Thanks for joining, everyone. We have Bill Meury and Pablo Cagnoni from Incyte. Super happy to have both of you guys up here. Really big year for the company. Big year ahead next year, too. Maybe you can just kick it off with where things stand today, and then we'll get into some more detailed Q&A.
Yeah, thanks. It's great to be here. Our focus right now is, I think, pretty simple, which is to transition the company from Jakafi to a Heme-Onc, I&I company. And essentially, what we're trying to do is build the glide path to high growth and durable revenue, earnings, and cash flow post 2029, post Jakafi. There's a lot of substrate in the company. We have the R&D and commercial capabilities to execute. We kind of break the business down into three parts. There's a core business, our pipeline. Of course, we have OpEx and then business development. Core business is performing extremely well. That includes not only Jakafi, but the growth portfolio that exists post Jakafi: Opzelura, Niktimvo, Monjuvi, and Zynyz. And maintaining solid fundamentals with that part of the business is going to be important as we transition.
In terms of the pipeline, we have seven priority projects that can create meaningful value long term. We're focused right now in 989 and V617F in hematology. We also have three solid tumor programs in pancreatic, colorectal, and ovarian cancers. That's G12D, TGF-beta/PD-1, and CDK2. Those programs are really starting to declare themselves, and we'll be moving several of them into phase three in 2026. I'd say that Incyte has systematically and quietly created what could be a high potential oncology portfolio. Then in I&I, we have povorcitinib, an oral JAK that we're developing for three indications: hidradenitis, prurigo nodularis, and vitiligo. We'll submit the NDA for povorcitinib in the first quarter of 2026. Then I add into that to the six, number seven, which is Niktimvo, which we launched for GVHD alongside Syndax, which is off to a very good start.
I include that because we're developing Niktimvo in combination with Jakafi and with steroids. Those results will be available in 2027, 2028. But that pipeline has the potential to create a lot of value in the future. Not all these programs necessarily will work. Not all of them have to work in order for us to build Incyte into the next decade. We're going to be smart about operating expenses, being financially disciplined on one hand, but not underfunding any critical initiatives that can compromise growth over the long term. Business development, like in any situation, is going to be supplemental. It can be a multiplier of our growth. We'll do things that extend the core or strengthen the core and be really smart about how we use the balance sheet.
And now it's time to convert phase one studies when we think about our pipeline into phase three studies and FDA approvals. And that's about execution.
Awesome. Let's start off on the pipeline side. I think we should start on calreticulin just because pretty close to a big-ass presentation. A lot of focus there, obviously. Not much to talk about on the safety front. The only thing we've gotten some questions on is the cytopenias and anemia rates. Maybe you could just kind of walk through, number one, what are the background rates in some of these trials? And then number two, mechanistically, could there be anything that would explain a low rate of events?
Yeah, so it's hard to talk about a background rate because it's a very broad, very heterogeneous population. So what you're going to see, just to go back to what you're going to see at ASH in four days, in essential thrombocythemia, which is a totally different population from MF, you're going to see an update of data represented at EHA early this year. And in that, what you see is a rapid normalization of platelet counts. A lot of these patients at the beginning of the study are on hydroxyurea or other cytoreductive therapy. So some of the cytopenias, which are rare, could be related to that over time. I think platelet counts stabilize in normal range. So I think that's really not an issue.
I think MF is a more complicated disease because the balance there that we're trying to correct is an imbalance between the wild-type clone and the mutated clone that is basically, over time, replacing the wild-type clone. That's why these patients have cytopenias. There's also a shift away from making red cells for erythroid production, and that also causes the cytopenias that you see. The correction of that, when you give 989, may not be immediate. We suppress the malignant clone fairly quickly. You'll see data on that at the translational presentation on Saturday, but sometimes the wild-type clone takes a little bit longer to recover, or sometimes it's much smaller. Sometimes there's a lot of fibrosis in the marrow. As a result of that, cytopenias do get reported over time. Now, I think it's important to understand how the drug works.
CALR has two mechanisms by which it's exquisitely selective for mutated CALR cells, malignant mutated CALR cells. One is it binds to a neoepitope, which is mutated calreticulin. That's obviously, as the word defines it, is not expressed in a broad set of tissues. But importantly, what it does is it disrupts the interaction between the mutated CALR protein and the thrombopoietin receptor. So in order for a cell to be inhibited by the antibody, it has to express both. Malignant cells express both the TPOR receptor and the mutated protein. There's a group of normal cells that express mutated CALR but don't have the thrombopoietin receptor. Those cells will not be touched by 989. So when you put all that together, it's hard to conceive that 989 will be toxic to normal hematopoiesis.
That cytopenias may occur early in the treatment as it reduces the size of one clone and the wild-type cells emerge. That's possible, and we'll see that, and it's reported as a single-arm study, so you're going to see a number of adverse events listed, but it's hard to conceive that this drug will be fundamentally toxic to benign hematopoietic cells.
I guess one more data point on that is the anemia benefit. At least that's laid out in the abstract.
Yeah, thank you. Thank you for the assist there. I should have said it. So there is a clear impact on anemia that tells you that the drug is unlikely to be toxic to red cells. And what we reported in the abstract is that 55% of the patients have improvement in anemia, 40% major, sorry, 15% major, 40% minor. And that is a hard endpoint. That is either becoming transfusion independent or is an improvement in hemoglobin more than 1.5 grams in a sustained way. So this drug, I think, is the first time that this magnitude of anemia improvement has been seen in patients with MF. And it's as a result of the fact that 989 really shifts the production of blood cells away from malignant cells and into the benign normal erythroid cells. And that improves hemoglobin.
I think the anemia point is probably underappreciated by investors.
I agree.
Yeah, why so much?
So much so that I forgot to say it. Yeah.
Well, you know I would point out that, and this was done at the Mayo Clinic, patients with MF and no anemia will live on average about seven to eight years. Patients with MF and anemia, only two to three years. And there's a real trade-off when you're using Jakafi or any other type of inhibitor like Jakafi, which is you can control the disease, symptoms, and shrink spleen, which cause anemia. If you avoid the anemia, you can't control the symptoms. And so as remarkable and as successful as Jakafi has been and made a big difference in patients' lives, it's a trade-off drug. And this is a fundamentally different approach.
Yeah, I think that it's really important. So there's three things you want to do in MF: shrink the spleen, improve the symptoms. And as a result of that, you want to improve the anemia. Jakafi does two of the three. It makes the third one worse. No, it doesn't make it better. It makes it worse. 989 clearly does all three. That's the data in the abstract. You'll see more detail on Saturday and Sunday. But it clearly does all three: shrinks the spleen, improves the symptoms, improves anemia.
Awesome. And the anemia benefit, besides being commercially relevant, as you laid out, besides being proof of mechanism, it also kind of opens the door from a regulatory perspective in MF?
I think it does. Obviously, we need to see if the FDA agrees. For those of you maybe not super familiar, spleen shrinkage measured at SVR35, 35% shrinkage of the size of the spleen by MRI has been the endpoint, part of the endpoint in MF for now 14, 15 years since Jakafi was first approved. The second component of that endpoint has been improvement in symptoms measured in a couple of different ways or expressed in a couple of different ways, either as mean reduction or TSS50. I think it's very important to have a, but there's never been a drug that improves anemia to this magnitude. And so I think it's time to have a conversation with FDA and propose spleen and anemia as co-primary endpoints. I think it's very relevant. I think anemia, as I defined it, is a hard endpoint in these patients.
Now, we'll see how the conversation goes. If we need to do symptom, we'll do symptoms. The symptom data you're going to see at the meeting expressed as TSS 50, I think, looks strong, so we can go either way. I just think anemia is a more relevant measure of what the drug does.
Yeah, that makes sense. And for what you just laid out on the regulatory side, is that second line in addition to front line for MF?
So I think in MF, the development will proceed in both a staggered fashion. Second line is more straightforward. We have a lot of data, again, in the abstract and the presentation. And patients are either intolerant or suboptimal responders to Jakafi. That's where most of the data in the abstract are. And it shows, once again, spleen reduction, symptom improvement, anemia improvement. That's a pretty straightforward phase three trial to design. We are in the process of finalizing the dose selection. And at some point in 2026, we'll roll that out. First line, we need a little bit more data. So what we have right now, in the cohort of patients that receive single agent 989, there's a small group that will consider Jakafi ineligible. So not an all-comer, naive population, but a subset that are called Jakafi ineligible.
We'll show data in those patients at the conference on Sunday, and that is sort of the beginning of understanding what 989 does in true first line MF, selected group with probably worse outcomes, but still first line. We're in the process of enrolling patients, truly naive patients, to 989 or 989 Jakafi. That's ongoing. We'll have the data in 2026, and that data will serve as a foundation for the phase three trial in first line as well, so this is all moving in a staggered fashion: second line ET, second line MF, first line MF.
Should we be talking about transfusion burden at all within the anemia conversation?
It's a good question. If we hadn't seen this increase in hemoglobin, perhaps it would be more relevant. But I think the increase in hemoglobin alone might be important enough. We'll have that data.
Yeah, I guess if you're seeing that level of hemoglobin increase, why wouldn't you be helping out the transfusion burden?
Not all the patients that enter transfusion dependent. That's all.
Sure. Sure. That makes sense. All right. What about on the co-mutation side? Maybe this is a topic for ASH, but yeah, one question for a long time has been, MF cells can accumulate more mutations. Can it be later stage, get more beat up, if you will? What's our level of confidence calreticulin is still the driver mutation there?
So what do we know about MF in general, aside from 989, is that it's a monoclonal disorder. So when there is a mutation present, that mutation drives the disease. There could be coexisting mutations, but those are what we usually call passenger mutations. They don't drive the disease. And we'll have, without getting ahead of ourselves, but on Saturday, you'll see a deep translational analysis of the data that shows in a small data set that when patients have a coexisting mutation, hitting CALR still leads to the reduction in the size of the clone, which tells you that CALR is indeed the driver.
Perfect.
It's the same with V617F. It's the same with BCR-ABL and CML. These are monoclonal disorders.
Perfect. Just one on the ET side. What is the status of regulatory discussions? And as we're talking about the DCHR endpoint, there's different platelet cutoffs. What's your expectation there?
Regulatory interactions have started. They have not been concluded. Base case is that we'll have to use 450,000 platelets. I think there's an argument to be made that a little bit of room there is helpful for patients, by the way, because there's no evidence that patients with 500,000, 550,000 platelets have any higher risk of thrombosis. But it will be a conversation with FDA.
Awesome. All right. Let's switch gears. Let's go to the JAK2 V617F, stay on the heme-onc side. Recently, optioned Prelude's asset. What does that tell us about your ongoing study, your confidence in your lead asset?
Not much. So let's take a step back. I remain convinced that the thesis of inhibiting V617F, the pseudokinase, and the mutated patients with the V617F mutation, if you hit it, it's going to lead to positive clinical outcomes in patients with MPNs. And let's remember, V617F is the remaining of MPN patients. MF, if you combine V617F and CALR across ET, MF, and polycythemia vera, you basically cover more than 90% of MPNs. So that's an important point. And they're mutually exclusive. We introduced the program in the clinic. What we learned over the past 12 months is that due to the poor solubility of the molecule, despite a better formulation that we introduced, the exposures were not hitting the IC35 that we thought and predicted you have to hit to get a positive clinical outcome.
We are replacing the formulation for a solid dispersion formulation that will be introduced imminently, and we expect that that will solve the exposure problem, so over the next six to nine months, we'll generate data that will help answer the question, A, whether we have the right molecule, B, the right exposure. And if those two things are correct, then we should have some degree of clinical impact. Now, in parallel with that, we have internal backup programs because this is a critical area for us to win, so we are never betting all on one molecule. Those backup programs are going to be advanced now, just in case, and in parallel with that, we're constantly scanning the landscape for ideas that conceivably could be better than our ideas in this space. Of those ideas that we saw, Prelude had found a different chemical space for V617F inhibitor.
We thought it was important to have an option to acquire that. What we did is we put in place a collaboration. They're going to put the molecule in the clinic. Once the data are out, we get to take a look at the data and then decide whether we exercise the option.
Perfect. And what got you excited about the Prelude compound? Is it more about a bioavailability medchem, different binding pocket? What are the properties?
It's a different binding pocket. Honestly, the preclinical data was really of interest to us. I mean, to get further insights into the molecule, you need to discuss it with the Prelude team. I mean, it's their molecule at this point. We just have an option deal.
Awesome. All right. I guess just thinking about the target product profile for V617F, without going into too many details, but do you think this needs to match Jakafi on efficacy? Or given a safety advantage, can it be a little lower? What's a way to think about that?
That's a really good question. Look, the idea here with a completely different tool is to have the selectivity you see with 989. Now, antibodies, obviously, when the selectivity you get with an antibody is rare, you're going to get with a small molecule. So it's never going to be the same. But I think that if that window, that therapeutic window that we saw in preclinical models pans out, you should have some of the same impact on the disease that you see with 989 without a toxicity of Jakafi. Let's remember, Jakafi has no selectivity between wild type and malignant clones. It works beautifully, as we discussed, on spleen and symptoms, but it has no selectivity.
So if you expand that selectivity window, you should get a lot of the benefits of Jakafi, at least in terms of long-term spleen reduction, symptom improvement, and perhaps some of the anemia impact that you see. Whether it's as good as 989, that's a different question that I can't answer today. But the selectivity window, it's going to have to be wider than Jakafi.
Great. And for TAFA, I mean, there's a first line DLBCL study, phase three, that's ongoing. I feel like it's fairly under the radar for investors. It's been a little slow on the event rate accrual side, right? Is there anything else that's going on there? Where do we stand?
There's nothing going on. We just need the events. This is just for everyone. It's a first line DLBCL study adding Monjuvi Revlimid to our chop, basically. So this is a curative intent. We think it will dramatically expand the eligible population for Tafasitamab. And the study has been running. And as Gavin asked, the only thing remaining is to reach the number of progression events, PFS events, in order to lock the database and then blind the study. There's nothing else going on.
How much will that expand the opportunity for TAFA?
The total addressable market front line DLBCL is probably two, two and a half times what it is for relapse refractory. So it would be a pretty significant value driver for Incyte if that study broke our way.
Yeah, makes sense. All right. I'm going to actually jump over some other pipeline assets we don't have time for today, which we'll talk about next year. But I'm going to go commercial, but stay on Heme-Onc and do Jakafi XR. Mid-2026 approval?
Yes.
How much are you expecting in terms of switch from the twice a day?
I think when you look at analogs, the range is pretty wide. It could be as low as 10% and as high as 50%. We like to work with a range of 15%-20%. If you pick a midpoint, call it roughly 20%. It provides an opportunity to preserve almost $750 million of Jakafi as we go through the 2029 transition. The key to these conversions is, obviously, you have a sales organization that's wired into the hematology community. And then you have to secure formulary coverage and work with specialty pharmacies. And we'll set a price that makes sense for the healthcare system and makes sense for Incyte. And I think that's a reliable way to think about it.
All right. That makes sense. Anything you wanted to flag quickly on Niktimvo in the last 30 seconds or so?
Just that it continues to do really, really well. We'll have a very good fourth quarter, drugs annualizing it at north of $200 million. I think it's differentiated by mechanism, CSF-1R, targets macrophages and fibrosis, broad organ control. Importantly, we see it retains activity after Jakafi use. If we can get the combination studies done and have positive results, it'll be an important product to Incyte.
Awesome. I think we'll actually wrap it up right there, right on time, but really appreciate you joining, and see you at ASH next weekend.
See you then. Thank you. Thank you, everyone.
Nice job.