Hello and welcome to today's Incyte investor presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. This time my pleasure to turn the call over to Ben Strain, Head of investor relations. Please go ahead.
Thank you, Kevin. Good morning and welcome to today's conference call to discuss the acquisition of Escient Pharmaceuticals. Before we begin, I encourage everyone to go to the investors section of our website to find the press release and slides that follow today's discussion. On today's call, I'm joined by Hervé and Pablo, who will deliver our prepared remarks. Christiana, Steven, and Jim will also be available for Q&A. Today we are only answering questions regarding our acquisition of Escient. We will be happy to answer broader questions following the release of our first quarter results on April 30th. I would like to point out that we'll be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially.
I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I will now hand the call over to Hervé.
Thank you, Ben, and good morning, everyone. We are on slide five. As highlighted in the press release issued this morning, we have reached an agreement to acquire Escient Pharmaceuticals, a privately held clinical-stage drug discovery and development company with a pipeline of novel medicines for the treatment of a broad range of neurosensory inflammatory disorders. The focus of Escient's development pipeline is on Mas-related G protein-coupled receptor antagonists, where evaluation is ongoing with two clinical-stage programs targeted: MRGPRX2 and MRGPRX4. This agreement adds two first-in-class medicines to our inflammation and autoimmune portfolio and complements our internal efforts. With this acquisition, we will be able to leverage our existing development and commercial capabilities. In addition, these programs offer a large potential commercial opportunity across multiple indications. Based on the current estimated development timelines, we anticipate several potential launches starting in 2029.
Moving to slide six, under the terms of the agreement, we will acquire Escient Pharmaceuticals for $750 million in an all-cash transaction. This agreement is subject to clearance by the U.S. antitrust authorities under the Hart-Scott-Rodino Act, among other customary conditions, and will become effective as soon as this condition has been met, which we anticipate will be the third quarter of 2024. The two lead assets, EP262 and EP547, address large populations with a clear medical need and a multibillion-dollar total market opportunity across indications. Initial evaluations for EP262 will be in chronic inducible urticaria and chronic spontaneous urticaria, and for EP547 will be for cholestatic pruritus with potential expansion for both programs into additional indications.
Based on current projected timelines, these medicines have the potential to launch in 2029, and these programs will be synergistic with our existing IAI pipeline as well as with our development and commercial capabilities. We expect the impact of the acquisition on 2024 R&D expenses to be limited. We will provide more details on the Q1 earnings call next week. In addition, following this acquisition, we continue to have a strong and growing cash position, which allows us to consider additional external opportunities. With that, I'll now turn the call over to Pablo for additional details on the clinical program.
Thank you, Hervé, and good morning, everyone. We can go to slide eight. Escient's lead program, EP262, is a first-in-class oral small molecule inhibitor of the Mas-related G protein-coupled receptor X2, or MRGPRX2. This novel medicine has the potential to treat multiple mast cell-mediated disorders, including chronic spontaneous urticaria and chronic inducible urticaria, for which there remains a significant patient need. MRGPRX2 is a specific novel mechanism for blocking mast cell activation independent from IgE. Data presented at the American Academy of Dermatology annual meeting in March 2023 showed that EP262 improved AD-like skin lesions and markers of type 2 inflammation. Additionally, data from a phase I study of 64 healthy volunteers showed that EP262 was safe and well-tolerated at all doses tested, with no serious or severe adverse events and no adverse events leading to discontinuation.
EP262 is currently being studied in a phase I-B open-label study in CIndU and in two randomized phase II studies, one in chronic spontaneous urticaria and one in atopic dermatitis. Data for all three studies are expected by early 2025. Moving to slide nine, Escient's second program, EP547, is a potent oral and highly selective antagonist of MRGPRX4. MRGPRX4 is expressed on neurons in the dorsal root ganglia and also in keratinocytes and is activated by various bile acids, bilirubin, and urobilin. EP547 effectively blocks the activation of MRGPRX4 by bile acids, and as a result, it has the potential to treat pruritus associated with several diseases, including primary biliary cholangitis and primary sclerosing cholangitis. EP547 has completed a phase 1 study in healthy volunteers and is currently in a randomized phase II study in cholestatic pruritus, a condition often non-responsive to standard pharmacological treatments.
Slide 10, we believe the safety profile seen with both EP262 and EP547 could be a key differentiator for these programs. Escient presented data from a phase I study of 64 healthy volunteers, which showed that EP262 was safe and well-tolerated at all doses tested, with no serious or severe adverse events, no adverse events leading to discontinuation, and no adverse events or changes in safety laboratory parameters, vital signs, or EKGs. Treatment emergent adverse events for EP262 were mild, with an incidence that was lower than placebo, 33.3% versus 62.5%, and did not increase with dose. Results from the phase I study of EP547 highlighted that in patients with chronic cholestatic or kidney disease at all doses tested, there were no serious adverse events, no adverse events leading to discontinuations, and no safety signals identified.
Moving to slide 11, the initial evaluation of EP262 is ongoing, and chronic spontaneous urticaria and chronic inducible urticaria - two large opportunities - where significant patient need remains. In the U.S., with up to 50% of the 1 million-2+ million patients with chronic spontaneous urticaria and approximately 500,000-1 million patients with chronic inducible urticaria not adequately controlled with antihistamines, we believe these two indications hold blockbuster potential. Based on current projected timelines, both indications have the potential to launch before the end of the decade and add to our top-line growth trajectory post the Jakafi patent expiry, and they could further establish our leadership in inflammation and autoimmunity. Moving to slide 12, we provide here an estimated timeline of the MRGPRX programs and show the number of exciting readouts expected by early next year on the potential first launch of EP262 in chronic spontaneous urticaria by 2029.
We are delighted to add EP262 and EP547 to our portfolio. This acquisition builds on our strategy to develop differentiated first-in-class medicines that address significant patient needs, and we look forward to providing additional details on these programs in the future. Operator, that concludes our prepared remarks. Please give your instruction and open the call for Q&A.
Thank you. Now we'll be conducting a question and answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. Our first question today is coming from Kripa Devarakonda from Truist Securities. Your line is now live.
Hey, guys. Thank you so much for taking my question, and congratulations on the acquisition. So big picture question: does this acquisition—you're spending $750 million, but you have more cash—mean that a larger acquisition is off the table? Can you walk us through the—and sorry if I missed a couple of the first few minutes—but walk us through the rationale for acquisition of this platform. Is it these two drugs only, or is there potential to expand the platform? Thank you.
Pablo, do you want to take this one?
Yeah, sorry. I was saying, yeah, Pablo can speak about the technology. Let me say a word about what it does strategically related to our cash position. So this acquisition is $750 million. It's not preventing us from doing additional and larger acquisitions in the future. We see it as something that is very complementary to what we have in our internal pipeline. So strategically, that's where it fits. It's leveraging our current existing IAI development and commercial capabilities in large part, and it has the potential to lead to launches by 2029 in multiple indications. So it's fitting well with the portfolio dynamics that we are looking for. So that's how it does fit. Now, in terms of expansion beyond what we spoke here, Pablo, do you want to say a word?
Yes, happy to. So let me comment separately on MRGPRX2 and MRGPRX4. So MRGPRX2 is expressed in mast cells, as I mentioned in my prepared remarks, and it's a very critical component of the mast cell activation independent of IgE. Now, what you have to remember, what we have to remember, is that mast cells and MRGPRX2 particularly is expressed in mast cells not only in the skin but connective tissues as well. So while the ongoing exploration, as I mentioned, are chronic spontaneous urticaria, chronic inducible urticaria, and atopic dermatitis or large opportunities, potentially, that mechanism, overexpression in mast cells and connective tissues, allows us to explore a range of other opportunities.
We're not going to comment on those today, but we see this as truly another pipeline and a compound type of opportunity for MRGPRX2, and we believe that the really clean safety profile observed to date is going to be a very important difference as well. MRGPRX4, as I mentioned in my prepared remarks, is key. It is related to itch, pruritus associated with not only liver disease but potentially with uremic pruritus as well. These are, in addition, very large opportunities that are currently unaddressed with existing standard of care. So what we're acquiring with the acquisition of Escient is those two programs, both in the clinic, with a number of readouts in the next few years, as I mentioned in my prepared remarks.
Great. Thank you so much.
Thank you. Next question today is coming from Brian Abrahams from RBC Capital Markets. Your line is now live.
Hey, good morning, guys. Thanks for taking my questions, and congrats as well on the deal. I was wondering if you could talk a little bit more about 262's potential positioning in the paradigm versus XOLAIR, just given a mechanism that's independent of IgE. And then I'm curious about the commercial synergies that you foresee and the potential overlap here with the existing derm-inflam commercial infrastructure that you have today. Thanks.
So Pablo, do you want to take the first pass?
Yes. I think you pointed to the key differentiation here, which is the IgE-independent mechanism. Let me ask Jim Lee, who heads our IAI group, to expand further how we see this over time position vis-à-vis XOLAIR and other competitors. Jim?
Yeah, thanks, Pablo. So as you mentioned, omalizumab has been available for CSU patients for a number of years. But we know from the literature, also from feedback from treating physicians, that there are quite a number of patients, a very large number of patients, that either don't respond or lose response. And this is likely because their CSU is being driven by other triggers. We believe that mediates effects through the MRGPRX2 receptor, so cationic proteins, neuropeptides, etc. So we think that MRGPRX2 should treat everyone with CSU, but in particular, it will treat many patients who do not respond to omalizumab.
On the synergy side, I mean, there are two aspects of it. One is on the R&D side, where we have a lot of capabilities in biology and in early clinical development that can apply to these indications and where it's very much in a field where we have a lot of knowledge already and experience. On the commercial side, I would say it's mostly about 262, where in CSU, we see a lot of dermatology overlap with that indication. So that would be already a good start in terms of leveraging our commercial team that is already working in dermatology.
Thanks very much.
Thank you. Next question is coming from Tazeen Ahmad from Bank of America. Your line is now live.
Hi, good morning. Thanks for taking my questions. I wanted to understand how you're thinking about potential future indications for OPZELURA, just with the announcement that you've made today. Atopic derm looks like it's on the list of indications that's currently being pursued. How would you see that being complementary to OPZELURA? Would it simply be an oral option to the cream, or do you think there could be a potential expansion of addressable patients? And then secondly, as it relates to more mid-stage assets—so these two would launch at the end of the decade—what's your view on the potential need for bringing in assets that could launch closer to when the IP would expire for Jakafi, meaning a couple of years earlier than the end of the decade? Thanks.
Maybe, Pablo and Jim, can you take the first part of the question?
Yes, happy to. So we see this, as I mentioned, highly complementary with our portfolio. Obviously, OPZELURA is a really important medicine already on the market for patients with atopic dermatitis. We believe that this different mechanism that you see that we mentioned during my prepared remarks could potentially be very useful in certain patients, perhaps as a complement to OPZELURA, perhaps in patients that don't respond ideally well to OPZELURA. As we see it in OPZELURA today, we believe that having multiple offerings for patients, topical and oral, for different levels of severity of certain indications, such as atopic dermatitis, such as prurigo nodularis, such as vitiligo even, is really important. And that way, we think that 262 really complements the rest of the CSU pipeline very, very well.
Yes, and your comment on the need for additional growth in the years before our launches in the years before 2028 is totally right. I think here we have potential to have large indications starting in 2028, 2029. So it's coming at a time where it will be certainly very valuable for the corporation. But we are still, as we said earlier, we are still looking for potential acquisitions that could be impacting us earlier than that.
Thank you. Next question today is coming from Marc Frahm from TD Cowen. Your line is now live.
Hey, thanks for taking my questions. Congrats on today's deal. Maybe just following up on a couple of your answers to earlier questions. When you think about the competitive positioning within, say, CSU, the comments on XOLAIR were appreciated. But if you can think broader to some of the later stage, the things ahead in the clinic, particularly around KIT inhibition, and how do you see this fitting in? Are there combo approaches that you're particularly interested in? And then getting to that connective tissue side, is that something we should expect to see kind of happen shortly after closing, or is that going to be triggered more by whatever you see in the larger phase IIs that are ongoing right now?
No, thanks for the question. Pablo, do you want to speak about that?
Yes, certainly. So let me take the second part first. Obviously, this transaction is very fresh. We're going to spend the next several weeks with our colleagues at Escient, who have done a terrific job developing these two medicines up to this point. And we're going to start exploring some of these hypotheses about the importance of connective tissue mast cells and the overexpression of MRGPRX2. There's a fair amount of this in the literature, and we intend to prosecute some of these opportunities. And you'll hear more over time after the transaction closes, obviously, as we continue to potentially expand the development plan. When it comes to the competitive landscape, I'm going to ask Jim to make a couple of comments here.
But we believe that, number one, I think the safety of 262 - and obviously, it's early in the development of this program - but the safety of 262 could potentially be a key differentiator here that I think we need to pay attention since these are going to be chronic therapies in these types of patients. So Jim, why don't you comment perhaps about specifically anti-KIT antibodies?
Yeah, so that is a great point, Pablo and Mark, a great question around the competitive landscape in terms of mast cell targets. So we're very excited because the MRGPRX2, obviously, is predominantly expressed on mast cells. And so we believe we have a very targeted therapy with limited off-target effects. And therefore, hopefully, we'll see a very clean safety profile. The challenges with some of the other treatments, obviously, is that they treat either wipe out the mast cells or they prevent the inflammation after the mast cell degranulates. And they all have off-target effects that some patients and physicians would like to avoid. So I think from a competitive perspective, we believe we'll have a very effective medicine but perhaps one of the safer medicines out there for patients to use, especially long-term.
Thank you. Next question is coming from Evan Segerman from BMO Capital Markets. Your line is now live.
Hi there. This is Connor McKay on for Evan. Thanks for taking our question, and congrats on the deal. Just one from us on the lead program, 262. Can you just help us frame the expectations for data coming in 2025 for CSU and AD? Thank you.
Certainly. We have two randomized phase II, oh, sorry, Hervé?
No, no, go ahead. Go ahead.
Yeah. We have two randomized phase II studies ongoing, as I mentioned in my prepared remarks, one in chronic spontaneous urticaria, one in atopic dermatitis. There's also an ongoing phase I-B study in chronic inducible urticaria. Those three studies are currently ongoing, and we expect those readouts to be in early 2025.
Thank you. Next question is coming from Gavin Clark-Gartner from Evercore ISI. Your line is now live.
Hey, congrats on the deal, and thanks for taking my questions. First, I was just wondering, in your press release, you noted that 262 has demonstrated proof of mechanism and also the fact that the open-label CindU study has been ongoing for seven months. I'm just wondering if there's any comments you can make around the efficacy that's been observed there to date.
Pablo?
Correct. 262 has been in patients with CIndU already, and there is, as we mentioned, the press release proof of mechanism. We are not going to comment on additional data today. We're going to reserve that commentary for a later date after the transaction closes. But we obviously had the opportunity to review that data.
Yeah, that makes sense. Thanks. And how do you think that, just in general, CIndU efficacy data translates into CSU or any other diseases for the X2 mechanism?
Maybe Jim or Pablo?
Sure. Yeah, no, I can take that. So if you think about the X2 and what it does to mast cells in terms of the triggers, the natural ligands that have been identified that trigger through the X2, by blocking those ligands with this molecule, that gives you a very good idea of how it would work in other mast cell-mediated conditions and diseases. So that's how we're looking at the CIndU data and expecting then to see similar results, efficacy results, in other mast cell-mediated diseases.
Makes sense. Thanks.
Thank you. As a reminder, it's star one to be placed into question queue. Our next question is coming from Salveen Richter from Goldman Sachs. Your line is now live.
Hey, thanks. This is Matt Owen for Salveen. For 262, could you share the patient population you are looking at in the phase II-A study for AD? And then could you speak more about the opportunity for 547 in cholestatic pruritus and what the current standard of care is there? Thank you.
Yeah, Pablo and Jim, maybe.
We're not going to go into the specifics of the patient in the current AD study. I'm going to have Jim give some comments on the potential populations for AD where this mechanism could be really important, and then we can comment briefly on 547.
Yeah, no, that's a great point. Just a reminder, so every treatment for atopic dermatitis is you're treating the flare, at least in a clinical study. That means the inflammation has already been triggered. If you think about some of the ligands, the bacterial ligands, the Staph aureus ligands or products, as well as some of the antimicrobial proteins or peptides such as cathelicidin that are elevated in atopic dermatitis, these molecules mediate their effects or trigger mast cells via the MRGPRX2. If you think about it, in addition to knocking down the inflammation in an ongoing flare, there's potential to reduce the frequency, the number of flares that AD patients experience. That's a very exciting aspect of this mechanism in atopic dermatitis patients.
Moving on to the second question in terms of the cholestatic elevations, the cholestatic itch, it's the primary biliary cholangitis and the primary sclerosing cholangitis patients that have the obstructive liver disease that leads to the elevation in these bile acids. Most of these patients experience severe itch. Right now, the approach is either to have them reduce or basically have those bile acids eliminated through the GI tract. But we know that those current treatments that are available to them cause lots of GI side effects, toxicities that patients don't like.
Just one follow-up. Does PBC then represent a large portion of this cholestatic pruritus population?
It's one of the key opportunities, and the one that is ongoing in the current study. But not only cholestatic pruritus, but uremic pruritus potentially as well could be an opportunity for MRGPRX4. So without providing specific numbers, yes, PBC is going to be a key target. But in terms of total number of patients, it's just one of many potential opportunities for 547.
Got it. Thank you.
Thank you. Next question today is coming from Kelly Shi from Jefferies. Your line is now live.
Hi, this is Claire Owen for Kelly. Congrats on the acquisition. So for CSU with the new program, 262, how does 262 fit into the grand scheme of CSU beyond your current development of oral agent Povorcitinib in CSU, given both are oral agents? And what are other potential opportunities of 262 and 547 beyond what's already being studied in the clinics?
Pablo?
Let me take the second part, and then Jim can comment on our portfolio approach to some of these diseases. It's hard to comment further today. I think that what we know today for 262 is what we mentioned in my prepared remarks. We have trials ongoing in CSU, in CIndU, and in atopic dermatitis. And the fact that this is expressed not just in mast cells in the skin but also in connective tissue can potentially expand to a range of other indications that we'll discuss over time and will provide additional details over time. Now, let's talk a little bit about the complementary portfolio that we have now to address diseases such as chronic spontaneous urticaria, Jim.
Yeah, we see the X2 asset as complementary to Povorcitinib. Because of the different mechanisms, we prevent mast cell degranulation. But we also know that many patients can have ongoing type 2 inflammation as well as other types of inflammation that Povorcitinib can target. So if you think about the two different mechanisms, they really do complement each other very well. And we see that we can treat a broader range of patients with the two assets. So we're very excited to have this in our pipeline.
Great. Thank you.
Thank you. Next question today is coming from Michael Schmidt from Guggenheim. Your line is now live.
Yeah, hey, guys. Good morning. Thanks for taking my question. And yeah, congrats on the deal. Great fit, in my opinion. Just high level, how does the acquisition impact priorities, R&D priorities, in your earlier development stage pipeline? And how do you think about prioritizing oncology versus IAI as you think about future business development opportunities down the road? Thank you so much.
Yeah, let me take this. And maybe Pablo or Christiana can complement my response. We are in the process, independently from this deal, of prioritization of the pipeline anyway. So that's something that, obviously, now will be included in our top priority projects. And that will have an impact of maybe moving some other projects to a lower level of priority. That could be the case. In terms of oncology versus inflammation, frankly, we look at them a little bit independently from each other in terms of the sequence and the way the portfolio is evolving. And you have seen, I mean, there are on both sides a lot of very promising projects. And this will certainly put in the IAI portfolio now with Povorcitinib and Rosnilimab and IL-15 antibody.
It's sort of building a portfolio that is certainly very interesting and where we have now with this project two indications where we could be two mechanisms where we could be first-in-class, which is obviously very important. So I don't know, Pablo, I mean, do you want to speak about the portfolio dynamic?
I can add just a couple of points. I obviously agree with everything Hervé said. I think independently from the acquisition, we review each project in our portfolio regularly to determine where we're going to allocate resources going forward. The three pillars of our R&D strategy will remain: myeloproliferative neoplasms and graft-versus-host disease, targeted oncology, and IAI. Specifically in oncology, as you know, Michael, we have data coming later this year on our CDK2 inhibitor, our KRAS G12D just entered the clinic. So we're not moving away from oncology. We're continuing to build what we think is becoming a world-class IAI franchise. Christiana?
I think all points were well covered.
Great. Thank you.
Thank you. Next question today is coming from Jessica Fye from JPMorgan. Your line is now live.
Great. Good morning. Thanks for taking my question. Just a question kind of related to business development strategy. With a number of proof of concept readouts for these molecules approaching in what looks like less than 12 months from now, how did you make the decision to acquire these assets now versus wait to get to the other side of proof of concept data? Thank you.
Yeah, I mean, again, I can speak about that. I mean, it's obviously always possible to wait for all the data to be out there. I think it's a mechanism. It's a field where we have a lot of internal interest. It's something that we are able to evaluate from the preclinical and the early clinical data. And that's what triggered our interest to do the deal at this point, at the time before maybe the value would be multiplied by existing data in a randomized setting. So that's how we came to this conclusion. Pablo, do you want to comment on this?
I will only add that, Jess, we conducted a very detailed diligence, and we were comfortable moving forward at this point. Otherwise, I agree 100% with Hervé's comments.
Thank you.
Yeah.
Thank you. Next question today is coming from Eric Schmidt from Cantor Fitzgerald. Your line is now live.
Oh, good morning. Thanks for taking my question. It's a little bit more on mechanism of the MRGPRX2 antagonism. I guess in c-KIT inhibition, we're used to seeing very strong serum tryptase level reductions correlate with clinical activity. I'm wondering if you think the mechanism of EP262 also will show such correlation and whether you've been able to observe it in the open-label study.
Jim and Pablo?
Yes. I'm going to have Jim comment on that. Go ahead.
So we'll share the CindU study data later. But we agree that tryptase is an important serum biomarker to look at in a condition like CSU. So yes, we'll share all of that data as we get it. But we agree about the tryptase.
Thank you.
Thank you. Next question is coming from Eric Young from William Blair. Your line is now live.
Hi, Eric. This is Matt Phipps. Thanks for taking the question. You spoke earlier about 262 being used potentially in patients who don't respond to omalizumab. I was wondering if you think the mechanism will have activity across a broad range of baseline IgE levels?
Jim?
Sure. The second question is yes. We do believe that the X2 blockade should work across patients with either normal levels or elevated IgE levels. And I think your first part of the question implied the omalizumab target patients. And we know from their studies that the patients with the lower IgE levels didn't respond as well. And that goes to the autoallergenic or autoallergy driver for the IgE, right, in terms of how it triggers the mast cell. It's predominantly driven by an allergic response that is the allergens bound by the IgE. So that's why we're so interested in X2. Again, there are a lot of different drivers of urticaria besides the allergens. But we believe the X2 should work across patient populations.
Great. Thank you.
Thank you. Next question is coming from Reni Benjamin from Citizens JMP. Your line is now live.
Great. Thanks for taking the questions, guys. Can you talk a little bit more about the randomized studies that are currently running? How many patients are enrolling? Have they completed enrollment? What kind of effect size are you looking for to detect? And when we think about what you'd like to see outside of just a statistically significant result, what would involve a go-no-go decision for you guys? Thank you.
Pablo?
Yes. Look, the deal is fresh. As the deal closes later this year, then over time, we'll provide additional details. What I can tell you today is that there are randomized phase II studies, that the CSU study has two different dose levels, the AD study has a single dose level. We're not going to discuss any more details as to the specifics of the designs of the studies at this point.
All right. If I could quickly follow up then, is there any chance that with any of these programs, you could have an accelerated regulatory path by chance? Or is it pretty standard? We're going to have to go through a large phase III?
So Jim.
Yeah. Our expectation is that we're going to need phase III trials. This type of indications, in our experience from the Rosnilimab and Povorcitinib programs, you need large randomized phase III studies, not just to confirm the efficacy, which might very well be evident in a randomized phase II study, but to have much larger safety databases and longer follow-up in order to ensure the safety in this type of indication. Full expectation here. That's why I think we mentioned that the launches will start in 2029 because we expect we're going to need phase III trials.
Excellent. Thank you, guys.
Thank you. Next question today is coming from David Lebowitz from Citi. Your line is now live.
Hi. This is Devanjana on behalf of David. Thanks for taking our call. We were curious if MRGPRX2 plays any role in mastocytosis. And do you think EP262 can benefit indolent systemic mastocytosis patients?
Pablo?
We don't expect that. We're not considering that an opportunity for MRGPRX2 inhibition. Let me have Jim comment further on that.
No, we agree. Remember, what we're trying to block with the X2 is the cationic proteins, all the natural ligands, the neuropeptides that trigger it. And so we don't expect it to work in the conditions that you just mentioned.
Okay. Thank you.
Thank you. Next question is coming from Allison Bratzel from Piper Sandler. Your line is now live.
Hey. Good morning. Thanks for taking the questions. Just some follow-ups on prior questions. Could you talk about incremental R&D spend or how we should think about this deal changing the spend trajectory just since it sounds like this may be somewhat offset by some pipeline reprioritization? And then just looking at slide 12 with the estimated development timelines, could you just frame your level of confidence in the 2029 launch timing for both 262 and 547? Thanks.
Okay. Maybe Christiana on the budget impact and Pablo on the timing.
Yes. So in terms of the budget impact, for 2024, as Hervé indicated in his prepared remarks, we expect the impact to be limited. So based on current estimates, it would be less than 2%. And we'll have more details when we speak next week on our Q1 earnings call. Beyond 2024, the net impact of the program would depend on the progression of other programs in our pipeline. And as we have discussed in the past, and actually, Pablo alluded to, our goal is to continue to invest in high-potential programs, but at the same time, ensure that the growth of our R&D spend over time does not exceed the growth of our top line. So we continue to increase the operating leverage of the company.
Pablo on the timeline?
Yes. We are confident on the estimates that we put in slide 12. Obviously, as the data becomes available and we disclose it in 2025, we'll provide more precision on the initiation of phase III trials. At that point, those estimates will become even more clear on the approvals and launches. Right now, based on the data we have on hand and the information we have from the ongoing randomized phase II studies, we're confident on the estimates on slide 12.
Okay.
Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Ben for any further closing comments.
Thank you all for participating in the call today and for your questions. As a reminder, management and the IR team will be available for additional questions after we report Q1 earnings next Tuesday. Thank you and goodbye.
Thank you. That does conclude today's teleconference webcast. You may just connect your line at this time and have a wonderful day. We thank you for your participation today.