Good morning, everyone. Thanks for joining us for the next fireside discussion. My name's Derek Archila. I'm one of the senior biotech analysts here at Wells. I'm very excited to have the next company here, Incyte. From the company, we have Bill Meury, Chief Executive Officer, as well as Pablo Cagnoni, Global Head of Research and Development, if that's right. Gentlemen, a lot of changes at Incyte from last year when you started as Chief Executive Officer, Bill. Maybe just talk a little bit about a year in the seat, priorities, and then we can go through some of the key growth drivers here.
Yeah. Thanks, Derek. At the beginning of the year, we laid out a framework for how to think about the company, and I think there's really two simple parts to our plan, to our strategy. The first one is we have a core business ex-Jakafi, and how we should be judged on that core business is maintaining a double-digit growth rate for the next five years. By 2030, we think that core business, which sets the floor for Incyte in many respects, is going to be at $3 billion-$4 billion. Product launches is what will continue to drive our core business, and I think we are on track to do that. You see that each quarter as we report on the performance of OPZELURA and Niktimvo and MONJUVI and Zynyz. Then part two is really executing against the pipeline, and that will drive the recovery.
Our aim is to have a business post 2029 that can grow at a 15%-20% five-year CAGR. If you look at the unadjusted peak sales potential of the pipeline, you could see a business, we don't have to be perfect, but we have to be successful, that has about $8 billion-$10 billion in top-line potential. When you look at the pipeline, we have three therapeutic areas as you know, hematology, oncology, and immunology. There are five assets that I think have a high PTRS and will drive 80%-90% of that recovery. In hematology, we have INCA33989, our monoclonal antibody for MF and ET, which is in phase III. We have latarcibart, which is a bleeding disorder, which we acquired at the beginning of the year.
In oncology, we have a G12D inhibitor, frontline PDAC, which is in phase III, and TGF-beta by PD-1 bispecific in frontline MSS CRC, which is also in phase III. Then, of course, we have povorcitinib in immunology. That's where our focus is right now, and this is an execution test. We have to convert phase III studies into FDA approvals and those approvals into revenue earnings and cash flow. It's a two-part story. Business development will be used to supplement what we have internally to start a therapeutics deal for latarcibart is, I think, a textbook example of a type of deal that makes sense for Incyte. We have a clear framework for doing deals. We have criteria. If a deal meets those criteria, we act quickly. If it doesn't, we're comfortable being patient. I think that framework makes a lot of sense for recovery.
Perfect. Good segue. Let's talk about these five growth assets that you're pointing to, and maybe starting with INCB000734 and G12D, just because ESMO's coming up and maybe, Bill Meury or Pablo Cagnoni, if you can set expectations on what we should be seeing in that data set and what gets you confident to build around and really invest around this, given a lot of the competition that's out there.
Pablo, go ahead.
It's a really important program for us, as Bill highlighted, and I think ESMO will be a very important meeting for all of you to understand why we're so excited about 734. What you're going to see are a couple of really important data sets. First, it's going to be a combination with two types of chemotherapy, gemcitabine and nab-paclitaxel and FOLFIRINOX, in patients with previously untreated pancreatic cancer. That's our lead indication. We haven't shown mature data in combination with chemotherapy, so this is going to be very important. Will be efficacy, will be a comprehensive update on the safety, including discontinuations, interruptions, dose intensity, et cetera, which I think everybody would like to see. The efficacy data is maturing very well. Importantly, we will not have yet a mature PFS, quite honestly, because we don't have enough events. Not enough patients have progressed.
But we'll have a landmark analysis that will give you an idea of the durability of these responses. So very important data set to de-risk the frontline phase III study that is ongoing in patients with pancreatic cancer in combination with chemo. That study is ramping up very quickly globally. It will have more than 150 sites open at its peak, and we're very optimistic on the enrollment rate and how that study's going. So that's the cornerstone, the foundational part of the G12D program. In addition to that, we will show data in combination with ERBITUX in patients with late-line colorectal cancer. If you remember, ERBITUX in those patients have a single-digit response rate. We're very enthusiastic about the data that we've seen in combination with our G12D agent. We'll show that data.
We are having regulatory conversations with the agency to design a phase III study in late-line colorectal cancer of our G12D in combination with ERBITUX. A very important part as we continue to expand the franchise into a different tumor type. Two more important things, or three, that we are not going to show data yet but are important to keep in mind how the program is evolving. We are very interested in moving into adjuvant pancreatic cancer, a very important area for patients because it can drive a lot of benefit, and obviously an important part of the market. We have combined also with FOLFIRI and ERBITUX in frontline colorectal cancer. That will not be at ESMO, but it is evolving very well. The final point is we are going to give you an idea of the combination strategy.
We realize that G12D is combined well with other targeted agents, and that is also something we are building. You will see pancreatic and colorectal data, and you will get an idea of how we are expanding the program going forward.
I think a key takeaway in what Pablo Cagnoni just talked about is we should be judged when it comes to G12D, I think the data are very competitive, and you will see that at ESMO, is on systematic expansion, so that this moves from or transitions from a single asset story to a franchise. That type of breadth is how we extract as much value out of G12D as anything else.
Got it. I guess when you think about the need to be differentiated, as you said, you believe the data is very strong, and we know where that competitive benchmark is. But maybe talk to the development strategy as you outlined, Pablo Cagnoni, how you can differentiate around that, and ultimately maybe be first in areas.
How do you think the market evolves commercially, again, with the options that will be out there?
I think when I look at the KRAS G12D space, I think it's fair to say that there's two companies, us and our main competitor, that are ahead of the pack. Let's call it that, when it comes to executing frontline pancreatic cancer. I think when you see the data at ESMO, hopefully you will agree with us that I think getting into who is 2 percentage points higher or lower on response rates or nausea or I don't think it's a very productive use of time. I think you'll see that the two programs or the two drugs are basically comparable, and I think that's okay. In terms of who's going to finish first in pancreatic cancer, I think, again, we're neck and neck. The two studies are likely to finish pretty close to each other.
For us, the differentiation here is going to come by combination strategy. That's why we think colorectal cancer is very important because I think we have generated data that you'll see at ESMO that is fairly mature, showing that we can combine with ERBITUX, and we can really significantly improve the response rate of single agent ERBITUX in late-line colorectal cancer. Then taking that, which is in itself an important market, and moving that to frontline colorectal with ERBITUX and chemo is a really important area of growth for the program. That's the approach we're taking. Obviously, the combinations are going to come as well. The key for us in this point is to accelerate as much as possible colorectal cancer. We think it's a critical area of differentiation from our competitors.
Got it. As you think about the opportunity from a TAM perspective or commercial opportunity, I know, Bill Meury, you were saying last night, framing out this GI oncology. What could that be? What could that look like?
Well, we know the size of the PDAC and CRC markets. In PDAC, G12D is about 40%. If you look at CRC, it is roughly 15%. You could estimate a TAM of $7.5 billion-$10 billion just in the U.S. I firmly believe, and precedent proves this, that this will be a multi-asset, multi-billion-dollar category. You look at other areas of oncology like HER2 and BCR-ABL and PD-1 and CDK4/6 and EGFR. There are first generation, second generation, third generation, multiple lines of therapy, multiple tumor types, and multiple combinations. Right now, as you and I have talked about, there is only two companies in late-stage development with a G12D inhibitor in phase III, and that is Incyte and, of course, Revolution Medicines.
I believe that we are set up to build a vertical inside of Incyte that has the potential to be as relevant and as big as our hematology business, which in many respects is the central identity of the company.
Executing against the plan that Pablo Cagnoni just talked about
is the priority. If we focus on that, this will help drive the recovery of Incyte post-2029.
Got it. Continuing to move on down the list of assets here. We talked a little bit about TGF-beta as well. I guess, how does this fit in and ultimately part of that CRC story as well, and maybe even the combinability of G12D and TGF-beta, but maybe a little bit more higher risk, but maybe you can give us your sense of how we should be thinking about that program in the portfolio.
I think Pablo Cagnoni does an excellent job of describing the scientific hypothesis behind TGF-beta by PD-1, which we are in a one-of-one situation in one of the largest wide-open white spaces in oncology. It is a higher risk program, but if we are right, it could have a profound impact on the future value of the company. I will let Pablo Cagnoni talk about the hypothesis.
Got it.
Because I think he is spot on.
TGF-beta is arguably the second most important mechanism of tumor evasion in solid tumors. Obviously, PD-1, PD-L1 axis is the key, and we figure out how to drug that now for the past 15 years. The challenge is, if you give a systemic TGF-beta inhibitor, is systemic toxicity. Those have been tested multiple times, antibodies and small molecules. Traps don't work as well because catching enough ligand to make a difference is problematic. Those have been ineffective instead of toxic. What our team did is come up with a completely different idea, which was take an antibody against the TGF-beta receptor II, only one, which we think it's the most important one, and attach to it an anti-PD-1 arm. The TGF-beta receptor II antibody only engages when PD-1 is fully engaged.
What that does is basically it drives the bispecific to the key site of action, which is the tumor microenvironment. In the phase I study, what we've seen mostly up to doses of 900 milligrams were PD-1 related side effects, which you would expect. At the end of the day, I would call it a better PD-1. Very little, if any, TGF-beta side effects. Now, if you exceed the doses, there's a point where you start to get a little bit of that, but that's not the dose we're taking for further development. That's the scientific concept.
The data that we've generated, which is in hundreds of patients, we have now well-characterized the safety of this molecule, is in patients with late line colorectal cancer, MSS colorectal cancer, including more than half the patients with liver mets, a very clear evidence of single-agent activity, which you don't see with anti-PD-1s. Anti-PD-1s have been tested in MSS colorectal. The response rate is zero. We showed a 15% response rate, including more than half the responders were patients with liver mets, and the responses were quite durable. That was the data that really set up the chain of events of where we are today, which is we decided then to combine it with chemotherapy, which we've done, combination with FOLFOX, and then we started generating a larger data set, which you will see at ESMO in frontline MSS colorectal in combination with FOLFOX.
In parallel with that, we took what is, I would say, a risky approach. We launched a phase III study in frontline colorectal. High risk, high reward. That study's going very well. It's expanding globally rapidly, and you will see at ESMO the data that we have now in hand that hopefully helps significantly de-risk the program. A 40+ patient data set, frontline colorectal MSS, including about 2/3 of the patients with liver mets and the response rate and some idea on the durability. Again, not a lot of progressors yet in combination with FOLFOX. That's the data that we've generated. In parallel with that, we're doing a couple of other things. We're combining with a G12D inhibitor. That's a very intriguing combination. When you have two novel drugs that work well, you try to see if you can give them together. That work is ongoing.
We are moving the TGF-beta program also into the adjuvant setting in colorectal cancer, which we think is also a very important indication for patients and a big market. If you take patients with surgically resected MSS colorectal, you give them chemo. After chemo, patients that have circulating tumor RNA have a very high risk of recurrence. We think we can fix that by giving them a TGF-beta, by PD-1 in combination with chemo. That is the plan for TGF-beta. We also have data in other tumor types. We will not talk about that at ESMO. We want to focus on mostly GI cancers at ESMO.
Got you. When would we learn more about potential other areas or other tumor types that you would want to?
I would call it first half of next year.
Yeah.
We will generate some more proof of concept data. We have presented some of that.
Yeah.
We showed data in ovarian cancer, head and neck, and lung. 20%-30% response rates, including post-PD-1. The drug is active in other settings, and the question now is the development plan, and you will see more next year.
Got you. Maybe shift gears to INCA33989. This is one basically helping replace the current business with Jakafi in myelofibrosis MPN. We should get a couple updates, but the main one around the phase III for MF. Maybe just talk about some of the options that are on the table there. I know with a more targeted therapy like this that could be disease modifying, your push to the FDA is maybe more novel endpoints, but where do you think we will net out in terms of that relative to more traditional endpoints?
I will set it up and let Pablo expand first, and we have talked about this. There is a base case scenario here.
Second line MF conventional endpoints. That is SVR35, TSS50. We will collect information on anemia with a focus on Type 1, although we will study non-Type 1. There is an ideal scenario, you could argue, which is we convince the FDA that a composite endpoint makes sense given the attributes of INCA33989. It is a more complete way to look at the benefit of the product in MF. Base case, we get conventional endpoint with a focus on Type 1, and we turn the composite endpoint into a key secondary, and then continue our conversations with the FDA as it relates to a composite endpoint, which could be relevant to a first-line program or to our next gen antibody. We will provide an update on the third quarter call. We have not finalized the protocol, but those are the two paths.
The same two paths we talked about several months ago. We know that with the conventional endpoint in a base case scenario, that 989 is going to beat best available therapy if you look at the data from our phase I. We are very confident about that. When you go into the frontline setting, what is going to be relevant is the data we share at the end of the year, which is we will have data in monotherapy and combination therapy with ruxolitinib, roughly 50 patients or 60 patients split 2/3, 1/3 monotherapy and combination.
Those data are going to help instruct what our approach is in the frontline setting. If the data in our ASH update looks like the data from the JAK inhibitor-naive eligible cohort that we shared in the middle of the year at EHA, we have a real line of sight even on conventional endpoints to going into a frontline study. We will provide as complete an update as we can at the third quarter call.
Got you. What do you think that composite endpoint and the disease modify, what does that afford you down the line, and how do physicians really start to understand that and where we are going versus the more blanket JAK approach getting to more targeted therapies? There is going to be a learning there.
Yeah.
Yeah. Look, when you introduce a new mechanism, you need to understand what the new mechanism does for patients. We do not think SVR35 and TSS50 are the best way to understand what INCA33989 does for patients with MF, quite simply. Those endpoints were tailored for Jakafi, and that was the right thing to do at the time. When you look at the data that we present at EHA, and we will present more of that later this year, the normalization of hematopoiesis, which is what INCA33989 does in these patients, is not reflected in SVR35 or TSS50. We think it should be. The conversation with FDA will be important, as Bill Meury outlined, and whether we get there soon or we get there a little bit later, honestly, it does not really matter. The first step is to get this drug available for patients on the market.
We have a way to do that, both in ET and MF using conventional endpoints. The second step of the journey is to really convince the FDA to redefine the regulatory landscape for patients with MF, and I think we have a way to do that. I do think they are going to be receptive. They may need more data. We will generate the data, and I think we are going to get there.
Got it. I guess when you think about the opportunities across MF and ET for INCA33989, maybe can you help quantify those in light of the fact that it is being delivered IV, but you guys do have a very robust program to get to sub Q, so kind of marry all that together.
Yeah. We expect when we launch for ET that within six months ± , we will have an on-body device available. So you go from taking, for example, hydroxyurea once a day, for the rest of your life to a twice-a-month injection, which I think is much more convenient. I think in order to penetrate the ET market, we are going to need the on-body device, and then, of course, that would be available for MF. When you look at the size of these categories, just to combine it, there is roughly, let us call it 20,000 people with a CALR mutation that either have ET or MF.
So you are looking at a market that is north of $5 billion. The question is, how much does a monoclonal antibody targeting CALR get? I do not think it takes heroic assumptions to pencil out a peak sales estimate where INCA33989 across MF and ET in CALR mutated patients could be as big as Jakafi. That is this working. If you think about the ET market, they have been using hydroxyurea for four decades.
It is not an easy drug to dose. It has warnings and precautions, Grade 3 AEs. If there is one thing you can say about INCA33989, in addition to being at least as effective as hydroxyurea, it is a very safe antibody. For patients with ET that are diagnosed at 40 years or 50 years of age, and half the patients in our study were that young, they are going to live with this condition for the rest of their life.
All you are doing with hydroxyurea is treating it like you treat a fever with Tylenol. You are not doing anything to the underlying disease. I think there will be a shift in ET from platelet counts to disease modification. Half the people on hydroxyurea get a partial response, which means residual symptoms, residual thrombotic risk, and residual risk of transformation, although that is low. On the MF side of it, we know that there is a therapeutic squeeze with Jakafi and JAK inhibitors. If you increase the dose, you control the symptoms, but you cause anemia.
If you do not increase the dose, you avoid the anemia, but you have symptoms. INCA33989 goes to the one flaw of JAK inhibitors. I think that the potential here is real, and the most important thing is for us to get it out, even in the second line, in both conditions. The hematology community is going to reshape how they use the two current standard of cares.
Hydroxyurea and obviously the JAK inhibitors, namely Jakafi.
Got it. Again, these are must-win for you guys in MPNs and just because Jakafi and what you have there. Can you just talk about. You have talked about another mutant CALR antibody. You have talked about a TCE. Maybe just reinforce your commitment to this space and the options that you are looking at in the pipeline.
Yeah. Go ahead.
We are the company that basically built the Philadelphia-negative MPN space over the past 15 years, first in MF, then in PV. Jakafi has created this, through the ability to help patients, created this significant business. Our goal now is to go after the entire group of patients with MPNs, all MF, all ET, all PV. The first step in that direction is 989, as Bill outlined. We are confident that we are going to be first to market for a CALR antibody. The next step is we have to be best with CALR antibody. That is the next generation program. We will introduce it at the right time. It basically optimizes every property of 989. More potent, almost equipotent for Type I and Type II, but much more potent overall and longer half-life. You will see some of the data in the relatively near future.
In parallel with that, we have a TCE. We have T-cell engager, CD3 by CALR. That study is in dose escalation. We will have data in 2027. We think it could be an important part of the story for certain patients with MF that do not respond or respond poorly to a regular CALR antibody. The next step of the story is V617F. We had a program. We discontinued it because we did not think it would clear the bar in terms of optimal efficacy. The new next generation V617F inhibitor is a much, much better molecule. You will see data at the right time as well, but that will be introduced in the clinic in the very, very near term.
By doing this, we are committed to this space, and we are committed to going after to find a solution, a targeted therapy, a disease-modifying therapy for every single patient with an MPN by the end of the decade. We think that plan is on track.
You also have a couple shots on goal with V617F, with Prelude as well.
We do. Thank you for bringing it up. We have an internal program that I just mentioned. That R&D will go in relatively soon. Then we have a collaboration with Prelude. It is an option deal. The option vests in 2027. It is not just one program. The lead molecule is in the clinic already, but they have other backups that are moving through the system. We are going to get to see all the data that they have, and then we will make a decision. We do not play favorites. The best drug will win. Our goal is to win in V617F inhibitors. We think we can do that because we understand that biology very well, and we have the right models in-house to understand that biology very well. That is why the best of those molecules will be advanced in development.
The biggest shift, I would say, over the last 6 months at Incyte as it relates to, I would say, our two most important therapeutic areas, hematology and GI oncology, is they are moving from single asset stories to franchise plans. In other words, we had to walk before we ran. INCA033989, we had to get it into phase III, and the same thing with G12D. But they have been single asset, single study, single indication plans. You are seeing over the next 6-12 months, it will become clearer that we are going after breadth as it relates to both those programs and systematic expansion. I think that is how you extract as much value out of these two very novel compounds as we can.
Well, let us segue into VGA039 because, again, this is another potential franchise play, as you just talked about. I guess what really was attractive about this deal and certainly the asset, and in your wheelhouse because of the hematology, but what gets you excited about von Willebrand disease?
Yeah, I'll make a couple comments and let Pablo expand on it. If you look at a neighborhood right next to von Willebrand disease, it would be hemophilia A. HEMLIBRA is now a standard of care for hemophilia A patients and went from replacement therapy to once a month injection to provide protection against bleeding. For von Willebrand disease, all they have is replacement therapy. Replacement factor degrades over time, requires frequent infusions, and only a very small percentage of patients with von Willebrand disease are receiving prophylaxis therapy because it's not convenient, and there's peaks and troughs when you're given replacement factor. There's a segment of von Willebrand disease that looks like hemophilia A, severe frequent bleeders. That's 7,000 patients- 10,000 patients. When we look at a Protein S modulator, it's a system-level correction. It's restoring thrombin under a bleeding challenge, but not increasing thrombotic risk materially.
We thought this VGA039 could be to von Willebrand disease exactly what HEMLIBRA was for hemophilia A. Phase I data is a limited data set, but we saw significant reductions in bleeding. The entire biomarker package was very supportive, and there was a clear regulatory path to be the first prophylaxis once a month treatment for von Willebrand disease, which doesn't exist today. It was a perfect adjacency to our current MPN business. The deal made sense strategically and operationally and obviously financially, too. I think Pablo can talk a little bit more about the scientific hypothesis.
We love the program. I think Bill made all the points, but just to maybe emphasize a couple things. Great science. It's in a completely novel way to treat a bleeding disorder. It's a modulator Protein S, which is a natural anticoagulant. By modulating, not reducing or depleting it, by modulating Protein S, you don't create a procoagulant state, but you rebalance the coagulation cascade. We know that because you normalize thrombin generation. You don't overshoot it. You don't increase D-dimer. You don't increase fragment. So it's very clearly rebalancing in a way, but more modulating Protein S activity. Second, the medical need is clear. Von Willebrand disease patients need something better than infusions two to three days a week in order to prevent their bleeding.
The data package was very solid, and we think because of the mechanism of action of modulating Protein S, that can potentially work on all types of von Willebrand disease. In fact, the data set that we presented at ISTH in July shows exactly that. The reduction in ABR, annual bleeding rates, was independent of type of von Willebrand disease, independent of type of bleeding, independent of frequency of bleeding. So very clear evidence across the board, even though the sample size is relatively small. When we put all that together, we really thought this was a perfect program to bring into the company. The phase III study's enrolling very well. The pivotal trial is ongoing. We have a very strong agreement with FDA on the design of that study, so we're very comfortable. It will be a global study.
We think it could enroll ahead of schedule perhaps, and we'll have data in the first part of 2029.
Beyond von Willebrand disease, where could you see this type of more universal agent to expand into?
I think it's an important point because this is not a von Willebrand disease drug. It's not factor replacement. It's really independent of that. There are a number of areas that we're looking at. The first and most important one, I should say, is to do a study in prophylaxis. Patients that are on prophylaxis today. The pivotal trial excludes those patients. Patients have to be free of prophylaxis for six months. It's an observation period, and then they enter the study when they start to be dosed for a year. We need to do a profi switch study. Patients that are on current prophylaxis for von Willebrand switch them to latarcibart VGA039 to make sure we can keep the control on bleeding that they had on the prophylaxis.
I would argue that's the most important study for the program after the pivotal trial, to supplement the label as well to supplement or support reimbursement, particularly ex-U.S. After that, the story gets a little bit more complicated because we don't have any preliminary data in the clinic yet. However, potentially, there are diseases like HHT where this could have a role. That's a disease where patients have severe bleeding, particularly a lot of epistaxis is very common in those patients, and arteriovenous malformations, which also create a risk for those patients. There's an argument to be made that by modulating Protein S, you can again improve the coagulation, the formation of that initial clot in these patients, and that could really be very, very helpful.
There's a group of disorders called bleeding disorders of unknown cause that happen to be fairly frequent in bleeding disorders clinics, and there's a strong interest also generated in that group of patients. That's some of the ideas. I don't think we are planning to go into hemophilia right now. That seems a problem that is well addressed by current interventions, but those are some of the other ideas that we have.
Got it. So more to come.
Yeah.
Then maybe the last couple of minutes, last but not least, povorcitinib.
Yeah.
You know, you got launches coming up, in HS potentially, and other indications. So talk to us about how you think about that in the context of your I&I franchise.
Yeah. povorcitinib is going to be an important launch for the company in 2027. It is under review at the FDA right now. We expect an approval in the first quarter of 2027. The current options for hidradenitis suppurativa, which is one of the worst dermatological conditions you have, are completely imperfect. On one end, you have antibiotics and steroids, and on the other hand, you have the IL-17s, which have had a big benefit for a certain portion of patients. What povorcitinib is going to be in HS is the first FDA-approved multi-cytokine inhibitor for a multi-cytokine disease. It is not like single cytokine, IL-13 mediated AD or IL-23 mediated psoriasis. You have very impressive skin clearance data, very impressive pain data, pain relief data, which is the cardinal symptom of the condition. There is one thing a JAK inhibitor does, and that is it works fast.
It has a well-characterized safety profile, and it is an oral. Our view is that this drug is going to be used in both the pre and the post-biologic setting, subject to a label for both populations, which is what we expect. I think there is going to be immediate trial and adoption of povorcitinib. If it performs in the real-world setting like it did in the clinical trial setting, this will be a very important first indication for povorcitinib. We will follow it up with vitiligo and PN roughly a year later. I believe that this business has peak sales potential of at least $1 billion in sales.
These are product launches as you know, Derek, our job is to execute this launch, and it will be fully funded and resourced. It will be marketed right alongside OPZELURA. OPZELURA will have data in HS at the end of the year in the fourth quarter. It could create a really nice sequencing strategy of a topical to an oral. Right now we are heads down in terms of managing the program.
Got it. We will look forward to that. Thank you guys so much.