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Table of Contents 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM        TO        

Commission File Number 0-29889

Rigel Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware

94-3248524

(State or other jurisdiction of incorporation or

(I.R.S. Employer Identification No.)

organization)

1180 Veterans Blvd.

South San Francisco, CA

94080

(Address of principal executive offices)

(Zip Code)

(650) 624-1100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, par value $0.001 per share

RIGL

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No 

As of July 29, 2022, there were 172,836,336 shares of the registrant’s Common Stock outstanding.

Table of Contents 

RIGEL PHARMACEUTICALS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

INDEX

Page

PART I

FINANCIAL INFORMATION

3

Item 1.

Financial Statements

3

Condensed Balance Sheets (Unaudited) — June 30, 2022 and December 31, 2021

3

Condensed Statements of Operations (Unaudited) — three and six months ended June 30, 2022 and 2021

4

Condensed Statements of Comprehensive Income (Loss) (Unaudited) — three and six months ended June 30, 2022 and 2021

5

Condensed Statements of Stockholders’ Equity (Deficit) (Unaudited) — three and six months ended June 30, 2022 and 2021

6

Condensed Statements of Cash Flows (Unaudited) — six months ended June 30, 2022 and 2021

7

Notes to Condensed Financial Statements (Unaudited)

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

45

Item 4.

Controls and Procedures

45

PART II

OTHER INFORMATION

45

Item 1.

Legal Proceedings

45

Item 1A.

Risk Factors

46

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

91

Item 3.

Defaults Upon Senior Securities

91

Item 4.

Mine Safety Disclosures

91

Item 5.

Other Information

91

Item 6.

Exhibits

92

Signatures

93

2

Table of Contents 

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

RIGEL PHARMACEUTICALS, INC.

CONDENSED BALANCE SHEETS

(In thousands)

June 30, 

December 31,

2022

    

2021(1)

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

27,201

$

18,890

Short-term investments

 

61,965

 

106,077

Accounts receivable, net

 

17,198

 

15,472

Inventories

6,218

 

6,616

Prepaid and other current assets

 

7,939

 

7,412

Total current assets

 

120,521

 

154,467

Property and equipment, net

 

1,832

 

2,184

Operating lease right-of-use asset

5,245

9,703

Other assets

 

403

 

974

$

128,001

$

167,328

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

2,155

$

3,795

Accrued compensation

 

7,525

 

10,690

Accrued research and development

 

9,213

 

10,384

Other accrued liabilities

 

16,885

 

12,691

Lease liabilities, current portion

5,811

9,892

Deferred revenue

1,543

2,596

Other long-term liabilities, current portion

11,823

13,506

Total current liabilities

 

54,955

 

63,554

Long-term portion of lease liabilities

 

 

759

Loans payable, net of discount

29,835

19,914

Other long-term liabilities

 

46,888

 

52,727

Commitments

Stockholders’ equity (deficit):

Preferred stock

 

 

Common stock

 

173

 

172

Additional paid-in capital

 

1,361,411

 

1,354,190

Accumulated other comprehensive loss

 

(438)

 

(102)

Accumulated deficit

 

(1,364,823)

 

(1,323,886)

Total stockholders’ equity (deficit)

 

(3,677)

 

30,374

$

128,001

$

167,328

(1)The balance sheet as of December 31, 2021 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (SEC) on March 1, 2022.

See Accompanying Notes to Condensed Financial Statements

3

Table of Contents 

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

Revenues:

Product sales, net

$

18,550

$

17,053

$

34,747

$

29,429

Contract revenues from collaborations

11,269

3,713

11,807

69,355

Government contract

5,500

8,500

Total revenues

29,819

26,266

46,554

107,284

Costs and expenses:

Cost of product sales

1,036

129

1,157

445

Research and development

 

14,767

 

16,807

30,241

 

33,633

Selling, general and administrative

 

26,981

 

22,378

54,382

 

44,499

Total costs and expenses

 

42,784

 

39,314

 

85,780

 

78,577

Income (loss) from operations

 

(12,965)

 

(13,048)

 

(39,226)

 

28,707

Interest income

 

42

 

16

 

63

 

17

Interest expense

(569)

(1,759)

(1,774)

(2,244)

Income (loss) before income taxes

(13,492)

(14,791)

(40,937)

26,480

Provision for (benefit from) income taxes

(970)

801

Net income (loss)

$

(13,492)

$

(13,821)

$

(40,937)

$

25,679

Net income (loss) per share

Basic

$

(0.08)

$

(0.08)

$

(0.24)

$

0.15

Diluted

$

(0.08)

$

(0.08)

$

(0.24)

$

0.15

Weighted average shares used in computing net income (loss) per share

Basic

172,147

170,192

171,961

169,997

Diluted

172,147

170,192

171,961

175,912

See Accompanying Notes to Condensed Financial Statements

4

Table of Contents 

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

Net income (loss)

$

(13,492)

$

(13,821)

$

(40,937)

$

25,679

Other comprehensive income (loss):

Net unrealized gain (loss) on short-term investments

 

(22)

 

8

 

(336)

 

11

Comprehensive income (loss)

$

(13,514)

$

(13,813)

$

(41,273)

$

25,690

See Accompanying Notes to Condensed Financial Statements

5

Table of Contents 

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share amounts)

(unaudited)

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

    

Shares

    

Amount

    

Capital

    

Loss

    

Deficit

    

Equity (Deficit)

Balance as of January 1, 2022

 

171,602,226

$

172

$

1,354,190

$

(102)

$

(1,323,886)

$

30,374

Net loss

 

(27,445)

 

(27,445)

Net unrealized loss on short-term investments

 

(314)

 

(314)

Issuance of common stock upon exercise of options

 

420,521

940

 

940

Issuance of common stock upon vesting of restricted stock units

22,500

Stock-based compensation expense

 

3,243

 

3,243

Balance as of March 31, 2022

 

172,045,247

$

172

$

1,358,373

$

(416)

$

(1,351,331)

$

6,798

Net loss

 

(13,492)

(13,492)

Net unrealized loss on short-term investments

 

(22)

(22)

Issuance of common stock upon exercise of options and participation in Purchase Plan

 

609,839

1

598

599

Issuance of common stock upon vesting of restricted stock units

181,250

Stock-based compensation expense

 

2,440

2,440

Balance as of June 30, 2022

172,836,336

$

173

$

1,361,411

$

(438)

$

(1,364,823)

$

(3,677)

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Accumulated

Stockholders’

    

Shares

    

Amount

    

Capital

    

Loss

    

Deficit

    

Equity

Balance as of January 1, 2021

    

169,316,782

$

169

$

1,339,833

$

(4)

$

(1,305,972)

$

34,026

Net income

 

39,500

 

39,500

Net unrealized gain on short-term investments

 

3

 

3

Issuance of common stock upon exercise of options

 

813,854

1

2,096

 

2,097

Stock-based compensation expense

 

2,672

 

2,672

Balance as of March 31, 2021

 

170,130,636

$

170

$

1,344,601

$

(1)

$

(1,266,472)

$

78,298

Net loss

 

(13,821)

(13,821)

Net unrealized gain on short-term investments

 

8

8

Issuance of common stock upon exercise of options and participation in Purchase Plan

 

711,847

1

1,318

1,319

Stock-based compensation expense

 

2,306

2,306

Balance as of June 30, 2021

170,842,483

$

171

$

1,348,225

$

7

$

(1,280,293)

$

68,110

See Accompanying Notes to Condensed Financial Statements

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RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

Six Months Ended June 30, 

2022

    

2021

Operating activities

Net income (loss)

$

(40,937)

25,679

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Stock-based compensation expense

 

5,598

4,945

Gain on disposal of assets

(253)

Depreciation and amortization

 

474

497

Non-cash interest expense

682

1,428

Net amortization and accretion of discount on short-term investments and term loan

107

95

Changes in assets and liabilities:

Accounts receivable, net

 

(1,726)

(1,399)

Inventories

483

(5,158)

Prepaid and other current assets

 

(527)

7,439

Other assets

 

571

(16)

Right-of-use assets

 

4,458

4,000

Accounts payable

 

(1,585)

(2,030)

Accrued compensation

 

(3,165)

(1,828)

Accrued research and development

 

(1,171)

1,575

Other accrued liabilities

 

4,194

1,436

Lease liability

(4,840)

(4,197)

Deferred revenue

(1,053)

2,795

Other current and long-term liabilities

 

142

 

Net cash provided by (used in) operating activities

 

(38,548)

 

35,261

Investing activities

Purchases of short-term investments

 

(6,997)

(71,450)

Maturities of short-term investments

 

50,645

29,801

Proceeds from disposal of assets

264

Capital expenditures

 

(188)

(478)

Net cash provided by (used in) investing activities

 

43,724

 

(42,127)

Financing activities

Cost share advance from collaboration partner

57,900

Cost share payment to a collaboration partner

(8,346)

Net proceeds from issuances of common stock upon exercise of options and participation in Purchase Plan

 

1,539

3,416

Net proceeds from term loan financing

9,942

Net cash provided by financing activities

 

3,135

 

61,316

Net increase in cash and cash equivalents

 

8,311

 

54,450

Cash and cash equivalents at beginning of period

 

18,890

30,373

Cash and cash equivalents at end of period

$

27,201

$

84,823

Supplemental disclosure of cash flow information

Interest paid

$

951

$

723

See Accompanying Notes to Condensed Financial Statements

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Rigel Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

In this report, “Rigel,” “we,” “us” and “our” refer to Rigel Pharmaceuticals, Inc.

1.

Organization and Summary of Significant Accounting Policies

Description of Business

We are a biotechnology company dedicated to discovering, developing and providing novel small molecule drugs that significantly improve the lives of patients with hematologic disorders, cancer and rare immune diseases. Our pioneering research focuses on signaling pathways that are critical to disease mechanisms. Our first product approved by the US Food and Drug Administration (FDA) is TAVALISSE® (fostamatinib disodium hexahydrate) tablets, the only approved oral spleen tyrosine kinase (SYK) inhibitor, for the treatment of adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment. The product is also commercially available in Europe, United Kingdom (UK) (TAVLESSE) and Canada (TAVALISSE) for the treatment of chronic ITP in adult patients.

Our portfolio also includes olutasidenib, an oral, small molecule inhibitor of mutated isocitrate dehydrogensase-1 (mIDH1) being investigated for the treatment of relapsed/refractory acute myeloid leukemia (R/R AML) and other malignancies. We in-licensed olutasidenib from Forma Therapeutics, Inc. (Forma) with exclusive, worldwide rights to develop, manufacture, and commercialize the investigational agent. See “Note 12 – Subsequent Events” for further discussion.

We conducted a Phase 3 clinical trial evaluating fostamatinib for the treatment of warm autoimmune hemolytic anemia (wAIHA); Fostamatinib is also currently being studied in a Phase 3 clinical trial for the treatment of hospitalized high-risk patients with COVID-19; and a National Institute of Health (NIH)/National Heart, Lung, and Blood Institute (NHLBI) sponsored Phase 3 trial (ACTIV-4 Host Tissue Trial) for the treatment of COVID-19 in hospitalized patients.

Our other clinical programs include our interleukin receptor-associated kinase (IRAK) inhibitor program and a receptor-interacting serine/threonine-protein kinase (RIPK1) inhibitor program in clinical development with partner Eli Lilly and Company (Lilly). In addition, we have product candidates in clinical development with partners BerGenBio ASA (BerGenBio) and Daiichi Sankyo (Daiichi).

Basis of Presentation

Our accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (US 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 the information and notes required by US 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 as of December 31, 2021 has been derived from audited financial statements at that date but does not include all disclosures required by US GAAP for complete financial statements. Because certain disclosures required by US 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, 2021 filed with the SEC on March 1, 2022.

Use of Estimates

The preparation of financial statements in conformity with US 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.

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Significant Accounting Policies

Our significant accounting policies are described in “Note 1 – Description of Business and Summary of Significant Accounting Policies” to our “Notes to Financial Statements” contained in “Part II, Item 8, Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to these accounting policies.

Liquidity

As of June 30, 2022, we had approximately $89.2 million in cash, cash equivalents and short-term investments. Since inception, we have financed our operations primarily through sales of equity securities, debt financing, contract payments under our collaboration agreements and from product sales.

Based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of this Form 10-Q.

Recently Issued Accounting Standards

No new accounting guidance adopted during the period. Recently issued accounting guidance is not applicable or did not have, or is not expected to have, a material impact to us.

2.

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (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, restricted stock units and shares issuable under our Employee Stock Purchase Plan (Purchase Plan). 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.

The following table sets forth the computation of basic and diluted earnings per share (in thousands except per share amounts):

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

EPS Numerator:

Net income (loss)

$

(13,492)

$

(13,821)

$

(40,937)

$

25,679

EPS Denominator—Basic and Diluted:

Weighted-average common shares outstanding

 

172,147

 

170,192

 

171,961

 

169,997

EPS Denominator—Diluted:

Weighted-average common shares outstanding

 

172,147

170,192

171,961

169,997

Dilutive effect of stock options, restricted stock units and shares under Purchase Plan

 

5,915

Weighted-average shares outstanding and common stock equivalents

 

172,147

 

170,192

 

171,961

 

175,912

Net income (loss) per share

Basic

$

(0.08)

$

(0.08)

$

(0.24)

$

0.15

Diluted

$

(0.08)

$

(0.08)

$

(0.24)

$

0.15

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The potential shares of common stock that were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive are as follows (in thousands):

Three Months Ended June 30, 

Six Months Ended June 30, 

2022

    

2021

2022

    

2021

Outstanding stock options

33,081

30,639

33,081

9,469

Restricted stock units

1,191

234

1,191

4

Total

34,272

30,873

34,272

9,473

3.

Revenues

Revenues disaggregated by category were as follows (in thousands):

Three Months Ended June 30, 

Six Months Ended June 30, 

2022

    

2021

2022

    

2021

Product sales:

Gross product sales

$

26,427

$

22,037

$

49,045

38,146

Discounts and allowances

(7,877)

(4,984)

(14,298)

(8,717)

Total product sales, net

18,550

17,053

34,747

29,429

Revenues from collaborations:

License revenues

2,337

3,305

2,545

67,923

Development milestones

5,000

5,000

Research and development services and others

3,932

408

4,262

1,432

Total revenues from collaborations

11,269

3,713

11,807

69,355

Government contract

5,500

8,500

Total revenues

$

29,819

$

26,266

$

46,554

$

107,284

Our net product sales include sales of TAVALISSE in the US, net of chargebacks, discounts and fees, government and other rebates and returns. The following tables summarize the activities in chargebacks, discounts and fees, government and other rebates and returns that were accounted for within other accrued liabilities, for each of the periods presented (in thousands):

Chargebacks,

Government

Discounts and

and Other

Fees

Rebates

Returns

Total

Balance as of January 1, 2022

    

$

3,404

$

2,494

$

2,017

$

7,915

Provision related to current period sales

9,680

2,711

613

13,004

Credit or payments made during the period

(7,748)

(2,901)

(39)

(10,688)

Balance as of June 30, 2022

 

$

5,336

$

2,304

$

2,591

$

10,231

Chargebacks,

Government

Discounts and

and Other

Fees

Rebates

Returns

Total

Balance as of January 1, 2021

    

$

2,461

 

$

2,115

$

1,489

$

6,065

Provision related to current period sales

4,589

2,710

483

7,782

Credit or payments made during the period

(4,800)

(2,433)

(293)

(7,526)

Balance as of June 30, 2021

 

$

2,250

$

2,392

$

1,679

$

6,321

Of the $14.3 million discounts and allowances from gross product sales for the six months ended June 30, 2022, $13.0 million was accounted for as additions to other accrued liabilities and $1.3 million as reductions in accounts receivable (as it relates to allowance for prompt pay discount) and prepaid and other current assets (as it relates to certain chargebacks and other fess that were prepaid) in the condensed balance sheet.

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Of the $8.7 million discounts and allowances from gross product sales for the six months ended June 30, 2021, $7.8 million was accounted for as additions to other accrued liabilities and $0.9 million as reductions in accounts receivable (as it relates to allowance for prompt pay discount) and prepaid and other current assets (as it relates to certain chargebacks and other fess that were prepaid) in the condensed balance sheet.

For detailed discussions of our revenues from collaboration and government contract, see “Note 4 – Sponsored Research and License Agreements and Government Contract” below.

The following table summarizes the percentages of revenues from each of our customers who individually accounted for 10% or more (wherein * denotes less than 10%) of the total net product sales and revenues from collaborations:

Three Months Ended June 30, 

Six Months Ended June 30, 

2022

    

2021

2022

    

2021

McKesson Specialty Care Distribution Corporation

34%

33%

36%

13%

Kissei

25%

*

16%

*

Cardinal Healthcare

16%

13%

20%

*

ASD Healthcare and Oncology Supply

12%

36%

19%

13%

Lilly

*

16%

*

65%

4.

Sponsored Research and License Agreements and Government Contract

Sponsored Research and License Agreements

We conduct research and development programs independently and in connection with our corporate collaborators. As of June 30, 2022, we are a party to collaboration agreements with Lilly to develop and commercialize R552, a RIPK1 inhibitor, for the treatment of non-central nervous system (non-CNS) diseases and collaboration aimed at developing additional RIPK1 inhibitors for the treatment of central nervous system (CNS) diseases; with Grifols S.A. (Grifols) to commercialize fostamatinib for human diseases in all indications, including chronic ITP and autoimmune hemolytic anemia (AIHA), in Europe and Turkey; with Kissei Pharmaceutical Co., Ltd. (Kissei) to develop and commercialize fostamatinib in Japan, China, Taiwan and the Republic of Korea; with Medison Pharma Trading AG (Medison Canada) and Medison Pharma Ltd. (Medison Israel and, together with Medison Canada, Medison) to commercialize fostamatinib in all indications, including chronic ITP and AIHA, in Canada and Israel, respectively; and with Knight Therapeutics International SA (Knight) to commercialize fostamatinib in all indications, including chronic ITP and AIHA, in Latin America, consisting of Mexico, Central and South America, and the Caribbean (Knight territory).

Further, we are also a party to collaboration agreements, but do not have ongoing performance obligations with BerGenBio for the development and commercialization of AXL inhibitors in oncology, and with Daiichi to pursue research related to MDM2 inhibitors, a novel class of drug targets called ligases. We have an agreement with AstraZeneca AB (AZ) for the development and commercialization of R256, an inhaled JAK inhibitor. In December 2021, AZ provided a notice to terminate the agreement effective April 19, 2022 and returned to us the full rights to our propriety JAK inhibitor.

Under the above existing agreements that 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. As of June 30, 2022, total future contingent payments to us under all of above existing agreements, excluding terminated or terminating agreements, could exceed $1.3 billion 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, $279.5 million relates to the achievement of development events, $283.1 million relates to the achievement of regulatory events and $796.0 million relates to the achievement of certain commercial 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.

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Global Exclusive License Agreement with Lilly

On February 18, 2021, we entered into a global exclusive license agreement and strategic collaboration with Lilly (Lilly Agreement), which became effective on March 27, 2021, to develop and commercialize R552, a RIPK1 inhibitor, for the treatment of non-CNS diseases. In addition, the collaboration is aimed at developing additional RIPK1 inhibitors for the treatment of CNS diseases. Pursuant to the terms of the license agreement, we granted to Lilly exclusive rights to develop and commercialize R552 and related RIPK1 inhibitors in all indications worldwide. The agreement became effective in March 2021 upon clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The parties’ collaboration is governed through a joint governance committee and appropriate subcommittees.

We are responsible for 20% of development costs for R552 in the US, Europe, and Japan, up to a specified cap. Lilly is responsible for funding the remainder of all development activities for R552 and other non-CNS disease development candidates. We have the right to opt-out of co-funding the R552 development activities in the US, Europe and Japan at two different specified times. If we exercise our first opt-out right (no later than September 30, 2023), under the Lilly Agreement, we are required to fund our share of the R552 development activities in the US, Europe, and Japan up to a maximum funding commitment of $65.0 million through April 1, 2024. If we decide not to exercise our opt-out rights, we will be required to share in global development costs of up to certain amounts at a specified cap, as provided for in the Lilly Agreement.

We are responsible for performing and funding initial discovery and identification of CNS disease development candidates. Following candidate selection, Lilly will be responsible for performing and funding all future development and commercialization of the CNS disease development candidates.

Under the terms of the license agreement, we were entitled to receive a non-refundable and non-creditable upfront cash payment amounting to $125.0 million, which we received in April 2021. We are also entitled to additional milestone payments for non-CNS disease products consisting of up to $330.0 million in milestone payments upon the achievement of specified development, regulatory and commercial milestones, and up to $100.0 million in sales milestone payments on a product-by-product basis. In addition, depending on the extent of our co-funding of R552 development activities, we would be entitled to receive tiered royalty payments on net sales of non-CNS disease products at percentages ranging from the mid-single digits to high-teens, subject to certain standard reductions and offsets. We are also eligible to receive milestone payments for CNS disease products consisting of up to