Greetings, and welcome to the Insight Corporation Second 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Booth, Head of Investor Relations.
Thank you, sir. You may begin.
Thank you, Jesse. Good morning, and welcome to Insight's 2nd Quarter 2019 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 Herve Barry Stephen and Cristiana, who will deliver our prepared remarks and by Dash who will join us for the Q And A session. During the question and answer session, I ask that you limit yourself one question and if needed, one follow-up, and 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 product and the development 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 March 31, 2019, and from time to time in our other SEC documents We'll now begin the call with Herve. Thank you, Mike, and good morning, everyone. So at the beginning of 2019, set out to achieve a series of specific goals. And in the first half of the year, we have already executed on the number of those commercial and clinical objectives.
Q22 2019 was another strong quarter with 21% growth in total products and royalty revenue when compared to the same period last year. Sales of Jakafi grew by 18%. IQOSY revenues increased by 23% and Jakavi and Olumiant royalties we announced that the FDA granted full approval of Jakafi for use in patient Theroid refractory acute GvHD. Our team was prepared and we launched Jakafi in this new indication immediately. There were 2 additional important updates within our development portfolio during the second quarter.
CAPP Metinib data in patient with non small cell lung cancer, harboring MET ex and 14 skipping mutations were presented at ASCO, and Novartis continues to guide an NCA submission in this indication in the second half of this year. If approved inside become eligible for 12 to 14 percent royalties and global net sales by Novartis and could receive over 500,000,000 in potential milestones over time. Following our prior announcement as a phase 2 trial of ruxolitinib cream in Vitiligo and achieved its primary endpoint the data was presented at the World Congress of dermatology. The data were well received and we believe ruxolitinib cream has a potential to be transformative for the treatment of the millions of patients with Vitiligo. We are preparing for phase 3 development in this indication, which we expect to initiate by the end of this year.
We therefore begin the second half of the year with strong momentum and we look forward to reporting on several other important clinical and regulatory milestone in the coming months. 1 of insights cost strengths is our discovery engine. Several years ago, in order to capitalize on this, we tasked a separate group of scientists to review potential uses for our molecule and targets outside of oncology. These efforts are no bearing fruit. In addition to our portfolio in hematology and oncology, we now have a separate and growing clinical portfolio in information and autoimmunity indication.
As you know, we are currently running proof of concept trial across several molecules and indications and the 2 most advanced project within the IAI group of the evaluation of ruxolitinib cream in atopic dermatitis and vitiligo. The data to date have been compelling in both indications and we look forward to future updates from work stream and our other proof of concept AI program. We believe that adding this exciting new potential growth driver on top of our well established technology franchise could further accelerate and diversify our revenue line and better position insight for sustainable long term growth. I will now turn the call over to Barry for an update on Jakafi. Thank you, Herve, and good morning, everyone.
Patient demand for Jakafi continues to be strong. In the 2nd quarter, demand grew by 14% year over year, why net sales grew by 18%. As a result of these encouraging results and given early data from the launch in GVHD, we have increased the lower end of our guidance. Our full year 2019 guidance for net sales of Jakafi is now $1,610,000,000 to $1,650,000,000. At bone marrow transplant centers across the nation as they learn about the approval of Jakafi for the treatment of patients with steroid refractory, TBHD.
The data supporting the approval has also been very well received. It's early to fully quantify the impact of GVHD launch on overall Jakafi performance, but indicators from BMT Centers are good, and we are seeing an increase in new GVHD patients on Jakafi. For example, we have previously outlined the country's nature of this opportunity, which it exists at a relatively small number of bone marrow transplant centers in the US, and our initial data indicate that over 80% of these top tier centers have purchased Jakafi since FDA approval. Insurance coverage has also been encouraging, and we are not aware of documented denials to date. And we look forward to keeping you updated on our progress over the coming quarters.
I'll now turn the call over to Steven for the clinical update. Thanks, Barry, and good morning, everyone. Insight is currently running 6 key late stage development projects. These have the potential to treat a significant number of patients across numerous indications Ultimately, these projects aim to transform insight into a company with multiple approved products in the United States, Europe, and Japan. Over the next several years.
We've made good progress over the last few months, and we remain on track to achieve the clinical milestones that we have previously laid out. I'd now like to touch on 2 key data presentations made during the second quarter. In June, the phase 2 data of ruxolitinib cream in patients with Vitiligo were presented at the World Congress of Dermatology in Milan. As previously announced, the trial achieved its primary endpoint of a facial VACE 50 versus vehicle in week 24. Here, you can see the improvements by dose over the course of the trial.
The highest facial VASI 50 scores were achieved using 1.5% ruxolitin green daily and twice daily. Importantly, ruxolitinib cream was well tolerated. It was not associated with any clinically significant application site reactions or serious treatment related adverse events. As you know, the facial vaccine 75 represents a more complete clinical response in patients with Vitiligo And this is why we have chosen this as the primary endpoint in our global phase 3 development plan. On this slide, you will see the facial VACI 75 data from our Phase 2 study.
These data show a clear dose response and that the 1.5% dose of ruxolitinib cream used twice per day was the most effective in treating Vitiligo lesions. Our plans for phase 3 development are moving forward and we continue to expect the initiation of pivotal development before the end of this calendar year. We intend to initiate 2 phase 3 trials with 300 patients in each. The trials will evaluate ruxolitinib cream at a dose of 1.5% twice a day versus the vehicle. And our plan is to use facial VACI 75 to 24 weeks as the primary endpoint of both studies.
Note that at this dose and schedule, in the phase 2 trial, 30% of patients treated with ruxolitinib cream achieved a facial VACI 75 score, whereas none of those patients treated vehicle achieved a facial VACI 75. We are hopeful that ruxolitin cream will be the first Vitiligo therapy approved by the FDA and that it may provide these patients with a meaningful improvement in their disease. The Vitilizer data are very important to inside. Ruxolitinib cream is a 1st in class agent with a potentially disease modifying mechanism of action in a large indication with a clear unmet need. The transformative effect of ruxolitin cream could having the treatment of Vitiligo has therefore placed even greater momentum behind our IAI franchise and development efforts.
Let's move on to one of our out licensed molecules, CAPMagnib, which has been developed by Novartis, at ASCO in June, updated daily patients with non small cell lung cancer, harbor in MET exon 14 skipping mutations from the geometry trial were presented. These data showed that almost all patients experience reduction in tumor volume when treated with CAPMatinib and by resist these data showed overall response. Rate of 68% in 1st line patients and 41% in second and third line patients. The data also show a manageable safety profile. As a reminder, CAPMATIN was granted breakthrough therapy designation and in Novartis expects to file an NDA by the end of this calendar year.
I'll end my update by reminding you about the expected key new flow events during 2019. We continue to expect to submit the NDA of Pemigatinib and second line Glanjocarcinoma before the end of this year. We are also planning for the presentation of updated data on the 5202 trial, which will form the basis for the NDA submission later this year. We have multiple phase 3 trials running across various types of graft versus host disease that are expected to deliver top line results by the end of this calendar year. Reach 2 is evaluated ruxolitinib in patients with steroid refractory acute graft versus host disease and reach 3 study in ruxolitinib in patients with steroid refractory chronic graft versus host disease.
Both of these trials have been conducted in collaboration with Novartis. Gravitas 301 is evaluating itacitinib, our wholly owned JAK1 selective inhibitor in patients for treatment naive acute graft versus host disease. If Gramet Test 301 is positive, we would expect to seek approval for itacitinib in the United States, Europe, and Japan based on these data. 2019 has been an excellent year of research and development execution thus far, and we look forward to keeping you updated on our progress. With that, I'd like to turn the call over to Cristiano for 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 2320 for in the backup section of the deck and to the press release we issued this morning. Turning now to Slide 17. Our second quarter results reflect continued strong performance across all products with total product and royalty revenue of $510,000,000 representing an increase of 21 percent over the second quarter of 2018.
This is comprised of $410,000,000 Jakafi and $24,000,000 in Iclusig net product revenues, $57,000,000 in Jakavi Royalties from Novartis, and $19,000,000 in Olumiant royalties from Lilly. We also recognized $20,000,000 in contract revenues and there are collaboration agreement with Innovent, resulting in total revenues for the quarter of $530,000,000. Higher total costs and expenses for the quarter on a non GAAP basis of $379,000,000 decreased 3% from the prior year quarter Ongoing R and D expense for the quarter was $237,000,000 on a non GAAP basis, representing a decrease of 7% from the prior year period. This decrease reflects the impact of our decision to stop co funding by accident development and lower costs related to the poker asset program, partially offset by costs to advance our other internal development programs. SG and A expense for the quarter of $93,000,000 on a non GAAP basis decreased 3% from the prior year quarter.
This decrease reflects the timing of certain commercial activities, which this year are expected to take place in the second half. Moving to our guidance for 2019, we are increasing the low end of our Jakafi revenue guidance from $1,580,000,000 to $1,610,000,000 based on the results in the first half of the year. We are reiterating both R and D and SG and A expense guidance as we continue to invest in both our commercial efforts and in our clinical development portfolio. I will now turn the call back to Ervin.
Thank you, Christiana. So our last slide outlines our progress to date in 2019 as well as the remaining in useful events we expect during 2019, including those from our partners. With this little exciting late stage program, we are taking important steps to add our strategic goals of further diversifying the organization and driving sustainable revenue growth. That concludes our prepared remark and we are now happy take your questions. You.
Session. Our first question comes from the line of Cory Kasimov with JPMorgan. Please proceed with your question.
Hey, great. Good morning. Thanks for taking my questions. And also for such efficient scripted comments. Always appreciated.
So my first question is regarding GVHD. Can you just help us better understand the key gating items and levers we need to think about with Jakafi's launch in this setting and should we be looking at this as a growth driver for the company in the near term as more of a a place setter for itacitinib? And then I have one follow-up.
Sure, Corey. This is Barry. Well, as far as gating levers go, you know, one of the most important things is access, and we haven't had any problem with access at all. You know, it's early, but we really think the launch is going very well, both, we have some qualitative and quantitative measures qualitatively. We know that even, centers that have been using, a jackpot for GVHD 4.
They might have been using it 3rd or 4th line or even later. And now they've moved it up to 2nd line. Quantitatively, we know that orders from the 150 or so of Omaha transplant centers have increased. We don't always know exactly why they're ordering it, whether it's for MFPB or, or GBHD, but we can assume that most of the new orders are actually off GVHD. We know that specialty distributor orders are up, and those are generally, as opposed to specialty pharmacy, specialty distributors shipped to hospitals.
And we know that, those are up, pretty substantially. We really think that for this year, and I think I've said this before, of our top line net sales, GBHD will account for about, $80,000,000. And that's for spontaneous use as well as use, once we have the approval. Is it a growth driver? For sure.
It's a growth driver as we get more data and new indications for Jakafi, but also ultimately for indacitinib as we gain approval, in the first line setting in both acute and, chronic DVHD. Okay. That's very helpful, Barry.
And then my follow-up, probably for Herve, but I'd be interested in getting your broader thoughts on and health care reform and and all the noise that's out there and to the extent there's something that's enacted that incorporates Part D. Can you just, remind us of your potential exposure there? Thanks.
So now, thanks for the question. Obviously, it's a top of mind for many people. It's a It's a situation of Medicare sales for Jakafi in the US. I think we set out around 50% of our, total business in the US for Jakafi today. So that gives you an idea of the of the of the size of, of our Medicare exposure.
The way we look at it is first, we know that there are a number of patients in the U S on Medicare who are not taking a Jakafi because of the co pay that they have to contribute today. So the goal for us of any kind of reform is first to reduce the co pay because it will be good for us, but also because of, you know, human Italian reason, I think it's one of the effect of the current system in the U. S. Is that there are a number of people who cannot afford the co pay the way defined today. So one of the good thing of what we have seen in the draft of the Senate document is a significant reduction in the co pay for patients.
It's very difficult for us to quantify what kind of effect it would have on, on the number of patients who could now afford to be treated with a product like, Jakafi. It's not just Jakafi. I mean, it's really touching on the oral cancer treatment in general. And we think it will, it will be a huge positive for, for, for these patients as a co pay is reduced. And we frankly, we wish it would be further reduced.
I mean, the counterpart for that before us the contribution to the catastrophic coverage. And the net net of the 2, frankly, is difficult to quantify what we think, what I think personally is that as we move forward for the next 10 years, for a company like us with innovative product coming to market over the next 10 years. The fact that the patient's part of the payment for this innovative treatment is reduced is fundamentally a very good thing because it would give access to more people in the U. S.
Thank you. The next question is from the line of Brian Abrahams with RBC Capital Markets.
There. Thanks so much for taking my questions.
I wanted to drill down a little bit more on phase 3 vitiligo trial design. I'm curious if you could talk a little bit more about what shape your choice of endpoints there for the phase 3, the FASI 75, whether that was driven by regulatory feedback or more about, meaningful list of patients. We should be thinking about timelines, potential timelines for enrollment there? And then what your goal would be for potentially maximizing its differentiation versus other topicals from those studies? Thanks.
Brian, hi, it's Steven. Thanks for your questions. So read the phase 3 design and the primary endpoint and whether it's regulatory or patient driven or both. As you can see, as you said, the bar higher as regards to the scores whether it's 25.50 or 75%. Obviously, the relative percent gained in achieving the efficacy endpoint is somewhat lowered.
But it's meaningfulness, right? So once you get up to 75% repigmentation, you know, you are proving to regulators that you've achieved something meaningful as well as 2 patients. So it's it's both in that regard. And as driven by discussions with regulators and obviously taking patient input into regard. You'll see the, you know, the vehicle response rate is 0 at that time of 24 weeks.
What we and what we know from the cream and heart behave is over time, actually, these numbers go up. So remember, the study actually goes on for a total of 2 years. We will eventually have 52 week data and then data beyond that. And then their expectation given the way it works and the natural course of this disease that those numbers will increase over time in 52 weeks and beyond. So it's a bit of both, and it'll set a standard, for future studies in terms of achieving that endpoint.
In terms of timelines, again, I'll just be repetitive. The vehicle response rate is 0, so we don't require a great deal of patients to conduct these studies. We're required to study does per the regulations, but they're only 300 patients each given the very low to 0 vehicle response rate. So we're looking to to enroll 600 patients I expect it will enroll quickly. We just can't give you exact timelines at at this juncture.
Differentiation wise, we know from the atopic dermatitis program that and that has extensive now, patient numbers in an exposure data, that the cream's extremely well tolerated in atopic in atopic dermatitis. There's resolution of ash of the itch 48 hours or less. There's no burden on application. So, you know, we have as long as we achieve the efficacy, we fully expect from our phase 2 program, we have a reinjaded profile from a tolerability point of view. Thanks.
Our next question is from the line of Carter Gould with UBS. Please proceed with your question.
Great. Good morning. Congrats on the quarter. Thanks for taking the question. Maybe one for Steven, just thinking a little bit more into Gravitas-three zero one, Just kind of wondering around kind of your assumption and the importance of showing a separation on non relapsed mortality when you think about sort of the target product profile and as we we think about that phase 3 readout?
Thank you. Carter, hi, Steven. Thanks for your question. So gravitas, we are one for everybody else. Is it's a sit in a bit steroid, naive acute graft versus host disease.
It has 2 very important endpoints the overall response rate as well as non relapse mortality. So that's death, due to anything other than disease relapse. So either infections or progression of graft versus host disease. In terms of the primary endpoint and overall response rate, The study is powered to show a 16% or greater increase in in overall response rate. That's that's public, and we've made that available.
In terms of non relapse mortality, it's a 40% relative reduction in non relapse mortality at 6 months. And that we fully expect from our, you know, abling proof of concept data to achieve both those endpoints. We need to achieve both, to get, the the study across the finish line and and and work towards a submission for both. So those are the endpoints we aim for. The proof of concept data easily exceeded those.
So, we have room to move.
The next question is from Salveen Richter with Goldman Sachs. Please proceed with your question. Good morning. Thanks for taking my question. So with regard to your phase 3 topical trial and atopic dermatitis that's reading out next year.
The the study ongoing is in adults with surface area limits. Can you just help us to understand the market targeted by this study. And when you look at the adult population versus the pediatric population, and then your plan for studying pediatric patients given you have a Phase I study ongoing? Thank you.
Yes, Salveen, hi. Thanks for your question. So you correct. The current program looks at patients, 12 years and above, and that it covers mild to moderate atopic dermatitis. That covers the vast majority of patients suffering from the condition.
We do want to eventually, once we achieve adequate, safe data to enable the work, study younger, younger patients, but we need to first, prove that there's no issue in terms of safety in that population. But as I said, it doesn't represent the majority of the patients, up there. The body surface limits are just somewhat practical in nature. Remember we applying a cream, and that you just can't, you know, apply it to the entire body. But again, this encompasses patients with the majority of atopic dermatitis, and, we're comfortable with the way the program is set up.
Thanks. Thank you.
From with Cowen and Company. Please proceed with your question.
Yes, thanks. One thing that wasn't touched in the, reiterate or in the R and D update. If maybe you could touch on the central thermostatemia kind of enrollment update or trying to maybe cut the trial off and get a publication out. That could support something like guideline, inclusion. And then given the fact that, you know, those have been kind of much lower than expected, but we're part of long term guidance.
Is there you need to update that long term guidance for Jack White? So, for Mark, hi. It's Steven. I'll do the the first part in the mouth, Barry, to address and the ET contribution to guidance. So you are correct and we said this on numerous calls that given the eligibility criteria required to get onto the study and the patients have to have a a high white cell count and and be, you know, post hydroxyurea and then be further randomized to either ruxolitinib or or, a Negro line.
It hasn't been an easy study to enroll at all. And we said, you know, it's taking longer than expected. So we are very much considering whether, as you said, there should be, change more into a publication strategy. We're currently working with the regulatory authorities on another amendment that may help enrollment, and that's allow prior nebulide. And we'll see if that will help enrollment tonight.
It's too early to tell, in terms of that. Remember, the vast majority of patients with essential pharmaceuticals with hydroxyurea. So it was really always for the patients who weren't in that space. It's the last minor prohibitive neoplasm that we don't have an indication for. We know from spontaneous use anecdotal reports and others, you know, that the drug has, efficacy there, and that's why we conducted the phase 3 program, but it could well be turned more into publication, opinion list in top strategy.
I'll ask Barry to answer next question. Hi, Mark. So, we're very confident in our long term guidance of $2,500,000,000 to 3,000,000,000. We, even without ET, but as, Steven said, we do have some spontaneous use of of Jakafi for patients with 18. I think that will continue, but the vast majority of sales really come from, continued growth in MFPV strategy.
All right. Thank you.
Thank you. The next question from the line of Michael Schmidt with Guggenheim Securities. Please proceed with your question. Hi guys. This is a Kelsey on for Michael.
Thanks for taking questions. First, so we've heard from physicians that patients stay on Jakafi for a pretty long time. I guess in this context, how could the potential approval of Fedratinib in the coming months maybe affect, Jakafi patient duration? And then secondly, we were just hoping if you could provide a little more color on the FGFR tumor agnostic program. Maybe just kind of remind us what BAR needs to be cleared with that data set to potentially warrant an agnostic label.
Thanks so much.
So, thanks, Kelsey. This is Barry. I'll take the first part of the question and hand it over to Steven for the second part of the question. So for, potential launch, Fedratinib. You know, we believe that patients will continue to stay on therapy as long as they benefit from Jakafi, which is both in MF and PB, quite a long time.
So I think that's the most important thing is that patients get the most benefit out of Jakafi before they move on to something else. As far as the efficacy and safety of Jakafi as compared to other JAK inhibitors, including, Filgotinib, we're very confident that, Jack Fi is the best class drug, and that patients should start on Jakafi, before they move on to, something else. So we don't think it's really going to affect as much at all. Stephen. Thanks, Barry.
Thanks for the question. So this is a very important part of the Pemigatinib program. So remember the cholangiocostinoma studies complete. We expect to file in the second half of this year. The bladder cancer work is ongoing and should complete enrollment also second half of this year.
And hopefully would be part of a submission next year. And then the 3rd pillar here, is the tumor agnostic program. Also have an ongoing effort in a very rare amount of proliferative neoplasm that's driven by FGFR1, chromosome AP translocation. But in terms of the tumor agnostic program, you're right. The there is, you can't be specific in terms of a bar let me just give you a sense of some of the tumors.
If you look at endometrial carcinoma, there's about 10% of those patients that have FGFR mute 2 mutations or fusions. Clearma glioblastoma is also about 10% for FGFR 3 squamous cell non small cell lung cancer, about 5% if tumor mutations or fusions, rectal cancer, about 2% and and squamous cell head and neck was about 2%. All of those are allowed to come on the program. The the guidance from regulators to date has been if you already have an indication you have an established drug that hit a an oncagena's already been shown to work. And at that juncture, we'll have, cholangiocarcinoma and hopefully bladder cancer as well.
Then there's obviously precedent you know, the most recent one is probably, you know, checkpoint blockade with MSI high tumors with checkpoint blockade. They've got an indication In terms of de novo indications, there's obviously NRTK inhibitors now that are given across the board, where where the strategy diagnostic so you need to see, you know, reasonable response rates that are durable. Some of those tumors I mentioned, you would require a higher number than Cleo Glastoma, which where there's a lot of unmet need. So it would be a little bit on case by case basis as long as the the genetic mutation is a driver The drug hits that driver mutation and causes a response rate that's durable. We expect, with the cumulative data set possibly get a tumor agnostic indication.
The the opportunity from a patient point of view, actually if you add all those up becomes bigger than the whole the other tumor types. That's a very, very important program to us.
Okay. Great. Sounds really helpful. Thank you so much. Thank you.
Our next question is from Matthew Harrison with Morgan Stanley.
Great. Good morning. Thanks for taking the question. I guess I wanted to ask about gravitas301 as well, but more on the commercial side, could you just talk, I guess, two parts here. Could you talk a little bit about given that there are a bunch of cheap generics available, what sort of efficacy differential you think you need to be able to achieve to have a solid pricing premium there and uptake?
And then just briefly comment on, what sort of Salesforce expansion you think you need to have to maximize this indication? I'll I'll let Steven start off at the beginning and then I'll pick up on the sales force and potential for the drug. So, Matthew, let me just go back to you. An important question around endpoints in Gravitas-three zero one spoke about them briefly earlier. So remember, there there are 2 important endpoints.
There's the overall response rate at day 28 and then there's non relapsed mortality obviously, this is steroid naive acute graft versus host disease. So it's a combination of intracitinib and steroids versus steroids alone. And you alluded to steroids being a cheap generic. And that's exactly why, you know, the study is conducted in power to show an appreciable difference in both. Just let me remind you on the overall response rate, we need to see a 16% absolute improvement in response rate or better.
And then that had to be coupled with that 6 months of non relapse mortality that was relatively speaking 40% or better to get both, to justify the use of a JAK inhibitor in addition to steroids in that population. I'll ask Barry to address your commercial question. So with the endpoints that Steven laid out, I don't think there'll be, much of a problem getting, premium pricing at least compare it to generics like steroids if that's what you're you're implying. Non relapse mortality is a significant endpoint in Again, I think we'll be able to have, you know, an adequate price, for the for this drug. As far as the Salesforce goes, In the United States, we mostly have it covered, to be honest.
We might have expansions for other drugs that, that are coming, including itacitinib and pemigatinib. That, we'll think about in a little bit, but in Europe and, Japan, then we'll need to have a, Salesforce that increases to certain amount. If it's a win on Europe, in fact, did, we did the calculation recently and the high closing sales force that we have today is in fact very much targeting same center that are doing bone marrow transplant. So there would be some increase, but it would be relatively marginal regarding the European side. And in Japan, we, would love to have itacitinib in GvHD as our first product launch in hematology because, again, the number of centers is relatively limited compared to the overall need for a sales force in hematology And it would be something that would be feasible with a number of reps of commercial people that is a really small compared to the traditional Japanese sales force that you need for oncology.
So, Europe we are almost there. So there is a marginal increase in Japan. It would be very reasonable. So it's a it's an indication for us that would be a driver of the top line growth, but would be also a very good contributor to the bottom line. We can go to the next question please.
Thank you. Our next question is from the line of Alethia Young with Cantor Fitzgerald. Please proceed with your question.
Hey, guys. Thanks for taking my question. Congrats on the progress. I just wanted to go on to the PI3 kinase. I know you have data coming.
Next year. And obviously, there's some pediatric audiences that are starting to merge again. So just wanted to get your, updated thoughts on how you're thinking about what the what reasonable profile for this drug could be and kind of some of your thoughts heading into the data in 2020?
Alethia, hi Steven. Thanks for your question. In terms of the pediatric anti delta program in lymphomas, I'll also remind you by the way, we have the RAC combo ongoing in in minor prolific neoplasms as well, particularly MF. But in terms of lymphomas, which I think is the meat to your question, the 3 registration directed approaches. 1 is against follicular lymphoma, the other against mantle cell, and the third one against marginal zone lymphoma.
They're all enrolling really well. They'll complete enrollment in the second half of this year. We'll get data as you do in 2020. And we expect, you know, based on the activity we've seen to date, you know, high response rates that are durable, and then on each on their own, we'll be submitted as as potential indications. There's a potential to, lump together lower lower grade lymphomas.
So you could do follicular and marginal zone together. For example, mantle cell is property standalone. There is a crowded space as you alluded to in terms of of action, their BTK inhibitors, B cell 2 inhibitors, CAR T therapies, etcetera. But all those conditions remain incurable all have unmet need attached. And we've seen regulators even more willing lately, in areas of unmet need to approve additional agents.
So, we remain confident in the approach thus far. They'll probably be more in the accelerated approval, conditional approval camp. So you will likely see that should the datasets justify them in a confirmatory study has been set up more likely combination work. But that's the entirety of the program. All the data on those studies in 2020.
Thanks.
And just, sorry, just a quick follow-up on that. As far as safety goes, I mean, do
you think that's what really is gonna differentiate, and, you know, kind of what have you
been doing Dupin to kind
of help with that as well. Thanks.
Yeah, Alethia, I think you're right. We took a timeline hit because of that. We did some very careful work with with scheduling and dosing, because we knew the drug's highly active. I mean, B cell treatment is literally melted away with PR3 kind of Delta Innovation. But then the the the long term toxicity, particularly colitis.
So we looked at, induction daily dosing for 8 weeks and then switched it to weekly. And then we looked at induction daily dosing, for 20 milligrams daily grade weeks and switching to lower dose daily. And we've done a lot of work in that regard. It looks like both of those, the schedule and dose changes ameliorate the safety profile quite substantially. For example, we see little to no colitis at this date at this juncture.
We still have to wait for the complete data set. I think it's likely at this juncture that you'll see There's 20 milligram daily for 8 week induction to get the maximum effect, maximum response, and then the latch is switched to lower dose daily dosing of like point 5 daily. And that should get us to the therapeutic ratio we desire and that you allude to because it will be critical. You'll have to hit that efficacy bar and then have a horrible safety profile. Thanks.
Thank you. Our next question is from the line of Tyler Van Buren with Piper Jaffray. Please proceed with your question.
Great. Thanks guys. Good to see all
the progress over the course of the quarter. I had a question with respect to Reach3 in chronic GVHD that we'll see by the end of the year. Much like you did for Revitas 301 where you spoke about the parameters for overall response rate and non relapse mortality. Could you speak about the powering assumptions or what you need to achieve for success in Reach 3 in your comfort with what we will see on best available therapy and what you would expect it to show?
Sure. Thank you. It's Steven. So we haven't given out, the statistical analysis plan powering assumptions for for region 2 and 3 like we have for Gravity 3 or 1, but I can talk to the meat of your your question. Remember both, Reach 2 and Reach 3 are randomized against best available therapies.
It's not wide open. There's a specific list for each trial that's available on the clinical trial to cover the for reach 3 best available therapy in chronic include therapies like extracorporeal photopheresis, low dose methotrexate, Michael Fenner Lake, M2 inhibitors, and a few others including, BTK inhibitors. So you you correct. I mean, the the study has to beat those best available therapies. You know, we know from our, again, our proof of concept data with ruxolitinib in the setting that we get, you know, higher response rate that's what's been published to date with best available therapies.
All those therapies are mentioned while not approved have had you know, phase 2 studies done and showing, you know, 30 to 50% response rate. But in totality, we'll have to beat the response and the durability response, but we haven't shared the powering assumptions publicly yet. Thanks. Okay, thanks. And just as
a follow-up on Reach 2, Is there any kind of, I guess, what incremental data in that study do you think is most important to continue to, facilitate uptake of Jakafi in that setting.
I'll talk from a clinical perspective. I don't think Barry will want to add anything afterwards. The, again, it's different from REACHONE. REACHONE was a single arm study. You've you've seen the data and as UBET said, we got a full approval from the FDA on that data set.
So there's actually nothing more required in the US from a regulatory point of view. For each one. But, obviously, this is an important data set. It'll be randomized against best available therapy. We'll get a sense of what the response rate is in that randomized setting with Novartis, they'll be using that globally for a file in steroid refractory acute.
And we'll get a sense of the safety versus best available therapy. But I don't expect to see, you know, a different data set in terms of response or durability of response that we've seen from REACH 1. And we actually don't need it from a regulatory point of view. From Barry, do you want to add anything? Yes, no, obviously, it's for what Stephen said.
It's another solid dataset that for those people that, might still have some hesitation, BMT, health care professionals that might have some hesitation about introducing a drug like JAK file just given more confidence that in fact this is an important drug to be used in the treatment of this devastating disease. Great. Thanks very much.
Thank you. Our next question comes from Josh Schimmer with Evercore. Please with your question.
Thanks for taking 2 quick questions. First, can you quantify how much
of the check by quarter
growth came from MF versus PVA versus GVHD versus improvement in gross to net. And then on that topical franchise, I get I get asked a lot whether topical drugs can be premium priced. If so, what kind of bracebend, are you thinking that would account for both, a Vitiligo indication, which is less common for any topic dermatitis indication that might be more Sure. So, Josh, thanks for the question. So, for the quarter.
So MF continues to be if there's about 14,000 patients in any given quarter, MF accounts for about 7000 patients TV accounts for about 5000 patients and other is about 2000 patients in any given quarter. So the gross so new patients in total patients for MF grew quarter over quarter for PV grew quarter over quarter. For other group quarter over quarter, and can't always break that out, for GVHD. How much was accounted for in gross to net was, 4% quarter over quarter. So as you know, the gross to net in the first quarter, it has the biggest impact, and then it gets better in the second quarter.
As far as premium price, I'll turn it over to Urvi and CVS comments. So the situation is the following that we have a phase 3 ongoing to phase 3 ongoing in atopic derm with 2 different concentration being compared to a placebo. So very clear versus 2 different concentrations. So that will lead in 2020 somewhere next year. And we are initiating the Vitiligo Phase III study.
So Your comment is your question is really about the pricing is a pricing identical between 2 indications where for one of them which I go, we have a 1st in class disease modifying, effect and another atopic derm where there is a fair amount of competition. I think it's important to remember that the duration of treatment are very, very different between the two indications. You heard, from Stephen that the Vitiligo, the 24 week data that has been published is one aspect, but the 52 weeks if the trend continues, we'll, you know, show that the duration of treatment should go beyond 24 weeks, where in fact the treatment in that the big term at 80s is in many cases, just a few weeks per year, if you look at it over 52 weeks period. So this entire pricing question is not result yet. We need to have more data points to be able to make the right decision between the 2 indication and the different concentrations.
And frankly, it will be something that will be done probably, during the, you know, when we see the data in atopic Can we have a premium price on topical formulation is an excellent question. I frankly if looking at the Vitilay container that is accumulating that there is a case to be made about the economic value of this topical ruxolitinib formation because it is frankly, giving a level of efficacy that is better than what we can see from the data we have, what we can see with alternative treatments that are in fact fairly So there is a value case that could be made around the Vitiligo indication.
Thank you. Our next question is coming from the line of Stephen Willey with Stifel. Please proceed with your question.
Good morning, this is for taking the question. Just a quick question on Jakafi. Got it. And then, one for Steven. It looks like the high end of the new range implied think less than 4% sequential growth going forward.
Just want to make sure that there's nothing implied in there from
a discounting or a headwind perspective. This is Barry. Thanks, Steven. So, no, there's no, discounting. We think that, the low end of guidance is 60 percent growth year over year and net sales, the high end guidance is 19% growth year over year.
We're confident, by lowering the lower end of our guidance that will come in, at the upper end of our guidance.
Got it. And then, maybe just quickly first, Steven, it is. Is it your expectation that the competitive landscape of FGFR inhibitors including Pemigatinib are going to have shared mechanisms of acquired resistance?
Yeah, it's a good question that, you know, there is there is obviously who the fit never approved name bladder cancer. We should be the the 1st in in Kolangio, but there are other inhibitors out there. They would have slightly different profiles in terms of their specificity and whether they're more promiscuous for for other other receptors, and because of that, you know, the resistance profile, that may ultimately emerge may be different for each of them It's just too early to know. I mean, we we highly encourage the collection of of biopsy and and sequencing of patients at progression. It's just not that easy to do.
And, you know, if you witness, historically other diseases that matric chronic myeloid leukemia you know, with the introduction of tyrosine kinase inhibitors there, you got the form, you know, the entity of T3159 mutations form in is a new disease for which a drug like Panatinib works. Right? So, you'll see what what develops. We just don't know at the moment. What the resistance mutation profile will look like for outbreak versus the others.
I suspect there may be slight differences because each of the agents hit slightly different receptors upfront. Can't give you more at the moment.
Our next question is from Peter Lawson with SunTrust Robinson Humphrey. Please proceed with your question.
For taking the questions. Just on Pemagatinib, just how should we think about the durability you would need to see in the in the pan tumor setting, should we think about that as kind of individual case by cases or can we kind of think about it as a collective durability?
Sorry. We just have, yeah, we have. Sorry. Peter, we set a microphone issue for a second. So, just in in cholangiocarcinoma first, then I'll talk about the pan tumor thing.
Remember, it's a second line study in standard of care currently chemotherapy with 10% to 15% response rate and very short progression free survival of a few months. So in that setting, you know, first step, we would have to beat the response rate and then the progression free survival data. Pan tumor wise, as I said, if you look at the different entities, individual carcinoma EMS stoma, you know, you're gonna have different progression free survival in durability that you need to see, and each one will be a case by case to get to the point you made. It's just hard to comment now. Thanks.
Gotcha. And just just a follow-up on the PO 3 k the dose changes and intermittent scheduling, do you think that kind of hinders the potential uptake in what could be a crowded marketplace in follicular MZL?
I think it's a good question. You know, when we did toy with the purely scientific data driven with with weekly dosing, which may or may not have had a compliance issue. But as it turns out, it's looking like, and we'll have to back this up with data in the future. That it'll still be daily dosing. It'll just be a different dose.
So there'll be a 20 milligram induction for 8 weeks, followed by a a lower daily dose. So there's not gonna be a scheduling issue. That I think will will hinder uptake. I think what we're doing with the high higher dose induction is the right thing because most just about all the responses take place in first 8 to 9 weeks. So you maximize your response and then you scale back to still hold the 2 main check but manage the tolerability.
I don't see an uptake issue with that. Great. Thanks so much. Thank
you. The next question is from the line of Evan Sigerman with Credit Suisse. Please proceed with your question.
Hi, all. Thank you
for taking the question and congrats on the progress. One on Pemagatinib. So can you just remind us of the opportunity opportunity in cholangula carcinoma? And more broadly, how do you compete against, J and J in the potential bladder cancer opportunity? Then one for Christiana, Christiana.
You had mentioned that you have some ability to potentially do some BD. Can you remind us of your estimated capacity how this could potentially fit into the, strategic priorities of insight? Thank you.
Kevin, thanks. It's Steven. I'll go first. So if you look at, the Calendly opportunity, opportunity intra hepatic cholangiocarcinoma about 13% to 20% of patients have FGFR2 translocations So we estimate there are about 2000 to 3000 addressable intrahepatic cholangiocarcinoma patients in major markets globally with with that, with that particular mutation and we should be first there. You're right that, Jade and Jodafitinib has the indication in bladder First, there's probably about 15,000 patients globally with the FGFR3 mutation there.
But just a few issues. So we'll see, you know, if you look at the label in terms of tar because obviously they hit the efficacy bar they wanted, but in tolerability, you know, they have, as I said, up front a different profile in terms of hitting different receptors, and they did have a an ocular tolerability issue of around 20%, twenty five percent. We'll see if we're able to compete there in in a better way in that we'll, you know, achieve this because he desired have a better tolerability profile. So that's one way of differentiating as long as you have have the efficacy. And then, you know, it's in terms of life cycle management, we have different approaches going forward on what is needed from a confirmatory study point of view and you'll see you know will be and it's already up on clinicaltrials dot gov doing a first line study in bladder cancer and they're not.
So that's one other way, you know, should that work? We will differentiate and potentially get a jump on the market there.
Hi, Evan. It's Cristiano. I'll take the question on the BD. First of all, as we have previously discuss our focus is on diversification and long term growth. So when you look at the R in internal pipeline, late stage pipeline, shaping up very nicely to help us achieve that objective.
At the same time, we have on 7 as of the end of June of cash on our balance sheet. And that gives us the ability to opportunistically look at BD to supplement our internal activities. So when we look at BD, we be in line with the same corporate objective of adding to diversification on the top line and driving long term growth and focus more on the midterm type of timeline.
Thank you. The next question is coming from the line of Jay Olson with Oppenheimer.
Ahead. Congrats on the quarter and thank you for taking my questions. I just wanted to follow-up on pemigatinib. I think you said you would submit NDA filing later this year. I was wondering if you were going to present an updated cut of the phase 2 cholangiocarcinoma data later in the year?
And also could you comment on which sales force you would use to promote Pemegatinib? Would that be your Jakafi sales force? And can you just talk about, the overlap there?
So Jay, it's Steven. The echo correct, the Pemigatinib, files. We have the data. We have it in hand. We're presently preparing the submission that'll go in the second half of this year.
In intrahepatic cholangiocarcinoma that has the FGFR2 mutation. With that, although we can't give you the exact median, but there'll be a a an R presentation at the data at a meeting in the second half of this year. It'll that'll be have the content of what's in the NDA with it as well. Yeah. So Jay, this is Barry.
So, we're still working on exactly how we're gonna roll out the Salesforce next year we're kinda getting it, but it will add a few people, to our 120, sales reps that we currently have. And will keep, basically the same number of FTEs on MF, PV and GVHD. And have a certain number of FTEs that are, dedicated to the promotion of mitgatinib, you know, that, in fact, you know, a hematologist, an oncologist, throughout the United States, basically treats everything, at least in the community settings. So we're really calling on many of these same offices, today. As we will with them again.
Thank you. We have one final question coming from the line of Andrew Barron with SVB Leerink. Please proceed with your question.
Hi, thanks. Good morning, guys. Just have a question or a couple of questions on the GVHD franchise, and then maybe I could sneak one in on the Durham franchise too. I was wondering, with Jakafi approval in GVHD, has there been any changes to the formulary treatment of Jakafi? And then also, I I was just wondering if that is approved, in the frontline setting, how does that change the opportunity for Jakafi and the refractory setting.
Hi. This is Barry, Andrew. So, in fact, for does it change anything, for acceptance and access for patients, and Jakafi with your PhD No, I mean, we've always had great access, from the payers for Jack Five Four PV and MF. And as far as we can tell in the launch, we really have had no restrictions whatsoever. Many of the insurers actually have no utilization management, projects to projectify in GBHD, whether they'll write them in the future or not.
We don't know, but generally speaking patients with, getting bone marrow transplants have access, to all drugs. As far as, itacitinib goes, we think that it's itacitinib is going to be, used in 1st line setting. We think it's gonna help many patients in that setting for both acute and chronic GvHD. We do think that both of the drugs can live together, but obviously itacitinib will have worldwide and that will be a very important to us to to launch in countries around the world. So will patients get ruxolitinib after they get, inacitinib?
It's certainly possible.
Okay. Thanks. And then maybe this, the question on the Durn franchises for Herve. Just wondering how you're thinking about developing that opportunity outside the U. S?
No, thanks. What we said in the past is that the the the kid is getting been a more and more convincing on the U. S. Side to obviously for us to book the sales, to diversify our portfolio, to do promotion and a lot of the commercial work in the U. S.
Ourselves as the size of the team required fairly, it's fairly modest. The question is still very much open for the rest of the world. I think you can imagine Asia is a is a part of the world where we would probably benefit from having partner and the question about Europe is really fifty-fifty at this point. We are looking at different options of collaboration that could help us And, we have time before we make that decision because we will get, yes, the big term, data, let's say, midyear on the fighting in the second half of the year. So from there to European approval, there will be another 12 months at least.
So we are basically 2 years away from the at least from the launch in Europe. Probably more. And we want to take that time to have a full understanding of the financial and strategic implication of that decision for Europe.
Okay. Thank you very
back over to Urvi for any additional concluding comments.
So, thank you all for your time today and for your questions. So, we look forward to seeing you at upcoming investor medical conferences. But for now, we thank you again for your participation in the call today. Thank you, and goodbye.
Ladies and gentlemen, this does conclude today's conference. Again, we thank you for your participation and you may disconnect your lines at this time.