RIGL

Rigel has quietly transformed from a perennial cash-burner into a profitable, cash-generative specialty pharma. The MD&A shows three FDA-approved commercial products — TAVALISSE (oral SYK inhibitor for chronic ITP), REZLIDHIA (R/R AML, IDH1) and newly launched GAVRETO (RET fusion NSCLC/thyroid) — driving product sales of $232.0M plus $62.0M of collaboration revenue, for total revenue of $294M (+64.1% YoY). Operating income reached $125M at a 42.6% operating margin and operating cash flow was positive $75.7M. This is the second straight profitable year (net income swung positive in FY2024 at $17.5M), so the turnaround is not a single-quarter fluke. Leverage is modest (liabilities/equity 0.31x, long-term debt $52.5M) and current assets cover current liabilities 2.4x.

The headline valuation looks absurdly cheap — P/E of 2.0 on $19.48 diluted EPS — but that number is a trap and should not anchor the call. Net income of $367M exceeds total revenue (net margin 124.7%) and sits $242M above operating income of $125M; with an accumulated deficit still at -$1.02B, this gap is overwhelmingly a non-cash deferred-tax-asset benefit from finally being able to use prior NOLs, not repeatable operating earnings. Strip that out and the durable earnings power is roughly the $125M operating line (~$6.75/share pre-tax, shielded by NOLs), putting the $715M market cap at ~5-6x operating profit and 2.4x sales. For a de-risked, profitable, growing commercial platform that is still cheap, even after normalizing out the tax windfall.