Good morning, everybody. Welcome back to the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I'm one of the senior biotech analysts at the bank. It's my pleasure to have our next presenting company here, Incyte. Presenting for Incyte up here on stage with me is Bill Meury, who is of course President and CEO. Bill, thanks for making the trip out west to see us.
Thanks, Tazeen. It's good to be here.
It's been quite the year of transformation for Incyte, so I thought maybe we usually start off by asking for an overview of the company, but I thought I would switch it up a little bit with you. Have you tell me what it's been like to be at Incyte since you became the new CEO a while back last year?
Yeah, thank you. It's a good question. It's been about a year. I can tell you that I did a lot of diligence before coming in. I had an opportunity to speak with the members of the board for an extensive period of time. There have been nothing but good surprises so far.
Yeah.
You know, one of the reasons I joined is I thought that the core business as well as the pipeline was somewhat underappreciated. I think there's a lot of substrate and potential for meaningful product flow over the next several years. That's just gonna be important in terms of replacing Jakafi and going beyond Jakafi with, you know, multiple growth drivers. Second is I was impressed with the R&D and commercial capabilities of the company. I think the, you know, the discovery group, there's a talented bunch of biologists and chemists and translational researchers. The development group, you know, we have about 10 phase III studies underway. They know how to execute. Commercial team is wired into the markets that we're in. Financially, the company's in a good position.
You know, right now we have strong revenue growth and cash flow and a growing balance sheet. We're squarely focused on act two and just going beyond Jakafi. You know, I inherited a good business. I think the company has achieved most of its major milestones over the past 12 months, and I think the growth profile of Incyte post 2029 is much clearer today than it was even a year ago.
Yes, and you've been very passionate about talking about that. We'll go into some details. Maybe let's talk about the current commercial lineup, especially Jakafi. I think it still manages to surprise people, the uptake that it gets every quarter, given that it's a very mature asset. We're actually approaching the LOE for it. Can you talk to us about what some of the drivers you've seen over the last year that allow it to keep, you know, bringing in new patients or circling patients back?
Yeah, it is pretty remarkable. It's year 15 on the market. This quarter, as you know, sales were up about 7%. 6% of that was pure demand. We see broad-based growth across the three indications, so MF, PV, and GVHD. MF and GVHD are low to mid-single digit growing indications. PV is + 10%, and by the end of 2026 it'll be the largest indication for Jakafi. It's a standard of care treatment. It's got a lot of support from prescribers, it has excellent formulary coverage, you put those two things together and you have a sustainable growth story. You know, this year looks strong, and we expect the same for the next couple years when we lead up to 2028.
Okay. How should we be thinking about the switch rate to Jakafi XR? You recently got that approved. How important is this for life cycle management?
Yeah, it's a good question. XR is a bridge for the company, in terms of conversions, there's models out there as you, as you well know, analogs you can look at, we estimate that we can convert, let's call it, 20% of Jakafi IR. On a relative basis you'd say that's modest, but in absolute terms that could be $250 million in sales. It's a once-a-day version of a standard of care. We know that with a chronic symptomatic condition, when you miss doses, there can be a loss of control. When you go to a once-a-day formulation, the adherence rate's gonna be 15%-25% better than BID. The way I think about conversion right now, in 2026 think about measured early uptake with a step-up in conversion tied to access in 2027. 2026 will be about formulary coverage.
Conversion rates will be in the low to mid-single digits. Then in 2027, that's when we expect to really accelerate the rate of conversion, and by the time you get to early 2028 we'd like to see that number around 20%.
Okay. Is there a subgroup of patients that you think will be earlier in conversion?
There's definitely a subgroup of physicians.
Okay.
Early adopters. We also believe that in the GVHD market, where patients are on multiple therapies, a once-a-day version of Jakafi may be more favorable. There are also certain channels where we believe conversion can be accelerated. The program is being launched right now. In fact, our sales organization, both on the East Coast and the West Coast, has launch meetings this week. Interactions with health plans have already started. The key metric, and we'll be talking to you about this on each quarterly call, will be what does the formulary coverage look like? How rapidly can we achieve it? At that point you can really start to drive conversion.
Okay. In general, what is the sentiment at Incyte about the time it'll take to get onto formulary coverage? Is there anything complicating about this that would make it, you know, longer than what you would think?
Yeah. It's a good question, and it's the right question. We priced Jakafi XR purposely at parity to Jakafi IR.
That was to enable fast formulary coverage. I would expect that in a six to nine-month period, we're approaching 50% or more formulary coverage. You know, we'll focus on the top PBMs and the top plans, and I would hope we've made some meaningful progress by the end of the year, which gives us, you know, just over six months of time.
Okay. Let's talk about OPZELURA. It's received phenomenal reviews when we talk to physicians about it, and all the survey work indicates, like, the drug is really efficacious. Efficacious that the amount of drug that patients need seems to be much smaller than we thought. Is that a good thing?
Is that a good thing? I think it's a good thing that when a dermatologist thinks about a treatment for AD that it's topical, they know that OPZELURA is superior to TCI.
Yeah.
For long-term use, is superior to topical corticosteroids. Yes.
For the, I guess, the patients on the milder end of AD, for example, do you think that you could make up for it with more patients over time as opposed to us all counting the number of tubes per patients, which seems to be lower than what initially was thought?
I do. The business between now and 2030 has the potential to grow at a 10%-15% five-year CAGR, which means globally we expect OPZELURA to do almost $780 million this year.
We're just under $800 million. By 2030, we expect that number to be about $1.3 billion. Right now, we know that the underlying growth in the U.S. for AD and vitiligo is very strong, and there's just two metrics that we looked at to get to your question. What is our share of new patient starts?
be the measure of the health of any business in biopharma. We're at 46%. You also look at what are your new patient starts on a year-over-year basis. In the first quarter of 2026, new to brand or new to patient starts for OPZELURA were up 30%. The fundamentals of the business are very strong, and I think it's because of what you said. It performs well, and we have 20,000 writers, and we have very good formulary coverage at this point, and so we just have to keep our foot on the gas and continue to drive the business organically. Of course, we would layer in the international launch of OPZELURA for AD, which is in the second half of this year, and we may have an indication for HS.
Those are the 3 components of growth for OPZELURA over the next 5 years.
Okay. Yeah, since you mentioned the ex-U.S. launch for OPZELURA, how are you thinking about that?
Internationally, OPZELURA is available for vitiligo, and in 2025, it did roughly $130 million in sales, and we didn't have an indication for AD. We get the indication for AD in the second half of 2026, the AD market is about 5x the size of the vitiligo market. I expect it could throw off $200 million-$300 million in incremental sales over the next several years. The first country we're going to launch in Germany, where we have reasonable pricing, and we'll also launch in the other E.U. four countries.
Okay. What is the pricing differential between U.S. and Europe, just directionally?
Depending on the country, it can be about 50%.
Yeah.
In Germany it's better.
Okay. How should we be thinking about the rest of this core business? We talked about Jakafi, we talked about OPZELURA. As we approach 2028, you've done a good job of letting people know, you know, where you think sales might go to. Obviously, they're gonna decrease because you're gonna lose exclusivity, but what is the floor? Maybe just remind us what you think it's gonna be, how long it'll be there, and then we can move into talking about mCALR.
On a revenue basis?
Yeah.
Yeah. The core business without heroic assumptions about the other products.
Yeah
MONJUVI-
Right
ZYNYZ, and we put povo in there, should be at least a $3 billion-$4 billion business, which is this core business growing at, you know, roughly, let's call it a 20% CAGR. This quarter, our core business was up 63% year-over-year. It is in very good shape right now. What will be key is that when we launch MONJUVI for frontline DLBCL, that we garner a reasonable percentage of that market. Now, you have POLIVY, and you have EPKINLY. There will be a place for MONJUVI. We'll share data on our frontline DLBCL study. There's only been two positive studies, POLIVY and ours, on top of R-CHOP at the ASCO meeting.
Right.
People will be able to see the PFS, which we reported in the press release, but also how the product does across subgroups, different cells of origin, ABC and GCB. This was an IPI 3-5 population, so a more severe population, a more complex patient group. You know, from our perspective, a 10% share of the frontline DLBCL market, which is modest in relative terms, doubles the size of MONJUVI. The povo launch is gonna become very, very important, which we'll introduce in early 2027. We're currently discussing with the FDA the application. The business right now with those five assets, I think reliably sets, as you put it, the floor for the company.
Okay. Maybe let's spend a minute on povo for HS. You know, where do you think in that treatment regimen?
Yeah
This can, you know, fall into? It's gonna get crowded pretty quickly.
Yeah.
You know, what do you think are the special attributes here that we should be aware of?
HS is one of the most difficult dermatological conditions you can have, other than maybe advanced skin cancer. There's no FDA-approved oral inflammatory or anti-inflammatory. It's a multi-cytokine disease. POVO is a multi-cytokine inhibitor. I think we're gonna capture patients at two inflection points, pre-biologic and post-biologic. If you look at the data from our phase III, you have biological efficacy, HiSCR 50, 75, 90, and 100, pain relief, draining tunnel clearance. I think that the market is structurally set up for an oral anti-inflammatory and for sequencing oral to biologic. That's not to say that it's only gonna get used pre-biologic. I think it'll source patients from both the pre-biologic setting as well as the post-biologic setting. We know that IL-17s work. They don't work for everybody. There are patients on those drugs with active disease not getting pain relief.
There can be some wear off. I think they would cycle right off IL-17s onto an oral anti-inflammatory, in this case povorcitinib. Our job right now is get it approved, broad label, and wire the launch for success.
What is the proper range of pricing to assume?
It's a good question. There's a corridor in the market, if you just talk about WAC prices for a minute. At the low end, it's about $7,000 a month. At the high end, it's, you know, north of $10,000. We will work within that corridor, and as we get closer to launch, understand what the label looks like, we'll decide what the final price point is. This will be about volume and establishing POVO as a legitimate option in both of those populations.
Okay. Do you get to leverage the sales force from OPZELURA for this?
Yeah, it's a good question. We get a lot of leverage out of it. We'll expand the sales force to call in some HS specialists, but most of the infrastructure is in place, and there is a lot of overlap.
Okay. From the time it gets approved, how quickly can you start marketing it?
We expect an approval at the end of 2026. I would say we'd have a launch all raring by first quarter of 2027.
Okay, cool.
One other point is OPZELURA, if it gets positive data in HS.
Yeah
In mild to moderate HS, which we'll get those results in the fourth quarter of 2026, we have a topical to oral solution, and the leverage point that you just made is highly relevant to both products.
Okay. We'll come back to POVO later, but I wanted to spend some time on mCALR.
Yes.
This became, You started presenting data for this a couple years ago, and it became a little bit more prominent last year. I think when we have conversations with investors, MF, I think largely people understand what role it could play. We could talk about that for a minute, I also wanna spend some time on the potentially bigger indication, which is ET. Maybe let's start with ET, and then we can go back to MF.
Yeah. We'll start the phase III trial in the next several weeks. We have agreement with the FDA on a phase III study design. I think the important thing when you think about ET is to stratify that market. You have patients, half of 20,000 patients that are doing fine on hydroxyurea. You have the other half of patients, which is about 10,000 patients, who do not achieve a complete hematological response, not because hydroxyurea is not an effective cytoreductive agent, but because it's very difficult to get to the 1,000 mg dose where you can get those complete responses. Those patients have residual symptoms, residual thrombotic risk, and albeit low residual transformation risk. Those are patients in their 40s or 50s. They'll live with ET for a good portion of their life.
INCA033989 achieves a complete hematological response, as you know. It varies by type, but roughly 80%. It has a disease modifying benefit in terms of the reduction in VAF. This would fundamentally change the way ET is treated from hydroxyurea, which is a trade-off drug, to a disease modifying mutation-specific targeted therapy in INCA033989. I think that it will reshape the way hydroxyurea is used today, assuming we take what we produced in phase I and replicate that in a phase III study, and we've talked about the design of that study, as you know.
Yeah. For physicians, when we talk to them, they say that that specific patient population may not feel the need to be on therapy because they're not as advanced as an MF patient is. What's your market data research telling you on that?
Yeah. If you look at patients with a CALR mutation ET, they have very high platelet counts, and they're not achieving a response with hydroxyurea. The reason why a physician would say, "Well, it's a small number of patients," is think about all the people with ET. It's like over 100,000. If you look at the CALR population, it's roughly 20,000. We're saying half of that 20,000, 10,000, is the target market.
Yeah
for 989. I haven't met anybody that has not commented that ET for CALR patients is like a ticking time bomb. The disease does have the potential to cause thrombosis and transform, and they wanna get platelet counts into a normal range. In this case, it's less than 400. I think if you stratify it the right way, this targeted therapy has utility in that part of the market.
Okay. you're gonna start your phase III.
Yeah.
How long do you think it'll take to enroll that study?
From first patient in to last patient, you're probably looking at a 24-month period for enrollment, and then you have, of course, six months of treatment.
Okay. In the meantime, do you have plans to show any follow-up data from previous datasets at medical meetings?
Yeah, it's a good question. At the EHA meeting in the middle of this year, the last data set we had was 55 patients at week 24, and at the EHA meeting we will have 110. You'll see more patients at week 24.
Okay. What metrics should be looking at there?
Yeah, complete hematological response.
Yeah
is namely the and you'll look at VAF, and you'll see that unlike in MF, which is a much more complex, aggressive, condition, the VAF reductions in ET are more pronounced and are stronger than even what we showed at ASH.
Okay. That's ET. Let's now go to MF. You've shown impressive data for that subset of the population already. Remind us what part of MF patients have the CALR mutation.
Yeah, it's a good question. About 35% of patients with MF have CALR mutation. Roughly speaking, it's probably almost 10,000 people.
How easy are these patients to find? Are they already typed, gene typed?
Yes. That is pretty routine these days.
Okay.
It's a good question. We have not had any challenges in enrolling patients in our phase I trial. I think the MPN community is especially focused on moving away from broad pathway, non-specific treatments to, just like in other areas of oncology, to mutation-specific targeted treatments.
Okay. For CALR patients that have been on Jakafi, what are additional challenges that they've had relative to the patients who don't have the mutation?
Yeah, it's a good question. This isn't widely known. There is data in the literature, and we will share data. Response rates with JAK inhibitors in CALR patients are lower than what you see in the overall population. For example, if you look at the label for Jakafi, it achieves a SVR35 of between 30%-40%. I think it's 29%-40%. In a CALR patient it could be, like, 20%. It is a unique population of patients where we think 989, our monoclonal antibody, can have a lot of utility.
Okay. It does look like other companies, larger companies, are also looking at this subset of patients. Why do you think that is?
I think, well, it goes to what we believe is a trend in MPNs, which is the JAK-STAT pathway is fully understood and exploited.
Yeah.
More and more they're looking to segment the population, match therapies with the biology. I think we will see more and more work being done across MPNs.
Okay
Whether it's 989 with CALR or our 617F, so that precision oncology enters the area of MPNs.
Okay. Are there other mechanisms outside of JAK-STATs that you think could have efficacy on CALR patients as well?
not that's not a broad pathway blocker.
Yeah.
I mean, this is a mutation-specific targeted approach, and one of the features of 989 is it's exquisitely selective, and you see that in the benefit/risk profile. You know, we focus a lot on spleen volume reduction, symptom relief, anemia response, the translational data. Notice every other novel mechanism for MPNs, or most novel mechanisms for MPNs, are associated with cytopenias and other toxicities, but the benefit/risk profile of a monoclonal antibody like 989 is pretty impressive.
What is the next data update for MF?
At EHA we will provide an update. At ASH we showed data at week 24 in a second line setting, 36 patients, and when we get to the EHA meeting, it will be roughly 60 patients.
Okay. Trend-wise, numbers, do you want them to look the same as they did last year?
Yeah, you're looking for consistency in terms of spleen volume reduction, symptom relief, and anemia response, and we'll also share where we are with translational data.
Okay. Now, what about combination of Jakafi, you know, with 989?
It's a very, very good question. It should be complementary. I think hematologists look at that combination as potentially very interesting.
We're gonna have data at the end of the year at the ASH meeting in 2026, looking at 989 in the front-line setting as a monotherapy and as a combination therapy.
Yeah.
There is a concept, a use case of induction and maintenance, where you work with 989 and with Jakafi, and then perhaps maintain with 989. That's a concept. We would have to produce data and, of course, secure approval for that. Jakafi is dealing with spleen volume reduction and symptoms but no other part of the disease. 989 is dealing with those two things plus anemia, platelets, neutrophils, and as well as all the translational data that you've heard Pablo talk about, which is megakaryocytes and CD34 positive progenitor cells. It's a much more holistic approach and is focused on restoring bone marrow function, not just a quality of life endpoint.
Right. What about the survival benefit that Jakafi has? How do you think that could be complementary in combination?
It should be additive.
Yeah
Those are data that we have to produce in long-term studies.
Okay. Let's maybe go back in the few minutes we have, I wanted to touch on POVO again. Outside of HS, what other indications do you think are gonna be compelling to look at?
Yeah, it's a good question, 'cause we spent all of our time on HS because we have an NDA submitted to the FDA. We will get data this year in the middle of the year. Well, we just got the vitiligo data. We'll have data at the end of the year in PN. You're talking about three indications. I think the primary driver for povor will be HS. When you look at vitiligo, it's the largest market of the three, HS and prurigo nodularis. The key with vitiligo is to medicalize the treatment, and the more and more patients and physicians see it as a chronic inflammatory condition, a chronic immune condition, the more likely you can unlock more and more patients. I think that's key, whether it's AbbVie with their product or Pfizer with their product, or Incyte with povorcitinib.
One of the benefits that we have in vitiligo is we already have a topical solution with OPZELURA. We will have a topical to oral option. What povo does is it unlocks those patients with vitiligo who are not taking OPZELURA, who have a BSA of greater than 5%, where applying a topical on your body is not always that practical. In prurigo nodularis, the way I look at it, that's an itch disease. There's one thing JAK inhibitors are really good at, itch. I think JAKs were made for PN, and they work very fast. Between the three indications, we think we have a product that could do between $1 billion to $2 billion in sales.
Okay. We've talked about this. In terms of vitiligo, if you pursue povo in this indication, how does OPZELURA fit in going forward?
I think they're complementary and they work together. That's true whether you're in HS or whether you're in vitiligo. OPZELURA is very good for people that have less skin involvement. povo is much more practical for patients who have more extensive skin involvement. I expect very little cannibalization, and whatever cannibalization we get is more than manageable.
Okay. What have you learned from the vitiligo launch so far with OPZELURA, outside of it tends to be more popular and, you know, less, less surface area portions of the body, face or hands?
Yeah. I think that there's a lot of education that is required. Educating about the condition, also educating about the time it takes for treatments.
whether they be topical or oral, to repigment the skin. I think there are some patients who are willing to live with it, and I think that's a choice. I think there are other patients that are really looking to manage it, especially when your vitiligo is affecting your hands and your arms and your face and your neck, which are very sensitive areas. There is a major consumer activation component in a condition like this, so that patients are aware of the availability of the treatment. I think with povorcitinib and OPZELURA, we can leverage both assets.
Yeah
to care, 'cause I do believe you could unlock diagnosis and treatment to a much greater extent with approved orals, ours and others, that we haven't been able to do before.
Okay. How should we be thinking about the catalysts over the next 12 months? We've talked about upcoming data for up at ASCO. What should we be thinking about for ESMO?
Two important data updates at ESMO. One is we'll have an update on our frontline study with G12D in combination with standard of care chemo. Our G12D plus FOLFIRINOX and gemcitabine and nab-paclitaxel. We're very reassured by the data in terms of the objective response rate. The most important component here at this point is durability of response and an estimate on PFS.
That's in PDAC?
That's in PDAC, in pancreatic. That's exactly right. We have a novel G12D inhibitor, very active, combinable with both FOLFIRINOX and gemnab, we started a phase III study, as you know. I believe it's an underappreciated asset. I think it's gonna start to declare itself and could be an anchor for our solid tumor oncology portfolio at Incyte. We also provide an update on our TGF beta/PD-1 bispecific in colorectal cancer. You'll see those data on top of FOLFOX, Bev and cetuximab, that is also an interesting opportunity for us. As you know, PD-1s have almost no efficacy in MSS CRC. We showed in our late line or second and third lines phase I study an objective response rate of about 15%, 23% no liver mets, 12% liver mets.
This is a really unique product. No one's cracked the code on TGF beta/PD-1. The program is still maturing. We are in a phase III study. It was a calculated risk. It has the potential to be a outlier opportunity for the company. Let's watch the data mature, and we'll see if we have something.
Okay. That covers ESMO, we talked about EHA, we've talked about ASH. That covers 2026. Did I miss anything?
No, you didn't. Good job.
Okay. Okay. What data readouts, just summarize top level to expect next year?
Good question. In 2027, well, we'll have updates on the 989 program.
Yeah
on jak2 v617F, anything coming out of discovery.
Yeah.
We'll probably also have some updates on the solid tumor oncology program. What we'll be in launch mode in is all of our immunology business.
Okay. Perfect. Last question from me really quickly, your views on business development, bringing in assets.
Look, it's gonna be an important part of our growth strategy like every company, and we're focused on the three therapeutic areas that we're in today. I think a deal for Incyte can come in one of two sizes, a smaller transaction, somewhat de-risked, less upfront capital, or something that may be a little bit larger that requires more upfront capital. Our balance sheet is a strategic asset right now.
What we're solving for in BD is not a revenue gap. It's constructing a portfolio of multiple growth drivers so that Incyte could be a top quartile growth company post 2029.
Is it important for you that anything you bring in already generates revenue, or do you prefer it not yet? Be closer to it, but not yet.
I think business development for revenue stage assets, there's not a lot of return left for the buyer, as you know.
Yeah.
Flip side is we're not looking to buy a lot of unbounded downside risk. I think we're looking for things that can contribute to top quartile growth when we hit 2030, 2031, 2032, which would be, you know, entering phase III.
Yeah.
Somewhat de-risked. I think those make the most sense for Incyte.
Okay. Perfect. All right. Thank you. With that, we're out of time. Thanks guys for joining us.