Greetings, welcome to Incyte Corp's third quarter 2019 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Michael Booth, Head of Investor Relations. Please go ahead.
Thank you, Brock. Good morning, and welcome to Incyte's third quarter 2019 earnings conference call and webcast. The slides used today are available for download on the investor section of incyte.com. I am joined on the call today by Hervé, Barry, Steven, and Christiana, who will deliver our prepared remarks, and by Dash, who will join us for the Q&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, however, I'd like to remind you that some of the statements made during the call today are forward-looking statements, including statements regarding our expectations for 2019 guidance, the commercialization of our products, and our development plans for the compounds in our pipeline, as well as the development plans of our collaboration partners.
These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our 10-Q for the quarter ended June 30th, 2019, and from time to time in our other SEC documents. We'll now begin the call with Hervé.
Thank you, Mike, good morning, everyone. Incyte continues to execute well across all aspects of the business. We have delivered multiple positive updates from our late-stage portfolio in recent weeks, and our product and royalty revenues continue to grow at a remarkable rate for a company of our size. Product and royalty revenues in the third quarter grew at 24% over the same period last year, totaling over $530 million and including $433 million in Jakafi sales, which increased 25% in Q3. Sales of Iclusig in Europe, as well as royalties from Jakavi and OLUMIANT, also increased year-over-year. At the beginning of 2019, we set out an ambitious list of R&D goals for the year, and I am pleased to report today that we have already achieved the majority of them.
The NDA for pemigatinib, seeking approval as a treatment for patients with FGFR2-driven cholangiocarcinoma, has been submitted to the FDA, and the positive updated data that supported the submission were presented in September at ESMO. We recently reported that REACH2, the phase III trial evaluating ruxolitinib in steroid-refractory acute GVHD, met its primary endpoint of superiority over best available therapy. This data further reinforced the efficacy of Jakafi as a standard of care treatment option for these patients, following FDA approval in this indication in May. We were also pleased to provide 52-week follow-up data from our randomized phase II trial of ruxolitinib cream in vitiligo at EADV. This data shows that patients treated with a higher concentration of ruxolitinib cream experienced continued improvement in their disease with additional time on therapy, and we have already launched a global phase III program for ruxoliti nib vitiligo, with results due in 2021.
We still have some key items we expect to deliver before the end of the year. For now, I'll turn the call over to Barry for an update on Jakafi.
Thank you, Hervé, and good morning, everyone. Net product revenues for Jakafi were very strong in the quarter, totaling $433 million. This is an increase of 25% when compared to the same period last year. Growth was primarily driven by patient demand, which grew 18% year-over-year, and there were no appreciable effects of inventory in the quarter. Because of the strong demand for Jakafi today, we are very pleased to be increasing both the bottom and top end of full year 2019 guidance for net sales of Jakafi to a new range of $1.65 billion-$1.68 billion. We are seeing good demand for Jakafi in all three approved indications. More than 50% of eligible myelofibrosis patients in the U.S. are currently on Jakafi, and total patients on therapy increased approximately 5% year-over-year.
We continue to be encouraged by the growth we see in this indication, especially in its eighth year since approval. Patient growth in polycythemia vera continues to be higher than myelofibrosis, and within the eligible population, Jakafi has reached more than 20% penetration. We saw an opportunity to increase disease awareness in both PV patient and physician community, and in an effort to augment the patient voice, we recently launched a pilot television and social media disease awareness campaign. This pilot was conducted in several key target markets where it has been very well received, and we have now expanded the education campaign nationwide. This is the first full quarter of sales since approval in steroid-refractory, acute GVHD, and while early, the launch is currently outpacing our internal expectations.
Importantly, we are seeing comprehensive access in both the inpatient and outpatient treatment settings, and we continue to see strong uptake and broad utilization across bone marrow transplant centers.
I'll now turn the call over to Steven for the clinical update.
Thanks, Barry. Good morning, everyone. Continuing with Graft-versus-host disease, we were pleased to report the positive outcome for REACH2, the randomized trial of ruxolitinib versus best available therapy in steroid-refractory acute Graft-versus-host disease. We plan to share these data with the FDA for inclusion in the JAKAFI label, and we look forward to sharing the detailed data with you at an upcoming scientific meeting. REACH3, the randomized trial evaluating ruxolitinib in patients with steroid-refractory chronic Graft-versus-host disease, is ongoing and has almost completed recruitment. A recent interim efficacy and safety analysis conducted by an Independent Data Monitoring Committee recommended that REACH3 should continue without modification, with results expected in 2020. Moving on to pemigatinib for cholangiocarcinoma. Slide 11 shows the data that were presented at ESMO and which formed the basis of our recent New Drug Application.
As you can see, in Cohort A, the overall response rate was 36%. Median progression-free survival was 6.9 months, and median overall survival was 21.1 months. Importantly, the vast majority of patients have some degree of tumor size reduction, as evidenced by the 82% disease control rate and as illustrated in the waterfall plot on Slide 11. We believe that pemigatinib offers a meaningful improvement over the current standard of care in the second line, which typically results in single-digit response rates, median progression-free survival of three months, and an overall survival of approximately six months. The most common adverse event of all grades was hyperphosphatemia, which is an on-target effect of FGFR inhibition that can be managed with a low phosphate diet, phosphate binders, and diuretics. Hypophosphatemia occurred in 23% of patients, which was likely due to the treatment for hyperphosphatemia.
Serous retinal detachment was seen in 4% of patients, which was mostly Grade 1 or 2. If you recall, the only potential curative therapy for cholangiocarcinoma is surgery, but approximately 70% of patients are diagnosed with unresectable disease, so the need for new therapeutic options for these patients is clear. My third slide summarizes updated data from the randomized Phase II trial of ruxolitinib cream in vitiligo, which were presented a few weeks ago at EADV. These data showed continued improvement in repigmentation with additional time on therapy, as objectively measured by VASI scores. For example, in patients dosed with 1.5% BID and followed for 52 weeks, the facial VASI 75 was achieved in 52% of patients, up from 30% of patients at 24 weeks. The facial VASI 90 was achieved in 33% of patients, up from 12% at 24 weeks.
The global phase III program of ruxolitinib cream in patients with vitiligo is already enrolling, with the facial VASI 75 at 24 weeks being the primary endpoint. We expect the result to be available in 2021. With that, I'll like to turn the call over to Christiana for a 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 19 and 20 in the backup section of the deck and to the press release we issued this morning. Our third quarter results reflect continued strong growth with total product and royalty revenues of $534 million, representing an increase of 24% over the third quarter of 2018. This is comprised of $433 million in JAKAFI and $21 million in ICLUSIG net product revenues, $58 million in Jakavi royalties from Novartis, and $22 million in OLUMIANT royalties from Lilly. We also recognized $18 million in contract revenues under our collaboration agreement with Zai Lab, resulting in total revenues for the quarter of $552 million.
Our total costs and expenses for the quarter on a non-GAAP basis of $365 million decreased by 1% from the prior year quarter. Ongoing R&D expenses for the quarter was $251 million on a non-GAAP basis, unchanged from the prior year period, reflecting our decision to reallocate capital from the co-funding of baricitinib and the development of epacadostat to our other late-stage development programs. SG&A expenses for the quarter was $90 million on a non-GAAP basis, representing a 6% decrease over the prior year quarter. Moving to our guidance for 2019. Given the strong performance of Jakafi in the first nine months of the year, we are increasing Jakafi full-year guidance to a range of $1.65 billion-$1.68 billion.
Our guidance for both R&D and SG&A remains the same as we continue to invest in our commercial operations and our clinical development portfolio. We expect certain of these expenses to be more back-end loaded into Q4 2019. I will now turn the call back to Hervé.
Thank you, Christiana. Our last slide reminds you of our progress to date in 2019, as well as the remaining key news flow events we expect during the year. These expectations include the NDA submission by Novartis for capmatinib in patients with MET exon 14 skipping mutations in non-small cell lung cancer. Capmatinib is another development candidate discovered in Incyte laboratories and has the potential to be an important product in lung cancer. It was recently positioned in the Novartis third quarter material as a key approval for them in 2020. For Incyte, capmatinib also has the potential to be a meaningful contributor to our top line, with over $500 million in potential milestone and 12%-14% royalties on global net sales. We're also looking forward to having the result of the GRAVITAS-301 trial of itacitinib in first-line acute GVHD in-house at the end of the year.
Itacitinib has the potential to be another key contributor to near-term revenue growth. With this strong execution across our late-stage development programs, we are making significant progress toward our strategic goals of adding diversification to the top line and further accelerating revenue growth. That concludes our prepared remarks, and we are now happy to take your questions. Operator, please give your instructions and open the call for Q&A.
Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. The first question today comes from Salveen Richter of Goldman Sachs. Please go ahead.
Thanks for taking my questions. With regard to the early uptake and feedback for JAKAFI and GVHD, what does that suggest for the trajectory here, and have there been any gating factors? A follow-up for Hervé. Given the progress of your pipelines in both oncology and I&I, how are you thinking about business development opportunities?
Sure, Salveen. GVHD, as I said, the uptake has been very good since the beginning. We think the opportunity for itacitinib is ultimately where the opportunities lie. Jakafi is giving patients benefit right now. We believe it'll give benefit in acute GVHD as we are now, and then in the future for chronic GVHD. We await the results of GRAVITAS-301 for itacitinib and a potential worldwide for that drug.
Salveen, on the progress of the late-stage portfolio, obviously our strategic goal of diversification and growth, that's really what we are aiming at. Obviously a lot of it is now starting to take place with pemigatinib. We spoke a little bit about capmatinib, which is not always the most known of our pipeline products that Novartis has been licensed to Novartis. We are on a good track to succeed on getting these products to market over the next few years. At the same time, we are obviously looking at BD opportunities that would fit with our portfolio. We are mostly looking at oncology, hematology type of assets. It's a continuous process where we are reviewing opportunities. We are expecting, we hope, to be able to gain some additional products to fuel the growth of the top line in the next few years.
Thank you.
The next question is from Marc Frahm of Cowen and Company. Please go ahead.
Hey, thanks for taking my questions. Maybe this is for Barry. In the prepared remarks, you mentioned that the awareness campaign in PV is having some success. Can you maybe define that a little bit better? Are you already seeing an uptake in sales within those regions, or is it more qualitative measures? Then, what type of budget are we talking about now that you're expanding it nationally and trying to broaden that success?
Well, the way we measure uptake, it's very early. As we said, we did it in five key markets across the country first, and what we saw there was really the uptake in social media sites. For example, Take Action PV is what we direct patients to go to, or healthcare professionals to go to get more information. There's education materials there, materials they can download to track their symptoms. We saw spikes in those first five key regions. Now, as we expanded across the nation, which only started October 1st, so we don't really have all that much data yet, but it certainly has grown dramatically on those sites that we're sending patients to. The budget nationwide is relatively small. This is a 30-second commercial.
We're placing it at time periods that we think patients will see it, but at the same time, don't cost a fortune. It's not going to the Super Bowl, but it is, in fact, we think, being very effective as an educational tool for patients and healthcare professionals.
Okay, great. Maybe a short follow-up on kind of the market dynamics for JAKAFI. Maybe some comments on what the initial impacts of fedratinib's launch that you may or may not have seen yet.
Yeah, I think it's early. We haven't really seen much of an impact yet. We know that Celgene is really positioning it as a second-line agent just by their pricing strategy that they came out with, then very particularly, their marketing materials that we have seen are positioning it as a second-line drug. Maybe you also are aware that the only two clinical trials that they have ongoing now, a single-arm trial and a phase III trial compared to best available therapy, are both after Jakafi. Clearly, they're positioning it for a second-line drug, and we haven't seen the impact yet on Jakafi. We're fully confident because we have long-term follow-up data, eight years of data, more than 50,000 patients treated in the U.S. with the drug.
The safety profile is there, and of course, an overall survival advantage that I don't think that fedratinib will ever be able to achieve, particularly with their JAKARTA study, because it was never followed up on.
Great. Thank you.
The next question is from Tyler Van Buren of Piper Jaffray. Please go ahead.
Hey, guys. Good morning. Great to see the solid results on the quarter. Just had a couple of follow-up questions to Marc's line of questioning. As you look at Jakafi in MF and PV, can you give us an update on duration of treatment for both of those indications? Also, as we think about long-term in terms of PV, could we see ultimate penetration of the patient population reach that 50% level that we're seeing with MF? Perhaps just some updated thoughts on the long-term guidance that you guys gave last year. I believe it was $2.5 billion-$3 billion by 2027. If we see the continued growth in PV and GVHD, that seems exceedingly achievable. Be interested to hear your updated thoughts.
Sure, Tyler. This is Barry. We're still confident of the $2.5 billion-$3 billion long-term guidance. That's clear. In terms of persistence, it's what we've said all along, to be honest with you. I think we have to turn to the clinical trials for persistence. When you look at PV, when you look at the response data, you saw 80-plus, 83% of the patients were still on therapy at two years. In the COMFORT trial, you saw that 50% of the patients were still on at three years. That's still our touchstone for persistence. In PV, we continue to grow year-over-year. This year, we grew total patients in PV 15% year-over-year, and that continues to exceed the continued growth in patients in MF.
We see that in PV, we'll catch up to the MF patients sooner or later, and we certainly are confident that the clinical profile of Jakafi in polycythemia vera patients could hit the 50% mark at some point.
Thanks for taking the questions.
The next question is from Brian Abrahams of RBC. Please go ahead.
Hi there. Thanks so much for taking my questions, congratulations on the strong quarter. On GVHD, can you provide any perspectives on the REACH3 stopping rule at the interim and maybe frame expectations now that readout's been pushed out to next year? Related to that, I'm curious your latest views on the potential impact of JAK1 versus pan-JAK inhibition on the potential for efficacy in GVHD and the bar for the itacitinib readout now that you guys have more clinical and commercial experience in the space. Thanks.
Yeah. Hi, it's Steven. In terms of REACH3, we don't normally guide to interim results, but this time working with our partner, Novartis, we obviously did expect to potentially have some results by the end of 2019. As you can see, the study at interim made it through the interim analysis by the IDMC, and they recommended to continue the study to completion without modification. The recruitment itself is about to finish. We literally have only a few patients left. By the nature of an interim, there's always a higher bar to achieve at interim analysis to close a study because you have to be very careful that you do it appropriately. We're not at all worried. We remain extremely confident in the data sets.
The primary endpoint in the chronic graft-versus-host disease study is an overall response rate at month six, there are numerous secondary endpoints that are important here, including failure-free survival, symptom improvement, overall survival, and others. Sometime in 2020, we'll get those results. We remain extremely confident in that. Just to reiterate, it was a little unusual for us to guide to an interim, again, working with a partner, that's what we did. In terms of reading through to itacitinib and a more JAK1 agent, it hits JAK1 more than the other JAKs. We saw our proof of concept data for itacitinib. It was strong across the spectrum of disease, it was even stronger in steroid-naive acute graft-versus-host disease, which led to GRAVITAS-301.
In addition, patients with steroid-naive acute graft-versus-host disease or immediately post bone marrow transplant or allogeneic transplant tend to be sicker, tend to have cytopenias, particularly low white cell counts and low platelets. To have a relative JAK2-sparing agent that doesn't cause as much cytopenia as the others is potentially beneficial from a therapeutic ratio point of view. In terms of the biology of the disease, it ameliorates the biology appropriately, and again, we remain confident in that.
That's really helpful. Thanks, Steven.
The next question is from Michael Schmidt of Guggenheim. Please go ahead.
Hey, thanks for taking my questions. I just had a follow-up on GVHD as well. I think you said the launch is outpacing your internal expectations. Just wondering if you could help us with a little bit more information around what treatment share do you have at this point, and maybe what % of top-line sales was contributed by GVHD?
Sure, Michael. Well, treatment share, I'm not exactly sure. I think that we're the most used agent maybe already in the second line setting. I can't be sure of that. Trying to get information on GV-HD is a little bit harder than MF and PV since it's all hospital-used. That's it. I think last year I said something like, with spontaneous use and then with the approval, we'd hit somewhere around $80 million for this year. I think we're ahead of that. I can't give you an exact number for that. We're very pleased with the uptake in GV-HD, and we think with now the REACH2 data, it'll even be stronger in the future.
Great, thanks. Maybe a bigger picture question for Hervé regarding the earlier stage pipeline. I guess you're pursuing both new immunotherapies as well as targeted oncology drugs, and obviously there's been some very interesting data generated in the last couple of years, specifically with TKIs going after driving mutations, including pemigatinib, obviously, but there are other targets as well. On the other hand, I think many would agree that the success rate for new immune oncology drugs has been rather mixed. I guess in that context, I was just wondering, how do you see your bigger picture pipeline strategy evolve longer term going after both areas?
Thanks for the question, because obviously it's very important, and it's a field where the effect of the decisions we made over the past few years are always seen with a delay. We were obviously with a very heavy share of the research effort in immuno-oncology and immunity in general, which led to a number of other projects beyond oncology. What has been happening over the past two years is a rebalance where we have now more targeted therapies or targeted oncogenic mutation type of projects that are a larger part of our portfolio. At the same time, we are keeping immuno projects today. I would say it's a balance that is probably in the 60-40 or 40-60 kind of ratio, where maybe in the past it was more heavy on the immuno aspect. Dash, if you want to speak about it.
Yes. Thanks for the question, Michael. Just to sort of echo what Hervé was saying, I think you're right at some level, the promise of immuno-oncology is being tempered by clinical data. We still think there's plenty of opportunities out there in both the targeted and the immuno-oncology space. You'll remember or you'll know from our sort of access to modalities that we have both small molecule and biologics capabilities. Having both of those options open to us does keep the entire area open. We have a number of programs that we think will enter the clinic in the coming months that target both going after a very sort of traditional targeted therapeutic approach as well as an immuno approach, and then combinations thereof.
Thank you.
The next question is from Cory Kasimov of JP Morgan. Please go ahead.
Hey, good morning, guys. Thanks for taking my questions. First one for you is on expenses. SG&A and R&D both came in pretty meaningfully below expectations for the quarter, but guidance was unchanged, which would imply a decent step-up in 4Q just to get to the low end of your range. Is that something we should be anticipating? Maybe to the extent you're willing to qualitatively comment on trends into 2020, do you have any kind of preliminary big-picture expense thoughts going forward? I have one follow-up.
Hi, Cory. It's Christiana. Thank you for your question. First of all, big picture in terms of R&D and SG&A costs, we continue to aggressively invest in our clinical development portfolio as well as on our commercial operations. What you are seeing with R&D this year and the expenses coming on the lower side is that we were able to reallocate expenses that were previously for epacadostat and baricitinib to our other late-stage development programs. That allowed us to be able to push forward the other development programs without seeing an increase in R&D. Going forward, however, as we have discussed in the past, we are looking to invest in R&D based on the quality and the progress of the program. Based on data and merits of the programs, if those programs progress through later stage of development, you would expect that to drive R&D expenses.
In terms of Q4, we reiterated the guidance that we provided on both R&D and SG&A because there is a timing factor for some of the expenses on both lines that we expect to be more back-end loaded into Q4 of 2019. Therefore, we continue to be comfortable with the initial guidance that we have provided.
Okay, that's helpful. My follow-up is a quick one for Steven. How much patient follow-up will you wait for in that FIGHT-201 pemi bladder study before potentially top-lining that data?
Hi, Cory. Steven. Typically, across the board, ballpark follow-up in these sort of studies required by regulatory agencies is around 12 months. That's for your last responder. What I'm saying is you complete recruitment, if that very last patient is a responder, you typically require about 12 months. If you think we've just recently completed recruitment on the study, we're looking at data sometime mid-2020 or beyond to get a complete view of that picture across the board on our bladder data.
Okay, perfect. Thanks for taking the questions.
The next question is from Evan Seigerman of Credit Suisse. Please go ahead.
Hi, all. Thanks for taking my question and congrats on the progress. Christiana, one for you. How would you characterize your capacity to transact? I know Hervé mentioned some high-level thoughts on BD, and then I have a follow-up on that. Just basically, what are some characteristics of assets that you would consider bringing in-house? One for you, Christiana, and one for you, Hervé.
In terms of the capacity, as we have discussed in the past, we have a strong balance sheet. We currently have $2 billion of cash on our balance sheet. That gives us the opportunity to consider bringing in external assets to add to our internal portfolio. In terms of the nature of the assets, we are looking at programs that could contribute to revenue diversification and growth in the mid-term timeframe. Continuing to add to growth as we're getting closer to the Jakafi potential patent expiry period. Bringing additional growth drivers then obviously makes a lot of sense for us. Do you want to-
Yeah, the type of assets it's fairly clear. The first is obviously hematology oncology. Anything that would be good science, that would be innovative, that would provide a benefit that is unique in the field of cancer treatment, could fit with our portfolio, where we have a very strong hematology franchise, both in Europe and the U.S., and where we have this emerging solid tumor franchise also in the U.S. and a little bit later in Europe. That makes sense. In terms of timing, we are looking at the window between 2025 and 2030, and it's fairly obvious why, because that's where we will need more diversification.
The second aspect is to complement our MF and PV franchises, where there are new mechanisms that can be complementary to what we have in our portfolio, and where obviously our leadership in MF and PV could be reinforced by external assets if any benefit could be shown from this. We have a little bit of a longer view on the non-oncology aspect. As we said, we will be commercializing our Opzelura in the U.S. We may have partnership if needed, but we will be leading the commercialization in the U.S. We will be partnering our dermatology assets outside of Europe and U.S., and we are still looking at what the best strategy for Europe. There, there could be also potential BD aspect to the dermatology franchise.
We are very confident in the benefit we are showing, both in atopic dermatitis and as you saw in vitiligo. It's a fairly striking data with the long-term follow-up, and we believe there is a true value in this franchise, and complementing it with external assets could be an option. It's not absolutely mandatory because we believe in the U.S. we can build a team to successfully commercialize. There could be some complement to it. It's fairly clear. It's hematology oncology for 25 to 30, that's where the contribution to the top line will be the most valuable. It's lifecycle management of MF and PV. Potentially, if we find the right assets in dermatology or somewhere in non-cancer immunology, it could be also another dimension.
Okay, I just follow up there. Are we talking $1 billion, $2 billion, or really, have you give color on that in terms of what you'd pay?
The main focus is on what I would characterize as pack-in type of assets that we can bring in either through licensing or M&A. We are agnostic in terms of the structure, whatever makes sense.
Okay. Thank you.
The next question is from Jay Olson of Oppenheimer & Co.. Please go ahead.
Hey, guys. Congrats on the quarter and all the progress. I had a couple questions. Could you comment on what were the best available therapies that JAKAFI beat in REACH2, and is there overlap between those best available therapies, in REACH2 and REACH3? Just to follow up on pemigatinib, could you provide some additional color on how the enrollment is going in FIGHT-205 and FIGHT-207 and also the bladder cancer continuous dosing cohort?
Hi, Jay. It's Steven. Thank you for your question. Both REACH 2 and REACH 3 are randomized studies against best available therapies. Just to mention, REACH 2 that we've just said reported out as positive and will be presented at an upcoming medical meeting. To our knowledge, is the first randomized study in graft-versus-host disease that has reported out as positive. That's really good news, obviously, for patients and for us. The therapies themselves are listed on clinicaltrials.gov, but just to give you a sense, there are slight differences because they're different disease entities. For REACH 2, they include things like antithymocyte globulin, extracorporeal photopheresis, there's mesenchymal stromal cells, low-dose methotrexate, mycophenolate, and even mTOR inhibitors like everolimus can be used.
For REACH3, there's some overlap, but they also, in addition, because it's chronic graft versus host disease, include therapies like rituximab and imatinib as well as ibrutinib, which is approved in chronic graft versus host disease. The complete list is available on clinicaltrials.gov. Enrollment to the second part of your question on the studies you mentioned for the entirety of the pemigatinib program, obviously includes our completed first part in cholangiocarcinoma and then the ongoing first-line study there, then the large bladder cancer program, and then the tumor agnostic, as well as a smaller entity that we don't speak about much but very important to patients is an 8p11 myeloproliferative neoplasm. We don't guide to exact dates in terms of enrollment other than when we start and sometimes when we end the studies.
Just to give you a sense that the agnostic study 207, which you mentioned, has started enrollment, and will be looking at different driver mutations there. We expect to complete, as I just alluded to, the second-line bladder study before the end of this year and have data latter part of next year. We're about to start the first-line bladder study. That gives you a sense of the cadence of enrollment and the entirety of the program.
Great. Thanks for taking the questions.
The next question is from Ren Benjamin of JMP Securities. Please go ahead.
Hey, good morning, guys, and thanks for taking the questions and congratulations on a great quarter. I guess just as a follow-up regarding the REACH2 data. Steven, is there anything there that kind of increases your confidence in regards to REACH3, or are the two diseases really separate and distinct, acute versus chronic?
Ren, thank you. It was great to see a randomized study against best available therapy being positive. Again, as I just said, we look forward to sharing those results to you. It further does increase our confidence in what we already know, per se, that ruxolitinib is a really good drug for steroid-refractory acute Graft-versus-host disease. Chronic does have a slightly different pathophysiology as it's more a disease of fibrosis with more skin manifestations as opposed to a more apoptotic disease in acute, where there's more sort of cell death in the liver and GI tract. There's enough overlap, and our proof of concept data was strong enough that we remain confident in chronic Graft-versus-host disease. We do think, although the pathophysiology there's a little bit of a difference, there's a good read-through and we're confident in getting that data next year.
Got it. Just as a follow-up, the vitiligo studies have started. Can you give us any sort of a sense if its enrollment is on track or ahead of schedule and have all the sites open?
Yeah. You're correct. The vitiligo studies have started. As you saw in my formal presentation, we just presented the 52-week data at the EADV with continuing improvement, quite dramatic in patients through one year. The studies have just recently started, I will tell you, it's a pleasant surprise to us working in dermatology. These studies accrue really, really well. With sites open quickly, we have dedicated dermatology centers across the globe who are good at doing clinical research, who put patients on quickly, and we're up and going with gusto and very positive about it.
Great. Thanks for taking the questions.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Alethia Young of Cantor Fitzgerald. Please go ahead.
Hey, guys. Thanks for taking my question. Congrats on the quarter. Two, one, maybe Steve, can you talk a little bit about best supportive care for REACH3 and how it varies across the world? Do you think there's any kind of variability there that you should consider in the trial that's ongoing? The second question probably is more for maybe Hervé. I guess I'm just curious how you think about kind of long-term margins for the business, and where we are exactly in kind of the peak cycle for JAKAFI. It seems like there's still a lot of room to move and you're building in PV, kind of an awareness and there's penetration that could be had. Maybe if you can frame that from a high-level perspective, that'd be helpful. Thanks.
Hi, Alethia. It's Steven. You do allude to something we see in graft-versus-host disease, not only across the world, but even within the United States and even within cities themselves. There are treatment differences in patterns at bone marrow transplant centers in how people have treated this condition to date and continue to, both in terms of preparative regimens and actual regimens. Which is exactly why for best available therapy, we have to account for a number of therapies. There's no dramatic differences across the world compared to just, as I said, even within the U.S. itself. We always, as a matter of course, do analyses that look at differences, if there are any, between different parts of the world to explain response rates, et cetera. Those analyses will be done.
Typically, you do the U.S., Western Europe, and rest of world analyses, and we'll look at those. Nothing that we're concerned about.
Regarding the cycle, I mean, the sort of medium to long-term cycle of the business, obviously the growth of JAKAFI in the U.S. is very key to the entire P&L of Incyte. As you can see, this quarter, in fact, is growing even faster than the previous one versus last year. Q3 last year was a little bit lower maybe than it should have been. The ratio of the 25% growth for JAKAFI U.S. may be slightly higher than the true trend over the year. I think we are more in the 20%, but which is still very, very strong for a sort of a seventh or eighth year of commercialization. We see a lot of potential for continued growth of JAKAFI in the U.S. in MF. It is still volume growth. Patients volume is increasing in MF.
In PV, as we said, there is a larger potential for two reasons. It's because the treatment rate is still on the low end, below 50%, and the duration of treatment for every patient started on Jakafi is very much longer than what we have in MF. What we see is a sort of a chronicization of the disease in MF that is leading to this growth potential that is obviously higher. We are not changing the long-term guidance very frequently, but we have made a lot of progress towards the numbers that we gave a few years ago of 2.5 to three, and that's something we are very confident in. Regarding the P&L itself and the margin, as Christiana has said, we are investing in R&D based on the quality and the required work for the assets that we have.
It may be fluctuating, as you have seen, when epacadostat did not work as planned, to say the least. You could see that it had a positive impact on the R&D budget, which is obviously the paradox of our industry, is that if you stop a project, it will improve margins. Obviously, our goal is not to manage the margin short-term proactively, but to maximize the value to the company and the shareholders by doing the right clinical development for each of the assets that we have in our hand.
At the same time, you may have seen from 2014 to today, is that we are in a trend of improving ratios in the P&L, where the growth of the top line has been not every single quarter, but if you look at it on a cumulative four-quarter in a row, that margin has been improving over time. That's why we are where we are today, where the P&L has the shape that it has today. That's something we will continue to look for, but it may include quarters where investment will increase because some of the assets that we have are requiring an increased investment at some point.
Overall, the way we have been sort of looking at this is certainly growth of the top line is driving our ability to invest in R&D, and they are the two components to create value that will be sustainable for the long term for Incyte.
Our next question is from Vikram Purohit of Morgan Stanley. Please go ahead.
Hi, good morning. Thanks for taking the question. I wanted to go back to long-term Jakafi and the tail on that franchise. I had two questions on Jakafi lifecycle extension programs. I believe earlier you'd alluded to possibly getting some extended release data in 2020. I just wanted to see what the status of that program was, if it's in the clinic yet or not. Secondly, I believe the last time we saw some Jakafi combination data was at ASH last year in combination with the PI3K molecule. I just wanted to see when further data from that combination could be available, as well as from other combinations like PIM and itacitinib in the MF setting. Thanks.
Vikram, hi, it's Steven. Thank you for your question related to ruxolitinib lifecycle management, which we view as something for ruxolitinib itself as well as for myeloproliferative neoplasms in general. There are three pillars to the program, and you mentioned all of them. Firstly, in terms of formulation work, which you brought up, that's been ongoing this year. It involves an extended release approach in terms of formulations and bioavailability and bioequivalence work. That is underway. It's been going and will, as you just said, complete in 2020 at some point, and then we'll use it to have regulatory discussions probably through the middle of 2021. We'll find an appropriate meeting to present it at, but I'll remind you that we actually presented some ruxolitinib data in 2011 with the 25 milligram XR tablet. We have already and that work is ongoing and progressing well.
In terms of the second pillar, combinations, we are running, as you said, a PI3K delta combination. That's the most mature of them. We also have a ruxolitinib plus PIM combination and a ruxolitinib plus itacitinib combination ongoing. We'll have our sales data in-house to look at ourselves with ruxolitinib plus delta approximately end of this year, and we'll find an appropriate meeting to present it at in 2020 and make go-forward decisions or not in either first or second line myelofibrosis when we look at the completeness of the data. We'll also should have enough data with PIM and itacitinib also to present in 2020 at an appropriate meeting. The third pillar, and very important, is new targets to look at in MF, PV, and collaborations with academia and different vendors, including epigenetic screens, to look if there are any new targets there.
We haven't announced anything publicly yet, but that's a very active endeavor as well.
Okay. Appreciate it. Thank you.
The next question is from George Farmer of BMO Capital Markets. Please go ahead.
Hi. Good morning. Thanks for taking the questions. I was wondering if you could comment a bit on pemigatinib and how you believe this molecule differentiates from other FGFR inhibitors.
It's Steven. I'll go first. Dash may want to add something to it. We're an FGFR1, 2, 3 specific inhibitor. We know the PK and PD effects of this compound really well. We've done both intermittent dosing as well as continuous dosing. We've got a very good PD marker, pharmacodynamic marker in hyperphosphatemia, so we can dose to that, and as I said earlier, manage appropriately. All compounds, obviously, chemically, are different. The only approved FGFR inhibitor currently is erdafitinib, the Janssen compound, and that does hit FGFR4 as well and may explain some of the difference in safety profile that we've seen. We'll wait for the full data sets to bear that out. As regard the other compounds, I don't know enough to comment on. I don't know if Dash wants to add anything.
Yeah, I think you covered the major points there, Steven. We feel that pemigatinib is probably the most selective FGFR inhibitor out there. We are focused on FGFR1, 2, and 3. We don't really touch the other isozymes, in vitro in biochemical assays or cellular assays, et cetera. We have what we think is a great PK profile clinically. Overall, we feel it's a balance of optimal selectivity for our target proteins as well as the clinical profile, to sort of leverage that selectivity in an optimal way.
Okay, great. That's helpful. I know it's early days, but do you have any sense for duration of therapy in the steroid refractory acute setting with Jakafi?
Well, we can only go on, again, the REACH1 trial. We believe, in fact, in the duration of response of 173 days that's in our label, where therapy isn't changed or the patients don't come off for whatever reason. That's what we're going by. We don't really have, from a commercial standpoint, a follow-up yet on what the true nature is. We do know that it's successful, that patients seem to be staying on it for a long time. As you know, in graft versus host disease in general, but it's particularly in acute graft versus host disease, physicians, bone marrow transplant docs want to taper off drugs like steroids and then even like Jakafi over a period of time, just so they can do it safely and make sure they fully managed the effects of GVHD before they do so.
Okay, great. Thanks very much.
The next question is from Mara Goldstein of Mizuho. Please go ahead.
Great. Thank you very much for taking the question. Just a couple questions. One is on the promotional sensitivity on JAKAFI in the PV indication. You mentioned that you thought that that category could get 50% penetrated. I'm wondering where the resistance is among the prescribing community. Is that something that is subject to also greater promotion? Then just secondarily, if you could update us on the status of the commercial organization for pemigatinib as you have that NDA filed for cholangiocarcinoma.
Sure. Jakafi is actually promotionally sensitive across all indications. Most of our treating physicians and healthcare professionals don't see these patients that often. Sometimes they're often worried about some of their other patients that might have lung cancer or pancreatic cancer, so they don't pay enough attention to the symptoms, in fact, that these patients are experiencing and other indicators that their disease may be getting worse. We have oncology clinical nurse educators, we have, obviously, our MSLs, and we have our sales representatives are continuing to try to educate healthcare professionals that they need to look more closely at these patients, particularly the PV patients who are suffering.
That's one of the reasons we do our educational campaign, obviously, to encourage patients themselves to go out and, in fact, advocate for themselves if they don't feel like they're getting the appropriate.
Your second question was, oh, the commercial footprint for pemigatinib. We do plan, in fact, to add a few more people in 2020 to get ready for the pemigatinib launch. We're going to keep the full amount of current FTEs against Jakafi for MF and PV. We're going to increase slightly the number of FTEs that we have that are targeting graft versus host disease in bone marrow transplant centers, and then a few FTEs that will be concentrated on pemigatinib. We also have a couple of oncology clinical nurse educators, and obviously our market access people that are in fact fully ready for and fully trained on pemigatinib and cholangiocarcinoma for the launch in 2020.
Our final question is from Christopher Marai of Nomura Instinet. Please go ahead.
Oh, hey, good morning. Thank you for taking the question. Just maybe touching upon some of the Ruxo life cycle management plans. I recall previously, Incyte had a BET inhibitor in the pipeline or had been looking at that target. At EHA, there was some great data for one CPI-0610 in myelofibrosis and had the potential to potentially work in the second line, but also maybe augment Ruxo in first line myelofibrosis. I was wondering if perhaps you could comment on your progress there with BET inhibitors and how you might be looking at that particular target. Thank you.
Yeah, Christopher, hi. It's Steven. Just remind you, we ourselves had a BET BRD program. Obviously we had pre-clinical data that showed that Rux plus that target had enhanced or potentially enhanced efficacy in myelofibrosis. We ran into toxicity in terms of a non-target toxicity in terms of thrombocytopenia, and currently put ourselves the program on clinical hold with the regulators. You allude to a competitor BET BRD program, which showed, you're right, some interesting data and have an abstract in for a future medical meeting that they may show more, we'll follow that closely. We are interested in anything that enhances Rux activity, and we'll keep looking across that. Our own programs are there for us to use should we need to resurrect them.
Okay, great. The toxicities, I think it sounds like the competitor had, but as you noted, that was something you're still investigating. Any improvement on the therapeutic index there? Maybe any mechanistic reason why you think yours might be different from the competitor's? Thank you.
Yeah. I won't address this directly, but it's known that BET BRD inhibitors have on-target thrombocytopenia that can be profound. You have to weave the therapeutic ratio carefully in terms of potentially dosing to get there. I can't speak to the competitor compound there.
There are no additional questions at this time. I'd like to turn the call back over to Hervé Hoppenot for closing remarks.
Okay, thank you. Thank you all for your time today and for your questions. We look forward to seeing you at upcoming investor and medical conferences. For now, we thank you again for your participation in the call today. Thank you and goodbye.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.