Morning, guys. Welcome to day 2 of the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I am one of the Senior Mid-Biotech Analysts here at the bank. It's my pleasure to have with us this morning, two members from the Incyte management team. Sitting to the left of me is Christiana Stamoulis, who is CFO and Executive Vice President, and next to her is Pablo Cagnoni, who is President of R&D. Good morning. Thanks for joining us.
Thank you for having us.
Thank you for having us. Good morning, everyone.
Maybe we can start off with a quick overview of the company, Christiana. Tell us about the platform of Incyte, what's been happening of late that you think is important, and then, Pablo, we can talk about some pipeline updates that are expected.
Okay, happy to do that. Some of you may know that, Incyte is a company that is engaged in the discovery, development, and commercialization of programs for oncology and inflammatory immune indications, an additional area that we expanded into over the last few years. We have a number of programs commercialized on the oncology side. Our flagship drug is Jakafi. And, in inflammation, we started the commercialization activities with Opzelura, which was launched a couple of years ago for atopic dermatitis and vitiligo. We have been very actively and aggressively building the company, both on the commercial end as well as on the development with a very rich pipeline that spans both oncology and autoimmune indications.
Just a couple of weeks ago, we had our earnings call, where we disclosed the results from the first quarter of the year. As you may have seen, the results continue to show the progress that we have been making, both on the commercial and on the development fronts. On the commercial end, with Jakafi and Opzelura, we continue to see strong growth in demand in both indications, even though the results of Q1 were a little bit masked by Q1 typical dynamics, but the underlying fundamentals continue to be very strong.
On the development front, we have been doing, making a lot of progress, building the pipeline and now looking at the pipeline, where we could have more than 10 launches by 2030 of high-impact programs and additional indications. Also, we have been very busy this quarter, bringing in additional assets. Two of the strategic transactions that we announced, the first one was around the program that we already own part of the rights, that is tafasitamab. We acquired the remaining rights to the program, so now we have full control of this program globally. The first indication for Tafa is for relapsed refractory DLBCL, already launched under the name of Monjuvi in the U.S., Monjuvi ex- U.S.
And two other indications are currently in development, with data coming up this year and next year. Or actually, this year, both of them, later this year. And then the second transaction that we announced, a very strategic this transaction for us, was the acquisition of Escient in the inflammatory immune space that brings in two additional assets that I'm sure we'll be spending some time discussing further. So a lot going on, and a lot of progress, building the company to make sure we have sustainable long-term growth.
Okay. Thanks, Christiana. So on the topic of Escient, maybe we can spend a few minutes on that, Pablo. What was it specifically about the company that Incyte found attractive, and how does it fit in with the rest of the pipeline as you see it going forward?
So just to bring everybody up to speed. So Escient is a private company in San Diego that we decided to acquire. Obviously, the deal will close hopefully in the relatively near term. And there were two programs that have been disclosed at Escient. One is an MRGPRX2 program and MRGPRX4 program, both small molecules, both block a receptor in mast cells. So this is related to mast cell biology. The lead program, which is MRGPRX2, was the main driver of our interest in Escient, although MRGPRX4, I think, has a number of very interesting properties. So the reason was, we saw the opportunity here to basically be first in class, potentially best in class, in MRGPRX2 biology, to expand our footprint and inflammation, particularly in some dermatological diseases, but not exclusively so.
MRGPRX2 is a receptor that is expressed in mast cells, specifically mast cells in, in the skin and connective tissues. As a result of that, it's very interrelated with other inflammatory conditions that are depending on Th2 as well, Th2-related diseases. Escient has done a terrific job developing both the MRGPRX2 and MRGPRX4 programs. They put in place a beautiful set of preclinical experiments, including very unique animal models that they developed in-house. And the data, we thought at the point of the interaction we had with them, was very compelling. In addition, they have initiated a number of clinical trials. There's a trial ongoing in chronic inducible urticaria. There's a randomized phase II study ongoing in chronic spontaneous urticaria, and there's a randomized trial ongoing in atopic dermatitis, all those with MRGPRX2.
There are potentially other indications that we will pursue, and I'll be discussing in more detail, in the future after the transaction closes. MRGPRX4 is interesting because it could be related in very important ways to pruritus related to cholestasis, which obviously is a result of a number of indications, a number of diseases. Specifically, Escient has put in place a study, which is ongoing in patients with primary biliary cholangitis and sclerosing cholangitis with cholestasis and intensive pruritus. X4 is expressed, as I mentioned, in mast cells, and so potentially it could be a really important intervention for patients that have pruritus due to a number of diseases that cause cholestasis. So when we put all that together, we thought it was a perfect fit for us. We liked the biology, we liked the stage of the molecules.
They are two excellent molecules, and we have really the potential to be first in class in a number of indications here.
Okay, thanks for the overview. As we think about catalyst, specifically timeline-wise, what are you expecting coming up next year and beyond?
From the Escient transaction, what we said, you know, when at the last quarterly call, is the chronic inducible urticaria, chronic spontaneous urticaria, atopic dermatitis, all those studies will have data in the first quarter of 2025, and that will determine the next set of steps in terms of how to proceed from there in different indications. We have not disclosed the timeline for MRGPRX4. That study is enrolling and is going very well.
Okay. And then specifically for 262 , you mentioned urticaria. It's a relatively crowded space, so where do you think the profile of the drug could place it?
So 262 is the MRGPRX2 program, and it's true, chronic urticarias, CSU, CIndU, are becoming relatively crowded. We have a randomized phase II study ongoing with povorcitinib, a JAK1 inhibitor in CSU as well. I think the properties of MRGPRX2 that we found very attractive is an extraordinarily clean safety profile. So we reviewed the safety data, some of which has been disclosed by colleagues at Escient, and we thought that for a chronic oral therapy, an excellent safety profile in its indications will be critical.
The other is, is a different mechanism of action, and those, the ability to really prevent degranulation of mast cells as a result of stimulation by a number of different ligands, which is what MRGPRX2 does, we thought would present a unique opportunity as a standalone therapy in patients that don't respond to antihistamines or potentially even in combination therapy with povorcitinib, for example, in the future, since the mechanisms of actions are completely non-overlapping.
Okay.
I also think tolerability, Tazeen. I mean, when you look at some of our competitors that have disclosed data, I think the tolerability will be a very important differentiator for this therapy.
Okay. You mentioned povorcitinib a second ago, so I did wanna get your thoughts about how it could be synergistic, indication-wise, and how you're gonna make a decision of which molecules in derm you'd wanna pursue and which indications.
So povorcitinib, for those of you listening, is our JAK1 inhibitor, is now currently in pivotal trials in three different indications, in hidradenitis suppurativa, in vitiligo, and in prurigo nodularis. And we have two randomized phase II studies ongoing in chronic spontaneous urticaria and in asthma. Look, it's a little bit too soon to spend too much time thinking how these different medicines will be used once approved. What we like is this portfolio approach, like we have in vitiligo with with Opzelura, which is currently approved in vitiligo and povorcitinib potentially as well. Hidradenitis suppurativa, where we will have data with povorcitinib next year, and we recently disclosed randomized phase II data with Opzelura as well, and we're discussing with FDA how to proceed.
It's possible that these medicines will be used in patients with different degree of severity for a particular indication. It's possible that they will use in different lines of therapy. But what we're building is a comprehensive portfolio of medicines and inflammation and autoimmunity, with a focus more on dermatology, but not exclusively so, which we think will give us a unique advantage, in the marketplace.
Okay. On one of the indications that you just mentioned, HS, I also wanted to get your thoughts on what you would consider to be a good result when phase III reads out. That's also a space that we get a lot of inbounds on, not just because Incyte's involved, but there are other companies trying to develop therapies there too.
Yeah, HS has gone from being a disease that most people never heard of to a very crowded space, as you know. When you look at the povorcitinib data that we presented, and we put it side by side with competitors, I think it's interesting, you know, every different companies tend to pick different endpoints where they fared better. But when you look at the whole data from these clinical trials, I'm convinced that povorcitinib has the potential to be best in disease in hidradenitis suppurativa. And the reason for that is two or threefold. One, we reported HiSCR 100, which most companies don't even report because it's really hard to obtain. That is 100% clearance of lesions in patients with hidradenitis suppurativa.
In the povorcitinib trial, between 20% and 29% of the patients had HiSCR100. We believe that's gonna be an important differentiator for patients that want the chance of a complete resolution of their lesions. The second, which I think is equally important, is the rapid improvement in pain. While that's not the primary endpoint of HS studies in general, it is one of the things patients complain about the most for obvious reasons. The rapid improvement in pain, we think it's gonna be another important differentiator for povorcitinib in patients with HS. The data, obviously over time, will be compared side by side in the studies.
We believe we have a package that when you put together the efficacy, the primary endpoint, as well as other endpoints that just mentioned, together with the safety, together with the fact that we have an oral agent, all that together has potential to be best in disease in HS.
Okay, and when do you think that readout could be?
I think what we guided for HS studies is next year with a potential launch in 2026.
Okay.
It will be the first launch for povorcitinib.
Okay, perfect. Maybe let's move on to axetilimab. You filed for approval in chronic GVHD. How do you think about that market opportunity? And, you know, maybe this is also a question for Christiana. What increase in resource use do you think will be needed to support that launch?
You want to start?
Sure, I'm happy to start with the commercial end. In terms of the resources, we have resources in place currently addressing the GVHD space. So we believe that we will be able to leverage the majority of those resources with no significant incremental cost on the commercialization.
Okay. And then in terms of the opportunity, how would you think about the cadence of that?
For the first indication-
Mm-hmm.
Third line, we expect that it would look similar to Rezurock. If you look at it, it's a good proxy.
Mm-hmm.
They would be used, you know, those drugs are used interchangeable.
Okay. And ultimately, how are you thinking about... You do know the you know, GVHD space already. Where do you think the unmet need is?
When you talk to clinicians, and one of the things, obviously, they want better therapies. That's pretty obvious. But one of the things they have been pretty clear with us is they would love to have a steroid-free regimen. Almost all patients with chronic graft-versus-host disease receive steroids at some point, many of them because they had acute graft-versus-host disease first, and they sort of transition into chronic graft-versus-host disease therapy. But they really would like to have the option to have a steroid-free regimen. So that one of the studies we're doing as a follow-on to the axetilimab pivotal trial, which is under review by FDA, is a combination with drugs. It's a randomized phase II as a first-step combination with drugs in patients with first-line chronic graft-versus-host disease.
The other study that we're doing is a combination with steroids. Again, building on the current standard of care, first-line chronic graft-versus-host disease, we're getting ready to run a phase III study with in combination with steroids, with axetilimab.
Okay.
So the idea is to move. It's better for patients to treat this complications of bone marrow transplant as early as possible in the course of the disease before fibrotic complications have developed that make them pretty much palliative, but not truly. We're not able to resolve fully this complication. So moving axetilimab as early as possible in the management of the disease is the right thing to do.
Okay, thanks. Maybe spend a minute on tafasitamab, and also on general oncology updates that you're expecting this year and beyond.
So tafasitamab, as Christiana mentioned, we secure the remaining rights, and we have 2 really important trials coming up. 1 is a follicular lymphoma study that will read out this year, and the other is a diffuse large B-cell lymphoma, which is a first-line study. Obviously, CD19, CD20 malignancies have gotten extraordinarily competitive over the last few years, but we think that tafasitamab has a unique safety profile that could make it very appealing as an option for patients that cannot tolerate more aggressive therapies, such as CAR-Ts. So that's a really important place, I think, to start thinking about how tafasitamab use could be expanded in the future. In terms of the rest of the oncology pipeline, a couple of things that that we announced recently and that we are working towards, 1 is our CDK2 inhibitor.
We think we have potentially a best-in-class CDK2 inhibitor. We have decided to focus a little bit more attention to ovarian cancer, but we are doing work in breast cancer as well. And, our guidance is to provide clarity, first of all, to provide a comprehensive clinical update in the second half of the year on our CDK2 inhibitor program, and to provide clarity on what the development plan will be from then on in terms of potential pivotal trials. Our focus initially will be ovarian cancer, but as I mentioned, we are doing work in breast cancer as well. The other important recent announcement is, we entered the clinic recently with our KRAS G12D inhibitor, which again, we think is very competitive and potentially a best-in-class G12D inhibitor.
Just to situate everyone, this is the you know, in patients with pancreatic and colorectal cancer, as well as relatively frequent, relatively speaking, in patients with lung cancer. It's probably the second most common KRAS mutation, about 5% of patients with lung cancer, about 40% in pancreatic cancer. All in all, there are about 100,000 new cases of G12D mutated malignancies a year. So we are moving that program very aggressively into the clinic, and we haven't provided a timeline for an update, but it will probably not be this year.
Okay, and then last question for you, Pablo. Just overall big picture, as you think about the focus areas for the company going forward, historically, we all know Incyte as a hematology, you know, science and development company. The company's made the pivot to also look at dermatology in recent years. Is it your, your vision that those are gonna be the two key areas of focus for the company on a continual basis, or do you think that you would expand out over time?
So I think for now, the pillars of our strategy will remain the same. So we have 3, arguably 3 and a half pillars, right? 1 is myeloproliferative neoplasms, and there we are determined to win. We have changed the standard of care for patients with MF, for patients with PV, and we'll continue to do so by evolving combinations with ruxolitinib, with our BET inhibitor, ALK2 inhibitor, and then try to change fundamental outcomes in these patients with our JAK2 V617F inhibitor and a mutant CALR antibody. So that's MPNs. As an adjunct to that is our work on graft-versus-host disease, which came up initially opportunistically through ruxolitinib, but now we are really expanding with axetilimab. The second pillar is, I would call it more inflammation and maybe autoimmunity.
There, obviously, our first entry has been Opzelura, which is approved in two indications and will continue to expand its use, povorcitinib, and now we are adding MRGPRX2, MRGPRX4, and some preclinical programs that we'll unveil in the future. And the third is our oncology strategy. In oncology strategy, what you will see, what you have seen already, and you'll continue to see, is a shift away from immune oncology with more focus in molecular-targeted therapy, large treatment effects, well-defined patient populations. And I think the G12D and the CDK2 programs are examples of that approach.
Okay. Maybe let's go back to the commercial part of the business for a couple of minutes, and then, Christiana, maybe wanted to ask you a couple of questions about the recently reported quarter. You know, we did get a lot of inbounds post your call about trends for Jakafi, so that actually motivated us to do a physician survey. So, we did wanna get a bit more color about, you know, feedback that you're getting from the field, that you're not seeing competition really impact Jakafi sales. And these are always, you know, sample sizes that are much smaller than the total number of physicians, obviously, that you interact with.
But it was a bit interesting for us in that the results of our survey showed that about half of the doctors do think that as it relates to MF in particular, they are, over the next, you know, months to years, gonna be, you know, considering using other products outside of Jakafi. And so how does that, you know, compare to what you've been hearing from your field force about not just competition now, but expected competition going forward?
Yeah. So as we shared on the call, in Q1 and so far, we haven't seen any impact from competition. We continue to maintain our market share in first line for MF. There has been no impact on the duration of therapy, so no impact at all from the competitive agents. And that's what we expect to continue to see based on the feedback that we're getting from physicians. Jakafi is very well understood. It's been around for a long time. The durability of response and the data available on Jakafi is not matched by any other therapy. And also, the side effects of Jakafi are very well understood and the efficacy very strong.
So, again, we do not see, and based on the feedback, we don't expect to see any real impact on the utilization of Jakafi. So, that's what is built into the guidance that we have provided for the rest of the year, and as we were commenting in the past, we expect to continue to see Jakafi becoming a $3 billion plus in peak sales by 2028.
Pablo, do you have any thoughts on that?
Well, first of all, I completely agree with Christiana, obviously. Look, the way this is evolving, I think it's interesting. Jakafi continues to be the market leader. I think when you talk to physicians, they'll tell you, if you want rapid spleen reduction, rapid symptom improvement, and a shot at improvement survival, Jakafi is the drug you have to use. I think that's pretty straightforward. Some of our competitors have made claims about working better in patients with anemia. I think that people need to go back and look at the pivotal trials, the Jakafi that led to the Jakafi approvals. The median hemoglobin in those studies was about 9, 10, depending on the study.
So most of the patients in the comfort studies were actually anemic, and in those patients, Jakafi provided all the benefits we know and improved survival. The other thing we're hearing from the field is, with some of our competitors, is patients do have a hard time staying on because of side effects, a different set of side effects. So, I totally agree with Christiana how this is going to evolve, and we're fully confident in Jakafi's ability to continue to dominate the MF market.
On the guidance portion, the 2.69-2.75 that you guided for the year, what's the main factor that could push results to the higher end, just based on where you are right now?
So the guidance and the implied growth of the guidance is primarily driven by demand growth or exclusively driven by demand growth this year. And we expect this to come from PV and GVHD, and expect MF to remain stable. PV, in PV, we see PV as the biggest growth driver, and especially in the second half of the year, and then continue to see that next year. And that we see it being driven by the IRA-related reforms, where, in this year, the out-of-pocket deductible for patients in Medicare Part D is reduced to $3,250-
Mm-hmm.
... for the year.... and next year is reduced to $2000, so it's capped to $2000 and spread over the course of the year. And we believe this will help a lot with access, and especially PV patients, who in the past were the ones that could say, "You know, I cannot afford the out-of-pocket. I will not get on therapy." So they were delaying getting on therapy. So the IRA reforms around the out-of-pocket, we expect to have a significant impact in access and especially for PV patients. And so the impact is expected to be seen more in the second half of the year and then more significantly next year. And this is what is base is.
Mm-hmm.
... is built into the guidance. Depending on the level of the impact that we see this year, we could be at different, you know, points within the range that we gave for guidance.
Okay, sure. That's super helpful. And then on the point that you made about having MF stay stable, what is the latest on market share penetration Jakafi has in the MF market?
So in MF, it's over 50%, and when you look at the mix of indications within... For Jakafi, you have MF accounting for over 40%, followed by PV-
Mm-hmm.
at around 35%, followed by GVHD and other. Eventually, we expect PV to become larger than MF, so you would expect to see PV, MF, and GVHD in terms of size of populations within the Jakafi prescriptions.
What do you think would be needed in order to get north of the roughly 50% or so penetration that you have for MF?
For MF, we expect the penetration to remain pretty stable.
Is there a reason for that, based on patient profile, that you think you've gotten to all of the eligible patients?
We, we see a... Those levels are pretty high penetrations.
Mm-hmm.
... for MF patients.
Have you been at that level for some time?
We were seeing growth in the prior years, and the growth was stabilizing, and now we are at this stable point.
Okay. And then, maybe a question on Opzelura before I let you go.
All right.
So, doctors, again, so we rely on a lot of feedback from the survey work with that we do. We get a lot of feedback that physicians are very happy with the product, excited about using more of the product. They do talk about insurance reimbursement as still being a bit of a barrier for them to be able to use it as much as they want to. So I wanted to get your thoughts about what Incyte is doing to try to, you know, make the process of coverage a bit more smoother so that physicians can use it more.
Yeah. So the feedback we're getting from physicians and patients on Opzelura is very, very positive. In the case of AD, it's about itch and the very rapid itch reduction. I don't think there is any other therapy that has that rapid impact on itch, and in the case of vitiligo, obviously, it's the only therapy that is approved for re-pigmentation. As we're looking at the penetration, there are two different sets of issues and opportunities and initiatives that we are pursuing. For AD, it's around access-
Mm-hmm.
... and how can we further improve access to make the prior authorization process easier for physicians? And for vitiligo, it's around adherence and getting patients to use the cream appropriately, to stay on therapy for the duration of treatment that they need to be on in order to get to repigmentation. In the case of access, we are pursuing a number of different initiatives to improve access and make it easier for physicians to get patients on therapy. Some of those initiatives are targeting the position of Opzelura on formularies.
So, for example, we announced a few months ago that as of the beginning of January, for CVS, Opzelura is now on preferred tier, which makes it easier to get patients on therapy because now AD patients need to have gone only through one therapy, one treatment before getting on Opzelura, so corticosteroid, TCI or TCS type of treatment that basically every patient has gone through before moving to another therapy. We are also having a number of different programs to assist physicians with the prior authorization process and to making sure that patients can get their prescription filled, so initiatives that we are working with the pharmacies to-
And so do you think this is gonna be something that can be resolved in the nearer term, or is this a multi-year process?
No, we are looking at the impact from all these initiatives to, to start taking place over the course of the year.
Mm-hmm.
Then, obviously, we will continue to see the growth trajectory building up year over year.
Okay, perfect. I think with that, we are out of time this morning. I wanted to thank you both for coming out here to Vegas and joining us, and I wanted to thank everybody for coming into the room and listening to the presentation. Hope everyone has a good rest of the session. Thanks.
Thank you.
Thank you.