The Cantor Conference. My name is Eric Schmidt, and it's my pleasure to moderate the next session with my colleague, Imogen Mansfield, and delighted to have with us the Incyte team, fresh off a big year and looking forward to a very eventful fall as well. We've got the company's Chief Executive Officer, Bill Meury, as well as the company's President and Head of R&D, Pablo Cagnoni. Pablo, Bill, thank you for being here.
Great to be here.
Bill, it's been just about a year since you took the helm.
Yeah
Give us a lay of the land and what's worked well over that intervening period since we last saw you.
Yeah, look, I joined the company just about 14- 15 months ago. One of the things I observed from the outside looking in is that the pipeline when I joined was still really in a proof of concept stage. We did not have significant phase I data on INCA033989, G12D, TGFβR2xPD-1. Obviously, we didn't have our protein S modulator for von Willebrand disease. Here we are about 18 months into the phase, and we're in phase III on all those assets. I think the pipeline has advanced in a way that is very reassuring, number one. Number two, I think it gives us much greater visibility into the recovery phase, the growth rate of Incyte post 2029 after we lose Jakafi.
I think we as a management team should be judged on two things right now, and we laid this plan out at the beginning of 2026. The first one is getting the core business to $3 billion-$4 billion. That is essentially the floor for Incyte. That is supported by multiple product launches over the next 12 to 18 months. Two of them are already on the market, Jakafi XR, and we launched OPZELURA in Germany, actually a couple of weeks ago, and then we're waiting for povorcitinib and potentially frontline DLBCL for MONJUVI. That's the core business, and we have to keep that product line moving, and you'll get reports every quarter as we report on the performance of those launches. Then part two is the pipeline. There are five assets in the company right now that will represent roughly 80% of our recovery.
That is INCA033989, our CALR antibody for MF and ET, our G12D inhibitor for pancreatic cancer, our TGFβR2xPD-1 bispecific for colorectal cancer, the protein S modulator for von Willebrand disease, and then povorcitinib, which will be part of the core business as soon as it gets approved. We expect at the beginning of 2027. That is an execution test, and I think a lot of the biology risk has been removed. The phase I programs that supported our decisions to go into phase III were sizable phase I programs. Now it's about making sure that we maintain study timelines, secure regulatory approvals, and then convert those approvals ultimately to revenue, earnings and cash flow. The last point I would make is business development, like at any company, is going to be used to supplement what we have internally.
We're not going to buy our way through 2029, and we look primarily for opportunities that can be highly accretive to the growth rate of the company when we get past the transition.
Very helpful. So as you execute on part one, the execution on the core business, then part two, the de-risking and maturation of the pipeline, when is the right time to provide us with some guidance on that trough earnings and the growth coming out of the trough?
Yeah, it is a really good question. I think sometime next year, as we get more clarity on the recovery. While it is de-risked, in my opinion, there will be proof points between now and as we get closer and closer to the transition, and we will start to provide a framework for how to think about the company in terms of revenue, earnings, and cash flow during that period of time. I think we are set up very well right now, but there is one thing you can never underestimate in biopharma, and that is attrition, whether it is a delay or an underperforming launch or I do not believe in our case it is zero. As we get more information, I think it is important we give visibility into how we will manage the P&L of the company and what we think the long-term growth rate of Incyte can be.
What we are targeting is top quartile growth, and if we can get this business to grow at a 15%-20% CAGR from 2023 to 2035, for example, just to pick a period in time, that will be really successful. Certainly, the assets that we have, and if you look at the potential without using heroic assumptions, have the potential to 2X the business. But we do not expect people to take our word for it. We have to execute these programs, and we have all the pieces in place right now.
Throughout this period of transition, if you want to call it, you have a lot of cash on the balance sheet. You are generating a lot of cash each year. You referenced business development. Is that the right use of that cash, the reallocation of the cash, and what else are you looking for there?
Yeah, I think the first call on capital is making sure that this R&D program that we have in place, which is heavily phase III weighted, is maximized. Pablo will talk a little bit about what we are going to do with INCA033989 and G12D, because those are single assets. Our job is to systematically expand INCA033989 into an MPN portfolio of multiple targeted therapies, and then to do the same with G12D in terms of tumor types, lines of therapy, and combinations. Second call on capital will be business development. When we think about business development, I think the Star Therapeutics transaction was a textbook example of the type of deal that makes sense for Incyte strategically and financially.
It was a late-stage or a phase III asset in an area where we have differentiated knowledge and capabilities. We believe it has + $1 billion potential, a relatively de-risked asset, and it was a staged deal in terms of how we deployed capital, and very accretive if we are successful to the post 2029 picture. Then there are, of course, things you can do that are more near-term, and that could be supportive of the company over the next several years. Those use larger, more upfront capital. We will be very selective if we do that.
Okay. Speaking of the nearer- term, as you advance toward the Jakafi patent expiration, we are about to talk, I am sure, about this top five or so pipeline candidates where you are going to spend considerably and really expand the franchises and create some hopeful long-term shareholder value. How much do you care about your P&L in 2027 and 2028?
Yeah. Listen, we have to manage it. We are not pursuing a growth at all cost strategy. I do not think anyone has the luxury of doing that. To be clear, what we are solving for is not margin right now, we are solving for a growth rate. If we can invest now and take care of the next decade, we are going to do it. We want R&D over the long- term as a percentage of sales to come down, and that happens one of two ways. You grow your sales, that is the best way, and the other way is you moderate your spending. What I will say about R&D investment right now is that over 80% of our investment is focused, Eric, on the assets that we are talking about.
We don't have inside the company, I give Pablo a lot of credit for this, we don't have a lot of limbo projects or zombie projects or lottery tickets. We're investing in assets that we think will improve the risk-adjusted net present value of the company. Full stop. We have to continue to call balls and strikes as it relates to what we invest in. I think we're doing that, and as we get closer and closer to this transition, we'll again provide more framework on that.
Okay, let's transition to the pipeline. You've highlighted your top five candidates. I think two of them in particular are very timely in terms of the discussion. Pablo, do you want to start with G12D?
Yeah sure
that we go there, given the updates at ESMO that we'll expect.
Happy to.
Yeah.
Okay, we call our G12D program 734. Those are the three numbers. We are working on a name, but for now, let's stick with 734. What you are going to see at ESMO, which is just in a few weeks, it is an update on two tumor types, two different lines of therapy for the 734 program. The highest priority is frontline pancreatic cancer, and in that area, we are going to present a larger data set that you have seen so far. Close to 50 patients, half of them of 734 in combination with FOLFIRINOX, and half in combination with Gem-Nab. So frontline chemotherapy-based in pancreatic cancer. We will provide a comprehensive update on efficacy and safety.
I think the data that is going to be revealed at ESMO, not in the abstract and not some of the data that has circulated, but the data at ESMO, I think, are very competitive in the space in terms of frontline combination with chemotherapy and pancreatic cancer. That gives us a lot of support, I think, for what we are doing in the background, which is we launched the phase III trial in the indication. That is going very well. We are expanding that globally. It will be conducted in 200 sites around the world, and we feel very good about the way that trial is enrolling and progressing so far. That is the core or the centerpiece of the G12D strategy for us. Around that, we are building within pancreatic cancer, we are going to move in the adjuvant setting.
We are designing and implementing a trial for patients post-surgical resection in pancreatic cancer, and you will also see data in colorectal cancer. We believe that that is an opportunity for us to move quickly in that space. We have generated data in combination with cetuximab. We will present that data at ESMO, and we will tell you what we are going to do next. We have a meeting scheduled with FDA to get regulatory clarity, but we intend to pursue that indication. We have also done work in combination with chemotherapy in frontline colorectal cancer. We will not present that data at ESMO. It is not mature enough. You should keep that in mind. That is how we are expanding pancreatic, front-line first, adjuvant next, colorectal late- line first, front-line next. We are also putting in place a combination therapy strategy for 734. Obviously, those are external collaborations we are working on.
You will hear more about in the next few months, hopefully at ESMO, but sometime around that timeframe, how we are thinking about that. That is the whole 734 program that you are going to hear more about at ESMO, which we think substantially de-risks the program, at least I hope you will agree with that.
In the most recent update, we saw a 62% ORR in the Gem-Nab combo and 75%
Yeah
with FOLFIRINOX. What more could we learn at ESMO, and where do you think
Yeah. This came from an unredacted protocol filed in Europe. The numbers have gotten a little bit better, so you'll see better numbers than that. We'll have to wait for ESMO to reveal that. Those are the same numbers you'll see in the abstract. The numbers in the presentation are a little bit better. That's what I alluded to. Look, when I look at the data that we'll present at ESMO, I think it's fair to say that it's comparable to the best data set that has been put out there, which I think everybody's aware of. I'm not going to claim that we're better, but I don't think we're worse. Again, safety numbers up and down a little bit, efficacy number, a couple percentage points here and there. I think the data sets are comparable.
We feel very good about where we are from the competitive perspective in terms of quality of the data and in terms of timeline to first-line approval.
It is a very competitive field.
How are you thinking about differentiation here and within the G12D class, but then also with pan-RAS inhibitors on the scene as well, or combinations of pan-RAS as well?
Yeah. I think the differentiation with pan-RAS inhibitor is pretty clear. It is not a question of who is better or not. I think time will tell in frontline therapy which approach is better or whether both approaches are comparable. They are different. Safety profiles are very different from a pan-RAS inhibitor from G12D-specific inhibitors. One thing we noticed with 734, and you will see this at ESMO, is the GI adverse events get much better after the first cycle, and we will show this data that way. The headline number for adverse events is X, and it is higher than I would like, but it gets much better on subsequent cycles after cycle one. I think that is going to be pretty clear, I think, to everybody during the ESMO presentation or in the Investor event.
I think the question of whether it is better to give first line a pan-RAS versus a mutation-specific inhibitor, that can only be answered with data. But when you ask experts, and we have done that extensively, Bill and I, over the last few weeks, they will tell you that in general, the more mutation-specific approaches will get used first. Obviously, if there is a dramatic efficacy difference, that supports that thesis. But general, you give the more specific drug first. When patients progress, you give a broader inhibitor next. Tolerability will also come into question considering some of the side effects of pan-RAS inhibitors. But I do think that data will probably guide those decisions at the end.
I would just add one comment about competitive intensity. I agree with everything Pablo said. There are very few markets in oncology where it is winner take all. You can look at BCR-ABL or CDK4/6 or EGFR. If we are one of two, and right now there are only really two companies in late-stage development with a G12D inhibitor in frontline PDAC, that is RevMed and Incyte. It is a first-world problem. I think we are in a good spot if we are one of two. I think the most important point, and Pablo just made it, is how do you maximize this asset by studying it in all lines and tumor types? If we do that becomes a form of differentiation.
Yeah. I think more important than for us to try to convince you that we are better than XY, the most important thing for us is to execute on the plan and expand the indications, and that is what we are doing.
Not to focus too much on the competition, but one advantage they have is combinations. They have a PRMT5 they are working in collaboration with. They have a pan-RAS. When will we see some collaboration partners at Incyte?
Soon. Those conversations have started, and they are coming, I think, to fruition pretty soon. You will hear more about that, hopefully by ESMO.
I guess just one more on the GI adverse events. We have seen from some of the competitors very meaningful impacts of prophylaxis on
Yeah
recent reported GI AEs. How are you thinking about how that has been incorporated in the study?
Obviously, the lessons from the phase I have been incorporated into phase III, and I think that is going to make even a bigger difference. You will see some of the data that I mentioned from cycle one to subsequent cycles, and I think part of that is implementing prophylaxis.
Okay, maybe we should move to your mutCALR inhibitor INCA033989.
Okay.
Tell us what the latest is there. Again, we're looking forward to some data toward the end of the year.
The INCA033989, which is the number for CALR antibody, I think the one thing I would start with is the first step towards trying to address the entire group of myeloproliferative neoplasms, specifically Philadelphia chromosome-negative MPNs, which includes MF, ET, and PV. Our goal as a company is to cover that entire spectrum. INCA033989 is the first step in that journey. It addresses CALR-mutated patients, which are about 25%-35% of patients with ET and MF. Where we are today is the second line study in patients with essential thrombocythemia. The pivotal study has been initiated, so that's ongoing. Control arm is best available therapy, which in that context includes either retrying hydroxyurea or anagrelide or a little bit of interferon probably. The study is running, and we think that study's going to make it possible for us to be first to market with the CALR antibody.
The next step is the second- line of study, myelofibrosis. That study is being planned, and it will be initiated this year, before the end of the year. The specific design, we'll give more details at the next earnings call. But roughly, it will be a second-line study. The default today is using conventional endpoints, as we are SVR35 and TSS50. We think the data we presented in that setting convinces us that we can run a positive study. We'll enroll all comers. The primary analysis of that could have been Type 1 patients, but it will be an all-comer study. The next step is first-line MF. For that, we need a couple of pieces that are coming into place. One is the data in patients with front-line MF, which we will present as maturing, and it will be presented at ASH.
That will be about 40 patients with single-agent INCA033989 in untreated MF and about 20 patients in combination with ruxolitinib. That data, together with conversations that are ongoing and planned with FDA over the next few months, will determine the design of the front-line MF study. We don't have full clarity yet. We obviously have an idea in our head that needs to be finalized based on data and conversation with FDA. The final step in the CALR journey that I want to mention is, as we disclosed earlier this year, we have a next-generation antibody, which we think dramatically improve in key properties of INCA033989. That will be introduced publicly later this year, and we're looking forward to entering the clinic as soon as possible. We think it will be an accelerated development plan for that program.
How do you make the case that ET patients should be treated with a therapy like INCA033989? Is the case stronger for Type 1 patients?
I think today the efficacy is better in Type 1 than non-Type 1 patients. Whether that makes for a stronger case, it depends on the outcome of the study relative to what's available to these patients, which is the control arm. I think, yes.
Let me tell you why. There's no other intervention today available that has the clear evidence of eliminating the malignant clone that we presented in patients with ET. It's not just normalizing platelets, which does so without need for dose adjustments. It just normalizes platelets. When you look at every measure of translational biology, there's clear evidence of elimination of malignant megakaryocytes, elimination of malignant early progenitors, which are where the disease is coming from. Over time, we see, and we'll continue to see, elimination of the variant allele frequency, basically the size of the clone in peripheral blood. So INCA033989 is truly eradicating the disease, and there's no other drug in CALR-mutated patients that does so as clearly and as profoundly as INCA033989 does. The question is, ET is a relatively indolent disease, why use this?
Well, for the same reason that a lot of patients are treated with hydroxyurea today. Because even though it's an indolent disease, people with ET do have complications. Some have clots, some have bleeding episodes, and some of them progress to myelofibrosis. When that happens, it's not as indolent as primary ET. So there is a very strong argument that if you have a targeted therapy that is well-tolerated and it can eradicate the malignant clone, you should intervene early. One point I would make, and you'll see an update, is the study started about two years ago. The number of patients with ET that have discontinued due to adverse events is minuscule.
I think there's a couple of patients. This drug is well-tolerated by these patients over a long period of time, which supports early intervention.
To put a fine point on what Pablo said, there's 20,000 people in the United States with a CALR- mutation in ET. Half of those patients are 40 to 50 years of age, which means they're going to live with their ET for the rest of their life. Hydroxyurea has made a big difference for some people. It's an effective drug, but half the people don't get their platelet counts under control on hydroxyurea because you can't dose it high enough. I have a feeling that in that population of patients, which is 50%, everything Pablo said is going to be very. I believe ET is an underappreciated indication for INCA033989.
Then maybe pivoting to myelofibrosis and the development plan there. You've talked about how the default mode is the traditional endpoints, but we also know you're keen to try and validate the composite endpoint that you're looking at. How might that work out, and what's the plan for the first- line setting?
We've had dialogue with FDA, and I think they are, I would define it as receptive, but not there yet in terms of changing the regulatory framework for approval of new medicines in MF. That's basically what we're asking them to do. There's been a framework for the past 15 years since the approval of Jakafi on SVR35 and TSS50. We're asking them to change that, and that takes time, and that takes more than one conversation. We have already scheduled meetings with them. We'll continue that dialogue. What we're trying to do, just to be clear, is to switch to an endpoint that we believe, based on data that has been generated independently of Incyte, is more relevant to patients with MF.
That will include components that have to do with normal hematopoiesis, hemoglobin and platelets, malignant hematopoiesis, blasts, and of course, spleen has to be part of that story. I think when you put all that together, they correlate better with long-term outcomes, i.e. survival, than simply TSS50 and SVR35. From that conviction that these are better predictors of long-term outcomes that matter to patients comes the fact that we believe it's time to consider this for regulatory approval in MF. How quickly can we convince FDA? I do not know. We are working on it. We think we have a strong argument. It is supported by external data, which is always important. I think we will get there. We would like to get the drug approved for patients with second-line MF as fast as possible. We are not going to wait for the dialogue to conclude.
We are going to start the study with traditional endpoints. The composite will be a key secondary endpoint in the study. So we will have data regardless. Whether we can change plans later on for statistical analysis, that is debatable at this point, but we will be part of the study for second-line MF.
We will give a full update at the third-quarter earnings call once we finalize the protocol.
Yes. Thank you. Then maybe one last question on mutCALR. You have been much more vocal about your next-generation antibody. What is the timing, and how does that profile stack up versus the competition?
I think that our plan remains to be the first CALR antibody approved, which is going to be INCA033989 if things go well and we execute on the plan that I outlined, and then come as soon as possible after that with what we believe today, based on preclinical data and public disclosures, is a best-in-class CALR antibody. We have dramatically improved the potency against both Type 1 and non-Type 1, and we have significantly improved the half-life as well to make it more convenient for patients. I think when you put those two things together, it's just simply a better antibody. We're planning to enter the clinic in the near term. You'll see some preclinical data, hopefully at ASH this year.
Sure.
I think it's important to remember that the INCA033989 development plan took a little bit longer than I would have liked because we were asked by FDA to start a very low dose, a dose escalation. It was a new mechanism. Understandably, we started low. We took some time to escalate. I think we can shorten that timeline significantly with the next- generation antibody.
Let's touch quickly on your TGFβR2xPD-1 bispecific. We've also got data coming at ESMO. Can you help frame for us what good data looks like
Yeah
in first-line MSS CRC?
We presented earlier data, single agent, in MSS colorectal late-line. We show single agent activity, I would argue unprecedented for a PD-1 better. What we are going to have at ESMO is a large data set, about 45- 50 patients, front line MSS colorectal with, I would argue, an over-representation of liver mets patients. I think we have more than two-thirds in the study showing response rate in that population. The PFS is not mature enough because we do not have enough progressors, but you will get an event-free survival at 6 months data number, and obviously, a comprehensive safety profile. We believe that significantly de-risks what we are running, which is a frontline phase III global study of FOLFOX-bev± TGFβR2xPD-1. When you look at the literature, there is a little bit of variability.
I think most of the data that has come in, and depends significantly on the percentage of patients with liver mets, is somewhere between 40%-50% response rate. We think we will beat that number clearly in this cohort, and that is what we expect to be able to show you at ESMO.
I guess one more to finish up, latarcibart. Could you talk to us about how you view the potential here in von Willebrand disease?
Yeah. I can make a, I think a great analog for latarcibart is obviously HEMLIBRA. If you look at what HEMLIBRA did to hemophilia A, it basically replaced factor replacement therapy. It bridges factor IXa and X. Instead of giving factor a replacement therapy, you use HEMLIBRA, and it really transformed, became the standard of care in hemophilia A. The concept is exactly the same, which is why we acquired Star Therapeutics in von Willebrand disease. Today, factor replacement therapy is the standard of care. It degrades quickly. It has to be administered multiple times a week as a prophylaxis regimen. There are roughly 30,000 people, I think the number is, Pablo, that are eligible for prophylaxis for a regimen. Only 2,000 are receiving it today with Vonvendi or Wilate. What latarcibart does is essentially, it is a system-level correction, just like HEMLIBRA is for hemophilia A.
Modify or attenuate protein S activity, which is a natural anticoagulant, restore thrombin generation capacity. If latarcibart can be to von Willebrand disease what HEMLIBRA was to hemophilia A, we have a product that is going to be a sizable plus billion-dollar opportunity for the company. Right now, in severe frequent bleeders, we will be one of one, and that is a good place to be.
I think we are out of time, guys. Thank you so much, Bill, Pablo.
Beautiful
For spending some time with us today.
Thank you.
Good to see you.