Greetings, and welcome to the Incyte third quarter 2026 earnings call. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation. You may be placed into the question queue at any time by pressing star one on your telephone keypad. We ask you please ask one question then return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero on your telephone keypad. It is now my pleasure to turn the call over to Alexis Smith, Vice President, Head of Investor Relations. Please go ahead, Alexis.
Thank you. Good morning and welcome to Incyte's third quarter 2026 earnings conference call. Before we begin, I encourage everyone to go to the investor section of our website to find the press release, related financial tables, and slides that follow today's discussion. On today's call, I am joined by Bill, Pablo, and Suky, who will deliver our prepared remarks. Steven, Dave, and Mohamed will also be available for Q&A. I would like to point out that we will be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I will now hand the call over to Bill.
Thanks, Alexis, and good morning, everyone. As we look at the first nine months of the year, we have made meaningful progress against the strategy we laid out for Incyte. That strategy has two fundamental components, scaling the core business beyond Jakafi and advancing our late-stage pipeline to drive the next phase of growth. The core business is the foundation that gives us the scale to navigate the 2029 transition and fund R&D. Layering the pipeline on top of that gives us the opportunity to build a significantly larger company over the next decade. We now have several compounds in phase III development, including mutant CALR antibody for MPNs, a Protein S modulator for von Willebrand disease, a G12D inhibitor for pancreatic cancer, a TGFβ×PD-1 bispecific antibody in colorectal cancer, a CDK2 inhibitor for ovarian cancer, and a JAK inhibitor currently under regulatory review in HS.
We have increasing confidence in the biology behind these programs and believe we have taken meaningful risks out of them as they have advanced. That does not mean the risk is zero, but increasingly the risk we are managing is execution risk, running high-quality phase III programs, enrolling them on time, and achieving the regulatory milestones in front of us. Those are things we directly control, and that is our focus today. We are fully funding and resourcing these opportunities, leaving nothing to chance, and if we deliver against them, we believe the value creation potential is substantial, and that is how we should ultimately be judged. Now we will frame the quarter around three themes. First, key business performance. Every product grew year-over-year. Jakafi had another strong quarter with growth across all indications, and sales from our core business, excluding Jakafi, increased 37% from prior year.
Second, we achieved important regulatory milestones, including the approval and launch of OPZELURA for moderate AD in the EU in the third quarter. In parallel, the NDA reviews for MONJUVI in frontline DLBCL and povorcitinib in moderate to severe HS are well underway. Third, we continued to advance our late-stage pipeline, including trial initiations and expansion efforts for key programs like G12D, TGFβ×PD-1, and 989. I will now cover the quarter in more detail and then hand it to Pablo to expand on the progress across our pipeline. Total revenue for the quarter was $1.56 billion, representing growth of 14% year-over-year. Total net sales in the quarter were $1.32 billion, up 14% versus the prior year. Growth was broad-based and led by OPZELURA and our hematology and oncology franchise, while Jakafi remained a significant contributor.
Jakafi franchise net sales in the third quarter were $827 million, up 4% year-over-year. Underlying demand remains strong, increasing 12% with growth across all indications led by PV. Net sales growth reflects expected pricing dynamics during the quarter, including the impact of the CMS GENEROUS Model. Formulary coverage is expected to exceed 80% by year-end. The combination of increasing uptake here and expanding market access keeps us on track to achieve our full year-end target of roughly $50 million in XR net sales and supports our goal of retaining 10%-30% of the Jakafi business by 2029. Now to our core business, ex-Jakafi, which is one of the clearest indicators of transitioning the company.
Net sales from our core business excluding Jakafi were $490 million, representing a 30% increase versus prior year, reflecting contributions from key growth brands, namely OPZELURA, NIKTIMVO, ZYNYZ, and MONJUVI. The growth across brands and geographies strengthens the outlook for the company as we see this business growing to $3 billion-$4 billion by 2030. OPZELURA net sales were $255 million in the quarter, an increase of 36% over prior year. Net sales were driven by increased demand across geographies and favorable U.S. pricing dynamics resulting from the agreement with CMS related to the OPZELURA line extension. On a pro forma basis, which adjusts the third quarter of 2025 for the favorable impact of the Medicaid line extension settlement, total OPZELURA net sales increased 21% over the prior year period. Now we will break down the U.S. and international performance.
U.S. net sales in the third quarter were $208 million, up 45% year-over-year.
The week 36 assessment allows additional time to capture the full magnitude and durability of treatment benefit, consistent with the targeted treatment approach that we believe has the potential to address underlying disease biology. These are established endpoints consistent with those used for current approved therapies in MF. Notably, we are also evaluating a composite endpoint as a key secondary endpoint. The composite endpoint is designed to capture the benefit of INCA033989 on spleen and symptoms, including improvements in hemoglobin, platelet counts, and blasts in peripheral blood. This allows us to further characterize the potential benefit of a disease-modifying therapy on key manifestations of MF. The study's power to evaluate efficacy in patients with Type 1 mutations will represent more than 70% of the CALR-mutated MF population and have experienced the most robust clinical responses to date.
We will also continue to generate data in patients with non-Type 1 mutations to further characterize the potential of 989 across the broader CALR-mutated population. Looking ahead, we expect to share the first clinical data for 989 in first-line MF by year-end, both as monotherapy and in combination with ruxolitinib. This data will help define the role of 989 in an early treatment setting and inform our development plans in 2027. Additionally, we plan to share pre-clinical data on our next-generation mutant CALR antibody, which we will be progressing into the clinic in early 2027. Together, these efforts reflect our strategy to build a broader portfolio of mutation-directed therapies with the potential to meaningfully change the treatment paradigm for patients with MPNs. Beyond MPNs, we continue to advance important programs across our hematology pipeline.
The FDA's review of tafasitamab in first-line diffuse large B-cell lymphoma or DLBCL is ongoing, with approval expected in the first quarter of next year. In chronic graft-versus-host disease, we are evaluating axatilimab in early lines of therapy. This includes a phase II study of axatilimab in combination with ruxolitinib, with results expected at a medical meeting early next year, and a phase III study evaluating axatilimab in combination with steroids, with top-line results anticipated in 2028. We also expanded our hematology pipeline this quarter with the acquisition of Vega Therapeutics and its lead therapy, latarcibart. This novel Protein S modulator has the potential to be a transformative non-factor replacement treatment for von Willebrand disease. The pivotal phase III study is underway, with top-line data expected in early 2029. We also plan to share additional data from the phase I open-label extension later this year.
Turning to oncology, we have advanced our solid tumor programs from early clinical development to a growing late-stage pipeline. A year ago, we established clinical proof of concept across several novel mechanisms and tumor types. Today, we have pivotal programs underway for a KRAS G12D inhibitor, a TGFβ Receptor 2 by PD-1 bispecific antibody, and our CDK2 inhibitor, with expansion efforts planned for next year. As we reviewed at ESMO earlier this week, our strategy is to advance novel mechanisms in high-incidence cancers where outcomes remain poor, with a particular emphasis on building a leading gastrointestinal franchise anchored by 734 and 890. Starting with 734, our G12D inhibitor, our conviction in this program continues to grow, and we are rapidly expanding its development across tumor types, treatment settings, and novel combinations.
At ESMO, we presented phase I data evaluating 734 in combination with standard of care chemotherapy in first-line pancreatic ductal adenocarcinoma or PDAC, and in combination with cetuximab in heavily pretreated patients with colorectal cancer. In PDAC, 734 showed encouraging activity in combination with both standard of care chemotherapies with a safety and tolerability profile consistent with its established regimens. Objective response rates confirmed and pending were 58% for 734 plus gemcitabine and nab-paclitaxel, and 81% for 734 plus modified FOLFIRINOX. We also see promising signals of durability with six-month landmark PFS of 80% and 90%, respectively. The depth of response early signs of durability and consistent tolerability across both chemotherapy backbones reinforce our confidence in the ongoing phase III DAWN-303 study in first-line PDAC and support moving 734 into early stage of disease, with a phase III study in adjuvant PDAC planned to start in 2027.
Turning to colorectal cancer, 734 in combination with cetuximab produced a 36% objective response rate in heavily pretreated patients. This is notable because anti-EGFR therapy alone has historically produced response rates below 5% in late-line colorectal cancer, which suggests a synergistic combination. This data informed the design of our phase III DAWN-302 study in previously treated colorectal cancer. We reached alignment with the FDA on the design this quarter and plan to initiate the study in the first half of next year. Beyond these registrational programs, we recently announced clinical collaborations enabling evaluation of 734 with novel combinations. These include petosemtamab, an EGFR by LGR5 bispecific antibody in first-line colorectal cancer, navlimetostat, a PRMT5 inhibitor in PDAC, and SNV1521, a PARP1 inhibitor in solid tumors. These phase I studies will begin next year. Turning to 890, our TGFβ Receptor 2 by PD-1 bispecific antibody.
We believe 890 has the potential to serve as an immunotherapy backbone. Starting in microsatellite stable colorectal cancer or MSS-CRC, a disease that has historically been resistant to immunotherapy. At ESMO, we presented phase I data evaluating 890 in combination with standard of care chemotherapy in first-line MSS-CRC. 890 in combination with FOLFOX and bevacizumab showed encouraging antitumor activity with an objective response rate of 71%. Importantly, responses were observed across patient subgroups, including an objective response rate of 83% in patients with liver metastases, a population historically associated with poor outcomes and reduced responsiveness to immunotherapy. We also see early signals of durability with a six-month landmark progression-free survival of 81%. We look forward to sharing more mature progression-free survival data next year. This data support our ongoing phase III NEXERA-303 study in first-line metastatic MSS colorectal cancer, which is well underway with top-line data expected in 2029.
We are also moving 890 into early treatment settings, including a proof-of-concept study in patients with circulating tumor DNA positive disease following surgery and adjuvant chemotherapy. Finally, turning to 667, our CDK2 inhibitor. Based on the evolving treatment landscape, we are focusing our development on first-line maintenance in CCNE1 overexpressing ovarian cancer, where we believe the opportunity for 667 is greatest to offer a more meaningful treatment option for patients and physicians. As a result, we are deprioritizing development efforts in platinum-resistant ovarian cancer. The open-label Phase II MAESTRA-1 trial remains ongoing. However, we have made the decision to stop additional site activation and discontinue future enrollment in the randomized Phase III MAESTRA-2 study. This was not an easy decision, and we are grateful to the investigators and patients who participated in this study.
Stepping back, in a short period, we have moved from established proof of concept to advancing multiple registrational programs in oncology. We have done so by following the data, and we will continue to deliberate about where we invest. With that approach, we believe we are well-positioned to build multiple oncology franchises over time. Turning to IAI, where we continue to build on our leadership in dermatology across topical and systemic therapies. In July, the European Commission approved OPZELURA for adults with moderate atopic dermatitis or AD. This approval makes OPZELURA the first steroid-free topical JAK inhibitor available in Europe for this population and expands its EU label into a second indication. Povorcitinib, our oral JAK inhibitor, received a positive CHMP opinion for the treatment of moderate to severe HS in adults who have had an inadequate response to anti-TNF therapy. We anticipate a potential approval in Europe by year-end.
In the U.S., the NDA is under review with an anticipated approval in the first quarter of 2027. We also expect several important phase III readouts by year-end, including top-line results from ruxolitinib cream in mild to moderate HS and povorcitinib in prurigo nodularis. Together, this program's positioned povorcitinib for potential approval in multiple indications, including HS, PN, and vitiligo, building on the foundation OPZELURA has established in dermatology. To close, the pipeline we have today looks very different from a year ago. We have moved multiple novel programs into registrational development, and we have done so deliberately, guided at each step by the data. With a more mature and diversified late-stage pipeline supported by the discovery and clinical engine behind it, we're well-positioned to deliver meaningful innovation for patients and support sustainable top-line growth heading into the 2030s.
With that, I will turn it over to Suky for a financial update on the quarter.
Thank you, Pablo, and good morning. I'll begin with comments on our third quarter results and then turn to our updated full-year outlook. As Bill mentioned earlier, we delivered strong net sales, managed expenses well, and executed across all areas of the company. Total revenue for the quarter was $1.56 billion, an increase of 14%. Total net sales were $1.32 billion, reflecting 14% growth versus the prior year, driven by strong product demand. Total GAAP expenses for the quarter were $2.27 billion, an increase of 146% compared to the prior year. This includes a $1.23 billion IPR&D expense related to the closing of the Vega acquisition. Total cash consideration for the transaction was approximately $1.27 billion, including $1.5 billion for the upfront. When we exclude the Vega-related IPR&D expense, total operating expenses for the quarter grew 12%.
GAAP cost of goods sold was $109 million, representing approximately 8% of total net sales. This is in line with our expectations, and we expect COGS to be approximately 8% for the full year. Our GAAP R&D expenses were $1.79 billion for the quarter, an increase of 254% versus the prior year, driven by the Vega acquisition and continued investment in our late-stage development assets across hematology and oncology. Excluding the Vega acquisition, GAAP R&D expenses increased 11% for the quarter. Moving to SG&A. GAAP SG&A expenses were $364 million for the quarter, increasing 11% year-over-year, driven by pre-launch activities for povorcitinib. Lastly, we ended the quarter with $3.9 billion in cash and cash equivalents. Now turning to our outlook for the remainder of the year. Gross sales.
We are raising our full-year guidance for OPZELURA, hematology and oncology, and total net sales based on the strong performance delivered through the first nine months of the year. For OPZELURA, we are raising full-year 2026 net sales guidance to $1.1 billion- $1.12 billion, reflecting continued growth in both the U.S. and international markets. For hematology and oncology, we are raising full-year guidance to $890 million- $910 million, reflecting the performance across key growth brands. As a result, we are increasing total net sales guidance to $5.210 billion- $5.300 billion. We are also maintaining our full-year operating expense guidance. While unchanged based on our year-to-date R&D investment and expected spend in the fourth quarter, we expect total R&D and SG&A expenses to be towards the middle of our full-year range, reflecting investments in our late-stage development pipeline and pre-commercialization efforts.
To close, we are pleased with our performance for the quarter and the first nine months of the year, and we remain confident in our outlook. With that, I will turn the call back over to the operator and open it up for Q&A.
Thank you. We will now be conducting a question and answer session. If you would like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. As a reminder, we ask you please ask one question, then return to the queue. Our first question is coming from Tazeen Ahmad from Bank of America. Your line is now live.
Hi, guys. Good morning. Thanks for taking my question. So I just wanted to ask you, what are the key items we should be focusing on for the update for 989 and CALR in the frontline MF study coming up this quarter? Thanks.
Thanks, Tazeen. Pablo will take the question.
Good morning, Tazeen, and thank you for the question. At ASH, we are going to present, as promised, an update on the first-line data. Just as an aside, you remember that at EHA, we presented data in patients that were ineligible for Jakafi, and the data looked quite good in our opinion, both in SVR35 and TSS50, as well as the anemia improvement that we have become accustomed to seeing in patients treated with 989. To complement that or to expand on that, at ASH, we are going to have about a total of 55 patients in frontline. Of those, about 20 are in that group of ineligible, and the other 40 or so are in true first-line patients that would have been eligible for Jakafi. Those are split between single agent and combination with ruxolitinib, about two-thirds, one-third, approximately.
Importantly, we have quite a bit of follow-up in those patients at this point. In fact, one of the things I believe is important to highlight is the data in the abstract are much more immature than the data in the presentation. In fact, the data cut in the presentation about four months later than the data in the abstract. I would ask you, when the abstracts come out, which is in the relatively near term, that we wait for the data in the presentation because that is the truly relevant data. I think it is a pretty comprehensive update. I think it will give a clear idea of the role of 989 potential in frontline MS, and we look forward to sharing the data with you.
Thanks for the question, Tazeen.
Thank you. Next question today is coming from Etzer Darout from Barclays. Your line is now live.
Good morning. This is Gustav on for Etzer. Thanks for taking our question. My question is on the second-line MS pivotal for 989. How will prior JAK inhibitor treatment be defined? Will the patients be given resistance refractory or intolerance? Is there a minimum duration of treatment or dose for those? Thank you.
Go ahead, Pablo.
Thank you for the question. The definition is pretty standard in the fact that patients do not achieve ideal SVR35 or ideal spleen or symptom response to Jakafi. Usually the reason for intolerance is either thrombocytopenia or anemia in most patients. The physicians make that determination. There is no language in the protocol, but the physicians will make that determination. There is no minimum duration, I do not believe. I would have to confirm with the protocol. I do not believe there is any minimum duration of treatment or dose of Jakafi. The dose of Jakafi prior to entering a second-line study is not predetermined in a second-line study at all.
Thank you for the question.
Our next question today is coming from Jessica Fye from JP Morgan. Your line is now live.
Hi, this is Sylvia on for Jess Fye. Thank you for taking our question. Can you elaborate on the strength that you are seeing in OPZELURA, and are you able to quantify the gross-to-net you saw this quarter and how that differed from third quarter 2025? Thank you.
Yeah, it's a good question. I'll make a few comments, and then Mohamed can expand on them. At the start of the year, we made a very deliberate strategic decision to expand the sales force, increase promotion to NPs and PAs, and to improve access quality, which required an investment. If you look at the results this quarter, you focus on two key metrics, underlying prescription demand and new patient starts. It's been strong now for several months. I think it's an important indicator of the strength of the business, not just to finish the year, but in 2027. OPZELURA has a very large prescriber base of 20,000 physicians. We have extensive formulary coverage, and we have probably north of a quarter of a million people receiving OPZELURA today. That is a moat around the business. Our job right now is really simple.
Keep the pressure on, keep our foot on the gas pedal, and this business could represent over a third of our core business ex-Jakafi when we hit the transition in 2029. Mohamed and his team has done an excellent job managing this product for the past several quarters. Mohamed, do you want to add anything?
Yeah, maybe just to quantify a few of the points that you mentioned, Bill. Thank you. Just to reiterate, in the U.S., we grew net sales 25% on a pro forma basis, which basically accounts for the GTN benefit that you would have seen from the line extension settlement that we declared. On top of that 25% was driven by a 24% overall demand growth year-over-year.
So the majority of the pro forma growth was driven by demand. Actually, there was a little bit of a price downside on that when you look at it on a pro forma basis. So the growth of the business is really, really healthy, and a lot of the growth, as you can see, is coming from the brand's underlying health of the business, which is demand. Like Bill mentioned, new patient volume, which is really the best measure of competitiveness, grew 2x market when you think about AD and the vitiligo. So not only are we growing, but we're growing and we're outpacing the market, which is a really good indicator of not only the health of the business, but our competitiveness overall.
Yeah. Sylvia, just to add one thing to what Mohamed just said. When you think about price for OPZELURA, 2026 was a year of investment to improve the quality of formulary coverage. When we look out 2027 and beyond, think about price as a maintenance strategy. There's a cost to maintaining coverage, but we don't expect significant headwinds as it relates to average selling price for OPZELURA. Thanks for the question.
Thank you. Next question today is coming from Salim Syed from Mizuho. Your line is now live.
Hi, this is Eric on for Salim. Congrats on the quarter and thanks for taking our question. One on axatilimab in GVHD. It looks like the first-line axa plus Rux readout got pushed out from Q4 2026 to Q1 2027. Just curious about the puts and takes on that and how that is...
...for submission to an earlier meeting. We do not want to just show the primary endpoint. We want to show you durability of the response. We want to show you subsequent therapy, a comprehensive review of the safety profile. So we want to present that in a scientific meeting, and the most appropriate one is in the first quarter of 2027. That is the only reason for shifting the timeline a little bit.
Thanks for the question.
Thank you. Our next question today is coming from Brian Abrahams from RBC Capital Markets. Your line is now live.
Hey there. Good morning. Thanks for taking our question, and congrats on the continued progress. Maybe one on 989. I guess I am curious what monotherapy or combo activity do you think you would need to see and KOLs would want to see to warrant development of 989 as a frontline alternative or add-on for treatment-naive CALR-mutated patients, just given the known benefits of Jakafi, but also the known AEs. Thanks.
Great. Go ahead, Pablo.
So thank you for the question. Let me give you a little bit of a more comprehensive answer here because I think it is important. I know it is in everybody's mind. So we need two pieces of data to finalize the design of a frontline study in MF. First of all, let us go back to the comment I made a few minutes ago. We know from the EHA data in eligible patients that the efficacy of 989 in Rux-untreated patients with MF is substantial. You all remember the SVR35 and TSS50 data we showed and the really striking effect on anemia improvement. So what we need now is a more comprehensive data set with longer follow-up, which we will have at ASH, including single agent and combination with Jakafi, as you pointed out.
We need to see that data in order to decide the final decision on the design of the frontline study. The other event that needs to happen is we will have a meeting with the FDA, with a Type C meeting, with the surrogate endpoints team to continue the conversation that we have had on the use of a composite endpoint to try to shift away from SVR35 or TSS50, because we believe disease-modifying therapies like 989 need to be looked at differently. We need to address the fact that this medicine basically shifts hematopoiesis back to normal, and that is represented by improvements in anemia, reduction in fibrosis, reduction of mutated megakaryocytes in the bone marrow, et cetera. That needs to be addressed. So once we complete those conversations with the FDA, and once we have the full data set, we will make a decision on the frontline study.
Going directly to your question, we do know that Jakafi produces rapid improvement in symptoms and an SVR35 in CALR-mutated patients in frontline approximately 20%-22%. We think there is a lot of room for improvement there. Whether we need a combination arm in the study or not, we will decide based on the points that I just made. We do think there might be a role, in which case we will launch a three-arm study, which would be Rux versus Rux plus 989 versus 989 alone. That is a perfectly legitimate study. Patients and physicians will have two options to treat their MF, either single agent 989 or combination with Rux, and all that will be decided in the next few months, and we will update you early in 2027.
Thanks for the question, Brian.
Thank you. Next question today is coming from Evan Seigerman from BMO Capital Markets. Your line is now live.
Hi, guys. Thank you so much for taking my question. Great to see you earlier this week. Just taking a step back, the pipeline progress that Incyte has accomplished over the past year has been impressive. Can you just level set, remind us what you've accomplished over the past year, and then looking forward, aside from lslR at ASH, what are some things that we should be focused on over the next year so that when we get to the 3Q call, we can discuss those as well? Thank you all.
Yeah. Thanks for the question, Evan. I agree with you. I think the shape and maturity of the pipeline has changed over the past 12 months. I also believe it has the right balance of risk and reward. In other words,
Pipeline is not consumed on one hand by moonshots and on the other hand by safe low return bets. We sort of have a combination of products that can deliver what I would describe as outsized returns, potentially, with products that can deliver incremental but reliable growth over time. More specifically, we have six assets right now in phase III. They're not all equal when you think about them on a sort of risk-adjusted value basis. Povorcitinib, 989, 12D, and latarcibart are comparatively higher PTRS projects. TGFβ×PD-1, the fifth asset, is different. Significant potential value, but more biology risk. So in our strat plan, it has the widest range of possible outcomes, whereas the other three or four anchor franchises for us. CDK2, the last one, I would describe as an incremental opportunity. That's how we view it.
I don't think the pipeline thesis for Incyte is trading on any one opportunity. I do believe that the pipeline we have right now has the potential to support our target growth rate post 2029. Now, is it enough? If we execute, I think the answer is yes. But as you know, these are probabilistic opportunities, and attrition is a fact of life. Our job is to keep this product line moving. We can't declare victory yet. Over the next 12 to 18 months, you will receive updates on many of these programs, at least phase I updates, as we're running the phase III programs. You will receive updates on how we are expanding each program, the initiation of studies.
Pablo talked a great deal about our GI oncology program at ESMO, and we'll provide you and everyone else with visibility into how we are advancing this pipeline so that there's more clarity on the growth potential of Incyte post 2029 on top of the core business. Thanks for the question, Evan.
Thank you. Our next question today is coming from Andrew Berens from Leerink Partners. Your line is now live.
Well, congrats on all the progress. It was great seeing you guys in Madrid. I don't know about you, but I'm practicing my Spanish as an insurance policy against next week. Maybe a bit of color on the decision to deprioritize PROC for the CDK2. We noticed it wasn't a focus at your event on Monday, but we thought it really looked pretty good relative to some of the other oral programs in the same setting. Was it the trial wasn't enrolling well or something else that you saw? If I could just sneak in a little more on the MF program and the endpoints, and maybe give some color, but what's your sense of the regulatory buy-in, or the potential to get a biomarker-driven endpoint eventually in the frontline setting? Thanks.
Thanks, Andy. Pablo will take the question.
Thank you, Andrew. Good to see you earlier this week. Look, we like 667, the data coming in with Bev. As you saw and you pointed out, we thought it was pretty strong. 48% response rate in the late line population. But the data that has continued to accumulate in platinum-resistant ovarian cancer with ADCs convinces that, number one, the study would be very challenging to accrue, and number two, the commercial prospects in that indication were limited. We continue to believe that there will be a role for an oral option for these patients, particularly in molecular-targeted population. The maintenance study continues, and we do have a large data set in platinum-resistant disease that we will discuss with FDA.
I think the probability of accelerated approval on that basis is very small because there is very clear evidence that, A, randomized trials can be run in that disease, and B, the efficacy has been superior to what we have shown with 667 to be very frank. So that has been the basis for discontinuing that one study. On MF, look, a surrogate biomarker endpoint would be ideal. I do not think we are there, and I do not think we are there mainly because I am not sure what that endpoint would be today. We talked about VAF, and VAF is an interesting way to monitor to some extent the progress, but it is far from an ideal endpoint because, as you know, VAF in peripheral blood measures a lot of cells that are not relevant to the treatment effect of 989 or any CALR antibody.
What we do believe, however, is that it is time in MF to consider alternative endpoints to SVR35 and TSS50, and that is incorporating different measures of normal hematopoiesis, hemoglobin platelets, as well as blasts in peripheral blood, as well as spleen volume quite honestly. That is a better way to characterize a treatment response to a drug like 989 and is also those factors are better predictors of long-term survival in MF patients than simply using SVR35 and TSS50 and that is why we want to continue that conversation with FDA.
Thank you. Our next question is coming from Salveen Richter from Goldman Sachs. Your line is now live.
Thank you. Good morning. Could you speak to what you will share with regard to preclinical data for your next generation antibody at ASH and how we should think about the profile of this asset versus INCA033989 in competitors, and then also how you would position your bispecific given the similar pathway? Thank you.
Thanks for the question, Salveen. Go ahead, Pablo.
Thank you, Salveen. Good to see you earlier this week. Let me make two points that I think are really important. Based on the preclinical data that has been disclosed by our competitors and the preclinical data that we have on hand, I think our next generation CALR antibody is the best-in-class CALR antibody out there. The reason for that is we have optimized every property that we thought we had to optimize on 989. This novel medicine is 70 times more potent against non-Type 1 mutations, and it has a much longer half-life. You will see the details at ASH, but it will allow at least for monthly sub Q injection, maybe even less frequent, depending what we see in patients. It will be sub Q, obviously, from day one. We expect that the dose that is going to be required is going to fit in a pen.
We really believe that this will address some of the limitations that 989 has. As excited as we are getting 989 approved for patients with ET and MF, we think that this next-gen will be very helpful in the longer run. I know you didn't ask about that one, but we're also going to present data on the next-gen V617F inhibitor. We think this drug addresses a lot of limitations that we had with our previous entry in this space. We look forward to sharing that data with you. The other bispecific, as we've discussed a couple times over the past year, I need to see more data to understand exactly where the bispecific will be positioned in patients with MF. Efficacy and safety will determine what kind of a role this medicine potentially can play in this disease.
I think possibly in patients with more accelerated MF that need a more rapid tumor reduction. But if the data with 989 continues to look better and better, one could argue that the space for the bispecific could become a little bit more limited.
Thanks for the question, Salv.
Thank you. Next question today is coming from Jay Olson from Oppenheimer. Your line is now live.
Oh, hey. Congrats on all the progress and thanks for taking the question. For 734, what are your plans for combination strategies in PDAC and CRC, especially with the positive news from petosemtamab? How are you thinking about moving 734 into earlier lines in combination with petosemtamab? Thank you.
Thank you, Jay. The combination that we announced is in fact to study 734 in combination with petosemtamab and FOLFOX in patients with colorectal cancer. Obviously, you need to do a phase I study first, but the idea is to move to frontline therapy as quickly as possible. We reviewed the landscape of novel EGFR inhibitors. We decided, and I think the data that was released yesterday confirms that that was the right choice. We believe that petosemtamab is the best next generation EGFR inhibitor, and that's why we put that collaboration in place.
Thank you. Next question is coming from Ash Verma from UBS. Your line is now live.
For G12D program, can you talk about your enrollment strategy for...
If a lot of daraxonrasib gets used in patients that progress and whether that treatment effect of daraxonrasib post-progression is different in the two arms of the study. We've done extensive statistical modeling. We're going to track that in the study, and we can potentially shift to countries where daraxonrasib is not approved if we see that that's happening in a lot of patients. I would say at this point, we already have more than enough patients enrolled in the U.S. to be sufficient for an FDA submission. I have no concerns about not having enough U.S. patients. What we will monitor, though, is post-progression daraxonrasib use to make sure that that doesn't impact the post-progression of PFS two in a way in one arm more than the other.
If there is a need for intervention, we will shift to countries where daraxonrasib is not approved.
Thank you. Our next question today is coming from Gavin Clark-Gartner from Evercore ISI. Your line is now live.
Hey, guys. I just wanted to ask on the second-line MF and CALR study, are there any limitations on the percent of patients that can receive a JAK inhibitor in the best available therapy arm? What are your expectations for what that number will be? Just to clarify on the primary endpoint, that is Type 1 only. When you do hierarchical testing, do you go look in the ITT population, or do you specifically then look in the non-Type 1 population? Thank you.
Thank you, Gavin. No, there is no limitation in the percentage of patients that can receive a JAK inhibitor. As you know, if you look at the data, one has to be careful to looking at studies that allow versus did not allow washout after first-line therapy, the prior line therapy, prior to entering a second-line study. So the SVR35 is as low as 8% in patients, depending on whether they did or did not have washouts. Our data that we presented at ASH, which is close to 40% SVR35 and about 40%, 45% TSS50, is in patients with no washout that obviously are expected to do worse. So that is important to remember. So we feel very confident that all the approved therapies in second line are substantially inferior to what we have seen with 989 so far.
The only comment I am going to make about the statistical testing is that the primary endpoint is in Type 1 patients. We thought that was the right way to run the study to ensure success and to get this medicine approved for these patients, which are about two-thirds, if not a little bit higher, of the patients with KRAS mutations. We will collect the data in non-Type 1 patients. Obviously, we will have it available, but the primary analysis of the study is in Type 1 disease.
Thanks, Gavin.
Thank you. Next question today is coming from John Newman from Canaccord Genuity. Your line is now live.
Thanks for taking my question and congrats on all the progress. You previously stated that at least at this point in time, you probably will not pursue combinations with your G12D and a pan-RAS inhibitor. I am just wondering, outside of the work that you are doing with your G12D, have you considered at all licensing a G12V as in Victor? It seems like an area where there are a few competitors, but maybe not quite as many as G12D. Thanks.
Great question. On the pan-RAS, we don't rule out doing a combination with the pan-RAS. We are continuing to scan the landscape to see if there's an option that is suitable for us. We're not ruling it out. Let me be very clear. We've done preclinical work, and we think there's value in the combination. In terms of G12V, we are interested in expanding our KRAS franchise. Also, we would not rule out, at some point, addressing patients with G12V mutations.
Thank you. Next question today is coming from Michael Schmidt from Guggenheim Securities. Your line is now live.
Hey, thanks for taking my questions. I just had another follow-up on 989. Just thinking about the possible registration strategy in frontline MF patients, will the focus there also primarily be on Type 1 patients, with a 36-month endpoint, or would that include a broader opportunity? How will you position the next-gen CALR antibody relative to 989 in that context? Thanks.
Thank you, Michael. On the first part, we'll see where the data takes us. Right now, we continue to develop 989 to try to address the needs of all patients with CALR mutations. We made a decision in second line, as we just discussed. In front line, the data will guide that decision. Let's talk after ASH, and then once we both have the data in front of us, we can see what that looks like. Remember, a potential path in first line, as I discussed a few minutes ago, is a three-arm study with Jakafi in combination with 989. In that case, that calculation might change a little bit. Let's keep that in mind as we review the data at ASH. On the next-gen, right now, the positioning is get into it as fast as possible, get into pivotal trials as fast as possible.
We think that if we reach an agreement with FDA on the starting dose, our current understanding of this target will allow us to have a very short dose escalation period. If you remember, 989, we had to start at 50 milligrams- 70 milligrams, and we had to escalate all the way to 2,500. That took a long time. It is not going to be the case with the next-generation program. We think we can get to the recommended phase II dose much faster, and our goal is to start pivotal trials with next-gen in 2028.
Thanks, Michael.
Thank you. Next question is coming from Mitchell Kapoor from H.C. Wainwright. Your line is now live.
Hi, this is Amit Amin from Mitchell. Thank you for taking our question. Looking at 734 and DAWN-302, what supports 734 and cetuximab combo replacing second-line chemo, and will DAWN-302 second-line cohort be large enough to establish benefit independently of third-line results? Thank you.
Let me see if I understand the question. You are asking about the design of the theoretical colorectal trial?
Yeah. I was just wondering if we will be able to distinguish the benefit in second-line versus third-line patients.
Yeah. It is a good question. In general, let me put it this way. I expect that the study will involve predominantly third-line patients because the control arm will allow LONSURF Bev, which was the winning arm of the SUNLIGHT study, as well as regorafenib or fruquintinib. When you put those options in your control arm, you are more likely to end up with a third-line shifted population. Whether the data at the end are sufficient for a broad label, time will tell. It depends on the population we enroll, depending on the results of the study. Based on the control arms, that is what we expect. I wanted to use this question to address one point, which I think is very important about this DAWN-302 study, just to make sure we are all clear on what the expectations are for the control arm.
The SUNLIGHT study had a PFS of about 5.6 months, and that was cited by several as the benchmark. Importantly, in the SUNLIGHT study, Bev-exposed patients had a PFS of 4.5 months, which is substantially lower. DAWN-302 will be in Bev-exposed patients. So we expect the control arm overall will underperform the overall SUNLIGHT study. The other point that is important is we run a real-world analysis with Tempus showing that the SUNLIGHT study population and patients with KRAS mutations do worse on LONSURF Bev than patients that are wild type. Based on that, we think the reassured that the probability of success of DAWN-302 is quite high considering the expectations for the control arm.
Thanks for the question.
Thank you. Next question today is coming from Derek Archila from Wells Fargo. Your line is now live.
Morning, and thanks for taking our question. This is Jacob on for Derek. Can you provide us some of your thoughts on label scenarios for povo and HS, and what analogs would you point to there for the launch?
I think there are two basic label scenarios. We studied both a pre- and post-biologic population, and so that would be clearly the preferred label scenario. The other is just simply a post-biologic population. There are JAK inhibitors, for example, in AD that have an indication, different data set, different indication, post-biologic. I think that they're both workable paths. I think the biggest opportunity for povorcitinib is it can be used at pivotal inflection points. A moderate-to-severe patient diagnosed with HS, who has been only receiving antibiotics and steroids, which are imperfect solutions. That's a large pool of patients. Then after a biologic, for patients who have active disease, aren't achieving consistent pain relief or a loss of response, which has been well-documented, especially with TNF alpha.
We're in discussions right now with the FDA. As part of planning for this launch, we plan for both plausible outcomes. We've not seen the label. We expect that the data will support a broad label, but I'm laying out the range of possibilities. I'll let Mohamed comment on how to think about analogs.
Yeah, I think, Bill, really not much to add. I mean, the analog that we've seen so far will really dictate based on the data. We believe we have a broad label that supports a broad indication. Different analogs, I think, in the marketplace today suggest the same based on the data sets that were submitted in their pivotal program. We'll wait and see, but like Bill said, I think the most important point is that both scenarios are very workable, and we're very optimistic about the opportunity.
Thanks for the question.
Thank you. Next question is coming from Eric Schmidt from Cantor Fitzgerald. Your line is now live.
Great. Hi. Good morning, everyone. This is Imogen on for Eric. There is a trial in clinicaltrials.gov for an antibody in MPNs, INCA036978, that started enrolling earlier this year as monotherapy and in combo with standard disease-directed therapy. Could you just tell us a little bit about that program, and is it targeting CALR or something else? Then one question on povo. In the mild to moderate HS population, we have heard very encouraging feedback from KOLs here. If this ends up being a positive set of phase III studies, where do you think that peak sales could get to for OPZELURA? Sorry, not for povo, for OPZELURA in HS.
Great. I will turn over the first part of your question, Imogen, to Pablo.
Thank you for the question. At this point, we are not going to disclose the target. All I would say is that that antibody is a mutation-agnostic antibody for patients with MPN, so it can potentially target CALR as well as V617F as well as MPL mutations. We will disclose the actual target at the right time, Imogen. I am sure you understand.
Yeah. Imogen, I think your question was about OPZELURA in HS, and I think the backdrop here is really important. There is no FDA-approved oral anti-inflammatory, and there is no FDA-approved topical. The study we did was in mild to moderate HS, and so there is some overlap with povo, but not a lot. Our math is there is a couple hundred thousand patients, roughly, maybe 300,000, in that mild to moderate segment. If you picked up 10%-15% of that or more, it could be a 5%-10% lift on OPZELURA. We have to wait for the data in the fourth quarter, but it could produce $50 million, $100 million in incremental sales, I think is not a heroic assumption. We will wait and see what the data looks like, then it will be a part of the growth story.
It's not necessarily built into our models right now. We're just waiting for the data. Thanks for the question.
Thank you. Our final question today is coming from Tara Bancroft from TD Cowen. Your line is now live.
Hi. Good morning. Thanks for taking my question. I was hoping maybe you could tell us the timeline to the clinic for 954 , the V617F, and what we should focus on in the preclinical data that's most indicative of potentially improved clinical profile versus 958. Thanks so much.
Certainly. The entry in the clinic for next-gen, the V617F nine five four, will be early 2027. We never disclose the exact date, but it's going to be in the early part of 2027. The main things that we wanted to address here, compared with our previous entry, was improving the selectivity, and important in this case to always remind ourselves that what matters is selectivity between wild type and V617F mutated cells. This is not a JAK1/JAK2 selectivity question. It's wild type versus mutated cells. And we've run extensive preclinical studies that you'll see at ASH, and we think the selectivity of this molecule is substantially better than our previous V617F inhibitor. So we feel much better about that. The second is we worked the formulation ahead of time.
If you remember, we had to do a lot of work in the formulation of I four. Now the formulation that we're going into the clinic, we feel much better about. Both the formulation side and the selectivity of the molecule on the margin in preclinical tox studies are much better than 954, so we're really excited about moving this program forward.
Thanks for the question, Tara.
Thank you. We've reached the end of our question and answer session. Ladies and gentlemen, that does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.