Greetings, and welcome to the Incyte Twenty Twenty First Quarter Financial Results Conference Call. Please note this conference is being recorded. I will now turn the conference over to your host, Mike Booth, Head of Investor Relations. You may begin.
Thank you, Kevin. Good morning. And welcome to Insight's first quarter 2020 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 Before we begin, I'd the commercialization of our products and our 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 K for the year ended December 31, 2019, 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 as you're still relatively early to be able to assess the full impacts 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 Irvin.
Thank you, Mike, and good morning, everyone. I hope that all of you and your families are safe and healthy. During this unprecedented and uncertain time, it's evident that the COVID-nineteen pandemic has had a profound impact on almost every aspect of people's life has affected businesses all around the world. Before we begin, I want to take a moment to thank the millions of people who are the front lines, from doctors, nurses, to all other essential workers who are continuing to provide their much needed services. With this pandemic at the forefront of everyone's mind, I want to start our earnings call by providing an update as it relates to the COVID 19 impact on 4 areas of our business.
Namely on commercial, supply, regulatory and clinical operations. When we enacted our global business continuity plans, over 2 months ago, our key priorities were to ensure that patients continue to receive their lifesaving medicines that we continue to provide our customers the support they need. And importantly, to do this in a manner that minimizes the health risks our employees and our customers. I'm proud of the team here at Insight for continuing to deliver throughout this period am extremely grateful to Zoos working on-site to maintain our critical operations. Today, there has been no impact on our commercial business and we saw continued strong performance in the first quarter.
We have ample drug supply and our manufacturing processes are proceeding without interruption. On the regulatory front, there has been no impact to this on key timelines. We recently announced one of our 3 anticipated approvals in 2020, and we continue to expect FDA decisions on both CAPmatinib and tafasitamab the coming months. We do not expect disruption to other key regulatory timelines, including the NDA submission of ruxolitinib, cream, for atopic dermatitis at the end of the year. With regards to clinical development as of today, while our late stage programs remain broadly on track, we anticipate that short term effects may continue to emerge across different aspects of our global clinical trial programs, including new patient recruitment.
The degree of impact may vary by disease state and by severity of disease as well as by geography as some regions are more adversely impacted. In terms of our effort to help address this pandemic, We recently initiated a global Phase III ROCCOVID trial in partnership with Novartis to assess Roxaritanib in patients with COVID-nineteen as cited cytokine store. In the U. S, we are also starting another trial evaluating ruxolitinib as a potential treatment for COVID-nineteen patients who are on mechanical ventilation. We have also opened an emergency expanded access program which will allow eligible patients with severe COVID-nineteen to receive roxolitinib.
Studies are also ongoing with part Sitinib where Lilly has recently entered into an agreement with the National Institute of Allergy And Infectious Diseases, which is part of the NIH, to study baricitinib as an arm in its COVID-nineteen clinical trial. Multiple investigator initiated trial for both ruxolitinib and baricitinib are ongoing and planned as part of the global evaluation of whether Jack inhibition plays a role in improving outcomes in COVID-nineteen Turning to our first the result reflects the benefit of our long term strategy and our execution on the plans we have previously led out. In the first quarter of the year, we continued our strong commercial execution with Jakafi achieving 22% growth over the first quarter of last year to reach $459,000,000 and total product and royalty revenue growing by 24% year over year to 569,000,000 for the quarter. Our financial position is also strong with $1,300,000,000 in cash at the end of Q1 twenty twenty. In the recent months, we also made significant progress on the regulatory clinical development fronts.
We recently received FDA approval of Temazia, which brings another inside Discover molecule to market and provides further testament to the strong R and D capabilities we have here at Insight. By the end of 2020, with our respective collaboration partners Novartis and MorphoSys, we could see 2 additional new product approvals with CAPmatinib, as a treatment for certain patients with metastatic non small cell lung cancer and tafasitamab for relapsedrefractory DLBCL both of which are under priority review with the FDA. In addition, we presented positive data from our true AD Phase III program at the revolutionizing atopic dermatitis conference, and we remain on track to submit an NDA for ruxolitinib cream at the end of the year. Despite uncertainties, brought down by COVID 19, I remain confident about our future prospects as we continue to execute on our goals. Slide 6 shows our ongoing revenue momentum over the last several years with 4 sources of revenue driving top line growth.
We will be adding a 5th revenue stream following the recent approval of Timothy. Looking to the remainder of 2020, Our key priorities are to maintain our revenue momentum and to drive continued growth of Jakafi in We are also focused on executing a successful launch of Pemazyr, which Barry will cover shortly and preparing for the potential FDA approval of Facetamax. Our Limber development program remains a key priority and we are working towards planned initiation of our best and ALK2 programs and the expected opening of the pivotal works plus farceclizid trial. 2020 is shaping to be a transformational year for Incyte, and I look forward to updating you throughout the year. I'll now pass the call over to Barry who will provide more detail on those first quarter Jakafi performance as well as our commercial activities for Pemazil.
Thank you, Herve, and good morning, everyone. Slide 8 shows strong growth of Jakafi quarter over quarter. Mostly driven by increases in before under Medicare Part D and the increase in true out of pocket costs or troop that began in 2020. The chart on the right shows the total number of patients on therapy across all three indications. The total number of patients and new patients treated with Jakafi for MF PD and GVHD continues to grow.
In GVHD, Jakafi is rapidly becoming the standard of care in the steroid refractory acute setting. We are very pleased to have Reach 2 published in a New England Journal of Medicine underscoring the importance of Jakafi as a treatment option for patients with steroid refractory acute GvHD. In the 300 patient, randomized REACH II trial Ruxolitinib demonstrated a 62% overall response rate versus 39% seen with best available therapy. Reach II was the 1st randomized trial to show a benefit in this hard to treat patient population and showed convincingly that ruxolitinib was more effective an investigator's choice of therapy from a list of 9 commonly used options in patients in whom steroid therapy had failed. We also applaud the FDA for granting full approval to ruxolitinib last year based on the single arm REACH1 trial.
Results from REACH3, our study evaluating ruxolitinib in the steroid refractory chronic GvHD are expected in the second half of this year. Our long term outlook for Jakafi remains positive. Patient demand remains strong and as a result, we are reiterating our guidance and work even harder to engage our customers provide them with continued support and to drive disease awareness. We have much success in implementing our digital and virtual strategies and our top priority is to ensure that patients are and we take these learnings and apply similar methods to our launch of PEMAZIR. PEMAZIR is the 1st treatment innovation patients with cholangiocarcinoma in 25 years and represents an important addition to our portfolio of oral cancer medicines.
We have launched Pemazir and are focusing on a targeted group of approximately 1000 physicians, 2 thirds of which are already prescribing Jakafi. This allows our commercial team to leverage existing relationships, helping to facilitate part of the promotional effort behind Pemazyr. We will also drive healthcare professional interaction through our virtual programs and digital promotional assets building on some of the existing strategies market access and medical affairs teams are actively scheduling virtual appointments with our customers and are using the technology in place to share resources and materials in virtual meetings. All of these efforts complement our ongoing unbranded educational campaign focused on cholangiocarcinoma. And of course, as more patients are treated with targeted therapies like Pemozir, is increasingly important to continue to educate and promote appropriate FGFR testing in order to enable the proper identifications of those patients who stand to benefit most may be relatively modest.
Every patient we can help matters. So we are also developing Pemigatinib in other tumor types that are driven by FGFR alterations. With that, I'll turn the call over to Steven.
Thanks, Barry, and good morning, everyone. Starting with ruxolitinib cream, we were very pleased to share with you the positive results from our Phase III TRUAD program at the revolutionizing atopic dermatitis conference a few weeks ago. As you can see on the graphs on the left, ruxolitinib cream achieved clinical and statistical significance in the primary M point of investigator global assessment treatment success or IGA TS at week 8. Similarly, clinical and statistical significance was demonstrated in a 75% reduction in the eczema area and severity index score or EZ75 and in the analysis of the 4 point reduction in the each numerical rating scale or NRS4. Which is what the FDA has defined to be a meaningful endpoint in terms of its reduction.
With the highest concentration of 1.5%, we see substantial and more importantly, a very rapid reduction of itch with RUX cream within 12 hours of initiation of therapy. The strength of these data show that ruxolitinib cream has been able to demonstrate a dual mode of action, anti inflammatory and anti pruritic activities which together could make for a very effective therapy. As it relates to safety, there were no notable safety findings, either locally or systemically that were associated with treatment. We are on track with the development timelines for ruxolitinib cream, The long term safety data are being collected and we continue to expect to submit the NDA for ruxolitinop cream at the end of this calendar year. The Vitiligo trials remain ongoing and we continue to expect data in 2021.
Turning now to Pemozir. Pemozir was approved based on data from the FIGHT 202 study. Where treatment with pemigatinib resulted in an objective response rate of 36% and a median duration of response of over 9 months in patients with FGFR2 fusions or rearrangements. The most common adverse event was hyperphosphatemia, most of which was low grade and manageable. The full dataset from 52 or 2 was recently published in the Lancet.
We are very proud to offer a therapy for patients living with cholangiocarcinoma where prognosis is poor and where there has been limited treatment options to date. We continue to study pemigatinib in clinical trials for bladder cancer and 8p11 milder proliferative neoplasm as well as the tumor agnostic indications. Now turning to efforts in COVID-nineteen cytokine storm is a severe immune overreaction that can be triggered by viral infection and leads to serious complications. Including acute respiratory distress syndrome, which is a form of respiratory failure that is one of the leading causes of mortality in COVID-nineteen patients. Patients with severe COVID-nineteen experienced massive immune cell infiltration with associated pro inflammatory cytokines.
Ultimately leading to Lveolar damage. Many of the elevated cytokines that perpetuate the cytokine storm exemplified by interferon gamma, IL-six, GM CSF and G CSF, signal either through JAK1 or JAK2. We believe that treating cytokine storm with ruxolitinib as an inhibitor of both JAK1 and JAK2 may mitigate COVID-nineteen associated cytokine storm and thus reduced the overall disease burden. We recently initiated our RUX COVID program to evaluate Ruxolitinib a potential therapy for patients with COVID-nineteen associated cytokine storm. Our team in collaboration with our partners at Novartis initiated a global Phase III program.
We anticipate recruiting approximately 400 patients with COVID-nineteen associated cytokine storm in RUX COVID and we'll be evaluating Ruxolitinib 5 milligrams BID plus standard of care versus standard of care alone. The composite primary endpoint is the proportion of patients who die, develop respiratory failure, require mechanical ventilation or require ICU care by day 29. We are also opening a 2nd phase 3 trial in the United States, the three sixty nine trial. That will evaluate ruxolitinib in patients with acute respiratory distress syndrome secondary to COVID-nineteen. ARDS is a type of respiratory failure characterized by rapid onset of widespread inflammation in the lungs, and this trial will evaluate 2 doses of ruxolitinib 5 milligrams BID and 15 milligrams BID and is expected to recruit around 500 patients.
The key difference between RACS COVID and the three sixty nine trial is that patients in the former are not on ventilation. Whereas those in the 3.69 trial are on mechanical ventilation. My last slide is our news flow summary. As you can see, we have begun the year well and have already announced several important milestones, including positive Phase III data from ruxolitinopcream, and the recent FDA approval of Pemazir. With that, I would like to turn the call over to Christiana for the financial update.
Thanks, 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 2526 in the backup section of the deck and to the press release we issued this morning. Before turning to our results for the quarter, I'd like to review the accounting treatment for our collaboration with MorphoSys. As a reminder, our collaboration with MorphoSys has 2 components.
Sitamab by inside amortosis in the U. S, and the exclusive development and commercialization of Tafasitamab by inside, outside the U. S. In terms of how we'll be accounting for the collaboration, if pacisitamab is approved, MorphoSys will record all sales in the U S, and Site will record all sales outside the U S. Our COGS will include only COGS outside of the U S, as well as royalties payable to both forces on net sales outside the expense will include our 55 percent share of global and U.
S. Specific development costs as well as 100 percent of any development costs specific to territories outside the U. S. In addition, it will include any upfront and milestones that are payable prior to approval. Our SG and A expense, we include only our commercialization costs for Tafasitamab outside the U.
S. Finally, we will record that 50 percent of the U. S. In net commercialization profit or loss as a single line item in our financial results. As a revenue item when it constitutes a net profit or as an operating expense item when it constitutes a net loss.
COGS and all costs associated with the commercialization efforts related to Plasticsitabab in the U. S will be included in this profit or loss sharing line, not in the COGS and SG and A expense line. Now moving to our results for the first quarter. Revenue growth continued to be strong across all products, with total products, the royalty revenues of $569,000,000, representing an increase of 24% over the first quarter of 2019. This is comprised of $459,000,000 in Jakafi and $27,000,000 in Iclusig net product revenues, $56,000,000 in Jakavi Royalties from Novartis, and $25,000,000 in Olumiant royalties from Lee.
Our total cost and expenses for the quarter on a non GAAP basis of $1,200,000,000 includes the $805,000,000 related to the upfront consideration to MorphoSys, which consisted of a 750,000,000 dollars upfront payment and a $55,000,000 premium on our purchase of MorphoSys stock. Excluding R and D upfront and milestone expenses, total COGS, ongoing R and D and SG and A expenses for the quarter were $371,000,000 on a non GAAP basis. Ongoing R and D expense for the quarter was $251,000,000 on a non GAAP basis, representing a 3% increase from the prior year quarter. SG and A expense for the quarter was $98,000,000 on a non GAAP basis, representing a 12% decrease over the prior year quarter. This was primarily due to the timing of certain expenses.
Collaboration loss for the quarter was $2,100,000, which represents our 50% share of the U. S. Net commercialization loss for Tasasitama. Our financial position continues to be strong as we ended the quarter with 1,300,000,000 dollars 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 MorphoSys collaboration, partially offset by the cash flow generated during the quarter.
Moving on to our guidance for 2020, we are reiterating our revenue R and D and SG and A expense guidance for the year. While Jakafi and Iclusig performance in the first quarter was strong, the COVID 19 situation presents uncertainty. Therefore, we believe it is prudent to retain the full range of the previously communicated revenue guidance of $1,88,000,000 to $1,950,000,000 for Jakafi, and $100,000,000 to $105,000,000 for Iclusiq. For R and D, we are reiterating our previous guidance of $1,210,000,000 to $1,280,000,000. As a result of reallocation of funds between programs in our portfolio, Elio, we now expect this to cover also our 55% share of Tasasitamaxco development costs.
For clarity, this guidance range excludes the $805,000,000 upfront consideration recorded in Q1 related to our collaboration with MorphoSys. Finally, at this early stage, we will not be providing guidance of Pemazir sales or on our collaboration net profit or loss resulting from the commercialization activities for Tasasitamab in the U. S. Operator, that concludes our prepared remarks. Please give your instructions and open the call for Q And A.
Certainly. We'll now be conducting a question and A confirmation tone for questions. And answer session. Our first question is coming from Mark Frum from Cowen And Company. Your line is now live.
Hi, yes. Thanks for taking my questions and congratulations on the quarter. Maybe this question for Steven just seems like we're going to be getting decent amount of data out of the Lumber program over the next, you have 6, 9 months. Maybe if you can set the stage there. When we see PI3 kinase data in the first half, should we think of that as setting kind of the bar for all other combos to warrant advancement?
Or do you think the combinations are likely to be effective in kind of different patient populations? And therefore, they kind of need to be evaluated all on their own?
Hi, Mark. It's Steven. Thanks for the question. So obviously, as Evoluted up front, I mean, this remains of critical importance to us and of major focus to us. And thankfully, despite the pandemic remains on track as well.
In terms of this year's execution, there are 3 aspects beyond everything else going on in limbo. One is to get the monotherapy safety components of LK2 and the BED program done and move to the combinations of RUX Plus LK2 and RUX Plus BED. And then as you alluded to, is is start the pivotal phase 3 of Rax plus PR3 kinase delta. The there are slightly different. We don't have a biomarker selection per se, but they're different intents behind the program.
So if you look at Elk 2, the combination there it's important to both focus on enhancing efficacy, which we expect, but also also safety in terms of anemia there and hopefully ameliorate the through the hepcidin inhibition, which then would translate to being able to maintain ruxolitinib dosing and hopefully also enhance efficacy. So it's a dual play in that aspect. In terms of a bit, BRD inhibition, obviously, we've watched consolidation data evolve, both in the first line and later settings. And if some maturity of that data needed, and we have to make sure there are Apple Apple comparisons as much as possible in terms of patients treated. But the idea is to do the same thing there in terms of enhance, the efficacy of ruxolitinib in those settings, particularly in second line and potentially in first line as well.
Obviously, we'll just see where the data leads us in terms of getting that combination done as efficiently as possible. For Delta, we've been very carefully built that data set, we've done different experiments with scheduling and dosing. We've now come down to the constant dose being the way to go in terms of delta, in terms of the magnitude of the dose, we think we've weaved the therapeutic ratio correctly. Terms of getting the efficacy we need from Delta inhibition, but not the enhanced toxicity from it. And that's why we're initiating the phase 3 studies.
The bars, may well end up being somewhat different in 1st line, versus later lines. I think as we speak today, the first line bar in terms of spleen volume response, which we said with ruxolitin a few years ago, remains a 35% measured reduction plus associated symptom reduction. In later line settings, we'll see, as we work with regulators, whether, a lower bar may be acceptable, for example, something like a 20% spleen volume reduction with associated clinical benefit in other endpoints, lack symptoms, and that remains to be worked out with regulators. So the programs are full steam ahead as much as possible given COVID-nineteen and confident that they are in a good place and then have slightly different intents to all three programs.
Okay. And if I can do a follow-up based on that. You mentioned one of the big things is the bet inhibitor and getting it eventually into a combination. In the press release, it says you're preparing a phase 2, does that mean you've started combination dosing already or is that phase 2, the beginning of combination dosing?
So Mark, just to remind you, we had a numerous bet inhibitors in the clinic over the last few years and we put ourselves on a hold from on target thrombocytopenia a little over a year ago and then sort of resurrected that second bet inhibitor to go into the clinic now. So what I'm saying is we know that compound pretty well. Obviously, now we dosed in at a much smaller, absolute dose in terms of about a 20% to 30% dose range versus what we were in the clinic before and they expected on target toxicity should obviously be much less. We just need to prove that to ourselves, hopefully, relatively efficiently with monotherapy and then start combination as soon as possible. So that'll be the phase 2 component, if you will, will be when we move into the combination part.
But I think the semantics aren't that important what you call it here because it's about just getting sufficient safety and then go into combination as efficiently as possible.
Great. Thank you. Thank
you. Our next question is coming from Cory Kasimov from JP Morgan. Your line is now live.
Good morning guys. Thank you for taking my questions. I wanted to ask you about your work that you're doing in COVID-nineteen. And I guess first, do you have much insight into the timelines for RUX in the COVID-nineteen studies, especially CRS and you're thinking about standard of care, do you think you're going to have to build remdesivir into your protocols? And then secondly, I recognize this isn't the primary purpose of this work, but you discuss any general thoughts you have about the potential market opportunity if Rux were to ultimately be approved here?
So Corey, it's Steven. I'll start off and then hand it over to Herve for your second question. So again, there are 2 studies. There's RUX COVID, the global study with Novartis in patients who sit in hospital with evidence of elevated cytokines, but not ventilated yet. And then, and hopefully not, And then the second protocol, the 369 protocols in ventilated patients, and we tested 2 dose levels there.
We knew that the standard of care would likely evolve and would evolve relatively rapidly. So we wrote it in allowing standard of care in combination with the treatment arm, in this case, ruxolitinib as well as the standard K arm to be as dictated on the day. So it's open to whatever would have evolved and very much had prepared for remdesivir being the potential standard care, which it looks like it is now. So there's no issue related to that. What we will have to watch from a statistical point of view, obviously, is that the arms full with appropriate numbers of both patients But given where we're conducting the studies in Europe with Novartis and here in the United States with us and the sites that are involved, we expect that to be the case and remdesivir would be rapidly adopted as a standard of care and wouldn't be a problem.
There's no interaction to worry about in terms of drug drug interaction with that particular antiviral and ruxolitinib. So we're ready to do that. And then for the market opportunity point, I'll hand it over to Hervein.
Yes, thank you. So first, I mean, we obviously, we hope that it would be a relatively short lived phenomenon. So frankly, we don't see COVID-nineteen as a commercial opportunity of high any magnitude for ruxolitinib. We moved very fast. I mean, it there is a very strong preclinical rationale.
There is a lot of work that was done already with Jack inhibition in the CRS from, Carty treatment. So there was there is a very good science. We had the scientists, both at Novartis and Insight, work together to put the program to put the program in place. And frankly, it was very interesting to see the speed at which we were able to work on this with, with Novartis where we made the decision to go into the protocol on the phone with VAS in a few minutes. We had the teams work over the weekend to get the protocol be prepared so that it could be submitted and the speed at which everything moved was really driven by the emergency of trying to find a solution for this pandemic with and the COVID 19 situation around the world.
We think, over time, and then we put in place an early access program in the US, that will be is open already and will be providing the opportunity for all patients to receive ruxolitinib as part of this protocol free of charge. So that's where we are. The Phase III studies are starting. We will have the results. I assume in Q3, And the and then we would work with the FDA to see what we do from there.
But from our side, we don't We don't see it as a meaningful market opportunities over time. I think it's really trying to deal with the situations that we are all facing.
All right, great. Thanks so much for taking the questions.
Thank you. Our next question is coming from Salveen Richter from Goldman Sachs. Your line is now live.
Good morning. Thanks for taking my questions. The first one maybe for Herve, how are you thinking about capital allocation and BD strategy in the context of your launch outlook, you've got 3 this year and potentially 3 to 4 next year. And then given, the pipeline outlook as well, And then a second question here with PEMAZIR. Can you discuss how the groundwork around the launch in cholangiocarcinoma sets you up for bladder cancer?
Thank you.
Yes. I'll let Barry speak about the payment here. On the capital allocation and the BD strategy, I think we are very much in a in a mode that has been demonstrated by what we have done over the past few months. I mean, we are trying to continue to build the portfolios that will grow our revenue line continue to grow the revenue line at the fast pace over the next five, six year so that we have the diversified portfolio in 2025 to in that window 2025 to 2030. I think the agreement with MorphoSys is a good example of that.
It's synergistic from the commercial standpoint. It's dealing with the customer base that we know very well in hematology. It's adding a new product to our hematology portfolio and it has a large potential, to contribute to our revenue growth. So we will continue look for that type of opportunity. There is a dermatology field that is also now the second division that we have that we are building.
So it could be another place where if there are good opportunities in that field where we could also invest. We have a strong cash position now, we also have a very strong cash flow. So that's really the drive for our capital allocation and BD strategy is to continue to grow the revenue and deliver the portfolio with the target in the year of 25 to 30 as a sort of where we want to to see the impact of these new products and these investments.
So for the second part of your question, Salveen, so the time Timazir launch is going very well. We are very proud of the company that we got approved on a Friday night by the FDA and we had drug in our distribution center by Sunday, and we shipped out drug on Monday. So prescriptions are coming in for Pemozir. And to date, we have no indication that there has been any problem with market access or payers not paying for it. So in our sense, it's actually going very well despite the fact We're doing a virtual launch and we've learned lots of things.
We've been doing virtual activities, digital activities, for Jakafi for a while now and we're getting even better on it with for Pemozir. So that's going very well. For bladder cancer, the most important thing for cholangiocarcinoma and then for bladder cancer is that physicians are in fact testing for FGFR alterations. And we think that as we continue to work to educate healthcare professionals on making sure they're testing in cholangiocarcinoma situation for FGFR2 fusions or rearrangements that that will then have us set up very well for moving to bladder cancer, because again, the most important thing is to identify the most appropriate patients that could benefit from pemozir in bladder cancer when we have the data available.
Thank you.
Thank you. Our next question is coming from Bryan Abrams from RBC. Your line is now live.
Hi, thanks very much for taking my question. I guess a question on the commercial side for Barry. Just wondering if you're seeing any changes in prescription patterns for Jakafi, exiting first quarter or maybe early second quarter, as a result of COVID-nineteen, things like accelerations of refills, or fills, longer duration scripts, any impact on compliance in either direction. And I'm wondering also if you're starting to see any impact to GvHD as transplant practices evolve. Thanks.
Sure, Brian. So, for the first part of your question is, have we seen any changes in the amount of drug that patients are getting. And the answer is no. Generally speaking, all of our patients on Jakafi get a 30 day supply, particularly for MF and TV, And that, there was only about 3% of patients that actually might receive a prescription for more than a 30 day supply. And that hasn't changed.
At least in the first quarter. And now moving into 2nd quarter, we haven't seen any changes for that. As opposed to new patient starts, Again, in the first quarter, we had a very good first quarter. New patient starts were very good. And in fact, that should be able to carry us through for the next couple of quarters until we get back to a more normal state.
So we're very confident in that sense. There might be some indications, those high impact areas, whether it's for GvHD, MF or PV. So places like New York City, for example, you might see a slowdown in new patient starts. But in fact, because we are oral therapies that's well known. It's been on the market for GVHD.
And of course, for MF and PV for a long period of time, those refills and those patients are coming back and that's why we're still confident in our guidance that we provided today.
Thanks. Our next question is coming from Tyler Van Buren from Piper Jaffray. Your line is now live. Hi,
thanks. Good morning. I had another question on RUX for COVID-nineteen. 18. So I guess, recently I had a call with a pulmonologist who is the head of an ICU COVID-nineteen task force.
And She was discussing the history of immunomodulators and respiratory distress syndrome. And clearly, CRS here manifesting and respiratory stress is a little different than CRS that you see with cell therapy. And she mentioned that immunomodulators historically have every single therapy or every single trial has failed in respiratory distress syndrome. So I guess I wanted to ask you guys why maybe that history is not relevant here and why COVID-nineteen is different
Yes, Todd, it's Steven. Thanks for your question. And it's always good to have the learnings from prior studies invoked I think the central difference here, I'm actually careful of just attaching semantic labels to things that then apply to other things. If you look biologically and pathophysologically at what's going on, on the information we have out of China and now other places. There is elevation, moderate elevations of cytokines that have been documented like IL-six.
There's evidence of acute phase reactants going up like D dimers reactive protein and ferritin as well. And then we have evidence that with drugs like ruxolitinib, you can use appropriately suppress those. And then the question is will they translate to a clinical improvement in that setting? So just to be clear, it's not a across the board for every single patient with this entity. These rux COVID is for sick patients in hospital, who are pre ventilation but have biochemical evidence of cytokine storm or cytokine elevation and acute phase reactants being positive And then I'll randomize to ask the question very clearly.
And in this setting, induced by COVID-nineteen, does ameliorating those cytokines result in the clinical improvement. And it's different from ARDS due to other entities that in the past may have caused it. And that's why I think it's a key question to ask. And then you've seen the IL-six data evolve. I mean, now the question is beyond direct IL-six inhibition as a more broad inhibitor like eject inhibitor like ruxolitinib or baricitinib able to modulate this these cytokine elevations and then have a clinical benefit beyond that will be answered in these randomized studies.
So I think your word of caution is good, but this is a different entity and we have to be careful of some of the semantics.
That's helpful. And maybe just a brief follow-up as we think about JAK inhibition in comparison to IL-six, is there any reason to believe that JAK inhibition will be better?
Yes, this is Tash.
I'll take that question. So yes, in principle, as Stephen mentioned, something like, an IL-six antibody. You're only really blocking the one cytokine. That's believed to be involved in the disease process. With something like JAK inhibition, excuse me, you're now targeting multiple cytokines, which you know all signal downstream through the JAK STAT pathway.
So in principle, we would argue, and I think this data out there to support this, that by going further downstream of, targeting multiple cytokines you should have a big effect than targeting a single protein that we know is involved in the process.
Great. Thanks for taking the questions.
Thank you.
Our next question is coming from Vikram Paret from Morgan Stanley. Your line is now live.
Hi, good morning. Thanks for taking my question. So I had a couple on tafasitumab. So first, I wanted to see if the MAA submission is still on track for mid-twenty 20 in the EU. And secondly, I wanted to see if, COVID-nineteen related disruption is having any impact to your build out of the team and infrastructure, you'll eventually need to be able to commercialize tafasitamab in Europe.
And lastly, for the initial phase 1 data, I believe we're expecting in 1st line DLBCL by the end of the year. What can we expect to see there and how should we frame our expectations for what the benchmark should be there?
Vikram, it's Steven. I'll do your first and third question and then the commercial question someone else will take. So just to cut to the chase, in terms of the MAA filing, yes, completely on track. And we have had no problems getting that together and getting ready to submit it appropriately. In terms of first line diffuse large B cell lymphoma, the phase 1 looks at, the regimen of TAPFIDLAN plus the care standard R CHOP, and its safety profile there versus TAFA Plus R CHOP alone without the LEN addition.
That is ongoing and that we should have data by the end of the year to then enable the decision on which of those two regimens should potentially be used against R CHOP in a larger randomized phase 3 first line study. So that remains on track to be done in the safety component. Maybe I
can speak about Europe and maybe, Barry can speak about the U S, which is coming sooner. So in Europe, we are at the stage of the submission. So we are sort of targeting, next year. And as you know, we have in place a team in hematology today already. We will be expanding that team and we hope we expect that the expansion will take place after the confinement has been lifted in that case.
If it's not the case, obviously, it will lead us to a different direction. Regarding the U. S, and the prep for the U. S, maybe Barry can say Sure.
So, obviously, we're co promoting with MorphoSys. So MorphoSys has their team fully in place already, sales, medical, market access, and so forth. We actually have our medical affairs and market access team in place and in fact are actively bringing on our salespeople. As far as COVID-nineteen goes, our current situation, it's a very good time actually for them to train and become experts in diffuse large B cell lymphoma. And tepacitumab if they're not already there.
So training continues to go on interaction with health care professionals goes on as we continue to prepare for this launch. But and we don't think it'll interfere with it. And even if we have to do a lot of the R, launch of tepcidumab, virtually, we're fully prepared to do that as well.
Okay. Thank you.
Our next question is coming from Matt Sips from William Blair. Your line is now live. Good
morning. Thanks for taking my questions. 2 quick ones on the IO programs. Just the decision to not start a stage 3 non sell one cancer trial, I think that's probably prudent. But ultimately, how do you think you get a return on investment with your PD-one antibody?
And then as a follow-up for the oral compound, you know, when you see data later this year, is there potential to kind of quickly advance this to later stage trials if you hit kind of pharmacodynamic and safety profile, or are we going to just move to kind of mid stage expansion, indication for the more efficacy data?
Yes. Maybe I can take the first question on the antibody on the PD-one antibody012. And Stephen can speak about the perspective on the project for 550 and and the rest of the portfolio of oral products. I think if you remember, I mean, the rationale at the beginning, that is still totally true is that it is very useful in the portfolio to have a PD-one antibodies you can combine with other products that would be, potentially used in the same patient population. The typical example would be FGFR in bladder cancer, but there are many other combinations that are being done.
And I think that rationale is absolutely true. On top of it, we have the so called niche indication programs that, where we could have in the relatively short term, potential for an approval of the product. So this is ongoing and doing well. And then we had this, program in lung cancer and where we have 1 of the 2 Phase III studies in lung cancer in first line wholesale and cancer is ongoing. And we decided not to do the other one mainly because the design of the study was such that it would be problematic to gain FDA approval without doing a study that was extraordinarily large or very risky.
So we are in a situation where we believe there is a clear rational of having an antibody anti PD-one in our portfolio where we have a short term opportunity with some the niche indication. And we have to take a little bit more time to put on shore to have that product approved in the first time treatment of non small cell lung cancer, and that would give us overall an ROI that would be very satisfying on top of strategic opportunity also to have a springboard for our oral PD-one program. So I will let students speak about the oral program.
Thanks, Herve. In terms of the oral PD L1 inhibitor, the number we call 550 been in the clinic for a little over a year now, obviously, started off with a 1st in human dose escalation to get to a recommended phase 2 dose that we know is in the pharmacologically active range in terms of PD L1 inhibition and what we wanna see in the tumor micro environment as well. And then move on to treating tumors, which in broadly speaking, we call benchmarking. But looking at areas that are potentially IO naive settings like lung, melanoma, where we can treat those patients in that part of the world, and that's going on now, get that data to see the efficacy bars, the efficacy signals that we get from the drug in those various entities. Once we're able to look at that this year, internally, we would then decide, do we have proof of concept where it exists and where to go?
And the way we then approach it, which is the meat of your question, is what are the rapid registration approaches then, once we have internal proof of concept and where we want to go and chase those various entities. And then looking more broadly, given that it's an oral therapy, Given that it lends itself to maintenance and adjuvant settings, again, if we've achieved proof of proof of concept of the efficacy we've seen, look at those bigger phase threes in those sort of settings and then include potentially large tumor types as well. But the program continues to to progress well. We're enrolling patients as we speak in the benchmark and setting to work as quickly as we can to proof of concept. I think we've demonstrated once we hit that and once we're comfortable internally, we could move to later trials very quickly.
Thank you.
Our next question is coming from Tazeen Ahmad from Bank of America. Your line is now live. Good
morning. A couple of questions. Going back to Jakafi estimates for the year. On reiterating your guidance, I just wanted to get a little bit of color on your thoughts maybe about mix. Can you give us an idea of what percent of sales right now are coming from, from Medicaid?
And what part of maintaining guidance assumes that that proportion stays the same, and I'm asking this question, because the unemployment rate at least temporarily has picked up higher how does that come into your calculations about revenue streams from Jakafi for the rest of the year? And then a pipeline question, if I might also ask, what have you been able to learn from the launch of Valversa And the reason for this question is more to get a sense of how you're thinking about PEMICIC and indication in urothelial and if there's any learnings you've gotten from that. Thank you.
Sure, Tazeen. So as far as our mix of patients So, I guess in this situation, we're fortunate that, most of our patients are in fact covered by other government programs, Medicare Part D, VA, DoD, TRICARE and so forth. Our commercial patient population is about 30%, 35% that makes up. And yes, Medicaid is really only about 4% of our payer mix right now. Could it go up?
Sure. But again, if it's like 30% is it going to go up 10%. We really don't think it's a big factor at all. And, as we go forward with our forecasting for the rest of the year and the guidance that we provided today, we'll have to see. Obviously, there's uncertainty there, but nevertheless we think we're okay with reinforcing our current guidance.
As far as what we've learned from Valvera, I don't know what we've learned. We haven't heard a lot from Janssen or at least I haven't heard a lot from Janssen. They don't seem to be releasing their sales on Viper Bell Versa themselves. And the most important thing perhaps is that they're continuing to educate and testing for FGFR alterations that could help us in the future. Thank you.
Our next question is coming from
Jay Olson from Heimer. Your line is now live.
Hi, thanks for taking the question. I'm curious about your work in dermatology. What are the gating factors to filing your topical RUX NDA for atopic dermatitis? And then what are your plans to build your dermatology commercial infrastructure sure. And for Vitiligo, how is that study enrolling and how has it been impacted by COVID-nineteen?
Thank you.
Jay, it's Steven. Again, I'll do your first and third question and someone will take your middle one. So in terms, remember, the atopic dermatitis studies have completed enrollment. Obviously, we've presented the data now and we alluded to it in the prepared remarks, and we move in full steam ahead to get that file in place. You know, we were slightly worried about the impact of COVID-nineteen on the ability to go to sites, monitor and gather data, but we haven't had any problems date.
And that's why we said on the prepared remarks, we remain on track to do that submission by the end of this year that remains the plan. And it's full steam ahead on that. It's why the end of the year, it's to wait for the safety follow ups. So we need that adequate range of safety follow ups from the last patient as to make the complete submission and get it in by the end of the year. In terms of the Vitiligo studies, they were enrolling in really well.
There is an minor impact from COVID-nineteen. But as Herve said on his remarks, which I think are really important to remind you, different parts of the world have impacted at different times. And Again, our studies remain on track there and we remain on track to deliver those studies in 2021 as planned.
On the commercial plan, so what we have said is still very true today. In the U. S, we are in the process of building a team. So we have, already an excellent clinical development team that is in place We are looking at all the other components of what will be commercial groups that is of high quality with a lot of experience in the field with market access, with medical affairs and with the commercial commercial group. So all of that is ongoing.
You have the timeline. The submission is planned for the end of this year. So you can expect the end of next year as being the potential launch date. And we so we are on track to doing that. Outside of the U.
S, frankly, we are looking at many different optionalities, which could be going alone in Europe or having a partner on both options are still open. And we have discussions ongoing to identify what would be the best way to do it. I can tell you following the excellent data we had in atopic dermatitis. It certainly stimulated a lot of interest. And I would say for the rest of the world, we are more, we are more certain that we will need a partnership instead of building.
And we are also looking at the right timing for, putting these partnerships in place for Asia and some other regions of the year. So the plan is really being executed now and it's a and it's in good shape. And for the U. S, as we said, I mean, buildup of the commercial team is already, starting with the first, the first components with market access and some marketing people.
Our next question is coming from Michael Schmidt from Guggenheim. Your line is now live.
Hey, thanks for taking my questions. Maybe just going back to bladder cancer, could you just remind us of palazares profile there and how you think it, it might compare not only to bother, but also to other weekly launch drugs such as Seattle Genetics process. And then the second question was going back to tafasitumab and the U. S. Launch, we've obviously seen some early FDA action recently.
And I was just wondering, more curious about potential overlap year in terms of marketing with your current that Jakafi target market and utilization of that sales force for launching the casasitamab in the U. S?
So Michael, it's Steven. I'll take your first question. And thank you for it. So again, in terms of bladder cancer and FGFR3 being the driver there, obviously, we have the monotherapy data both with intermittent dosing and continuous dosing coming in and looking at it. We already spoke on a call a couple of weeks ago that there has been some COVID-nineteen impact in our ability to gather that data in house and present it.
So it's more likely in early 2021 that we'll have that monotherapy data for you. We have an ongoing first line study in combination with a PD-one inhibitor with Pembro And obviously, you allude to how does it fit in in terms of the Seattle drug. And we'll have to see, again, this is a targeted agent for FGFR3. And there may be a evolving care standard and we'll have to watch carefully and we may have to change the the first line study as that market evolves and that profile of treating patients evolve. But we're on track in terms of getting that bladder data early next year.
What's very important to us though is the tumor agnostic program, given the potential ability to impact multiple different cancers with multiple different histologies is enrolling incredibly well. And we've seen little to no COVID-nineteen impact there. We're able to find those patients and get them onto that study. And that's going to be important to our overall lifecycle management of the drug. Then for your next question, I'll hand it over to Barry.
Yes, Michael. So, your comment about the FDA and approvals, we're prepared any time between now and the PDUFA date to launch tafasitamab. And yes, actually, the nice thing about tafasitamab fuselage B cell lymphoma overlaps completely with our current target population for myelofibrosis, polycythemia vera and GVHD.
Great. Thank you and congrats on the progress.
Thank you. Our next question is coming from Mara Goldstein from Mizuho. Your line is now live.
Great. Thanks for taking the question. I appreciate it. Just on GvHD and Jakafi, do you have a sense of the how the duration of treatment has evolved at this point. And then, I just had a question on the Lumber program.
And when you look at the totality of that program, do you see it enhancing the overall number of patients that can be brought into the MS population?
So I'll take the first part and hand it over to Steven for the second part. So, duration of therapy, you know, all we really have to go by. It's a little bit harder to get the duration of therapy for GvHDs than it is for MF and PV, for example. But so we go by the clinical trials and approximately 6 months is what we believe is the duration of therapy for acute steroid refractory,
GvHD. So Yes. And for your second question in terms of the Lumber program and the potential ability to reach more patients with MF, I think the clean on says, yes. So let me give you an example. So if you look at L2, one of the main reasons patients, the small number of patients that discontinued therapy is due to the development of anemia that becomes unmanageable If the ELT2 effect on Epsilon inhibition works and manages that, then patients won't experience that.
We'll be able to stay on drug. And and get extra benefit from it. In addition, it would open up potentially patients who can't go on drug, been able to be treated then with the combination that's one good example. If you look at our formulation work, the XR formulation, the once daily formulation, I mean, there's potentially convenience there in in terms of once daily being better for patients. So that hasn't been an issue to date, but that's a potential upside.
In addition, if ultimately that drug has because of its PK effect and having a less Cmax has ends up having a flatter profile in terms of the of anemia, that's another issue wherein MF patients, there may be increased use there. And then largely I'll just add beyond everything, whether it with Bet or with Delta, if you have the desired enhanced efficacy, then treating physicians will overall be more likely to use your product in that setting. So the clean answer on yes, if we get everywhere we want to get, I think, is pretty clear.
Thank you. I appreciate it.
Thank you. Our next question is coming from George Farmer from BMO Capital Markets. Your line is now live.
Hi, good morning. Thanks for taking my questions. I'm wondering, Herbert, if you can comment a bit more on the PD-one strategy. What are your commercial expectations in frontline lung cancer? And can you elaborate at all on any more on any of the niche indications that you had
So, yeah, as we said, the niche indications are relatively small in terms of the number of patients for each of them. There are potential way to have the product approved, which could be very important for many other aspects of the program and the combination with some of our pipeline products, etcetera. In the first line non small cell and as you know, the approach we have is a mid to approach in the first line treatment of patients receiving chemotherapy in cancer. So it would be a chemo plus or 12, versus chemo. And if this is successful and allows us to get FDA approval in that indication, it will give us a position where it will become an alternative to existing treatment in that setting.
And frankly, it's such a large number of patients that we believe it can be productive from the revenue standpoint. It is also an opportunity in the right setting because as you can imagine, if you give chemotherapy to a patient, it's not the right place to use an oral PD-one versus an IV PD-one, While after the chemotherapy is over, there are 18 months of treatment with single agents, injectable antibody that could be obviously better managed with an oral product. So there is a scenario where it will help us organize the treatment of patients with non small cell lung cancer where you receive chemo plus an injectable PD-one and then you can have consolidation or the next months of treatment being done with an oral product. So there is a number of ways where this can fit very well with our portfolio and where by itself, it is not a small number of patients in first line lung cancer. There are a number of ways where we could gain market share just by having the approval in that indication.
Okay. Thanks very much.
Thanks. Our next question is coming from Ren Benjamin from JMP Securities. Your line is now live. Hello, Ryan. Perhaps your phone is on mute.
Please up your handset. If you can hear me, we cannot hear you.
Hey, good morning. Thanks for taking the questions and, congratulations on the quarter. Maybe for Steven, can you talk a little bit more about the data collection and validation disruptions on FIGHT 201? Is that something that's particular to that study and shouldn't impact other studies? Or if it could impact other studies like a true the, what kind of measures you have in place, to prevent that from happening?
And then as a follow-up, maybe for Barry, I keep getting amazed by, the growth in MF. Every time I think we're hitting a plateau, you continue to find more patients. I see about Looks like about 8000 patients for MF, 4500 for PV and 1500 for GvHD roughly. Can you just talk a little bit more about how much growth you might potentially see in MF and where these patients are coming from?
Stephen. I'll start. So across the board, there has obviously been a COVID impact on the program in particularly obviously in places like New York City in terms of the ability to get studies done there and access sites to get data. I think for 5201, the particular issue was to try get it ready to present at a meeting in the second half of this year in time. Just to meet those meeting timelines.
And we realized from a site access point of view in terms of getting it in, we're just not going to be able to do that in a timely manner. So that's the issue peculiar to that related to the particular meeting and nothing more than that. Gary?
So, Ren, yes, so MS continues to be the backbone, even though PV continues to grow faster quarter over quarter in terms of new patients or total patients, but MF certainly hangs in there. 8000 patients might be right. We think the prevalent population is still 15,000. Obviously, we have about 3500 to 4500 new MF patients a year, but I think mostly it's because we're starting new patients earlier, physicians recognizing that when they start earlier, that's when their survival benefit really comes through. And obviously, the duration of therapy, we have many patients that have been on therapy for 8 years or more.
In fact, So it's really starting patients earlier, getting all the new patients that are newly diagnosed and the duration of therapy.
Thanks for taking the questions.
Thank you. Our next question today is coming from Christopher Marai from Nomura. Your line is now live.
Yeah. Hey. Good morning. Just a follow-up on on some of your GVHD comments for Jakafi. I was wondering if you could, elaborate on the number of patients treated, whether that's just the acute setting or the acute in the chronic setting?
And how do you look at growth you know, going forward given the emerging competitive landscape there for Jakafi and GvHD.
So, so the number of patients in GvHD, so, if it is approximately a 1000 patients maybe so far that are on it, obviously there is spontaneous use of Jakafi in chronic GvH D. So it's some of those patients included there. We think the chronic indication that's coming if we get data at the end of this year towards the end of this year for Reach 3. It's very important for the continued growth in that patient population. But, Jakafi, as we said beginning in the prepared statements that is fast becoming the standard of care and acute steroid refractory GvHD some of the other studies, some of the other drugs are being developed in acute GvHD or chronic GvHD.
So far, there hasn't been necessarily pivotal data compelling data that would we would think we would interfere with the current use of Jakafi in steroid refractory or then chronic GvHD.
Okay. And then just thinking about, your PD-one antibody, and some of those combinations that you alluded to When might we start to see some of the first combination data and perhaps, you know, what combination data would you be looking at as potentially most exciting, you know, relative to, I guess, combinations with your current, internal pipeline.
Yes. Christopher, it's Stephen. Hi. So as Evi said, the 3 niche tumors are on track squamous cell, anal carcinoma, MSR high endometrial and the Merkel. And then the lung program, the what we call the sort of clone study, enabling safety work with all of them as we speak over this calendar year.
Thanks. Thank you.
Thank you. We have reached the end of our question and answer session. I'd like to turn the floor back over to any further or closing comments.
So thank you all for your time today and for your questions. Of course, the IR team will be available throughout the day. Any follow-up questions you may have, and we look forward to talking to you at investor conferences in the coming weeks. But for now though, we thank you again for your for your participation in the call. Stay safe.
Have a good day.
Thank you. That does conclude today's teleconference webinar. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.