Greetings, and welcome to the Insight Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Booth, Vice President of Investor Relations for Insight. Mike, please go ahead.
Thank you, Kevin. Good morning. And welcome to Insight's 3rd quarter 9 months 2018 earnings conference call and webcast. The slides used today are available for download Stephen and Dave who will deliver our prepared remarks and by Reid who will join us for the Q And A session. Before we begin, we'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 2018 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 30, 2018, and from time to time in our other SEC documents. We'll now begin the call with Ube.
Thank you, Maich, and good morning, everyone. I'm pleased to report that insight continues to perform very well across all aspects of the business. We have recently delivered exciting data at both the EADV Congress and that ESMO And we are looking forward to seeing many of you at ASH in San Diego. Total product revenue continues to grow nicely, and we recognized 25% increase in 9 months revenue versus the same period last year. Revenues of over 1,200,000,000 in the 1st 9 months of 2018 included over $1,000,000,000 in Jakafi sales and over $160,000,000 in royalties from Jakavi and Olumia.
Reflecting strong demand for both ruxolitinib and baricitinib on a global basis. It's important to note that Q3 net sales for Jakafi were negatively impacted by inventory moves late in the quarter. And Barry will provide additional details in a few minutes. Patient demand for Jakafi remains strong and Slide 5 provides some historical data. Charting U.
S. Patient demand alongside U. S. Revenue recognized for Jakafi. Going back to the third quarter of 2012 You can see that Jakafi revenue and the total number of patients taking Jakafi show a fairly consistent rate of growth.
Due to the strength in underlying demand and the growing number of patients on Jakafi, we are pleased to be increasing the bottom end of our guidance range so that our guidance for full year revenue for Adlacapai is now a range of 1,370,000,000 to 1,400,000,000. Before I pass the call to Barry for more details on Jakafi performance, I would like to quickly mention recent updates from our portfolio. It's been an exciting few weeks for Incyte starting with a very encouraging data from ruxolitic cream in patients with atopic dermatitis presented at EASD last month as well as data from CAPmatinib and Pemigatinib at the ESMO conference last week. On the regulatory front, We were pleased that the FDA accepted the SNDA for Roxatybean steroid refractory acute GvHD for priority review and assigned a PDFA date of February 21st next year. Looking forward, Gloritas-three zero one study of Itacitinabine in patients with newly diagnosed GvHD is enrolling very well and both our PD-one and pediatric NAS Delta programs are on track.
We phase 3 baricitinib beta in atopic dermatitis also expected in the first half of next year that is much to be excited about in the coming months. With that, I'll turn the
call over to Barry for more details on the search performance of Jakafi. Thank you, Herve, and good morning, everyone. Patient demand for Jakafi remains very strong. And we are seeing good uptake in both MF and PV indications. Slide 8 shows the robust growth in patient demand for both MF and PV.
As you can see, the total number of MF patients currently on Jakafi shown in blue continues to rise and the pool of MF patients on therapy continues to be greater than PV shown in orange. The total number of PV patients on Jakafi is growing faster than MF, and we continue to expect that in time, the number of PV patients taking Jack 5 will overtake MF. The sales bridge provided on the left hand side of Slide 9 shows continued demand growth in Q3 and the effective inventory changes on net sales. We saw an unexpected destocking at several large customers late in the third quarter leading to a negative inventory effect of approximately $8,000,000 in the quarter. The 9 month sales data shown on the right hand side of slide 9 where effects of changes in inventory or normalize shows a strong 21% growth over the same period last year.
The number of new patient starts is typically a leading indicator for sales performance and Q3 new new patient demand data are encouraging and provide us with good momentum as we enter the 4th quarter. Giving our confidence in the full year outlook today, we have adjusted Jakafi guidance by lifting the lower end of the adding more than 200,000,000 in net product revenue each year since 2014. We are on target to continue that trend again for the full year of 2018 given that the midpoint of the new guidance range represents more than $250,000,000 and increased Jakafi revenue versus the full year of 2017. I am very pleased that both indications are driving growth as we Given the success of the REACH-one trial, we continue our readiness efforts for potential approval of Jakafi and steroid refractory acute GvHD. Our team has made excellent progress provides in both MF and PV indications.
And I have every confidence the team will do an equally outstanding job for patients with GvHD. We submitted the sNDA on schedule during the third quarter based on positive results from REACH 1 in patients with steroid refractory acute GvHD and the FDA has recently accepted for priority review. As we detailed last quarter, we believe our team's size and structure has already been optimized and I'll pass the call over to Steven for an update on our portfolio.
Thanks, Barry, and good morning, everyone. We believe that JAK inhibition has significant potential as a treatment for graft versus host disease, and we have 2 pivotal programs that span several aspects with this devastating and often fatal disease. As Barry touched on, we were pleased to have the ruxolitinib sNDA accepted by the FDA or priority review based on the results of REACH 1. Beyond REACH 1, we have 3 ongoing Phase 3 trials that are all currently expected to yield results next acute graft versus host disease and steroid refractory chronic graft versus host disease, respectively. GRAVITAS-three zero one is the first pivotal trial that is evaluating our JAK1 selective inhibitor, itacitinib in patients with treatment naive, acute graft versus host disease.
Early next year, we expect to launch a second phase 3 trial of itacitinib This time in patients with steroid with treatment naive chronic graft versus host disease. There are significant number of new patients each year that would become eligible for treatment with either itacitinib as a first line treatment or ruxolitinib following treatment with steroids. If our trials are successful and we obtain regulatory approvals. On Slide 14, we have included data for Pemigatinib, IFGFR 123 inhibitor, which was presented recently at ESMO in Munich. If you recall, we presented some initial data from this group of patients at our R and D day in June this year, which showed a disease control rate of 82% and overall response rate of 24% and a 6.8 month median progression free survival.
You can see here that as patients remained on therapy, responses have been more durable and more patients have become responders such that the response rate is now 40% with a median progression free survival of greater than 9 months. Importantly, all tumor response data are from central review. Recruitment into the FIGHT202 trial in patients with cholangiocarcinoma is now largely complete. We will now wait for the data from the trial to mature. If the data continues to evolve as we expect, we intend to submit an NDA seeking approval of Pemigatinib In second line, FGFR2 translocated cholangiocarcinoma next year.
We therefore expect cholangiocarcinoma to be the initial indication for as well as a development program seeking a tumor agnostic FGFR altered indication in the future. Data on CAPMatinib were also presented at ESMO. CAPMatinib is an oral reversible inhibitor of the MET receptor tyros kinase. And it has shown both high selectivity for MET and is extremely potent against MET exon 14 skipping mutations compared to all other MET inhibitors in development. CAPMAT was discovered by Incyte was included in the 2009 license agreement with Novartis and has the potential to be the 1st MET selective inhibitor to be approved given the exciting data presented at ESMO this year.
Data at ESMO were from the geometry monowone study being run by Novartis and these data were in patients with non small cell lung cancer with MET exon 14 skipping mutations, which occur in up to 4% of patients with non small cell lung cancer. The response rates seen in this 94 patient trial were clinically meaningful with an overall response rate in second and third line patients of 39% And in first line, the response rate was 72%. All data was centrally reviewed and CAPMatinib showed a manageable safety profile in this challenging patient population. Novartis is guiding to an NDA submission for CAPMatinib next year. And we are very proud that another Incyte invented molecule appears to be on the path to potential registration.
Let's move on to our development efforts in inflammation and autoimmunity. We were excited that data from ruxolitinib cream in patients with atopic dermatitis were presented at the recent EADV meeting in Paris and were very well received. As you can see here, the data showed rapid improvements in itch for patients on raxolitinib cream versus both placebo and steroid cream, which was seen as early as 2 days after the first use. These responses as well as other endpoints based on the eczema area severity index and the investigator global assessment scales were durable and the treatment was not associated with any notable safety or tolerability findings. We are currently in discussions with the FDA design a Phase III program in adults with atopic dermatitis, which we expect to initiate shortly.
Ruxolitinib cream also has potential as a treatment for patients with Vitiligo, which is an autoimmune disease of the melanocytes, leading to disfiguring patches of hypopigmentation on the patient's skin, most notably on the face and hands. A small proof of concept trial of ruxolitin cream has already shown promising results in a randomized, double blind, vehicle control phase 2 is ongoing. We expect to announce data from that trial next year. I'll now pass the call
and non GAAP numbers. For a full reconciliation of GAAP to non GAAP, please refer to our press release For the third quarter, we recorded $450,000,000 of total revenue on a GAAP basis. This is comprised of $348,000,000 and Jakafi net product revenue, $20,000,000 in Inclusig net product revenue, $51,000,000 of Jakavi royalties from Novartis, $11,000,000 in Olumiant royalties from Lilly and $20,000,000 of contract revenues for a milestone earned from Lilly for the commencement of the Phase III program in lupus. Total revenues for the quarter on a non GAAP basis were 430,000,000 and exclude the $20,000,000 milestone from Lilly. Our Jakafi gross to net for the quarter was 13.5%, and we expect for the quarter was $19,000,000 on a non GAAP basis.
This includes the cost of goods sold for Jakafi, Aniquis and the payments of royalties to Novartis on Jakafi Net Sales. Our R and D expense for the quarter was $251,000,000 $85,000,000 on a non GAAP basis. Moving on to non operating items, we recorded GAAP and non GAAP net interest income of $10,000,000 in the 3rd quarter. Our net income for the 3rd quarter on a non GAAP basis was 83,000,000 which is double that reported for the same period last year. Looking at our year to date results, our net income on a non GAAP basis was 137,000,000.
We ended the 3rd quarter with 1,400,000,000 in cash and marketable securities and we expect to end the year with approximately the same amount. Slide 21 provides summary reconciliation from GAAP to non GAAP metrics. And as I mentioned earlier, a more detailed reconciliation is provided in this morning's press release. My last slide provides a summary of our current financial guidance based on Jakafi's year to date performance, We are increasing the lower end of our net sales guidance by $20,000,000 to a revised range of $1,370,000,000 to 1,400,000,000 We are also decreasing dollars and increasing our SG and A guidance from a range of $390,000,000 to $410,000,000 to a new range of 420,000,000 to 4.40 based on our run rates for the year to date. Our guidance for non GAAP net income of $200,000,000 to $250,000,000 is unchanged.
Urvey will now conclude our prepared remarks by summarizing our expected news flow.
Thanks, Dave. And I would like to pause here for just a minute to say a few words of thanks for the inter labor world you have played in the Insight leadership team since joining us in 2014. And I would like to take this opportunity to publicly thank you for all of your contribution and to wish you well in your retirement when we identify your successor. So to end our discussion, I would like to share our key objectives for between now the end of 2019. On the regulatory front, we have 3 important goals.
First, we expect to achieve FDA approval for ruxolitinib in steroid refractory acute GvH in the first quarter of 2019. It may come sooner, and if so, we are ready to launch. 2nd, should the pemigatinib data continue to evolve as we expect to intend to submit an NDA for cholangiocarcinoma next year. 3rd, Novartis has stated that it plans to submit an NDA for CAPITINib in non small cell lung cancer with MET exon 14 skipping mutations next year. Regarding
key clinical data,
we are currently expecting results from several registration enabling trial for the end of 2019. Firstly, we expect to announce a result of the Phase III program for baricitinib in atopic dermatitis. Then data from 3 GVHD pivotal trials, Kavitha-three zero one with itacitinib and reached 2 and reached 3 with ruxolitinib are also expected to be available during 2019. We also expect to complete recruitment of the continuous dosing cohorts for pemigatinib in patients with bladder cancer. If data from these cohorts are positive, They could form the basis for regulatory submission.
We also anticipate initiating several Phase III programs before the end of next year. Gravitas-three zero nine trial is in preparation and will study itacitinib in patient with treatment naive chronic GvHD And we are also planning on opening a Phase III program evaluating ruxolitinib cream in adults with atopic dermatitis and use the phase 2 is successful to phase 3 program in patients with Vitiligo. Finally, we plan to start phase 3 trials polygastinib in both cholangiocarcinoma and first line bladder cancer. We believe that there is a significant value embedded in our portfolio and it's up to us to execute on these opportunities in the coming months. By creating the right molecule and working towards clinical success, we aim to create value for both shareholders and society by bringing new and innovative therapies to patients.
In doing so, we expect to drive insight towards sustained and significant profitability. Operators that conclude our prepared remarks please give your instructions and open the call for Q And A.
Thank you.
Thank you. And I'll be conducting a question and answer session. You. Our first question today is coming from Salveen Richter from Goldman Sachs. Your line is now live.
So I have, two questions on Grad versus host disease. So firstly, in light of the upcoming PDUFA date, for the REACH-one study, Could you comment on the education required here on on the sales side and any additional build you might require in terms of Salesforce. And then secondly, in light of this positive data, how does that read through to the other Ruxo studies in graft versus host as well as itacitinib and then specifically for itacitinib, what is the benefit of JAK 1 alone in the treatment naive setting versus JAK 1 too? Thank you.
Hi Salveen, this is Barry. I'll take the first part of your question and hand it over to Steven for the second part of the question. So, in terms of the build, So, we already have, at the, throughout this year, we've added 25 sales representatives 3 MSLs and, 2 oncology nurse educators. And that was to get ready. In fact, for GVHD, but also to take advantage of, continued growth opportunities for Jakafi and myelofibrosis and polycythemia vera.
So those, oncology sales representatives are actually positioned around the top centers that do stem cell transplants and where most PDHD would be found. So I think as we said before, the top 50% the top 50 stem cell transplant centers account for about 70% of the transplants. So, we think it's really targeted, our training is beginning, now, for, so our training materials are all prepared in terms of educating our internal teams, including the sales teams, we call on many of these, targets already. These, about 50% of the positions that are doing transplants because remember, some of them are doing transplants for myelofibrosis patients. So we know the centers.
We've been profiling the centers. We have another team that we call our national accounts, managers that have been making sure that we'll be able to, to have Jakafi on formulary. For surgery, acute GvHD, we think we're well prepared in terms of that education. And then, of course, we'll educate healthcare professionals about the benefits that Jakafi provides in this patient population and we're fully prepared in putting together materials for that. With that, I'll hand it over to Steven.
Thanks, Barry. Thanks for the question, Salveen. So you asked about the read through from the Reach 1 results to the Reach 2 program, which is in steroid refractory acute well, but a randomized study against best available therapy. And then REACH3, which is in, chronic graft versus host disease and also randomized study Overall, the read is positive given that it's JAK inhibition with a, with a few nuances, acute disease is generally an apoptotic disease, whereas chronic disease is more a fibrotic disease, but given that we have proof of concept in both entities, We obviously feel strongly about the likelihood of probability of success here and that's we conducted these large Phase III programs. So overall positive reads there.
The same applies to itacitinib, even though it's more selective for JAK1. Again, JAK inhibition been important across the spectrum of graft versus host disease. Let me just remind you of itacitinib's proof of concept data at ASH a few years ago, which showed a very high response rate in steroid naive, as well as in steroid refractory, but the steroid naive response rate was 20 points higher. And thus, gave us proof of concept to go ahead with Gravitas-three zero one. Why is it important?
Because of the sparing of JAK 2, is expected to be relatively less cytopenias. And given that these patients are, steroid naive acute immediately post transplant, what they're struggling with in terms of mobility is often cytopenias in terms of low platelets, low white cells, anemias. So the steroid, the cytopenia sparing effect should be helpful here and should translate to increased success and tolerability. Thanks.
Thank you. Our next question is coming from Mark Frahm from Cowen And Company. Your line is now live.
Hey. Just one for following up on Salveen. We think about the itacitinib data and gravitas 301. Can you just talk about what type of effect do you think you need to show to kind of justify moving, you know, an expensive therapy kind of into that front line, you know, in a more of a contract at the setting, like, like transplant And is it just the response rate, or is there some other aspect that we should really be focusing on to justify that?
Yes, thanks for the question. Again, it's Steven. The, the, generally speaking, steroids have a a 40% to 50% response rate with the attendant side effects, particularly when they use over the long term, which are well known in terms of steroid side effects, So from our point of view, a response rate that's one north of that, and an absolute numbers can be quantified, but it should be higher than steroids. And then in terms of what we know in terms of tolerability and We've got ample evidence of long term use of ruxolitinib in MF and PV now. The profile is very different from long term use of steroids.
The effect would have to be that higher response rate and a better targeting profile that would enable people to get off the steroids And that's what we're looking for in gravitas 301, and that would be an additional clinical benefit to the actual treatment of graft versus host disease is the ability for patients to be weaned, of the steroids.
Okay, great. And then just for Barry, on the, thinking about pemigatinib and, you know, potentially launching your getting filed next year, claimed your carcinoma. You just talked about the buildup that is gonna need to be done the timing of that for a, you know, commercial organization and solid tumors that doesn't really exist right now.
Well, you know, we're hopeful that we'll be get approved as soon as possible. But, you know, we're just working on, exactly the size as a team that will need for this patient population in cholangiocarcinoma, with FGFR2 translocations So those efforts are really ongoing and, you know, we'll continue to update you as we get closer to an actual launch date.
Okay. Thank you.
Thank you. Our next question is coming from Cory Kasimov from JP Morgan. Your line is now live.
Hey, guys. This is Sean on for Corey, congrats on the quarter and, just a couple of questions on on cholangiocarcinoma. So the updated results from Kavanaugh would love to be quite promising. It actually looks like there was a significant portion of patients in whom the response took a bit longer to evolve. On your previous update, I think there was like 11 out of 45 responses versus 19 out of 47 responses at Aetna.
So just kind of wondering if the kinetics of the response surprised you a bit. And as a follow-up, maybe you could share with us some color around your filing plans. Is there a chance that we could potentially see a BTP and a priority review on this indication and are those discussions currently ongoing with the FDA?
Sean, it's Steven. Thank you for your questions. Yes, it's a good surprise, right. The ESMO updated data showed that centrally reviewed, response rate to of 40%, which is robust. And as you noted, increased with time.
For reasons, in one particular tumor versus others that we see that is not entirely clear, but obviously the biology of that particular FGFR2 translocated cholangiose such that over time, you can get increased side of reduction. Probably a clue for that came, if you look at the entire waterfall plot, is the disease control rate is north of 80%. So just about everybody is having some degree of data reduction from the get go. And obviously, over time, those improved in a substantive way that were also really, really durable. So given the context, given that this is second line cholangiocarcinoma, given that chemotherapy in this setting has maybe 10 at a stretch 15% response rate with very short progression free survival.
We believe these results are now, in the territory to meet potential regulatory approval type data. And to further to your question, we will be discussing, of course, with the regulatory authorities, does this meet breakthrough designation criteria? And as such, would it qualify for priority review. And again, we feel strongly that that's starting to look increasingly to be the case. I am focused in my comments on the FDA, we didn't mention, Europe because the root there for single arm studies is harder.
But given this updated data set, will obviously be discussing these in Europe with the regulatory authorities as well. Does this now meet potential regulatory approval criteria? Very encouraged by the data set and surprised in a good way by the increase in response rate that's durable over time.
Thank you
is coming from Geoff Meacham from Barclays. Your line is now live.
Good morning guys. Thanks for the question. Dave also want to offer up some congrats on your retirement. Seems like we've had this conversation before. Barry, another one on Jakafi, when you look at the GVHD opportunity.
What do you think could be the initial uptake curve based on reach 1 and the unmet need? I guess my sense is, do you think docs will want to wait ultimately until 2 or, 2 or 3 data are fully out. And I have one follow-up for Hervey.
No, Jeff, I actually think the uptake be, quite good. Obviously, you know, what the patient population is, steroid refractory TBHD in the United States, you know, we say it's around 1500 patients. You know, we think that the data we've shown so far are compelling, better than anything else in this particular setting able to get patients off of steroids. Obviously these patients are very, very sick and they really need, to get their GVHD under control right away and it looks like we're able to achieve that with the profile that we have. So I am very encouraged about that opportunity.
And then we're looking forward to getting approval for chronic GvHD. We think that'll be a good opportunity as well. So, we're looking forward to both of these indications.
Okay. And then, Urvi, you've got a great franchise in Jakafi, which obviously could drive pretty robust profitability and an hour, you're get you're getting zero credit for pretty much anything in the pipeline beyond what's in phase 3. So So, why continue to develop so many assets that are earlier stage? Do you think you'd add more value by, for example, narrowing the pipeline breadth and focusing a little bit more on profits today? Thanks.
So, I mean, I think your question is, is really about our overall R and D investment. So what we believe is that the quality of the science we are, where we have here inside the quality of the discovery team is now proven. I mean, we spoke about ruxolitinib and baricitinib already approved commercially available. We are speaking of now pemigatinib, itacitinib capmethinib. So that would be like 5 molecules that are coming from our own discovery group that have been now very close to crossing the line and, and showing a lot of very promising data.
So it shows that R and D done the right way can be extremely productive. And before you have late stage products, obviously, you have to have early stage products, and that's why we have a portfolio of early stage program. We don't know yet from that portfolio. You know, which one will be, you know, the breakthroughs that are doing very quickly and which one may end up being more on hold. I must say in term of investments, most of it is coming from the late stage portfolio.
So if you look at the, at the weather investment is calibrated between early stage and late stage, which see is that the pre proof of concept program usually have a relatively modest impact on the modest, I mean, it's a relatively smaller impact on the on the R and D budget. And I would choice to develop these products is really based on the data and the science and the medical need and trying to improve treatment of cancer or outside of cancer. As you can see, there are now a number of fairly interesting programs we have. And I must say, the atopic derm and the Vitiligo program for, for roxulicity cream are assuming we get, we get good data from the phase 3 are going to be very productive for our cooperation. So that being said, obviously, we are very cautious about our investments in R&D.
And as I said in my remarks, the way we see the entire corporation evolve, is increased profitability. I think Dave spoke about the profitability we have seen in this quarter, which was double what we had a year ago, And that's a trend over a period of time that you will see confirmed with the progress of our business.
Thanks.
Thank you. Our next question is coming from Matthew Harrison from Morgan Stanley. Please proceed with your question.
Great. Thanks for taking the questions. I guess 1, can you just comment briefly on the inventory drawdown and whether you expect that reversing coming quarters or if there was a specific driver of that drawdown this quarter? And then maybe secondly, can you just comment on the, what are the key issues that you're speaking with the FDA about the Phase III or atopic dermatitis with the ruxolitinib cream? Thanks.
Okay, Matt. So I'll take
the first part. No, we think this is one time. Well, inventory changes periodically. We've seen it over quarter, sometimes the inventory is, you know, above the normal range that we experienced, sometimes it's below, the normal range, which is, you know, what we say is two and a half to 3 weeks of inventory in the channel. And even if you move a couple of days one way or the other, now that's about $12,000,000.
Was a driver of the inventory burn off this quarter. Well, you know, we took a 3% price increase, at the beginning of September And historically, we've seen after we take a price increase that inventory does go down, but generally it's gradually over time. This was very quick and a little bit more dramatic that we saw some destocking. To be honest, even in October, that's already reversed itself. We're on budget for October.
We're on budget to, to hit the guidance that we just gave before. You know, we're planning to deliver close $50,000,000 in 2018 above and beyond what we sold in 2017. So, we're, very confident moving forward. And I'll hand it over Stephen for the second part. Hi, Matt.
Thanks for your question, it's Steven. The, I mean, the obvious issues, but I'll go through them the type of things we discussed in given the proof of concept work we've conducted and presented already or the dosing the need, to study more than one dose or not. The number of studies that are needed in the setting in dermatology mentionally, it's at least 2 studies. The size of those studies, given that the safety databases, in dermatology indications tend to be a 1000 patients or north of that. And whether or not an active comparator is needed or not, in these studies.
I think those are the 4 main issues. The good news is we're very close, to closure on those. And we aim, as Herve said in the call, at a minimum to get these studies going in the first quarter of 'nineteen, if not sooner. So we're in a good place. We have the right set of proof of concept data we have agreement on most of these issues and we should be going soon.
Thank you. Our next question is coming from Brian Abrahams from RBC. Your line is now live.
Hi. Thanks very much for taking my questions. Two questions on Jakafi Lifecycle. I guess first off, I
was wondering if you could talk
a little bit more about the ongoing Jakafi combo studies, perhaps put a finer point on the timing for upcoming readouts, and maybe give us a sense for your view as the overall bar there, what you need show from a symptomatic improvement standpoint from tolerability to our potential exploration here not just in refractory patients, but in frontline, as a potential Jakafi replacement, what would be acceptable in terms of additional AEs?
And then, I had a follow-up.
So Brian, it's Steven. Thanks for your question. Obviously, the life cycle management of racks itself is incredibly important to us given that we have patent runway in the United States and beyond at least through 2027. So it's a large program with numerous efforts you focus your question on one of them, which is combination work. We have various combinations ongoing.
The one that you see that's currently the most encouraging to us and you'll see data readouts on relatively soon at upcoming meeting at the end of the year. Which we already showed you a sneak preview in 10 patients at the R and D day is ruxolitinib plus PR3 kinase program, the Delta program with with 50465. And in that, that early read we showed you in the 10 patients, at the R and D day, you saw both, a further decrease in spleen volume in terms of actual, and a reasonably objective measure of activity as well as symptom improvement. Remember, rux itself is such a fantastically successful drug that it's not easy to recruit these trials quickly, and, most people stay on rugs for a very long time and do really well. So the additional needs beyond in terms of regulatory endpoints aren't very clearly defined.
We've been working with the FDA in this space because we have numerous combinations ongoing in trying to come to a very strict definition of what constitutes, if you will, in inverted commas, ruxolitinib failure or rux refractoryness and then put people appropriately on those studies to make sure we always have epilabble comparisons across our programs and others. So they're not strictly defined yet, but we've been working very carefully to get those to you. We also have ongoing program just to mention with ruxolitinib plus our perm inhibitor, which is, has really good preclinical data. And then a combination with JAK1 with itacitinib itself that's ongoing as well in patients who either can't tolerate doses of rux or have to come off it. And then we have a switch strategy as well.
So it's a very large, combination program across all of them. With the lead clinical evidence now for which you'll see updated data at the meeting end of this year is the RUX plus PR3 kinase delta program. And hopefully, the endpoints will be more clearly defined over time.
That's really helpful. And then, just to follow-up to that, in terms of, next generation ruxolitinib formulations. I know you recently published data on an earlier formulation.
Just wondering where you are
with respect to optimization. How much cytopenia reductions and or improvement in efficacy, you could potentially achieve and might need to show for payers and KOLs to support, use of a next gen, once a generic Luxo is available. Thanks.
Yeah, hi, Brian. This is Reid. I'll take your question. You're right. We did publish some data on the, on a standard lease formulation of ruxolitinib and there's actually some intellectual property around that as well, which has recently been, locked down Those are important efforts for us and they really dovetail with the remarks that Stephen just had on the combination work.
In some respects, that is kind of the 1st line of the life cycle strategy. To try to work on a more optimized pharmacokinetic profile of ruxolitinib that's beneficial in terms of patient usage, but also potentially brings important benefits in terms of their cytopenias or even the benefits that ruxolitinib achieves in terms of of spleen volume reduction in symptomatic improvement. So that's sort of the first leg. I think the combination, studies that Stephen outlined as the 2nd leg and just for completeness, you know, the 3rd leg is a continued, strong interest in active research programs we have internally both fully in house and in collaboration with academic and company partners to try to identify new targets in the space that could be approaches frankly to obsolete ruxolitinib, one day. And so these are all, 3 active efforts with an insight and I think help to underscore just how significant the commitment is that we have to MPN patients.
Thank you. Our next question is coming from Catherine Chu from William Blair. Your line is now live.
Hi. Good morning. I just have a question on, Pemigatinib. Can you comment on the intermittent versus continuous dosing? Of the drug in both cholangio and in bladder?
And then are you confident in terms of efficacy that you could attain with this increase in dosing and then on the safety side, what would you sparked with this more intensified dosing mechanism. Practistically, understanding that these are FGRFR2 or 3, treatment, nutrition driven cancers, but it does not make does it make sense to find a combo partner to further increase the efficacy in these patients. Thank you.
Katherine, hi, it's Steven. Thank you for your question. It's a good one. So, in terms of the dose we netted out at the end of phase 2, trying to weave the therapeutic ratio between efficacy and safety, We had come up with a 13.5 milligram, 2 weeks on 1 week off dosing regimen, which many competitors at the time were doing as well, given the tolerability profile as regards hyperphosphatemia, GI side effects, etcetera. Our cholangiocarcinoma dose in regimen as seen is the intermittent 1, 13.52 weeks on 1 week off with the efficacy we just showed at ESMO and just spoke about.
In the interim, in ifGIP or 3 mutated bladder cancer, the lead competitor there, the J and J compound, had switched from intermittent dosing to different continuous dosing regimens and had shown incremental improvements in efficacy from the mid-twenty percent range up to the low 40% range and had filed earlier this year, had achieved breakthrough status and that's the way they do in their program in bladder cancer. So what we've done in bladder cancer is switch from intermittent dose into continuous because, again, we look like we have a similar response rate with intermittent there, and we're just beginning that continuous dosing journey and should enroll fully our study at some point next year, as Urvi said in his remarks. What we'd want to see from that is an incremental improvement in efficacy like they did in bladder cancer. So safety question is pertinent, though. If you look at discontinuation rates between intermittent regimens and continuous regimens, for our competitors, they almost double.
So you can go upwards of a 20% discontinuation rate where you do continuous dosing. And obviously, that'll have to be watched because you want patients to stay on therapy, you want durability of responses, and you have, you want long progression free survival. That's the, that's the sort of therapeutic ratio you have to weave when you do this effort. And it is likely that same with us with continuous dosing that the tolerability profile may worsen slightly. Although our discontinuation rates to date with caveats on low numbers, are actually much lower.
So that's encouraging. In terms of partners across the spectrum, obviously for the moment we've been talking mostly about monotherapy effort But as you move up to 1st line, particularly in bladder cancer, we may, we may be examining efforts in combination with IO in terms of checkpoint blockade, that may be one of the relevant areas to attend to. And as you know, we have our own PD-one inhibitor. So that's something we'd be to then going forward. There are, as Urvi mentioned, other FGFR potentially driven diseases, and there may be, a way of doing a more agnostic approach across different tumor types, just like was done with checkpoint inhibitors with MSI high tumors, for example.
That's something we're going to be exploring actively next year. So that's the status of the program. When we have all the, combination partners We need internally at the moment for the efforts we want to conduct. So thank you.
Thank you. Our next question is coming from Tyler Van Buren from Piper Jaffray. Your line is now live.
Thanks and good morning. In the release specifically mentioned the positive enrollment of the gravitas trial. So as we think about the enrollment as a positive indicator of potential market take. Could you elaborate on some of the factors driving enrollment in that trial? And then as a, as a follow-up question to that, I believe the long term Jakafi guidance includes the smaller acute steroid refractory, indications.
So as you think about the expansion of that into both chronic and steroid naive and the broader GvHD opportunity, could you help us you know, put some numbers around the magnitude of that potential opportunity in terms of sales, as you guys currently think about it.
Carter, hi, it's Steven. I'll go first and then hand it over to Barry. So just to mention, the gravitas 301 program that you referenced is with at NIP, our JAK1 inhibitor, and then you turned over the rest of the question to Rux. So I'll let Barry address that part. But for steroid naive acute, I think it's numerous factors.
We've been, really encouraged by the rapidity of enrollment and the enthusiasm around it. I think it's related to the fact that there's a large unmet need in this area, with a disease that can be, of high morbidity and actually high mortality, at 6 months. So there's that need to address plus now, the the knowledge and through numerous publications that JAK inhibition is highly effective. So people want to get on to these studies and have it tested. And I think those are, and then the global nature of the way we conducting the study across, the U.
S. And Western Europe, as well as some Japanese enrollment. So those are all driving very encouraging enrollment, and we're really happy to see where that is. I'll pass it over to Barry for your commercial question. Tyler, I
think you're asking 2 separate questions. One is that the long term guidance that we have on, Jakafi, which includes acute steroid refractory, GvHD and chronic steroid refractory GvHD as well as ET and that brings us to the $2,500,000,000 to $3,000,000,000 guidance that we have given before. In terms of itacitinib, obviously it would be used mostly in what we're currently studying in treatment naive acute GvHD and treatment naive chronic GvHD And globally, so that is a global product. So that is separate from, our guidance on Jakafi. So globally for itacitinib, we see about 15,000 patients that would have both, treatment naive acute GVHD and treatment naive chronic GVHD and then you can do the numbers from there.
And obviously, we haven't done, pricing and, other, forecast around that, but we know what the opportunity is. It's bigger than the, perhaps the, sorry refractory setting and, we'll take advantage of that. Thank you. Thank
you. Our next question is from Reni Benjamin from Raymond James. Your line is now live. Hey, good morning. Thanks for taking
the questions and congrats on the quarter. Can you talk us or walk us through kind of your thoughts regarding the data from competitors in terms of pemigatinib and how your you're viewing that data in terms of indications perspective, whether you're actually competing in things like bladder or you think certain indications are going to be kind of free and clear. And related to that, can you talk about the importance of Foundation Medicine companion diagnostics or companion diagnostics in general and how that could impact your uptake.
Stephen, I'll go first. Others may want to add to my comments. No, I think when you start getting more competitors, it's sort of validation of that chasing a target, although there's no approved FGFR inhibitor yet, but that's recognized as an oncogenic driver which should have compounds that are active. And you've seen activity data now in, cholangiocarcinoma as which is Eptia for 2 translocated, Eptia for 3 mutated bladder. And in fact, a milder proliferative neoplasm that we're studying as well, that's FGFR1 driven through an 8p11 chromosomal translocation.
And then potentially other areas where FGFR may be a driver, but it's a little more unclear because you are often looking at amplification rather than mutations. So in terms of talking directly about competitors, which I won't do, but it's interesting that the field is as busy as it is. It's encouraging. It's good for patients. And we can learn where others are ahead.
And I just gave you the perfect example earlier of the J and J switch with their inhibitor from intermittent to continuous and getting that efficacy bump, which we can clearly learn from and catch up pretty quickly. So we don't view bladder has gone in any way. We think we have a superb molecule. We're going to do the continuous dosing experiment. As I said, we should finish enrollment sometime next year, and we want to be very competitive there with what we think is an excellent compound.
In Calanjo, our view is we're ahead of everybody else. And as we said with the data set, we will take it to, hopefully, a regulatory filing next year In terms of companion diagnostic, the way it works to your, your study. We work in with the, with the lead developer in this area of foundation medicine with their test. It's important from the regulatory's perspective in getting the study completed, done and attached to your label. From an uptake point of view, I'll make a clinical comment.
And then only if anybody wants to add anything in that, what happens in the real world thereafter is a bit of a mix is that people often have low testing available through their centers under clear certification in the U. S. Or other means in the rest of the world. And as long as it's done appropriately, to measure either the FGFR2 translocation or FGFR3. No, they'll often go ahead and treat patients without waiting for the one that's actually per label, from an uptake point of view.
So, and that's increasingly been done across the globe now in various places. And certainly once you have a validated pathway with an approved drug, you start seeing testing become routine. So you can go back 20 years to her to cancer, then EGFR in lung, etcetera, etcetera. So they become routine diagnostic things. So from a clinical point of view, uptake should sort of in some ways take care of itself.
I don't know if anybody else wants to make other comments.
And then just maybe as
a quick follow-up or separate question for Herve. When we think about it from a company perspective, there's this growing franchise of what appears to be non oncology and then specifically dermatology. And so, you know, how should we be thinking about that going forward? Is this something that, you know, is, is really a focus? Is it something that could be packaged and kind of sold off and monetized, any sort of thoughts regarding that?
It's a good question and it's part of, you know, related to an earlier question about the value creation through research and development. I think that a very good example of a project that we have been working on in dirham now for more than 2 years of looking at non cancer related application of the technology coming from research. So we have a group of biologists working on that, and it starting to translate into clinical programs. And these clinical programs are going in many different indications. We have, obviously, the dermatology group of indications where there are a number of projects, but we have also, you know, a program in ulcerative colitis.
We have a number of pre proof of concept small program trying to establish this product. So as we get this proof of concepts, we will have to make decision on doing the phase 3, ourselves, or to find a partner in case of dermatology for atopic derm. And I can say already for Vitiligo, we will do the pivotal Phase III studies internally. And as we are seeing these data maturing and as we get the result of the phase 3, that's where we will have decisions to make on how do we, plan to do the commercialization for each of these products. At this stage, these decisions have not been made.
You can imagine that there are differences depending maybe on the geographies also. So we are looking at it as Asia, Europe, U. S, And we are looking at it as do we go and do it ourselves, or is it better value for the corporation and the shareholders to do it with the partner. And all of this is up in the air now. We are in the process of identifying and quantifying our options to make sure we choose the one that is the most productive.
Thanks for taking the questions.
Thank you. Our next question today is coming from Christopher Marai from Nomura Securities. Your line is now live.
Hi. Thanks for taking the question. Maybe to follow-up more on the, the topical rux. So you know, with respect to atopic dermatitis, could you perhaps comment on the potential size of the Phase III that you're going to be required to run And then secondarily, any other safety studies beyond the typical phase 3 that will be required for that. And then secondarily on Vitiligo, actually, the Phase 2 is ongoing.
Is that a registration or a good trial? A follow-up. Thank you.
Yes, it's Steven, Christopher. Thank you for your question. So, on the size of a Phase III program for atopic dermatitis, I alluded to it a little earlier, but The FDA, requirements and safety are the main driver here. We'd need at least 1000 patient worth of data, probably across 2 studies that could end up being slightly north of that. The good thing is these studies are relatively easy to do and go really quickly.
As you just witnessed from the baricitinib atopic dermatitis program. So there's no concern there. We'll get the right size in and get the right safety base safety database to do that. For Vitiligo, we have a very well, constructed, proof of concept study similar to the way we did atopic derm with the dose ranging, the right control, etcetera. Would that suffice your question was, on a stand alone for regulatory approval, it somewhat unlikely in the derm space, you usually have to conduct the studies I just mentioned.
But given that we will have a large safety database from atopic derm, It's certainly something we would discuss depending on the results. But, just to manage expectations, the likelihood is that we would have to conduct, as Eric said, the VitilAgro Phase III program to get it across the finish line there.
Station for for Penny. You know, it's obviously as someone else brought up outside you know, Hemog an installed I was just wondering could you remind us of the option that you have to co promote CAPATINib and how that option to cook remote might, might work into plans to also commercialize or set up commercialization of Penny? Thank you.
Yeah. I will answer on the worldwide basis, we we have no intention to go in a co promotion of Catanitini by this stage. I think the contract we have with, with Novartis on the Capmatini gives them the right to promote it. And so that's not part of the plan. I would say on On the hematology versus oncology, you have, depending on the countries, you have a separation of the 2 specialties or not.
I mean, most of them are practicing in same building in the same hospital. So you can imagine that there is from the hematology commercial organization already synergies for launching an indication in oncology, like, for example, cholangiocarcinoma is the first if it is the first to come up. Colonychocarcinoma is relatively rare. So it's a it's a it's an indication where we believe we could, fairly easily be promoting it by ourselves in a way that will not involve a very large increase of our sales force. So we, I mean, depending on other indications that will be coming after cholangiocarcinoma, I think bladder cancer will be a specific different type of, of customer base.
In fact, in a, in a with some of them being in a urology department. So we will have to adjust as we go my experience with hematology, oncology and a mix of products in both specialties of our a number of countries, a number of countries of a number of years is that there is a lot of ways you can organize or by specialty, depending on the density of your customer population. And that's probably what we will be doing.
Thank you. Ladies and gentlemen, in the interest of time, we have one final question from Carter Gould from UBS. Please proceed with your question.
Good morning. Thanks for squeezing me in. Dave, congrats on your retirement retirement. I wanted to ask on the rock program in AD, I want to understand better a little bit the stage gates to starting a, you know, some studies in pediatrics. How do you and I guess FDA feel with the safety profile potentially in that population?
And I guess how critical is that to how you see the value creation opportunity in AD? And then as a follow-up, Urvi, I appreciate your comments around the relative spend coming from early stage programs. Any intention to increase your disclosures around where R and D spend is coming today?
Carter, I'll go first and then Nerve will take a second part. It's Steven. So, the RUX program in total, we'll look at patient initially from twelve years of age and above, and with mild to moderate atopic dermatitis, and that, will address the vast majority of that population. In terms of the pediatric set in the 2 to 11 year age gap per the definition. That is to be what we're discussing with the FDA at the moment.
It's an area we'd like to address. We need to just work out with them. What they would consider safe dosing in terms again of the therapeutic ratio, and that should follow thereafter. But the program should start initially in ages 12 and above, and that'll address most of the mild to moderate population with which we want to go after with the ruxolitinib cream.
Yes. So on your question about R And D allocation, obviously, I think it's an important, question insight because as you can see, I mean, there are a lot of, aspects of what we do that is very much quantified and rational and based on, on our projects and the more clarity we can give on, on how resources are located. I think the better it is. So we are looking at what is the sort of norm in our industry. So we have been looking at how other companies have been giving more clarity on their R and D allocation.
And we will be considering doing some of that or all of it in the in the future when at the time we are reporting, next year.
Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further or closing comments.
Okay. Thank you for your time today for your questions. We look forward to seeing you at upcoming investor and medical conferences, including at ASH, But for now, we thank you again for your participation in the call today. Thank you and goodbye.
Thank you. That does conclude today's teleconference and webinar. You may disconnect your line at this time and have a wonderful day. We thank you