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Can you say that again?
Faster. With that, I'm Salveen Richter, biotechnology analyst at Goldman Sachs. We're really pleased to have the Incyte team with us. We have Hervé Hoppenot, Chairman, President, and CEO, and Christiana Stamoulis, CFO. Thank you so much for joining us.
Good morning. Thank you for inviting us.
To start here, maybe with a high-level overview, product diversification has been a focus for the company. As you stand today with Jakafi and PEMAZYRE and Monjuvi, and Opzelura, and the current pipeline, help us understand the outlook for business and growth in the medium and longer term.
Okay. That's, I mean, it is a big question. I mean, it's what we are all working on. The way we think about it is that there are, in our portfolio, there are products that are important, but of relatively small size and potential, based on what we know today. There are products who have these characteristics, a little bit like Jakafi 10 years ago, of, in fact, having the potential over a period of time to become more than just a single indication, but multiple indication and become a franchising product. In our current portfolio, Jakafi is going well. It's going in every indication where it's approved, in fact, which is frankly better than what we were expecting, because most of us were looking at myelofibrosis as a market that would be saturated after a few years.
10 years in, we are still at growing the number of patients, and obviously, polycythemia vera and GVHD. At the core, that has been, you know, still has a number of years of growth ahead, and I think we will be exceeding our guidance, if reaching it, over the next few years. That's doing really well. The question is, you know, what else do we have there? As you said, PEMAZYRE, Monjuvi, we see them as smaller type of a product, but they are contributing to the growth. Then you have Opzelura and the pipeline. What we did recently is to concentrate our resources in the pipeline on fewer projects, 8 of them. We call them the high-impact project.
These 8 projects have, for many of them, this aspect of having a lot of upside, potentially, not yet proven, but potentially, and that's why they have been chosen. Opzelura is a good case. We launched now a year and a half ago, and you can see the curve of adoption of Opzelura. The net sales of Opzelura look very much like Jakafi 10 years ago. It's more, in fact. Yeah. We have a number of indications that are coming over the next few years. First will be pediatric atopic dermatitis, followed by prurigo nodularis, followed by lichen planus, lichen sclerosus, with the growth in vitiligo and the, and the current indication in eczema.
All of that is telling us there is a real chance, it's not something that is theoretical, it's an approved product, that we can build a franchise with Opzelura over the next 5, 6 years that will make it meaningful in term of contribution to the revenue. In dermatology, there is another product, povorcitinib, with the same type of profile, where we are now looking at 5 indications. We have 2 of them in phase 3, starting with HS, where we have very good phase 2 data, and moving into a number of other indications with the same picture, the same view of cumulatively over time being able to build what would be a meaningful contributor to the revenue. You have the LIMBER project with ALK2, BET, CALR, and axatilimab.
That's the start of the four project if you put the XR on the side, but the four projects that are, like, getting now very interesting data at ASCO. Axatilimab will have data of a phase two study of three different doses coming mid-year this year, so very, very soon. CALR, the first in man, is happening. You know, it will be very quickly telling us if, you know, there is a chance that this mechanism can do what we hope it does, because we are already the first patient treated will be patient with the mutation. It will be very quickly visible. That's the fourth project we have in LIMBER.
We have the oral PD-1, which is progressing very well, PDL-1, progressing very well, where we are starting to see data showing that the efficacy/safety ratio that we expect very much possible. It's not yet proven. As we look at where an oral PDL-1 could be useful for patients, frankly, the more we look, the more we see a number of places where PD-1 have been proven to be useful, and where having an oral form would be better. We know that, we know that also because the subcu more or less following the same path, you know, with a different technology. We have Tafasitamab, where we have now very advanced phase 3 study. 8 projects that are prioritized for us.
Some of them, like Opzelura, where we are already way in the process of the, of the commercial success, and seven other projects that will contribute over the next few years, giving us a very good chance to do what we have been speaking about for a long time, which is diversify the portfolio and be able to continue to grow beyond the Jakafi five pipeline.
Before we jump into the portfolio here, could you just touch base on business development? You've talked about your interest in acquiring something that fits within your portfolio. Are there areas that you're most focused on? You know, what is the capacity you have to do BD?
From a capacity point of view, we have over $3 billion of cash on the balance sheet and no debt. You can see we have significant capacity both for M&A as well as licensing deals. In terms of the areas of interest, obviously, the areas that we are currently in, where we can leverage our capabilities, our infrastructure, commercial infrastructure, our development capabilities are the priority areas. Oncology, hematology, and more broadly, hematology, not only malignant, and dermatology. Also, we are interested in areas that would be adjacent to those. Again, there, we can leverage our capabilities, our expertise in those areas as well. You can see it's a pretty broad footprint that we're looking at, and we're not necessarily prioritizing one area versus the other.
We're interested to find good assets that are at valuations that make sense. That's how we are approaching BD.
Jumping in here into the Opzelura launch in both atopic dermatitis and vitiligo. On the first quarter, there were some headwinds driven by higher Medicare and true-ups from last year. You know, how should we think about that correction or maybe inflection as you look to 2Q? I don't know if you're able to provide kind of the split between these patient populations.
The launch of Opzelura was very successful and very sharp. I mean, the new prescription curve is, in fact, the best in the field of dermatology that has been seen. It's. Most of it is driven by the quality of the product for eczema, is that which can relieve itch and in vitiligo because it's the only product that can drive repigmentation. That was basically what we observed. In Q4, the growth was even faster. Everybody was happy. What we realized after the fact, that part of the Q4 brand units, the prescriptions, was, in fact, a shoebox effect, where patients are anticipating their Q1 prescription to avoid reentering the deductible part of their plan.
What you see is Q4 had a growth of prescription that was beyond the trend, and the trend continues to be very strong. Obviously, January was very low in terms of prescription, beyond the gross-to-net and everything else, and then it went back to normal. You can see, if you look at IQVIA, that the mega trend, the trend continues to grow and doing. The Q1 versus Q4 disappointment was in large part because of the volume and the shoebox effect in design. Obviously, for this year, now we know we can anticipate probably will happen in the same way. On the gross-to-net, we spoke about it, a lot about the way, you know, the landing of the gross-to-net, around 50% has been done last year.
We start the year with more deductible in Q1. The gross-to-net goes higher, and it will be back to, around 50%, more or less, during the year. That is really, you know, as planned and doing very well. What was not anticipated is a little bit of, like, one-time, correction in Q1 versus Q4, but more importantly, the volume in Q4. We see, like many of you can, follow on the IQVIA data, and the trend there is more or less reflecting the reality, that we are still very good situation where the growth continues, and we have this launch in vitiligo that is still, taking place.
What we see at the end of Q1 was around 70% of patients, eczema, 30% vitiligo, and the vitiligo proportion.
When you put this all in context, could maybe walk through demand here and kind of the interest and where you think that kind of peak potential opportunity plays out for this asset, for both vitiligo and atopic derm versus reimbursement and the hurdles that might still be there as you're kind of building this market?
The reimbursement, the kinetic of the reimbursement for Opzelura was in fact very good compared to other drugs in dermatology. You can see companies launching, large companies, launching new products in the field of dermatology and guiding to 2 years before net sales will be meaningfully contributing. In our case, after a year, in fact, we were already seeing a good coverage. Today, we are around 80%. 80% of the plans will be covering Opzelura, 20 do not. We are still working to move that. We think that max will be probably around 90%, so there is still some space there. The economic value of Opzelura is excellent, because in the field of eczema, the alternative in many cases is to use a systemic product.
These patients have been treated with steroids already, Elidel and Protopic, or that kind of product. They come to a dermatologist, and there, the choice is go back to Elidel or Protopic, or go to RINVOQ and Dupixent or Opzelura. The value of Opzelura for this, for the payers is excellent, because it's now an average of 2, 3 tubes per patient per year. The cost of that is a fraction of what it would be to go to a systemic treatment. We anticipate the coverage will continue to be very good, and maybe even over time, become better in the sense that using Opzelura before you go to systemic, at least more broadly. We are optimistic. On vitiligo, frankly, there is no alternative. The cost of treatment is different because the number of tubes is higher for vitiligo, so it's 8-10.
That's what we guide it for. It's not there, it's not there yet, by the way. We are still in the phase of adoption. We think it's an excellent investment for, you know, health plans, because these patients who have been fully repigmented have a quality of life that is very different from what they had before.
With atopic dermatitis, recognize the broad level of payer coverage, how do, you know, step edits and paperwork burden kind of play into uptake at this point?
It's very different from one city to another. You have pockets of difficulty. There are places where, you know, the whole process is still not as smooth as we would like. We have a team dedicated to that, to just work on, you know, helping people do the prioritization, do it electronically, so that it will not be burdensome. We have now a very large proportion of dermatologists who are totally comfortable with the process. It works really well. It's very smooth. We are still in this mode, but it's improving every day. In fact, every day, we identify an issue somewhere, we solve it, and then we go to the next.
It's, the curve of like, no problem versus it's difficult to use Opzelura, the proportion is changing positively every week, yeah.
On vitiligo, you know, you've talked about the opportunity here, 1.5 million people living with vitiligo.
Mm-hmm.
and 150,000- 200,000 that would initially seek treatment. Are you still comfortable with that patient population that you've identified? Maybe talk about the initiatives like direct-to-consumer initiatives, and how those are playing out in kind of reaching your goal?
Well, yeah, I mean, the incidence and prevalence is what we have discussed. The 150 being actively treated is obviously a moving number. It's an increasing number now, part of the increase is because of the buzz about Opzelura, and you can see it on social media. It's, it's a subject. It is the subject of discussion in the vitiligo community, I'm saying. What we observe is that out of like, you know, five patients who are being prescribed, now there is a good number of them who are coming because they heard about Opzelura on TV. TV is. It's not TV, I mean, in fact, a lot of it is social media and where they will hear about that. That is, it seems to be working.
One of the difficulties to get an appointment with the dermatologist, if you are a new patient today, calling the dermatologist saying, "I need an appointment," you don't get it next week. You will get it probably in October. There is an inertia in the flow of new patients coming back to the dermatologist, which we see. The numbers are showing, I mean, the number of new prescriptions for vitiligo is increasing every week, and what we see is that it's going cumulatively to prove that, in fact, there is a lot of patients who are coming back from the no treatment to back to the dermatologist.
Any change.
The refill rate will be a big criteria for the total potential for vitiligo. That's what we are still trying to calibrate, because the experience in the clinical trial is not the same as what's happening in the commercial real world. We are, we need to have some better understanding of the refill rate as we go. That's one big missing point to be able to give guidance for vitiligo.
for atopic derm, with the tube use, do you feel kind of-
The tube use is north of 2, actual. We said 2- 3, we are in the range. I think it will continue to improve those people are using more. What we see in eczema is a lot of patients are fully controlled very quickly. A little bit of like the product is working so well that some of the patients, after 2 weeks or a week and a half, will start using less of it, and then they will keep the tube for the next, the next prescription. We are where we wanted to be, which is north of 2. That's what we are seeing in actual refill patterns for eczema.
Where do plans stand with partnerships ex-U.S.?
Europe, we are launching. It is in fact launched in Germany. We are now seeing the prescriptions in Germany. It will take a year before it goes to other country beyond Austria. Austria, Germany, it's commercially available. It will go to Italy, Spain, France. It will take a year to get the reimbursement there. That's it for us. I mean, we will do Europe ourselves. We will do U.S. and Canada. We are partnering with companies who are specialized in dermatology. For example, in Japan, our partner is Maruho, who is the leader in the field in Japan. They are making a lot of progress now to get the approval there.
We have CMS in China, and Asia, we have a number of partners for different parts of the world, the U.S. and Europe will be... Canada will be.
Great. Just a last question on this vertical. You do have phase three data in pediatric AD patients coming by year-end.
Yes.
How important of a driver is this for sales?
I mean, the number of pediatric patients is probably 2 million plus , 2, 3 million. It almost doubles the potential size of eczema for the U.S. That's. It will be very useful because we all know there are a number of children where having a very quick itch relief is the number one goal. In our case, we just published data showing after 15 minutes, you have literally a new, a different... Itch can be improving in the first minutes following the application of the cream. Usually, people speak in days or weeks. In that case, it's very, very fast. We think for kids, it will be very useful.
Just switching over to Jakafi. You commented earlier there's a very good chance you're going to beat your $3 billion at peak.
Yes. We will reach the $3 billion at peak, yeah.
You'll reach the $3 billion at peak.
The guidance for this year is $2.6, so it's...
You know, that being said, you do have LOEs that are coming up in the second half of the decade, and you have this LIMBER program to try and offset that. You know, how much conviction do you have that one of the at least 3 LIMBER or 2 LIMBER programs at this point is going to be able to emerge, and you'll have this kind of transition over to that, you know, be it the ALK2 combo or something else? Remind us where you stand with QD, and if QD doesn't come to fruition, then how does this path move forward?
Yeah, QD was not approved because of FDA being worried about the Cmin bioequivalence. We showed, and they recognize that we have shown bioequivalence based on AUC, which is what we were trying to do. They want to see more equivalence on the Cmin. And that's what we are working on now. It could be done in different ways, but in the worst case, which would be a new formulation that has a different dose and a different profile, it would probably be a 2-year project. It's still very much in the window to have it available before the loss of exclusivity on Jakafi, but it's later. It doesn't change anything to the fixed dose combination and the ability to do fixed dose combination. On the new mechanism, it's not 2.
We have like we literally have four projects on the LIMBER side in the top eight, the project that we have now identified. BET and ALK2 are two very different hypotheses. One is increasing efficacy with a BET inhibitor, a new mechanism. At ASCO, we showed that it is in fact an active mechanism at the dose that we can give, that can be administered. Now we need to decide if, how do we combine, which dose of Jakafi we combine with, because a lot of the efficacy of the, of the doublet depends on dose intensity of Jakafi. That's something we are looking at very, very carefully. ALK2 is a very different situation. It's basically a way to avoid anemia. We showed that at ASCO again.
We have interesting curves of anemia for patients who are treated with Jakafi plus ALK2. It's a little bit like giving GCSF with chemotherapy. It's a way to reduce the rate of side effect and anemia in that case and to maintain dose intensity, which we believe, in fact, will have an impact on the efficacy. We are at the stage where the proof of concept now is becoming very clear. The design of the phase 3 study is not yet finalized. It's tricky. You know, the transfusion dependent, transfusion independence, I mean, there are a number of patients that we need to address. At the end of the day, the value of the product is not only on the transfusion rate, but on efficacy of Jakafi because of the dose intensity. axatilimab, it's a new mechanism for GVHD.
We will see what we have in the studies that will be public, very soon. It's basically 3 dose. I don't know the results, so I'm... It's 3 dose that are compared. Obviously, if we see a dose response that is strong enough, it can become a study that could be used for submission. If not, we'll do a phase 3 study as, probably in combination with Jakafi. Then we have the CALR project, which is a very interesting, totally innovative mechanism. It was a plenary session at ASH just a few months ago, and where the first in, the first in man will be happening. That could by itself be a transforming way of treating patients with MF and ET.
ALK and BET, combination with Jakafi, sort of, in the frame of what, we have today, and then ASH and CALR, sort of changing the way people could think about this GVHD or MF and ET.
If you had to pick between those programs and, you know, suggest confidence in where that future tale may lie, which one of these 4? Is it all 4? I mean, how do we think about that?
They are very different. ALK2 is very interesting because it could make Jakafi a better product, so it is literally building a super Jakafi in term of efficacy, beating on both. That would be, if we can prove that would be by itself very valuable for MF and potentially GVHD. CALR is like, if it works, it's changing everything. It's completely orthogonal. It's not like doing another Jakafi, better Jakafi. It's literally changing the way people will think about treatment of MF and ET. It's a little bit like Gleevec, you know, it's like allele burden, you know, is predicted to go down. If it does what we have seen in preclinical model, to go down very quickly. That will be very different by nature because it will redefine the way patients are treated and started on treatment.
We have a little bit of both. I would not put them as competing with each other. It's really two different ways of changing the way people will be thinking about MPNs and GVHD.
Can you remind us where you stand with the oral JAK for autoimmune indications, and how that might overlap in the future with Opzelura?
Povorcitinib is in phase 3 for HS, following the phase 2 randomized study that was showing a very good level of efficacy and a very good safety profile. It is being looked at in phase 2 studies in indication where in HS, Opzelura is also studied in a different form of HS, like a mild form, where having a topical treatment could work, so it's in phase 2. Both of them could be approved for HS, but they will be different patients with HS. In prurigo nodularis, we also have 2 different type of patients, some of them treated with a systemic JAK, povorcitinib, and some of them treated with topical JAK, Opzelura, depending on the type of disease that they have.
We believe, in fact, that for some dermatologic disease, having both a topical form and a systemic product could end up being commercially very interesting because it will give physicians a choice, and the choice will be based on the type of patient that they are seeing. Today, in atopic dermatitis, we see some patients being treated are patients who are also treated with a systemic treatment, like Dupixent plus Opzelura, when Dupixent does not lead to complete resolution of the lesion.
I think you were talking about asthma, too.
We are in the earlier stage of the studies we are doing. We are starting a study in asthma because we and the community, the asthma community was very interested in having a JAK1 selective product like povorcitinib in that indication. We will see, we will see what it does. I mean, it's just pre-work in that indication.
You have a, you know, IO platform outside of the oral PD-1, so you have a adenosine LAG-3, OX40, and so forth. Could you just maybe walk us through this portfolio where we should really kind of focus ourselves in this group?
OX40 and adenosine will be stopped. These projects are not going forward. OX40 was, in fact, a few months ago. What is actively being looked at is LAG-3, PD-1, and TIM-3. We are looking at something, it's a small study. It's a very specific question coming from biology of saying, we know LAG-3 plus PD-1 is, in fact, an active combination. We know it from other companies. It's approved. We have a lot of studies in the preclinical model showing that TIM-3, LAG-3, and PD-1 could be a triplet that has a differentiated effect in term of efficacy. We are testing that as we speak. It's a small study in head and neck cancer, and we'll see what it does. We are comparing PD-1, PD-1 plus LAG-3, PD-1 plus LAG-3 plus TIM-3.
That's basically for the injectable part of the IO portfolio, that the three products that we are still studying.
Is there anything about these profiles that differentiate themselves versus, you know, other-?
I think the triplet would be differentiated because nobody has studied it. That would be the way to think about it.
Yeah. let's touch base on the commercial launches outside of Jakafi and Opzelura. PEMAZYRE, when you look at it at this point, how do you think about the trajectory for the forward and whether there could be an inflection?
The trajectory is still positive. It's a growing brand. It's not a billion-dollar product in the current indication, that we were very clear for. In fact, I think in this meeting, at a different hotel in the past, I spoke about $200 million as the PEMAZYRE cholangiocarcinoma kind of... That's clearly where we are going, so that's, for cholangiocarcinoma. We are doing a study in GBM, where there are a number of patients who have mutations that are sensitive to PEMAZYRE, so that will tell us if there is a potential there. We have shown some data showing that it does, in fact, have activity, so we are doing a bigger study to confirm that. There are other mechanism or other type of application we are looking at in the preclinical model.
Today, I would think of PEMAZYRE as small risk in cholangiocarcinoma, $200+, more or less, for that indication, and potentially going to GBM in the future, which would give, you know, another... It's, as I was saying, it's one of these products that even if it becomes like a half billion, I mean, will not be by itself, you know, the type of product that will be compensating for Jakafi.
When could we see the next data for GBM?
... I would, I don't know, I don't know exactly. I would not anticipate that before maybe ASCO next year, yeah.
On Monjuvi, you know, how is this launch progressing, I think?
The launch, you know, the issue with the, with that indication in the DLBCL is when to use CAR T. That's really the question, and who to use CAR Ts in and who not to use who are the patients who will not receive it? We are in that mode where we have established today in the U.S., Monjuvi, in the setting that our patients who are not eligible for bone marrow transplant and would not be receiving a CAR T, and that's what we are seeing. That is basically a relatively stable population. The safety profile is excellent. The efficacy is very, very good, in fact, in term of complete response rate, and that's what we are saying.
In Europe, where CAR Ts are not used in the same way as they are in the U.S., in fact, the uptake is faster for Monjuvi. That's where we are, and I think that situation is not going to change meaningfully. What will change meaningfully are the new data we will be getting in follicular and lymphoma, where we have a phase 3 ongoing, and first line, the DLBCL, so before CAR Ts are used. Both of these phase 3s are now all fully accrued or almost fully accrued, and we are in the follow-up phase, where we will get the results in 2025.
2024 and 2025.
2024 for follicular lymphoma and 2025 for first line.
Okay. Any, questions from the audience?
It's fair to say that, yeah. It will take a lot to stop us now. I think the new data will tell you. There are two things. There is the dose of BET and IL-2. IL-2, we can still increase the dose. We don't see side effects. We see the effect of the drug, the on-target effect, but we don't see side effects. The question is, can we which is, there's a point where you have to make the decision and say, "Okay, that's it, we take it as it is," but we are not there. On the BET inhibitor, the question is: How do you establish a dose or a combination with Rux without decreasing the dose intensity of ruxolitinib?
That's something we are very careful about and we think could have an impact on the efficacy of the combination. Between now and the end of the year, that's what we will be doing, designing the phase 3, discussing with FDA, and then we will be doing the pivotal study probably next year, or earlier if we can. I would not count on it.
Just to follow up on that, apart from this trial, any other data sets from the pipeline that we should be focused on over the next year?
CDK2 is a very interesting target. We have one of the 2 or 3 leading products in the field of CDK2. It has indication in ovarian cancer and breast cancer, potentially, for what we know today. We are treating patients, and the question will be the therapeutic window, and that will be probably emerging over the next 12 months, yeah. That would be interesting. CALR, as I said, because that, there, we will see very quickly if it does something or not, in fact. We'll be treating patients starting now.
Okay, perfect.
Okay.
Well, thank you so much.
Oh, super. Thank you very much. Thank you.