Good morning, everyone. I'm Andrew Berens, Senior Biotech Analyst at Leerink Partners on day two of our Global Healthcare Conference in Miami. We're very happy to have with us Incyte. We have Pablo and Bill. Thank you, gentlemen, for joining us. Thank you for having us.
It's good to be here.
Yep. It's beautiful weather. Why don't we start. I mean, obviously, I think a lot of people know Incyte, but maybe just a general overview. I mean, you assumed the helm recently, you know, and maybe we could talk a little bit about how the company, what's changed and what's remained the same, I guess, since you joined.
Sure. We're focused on the company along, I think, three dimensions. There's a core business ex-Jakafi that we estimate over the next five years has the potential to reach about $3 billion-$4 billion in sales. Our core business ex-Jakafi, which is all FDA-approved marketed products, should be as big as Jakafi by 2030. That's important. That namely is Opzelura, Niktimvo, Monjuvi, and then we also put in there XR and povorcitinib which will be approved over the next 12 months. That's sort of priority number one. Of course, we have a pipeline of seven assets where about 80% of our R&D investment is focused. It's in hematology, oncology and immunology. We have 14 clinical studies that will be underway in 2026 against these seven compounds.
That, of course, builds the next growth phase for Incyte, and we'll continue to progress these programs in 2026 and beyond. More and more, I think there's visibility into what the potential of that pipeline will be. It hasn't completely declared itself yet, but on an unadjusted basis, that pipeline has the potential of 2-3x our top-line sales unadjusted. Then the third dimension is business development, which like at any company, will play a role in supplementing our growth and extending the core franchise. That's how we think about the business. That's how strategic, operational and financial decisions are made against those three areas.
Okay. Why don't we start, I guess, with Jakafi, and then I think we'll probably very quickly shift to the pipeline and things in development that you mentioned. You know, Jakafi has been a huge success for Incyte. There have been other JAK inhibitors for a while. There was the concerns about competition. You know, you have an XR formulation. You know, you have other compounds that we'll talk about in the pipeline in myelofibrosis and myeloid diseases. How should we think about Jakafi over the next several years, importance to the company and the investment thesis?
Yeah, it's a good question. In 2025, it was up just around 10% year-over-year. Keeping it healthy is a priority because it's a funding vehicle for the new product launches and for the pipeline. It's got three indications, as you know, MF, PV and GVHD. All three are growing. Our focus right now is maintaining a mid-single-digit growth rate on Jakafi between now and the end of 2028. We'll launch Jakafi XR in the middle of this year, and that will preserve a portion of the Jakafi revenue after it loses exclusivity. In terms of conversions, Andy, you know these models, you can assume based on analogs that we could convert about 15%-30% of Jakafi.
I like to use a sort of point estimate that's just below the midpoint of about 20%, which means we could preserve about three-quarters of a billion dollars in Jakafi as we go through the LOE. Then, of course, the more important piece of our whole franchise as it relates to MPNs is INCA33989, the monoclonal antibody.
Okay. Yeah, we'll.
Yeah
We'll definitely talk about that one. I just wanna-
Yeah
Kinda get there because I know when we start talking about it, there's a lot to talk about.
Yeah.
In terms of pricing, how should we think about pricing for Jakafi going forward?
The company's done an exceptional job at managing, you know, gross to net and the average selling price for Jakafi. It's largely a Medicare Part D product, as well as there's some 340B there. It's a relatively stable environment with the exception of migration of the 340B program, which can have an impact on every company's average selling price. I think we have it fairly well managed. As it relates to XR, it should be in the parity ZIP code. In order to get XR put on formulary, we're gonna have to set a price that makes sense, most importantly for PBMs and health plans, and at the same time makes sense for Incyte. I think there's a price point that is gonna be agreeable to the PBMs and the health plans.
The key thing is to make sure that out-of-pocket costs for patients are not changed and that the net cost of the plan is not higher with XR than it is for IR. It'll take us about 6-12 months to get formulary coverage, and then most of 2027 will be about conversion. The second half of 2026, when we launch, will be about formulary coverage.
Okay. Well, like I said, Jakafi has been very, very successful. It's been the foundation the company's been built on and generated tremendous free cash flow. One of the things that Jakafi was successful at was you basically defined the regulatory goalposts for myelofibrosis.
with the SVR35, the splenic volume reduction, and then also, TSS50, which is a measure of quality of life and symptom improvement. How difficult is it to then come along? A lot of companies have tried with other compounds to beat Jakafi at those two endpoints, which were essentially created for the molecule.
Specifically today, compounds that are looking to enter the MF space you're talking about?
Yes.
I think when you look at other JAK inhibitors that are out there, or other mechanisms that are in development that could be introduced, I think they can be important treatments, but they're really tools for subpopulations, I think more niche in nature, and refitting around the margins. I don't believe that there's gonna be anything that disrupts the standard of care, in this case, Jakafi over the next couple to several years. I think that's how I see the competitive landscape.
Okay. In your program, you've got several targeting different subgroups. We'll talk about the CALR. Do you think that those interventions can beat Jakafi, you know, in symptom improvement and splenic reduction?
I think you have to look at the totality of the evidence. You're talking about INCA33989, our
Yes
targeted treatment.
Yes.
There are both clinical and molecular endpoints that matter in this whole equation. If you look at the data that we produced in phase I, in the second-line setting with INCA33989, in both ET and in MF, it looks like first-line efficacy in a second-line study. That's whether you're talking about conventional endpoints like the SVR35, TSS50, or anemia response when you're talking MF. When you look at the results for INCA33989 in the ET population in terms of complete hematologic response or VAF reductions, that is a superior profile on paper to anything that's out there today, including Jakafi. If we can replicate the results from the phase I study in phase III in both ET and MF, there's a potential for a real changing of the guard in the treatment of both those MPNs.
We'll start those phase III studies this year, midyear and then end of the year. I think the key piece about Jakafi is an important product. It made a big difference in patients' lives. It's a quality of life drug, makes people feel better. But it's also a trade-off product. If you increase the dose to control the symptoms, you can cause anemia. If you keep the dose low, you avoid the anemia, but you don't control the symptoms. On the ET side of the house with hydroxyurea, which is decades old, there hasn't been a change in the standard of care there. It's also sort of a product that requires a trade-off. Most patients with hydroxyurea can't get to 1,000 mg a day, which is the dose needed, particularly for patients with high platelet counts, to control the condition.
I think INCA33989 solves the trade-off with both the standard of care in MF, Jakafi, and the standard of care in ET, which is hydroxyurea.
Okay. Why don't we pivot and start diving into INCA33989 and the CALR pathway? What is the role of CALR in MF and ET?
Go ahead, Pablo.
I think in the long run, or not even long, in the medium term, our goal is to establish molecular-targeted therapies as the standard of care across all MPNs, Andy. We're starting with ET and MF with nine eight nine, which is, as you pointed out, a CALR antibody. The data that we showed last year in two meetings, and most recently at ASH, clearly shows not only there is an improvement in clinical endpoints, which is what's going to matter for regulatory purposes and what matters to patients on a daily basis. As Bill mentioned, spleen reduction, improvement in symptoms, and perhaps more distinct compared with other available therapies, the improvement in anemia that we saw, which was pretty dramatic in over 50% of the patients.
As important as that is, I think the other bucket that is really important is the translational data shows very clearly that INCA33989 is eradicating the disease. It's a molecular-targeted therapy eradicating cells that have the driver mutation. We saw that in the bone marrow reduction of mutated megakaryocytes. We saw that in peripheral blood with the elimination of CD34 positive, CALR positive cells, and we see that in the progressive VAF reductions, more dramatic so far in ET, but also present in MF. The way disease, you know, the words disease modification gets a little bit overused, but I think what we're seeing is truly disease modification in the sense that INCA33989 can selectively eradicate the burden of disease in patients with ET and MF.
I think that's the most important way to look at it in the long run, because I think in the long run, that will translate in all kinds of benefits for patients, even beyond what we've seen so far in terms of spleen reduction, symptom improvement, and anemia improvement.
Pablo, you want to comment on the frequency of the mutations?
Yeah. The CALR, which was described, as you know, in 2013, is present in about 25% of patients with ET, in about 35% of patients with MF. Now, we need to spend a minute on this type one, non-type one story. Type one is very clear. That happens probably in about 55% of those mutated patients with ET, maybe 55 to 60%. In MF, we think that frequency is higher. It's probably 65 to maybe upwards to 70%. Those are non-type one. The best way to characterize, and there's a small group that is type two, and then there's a group that is non-type one, non-type two, and that is a very heterogeneous group of patients. That has characteristics, some of those non-type 1, non-type 2 look more than type 1, some more on type 2.
It's not as straightforward. You know, I'm now for short, I call them type 1 and non-type 1 just because it's simpler. The important part is I think the type 1 is about 65-70% of MF and about 55% in ET.
Okay. The difference between type 1 and type 2 and ET versus MF in terms of what we've seen, we'll talk about the data with 989 , and maybe we can talk about it now if you want. It seems like there is a difference in activity targeting CALR, and why would that be?
989, which is our first entry into this space, we've known from the beginning it has different affinity for type 1 mutations than the non-type 1, specifically type 2 in this case. We knew there would be a difference in dosing, and we think in large part that difference in affinity can be addressed with difference in dosing, by just increasing the dose. That's not to say that the efficacy of non-type 1 will be identical to type 1, but we can get pretty close simply by increasing the dose, which is what we intend to do in pivotal trials. We are discussing, we're in the middle of conversations with FDA, and we're discussing a dosing strategy that we think will in part address this difference in affinity.
I think it's important to note also that, by the time of our quarterly call in April, we will have clarity, and we'll be able to provide clarity on the design of the first phase III trial in ET, which will be in second-line ET when it comes to population, which we intend to enroll all comers. Dosing strategy, in order to be able to address the differential affinity for type 1 and non-type 1, as well as the endpoints, including, the incorporation of some molecular endpoints in this study.
Okay. The endpoint, the molecular endpoints could be a pathway for accelerated approval, or you don't know yet?
We think that in ET, based on the conversations we've had with the agency, hematologic response will be the approval endpoint. We intend to incorporate VAF as a molecular endpoint. Whether it's the hierarchy, we'll disclose that in April. We think there's a way to incorporate VAF as one of the endpoints in the pivotal trial. The other conversation we're having with FDA is the timing for the assessment of the primary endpoint, whether it's 52 weeks, which is what's been used traditionally in ET, or it can be done sooner.
Okay. What do you see when you target CALR? When we talked, you mentioned the SVR35, the TSS scores. What about bone marrow changes? You mentioned anemia too as improving, but what about some of the bone marrow changes that are the hallmark of the disease?
What we saw and reported at ASH is, there's three things that are important. Four, I would say. We see a very clear and very fast reduction of malignant megakaryocytes in the bone marrow. That's really part of the source of the disease, and they lead to the fibrosis in the bone marrow, which we also see improvement on. We saw improvement in fibrosis in the bone marrow. The second part is in peripheral blood, there's very immature cells in these patients that you don't see in normal population that are malignant CD34 positive progenitors. We saw dramatic reduction in those as well. The third part is we saw an increase of normal erythropoiesis. Basically, cells that make normal red cells increase in these patients when on treatment of 989. That supports the improvement in anemia.
Improvement in anemia is truly because of normalization of hematopoiesis in these patients, normal production of red cells in these patients. The fibrosis improvement is also important to note, in the subset of patients. Overall, every measure of the disease, it's getting better on patients undergoing treatment of 989, and that's reflected on the spleen shrinkage, on the symptom improvement, and anemia improvement.
Okay. Is the fibrosis improvement, is it just that you stop it from happening and then it starts to remodel on its own, or is there some direct impact on this fibrosis reverse?
Malignant megakaryocytes produce mediator cytokines that basically trigger fibrosis. By reducing those, I think fibrosis start to improve through remodeling. There's no direct targeting of the fibrosis by 989. It's just the reduction and hopefully over time, elimination of malignant cells in the bone marrow that then allows the bone marrow to regrow normal hematopoiesis and remodel over time.
Okay. I think you've mentioned before that there's no way, I mean, the FDA, it's difficult to biopsy, obviously.
Yeah
...the bone marrow, and there's inconsistencies because you're only getting a small segment. There, there's no modality to measure with imaging the fibrosis yet.
We're receptive to ideas. We've interacted with a number of institutions that have claimed to have a method that can be reproducible and widely applicable, because if you're going to run a worldwide study, you need for this imaging assessments to be done everywhere. We haven't seen it, and I don't think biopsy is reliable enough. I don't think the FDA is going to agree to that. Besides, I'm very happy we can incorporate VAF, and then as exploratory endpoints, we can have things as megakaryocytes and more important perhaps the peripheral. But those are really time-consuming, cumbersome assays. I think they're very important to understand what the drug does, but they are not necessarily the right regulatory endpoints. I think if the molecular side, I think reduction in VAF might be the most, the one that's going to be most widely applicable.
How much of a reduction in VAF do you think you need to have to see clinical benefit?
I don't think there is a line. What we saw in the ET trial, which is easier to measure because platelet normalization is such an easy to measure and reproducible marker, there is a clear correlation between degree of VAF reduction and degree of platelet normalization. That is pretty clear in ET. I think in MF we need more data and more patients because VAF reduction in MF is lower. Those patients have higher VAF at the beginning. They have lower residual normal hematopoiesis. Since VAF measures a ratio, if the residual hematopoiesis is lower, that ratio takes longer to reverse. We've seen changes in VAF and MF. It seems to be taking longer than in ET. I think ET is a cleaner story. In that one, there's a clear correlation between hematologic responses and VAF reduction.
Okay. Can we talk a little bit about ET? 'Cause it seems to be a less well-defined disease. You know, right now, what we hear from physicians is a lot of patients are watch and wait compared to MF, but what's your sense of how these patients are treated now, and how could a CALR agent change that?
Yeah.
I think the standard of care in first-line ET today is hydroxyurea. I think a lot of patients are intolerant to hydroxyurea. It requires multiple dose adjustments because of the white cell count. I mean, basically, hydroxyurea is cytotoxic, right? That just happens to kill platelets and white cells. That's why it gets used in ET. Second-line is in patients who are intolerant, which is very, very common, or cannot quite maintain an adequate platelet count, or they have a thrombotic event on hydroxyurea. The options are anagrelide or interferons. Interferons are being developed as well in first-line. I think the important part with interferon is in second-line patients that are post-hydroxyurea, the complete hematologic response on interferon is probably under 40%, so it doesn't seem to work very well, and anagrelide is probably under 10%.
I'm talking about platelet normalization. That's what's available. Non-specific therapies that just happen to normalize platelet count in some patients with some safety concerns and some cumbersome dose adjustments. I think what nine eighty-nine brings to the table is a completely different value proposition. It is the first molecular targeted therapy, not just for ET, but for MPNs as a whole. It showed very clearly not just platelet reduction, but platelet normalization. What we see in the graph that we present at ASH is the platelets drop, and they, without those adjustments, stop dropping once they normalize. The reason for that is nine eighty-nine is killing the malignant cells and completely sparing the normal megakaryocytes. You normalize the platelets, and you keep dosing the patients, and those platelets don't move from there. Don't keep going down.
Also, we saw no leukopenia and really no anemia to speak of. I think it's a different value proposition that would exist. In general, when you look at hematology or malignant heme the last 25 years, you know, going back to Gleevec, going through CD34 antibodies, molecular targeted therapies, when they work, they really take over segments of the market based on that.
I would just add that 'cause I've heard the indolent component of the ET population in the watch and wait group. Patients with a CALR mutation ET, there's about 20,000 of them. You remove watch and wait. They're not in that group. Real world evidence studies with hydroxyurea, only about 25%-50% of people get to a complete hematologic response. INCA33989 makes it to market. Someone has a CALR mutation, is not getting a response with hydroxyurea usually 'cause they can't reach the dose. High likelihood that they get put on 989. If you stratify that population just one more level, about 25% of people are resistant to hydroxyurea, which is a negative prognostic indicator. That's about 5,000 patients. They're also gonna be immediate candidates for INCA33989.
I think even in a second line setting, what's likely to happen is the use of hydroxyurea gets completely reshaped. Anyone that doesn't have control or isn't tolerating it, because almost 40% of people who have grade three AEs would get put on 989. I think it's an underappreciated indication for 989, and it'll be the first one.
Okay. The natural course of the disease, the patients that don't get therapy, what percentage of them progress and then ultimately either get worse with, you know, more aggressive disease or end up getting treated?
Look, I think that there's a high-risk population from the beginning, which are patients that are older and they had either a thrombotic or bleeding event. I think the important thing to understand, let me put it this way, Andy, about ET is. This is more clear even in CALR mutated patients. There is a point where this disease starts to progress towards MF. When that happens, it doesn't happen in everyone, but it's hard to predict who is it gonna happen on and when is it going to happen. It does happen in a big group of patients. What we're trying to do with nine eighty-nine in that population, one of the many arguments for using nine eighty-nine once approved in this population, is that you can reset the clock another, let's say, 10 years.
If you're diagnosed with ET and you're in your sixties or seventies, and all of a sudden we add another 10 years to that clock, then ET becomes a solved problem for a very large group of patients just by a very well-tolerated injectable that patients can self-administer at home once the subQ is available, which, you know, it's something we should discuss. Our subQ development starts this month, and we expect to have a subQ device and formulation ready for pivotal trials in the second half of this year.
Okay. You also have several other compounds you said in development. You have a TC, but you also have another. It sounds like another mab too.
Look, our MPN is an area where we're gonna continue to innovate and continue to raise the bar of what we can do. We have a T-cell engager in the clinic. It's going through dose escalation. We'll present data at the appropriate time. We have continued to try to improve on the properties of INCA33989, because we realize that, you know, the different affinity for type one and non-type one was something we could continue to improve even further. Of course, we have the whole effort in V617F inhibition. We have a lead program in-house, we have a backup program in-house, and we have an external backup of our agreement with Prelude. MPNs is an area where we wanna bring a molecular targeted therapy for every single patient with these diseases by the end of the decade.
Okay. Can you talk a little bit about the JAK selective program you just mentioned, your internal programs, and then the option you have with Prelude?
Our internal program is a pseudokinase inhibitor. Oh five eight is the short name. Entered the clinic a little over a year ago. We had some challenges with the original formulation. The solubility of this molecule is not ideal, and we knew that. The initial formulation did not solve the problem. We paused, we switched to another. As we saw, a dispersion formulation that is entering the clinic. We'll have data later this year with that formulation. If that formulation solves the problem, then we'll proceed as fast as possible with oh five eight. We have a backup program that we think solves some of the problems of the lead, that is a pre-IND work is ongoing. We'll have more clarity towards the end of the year.
We're constantly scanning the landscape for great ideas when it comes to molecular targeted therapies in MPNs, and it just so happens that Prelude, we thought, had a really interesting idea in a different chemical space. We basically did an option deal. They are running this program, we're not involved, up to a certain point. At that point, we have the option to basically buy the program and bring it in-house. It will be a question of which one of these programs has the best data, but that's an option that we have on the table.
Okay. I know we have a couple minutes left. We really didn't get deep into the pipeline, but what else in the pipeline, I mean, you have povo coming very shortly, commercially, probably. Do you wanna talk about that a little bit in the time we have left?
Well, listen, we expect to be launching it in the first quarter of 2027. If we get a priority review, it would be the second half of 2026. You have a three indication JAK inhibitor. The first and only for HS initially. AbbVie will be shortly behind us with Rinvoq. Probably first and only for prurigo nodularis, and then it'll be one of three in vitiligo. The indication for HS is probably the most important right now. That category, that condition is simply lacking in treatment options. On one hand, you have oral antibiotics or topicals, and then the other side, you have IL-17s, and there's no stepping stone in between. We have data both in pre and post-biologic patients.
If you look at HiSCR50 or HiSCR75, pain relief, draining tunnels, flare control, the data on povorcitinib are very, very convincing. I think we should be able to capture patients at two inflection points in the treatment of HS, before a biologic as well as after a biologic. You got 200,000 people out there with HS. Only about 50,000 of them are taking an IL-17. The rest are on all off-label steroids or antibiotics. It'll be an important first indication for the drug, and important just from the big picture of shoring up our core business ex-Jakafi, so that when we hit the transition, you have a JAK inhibitor that's producing well over several hundred million dollars in sales and has the potential to be a billion-dollar opportunity when you look across the three indications.
When we compare it to some of the biologics, you know, what are the attributes besides? I mean, obviously, it's oral versus IV, but it sounds like there are other attributes too that you think are commercially appealing.
If you ask dermatologists when they look at it, you see biologic efficacy when you look at skin clearance and pain relief. Of course, it's an oral, which patients still prefer over a biologic. The other thing about JAK inhibitors to remember is they work fast. Rapid. In other words, if you look at the pain relief in the studies with povo, about 30% of people had a 30% improvement in pain. Half of that benefit came in the first three weeks on the drug. It's a much more intuitive sequencing approach to go antibiotic, JAK, IL-17. Now we'll have to deal with policies at the health plans, but if you use psoriasis as an analog, Otezla was a stepping stone before in IL-23.
I think in this case, povo has better efficacy on a relative basis than, for example, Otezla did versus the IL-23s. I think there's a real opportunity here. There's certainly gonna be a lot of trial of the compound given the lack of treatment options in HS right now. This is gonna get used. We expect data on Opzelura in HS in the fourth quarter, which is not really on a lot of radars right now, but we'll have a topical to oral backbone for the treatment of HS if we can get positive results with Opzelura and povo approved by the FDA. I think we have a competitive advantage going into that category.
Okay. Let me see if there's any questions from the audience, before we wrap up the session. Anybody have a question for Pablo or Bill? All right. Well, thanks, gentlemen. Congrats on all the progress.