Welcome back to the 44th annual TD Cowen Healthcare Conference. Marc Frahm from the Biotech team. We're really happy to have with us the team from Incyte. We've got Christiana Stamoulis, CFO, and Pablo Cagnoni, the President, Head of R&D, to join in. We'll go through a number of topics, but maybe to start off with, Christiana, you want to just provide a kind of quick high-level status update on Incyte and kind of what you lay out the kind of key events over the next 12 months or so that investors should be looking at, and then we'll dive into some of the discussion of those events from.
Okay, great. So I'll start with a recap of 2023 because I think it's very relevant as we are looking in 2024 to continue to build on the progress that we made in 2023, and then I'll turn it to Pablo and he can walk through some of the key milestones that we are looking forward to in 2024. So 2023 was, first of all, on the commercial end, a year of continued execution, strong performance. We delivered $3.7 billion in product and royalty revenues for the year, which represented a growth rate in the mid-teens. The key contributors there were Jakafi, that contributed $2.6 billion in revenues, continuing to grow, and Opzelura, which is moving at a very nice trajectory two years into the launch. And we contributed close to $340 million in revenues for the year, representing a growth rate of over 160% growth year over year.
During the year, we also got Opzelura approved in Europe, and we launched already in Germany. We are looking to continue to launch in additional countries as we gain pricing and reimbursement in the course of 2024. A strong base to build on. The other key milestone that is worth noting for the year was the achievement of $1 billion in product and royalty revenues in a quarter. That was achieved in 2024 and obviously an important financial milestone for the company. On the development side and something that will also contribute to revenues going forward, we had a number of updates and progress made starting with MPNs & GVHD, axatilimab. We disclosed positive phase III data. We filed for BLA, and we are expecting, hopefully, approval later this year. That's a program that we expect to add to revenues later in 2024.
We also shared data on a number of programs, especially in dermatology, where we disclosed data from a number of phase II programs for povorcitinib, HS, vitiligo, and top-line data in PN. We also disclosed data from Opzelura in additional indications, and specifically AD, pediatric AD, which is an indication that we are preparing to file for approval later this year. So this creates the base off of which we are looking to continue to grow and build on in 2024.
Yeah, so let me pick it up there. So it's going to be another busy year, and I think the pipeline across the board is advancing very nicely. So if you look by pillar, if you start with Dermatology and Inflammation & Autoimmunity first, as Christiana mentioned, we will have the filing for pediatric atopic dermatitis. That will happen this year, which we think will lead to a launch of Opzelura in pediatric AD next year, which is an important new indication potentially for Opzelura. Next week at American Academy of Dermatology, we announced we're going to have two really important presentations, several others, but two very important presentations. One is the Opzelura representation of the ruxolitinib cream presentation in patients with mild to moderate hidradenitis suppurativa. That will be presented Sunday afternoon.
We will have an Investor Event early Monday morning where we will not only review that data in detail with key opinion leaders, but put it in context with the competitive landscape in HS as well. So that's another important potential growth opportunity for ruxolitinib cream. There is no, to our knowledge, any topical that has shown this level of efficacy in hidradenitis suppurativa, mild to moderate to HS, as we have. So that's really important going forward. For Povo at AAD next week as well, or next Sunday, we will present in detail the prurigo nodularis data. We presented. We put a press release with top-line data recently, but we are now going to present the data in detail and, again, put it in context with the competitive landscape. We're planning a phase III study with Povo in PN as well that we will launch this year.
So that's really important on the dermatology side of the business. If you move to axatilimab, Christiana mentioned we have a PDUFA date in August of this year for the sNDA submission in third-line chronic graft-versus-host disease. Our goal now is, with our partners at Syndax, is to try to make it available as quickly as possible. We're also launching two randomized trials, randomized phase II in combination with ruxolitinib in patients with first-line chronic graft-versus-host disease and a phase III in combination with steroids also in first-line chronic graft-versus-host disease. If you shift now to the MPN side of the business, we talked at ASH in December about two really important programs for the long term, not just for the business, but changing the objective of treatment in patients with myeloproliferative neoplasms.
Those are the V617F inhibitor, which is going to enter the clinic next month, and the mutant CALR antibody, which is already in the clinic and going very well. If you look at closer milestones, our BET inhibitor program in combination alone, single-agent in combination with ruxolitinib, is starting to look very good. We showed some of that data at ASH. We'll have more data later this year, and we intend to initiate a pivotal trial with our BET inhibitor. We haven't disclosed details yet, but we'll do that later this year. And I'll close with oncology. Obviously, I think everybody's aware of the transaction we did for the remaining part of tafasitamab that we didn't own before. We completed that acquisition. Now we have full rights, development, and commercial to tafasitamab, and we'll have data in the follicular lymphoma, mantle cell lymphoma trial this year.
We revealed at the last quarterly call that our CDK2 inhibitor program, we've seen numerous partial responses in that program, and we will disclose detailed data as well as the development plan for our CDK2 inhibitor later this year. All in all, a really busy year across the board, advancing a number of programs, early-, mid-, and late-stage programs forward.
Maybe starting with the commercial with Opzelura. Christiana, I think it's been talked about a fair amount that you've had some big formulary wins late last year that are now being activated. Of course, those usually come with somewhat of a hit to gross-to-net, a concession. As you've laid out before, the idea being TRx is going to more than make up for that. How quickly should we think of those changes in formulary translating into an acceleration or an improvement in TRx trends?
Yeah. So in terms of access, when you look at the efforts that we've made over the first two years of the launch, our focus was on getting broad access. So we worked very quickly to get contracts with all three PBMs and then worked to get Opzelura on formularies with all the plans under those PBMs. So that was the focus initially. Now our focus has shifted on enhancing access. And part of the activities that we are doing have to do with getting Opzelura higher up in the formularies in terms of the tier and getting on preferred tier. The first such agreement is CVS Aetna. It went in effect at the beginning of January.
To your point, getting Opzelura higher into a preferred brand level, it does require some additional discounts, but we are doing that only if we feel that it will help us maximize the opportunity of Opzelura, i.e., it will translate into greater demand and have a disproportionate impact on net sales. To see the value or the benefit from this will take some time because now we have the agreement. It covers around 30 million lives with the plans under the CVS Aetna umbrella. But now for this agreement to be filtered down the plans, it will take some time. But we do expect that it will have a positive impact on net sales, on demand for the product.
The other impact that we believe that will be a positive and somewhat offset of the discounts is the fact that when you have a drug in preferred tier, the out-of-pocket associated with this is lower. And given that we are the ones that are paying for the out-of-pocket, it will offset some of the discounts. So net-net, we expect that it will be a positive impact that we will see over time.
How should we think about this? It is one of the earlier Q1s going through. We don't have a big track record of how big they are. There's always a lot of headwinds in Q1, but how big they are for really Opzelura in its markets. How should we kind of view this Q1? Can there still be growth, or are the hits to gross-to-net and reauthorizations and all that so much that maybe demand is growing, but sales not so much?
Yeah. So we expect to continue to see growth overall in 2024 from AD and vitiligo. In terms of Q1, we do expect Q1 to be lower than the previous quarter and subsequent quarters. That's something that we see across all products, whether it is Jakafi or Opzelura, for the similar reasons. And we expect to see it as well here. In Q1, you usually have the plans resetting deductibles. So we do get that impact at the beginning of the year, and it's a big driver of the lower revenues of the year. When you look at Q1 last year, we saw that. If you look at Q1 as a percent of total sales for the year, even though the total sales grew, Q1 was a much smaller percent of the total relative to other subsequent quarters. And we expect to see something similar this coming year.
OK. And what's the latest data you're seeing on kind of refill trends? Stick with AD. We'll move to vitiligo in a minute. Just within AD, kind of how should we think about tubes per year? And are there any real efforts there that can be done to try to increase that number?
Yeah. So in AD, we are seeing an average of two tubes per year per patient. This is within the range that we were expecting, the two to three tubes a year, probably at the lower end because of how efficacious Opzelura has been. And we expect that it will probably stay around that level, with some potential for an increase if it gets to be used even more from moderate patients that may have a larger surface area to use the cream on and therefore need more tubes per patient per year. So that's in terms of the AD refill rate.
As you got approved in AD, you guys had talked about the opportunity with the existing label before you get to the pediatrics was potentially about $1.5 billion in AD for Opzelura. Now that you're a couple of years in, are you still confident in that number? And kind of what are the big pushes and pulls to actually getting to that from here, where I think AD is probably averaging about $250 million a year on an annualized basis, something like that right now?
Yeah. So we continue to see AD in the U.S. as a $1.5 billion opportunity. So we continue to feel comfortable with this. It includes the pediatric indication, so it's both adult and pediatric. Right now, to your point, the run rate would imply, given the share that is coming from AD, at around $250 million, but it's a great trajectory to get to this number. It's getting to the peak sales in dermatology looks very different than getting to peak sales in oncology in terms of the trajectory. There are a number of initiatives that will get us to that level. First of all, we are looking to expand the patient population through, hopefully, the approval of Opzelura in pediatric AD. That should expand the patient population by another 2-3 million people in the U.S.
We are also having a number of initiatives to help with access in AD, initiatives like what we discussed before in terms of getting Opzelura to a higher tier, to a preferred tier, but also working with physicians to make the process of the prior authorization and certification easier so that patients can more easily get on therapy.
You mentioned the pediatric label, and you're presenting the full data at AAD in about a week. Is that all we need to file, or is there still more follow-up that you need from a safety perspective before you can actually submit that sNDA? Just kind of what's limiting to getting it in?
No, we need to complete the longer follow-up because it's a pediatric population. We need longer follow-up for safety, mainly, to comply with FDA. We had this conversation with the FDA. The plan is in place. We've mutually agreed. It's on track. There's no derailers between now and the filing. We will file later this year.
OK. Maybe turning to vitiligo, just maybe that question on tubes per year, just the latest data on vitiligo of how persistent are patients, and then we can get into some more dynamics.
So we are still early into the launch of Opzelura in vitiligo. We see patients not yet using Opzelura appropriately. They either get on therapy and stop and start again or stop altogether because they don't see any effect, any repigmentation in the first week or two of treatment, forgetting that it actually takes some time before you start seeing results, or they're experimenting by using the cream in a small area to see whether it will have an impact before they start using it more broadly and more appropriately. There are a lot of efforts and activities that we are starting on helping with adherence. We expect that this should have an impact on the use of Opzelura.
These are targeted both on patients and how to use appropriately the cream and stick with the treatment, as well as prescribers reminding them how the cream should be used and how they should be directing the patients. So we are waiting to see more data on the utilization under the right way before we have a better sense of how the refills would look like for vitiligo. And that's the reason also why we haven't provided any guidance for Opzelura overall, and especially for vitiligo, even long-term guidance, because we want more real-world data. And right now, it's not being used as it should be used. So once we get to that point where there is greater adherence, we'll be able to have a better sense of the number of tubes that the patient will be using.
Do you have a sense of when you might be able to get to that level of comfort to start issuing guidance that's inclusive of the entire franchise, not just?
Yeah. So the increased adherence activities are initiated as we speak. So it will take some time through the course of the year. But as we get more data, we'll have a better sense of when we feel comfortable providing guidance.
If it's throughout this year, so at some point this year you would be, or you get comfort this year, and then as you go to issue 2025 guidance, that's kind of where you're likely to be there?
It is hard to commit at this point.
OK. The other piece is just vitiligo. As you've mentioned, patients kind of have to stick with it for a while to start seeing effects. But this is potentially a much more chronic therapy than AD. Are you seeing much management from payers in terms of reauthorizations and payers trying to see, is it actually working for this patient to let them keep up, or are they just trusting that a patient's going to discontinue on their own if it's not?
So first of all, what is great to see is that most of the plans do cover Opzelura for vitiligo. So only around 2% of the commercial plans do not currently cover Opzelura. So this is great to see. They realize that it's not a cosmetic, that it's a real autoimmune disease that needs to be addressed if a patient chooses to. Sorry, I lost my train of thought. The reauthorization process, usually plans are looking for a reauthorization after three to six months. And also physicians are looking for seeing their patients within that timeline to make sure that they are using appropriately the cream and they see progress.
But as per the label, there is a need to stick with the therapy for at least six months before they see results and they can really determine whether the cream is working for them or not, even though in the real world, we're seeing patients seeing results much earlier than that.
Pablo, you mentioned the HS data, the topical HS data that you're going to be presenting. I think investors have grown increasingly used to thinking about moderate to severe disease with a number of development programs in that space. But mild to moderate, can you just kind of lay out what is the unmet need there? And how should we think about endpoints? Have you figured out a way forward, not just that you have impressive phase II data, but what can be viable from a phase III endpoint perspective?
Yeah. So we're going to present the results in detail on Sunday, and they will be discussed by one of our KOLs on Monday morning. The challenge here for patients is mild to moderate spectrum, and in general, HS spectrum, right? Some patients advance rapidly between stages, early stages, which is what we're addressing here, one, two, and three . Other patients really have chronic disease with a certain stage. The Opzelura trial, the rux cream trial, addressed patients with early one and two, and specifically in patients that had no draining tunnels, which is important to remember. And one of the reasons why the HiSCR scoring system cannot really be used because these patients have abscesses and nodules and a smaller number of abscesses and nodules that patients with more advanced disease. But they still have a median of five lesions.
These are abscesses and nodules related to HS, which produce significant morbidity and need better treatment than what's available. So we think there is a clear unmet need. We think that rux cream, being a topical agent with a very clean safety profile, is going to provide a really good option here. The question now we need to discuss with the agency is, what endpoint are we going to use for the phase III trial? As you know, all ongoing trials in HS, as far as we know, have used HiSCR 50 as an endpoint. But that includes draining tunnels, which are not present in patients with mild disease. The alternative is to use the IHS4, which is a rating it's a linear continuous variable, as opposed to a binary yes or no that you hit HiSCR 50, which in the past FDA has discouraged.
We need to have that conversation. I think there has to be a path here for us to develop this medicine in patients that need it and have no available therapy today. So I'm optimistic. We just haven't committed externally to what the endpoint's going to be and when the phase III trial is going to start. But we fully intend to go forward with this.
OK. And how should we think of the scale of the opportunity in HS or in PN relative to kind of the labels that you already have? Are these all just 1 + 1 + 1 + 1, or are these bigger, smaller?
If you take all HS and, by the way, one thing you'll see if you dig deep into the HS literature is there's a lot of variability in this series because of the population they focus on when they divide it in one, two, and three. It's probably 40/40/20. In the study that we did with rux cream, it was 50/50 stage one, stage two, early one, and two. If you throw patients with stage three, the most advanced patients, those are a smaller percentage, probably 20%-30%. PN, the question again, there's one approved medicine in that context, as you know. The estimate is that there's about 100,000 patients in need of treatment with prurigo nodularis. So we think it's a sizable opportunity as well. And again, it's chronic therapy too, right?
How should we think about body because that's one of the big variables, right? It's body surface area that's involved, and therefore, how much drug you need to be applying for HS, for more mild HS patients, for PN patients relative to AD in terms of how much volume they use? Is it vitiligo? Just.
Well, vitiligo is very highly variable, as you know, right? The existing povorcitinib studies focusing on patients with 8% or greater body surface area. For ruxolitinib cream, for Opzelura, it's been patients with lower than 10%. So there's a little bit of an overlap. We haven't disclosed the details in the PN study. I believe in PN, you're going to see patients that have intermediate between the two diseases, perhaps on the higher end, about the 10%-20%. But they have sometimes these nodules that they don't cover an extensive part of the body surface areas, but they affect different regions in the patient's body.
OK. And you started touching on povorcitinib a little, which has positive phase II data in the moderate to severe HS patients. You're running phase III now. How do you view the type of profile it needs to demonstrate in phase III relative to the IL-17s that are starting to get approved? Is matching it OK because it's oral or because of the likely black box, given the JAK class? Does it actually need to be clearly better to really get adopted?
Yeah. Side-by-side trial comparisons are always we need to always be cautious, right? It's a little bit difficult. But I think what helps in this trial is the placebo-subtracted efficacy data. And when we look at it, when you look at the phase II data, I mean, we have the beauty is that we have randomized phase II data to make some of those comparisons. There's a couple of things that I think first of all, I think we have comparable efficacy in the primary approval endpoints, which is HiSCR 50. You can debate there's a little bit higher than some, a little bit lower than others. But it's basically comparable to the I would put povorcitinib on the top tier of efficacy for the approval endpoint of HiSCR 50.
What we have that I think is comparably better is HiSCR 100, which we've shown about a 20% plus placebo-subtracted HiSCR 100. That's complete resolution of the lesions, which I think is extraordinarily important for patients with HS. And if you ask your PN leaders, they'll tell you that, which I haven't seen with any other medicine currently. And the other important point, we have a dramatic, rapid, and profound improvement in pain in these patients that I think the broader anti-inflammatory effect that povorcitinib provides and some of the more targeted anti-cytokine approaches do not. I would put that together with that oral convenience as a very competitive profile, to be honest, in all the indications we're playing with povorcitinib today. I realized your comment about the potential black box.
But I think in the context of these more serious forms of HS and other indications, we're going with povorcitinib. The oral bioavailability and the really very strong safety and efficacy profile, I think, are very well differentiated.
You're also running phase IIIs in vitiligo. You started to touch on it. But how does that coexist with Opzelura? Is it you start obviously, if you have very extensive disease, you're out of the label for Opzelura. But is it then just get on drug, get your disease down into the Opzelura label, and transition? Is it stay on povorcitinib long term?
We haven't really discussed how to do that. But I do think you bring up a really important aspect. When you think about what we're building here an extraordinary dermatology franchise, right? I mean, we are the only company that has for patients with vitiligo, we believe, once we have all the data, we'll have an option with the topical for certain patients that have smaller body surface, perhaps sun-exposed areas, and an oral available agent for patients with more extensive disease, or maybe eventually a combination of both. We haven't discussed those plans in any level of detail. Same is true for HS. For patients with mild HS, we'll have rux cream available, again, assuming we launch the phase III and it's positive. But that's the vision and obviously povorcitinib for patients. So we haven't yet discussed externally how we're going to manage those transitions.
But I think the fact that we have two medicines to control potentially the full spectrum of two really important chronic skin inflammatory diseases, I think it's a great way to build what we think is going to be an extraordinary dermatology franchise.
Maybe turning back to on the oncology side, maybe starting with you brought up the CALR antibody. You said things are going pretty well in the phase one. So should we expect to see data this year from that program?
We're not committing to data yet. Let us take a little bit of a longer look as to how enrollment goes and the data that emerges. We have a lot of other data readouts this year, as we discussed at the beginning of the discussion. So no timing for mutant CALR antibody data yet. But it's possible this year.
Given that it's really going at the underlying mutation, maybe there's two diseases here, right? They're MF and ET. What does good data look like for this antibody in the setting? But you're saying MF, is it spleen volume reduction? Is it something else that you'll be looking at? Just how will you be evaluating this?
So I think the early readouts are obviously, nobody has given a mutant CALR antibody to these patients before. So safety is important. We want to make sure that this medicine behaves as we expect in terms of PK. And then over the sort of the intermediate endpoint is, yes, we want to see clinical activity, spleen reduction, improvement in blood counts, et cetera. And the longer-term readout that I think would differentiate the mutant CALR antibody from other interventions in MF and ET is the ability to reduce the allele burden in these patients, to really try to eradicate the malignant clone in these patients and have it outcompeted with the wild-type clone. That's a longer-term readout. I'm not committed to that this year for sure. But that would be the idea.
Once we see that, we see not only that this medicine works in controlling spleen and symptoms and blood counts, but that truly has a long-term impact on the natural course of the disease.
Just a follow-up. Can you just translate into what that means? In other words, what's the clinical endpoint? Is this associated with that? Would it be mortality, or what would you?
No, we can measure allele burden.
But is that an approval endpoint?
We haven't the medicine just entered the clinic. I'm not approval endpoints today. I think the question for approval would be whether the combination of mutant CALR antibody with, let's say, ruxolitinib in the near term improves spleen responses, improves blood counts, and improves symptoms better than rux alone. And that leads to a quick approval with a longer-term follow-up for survival, as you ask.
Do you think you need to combine it with Jakafi, or? I mean, if it's directly hitting the target.
Once we have data, I will tell you.
OK. The other one is the CDK2. I think that data is this half, right? The first half, or?
No, this year. CDK2, yeah. Sorry.
OK. Then you talked about numerous responses. There are a couple other CDK2 inhibitors in the, I believe, that's the quote you just said.
Yeah, we said several. Anyway, yeah, go ahead. Yeah.
Several. The others are a little bit ahead of you in the clinic in terms of with direct inhibitors, CDK2, Pfizer, and Blueprint. They primarily talk about this as a combination program. But if you're seeing several responses, is there a real single-agent opportunity here in your mind?
So we're going to size that over the course of the year. So as you point out, both Blueprint and Pfizer have competitive programs. I think externally, what we've seen is their focus has been more strongly on breast cancer than on ovarian cancer. I think we've said publicly that we're more interested in ovarian cancer. We think it's a simpler development path. And there's two options or three, perhaps. Single agent, obviously. We need a little bit longer follow-up, more patients at the higher doses to see to really quantify exactly the magnitude of the efficacy we're seeing. And then we'll decide whether it's a single-agent path. In the meantime, when the process of initiating combinations, mostly right now with the focus on ovarian cancer, but obviously, we're having discussions on breast cancer as well. So I think what we'd said is we'll have the data later this year.
And we'll disclose at the time what the development plan for the CDK2 inhibitor looks like. But we're very encouraged by the responses we're seeing so far.
Unfortunately, that's all the time we have. So we're going to have to cut off.