Greetings, and welcome to the Incyte Corporation 4th Quarter Year End 2020 Earnings Conference Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mike Booth, Head of Investor Relations. Please go ahead.
Thank you, Kevin. Good morning, and welcome to Incyte's 4th quarter and full year 2020 earnings conference call and webcast. The slides used today are available for download on the Investors section of insight.com. I am joined on the call today by Herve, Barry, Steven and Christiana, who will deliver our prepared remarks and by Dash, who will join us for the Q and A session. During the question and answer session, I ask that you limit yourself to one question And if needed, one follow-up, as this will enable as many of you to ask questions as time allows.
Before we begin, I'd like to remind you that some of the statements made during our call Today are forward looking statements, including statements regarding our expectations for 2021, including our financial guidance, the commercialization of our products and our development plans for the compounds in our pipeline as well as the development plans of our collaboration partners. These forward looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our 10 Q for the quarter ended September 30, 2020, and from time to time in our other SEC documents. We'll now begin the call with Herve.
Thank you, Mike, and good morning, everyone. So 2020 was a year of strong growth for product commercialized by Incyte and Commercialized by our collaboration partners. Total product and royalty revenues grew 18% Fueled by continued growth demand for Jakafi, which grew 15% year over year and revenue from other hematology and oncology product was up The launch of Monjuvie is progressing well as we continue to observe market share gains. Royalties were up 28% to nearly $400,000,000 with Jakavi up 23%, Olumiant up 38% and the launch of Tabreca now contributing to our royalty revenues. We also received over $200,000,000 in milestone payments during 2020 resulting in an increase of 24% in total revenues year over year.
Turning to Slide 5. In 2020, we presented positive data from several pivotal trials and submitted several regulatory filing And we expect to have decision on all of these during this year. These decisions include the potential FDA approval of Jakafi in chronic GvHD, Retifenlimab in squamous cell and larcinoma, tafacitamab in DLBCL in Europe and pemigatinib for cholangiocarcinoma in Japan and Europe, where we recently obtained a positive CHMP opinion. We are also just a few months away from the potential approval of roxolitinib
Thank you, Herve, and good morning, everyone. Jakafi performance was excellent in 2020 with revenues growing over $250,000,000 to reach $1,940,000,000 The demand for Jakafi remains high with the total number of patients being treated continuing to grow across all three indications. We are also encouraged by the partial recovery of new patient starts in the 3rd Q4 of 2020. For 2021, we expect strong Jakafi growth as we reach a normalization of oncology visits with a broader availability of COVID-nineteen vaccines. The potential approval of Jakafi and steroid refractory Chronic GVHD would represent its 4th indication and an additional important growth driver.
The range of Jack5 guidance we have provided today for 2021, a $2,125,000,000 to 2,200,000,000 reflects the ongoing impact of COVID-nineteen, especially in the first half of the year, as well as the expected increase in the gross to net adjustment with the largest impact coming in the Q1. Turning to Slide 8. The launch of Pembozir has gone quite well as we have been able to capitalize on our relationships and experience in oncology. Since launch, over 300 physicians have prescribed Pemazir. As expected, community based oncologists are driving adoption and testing patients for FGFR2 alterations is going smoothly.
Given the refill rate, we know that appropriate patients are being identified and are being treated with Pemazir. And it is very gratifying to know that we have been able to bring this much needed therapy to a previously underserved patient population. The launch of MONJUVI is progressing well. Sales in the 4th quarter reached $17,000,000 versus $5,000,000 in Q3. We believe the strong safety and efficacy profile of MONJUVY is resonating with physicians.
And as expected, we are seeing good utilization in the community setting. Since our Q3 update, The number of accounts purchasing MANJUVY has more than doubled to over 400. And we are also seeing good uptake from the vast majority of our top 100 key accounts. According to market research in BMT ineligible diffuse large B cell lymphoma patients, the MONJUVI LEN regimen is the most used treatment in the second line plus patient population. Turning to Slide 10.
We submitted the NDA for ruxolitinib Cream for atopic dermatitis in December last year, and we expect a regulatory decision mid year. There are an estimated 21,000,000 atopic dermatitis patients aged 12 and above in the United States, of which approximately 5,500,000 received prescription therapy today. The number of prescriptions for the treatment of atopic dermatitis has grown significantly in recent years as new therapies are introduced. However, only approximately 20% of patients report their atopic dermatitis is controlled with their current treatment, highlighting the significant unmet need that currently exist. We expect the initial uptake of ruxolitinib cream to be driven by specialists in medical dermatology and allergy.
Our team has identified approximately 11,000 high prescribers who collectively account for approximately 80% of total prescriptions written for the treatment of atopic dermatitis in the U. S. Over the past several months, we have been able to recruit an exceptional team with significant experience in successfully launching dermatology products in the United States. We expect a fully recruited field team of 150 FT feet feet feet feet feet feet feet
feet feet feet feet feet feet
feet feet feet feet feet feet feet Es by mid April, which is optimal to reach these high volume prescribers. I'll now turn the call over to Stephen
for a clinical update. Thanks, Barry, and good morning, everyone. In 2020, we made significant progress Across our development pipeline, as shown on Slide 12, some highlights include positive results from our pivotal trials of ruxolitinib In chronic graft versus host disease, ruxolitinib Cream in atopic dermatitis, redifanumab in squamous cell anal carcinoma and paciclusive in non Hodgkin's lymphomas, with each study forming the basis for regulatory submissions in their respective indications. We also announced multiple product approval, including Pembazire and MONJUVIA in United States and Tabrecta in United States and Japan, and a new indication for Olumiant in atopic dermatitis in both Europe and Japan. We also recently announced the positive CHMP opinion for As you can see on Slide 13, we are expecting multiple regulatory actions during 2021 with 7 expected approvals and 6 additional submissions during the year.
For ruxolitinib, we expect an FDA decision for Jakafi In chronic graft versus host disease and our partner Novartis is expected to submit Jakavi for acute and chronic graft versus host disease in both the EU and Japan during the first half of twenty twenty one. Within hematology and oncology, we await an EMA decision tafasitamab in diffuse large B cell lymphoma and an FDA decision for radifanumab in squamous cell anal carcinoma. We expect pemigatinib to receive European approval in cholangiocarcinoma following the recent positive CHMP opinion. We also have a submission under review in Japan. Later this year, we plan to submit an NDA for parciclusive monotherapy in non Hodgkin's lymphoma based on the pivotal Citadel trials.
Within dermatology, we expect an FDA decision for ruxolitinib in atopic dermatitis in June and we look to submit an sNDA in Vitiligo shortly thereafter, assuming our Phase 3 program in this indication is As you can see, it is shaping to be a very eventful and exciting year ahead for Incyte in terms of clinical development and regulatory action. Slide 14 provides a brief overview of the Limba clinical development program. Once daily ruxolitinib is the furthest along with potential FDA approval before the end of 2022. We have multiple combinations planned and in development With PI3 kinase delta, bet or ELK2, which we believe have the potential to significantly improve outcomes for patients living with myelofibrosis. As you can see on the right hand side, we expect the patent protection for many of these novel assets to extend well into the 2030s.
Moving to Slide 15. This year with our partner MorphoSys, we intend to initiate 2 Phase 3 trials. FrontMind is expected to enroll approximately 900 patients and will evaluate the combination of tafasitamab plus lenalidomide and R CHOP versus R CHOP alone in first line diffuse large B cell lymphoma. In mind is expected to enroll approximately 600 And we'll assess the combination of tapacitumab plus R2 versus R2 in patients with relapsed or refractory follicular or marginal zone lymphoma. We also plan on initiating 2 proof of concept trials in non Hodgkin's lymphoma, Investigating tafasitamab in combination with our own PI3 kinase delta inhibitor, parceclisib, and in combination with lenalidomide and plamotumab, CD20, CD3 bispecific antibody.
Moving to Slide 16. We recently announced the acceptance under priority review of the BLA for retifanumab. The BLA was submitted based on the results Podium-two zero two, data from which was shared at the ESMO Congress last year and the PDUFA date has been set at July 25. We've also been informed that the FDA expects to convene an advisory committee meeting as part of the review process. This slide also gives me an opportunity to remind you of our development strategy for ritafanumab.
The first part of the strategy is Beyond squamous cell anal carcinoma are ongoing in Merkel cell carcinoma and MSA high endometrial cancer. We also have an ongoing global Phase 3 study in lung cancer, which of course offers a much more substantial potential opportunity. A key part of our development strategy is related to the utility of having an in house PD-one antibody, which gives us the option to run numerous internal clinical combinations with other assets within our immuno oncology portfolio, including AxlMir and adenosine 2A2B, where there's potential for synergistic With that, I would like to turn the call over to Christiana for the financial update.
Thank you, Stephen, and good morning, everyone. Turning now to our financial results. Our 4th quarter results reflect continued strong revenue growth With total product royalty revenues of $680,000,000 representing an increase of 17% over the Q4 of 2019 and reflecting growth across products commercialized by Incyte and by our partners. Total product and royalty revenues for Quarter are comprised of net product revenues of $517,000,000 for Jakafi, dollars 29,000,000 for Iclusig and $14,000,000 Royalties from Novartis of $87,000,000 for Jakavi and $2,000,000 for Cabreca And royalties from Lilly of $31,000,000 for Olumiant. For the full year 2020, total product and royalty revenues were 2 point $46,000,000,000 an increase of 18% over 2019.
Total revenues for 2020 of 2 point 6 $7,000,000,000 increased 24% over 2019, reflecting the higher product and royalty revenues and an increase in milestone payments from our collaborative partners for the achievement of development, regulatory and commercial milestone. Moving on to our operating expenses on a GAAP basis. Ongoing R and D expenses of $380,000,000 for the 4th quarter increased 23% from the prior year period due to our 55% share of the global and U. S. Of ruxolitinib Cream as a treatment for atopic dermatitis.
Ongoing R and D expense for the full year 2020 of $1,240,000,000 increased by 10% over 2019, also driven by the impact of our 55% If ruxolitinib Cream is approved, the product supply cost expensed in 2020 will ultimately contribute to lower cost of goods sold for a period of time subsequent to the product launch. As a reminder, our total R and D expense of $2,200,000,000 $120,000,000 of expense related to our purchase of an FDA priority review voucher utilized to accelerate the review of raxolitinib Cream in atopic dermatitis. SG and A expense for the Q4 of $167,000,000 increased 23% from the prior year period due to the timing of certain expenses. For the full year 2020, SG and A expense grew 10% compared to 2019 driven by an increase in sales and marketing spend to support the commercialization of Pemazir in the U. S.
And to prepare for the potential launch of Ruxcream in the U. S. Our collaboration loss for the quarter was $12,000,000 which represents our 50% share of U. S. Net commercialization loss for MONJUVY.
For the full year 2020, the total collaboration loss was $43,000,000 and was comprised of total net product revenues of $22,000,000 and total operating expenses including COGS and SG and A expenses of $107,000,000 Finally, we ended the year with $1,800,000,000 in cash and marketable securities. Looking at the evolution of our P and L offer over the past 5 years, you can see how the growth in our product and royalty revenues has exceeded The growth in both our ongoing R and D expense and SG and A expense leading to increased operating leverage and reflecting our commitment to prudent management of our financial resources. Moving on to 2021, I will now discuss the key components of our 2021 guidance on a GAAP basis. Given the expansion of our commercial portfolio, we are providing 2021 net product revenue guidance for Jakafi And as a total for other hematology oncology products. For Jakafi, we expect net product revenues to be in the range of 2 point $125,000,000,000 to $2,200,000,000 which at the midpoint represents approximately 18% with the adjustment in the Q1 of the year being higher relative to the previous quarter and subsequent quarters.
For other hematology oncology products, which currently include Iclusig in Europe and Pemazir in the U. S, we are Excluding total net product revenues to be in the range of $145,000,000 to $160,000,000 As in previous We're not providing guidance for milestone or royalty revenues. We are also not providing revenue guidance for any potential new product launches during 2021 or for MONJUVY in the U. S, which was recently launched and which we are commercializing together with our partner MorphoSys. Turning to operating expenses, we expect COGS to range from 6% to 7% of net product revenues.
We expect R and D expense to be in the range of $1,350,000,000 to $1,390,000,000 representing mid single digit growth at the midpoint versus 2020, excluding the impact of the Mophosys upfront consideration and the PRV in 2020. Our SG and A expense guidance includes the investment related to the establishment of the new dermatology commercial organization in the U. S. And the related sales and marketing activities to support the potential launch of axolitinib Cream for atopic dermatitis, The expansion of our sales and marketing activities in Europe to support the potential launches of pemigatinib for phalangeocarcinoma and tafacitamab for DLBCL and the establishment of a commercial organization in Japan to support the potential launch of pemigatinib for calendula carcinoma. As a result, in 2021, we expect GAAP SG and A expense for the year to be in the range of $735,000,000 to $775,000,000 Excluding the impact of these investments, we expect our SG and A expense for 2021 to remain flat compared to 2020.
I will now turn the call back to Herve for further discussions of the year ahead.
Thank you, Cristiana. Slide 24 Provide a list of the important updates we expect in 2021. This include pivotal trial results for ruxolitinib Cream in Vitiligo as well as the approvals for ruxolitinib cream in atopic dermatitis, wetifundumab in SCSE and Jakafi in chronic GVHD. So before moving into Q and A, I want to take a minute to let you all know that Mike Booth We'll be leaving Incyte at the end of the month ahead of his planned return to the U. K.
Mike's role as Head of IR at Incyte We'll move to Christine Cho, who joined us in 2019 and who has been working very closely with Mike as part of a planned transition. I want to take this opportunity to thank Mike very much for all of his contribution to Incyte over the past 7 years, And we all wish him well in his future endeavor. With that operator, please give your instruction and open the line for Q and A.
Certainly, we'll now be conducting a question and answer session. One moment please while we poll for questions. Our first question today is coming from Vikram Pareet from Morgan Stanley. Your line is now live.
Great. Good morning. Thanks for taking my question. So I wanted to touch on the dermatology franchise. And I had two questions for RUXKRYM in advance of the Phase III Vitiligo data that we're going to be getting over the next couple of months here.
So first, could you characterize for us any key differences between the Phase 2 and the Phase 3 patient populations that you're looking at for Vitiligo? And then second, how should we think about which portion of the Vitiligo patient population that RUXCREEN could be most suitable for? How are you thinking about segmenting this patient population? And where do you think RUX Creme is going to be most valuable?
Vikram, hi, it's Steven. I'll take your question. In terms of the question on the translatability of the Phase 2 to the Phase 3, given the magnitude of the size of the Phase 2, the geography we conducted it in and the eligibility criteria, we actually expect it To be no differences in population or in outcome, we expect the read in the Phase 3 to be of similar efficacy magnitude To the Phase 2 and the safety to be the same, I'll just the one nuance on the difference is we, in Phase 3, Limit the body surface area of Vitiligo patients with depigmentation to be up to and including 10%, Whereas in the Phase 2, we're a little more liberal and allowed up to 20%. But that is the only difference. We expect no other in outcome and in read through of the population.
In terms of Vitiligo itself, It's probably a much more common disease than everybody realizes. If you look at the United States, there are several million Sufferers with Vitiligo, not all of them view it as a disease and not all of them want treatment. But currently given the available therapies, About 100,000 to 150,000 people we estimate seek different treatments, including steroids, Phototherapy, which is reimbursed as well and not they're not very effective in terms of Ameliorating the disease and improving it and nothing to the degree we saw in the Phase 2 with topical rux. There's also, as you know, a large Expect to work in the same population as the Phase 2, it will include the majority of sufferers with Vitiligo, particularly on the face and hands. And that's the label we'll aim for should the Phase 3 be as positive as we expect it to be.
Thanks.
Got it. Thank you.
Thank you. Our next question is coming from Michael Schmidt from Guggenheim. Your line is now live.
Hey guys, good morning. Thanks for taking my questions. I had a few on the ruxolitinib Cream launch coming up here as well. Maybe could you help us understand how far in are you with your launch prep in AD, especially when it comes interactions with payers around pricing and market access. And my follow-up question would be, in context of the recent post safety data emerging from Celgene.
So I was wondering how you think this may potentially affect utilization of oral JAK inhibitors more broadly and across indications and how that might position ruxolitinib Cream and NAD in that context? Thanks so much.
Michael, it's Barry. I'll take the first part
of your question and I'll hand it over to Stephen for the second part of your question. But as far as the preparation goes for the launch, It's going very well. We started off at Incyte with an excellent clinical development team that's very experienced in dermatology and immunology. We built a medical affairs team in the U. S.
That's outstanding and has deep experience in dermatology and immunology. Now we're building out the sales force and we built out an excellent market access team, again, that has Deep experience in immunology and dermatology, we have had interactions with payers across with the payers in the very near future. So we think the launch is preparation is right on schedule. Stephen? Yes, Michael, thanks for the question.
Given
the XELJAN's noninferiority data look Versus TNF therapy, particularly in RA patients, particularly looking at venous thromboembolism, malignancy and then major adverse Cardiac events, you asked a question on the read through to RUX itself and then I guess potentially to topical RUX. We've been with RUX on the market since 2011. So we have many, many 1000 years of patient exposure, Including with our partner Novartis, as well as long term follow-up on our clinical trial programs. So let me just talk little bit about the clinical trial programs. If you look at the COMFORT data in MF, now with In the 5 years of follow-up on those studies, there's been no signal for any of those events that are worrying in that particular exposure.
In polycythemavira, the response studies that is a pro thrombotic disease also now have 5 years of published follow-up We've looked across the board at thromboembolic events, cardiac events and malignancies there. And in fact, on the treated arms, The rates are lower in both the primary treated arm, the crossover arm versus the best available therapy arms there. So in keeping as well with our market experience that we're not seeing a signal for any of those events as we asked to on a yearly basis by regulatory authorities. And just to remind you, Rux Cream has no warnings or black box for any of these. Topical Rux itself, as we have in 2 published papers now, 1 in AD and 1 in Vitiligo, Showing that the bioavailability of the cream is about 4% to 7% of that applied, on average about 5%.
So and those are 2 published papers, 1 in AD and 1 in Vitiligo. And thus, the effect of Oral exposure there is very small and not at pharmacologically relevant concentrations. So given the parent compound itself not having an issue, Rex cream having that sort of bioavailability and now our safety from those clinical programs, we don't expect any read through there at
the moment. Great. Thank you.
Thank you. Our next question today is coming from Cory Kasimov from JPMorgan. Your line is now live.
Hey, good morning guys. Thanks for taking my question. I'll stick with the same line of questioning here on RuxCreme. And Barry, wanted to follow-up with I bound your comments on the pending launch for AD. And just given everything you've said so far, what do you see as the key impediments in this kind of market introduction?
How should we be thinking about the heavy lifting required here versus perhaps some of that potentially low hanging fruit you could relatively quickly capture given The data, the mode of administration and the number of patients who just aren't benefiting from existing meds. Thank you.
Hi, Corey. Well, as far as impediments go, I don't really see very many impediments. We've actually we think we're really in a very good We think we really can help patients with mild to moderate eczema, atopic dermatitis, from steroids all the way up to Dupixent to biologics. So we think that there is a Broad range of patients who will be very happy to use a cream like RUX cream as opposed to using systemic therapy that may in fact suppress their immune system in general. So we're very excited about it.
We know that in talking to dermatologists across the country that when they look at the data from TRU AD1 and TRU AD2, they're very excited. They've never seen anything like this that has Targeted that is a targeted therapy that's topical that has biologic like activity. So we think that the safety And efficacy we've demonstrated so far in TRUAD1 and TRUAD2 is going to help the uptake in patients throughout the United States.
Great. Thank you very much.
Next question is coming from Kripa Dela from Truist. Your line is now live.
Hey guys, thank you so much for taking my question. Staying on rux cream, I was wondering what sort of conversations have you had around the NDA that you filed with the FDA following your submissions. Have you had any further conversations? And also can you talk about your Strategy for RUX Creme in pediatric populations, can we expect it to be similar between atopic derm and vitiligo? Thank you.
Kripa, hi, it's Steven. Thanks for your question. We don't Talk in detail about any ongoing conversations with regulatory authorities, but I will tell you, as we've said publicly, The submission went in successfully in December. We utilized a priority review voucher that will give us a 6 month review and we expect an action in the middle of the year on that. Given that it's now early February, it's So early days of that submission and review, and it's going exactly as expected.
It's in 12 years and above the TRU AD studies, which covers the majority of the population Barry was talking about with atopic dermatitis. However, there is a population that is younger that does also have atopic dermatitis and we have a commitment to continue to study that. We have to do more safety enabling work in the pediatric population to enable those studies to look for example, is there any bone effect, As you look at young ages and we've got through those hurdles successfully and we'll determine this calendar year Given that the Phase 2 is successfully completed, what sort of Phase 3s we'll be conducting in conjunction with regulatory authorities to address that population 2 years and above and conduct those studies. And we'll let you know as soon as we have those studies in place, but it's going well.
Great. Thank you.
Thank you. Our next question today is coming from Brian Abrahams from RBC Capital Markets. Your line is now live.
Hey guys, thanks so much for taking my question. First off, I just want to thank Mike for all his help throughout the years and wish him well at his next endeavor Congratulations to Christine. Maybe shifting gears to MONJUVY. I'm curious if you could talk a little bit more about How that's being used in the real world, in particular, where it's sitting in relative to CAR T and what you may look towards to further the reach In academic settings where I would imagine cell therapy and investigational treatments like bispecifics are more available in addition to The community setting, how important that's going to be to continue the current uptake momentum? Thanks.
Sure, Brian. Well, the uptake of MINJUVY, like I said, is going very well in the second line plus patient population. Like any new therapy that launches, you end up starting in later line therapies, 3rd and 4th line therapies, for example, and we continue to Try to move patients try to move physicians up into the second line setting, because we think that's Our uptake at launch was mostly in the academic centers And we do follow the academic centers that actually have CAR T therapies available to them and we're actually doing very well. Patients who are referred to academic centers for Sometimes get there and they're actually not eligible for CAR T therapy, so then they need another therapy To choose, as we progressed with our launch, more and more of the community oncologists are taking up MONJUVY and that surpassing number of patients who are being treated in the academic center, but we still have Some of the largest centers in the country that are using this regimen of MONJUVY and LEN. As far as By specifics, Goh, we don't know that that's a problem necessarily yet.
And in fact, we think that the Safety and efficacy profile of MINJUVY will match up very well to any of the new therapies that might be coming Next year, as far as the CAR T therapies go again, physicians will choose their patient population Based upon their ability to tolerate the side effects of the CAR T therapy, so generally, it might be younger patients Who are healthy, that they might select for those therapies, but again, that's a limited number of centers around the country. So we think that MANJUVY
Thank you. Our next question is coming from Tyler Van Buren from Piper Sandler. Your line is now live.
Hey, guys. Good morning. Thanks for taking the question. Just had another one on JUVY. You've talked about the successful launch and the uptake in the academic Community settings and market share gains.
So curious to hear your latest thoughts and if you believe MINJUVIA could be a $1,000,000,000 product in the existing indication or So just curious to hear if that was like a deliberate deprioritization of what's going on there?
So Tyler, I'll just take the first part of
your question and hand it over to Stephen about B MIND. But what we said several times in the past is that in the current indication, MANJUVY could reach $500,000,000 to $750,000,000 and we'll as we continue to Develop more combinations and move up to frontline setting and that's $500,000,000 to $750,000,000 in the U. S. By the way. So anyway, that's where we're at.
And I'll hand it over to Stephen for Bmind.
Just a word, If you look at the worldwide sales for Monjie in 2nd line DLBCL, assuming it's €500,000,000 to €750,000,000 in the U. S, it will be Around $1,000,000,000 or north of that for the world.
Tyler, hi, it's Steven. In Your question on B MIND, just that it's an ongoing study. There are no changes to it and there were no news updates. It's A very relevant study, it's comparing to bendamustine rituximab, which is a regimen used in that particular setting And studying the utility then of a CD19 antibody in tafasitamab there. We hopefully will have data on that study if the events track as expected in 2022, but not just that it had nothing new to report.
Great. Thanks so much.
Thank you. Our next question today is coming from Alethia Young from Cantor Fitzgerald. Your line is now live.
Hey guys. Thanks for taking my question. And also my congrats on being one of the greatest IRs out there in the biotech field and Keeping us in check. I did want to ask 2 questions. 1, just about your thoughts on your PI3 kinase with the approval of TG Therapeutics yesterday And how do you think about positioning in that market after them?
And then also I just wanted to get kind of your perspective on the adenosine Access of the CD73 PD-one combination, is that something that you would use in non small cell as a potential option? Or how do you think about like non small cell combinations with your PD-one? Thanks.
Alethia, hi, it's Steven. Thanks for the question. I think the umbralisib approval from TG Therapeutics is good for patients. Obviously, we are believers in the PI3 kinase delta class. We think it has somewhat of a Unfair overhang from IDA list of years ago and that many have now addressed many of the untoward side effects.
So we view that as a positive outcome. It doesn't in any way impact our plans in terms of where we're going with the Citadel studies and the filings this year, Hopefully in follicular marginal and mantle cell lymphoma. If you look on the face of it with many, many caveats on cross trial comparisons, But our independently reviewed activity in all those indications follicular marginal and mantle cell is higher than that with drugs like umbralisib, again with lots of caveats. So we're very encouraged by the efficacy we've seen with And obviously, we are proceeding with our plans. Torrability is important as well.
And obviously, we looked at their label and their discontinuations And we again think the class has been somewhat unfairly burdened by prior products. We like our both our efficacy and safety profile and we see again to be repetitive, no impact. In terms of switching to earlier programs, you spoke about adenosine and the adenosine targeted compounds. We have 1 in the clinic already, a small molecule A2A, A2B inhibitor that's open and enrolling that we announced at JP Morgan. We also said we'll be following very shortly with a CD73 antibody that will inhibit adenosine production higher up in the pathway.
And Herve showed in his presentation that the 2 together, at least in a preclinical model, are synergistic. We also feel that this is potentially an area where you may require triplet therapy and you'll have to add checkpoint on top of it PD-one. It's too early to say Where these will be going in terms of histology, lung would always be of interest, particularly In lung patients that don't respond to current IO therapies, so that will remain of interest. I'll just remind you also that Both the adenosine program and the CD73 antibody are in house programs, and we're very, very proud of them. Thanks.
Thank you. Our next question today is coming from Tazeen Ahmad from of America, your line is now
live. Hi, good morning. Thanks for taking my questions. As you approach the RUPS I just wanted to get a little bit more color on how you're thinking about how the gross margin for RUX cream, let's start with Atopic derm might differ from the gross margins that you see for Jakafi. And then I have a quick follow-up.
So hi, Tasin, this is Cristiana. In terms of The COGS for RuxCreme, the guidance that we provided on COGS is 6% to 7% That reflects Rux Cream as well. In the near term, as we indicated, we have been dealing on the supply of API for AgScream and that would result in COGS being lower as We use up the supply that we have already expensed in 2020 and which was reflected under R and D.
Okay. So would you expect that once you have a second indication that that COGS would continue to improve?
So the COGS that we have the COGS benefit from the API that we have already expensed will take place over a period of time starting with the launch and then obviously we'll go back to more normalized levels. So we will actually we use what has already been expensed, it would be reflected in lower COGS.
Okay. And then as it relates to how physicians are viewing RUX CREAM now just Where the benefits of RUX CREAM might be?
Hi, Tien Tsin, it's Barry. I'll try to handle that. Well, I think as I said before that the physicians we've spoken to and there's many across the country, All the dermatologists see the TRU AD1 and TRU AD2 data as really something unique. They really like So, Eucrisa had some disadvantages to it when it launched. Certainly, It actually burns on application and doesn't seem to be that effective.
The side effect profile is pretty good, but I think Physicians dermatologists have turned away from it and they're very excited about what they see so far from RUX cream.
And so Barry, if it does get approved, do you think that it would have a steep uptick or do you think there still would need to be some physician education initially?
Well, there's always physician education that's necessary as well as perhaps patient education, but we think that the uptake is going to be go very well.
Okay. Thank you.
Thank you. Next question is coming from Salveen Richter from Goldman Sachs. Your line is now live.
Good morning. Thanks for taking my questions. Could you remind us where the QD formulation of Jakafi And then, Herve, if you could just give us your kind of updated thoughts on business development
Sylvain, hi, it's Steven. I'll start. The once daily formulation of ruxolitinib continues to go well. The bioavailability and bioequivalence work is being completed. We're now in stability and we need 12 months of stability to complete to then put the submission in.
We would expect a 10 month Review from that and thus expect an approval before the end of 2022 if everything goes smoothly. We are within everything expected in terms of the strict guidance required on BABE. So we're hopeful this will be a successful
So, Fabienne, regarding BD, in fact, looking at what we did this year In 2020 last year is a good way maybe to see what we are how we are approaching the We had a deal like MorphoSys where it was very complementary with our portfolio. You can We have combinations that we are doing now with partaklizib. There are a lot of synergies on the commercial side, both in Europe And in the U. S, so if there are opportunities looking like that, I think it will certainly be Interesting to us to continue to grow our revenue line and to diversify, so that would be One aspect, we also did a technology deal with a company called CELENCOs, and that was About myelofibrosis, so you can imagine also that we are looking at opportunities that we'll be adding to our internal portfolio As part of the Limber program and in general, the way we are thinking about it is if there are products That could be available that would be fitting with our hematology oncology portfolio that would be the priority. And if there were opportunities that are also providing additional Revenue to our dermatology team in the U.
S, it could be also something that we look, but mostly on a different time lines as we will be launching first Atopic dermatitis this year and then Vitiligo next year, so there is no urgency to add to that in the short term. So I would say it's In the short term, hematology oncology, maybe over a longer period of time, we could be looking at immuno Dermatology and the type of assets we are looking at are products that we'll be launching between 20232026.
Thank you.
Thank you. Our next question today is coming from Mara Goldstein from Mizuho. Your line is now live.
Yes. Thanks so much for taking the question. Just a follow-up perhaps on RUX Cream and just trying to understand a little bit around the dynamics of launches. As most derm products are associated with some type of support, couponing program and the like. And so I'm curious as to what your thoughts are on that.
And also one of the areas that the company hasn't touched on in a while is Jakafi in PV and some of the efforts Pre COVID to enhance that patient population. I'm wondering if you could touch on that as well.
Sure, Maher. I'll try to answer both of those on RuxiCream and then on Jakafi in TV. So we have plans in place just Like many products that you see particularly in dermatology, but throughout the United States for newly launched products, where that it's as easy as possible for the patient to obtain it. So that begins first with market access, working with PBMs and payers to make sure that there is as few restrictions as possible, as few prior approvals as possible. And then once we get to the pharmacy counter As far as Jakavi goes, Jakavi continues to Jakavi in PD goes, Jakavi continues to grow in PD Faster than it does in MF and even though MF continues to grow, the total number of patients continues to grow.
I suppose our biggest activity that we're doing In PV, well, is first talking about the long term follow-up of the response studies, which are very, very important. Over time, the data Continued to get more impressive and look better, but also we had our disease awareness campaigns around polycythemia vera and the number of patients who are suffering because of the symptoms that they undergo when they're getting PV. So we're very encouraged about the future of Jakafi in polycythemia vera as well as our other indications. But as you indicated, it's a pressing need for those patients to make sure that they have the most effective therapy to take care of
Thank you. Our next question is coming from Mark Frahm from Cowen and Company. Your line is now live.
Hi, thanks for taking my questions and let me offer my congratulations also to Mike to next step in his career. Maybe Barry with Vitiligo and your comments and Stephen's comments, there certainly are People who do get reimbursed today for off label use of various products. But we also hear from consultants that a number of plans Consider this to be a cosmetic indication. I guess, Barry, what's your sense as to kind of what percent of the relevant population Already has this covered and recognized by their plan as a true medical in a reimbursable condition? And then kind of what efforts do you need to do between now and launch to grow that number?
Well, Max, I can I'll tell you what number are currently covered for therapies because there aren't very many therapies. Stephen talked about phototherapy. That's one way. Other topical therapies may or may not be reimbursed, but I think it's Stephen talked about The millions of patients in the United States, somewhere between 2,400,000 patients that have vitiligo, but maybe only 150,000 to 200,000 patients are seeking therapy. And that's because in fact there aren't very many effective therapies.
We do have to continue to educate both payers. I don't think we really have to educate dermatologists very much. Dermatologists know that this is an autoimmune disease that drastically impacts patients' lives. So having a therapy like RUX cream for vitiligo, we think can greatly enhance the Quality of life for those patients and it's essential upon us to educate payers that this is not A cosmetic issue that is an autoimmune disease and that the responsible thing is actually to pay for it.
Are there some kind of similar launches that happened historically that you might do that have kind of faced the same type of dynamic?
Well, that comes to mind. So, I think there's lots of diseases that we come across that haven't had payers wanting To pick it up, you might even say eczema, for example, when older products were launching, they might have thought that this is Something that's not important, but in fact, it impacts patients' lives very much, where they don't want to go out of the house and where they're Suffering, not just itching and staying awake at night, but, of course, even bleeding and infections. So that's one example. I'm sure there's many other examples where education of payers and prescribers is very important. We think that is It's a LIGO, but we think that we can manage to overcome that hurdle.
Okay, great. Thank you.
Thank you. Next question is coming from Evan Seigerman from Credit Suisse. Your line is now live.
Hi, all. Thank you for taking my question. I just want a Quick shout out to Mike for everything over the past couple of years. You will be missed. So I wanted to ask on the Limber program.
While it might be early, Can you characterize kind of maybe some demand or feedback you've gotten on the QD rux option among both physicians and patients? And what do physicians really want to see from this QD formulation in terms of efficacy to potentially switch patients from the current on Jakavi?
Okay. Evan, hi. Thank you. It's Steven. I'll start.
Others may want to add comments. The Limba program itself is an umbrella program, has numerous pillars. The formulation work was one of the pillars. Obviously, once daily has potential compliance improvement Twice daily, although in oncology, people tend to do very well with Twice daily, but that was one of the efforts behind it Those combinations should we develop, for example, PI3 Delta or BETA or ALK2 as a once daily, it could lend itself to be combined with a once daily ruxolitinib in one FTC. So that would be really, really important from that.
After we pursue the 505 route through bioavailability and bioequivalents, finish the stability file and hopefully have it approved at the end of 2022, We could look at things that may be slight differences in the clinical profile of the once daily. For example, just by its very nature from a pharmacokinetic point of view, it will have a lower peak, a lower Cmax. If that is one of the causes of anemia from the drug, which we think it is, it may tend to have a lower rate of anemia with The once daily, which would be of benefit in MF patients because that's one of the reasons they discontinue and then allow patients Stay on drug longer and as a direct result actually enhance efficacy as well. So there are lots of aspects to the program. It's stepwise.
It's about getting approval first, which may lend itself to compliance, optionality on fixed dose combinations And potentially an upside on ameliorating anemia. Thanks. Excellent. Thank you.
Thank you. Ladies and gentlemen, we have time for 2 more questions. Our next question is coming from Ren Benjamin from JMP Securities. Your line is now live.
Hey, good morning guys. Thanks for taking the questions. Congratulations on an amazing quarter and great guidance and congrats Mike as well. Maybe just starting off the Limber program, this is probably for Steven. Can you just talk a little bit about these 2 Phase 3 trials that are Going maybe the timing as to when we might see readouts and how the optimal dosing was determined for both roxsen and parcelicofib.
And maybe just as a follow-up, Herve mentioned Faluncos. I'm just kind of curious What was the rationale to lead to this collaboration? Is there an unmet need that this collaboration seeks to address or is it more just trying to find a best response rate in
NPNs?
Yes, Ren, it's Steven. Thanks for your questions. So again, back to the Limba program, we just spoke about in the prior question about the first pillar around formulation work. The second pillar is around important combination work with combinations that either enhance efficacy or enhance safety like the ELK II or both because you ameliorate anemia with ELK II and you can stay on rugs. The Delta program that you alluded to has 2 very important Phase 3s that are open site initiations ongoing now.
1 is a Suboptimal setting for patients who have had at least 3 months of ruxolitinib, But I've not had an adequate response in terms of spleen or symptom control and are then randomized to rux Plus delta in that setting PR3 delta versus RUX alone. The dosing as because you asked the question specifically is for RUX itself. Obviously, we know optimal dosing and how to titrate based on potential safety issues like thrombocytopenia. The delta dosing came from proof of concept work we did in prior patients who had inadequate And that's how we determined that the 5 milligram was active there as well as had a tolerable profile and that's what we're using in both the suboptimal study and the first line study, which are now open and site initiations ongoing. In terms of selling costs, It's a completely new mechanism of action.
It's there's some enticing small clinical anecdotes. It's umbilical cord Derived regulatory T cells that they have a way to enrich for CXCR 4, which are then regulatory T cells that would then hone to the bone marrow. And they It's shown in a small number of patients who are heavily pretreated, some enticing data of clinical response Drop in allele burden and maybe even some fibrosis improvement. It's very early. We like the way the deal Because we go in with a small upfront, we finance the proof of concept work and then we have the option to take it up.
And we really it's exciting. It's an off the shelf umbilical cord with a completely new MOA. So that's the drivers behind that one. Thanks.
Thanks for taking the questions.
Thank you. Our final question today is coming from Jay Olson from Oppenheimer. Your line is now live.
Hey, thanks for taking the question and thanks to Mike Booth for all his help over the years. Maybe just to continue on the theme of your Limber program. Appreciate the progress there. And I was wondering if you could provide any details on your BAT inhibitor and What level of incremental benefit for the combination of, BET inhibitor plus rux versus rux alone would be clinically Meaningful on SVR35 and TSS? Thank you.
Jay, it's Steven. Thanks for the question. So just to remind, this is not a new compound. It's a compound we had in the clinic years ago that we dosed more than 100 patients in a very solid tumor mind frame. At the time, we were trying to drive MYC inhibition with our BET inhibitor.
And we treated, as I said, north of 100 patients. We had adequate inhibition, but we had a lot of on target toxicity In terms of thrombocytopenia and not much efficacy in solid tumors. So we put that program ourselves On hold or on the shelf, so to speak. And then obviously, the externally, the field involved CPI-six ten showed data There's monotherapy in MF patients in second line setting and then in combination with RUX in the first line setting We think has an interest in signals. So we reinvigorated our program.
It's up and open now for enrollment. And the idea is, this calendar year in the first half, hopefully COVID behaves, but is to get monotherapy safety And then in the second half of this year, get the combination safety with rux with our own BEAT inhibitor and then potentially go ahead with pivotal studies. You asked how does it differentiate. So we were able with external data to model a completely different dosing scheme from our prior one. We had about 1 third to 1 quarter of the dose who were in the clinic before.
We've looked at the external environment and we think that will weave the therapeutic ratio in terms of effect because they we know it's effective in MF with our own data And then not have unacceptable rates of thrombocytopenia. But it's not a different bed inhibitor in any way in terms of targeting otherwise. And then we'll make bigger decisions once we have the safety date at the end of this calendar year. Thanks.
Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further or closing comments.
Thanks, Kevin. Thank you all for your time today, for your questions and also of course for your kind words. You will be in excellent hands with Christine, I am sure, And both of us are available for the rest of the day for any follow-up questions. But for now, thank you all very much and goodbye.
Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.