RBC Capital Markets. We're really pleased to have our next presenting company, Incyte, here with us today. Representing Incyte, we have Christiana Stamoulis, their CFO, and Steven H. Stein, their Chief Medical Officer. Christiana and Steven, thank you guys so much for being here.
Thank you.
Thank you.
There's a lot to talk about. A lot going on in the commercial and strategic and R&D front. We'll try to touch on as much as we can in the next 25 minutes. Maybe we can start with Opzelura. You're coming off of first quarter earnings, and I would love to learn a little bit more about the overall dynamics that you're seeing with Opzelura. We continue to hear very favorable feedback from clinicians, especially in the atopic derm indication, where you've been in the market for some time.
Would love to learn a little bit more about what you guys are seeing on the ground with regards to demand, discounting, Medicaid utilization, true-ups, inventory. Maybe all the factors that are influencing translation from patient demand and physician interest to revenue, and how you see that evolving from the first quarter throughout the rest of this year.
Okay, great. The Opzelura launch is progressing very well. As we shared during our Q1 call, in the first quarter of this year, we saw over 68,000 new patients starting on Opzelura, and these were both AD and vitiligo patients. We continue to see growth across both AD and vitiligo. The feedback that we are getting from patients and physicians for both indications is very, very positive. In AD, the hallmark of Opzelura is itch reduction, very rapid itch re-reduction that I think is fair to say up to now it has been unparalleled. This address a very significant unmet need in AD patients. In the case of vitiligo, there are no other therapies that have been approved for repigmentation. You've seen the data.
It's very, you know, positive, very strong data in terms of how it can repigment skin. Very positive feedback. We see the growth on the demand side. When it comes down to Q1, we did see some dynamics that they are overall, very Q1 typical dynamics. When you look at copays and deductibles, they were higher in Q1. That was something that was expected. As we were giving guidance last at the end of the year for this upcoming year, we said that expect Q1 to be higher than the subsequent quarters and average out around 50%. That's exactly where we are. We expected Q1 to be higher because the payers the plans restart the copays and deductibles at the beginning of the year.
We are paying those down, so we have to pay down bigger amounts. Very typical Q1 dynamics. You saw it with Opzelura, Jakafi. You see it across all products for all companies. The other thing that we saw that I would also characterize it as a typical Q1 dynamic was that at the end of 2022, in December, we saw an acceleration of refills, and that's the, what you often refer to as a shoeboxing effect. You get patients that try to accelerate refilling their prescription before the year ends so that they don't have to deal with the higher deductibles and copays at the beginning of the year. We saw that happening in December, which impacted refills in January and February, so two months of Q1.
We've seen already the recovery in March, and we continue to see that in April and continuing now. These were the Q1 specific dynamics. The other thing that we saw was that the Medicaid utilization was higher than we were expecting. This is because eventually we were expecting always that we'll get to those levels of Medicaid use. There was a much more rapid uptake of Opzelura by the, by Medicaid. Now there is coverage across all 50 states. It does highlight, you know, the, the benefit that we see in the product and also the great work that the team has been doing in getting Medicaid coverage so quickly. It was more rapid than expected, and it did have an impact in Q1, a disproportionate impact.
Because it was both a Q1 impact and some true-ups associated with Q4 and Q3. That's what you saw. In terms of, now look moving forward, we do expect a gradual decrease in those copays and deductibles through the course of the year. That's why, we indicate that we continue to see an average gross to net of around 50% for the year.
Got it. What are you guys hearing from physicians? You alluded to the resonance of the itch reduction. What are you hearing in terms of how Opzelura is being used in the atopic dermatitis setting? Is it being used sort of more broadly? Is it in more niche areas of the body in combination perhaps with systemically delivered agents? What does this all mean for your expectation for the number of tubes per year an average patient is going to be using now that you have several quarters now of experience?
We see Opzelura being used very much in line with the label. In patients that have up to 20% body surface area coverage and who are not well addressed with TCIs and TCS. We see those being the patients using Opzelura primarily. You know, in certain cases, it's mild to moderate patients. In certain cases it's more limited disease. In others is some more coverage, but very much in line with the label. The feedback, as I indicated, has been very positive. When we look at... The cream is very effective. The itch reduction is very rapid.
We actually shared some data at the SCRATCH-AD a couple of weeks ago, and it showed how you get itch reduction as quickly as 15 minutes and then maximum peak of reduction in four hours. Very, very rapid itch reduction. In terms of the utilization, based on the data that we have now for on patients that have been one year on therapy, we are seeing on average at around two, a little bit over two tubes a year. The two tubes is within that 2-3 tubes per year on average that we had indicated, and we expect this to have room for improvement to increase within that range.
Given that, first of all, we are pursuing various patient adherence programs that should help patients make sure that they utilize the cream appropriately, they refill their scripts on time, et cetera. Also, as more and more patients get comfortable with the use of Opzelura, we expect the use to be expanded further within label. All this should help further increase the number of refills per patient on average.
Got it. That's really helpful. Can you talk a little bit about the vitiligo indication and I guess how that's going? It's sort of unique in that, you know, there's really nothing else out there that has been shown to improve pigmentation from a medical therapy, standpoint. At the same time, there's of course the challenges of kind of bringing patients back into, back to engagement with their clinicians because there hasn't been any really effective treatment and the need to be on the drug for a long period of time before you start to really see the maximal benefit.
I guess, can you talk about maybe how you're navigating some of those challenges and whether or not you're starting to see any signals of potential influx of patients getting back to their physicians, asking about Opzelura?
We're still in the early days of the launch in vitiligo. The feedback we're getting is very positive. Along the lines that you described, the data has been has shown a very efficacious therapy. Also now in real-life experience, we see patients that have started to self-report about, you know, their experience with Opzelura, and they're showing the benefits over time in terms of repigmentation. It's very early to say what the mix is between active and previously inactive patients. We expect that the majority of the patients that we're still seeing now are previously active patients that have been actively seeking treatment for vitiligo. These represent around 10% of patients that have been diagnosed with vitiligo.
The majority of patients in the past have not been seeking treatment because there was nothing available until now. Our objective, our goal is to try to activate those patients, those 90% of the diagnosed with vitiligo patients that previously were not doing anything to seek treatment and to get them to go and see their dermatologists in order to see whether it would be appropriate for them to get on Opzelura. We're doing this through different, you know, activities. One is patient awareness programs. There is, there are several DTC initiatives that we are pursuing. It's a multi-channel approach including TV, and you may have seen the advertisement on Opzelura for vitiligo.
We are providing patient education and, in general, education material to physicians and to patients, to help them get more information on Opzelura and vitiligo. We are working with patient advocacy groups to help with increased awareness that there is now a therapy or a treatment for vitiligo. We are also, as you know, supporting co-pay and deductibles in order to be able to allow patients to get on Opzelura.
Is there a point in time when you'll have an assessment as to whether or not some of those efforts are indeed drawing those patients into therapy? Is that something we should be looking for, maybe towards the end of this year or into next year as a, as a potential where we'll maybe see a demand inflection?
It will take some time. Again, we are even early in the launch of those DTC type of activities. It will take some time, especially to get the inactive patient population to get to the dermatology offices. Part of the reason is logistics. To get an appointment with a dermatologist, it takes six months. It would take some time to see those patients getting on Opzelura. We are already seeing some very early metrics that we follow. For example, a few weeks, a couple of weeks after the DTC, the TV campaign, where we did the market check, we saw that 1 out of 5 patients that were going to visit the dermatologist were asking for Opzelura.
Got it. Maybe a question for both of you related to Jakafi. Jakafi's obviously been very well entrenched for many years based on strong long-term data and physician experiences. When you gave guidance this year, you allowed for the potential increasing presence of additional therapies as with additional JAK inhibitors as well. I'm curious, what are you guys hearing from KOLs and community clinicians as to how the, I guess, competitive dynamics may continue to play out in the space as we look to the back half of this year and beyond? What is... What do...
What can you say about the overall data that maybe can enable you to help convince physicians to continue patients on Jakafi and titrate them accordingly, how they're used to doing it, if they run into issues like anemia or thrombocytopenia rather than switching to a different therapy?
Yeah. Thanks, Brian. I think, you know, just a few things to go back, you know, more than a decade ago, the, you know, study showed substantial efficacy in COMFORT studies in terms of spleen reduction symptoms as well as overall survival. You know, even over the last decade now in the U.S., two other JAK inhibitors already launched in pacritinib and fedratinib, and of course, you're alluding to the upcoming PDUFA for momelotinib. You know, despite that, I think, you know, we're very confident, and as you've said, people have voted with their feet, so to speak, in that we have the best JAK inhibitor, the best profile in terms of overall survival. You know, about 18,000 MF patients in the U.S., more than 55% of which are on Jakafi. You know, about 25,000 PV patients, more than 25% on Jakafi.
graft-versus-host disease, another 4,500 patients. You know, this extensive long-term experience with it. Just to also mention, because you alluded to momelotinib, the initial COMFORT studies allowed people with anemia onto the study. In fact, there are people with hemoglobins as low as 6.6 grams per deciliter who came on and had the same benefits in terms of spleen symptoms and survival. You know, having said that, there is a discontinuation rate related to JAK inhibition inducing anemia and, you know, if patients can't tolerate it, another, you know, compound post-ruxolitinib would be welcomed, you know, for patients. We think, based on the data, the momelotinib study against danazol and the PDUFA in June, that we expect that they'll have a second line label post-ruxolitinib.
You know, again, it'll be good for patients where that's, where that's the right thing to do. You know, overall for us, it's the data we stand on, plus the upcoming, you know, combination work that we're doing with BET, ALK, and ruxolitinib XR as well, that we think will manage the entirety of the myeloproliferative neoplasm franchise.
Got it. I wanna dig more into some of the lifecycle efforts that you alluded to, Steven, on, maybe starting with the BET inhibitor. There's obviously been validation to date with the class, which should help de-risk things overall. Can you speak to what you guys may be looking for internally with respect to the drug? And you've talked about recently that you're seeing spleen benefits both in monotherapy and combination. I guess how confident are you with this drug and with this mechanism that you'll be able to thread an acceptable therapeutic window? Maybe also talk about the practicalities of dosing patients based on platelet counts.
Yeah, sure. No, I think you hit the nail on the head. You know, the class has on target thrombocytopenia. It's been well known for a long time, and it's about getting that therapeutic ratio right. In terms of our own dataset, both with monotherapy and combination, you know, we've seen substantial spleen volume reduction, symptom improvement and occasional actually hemoglobin increases as well. In combination with RUX now, we dosing at 6 milligrams, and we've seen all of the above. We still have some room to go. We know with monotherapy at around 10-12 milligrams of our BET inhibitor, you start running into, you know, potentially unacceptable grade three thrombocytopenia. Just to give you a sense of the modeling, we think about 4 milligrams of our BET inhibitor is equivalent to the MorphoSys Constellation 125.
You can see we, you know, trying to push that efficacy bar a little bit higher while weaving the therapeutic ratio. One thing we're doing at the moment, which is a very interesting and potentially an approach that'll have legs, is dose to platelet count. In, you know, there'll be guidelines potentially in a future label, just like with ruxolitinib, that based on certain platelet counts, you'll use certain doses. It gets exactly to your question around therapeutic ratio. We know, you know, that MorphoSys are guiding to first line data now end of this year. Our program around that time will be, you know, have enough experience to declare, you know, a dosing schedule that we're comfortable with and then where we're going in terms of registration paths. You just see that confluence of timing coming together for the BET inhibitor.
Got it. Then maybe, can you talk about the ALK2 as well? Just in terms of what you're seeing out of the most recent data cuts, how are you thinking about, you know, how early maybe you need to go with this mechanism before a patient's bone marrow maybe is too fibrosed and it's harder to see proof of concept. I think you've mentioned also the potential to explore higher doses just given the clean safety that you're seeing. Can you expand more on that as well?
Sure. You know, I think our preclinical predictions were a little off in that, this clearly we can go at higher doses. Currently, in combination with Rux, we're at 600 mg. We're not seeing any dose-limiting toxicity, and we don't wanna leave anything on the table in terms of efficacy. Again, you know, across the board with monotherapy doses, you start seeing hepcidin decreases with a dose response. As soon as you get higher, you see more hepcidin suppression. In terms of hemoglobin responses, it's a little lag in, you know, in terms of mechanism of action, and you probably have to go higher to see more across-the-board hemoglobin responses. That's exactly what we're doing at the present time.
Again, we predict, towards the end of this year, we'll be in the sort of recommended dosing schedule to go forward for registration studies. In terms of the populations, the ones that are of interest, so in terms of low-hanging fruit, potentially are anemic MF patients, transfusion-dependent patients. There are other ways we're potentially thinking about it, and that is to use it potentially, and I use the word on purpose, potentially, first line with Rux to prevent the development of anemia. That would take, you know, a new endpoint with potentially a patient-reported outcome as well to, you know, document clinical benefit. That's where the thinking is currently. It's a very potent, specific ALK2 inhibitor and will have to be used in myelofibrosis with a JAK inhibitor, with ruxolitinib.
That's really interesting. We're gonna be coming up on data pretty soon for axatilimab. Can you talk a little bit more about how that fits into your lifecycle management, for GVHD and your count level of confidence, in the trial outcome and that one trial can be registration-enabling?
Sure. It's great. You know, graft-versus-host disease occurs in about approximately half of all allogeneic transplants. In the United States, there's about 2,000 new cases of acute graft-versus-host disease yearly. Prevalence for chronic's about 14,000. You know, again, we're very proud that we sort of ignited research in the field, and now, you know, many people are looking at mechanisms here. Axatilimab is an anti-CSF1R antibody. It's a completely different MOA to ruxolitinib, to steroids, to a ROCK inhibitor. You know, Phase II data in the third line setting showed extremely high response rates that were durable. The ongoing, now complete, and as you allude to, we'll get data in approximately the middle of this year.
The AGAVE-201 study has three arms, 0.3 milligrams per kilogram Q2, 1 milligram per kilogram Q2, and 3 milligrams per kilogram Q4. It's a three-arm, but albeit, as you said, single-arm study. We fully expect, you know, that'll be a positive data set that will go forward with a BLA, you know, around the end of this year in third-line graft-versus-host disease. Why do we believe, you know, in the United States it'll suffice for registration? It's our own experience with ruxolitinib, you know, doing the REACH datasets plus the ROCK inhibitor experience within the U.S., you know, getting it across the finish line. Theirs was a two-arm, you know, different dose study. Europe's different.
I mean, we think in Europe, and again, our own experience needing REACH3, the fact that the ROCK inhibitor hasn't filed there to our knowledge, that you'll need against best available therapy to get across the finish line. To move forward in combo with Rux, you know, in terms of moving up the treatment paradigm, potentially towards first line, non-overlapping mechanisms of action, a small molecule with an antibody, no drug-drug interaction expected, and, you know, a lot of excitement in the field for combining that and improving efficacy in graft versus host disease.
There's obviously a lot going on in the pipeline. We didn't I don't even think we're gonna have time to touch on povorcitinib, which I know is you guys are very excited about. Maybe just wrapping up, as you think about capital deployment, potential business development, what's your latest view on a business development strategy? Are you guys still thinking about smaller bolt-ons? Are you thinking about potential larger, more transformative acquisitions? Are you sort of doubling down on what you have and what's already a pretty broad pipeline? Tell us a little bit more about your latest capital thinking on capital deployment.
The BD strategy and capital deployment strategy has not really changed. We're looking the primary use of capital is to reinvest in growth. You may have seen that we prioritized eight programs in our portfolio to make sure that we both appropriately focus and allocate internal and resources and capital on those priority high-impact programs, also create room for other promising programs to come to the pipeline, both through our internal R&D activities but also through BD. Our BD strategy has not changed. We are continuing to focus on bringing in assets that could add to revenue growth in the second half of the decade and assets that would fit well in the areas where we currently have a presence and expertise, both on the development side as well as on the commercial front.
Great. Well, I know we're out of time, but Christiana and Steven, thank you guys so much.
Thanks, Brian.
Thank you.