632
Short-term investments	54,175	77,461	[1]
Cash, cash equivalents and short-term investments	94,300	115,751
Money market funds
Cash, cash equivalent and short term investments
Cash, cash equivalents and short-term investments	4,686	2,795
U.S. treasury bills
Cash, cash equivalent and short term investments
Cash, cash equivalents and short-term investments	6,729	6,726
Government-sponsored enterprises securities
Cash, cash equivalent and short term investments
Cash, cash equivalents and short-term investments	6,179	7,826
Corporate bonds and commercial paper
Cash, cash equivalent and short term investments
Cash, cash equivalents and short-term investments	73,720	97,822
Cash
Cash, cash equivalent and short term investments
Cash, cash equivalents and short-term investments	$ 2,986	$ 582
[1]	The balance sheet at December 31, 2017 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2017.

Cash, Cash Equivalents and Sh31

Cash, Cash Equivalents and Short-Term Investments - Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Cash equivalents and available-for-sale securities
Amortized Cost	$ 86,715	$ 112,456
Gross Unrealized Gains	1	1
Gross Unrealized Losses	(88)	(83)
Fair Value	86,628	112,374
U.S. treasury bills
Cash equivalents and available-for-sale securities
Amortized Cost	6,741	6,733
Gross Unrealized Losses	(12)	(7)
Fair Value	6,729	6,726
Government-sponsored enterprises securities
Cash equivalents and available-for-sale securities
Amortized Cost	6,192	7,835
Gross Unrealized Losses	(13)	(9)
Fair Value	6,179	7,826
Corporate bonds and commercial paper
Cash equivalents and available-for-sale securities
Amortized Cost	73,782	97,888
Gross Unrealized Gains	1	1
Gross Unrealized Losses	(63)	(67)
Fair Value	$ 73,720	$ 97,822

Cash, Cash Equivalents and Sh32

Cash, Cash Equivalents and Short-Term Investments - Unrealized Loss Position (Details) $ in Thousands	Mar. 31, 2018USD ($)item	Mar. 31, 2018USD ($)item
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position
Weighted-average time to maturity of cash equivalents and available-for-sale securities	85 days
Number of investments in continuous unrealized loss position for more than twelve months | item	0	0
Number of individual securities in unrealized loss position for twelve months or less | item	32	32
Other-than-temporary impairments of securities	$ 0
Fair Value	48,421	$ 48,421
Unrealized Losses		(88)
U.S. treasury bills
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position
Fair Value	6,729	6,729
Unrealized Losses		(12)
Government-sponsored enterprises securities
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position
Fair Value	6,179	6,179
Unrealized Losses		(13)
Corporate bonds and commercial paper
Fair value and gross unrealized losses of investments in individual securities in unrealized loss position
Fair Value	$ 35,513	35,513
Unrealized Losses		$ (63)

Fair Value (Details)

Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value
Investments at fair value	$ 86,628	$ 112,374
Estimate Of Fair Value Fair Value Disclosure
Fair Value
Investments at fair value	91,314	115,169
U.S. treasury bills
Fair Value
Investments at fair value	6,729	6,726
Government-sponsored enterprises securities
Fair Value
Investments at fair value	6,179	7,826
Corporate bonds and commercial paper
Fair Value
Investments at fair value	73,720	97,822
Fair value inputs Level 1
Fair Value
Investments at fair value	4,686	2,795
Fair value inputs Level 2
Fair Value
Investments at fair value	86,628	112,374
Fair value measurements recurring | Money market funds | Estimate Of Fair Value Fair Value Disclosure
Fair Value
Investments at fair value	4,686	2,795
Fair value measurements recurring | U.S. treasury bills | Estimate Of Fair Value Fair Value Disclosure
Fair Value
Investments at fair value	6,729	6,726
Fair value measurements recurring | Government-sponsored enterprises securities | Estimate Of Fair Value Fair Value Disclosure
Fair Value
Investments at fair value	6,179	7,826
Fair value measurements recurring | Corporate bonds and commercial paper | Estimate Of Fair Value Fair Value Disclosure
Fair Value
Investments at fair value	73,720	97,822
Fair value measurements recurring | Fair value inputs Level 1 | Money market funds
Fair Value
Investments at fair value	4,686	2,795
Fair value measurements recurring | Fair value inputs Level 2 | U.S. treasury bills
Fair Value
Investments at fair value	6,729	6,726
Fair value measurements recurring | Fair value inputs Level 2 | Government-sponsored enterprises securities
Fair Value
Investments at fair value	6,179	7,826
Fair value measurements recurring | Fair value inputs Level 2 | Corporate bonds and commercial paper
Fair Value
Investments at fair value	$ 73,720	$ 97,822

Lease Agreements (Details)

Lease Agreements (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)item	Jul. 31, 2017ft²	Dec. 31, 2014ft²
Sublease Agreement
Number of lease renewal periods | item	2
Lease renewal term (in years)	5 years
Area of real estate property (square feet) | ft²		9,328	57,000
Expected income from sublease | $	$ 21.2

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2018	Mar. 31, 2017
Subsequent Event [Line Items]
Aggregate proceeds		$ 43,083
Subsequent event | Common stock
Subsequent Event [Line Items]
Number of shares of common stock sold (in shares)	16,000,000
Share price (in dollars per share)	$ 3.90
Aggregate proceeds	$ 58,400