The Healthcare conference. I'm Marc Frahm from the biotech team. Next up, we're really pleased to have with us, CFO from Incyte, Christiana Stamoulis, and the General Manager of North America, Barry Flannelly. Maybe just start off, Christiana, you wanna just kind of level set people on Incyte status updates and kind of what are the major updates you're looking to over the next, you know, six-12 months?
Sure. As you may recall from our earnings call, this last month, we had progress along a number of different fronts in 2022 that we are looking to continue in 2023. First, on the commercial end, very important was the progress of the Opzelura launch, both in AAD as well as in vitiligo, which was the indication that we got approval for in 2022. We are very much looking forward to the continued progress with both indications and the launch there that we are expecting to see in 2023.
On the clinical development front, there were a number of programs that had updated data in 2022, and we're looking for several additional readouts in 2023 across the board. LIMBER, we shared some initial data with IL-2, which is one of the LIMBER programs and where we had proof of mechanism with the program for anemia. We look forward to sharing additional data in 2023, and especially combination data with Jakafi. Same for BET, which is our BET program is in development also as mono and then going into combination with Jakafi, and we're looking forward to sharing data later this year from this program as well.
Finally, moving the mutant CALR program into the clinic is a program that we are very excited about because we're looking to address the 30% of patients with CALR mutant in MF/ET, which will potentially take us into ET and MPN, where we're currently not with Jakafi. In terms of other oncology, oral PD-L1, we have the lead products selected. We have started combination studies, and we'll be looking for additional data later this year as well. Finally, dermatology. We have a number of studies in dermatology, both with Opzelura as well as our second dermatology asset, which is povorcitinib, which we are developing for HS, vitiligo, and prurigo nodularis as well. We'll be looking forward to data from those programs as well.
A lot that is going on and that we're looking forward to see this coming year.
Okay. Thanks for that. Barry, we'll start with you on diving into some of the specifics there. Can you remind us where Opzelura is on, you know? There's a lot of progress, both in volume but also in terms of net pricing 'cause gross net was coming down significantly through the years. Where did Opzelura end the year, you know, exit the year, and kind of what are your expectations going forward for 2023?
Well, if you're talking about just gross to net, for example, we ended the year, as we said, around 50% or right at 50% gross to net. We continue to see in 2023 that the average will be about 50% in the first quarter, as happens with every product, essentially, is that the gross and net will be impacted because of, you know, the restarted deductibles and the high deductibles that unfortunately some patients have, high amount of co-pays that they have, so we have to pick that up in the in the first quarter, and that will, you know, be lessened over the rest of the year. As far as the uptake in AD, that continues to grow.
The uptake in vitiligo certainly continues to grow, so that's what we have looking forward this year. The continued launch specifically in vitiligo and the continued rollout of direct-to-consumer approaches to attract those patients that have vitiligo.
Maybe on those kind of more volume side there, trajectory in 2023, I guess, you know, how much of the driver of growth is still AD versus, you know, how much is vitiligo really coming in and being a major driver of growth?
Sure. At the end of 2022, as we said, we had double-digit growth in AD. We expect that to continue going forward. Vitiligo, though, is becoming a bigger portion of the net sales. We estimate from Incyte data, outside data, the data is not always perfect, but about 30% of our net sales volume currently is coming from vitiligo. We'll see that continuing to grow just because of the number of refills those vitiligo patients will get as compared to an AD patient. There's many more AD patients than there is vitiligo patients. Nevertheless, the patients with vitiligo come back for more tubes.
One thing that we frequently get questions from investors is, you know, you guys are kind of the first novel topical in these spaces. Well, the only thing in vitiligo, but in AD, the first. There's kind of a few companies coming behind that are expected that are commercially available in other indications that are expected to come into AD. Just how do you see that impacting the AD market?
You know, AD is becoming more crowded, both with systemic therapies and with some topical therapies. We just think that our profile for Opzelura in atopic dermatitis is the best. We think it's actually the best drug to use in the treatment of mild to moderate atopic dermatitis, and we think that will continue. The other competitors, the data that they've released so far, phase III data, the other topical potential competitors, phase III data and phase II data, doesn't compare to the efficacy data and safety data that we have with Opzelura. We think we can maintain that position and continue to grow in AD going forward.
I think the fear some investors have is that maybe even if they agree with you that the data looks better for your drug on an efficacy basis, these products will have, you know, less warning statements and things like that in its label, just, you know, and therefore patients will just seek to at least try them first and see whether they work and do well for them before they would go to an Opzelura.
Well, I mean, the way I look at it, especially if you look at Eucrisa, for example, you know, we don't have to step through Eucrisa therapies. It's already approved. It's a relatively safe drug. It's just not that effective. Dermatologists aren't going to prescribe something that's less effective or they'll try to get around it. I don't have any expectation at all that those other products, if they're, you know, priced less or have, well, they don't have a black box, for example, it's not that they won't be used, they'll probably be used, but we still think we can maintain our leadership and continue to grow there without too much trouble.
Might their entrance, you know, kind of trigger some renegotiations and things like that, where maybe we should think about price coming down some as just there's more options for payers to play off of each other.
Well, again, it doesn't really happen now with, you know, one PDE4 that's on the market. You know, there's always the chance to renegotiate. I mean, we can go back and renegotiate. The payers can come back and renegotiate, but we're set through 2023, and some of them are multi-year contracts. We don't anticipate that anything untoward is gonna happen because of these new entries, but you can always go back and renegotiate or try to renegotiate again.
Okay. Maybe switching to vitiligo quickly here. Just, you know, who are the vitiligo patients that are kind of starting Opzelura today? Who's that kind of early adopter?
I think the patients who are already seeking treatment, as we said, I think in the past, of, you know, 150,000-200,000 vitiligo patients that are seeking, that are using drug therapy now or have, perhaps in the recent past, used drug therapy or even light therapy in the past. They're looking for new options that will really help them. We know, you know, speaking to many vitiligo patients, they're very excited about starting Opzelura, and, you know, some have actually reported, you know, great results so far, and as they tend to do today, is put those on social media. We think that will continue.
It's, you know, it's those other patients, let's say the total of 1.5 million or even more vitiligo patients that maybe gave up on seeking therapy because nothing was helping them in the past. Now here it is, a new breakthrough therapy, the only proven therapy that actually provides repigmentation. They'll go back to their dermatologist and then seek, you know, additional therapies like Opzelura.
You mentioned the dynamic before of, you know, there's obviously way less total patients, but, you know, there are less options for them, competitive options. The refill rate is potentially gonna be much, much higher for these patients. Just how should we think about the market size? Maybe this is also a bit of a Christiana question. You know, relative to the guidance that you have put out there for the AD label of about $1.5 billion of peak sales.
Yeah. For vitiligo, we haven't yet provided guidance in terms of the peak sales potential. When you look at the different factors here, first of all, you have a patient population that is at around 1.5 million in the U.S. Of these, only 10% have in the past been seeking treatment because there were no before Jakafi, there were no sorry, Opzelura, there were no efficacious therapies or therapies approved for repigmentation. The key question here and what we are waiting to see with more data, and I have a few more quarters to understand the trajectory and the mix of patients, is how quickly the 90% of the patient population that has not been actively seeking treatment in the past will now come and get on Opzelura.
We're waiting to see if that. Given that for vitiligo, we expect to see patients using a higher number of tubes versus AD. Even though the patient population may be smaller, the total number of tubes per patient is expected to be larger. For AD, we have said, expect on average two-three tubes for patients per patient, while for vitiligo, we expect on average around 10 tubes a patient, which means that for every 10,000 patients, if you assume 10 tubes and a net price of $1,000, just to simplify the numbers, you get $100 million in revenues for 10,000 patients.
Here we're talking about 150,000-200,000 patients that are already actively seeking treatment, plus another 1.3 million patients that could potentially be candidates to come into treatment.
I mean, it seems like if you do the math there on the, those patients who are just ignore the activation piece, but just the patients that are coming into care today. If you capture large chunks of that, doing the math you were just doing, it seems like you end up at a pretty similar number to what you've already put out for AD. Is that the right way to think about it?
We believe vitiligo could be a very significant opportunity, for the reasons that I said, we don't want to come out with a number yet. If you were to do the math on 150,000 patients, you get to-
It-
similar type of, sizes as AD.
Barry Flannelly, what, you know, in terms of the patients that are already flowing into clinics, why wouldn't they get Opzelura? What would be the... What's the pushback that you're hearing that your sales force needs to kind of detail around and make sure that Opzelura is the choice, not whatever else?
Well, I don't think we're getting any pushback. All we get is positive feedback. You know, we do have to educate not just the patient, but we have to educate the dermatologist as well. Some dermatologists are very comfortable and experienced in treating vitiligo. Others aren't, because they just didn't have anything to offer them in the past, or they may specialize in other various skin diseases, but didn't concentrate so much on vitiligo. It's as much getting them comfortable with then bringing back the vitiligo patients or bringing them into their office and offering them a new effective therapy that they didn't have in the past. That's, I think, our biggest challenge, is educating, one, the prescribers, the dermatologists, and two, then educating the patient.
In terms of trying to access that other 90% of patients who are not kind of going into the clinic today in vitiligo, Incyte recently launched some DTC ads. If you can maybe lay out what that strategy is of how you're gonna try to drive, hopefully large chunks of them into care and maybe can you quantify some of the early returns you may be seeing from it?
Sure. In terms of DTC, it goes, you know, far beyond television. What we think of as commercial television, obviously in today's world, it goes to connected and disconnected television viewing. Linear TV and nonlinear TV is one way to, you know, get to the masses, I suppose. We also do it through social media, of course. We do it through online searches. We do it through print materials. The way that we really see the early returns, we just launched our vitiligo commercial, for example. I think it was February 13th . Really it's just been rolling out. I just saw it here in the hotel yesterday, so that was good. Like to see the Opzelura commercial with Morgan Freeman out there, advertising the, you know, talking about the drug. That was good.
We'll end up continuing that strategy of reaching out to the patient through all a variety of ways. It's also working with the patient advocacy communities that are very excited about, you know, now here's new research coming in. Obviously, there's going to be other therapies coming into vitiligo, and they're excited about that. We're the first ones to sort of make this breakthrough for repigmentation. They know that then that'll trigger more research in this area. Of course, we have our own additional research going on in the field of vitiligo.
It's also then we even run our own, we'll do patient group, patient, direct, educational programs for patients, whether it's a webinar series or whether it's live programs, or we're bringing in experts and talk to them just about the disease themselves, not necessarily about Opzelura specifically. In those variety of ways, we'll be bringing back those patients who now want to, see if they can do something about their vitiligo.
Are there ways to kind of quantify the impact that you're seeing, you know, maybe in terms of web searches, page views on the Opzelura website, but then, you know, also maybe things like, you know, is that vitiligo patients' organization, are they seeing much, you know, rapidly growing membership, things like that?
Yeah, sure. Yeah, it's exactly. I should have said that before, is that soon as we launch a commercial, for example, then we notice immediately the searches for Opzelura and for vitiligo go up dramatically or for AD. We're running the AD commercials as well, and then do more searches on Opzelura, and then they go to the various websites that, you know, we follow or sponsor. Then we know there's just more hits, there's more download of information about vitiligo or AD, there's more downloads about Opzelura. That's very important as well, so.
Can you walk through kind of the timelines of when we should expect, you know, if we see, you know, okay, web traffic is increasing, you know, what's the timeline of that translating into, you know, actual sales?
For AD, we think it's much more rapid because for AD, you know, the patients are actively suffering right there. They're scratching, they're, you know, they're bleeding, they're getting infections because of the constant scratching. They might have a, you know, great more sense of urgency to get back to the dermatologist. For a vitiligo patient who's been sitting on the sidelines, especially, obviously, they have to get in touch with the dermatologist, make an appointment, and then come in. There could be a little bit of a lag, I guess, in terms of, you know, actually, turning that into prescriptions, but hopefully, that won't be too long of a lag.
Okay. You know, in terms of rounding out the vitiligo profile, there's gonna be a couple datasets at AD, both on Opzelura and then also from your second generation next molecule, povorcitinib, which is oral. Just how do you, from a market perspective, kind of see those informing use of both drugs?
The studies that you're talking about, obviously at AD on March 18th, we're very excited, two oral presentations on Opzelura for vitiligo and then one oral presentation on our JAK1-specific inhibitor, povorcitinib. The way we think they fit together is simply that just by the label. For Opzelura, it's for those patients that have less than 10% BSA for their vitiligo makes up less than 10% of their BSA. For povorcitinib, it's more than 8% of their BSA. Let's just say more than 10%, less than 10%. Extensive vitiligo than povorcitinib could be the right drug to use, and less than 10%, then Opzelura could be the right.
I think there'll always be an opportunity for both an oral and a topical for vitiligo for just because of patient choice, but also just because of the extent of their disease.
How receptive is the community to the labeling here? You know, it, right. Opzelura does have the JAK class label, but there's also a lot of qualifying language around what it's been observed in, and that this is a topical which will have, you know, like, much lower exposures versus, you know, the oral is the JAK label. You know, how receptive do you think the market is in vitiligo to those risk statements, you know, relative to, say, the AD market or some other places where we've seen those labels commercially available already?
Obviously, especially for Opzelura, we're not happy about the black box. We'd rather not be there. Dermatologists are used to dealing with black box. They have other drugs that have been dealing with black boxes for a while. Think of Accutane, for example. Think of the calcineurin inhibitors, for example. They also recognize that, you know, the oral JAKs had very specific labeling and side effects that, you know, unfortunately we got connected to, but we didn't necessarily see in our trials. That's one thing. I think they're open to. It's evident that they think that the safety is going to always be better with a topical, and that's why we thought the topical was great.
In terms of povorcitinib, at least for vitiligo, you know, it's a JAK1-specific inhibitor. It's different than the other JAK inhibitors that may have gotten stuck with a black box warning. We hope that we don't experience that with povorcitinib, but it may be inevitable just because of the JAK class. Dermatologists are smart, and they recognize the safety and benefits that these drugs provide.
Maybe before we fully get off Opzelura did just receive CHMP positive opinion for vitiligo. Maybe, Christiana, do you wanna walk through kind of the launch plans in Europe? you know, what build-out has already happened? What should investors be expecting over the next year or so?
Absolutely. We have now the positive CHMP opinion. We would expect hopefully approval in the next 60 days. It's going to be a rolling launch starting with Germany. Germany tends to be the first country that where drugs are launched following approval. We expect to launch in Germany in 2023. We are in the process of building the team there. There will be a dedicated sales force, specialty-focused sales force for Germany. We'll continue the discussions on the reimbursement front at a country level with the other countries. We would expect the other countries to follow, usually takes at least 6 months to see the next country following Germany. We'll be looking at more countries to follow in 2024.
The build-out will be focused on Germany for 2023, and then we'll continue with the other countries in 2024. Outside Germany, the way that vitiligo is treated in Europe is tends to be in the specialty centers. It would be a very small effort in each country, again, dedicated effort for derm.
Can you maybe provide some scale there? How big of a sales organization should we expect, you know, once you've kind of done that stage rollout, gone through the reimbursement? Is this look like what we think of as a European oncology sales force? Is it bigger than that? You know, how close to, you know, what Barry's built on the dermatology side in the U.S.?
It is smaller than the U.S. The reason again is that with the exception of Germany, you go to specialty centers that treat vitiligo. It's a very focused sales effort.
Okay. Also in dermatology, the company has recently reported was the long-term phase II data in hidradenitis, with povorcitinib. Can you just frame that data? You know, Barry, if that is replicated in phase III, how do you kind of see it fitting into the, into the HS market?
Well, I think the data we've had for the phase II that was just recently presented at the European Hidradenitis Suppurativa Meeting was very compelling, in fact, and certainly as good as the biologics so far and maybe even better. The phase III studies are very exciting. We're launching into, you know, two large phase III studies for hidradenitis suppurativa, 2 600 patient studies. We're actually very excited about that potential. We think it's perhaps a under-recognized marketplace and opportunity for a drug like povorcitinib. We're, you know, really looking forward to finishing those phase III studies and reading out the data.
Christiana, how do you think of that in terms of market size? You know, you've put up some numbers for Opzelura and AD. We've talked about vitiligo before. Like, what's that HS opportunity for an oral agent in terms of magnitude? Just ballparking it.
For HS, there are around 300,000 patients in the U.S. And these are, mild and moderate to severe. At around 50% are mild and around 50% are moderate to severe. We'll be looking between Opzelura and povorcitinib to have options for both patient segments.
Okay. Maybe turning off of dermatology, go to Jakafi. One thing we do hear from investors is, you know, concerns that there continue to be new entrants in MF, and maybe the ones that are coming, that have just entered and are about to enter seem to have more well-defined different points of differentiation versus Jakafi. Just, Barry, how do you see that coming in? Obviously, there are some patients who are entirely ineligible for Jakafi that seem to maybe be eligible for some of these labels. There's also these patients who, you know, Incyte themselves have said are not getting the most out of Jakafi and are maybe getting less than ideal responses and might be looking for other options.
Well, I actually think that the point of differentiation is for Jakafi, I mean, the only drug that has survival, spleen reduction, and unsurpassed symptom reduction, symptom improvement. I mean, that's really the points of differentiation. None of the competitors, either on the market or perhaps coming to the market, can claim the survival advantage that we've had. We've been on the market now for more than 11 years. We've demonstrated long-term survival improvements for these patients. That's the single most important thing that hematologists look for when they're treating myelofibrosis patients. Remember, we're only talking about myelofibrosis, not polycythemia vera nor GVHD, it's really the MF market. So far, Fedratinib, you know, really didn't pan out very well at all for BMS.
Pacritinib just released some sales data. CTI just released some sales data. It looks like they're flattening out even in the patients that are less than 50,000 platelets. Momelotinib is going to claim, you know, some anemia advantage, but anemia without transfusion reduction is nothing, but also, you know, each of these drugs come with their own baggage as well, particularly in terms of side effects. The great thing about Jakafi is not only the overall survival advantage that it provides to MF patients, but also the symptom improvement. You feel better when you start Jakafi for the most part, for these patients.
On the other hand, for those patients who don't stop responding for whatever reason, to Jakafi or have an inadequate response to Jakafi, if you wanna go to a second-line therapy and try one of these other Jak inhibitors that have come along, that's good, because all we wanna do is keep on moving up in the MF space, and we think there's a great opportunity to do that. Our biggest competitor has never been other drugs in myelofibrosis. It's actually been watch and wait. Because there was nothing else available to use after Jakafi, physicians, hematologists waited to start Jakafi until patients really started seeing symptoms. Instead of we know what the best thing to do is start early because that's really when you're gonna take advantage of the survival advantage for those patients.
We know, in the recently published data, again, showing that, if you start early, Jakafi after patients are just diagnosed rather than waiting until you see symptoms, their survival improvement is even better. That's what we'll continue to drive going forward.
Okay. You do have a PDUFA date, coming soon for the once daily formulation of Ruxolitinib.
Mm-hmm.
What are the kind of commercialization plans for that agent?
I think we said on our last earnings call that we'll let you know all that information once we're approved. PDUFA date is coming up March 23rd. We think that a once daily Ruxolitinib is a good option for some patients. We think that, you know, the convenience factor is obvious, but the compliance factor is, compliance could be better for some patients. If compliance is better for some patients, they may actually experience better outcomes. We think for some patients, that'll be a new one. We'll release all of our strategy once we're approved about, you know, which types of patients we're going after, which, what's the pricing strategy and so forth, once we're approved.
I understand you have a big chunk of that QD formulation's kind of longer term vision is the combinations which maybe we'll get to in a minute. Just as a monotherapy, are there examples that you look to of that show kind of what that path could look like and how much the monotherapy could protect the franchise?
Well, I think, you know, especially when you look at the end of the patent life, for example, is, you know, if you're now on this drug that's a once a day, once a day pill, and, you know, now some insurance company wants you to switch back to a generic Ruxolitinib that's twice a day, there could be resistance. I think in terms of the, you know, switchover to generics after in 2029 and beyond, it could be slower, and it actually could, just as it's set by itself, protect that. You know, just the idea of convenience, compliance, and perhaps, better outcome could actually protect the franchise by itself.
As you said, Marc, is that, you know, the real strategy was once a day so that we can combine with other once a day drugs, maybe turn that into a fixed dose combination, but just the combinations themselves having two drugs that you give at the same time is clearly a better advantage.
In terms of those combination agents available, is there one that you're, you know, most excited about?
Well, everybody in the company may have a different one. I think that the IL-2 is an obvious choice just because obviously it's for some patients, it could perhaps reduce the amount of transfusions that they potentially would get if they became anemic, stop them from becoming anemic in the first place. IL-2 by itself could be a standalone drug that could help anemia in other cancers or in other diseases. By itself, it has the potential to become a bigger drug.
Okay. Unfortunately, that's all the time we have. We'll have to cut it off there. Thanks a lot, Barry and Christiana for joining.
Thank you.
Thank you for having us.