Hello, and welcome to the Incyte Second Quarter 2020 Financial Results Conference Call and Webcast. At this time, A question and answer session will follow the formal presentation. 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 at Insight. Please go ahead.
Thank you, Kevin. Good morning, and welcome to Insight's 2nd quarter 2020 earnings call, earnings conference call and webcast. The slides used today are available for download on the Investors section of insight.com. I'm joined on the call today by Urvi, Barry, Steven and Cristiana, 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, like to remind you that some of the statements made during the call today are forward looking statements, including statements regarding our expectations for 2020 guidance, the commercialization of our products and the development plans and expectations 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 end March 31, 2020, and from time to time in our other SEC documents. In addition, I would like to caution everyone that the COVID-nineteen pandemic is an evolving situation and it is still relatively early to be able to assess the full effect of governmental business and social actions and policies and overall economic conditions on our business. Accordingly, It is important to keep in mind that our statements on this webcast speak as of today. We'll now begin the call with Herve.
Thank you, Mike, and good morning, everyone. In the second quarter, we continued to execute well across the various facets of our business, driving
strong
revenue growth, achieving success in regulatory actions and in key clinical programs, while further improving our sound financial position. Jakafi grew 16% year over year to reach $474,000,000 in the 2nd quarter. Jacquavi and Olumiant royalties also grew nicely up 16% and 35% respectively. And I'm also pleased to be able to report 6 sources of product and royalty revenues for the first time with the approvals of Pemazir and Tabrechtel. Total product and royalty revenues were 593,000,000 for the quarter, up 16% year over year.
We announced 2 product approval since we reported Q1, including Tabrecta, which is licensed to Novartis. And just recently, we received our first approval for Monduvi in collaboration with MorphoSys. Monjovy is the 1st FDA approved therapy for the 2nd line treatment of adults with DLBCL and we believe has the potential to transform the treatment of patients with relapsed or refractory disease. We also announced the positive results of which 3 which is the largest randomized clinical trial ever conducted in steroid or refractory chronic GVHD patients. At EHA, we presented encouraging proof of concept data from our Ruxolitinib Plus PASACLE zip trial as well as updated 2 year data from the L MIND trial, which confirms the durability of responses to Tafasitamab.
Our financial position is also very strong with one point $6,000,000,000 in cash and equivalents at the end of the quarter. Slide 5 shows our ongoing revenue momentum over the last several years, and we expect recent new approval to add further to our top line. During the remainder of this year, we expect to maintain the momentum of Jakafi and MPN and look to drive additional growth in GvHD. Furthermore, we are focusing on executing successful launches of both Monjovi and PEMAZIA and we expect Tabrecta royalties to increase following the approvals and subsequent launches by Novartis in both the U. S.
And Japan. Before the end of 2020, we plan to submit the NDA for ruxolitinib cream seeking approval in atopic dermatitis And we also expect to initiate the pivotal program of ruxolitinib plus paclitaxib in patient with myelofibrosis. Before I hand off to Barry, I felt it's important to provide an overview of COVID-nineteen impact on our business. On the revenue and supply side, we have not seen any material impact to date. And on the regulatory front, there has not been any impact on key timeline.
With regards to clinical development, there has been no chance to key late stage programs since we reported Q1. While the original shutdowns due to COVID-nineteen affected certain studies, The impact has been largely transient and we remain on track with key time lines. For example, While new patient recruitment in our Vitiligo study has experienced a slowdown early in the quarter, recruitment has since rebounded to pre pandemic levels. Therefore, we continue to expect results in 2021. In summary, since the beginning of 2020, We have announced 3 products approval and announced positive results from 2 separate pivotal programs with 3 and through AD, These achievements on top of strong commercial performance and excellent progress in clinical development are important parts of this transformational year for in site.
I will now pass the call over to Barry.
Thank you, Herve, and good morning. Jakafi sales increased 16% year over year. We continue to see robust demand across all three In April May, new patient starts were negatively impacted due to regional shutdowns related to COVID-nineteen. However, Since June, since early June, we have seen a rebound in new patient starts. Despite the challenges of the pandemic, I am proud of our team for their efforts to continue providing the level of service and responsiveness that our customers and our field representatives are continuing our conducting multiple virtual and digital programs with our customers.
Turning to Slide 9, we have been successful in identifying the appropriate patients and there are already more than 100 patients on therapy. We have not had any unexpected reimbursement issues and patient refill rates are encouraging We have maintained a good depth of prescribers in both academic and community settings, and we are proud to be able to provide these positions with a much needed therapy to help their patients. We're also excited about the approval of Munjovy, the first FDA approved second line treatment for adults with diffuse large B cell lymphoma. Manjubi is an important non chemotherapeutic option that has a convincing clinical profile as reflected in the clinical data included in the U S prescribing information. With compelling response rates and a long duration of response, while avoiding many of the toxicities associated with other forms of treatment.
Juan Juvy represents significant opportunity to transform the standard of care for patients with relapse refractory diffuse large B cell lymphoma. Our commercial and medical teams are fully staffed with joint insight MorphoSys team of approximately 150 full time equivalents. We have identified 11,000 potential prescribers, of which approximately 80% are also Jakafi prescribers. Executing successful launches for both Monduvi and Pemazir and we expect Travecta royalties to increase following the approvals and subsequent launches by Novartis in both the U. S.
And Japan. Before the end of Oh, sorry. We expect fraud market access for Monduvi and already have patient assistance programs in place. While the challenge presented by COVID-nineteen pandemic are not ideal for new patient launches. We believe Monduvia's strong clinical profile, the significant unmet need in relapsedrefractory diffuse large B cell lymphoma and our company's combined expertise leave us very well positioned for a successful launch.
With that, I'll now call the call over to Steven.
Thank you, Barry, and good morning, everyone. Recently we announced the success of our REACH3 trial evaluating ruxolitinib versus best available therapy in patients steroid refractory chronic graft versus host disease.
This was
the largest randomized trial ever conducted in this patient population and the positive data reinforced the importance of JAK inhibition in the treatment of graft versus host disease. Ruxolitinib met its primary endpoint on superior overall response rate at month 6 and achieved statistically significant and clinically meaningful improvements in both key secondary endpoints. The modified lead, chronic graft versus host disease symptom scale and failure free survival. The safety profile of ruxolitinib was with previously reported studies of ruxolitinib in graft versus host disease. Following these results, we expect submit the data from REACH3 for presentation at an upcoming medical congress, and we are preparing the supplemental NDA submission to the FDA.
Turning to our limbo development program on Slide 13. As part of our lifecycle management, we have multiple strategies ongoing. Including the development of a once daily formulation of ruxolitinib, combinations with ruxolitinib and potentially new targets and we are making progress on all fronts. The most advanced combination within Limba is our ruxolitinib plus Parsiclosa program, and we recently presented positive proof of concept data, which showed the additional benefit obtained from adding 5 milligrams of daily prostaglusive to ruxolitinib in myelofibrosis patients with an inadequate response to ruxolitinib monotherapy. Importantly, the addition of Parsiclusive was well tolerated and treatment emergent adverse events common to PR3 kinase delta inhibitors were infrequent with the addition of Parsoglycep.
These results warrant further study of the combination and we are planning to initiate ruxolitinib plus positive trials in both first line myelofibrosis patients and in MF patients with a suboptimal response to ruxolitinib monotherapy. Turning to Slide 14. In June, at the European Hematology Association, we presented updated 2 year data from the L MIND study of tafasitumab in combination with lenalidomide. These data were consistent with prior presentations. The overall response rate in this data set was 59 percent 41% of patients achieved a complete response.
The median duration of response for complete and partial responders collectively was 34.6 months, driven by the median duration of response for complete responders, which has not yet been reached. We hope and expect that the data from the L MIND are only the beginning for tafasitumab working with MorphoSys believe that we have multiple near term opportunities in diffuse large B cell lymphomas and other non Hodgkin lymphomas as shown in this summary slide. Later this year, we expect to have initial results from our first line diffuse large B cell lymphoma trial first mind. Based on results from the study, we expect to select the appropriate combination, either tafasinamer plus R CHOP or Tafasitamer plus lenalidomide plus R CHOP and move forward into a pivotal first line diffuse large B cell lymphoma trial in 2021. We also expect to initiate a proof of concept study evaluating tafasitamab plus parsiclib in non Hodgkin's lymphoma before the end of this year.
Turning now to our development programs and inflammation and autoimmunity. As Herve mentioned upfront, Our development timelines for ruxolitinib cream remain on track as we continue to collect long term safety data from our 2 pivotal atopic dermatitis studies and plan to submit the NDA at the end of 2020. And new patient enrollment has rebounded since the dip at the beginning of second quarter will remain on track for results in 2021. We have made significant progress within our key development programs thus far in 2020. We have announced 3 product approvals this year, and have presented positive data from multiple programs.
We continue to expect to have data in house from the ongoing pharmacology studies of once a day ruxolitinib in 2020. While a transient COVID related delay means the external presentation of these data won't be until next year, These data are not on the critical path, and we are still on track for an sNDA submission seeking approval of once a day ruxolitinib in 2021. We have also decided to discontinue development of our perm inhibitor and its combination trial with ruxolitinib. Lastly, a reminder of the various COVID trials that are underway, including studies of both ruxolitinib and baricitinib. With that, I'd like to turn the call over to Christiana for the financial update.
Thank you, Steven, and good morning, everyone. The financial update this morning will include GAAP and non GAAP numbers. For a full reconciliation of GAAP to non GAAP, please refer to slides 2527 in the backup section of the deck and to the press release we issued this morning. Moving to our results for the second quarter, revenue growth continued to be strong, with total products and royalty revenues of $593,000,000, representing an increase of 16% over the second quarter of 2019. This is comprised of net product revenues of $474,000,000 for Jakafi, $23,000,000 for Iclusig, and $4,000,000 for premises.
Royalties from Novartis of $66,000,000 for Jacoby and $1,000,000 for Abrechta and royalties from Lilly of $26,000,000 for Olumiant. We recorded revenue growth across both the products commercialized by inside and those commercialized by our partners, with the exception of Iclusig where we recorded a 7% decline in revenues as a result of some stocking that we experienced in the first quarter of the year due to the COVID 19 pandemic. Total revenues increased 30% over the prior year quarter, driven by both the increase in product and royalty revenues as well as $95,000,000 of milestone revenue related to the approvals of at Brekta and Pemacil. Total cost of and expenses for the quarter of $400,000,000 on a non GAAP basis represent an increase of 5% over the prior year quarter, well below the growth rate in product and royalty revenues. Ongoing R and D expense for the quarter was $250,000,000 on a non GAAP basis, representing a 6% increase from the prior year quarter.
This increase was primarily due to our 55 percent share of the global and U. S. Pacific development costs for Tafazitamab the clinical trials of raxolitinib as a potential therapy for COVID-nineteen and other pipeline programs progressing to later stages of development. SG and A expense for the quarter was $104,000,000 on a non GAAP basis, representing a 12% increase over the prior year quarter. This increase was primarily due to an increase in commercialization efforts related to Jakafi and Pemazir, and preparation for the potential commercialization of axolitinib cream.
Collaboration loss for the quarter was $13,000,000, which represents our 50 percent share of the U. S. Net commercialization loss for Mondi. Our financial position continues to be strong as we ended the quarter with $1,600,000,000 in cash and marketable securities. The decrease from $2,100,000,000 at 2019 year end reflects the upfront payment and stock purchase related to the Portfolio collaboration partially offset by the cash flow generated during the first half of twenty twenty.
We are reiterating our revenue and expense guidance for the year. While there continue to be uncertainties associated with COVID-nineteen, including risk of a broader resurgence, we believe these are capturing the ranges provided. As a reminder, the R and D guidance excludes the $805,000,000 upfront consideration related to our collaboration with MorphoSys. Finally, at this early stage of their launches, we are not providing guidance on TEMASIA sales or on our collaboration net profit or loss resulting from the commercialization activities for Monjovi in the U. S.
Operator, that concludes our prepared remarks. Please give your instructions and open the
One moment please while we poll for questions. And once again, that's one question and one follow-up, if needed. Our first question today is coming from Vikram Prahutt from Morgan Stanley. Your line is now live.
I had two questions on the Lumber program. First, just wanted to see if you could talk a bit more about what you saw in the initial PIM plus RUX data that led you to the decision to discontinue that facet of the Lumber program. And then secondly, for the Rux Plus PI3K combination studies you're looking to start in the first line and the refractory setting. I just wanted to see if you could talk a bit more about what those studies would look like from a design perspective and how you're thinking about what the initial bar for success there is going to be? Thanks.
Vikram, hi, it's Steven. Thanks for your question. In terms of the perm RUX program, as far as we know, we were the sort of last perm inhibitor left standing across R And D programs. And it's largely due to on target effects in terms of the liver and transaminitis. And we weren't able to get the Pim dose much above 80 milligrams And then if you look at that tolerability profile in combination with some of the efficacy we've seen, although interest in and pre clinically very interested in it wasn't a program that we felt had high chance of success going forward.
So for for those two reasons, both tolerability in terms of liver and reaching adequate efficacy bars. You know, turning to the rux Delta program, as we alluded to in our remarks, and this is this is our lead program. We've shown our internal proof of concept data. We explored various, dosing and schedule regimens. And clearly, you know, there's a delta effect.
If you you go back to the biology, PR3 kinase delta as a pathway is up regulated in myelofibrosis. This preclinical data that makes sense and terms of the clinical effect we've seen although very strictly defined in our proof of concept that patients had to have been on 6 months of rux in a stable dose for a couple of months, even with that, we saw increased, spleen response as well as symptom responses. So we're initiating 2 studies, a suboptimal responder RAC study as we've spoken about for people who've been on at least 3 months and they're not having an adequate RUX response as well as a first line study. In terms of the endpoints, you're going to have to wait for the controls dot gov listings to go up when we start these studies before we make those public. There should be relatively obvious for the 1st line study and suboptimal responder study that'll go up on that particular listing.
All right. Thank you.
Thank you. Our next question today is coming from Cory Kasimov from JP Morgan. Your line is now live.
Hey, good morning guys. Thanks for taking the question. Wanted to ask you around GVHD and can you just kind of describe next steps and timelines we should be thinking about on for the chronic UVHD opportunity and expanding the label for this indication. And would you expect more, I know you're not going to market to it, but would you expect more continuous use in this setting even ahead of approval given the promising, reach 3 data and the unmet need that's out there?
So Corey, I'll start off and then, the second part of your question, Barry will take. I assume you're alluding to to the retreat study that that we recently press released the outcomes. You know, it's a it's an outstanding outcome for patients and for us, in terms of hitting both the primary, very strictly defined, overall response rate endpoint at month 6. Plus, failure free survival and the PRO, the patient reported outcome in terms of the modified knee symptom score. So a great outcome for that.
You know, obviously, we will, we filed, you know, reach 2 as well now. Now we'll be going ahead, with filing and reach III as a supplemental NDA as soon as we can in terms of getting it into the label. Just I don't know if you were talking also about steroid naive chronic cough disease. That work with itacitinib continues this year in terms of dose exploration. We're looking at various doses and schedules plus the steroid effect there before initiating further work with it, the setting up there.
So across the entire spectrum of graft versus host disease, we're still very active both with filing and then, with itacitinib and steroid naive. In terms of your question for Barry? Hey, Corey. Yeah.
In terms spontaneous use in chronic GvHD, obviously we know that there's already some use in chronic GvHD, with Jakafi. And I think because we only released sort of the top line results from Reach 3, not until there's a full presentation or publication, will the awareness increase. At that time, some, additional spontaneous use may occur, but we'll have to wait and see.
Okay. And Barry, did you see any, like, major impact from COVID on the GVHD front to your transplants
that were presumably taking place?
Well, we certainly saw a decrease in new patients. So, you know, as you know, Corey, new patient starts really represents a relatively small part of the total number of patients that are on, Jakafi. So we do know that bone marrow transplants were delayed. We saw a decrease perhaps in April May, and we know that patients that need a bone marrow transplant have to come back, when they're feeling more safe. And when their disease requires it, as more bone marrow transplants go up and GVHD will go up.
Thank you. Our next question today is coming from Brian Abrahams from RBC Capital Markets. Your line is now live. Hey,
guys. Thanks very much for taking my question. Maybe a follow-up question also for Barry. Can you talk about any shifts in growth patterns that you saw with Jakafi maybe across the other 2 indications, due to Corona? I guess I'm curious if there's any inventory impact that you're seeing or any patient level stockpiling changes in compliance or persistence?
And then would you expect to see any changes now with the pandemic rebounding in July August to the overall patterns of jack values? Thanks.
Sure, Brian. Well, I don't think that the, that the percentage of patients who are taking Jakafi for TV, GVHD and myelofibrosis has really changed at all due to COVID. Now we do know, as I said, particularly in certain regions, you can imagine the East Coast, particularly New York and New Jersey, you saw new patient starts for each of these indications go down. In June and now in July, we have seen week after week, small increases in new patient starts, but new patient starts are relatively small in each given quarter in each given month anyway. But we have seen week after week starting in June, a new patient starts coming back.
So again, we haven't really seen any movements in one area versus another in terms of total amount of bottles sold.
Thank you. Thank
you. Our next question is coming from Salveen Richter from Goldman Sachs. Your line is now live.
Good morning. Thanks for taking my question. So as we look towards, proof of concept data from the oral PD L1 inhibitor later this year, Can you help frame expectations on the type of data we'll see and and what level of activity you're looking for to move forward?
Silveen, it's Steven. Thanks for the question. So in terms of our oral PD L1 program, we've been progressing well and we're in this phase now where the second half of this year from our clinical program will be able to present translational data from the actual clinical specimens to show directionally, the right degree of PD L1 inhibition, T cell changes that we want etcetera that are supportive of continuing the program. Substantive clinical data in its entirety will be more likely next year, but all the data we have in hand and that we presented in the second half of this year at an appropriate meeting are supportive of continuing. Thanks.
Thank you. Thank you.
Our next question today is coming from Evan Seagerman from Credit Suisse. Your line is now live.
Hi, all. Thank you so much for taking my question and congrats on a really great week with strong results today and the approval of Andrewbi late last Friday. So just on PEMZYRA in the tumor agnostic setting, can you just remind us of the status of this program? I can't remember if you mentioned it earlier. Is it also delayed as with the bladder trial?
And then any color on the penetration into the eligible patient population in cholangiocarcinoma following the launch earlier this year?
Evan, Steven, thanks. So in terms of your question, actually the tumor agnostic program has has not been affected by by COVID much at all in enrolling extremely well. Probably speaking to, you know, an extreme unmet need there. So it's across various fusions in terms of, the molecular biology as well as rearrangements as well as testing if there's any activity in AMP Communications as well. So they're different buckets.
We fill up that are histology agnostic, and that's progressing well. Now you spoke a little bit about the bladder program. The data we will be getting in the second half of the year will complete the continuous dosing experiment But in terms of presenting the data, it'll be next year. So that's the status of the bladder program. And then I'll turn it over to Barry.
Sure, Evan. So, you talked about penetration. I I think I said in my prepared remarks that there was over a 100 patients, treated already. And, actually, we know that there's more, most of those patients have come back for refills as well. So they're continuing.
So the duration of therapy something, that will continue to follow. But, even the 4,000,000 that we reported in this quarter, and the more than 100 patients, on therapy right now is ahead of what we predicted internally.
Next question is coming from Tazeen Ahmad from Bank of America. Your line is now live.
Good morning guys. Thanks for taking my questions. Just wanted to get a sense, perhaps on how you're thinking about the first line study. Is there, particular combination of the 2 that you're looking at that you would prefer as a really specifically alkalinealidomide, it somewhat of a priority to potentially avoid having that in the Commvial given its side effects profile and its possibility? Or I'd like to hear your thoughts of how that might impact some patients' desire to be on therapy?
Thanks.
Yes, it's Steven. Thanks for your question. If you look at 1st line, the Fuchs B cell lymphoma, the standard of care remains our CHOP with approximately a 40, 50% care rate. Curate, many, many have tried to beat that and hasn't been easy historically in the past to do that. So it's really about, upfront efficacy and improving the cure rate.
That's what you have to achieve to beat that bar. So, and a little bit maybe in terms sacrifice interoperability because it's about care upfront. So we'll see the safety data, as we said on the call yesterday, will be key looking at either, tafasitumab alone plus the R CHOP regimen or tafasitumab plus LEN plus the R CHOP regimen. If the safety ends up and we'll get the data by the end of this year, being is mostly awash and there's no increased talks that's worrying from from the doublet with our chop. That may be the way we end up going, because it's about getting to the efficacy bar.
As, the MorphoSys CMO said with us on the call yesterday, this is still subject to getting that data in house and then regulatory discussion on the appropriate endpoint. So those are the caveats there, but I just want to reiterate, you have to win on efficacy here. You have to improve the cure rate in diffuse large B cell lymphoma front. Thanks.
Appreciate that. Just maybe a follow-up. What percent of this population would be older patients given that they might be potentially more prone to side effects?
In terms of the epidemiology on age, I'll we'll have to get back to you. I'm not too sure what percent if you're asking is above 65. I'll have to find that that out for you. Sorry.
No worries. Thank you.
Thank you. Next question today is coming from Mark Frum from Cowen And Company. Your line is now live.
Yes, thanks for taking my questions. I'm very just to follow-up on your comments about the Pimazir launch and kind of success relative to your internal expectations. I guess what learnings have you had on kind of a virtual launch about things that are working, maybe some things that aren't working And how are those going to get applied to the launch of TAPSitinib?
Yes, Mark, I think we learned a lot. Actually, and I think we, you know, despite this pandemic, we learn things that, that really work that we'll keep doing. Virtual programs, virtual visits, virtual speaker programs, virtual advisory boards, all of these things, work. For Pemazyr, we really targeted, the positions that we wanted to target ahead of time that we know are GI docs that specialize in cholangiocarcinoma, liver cancer and so forth. And, we were able to reach them, virtually, through our representatives and then, of course, before that our medical affairs, people had, relationships with these docs and our oncology clinical nurse educators helped them managed the dosing and side effects and they were each able to, to reach out to them.
What we also learned about Pemazir about a new launch during this time period And I think it, relates to, longevity very much, is that docs want to hear about new launches and how to use drugs, particularly Pemazir is being used for, you know, first approved drug for a patient population. It's never had anything that was really effective before. And, in terms of, manjubi, the first drug approved for a second line, diffuse large B cell lymphoma, they want to hear about these new options for their patients who desperately need new therapies.
Okay. And then just
on the initial demand you're seeing, is that all in cholangiocarcinoma? Are you already seeing some off label use either in that the tumor agnostic indication or even maybe people who can't tolerate the available inhibitor and bladder cancer?
Yeah. It's the best part of our knowledge, Mark, is really all in glandular carcinoma for patients that have, FTFR rearrangements,
entusions.
Okay. Thank you.
Thank you. Our next question today is coming from Alethia Young from Cantor Charles. Your line is now live.
Hey guys, thanks for taking my question and congrats on all the progress. I'm just going to ask you a question on the Philadelphia program now that you have the combination data that looks interesting. Kind of wanted to talk about, your kind of focus on monotherapy there. And then, can you just kind of talk a little bit about, kind of continued investment for AD, heading into the upcoming line for the Rux screen. Thanks.
So Lee, I'll start off with Steven on on your first question related to the Citadel program. So All the studies have enrolled really well, follicular, mantle cell and marginal zone. We presented data at various points along the route for all three stoppages. We have, you know, in the range of the high activity we wanted, as well as the durability of response that we wanted. So, you know, we we will get that in house and we will proceed with you know, appropriate regulatory filings for monotherapy, in the different parts of the world where it's where it's relevant.
They are all likely to be under accelerated approval or conditional marketing authorizations and we'll need, as you allude to confirmatory programs, and those are likely to be in combination. The designs of which still need further refinement and discussion with regulators but they're likely to include combinations with CD20 or even CD19 antibodies given that we are treating lymphomas. And then I'll hand the question over about the investment related to the launch.
Yes, Sophia, I guess you were asking about the continuing investments in AD related to the launch, obviously it's AD and Vitiligo because we anticipate that Ligo could be relatively soon after we get approval for, atopic dermatitis. But, I think Erve said multiple times that we're building a separate business unit, for dermatology or autoimmune diseases. So we already have onboard our, a good part of our medical affairs team, our market access team. We're building out the commercial organization. So that's our new investment.
And obviously, we're really getting ready because we believe that Rux Cream, could really transform the treatment of atopic dermatitis in the United States.
Yes, regarding just a so that's for the U. S. Where the situation is very clear. Regarding the rest of the world, in the, in Europe, we are looking at the scenario where in fact, Vitiligo could be the first indication that we would be submitting. So the timing for Europe is slightly different from what we have in the U.
S. It's like more than slightly. It can be a few months behind. And we are still looking at the best commercial deployment there. And frankly, we want to have you know, take take our time.
And I know some of you are asking, you know, what what is the model that we'll be following in Europe? And we are really going through a level of diligence, that requires more time and, and we'll be able to communicate how we are going to centralized in Europe, probably early next year.
Thank you. My next question today is coming from Mara Goldstein from Mizuho. Your line is now live.
Great. Thanks so much for taking my questions. I had a question just on Rratofanlimab and status of where you are from a clinical trial perspective and, which data from the podium program are we likely to see initially? And then secondarily, is there an update on the, Jack's by COVID-nineteen
programs with CRS?
Yes. In terms of retifender about our our IV PD-one inhibitor, the the niche programs have again, all enrolled incredibly well. Squamous cell anal carcinoma, MSII, endometrial, and the Merkel cell program. We've we intend to submit data from, Merkel and anal cell carcinoma at a medical meeting second half of this year, and that's when that data will be public. In terms of rux in, COVID-nineteen, just a reminder, there there are 2 programs.
There's one in conjunction with Novartis globally called RUX COVID. Those that's, in patients that are pre mechanical ventilation, but have evidence of cytokine storm is looking at rux5milligrams twice daily, plus standard of care versus standard of care. It's in 4 patients. The primary endpoint for that study was the proportion of patients who die, develop respiratory failure or require ICU care by day 29. And that progressing well.
And obviously, we hope to have data complete study with an endpoint and report out before the end of the year. The second study we run-in our cells largely in the United States is the ventilator study So it's again, adults with COVID-nineteen associated respiratory failure who are on ventilation It has 2 dosage arms in terms of rux, a 5 milligram BID arm and a 15 milligram BID arm. Both were standard of care versus standard of care. And that is tracking a little bit behind in terms of enrollment largely because there's less ventilation than there was, because people are trying to avoid that. So again, we hope to have data before the end of the year, but it's hard to tell you exactly when at the moment, The end on that study, just to remind you, was a little larger.
So that was, 500 patients, because there's 3 arms. And the primary endpoint was a very clean one, was, overall survival due to any cause through day 29. So that's the status of those studies. Thanks.
Thank you very much.
Next question is coming from Jay Olson from Oppenheimer. Your line is now live.
Oh, hi. Congrats on the progress and thank you for taking the question.
I wanted to follow-up on
the Lumber program where you've tightened up the focus a little by discontinuing rux plus pin and you're moving rux plus parsa into pivotal trials, but you still have quite a few shots on goal. So I was wondering which of those are you most excited about with the highest probability of success and the greatest clinical differentiation. Thank you.
Hey, Jay, it's Steven. So it's an extremely important program to us for all the obvious reasons. Plus, you know, we have a lot of, scientific ownership of the milder predictive neoplasm space, just even beyond ruxolitinib, the diseases we feel very passionately about, Just to remind you, the limbo program has 3 pillars to it. The first one, is the formulation work, which we spoke about in our prepared remarks. And the once daily formulation work is going well.
And we intend to file that sNDA next year, and we believe that is important in itself and also potentially from a convenience point of view. And it may lend itself down the pike to us doing fix those combinations with other ones daily mechanisms. In terms of the second arm, which are ways to either enhance efficacy in the particular disease setting or safety or both. Those programs, the lead one is the rough plus plus occlusive program. Again, we spoke about in the prepared remarks.
We feel we have internal proof of concept data and we're initiating both the suboptimal responder to RUX study as well as the first line myelofibrosis study this year. The other programs, that are really important to us, are our resurrected bet inhibitor program So we do in monotherapy work this year just to prove, safety at the dose we've chosen. And then we'll very quickly go to to combination to work there. And we'll see where that leads us. Again, that could be potentially, in a second line set in as well as in a first line set in.
And then, and then very importantly, although, on the surface, looks like a tolerability play in terms of the ALK2 inhibitor and the hip cidin mechanism and improving anemia either due to the underlying disease, myelofibrosis, or due to the effect of a JAK inhibitor, Not only if that works, should it improve the anemia, but then we'll also allow patients to stay on the on rocks longer and should improve efficacy as well. So that is in, again, monotherapy safety now and should also go to combination, hopefully, by theendofthisyear And then the 3rd pillar, which for obvious reasons we speak less about, but he's all around, discovery efforts, run out of Dasha's shop, looking at, other ways, other new targets, epigenetic targets or other ways that we may be interested in even in PVR itself. And those will obviously be announced if and when they get to the clinic. So that's the entirety of the program. Thanks.
Great. Thanks for taking the question.
Thank you. Our next question is coming from Tyler Van Buren from Piper Sandler. Your line is now live.
Hey, good morning. Great to see the quarterly results, especially in light of the ongoing pandemic. I had a question on the Jakafi product revenue guidance, which was reiterated and seems very conservative. You mentioned that new patient starts have rebounded in June. You have a growing pool of total patients and robust demand in all three indications, yet the midpoint of the guidance assumes relatively flat quarter over quarter growth on an absolute basis.
And if you look at the top end of the guidance is still lower year over year growth rates or deceleration in the second half. So it's just just factoring in the ongoing uncertainty due to the pandemic? Or are there any potential year over year pressures that the guidance is that we should also consider?
Tyler, you are absolutely right. If you look at Jakafi in the first half of the year, we grew 19% when you compare to the first half of twenty nineteen with the growth primarily coming over 70% of this growth coming from volume. From demand. So, if you were to to look at this, you would think that at the point in the year, we would be, if anything, bringing up the low end of the guidance, the low end of the guidance implies a flat, Q3 and Q4 to Q2. So given the significant uncertainty that remains around COVID 19, the risk for a broader resurgence we felt that this year, it's appropriate to keep the guidance to where we had set it, to keep a broader guidance at this point in the year.
To be able to, address any potential, impact that we may see from a resurgence in COVID nineteen.
Okay. Thanks for the additional comments.
Thank you. Our next question today is coming from Josh Schimmer from Evercore ISI. Your line is now live.
Hey, thanks for taking the questions. Was positive reach 3 data reflective in your long term guidance for, 3,000,000,000 peak sales of Jakafi and you considering expanding your dermatology portfolio to further complement ruxolitinib cream? And if so, what might that look like? Thanks.
You're happy here. I'll I'll take it. So, obviously, the rich rich results, very positive. And it's, I don't say more than expected, but it's certainly a very, a very good study. You will have the opportunity to see the results when they are published.
And the question of what does it mean in term of long term guidance came up when we saw the results. So I think your question is totally appropriate. We have said in the past $2,500,000,000 to $3,000,000,000 for Jakafi. You can see where this year is going. So we are sort of ahead of the curve if you look at it from that standpoint.
What we also looked at is, political uncertainty. And the fact that in the U S, there are a number of questions still open related to, the health care system in general and reimbursement, of products. So I think the the the best way to to to to think about it is probably to see how this is evolving also see the data that we have in Reach 3 publicly and then it will give us with both of them an opportunity to to look again at the long term guidance, if we need, and that's again something that would be, after the end of this year. The second question is dermatology. So, you know, we are very Excited.
I must say over the past few months, we have had a number of, advisory board and the sessions of feedback with dermatologists in the US and in Europe on, the profile, of drug screen. And that has made us evolve our expectation from that franchise because what we are hearing from them is that there are no other products that is providing that level of efficacy that you saw in a true AD And obviously, the lack of systemic exposure and the level of safety that you can expect from a topical. So it's not really But, you know, in the category of the other topical product, it is a product that has the potential to be transformative. So we are looking at it now with a new eye in terms of how big it could be. We still have the Vitiligo study that is, as Stephen was describing moving very quickly.
So it gives us a potential submission in 2020 for AD approval in 2021 submission in Vitiligo and then approval Vitiligo. So there is already a sort of a cycle of new products that is coming for the next 2 years. And we are obviously looking at other product that could be complementing the franchise. Internally, we have programs ongoing with our own you know, group of products that are have potentially, an immunomodulating, potential. And so that could apply to many indication.
And we are also looking at external opportunities for what would be good science applied to dermatology that could be complementing the portfolio. So there is literally a new division of insight that is being built now that we'll be starting with Rak Stream. And I think could have a very important potential over next 5 years to add to the growth that we have in cancer and oncology and dermatology.
Thank you.
Thank you. Our next question today is coming from Ren Benjamin from JMP Securities. Your line is now live.
Good morning guys. Thanks for taking the questions and congrats on the quarter. Can we talk a little bit about the patent extension strategies? I see that once daily can definitely seems to make sense and can extend, our for your patents there, but how do we think about these combinations that are being evaluated, particularly in the Lumber study? Do they ultimately have to be developed as once daily formulations as well to continue to extend extend the patents?
I mean, the patents in cell phone works, I would not comment on that. So what is, Obviously, part of our plan is to improve our ruxolitinib from the clinical and the patient benefit standpoint and to do it in a way that will help us extend the life of our franchise in MF and PV and potentially in GvHD. So the QD is very important for tourism is that by itself, it has a longer patterns than we have with the twice a day. And it is also a way to do combination with other one set of products that we have in our portfolio. And when you think of 2 oral products being once a day, then you obviously, looking at the possibility of doing fixed dose combination.
And if the product you are combining with has a patent life that goes beyond the patent of checkify roxulatinib itself. It's obviously increasing, you know, the exclusivity that you have on this fixed dose combination. So you can think of Alk and PathFactory and Beth as potential partners for OXcelity that we are testing in the clinic first to establish the superiority from the clinical standpoint. And then that could give us an opportunity to develop fixed dose combination. If possible, that would be, certainly helping maintain the leadership that we have in the field of MFPV and GVHD.
That's really the way we are looking at it.
Got it. And then just as a quick follow-up with Manjini, can you just remind us the gross to net assumptions that that we should be, capturing?
Well, this is Barry. So, we didn't really comment on the gross to net assumptions. We talked about the price, the average monthly price and obviously, we're working on that together with, our partners. Some, obviously, discounts are required. Through government programs, through CMS and so forth, but we've really haven't said what the gross to net will be.
We'll have to see as we go forward.
Great. Thanks for taking the questions. Thank
you. Our next question today is coming from Aidan Hoosemov from Benchmark Company. Your line is now live.
Thanks for taking my questions. I have I have one on manjulie. So given this is a combinational, agent and given that drift, I mean, there's already expensive drug. I think more than $20,000. Do you expect any pay resistance or impediments, especially in budget conscious EU, pay environments such as fights and French authorities.
So, I'll take the first part of the question, address the United States, and everybody can address the outside the United States. So we think the combination of this injectable and oral drug together, is priced appropriately for the benefit that the regimen provides if you look to other analogs, for example, is particularly in multiple myeloma, injectable drugs that are combined with, with Revlimid are approximately the same price per month per year, and others are actually priced higher. If you compare it to CAR T therapies, obviously, they're many different complications there, but obviously that that's in the same sort of price range for per patient. And everybody Just to comment
on the EU, the the cycle of patent expiration for lenalidomide is different in the EU. There are generics already available in a number of countries already today. And when we look at the approval, timing for approval and reimbursement timing, for, Montreal of Tafestamab in Europe. In fact, it is almost coincidental that it is when lenalidomide is going generic in many of the large, countries. So what we anticipate is to be negotiating the price as we have to do in all of these countries in Europe at the time where the cost of lenalidomide would be going down very drastically.
So it should be a little bit by chance, but it should be a good, a good timing to be able to have a a reasonable, good price for tafasitamab in Europe.
Thank you. Appreciate that. And I have one follow-up regarding Jakafi. So how would you compare the performance of Jakafi versus Jakavi in Europe because both showed 16% growth, but Chicago and actual sales only grew 9%. And just was curious what's the MFF growth in Jakafi, Jakafi, indications MF growth.
No. The comment on the Jakavi in Europe versus Jakafi in the US, I think what we have seen since the launch is a sort of a classical curve where Obviously, the volumes are higher. The price are lower in outside of the U. S. That's a sort of a general statement on the on the all of these products.
And, and Novartis has done an excellent job to, ensure that, like, have became standard of care in, MF and PV. The GVHD launch has not been, yet done in Europe. GVHD. The decision was to submit together reach 2 and reach 3. So there are 2 large largest ever pivotal studies that will be used for the submission Europe and outside of the U.
S. In fact, in general, that will be used together. So the reason to do that is related to pricing because every new indication is leading to price reduction. So the decision was made by Novartis do it together. And now that we know the results of which free are fantastic, it is certainly a very good, very good decision.
So we will see the GVHD expansion happen later than what we have seen in the U. S. But overall, I must say the growth ex U. S. And U.
S. Has been, far exceeding expectations for both sides and has been very parallel in term of, how MF and PV, have been, have been evolving. So it's a story of good partnerships that frankly now for 10 years has been working very well.
Okay.
Thank you. Next question is coming from George Farmer from BMO Capital Markets. Your line is now live. Mister Farmer, perhaps your phone is on mute. Please pick up your handset.
Hi. Can you hear me?
Please proceed.
Yes, we can.
Okay, great. Thanks. I'd like to talk more about your strategy with, Parsaklacib and rocks in MF and how do you see that combination fitting in, with, other Jack inhibitors?
It's Steven. So again, just to reiterate the program as we set it up. So there would be 2 studies. The first line study would be in in rugs plus parts of those rocks. So, you know, if the ends up down the pipe being successful, then that particular combination would become the standard of care there.
In terms of the suboptimal responder study, that is for patients who've been on at least 3 months of of ruxolitinibatastable dose, but are having a very carefully defined inadequate response in terms of spleen volume reduction and or symptoms. And then you add on postericlib to that particular patient profile and looking for added benefit. The endpoint for that, as I said earlier, we will announce when the study goes live, and we'll go up on clinicaltrials dot gov. But it's a very different, patient segment, because these are people who have had an inadequate, response to ruxolitinib. If you play this out in your head, if the first line study wins and is more efficacious, then there are less patients with inadequate responders down down the pike.
So that's how you, you, you work out the, the patient flow through the various lines of therapy and mild of fibrosis.
Okay, great. And then, however, could you comment a little bit more on how we should think about launching RUX for atopic dermatitis in Europe. In the meantime, I mean, you had said that maybe you'd filed for Vitiligo or maybe launch ahead of with Vitiligo ahead of AD. Can you just clarify that?
Yeah. I said that because there was a discussion on how the price would be impacted by the sequence of launch. And what we believe today, and I'm not you know, you you never know what can happen. But at this point, what it looks like is that if we do a sequence of at big term followed by Vitiligo, we will end up with a reimbursement that will be very much lower than if we do Vitiligo first. So that's what we are now thinking about.
I was saying that because there were a lot of questions on the commercial model in Europe. And I think What seems to be emerging is that the launch in Europe may be delayed, compared to the launch in the U S if we start with Vitiligo.
Okay, great. Thanks very much.
Thank you. Our next question today is coming from Stephen Willey from Stifel. Your line is now live.
Yes, thanks for squeezing me in. Maybe for Steven. I guess your comments around endpoint selection in the inadequate deluxe responders trial. Maybe it implies like there's still some regulatory dialogue that's ongoing there. I think AVV just posted details around the phase 3 transformed study in the relapsed refractory setting and it looks like they're using SVR 35 as a as a primary.
I guess, should we think about this as a surrogate of regulatory flexibility around the potential use of lower SVR thresholds?
Yes, I'm not going to satisfy you in our response because you'll have to wait for the outcome when we publish it. But we did see there published their endpoint and SVR 35% decrease in the second line That is the established endpoint that we established in the first line, as you well know, and that's no secret likely to be the endpoint in any further first line studies at the moment. So you'll just have to wait to see what we we've completed our negotiations with regulators and we're all set to go, but you'll have to wait till we put it up.
All right. Thank you. Thank
you. Our next question is coming from Matt Phipps from William Blair. Your line is now live.
Good morning. Thank you. In the editorial associated with the recent Lancet publication, Topical rux in Vitiligo. It does bring up the acne side effect of the potential limitation given a lot of exposure to the phase So I'm just wondering if there's any temporal nature of acne. Is it associated with tubular exposure or was it more transient And then does this, you know, do you guys think this has any potential commercial impact mainly on duration of therapy?
Yes, it's Steven. I'll comment a little bit. We haven't seen, a temporal link per se, in terms of the onset of some acne, nor has it been particularly problematic? So from the data we have thus far in the proof of concept study, that's the conclusion. Obviously, as been telling you, we're enrolling now 2 large Phase 3s.
It'll be north of 600 patients total with longer follow-up and we'll see how that plays out. It's just not something that, that, other than the adverse event being reported, which is important for patients, that's particularly problematic in terms of long term use thus far.
Thank you. Our final question today is coming from Michael Schmidt from Guggenheim. Your line is now live.
Hey, guys. I had a question on your bispecific antibody program, mcla145. Maybe Stephen, just wondering what your level of excitement is for this asset and based on what you've heard from other similar product candidates. It seems like there's, you know, some some interest there. Just curious where you are and when we might see initial data from the study.
Yeah. Thank you for for mentioning our our bispecific program. No. There there it's a it's a very, interesting double it from a biology point of view. It's it's 41 BB or CD137 as the target, coupled with PD L1.
So four-1BB has a long history in the past, of other companies, TriNet, on its own, and ran into, toxicity, particularly liver tox. So the coupling with PD L1 was done as a delivery mechanism to take that four-1BB to PD L1 expressing areas and the theory being would avoid, that the associated toxicity plus then get, the enhanced efficacy either additive or synergy wise. And the program is going well. You know, we'll present data, probably next year, we won't see data this year from it, but it continues to go well. There's a there is a tremendous amount of interest from people who work in the field around it and and, you know, it the the sort of balls in our hands, so to speak, to get to a safe dose and then progress it.
But we're encouraged by what we've seen thus far and the programs enrolling pretty well. Thanks.
All right. Thank you.
Thank you. We've reached the end of our question and answer session. To turn the floor back over to Mike for any further or closing comments.
So thank you all for taking the time to join us on the call today and for your questions. Of course, Christine and I will be available for the rest of the day for any follow ups. But for now, we thank you again, and we'll close the call. Thank you, and goodbye.