Incyte Corporation — 2024 Q1

Kelly, it's Christiana. Let me take the first part of the question, and then I will turn it to Matteo to comment on the second part. So in terms of the gross-to-net in the first quarter, it was at the same level as last year Q1, so at around 60%. Going forward, as we have previously discussed, we will not be making forward-looking comments on gross-to-net. Our focus is on maximizing the potential of Opzelura, and by this, I mean the maximizing net sales versus looking at gross-to-net in isolation.

And on the split of business between the 2 indications, when we look at the IQVIA data, triangulated with external and internal sources, we see a 40-60 split consistent over time, where 40% is non-segment of Vitiligo and 60% is atopic dermatitis. And we're very happy to see that both indications are growing at quite a healthy pace.

Yes. Thank you for the question. It's Steven. So the milder type of HS still represents about 100,000, 150,000 patients in the United States. It still has morbidity and unmet need, and these patients have abscesses and nodules that cause them discomfort and morbidity and lends itself to a topical treatment because it's not as extensive as the moderate and severe, which has fistulas, et cetera. So we conducted this PoC study and saw this data, which is extremely encouraging in this mild stage of HS in terms of abscess and nodule decreases. And as Pablo said in his prepared remarks, we're now working with regulators to get an appropriate endpoint in this entity for which no drug is approved and has this unmet need I spoke about.

Sure. As you saw from our guidance, $2.69 billion to $2.75 billion, we're very optimistic about the continued growth of Jakafi. Obviously, we benefit in the IRA because as we talked about before, we have the small biotech exemption.

No. We obviously said we're still confident about $3 billion plus by the time we hit 2028, so that's what we're still confident in. And so we think that '24 and '25 should be just fine.

Kripa, I'll take your first call, and then I'll hand it over to Pablo for the second part of your question. So for Jakafi share from competitors. There really hasn't been any impact on our duration of therapy or discontinuation rates at all, certainly in myelofibrosis. So we're very confident. We remain the market leader. Other JAK inhibitors may be used in the second line, third line setting. If anything, the market size itself is growing because now patients will go on 1, 2, 3 therapies, and I'll hand it over to Pablo for the second part of your question.

Yes, thank you for the question. So I mean, obviously, I'm not going to comment on data from other companies. Our BET inhibitor program, as we've discussed, is going very well, and we'll discuss additional data over the course of the year, and we're planning a potential pivotal trial going forward, which we'll unveil later this year. Reviewing the data from our internal program, we have, at this point, no concerns over the safety when it comes to AML transformation.

Yes, Michael, thank you for the question. Now we've seen the data. Obviously, it's an impressive data set. At this point, as you know, we have a number of studies ongoing with povorcitinib. We've had internal discussions about the potential to extending the trials of povo to atopic dermatitis. What I can say right now is we're encouraged by the data from RINVOQ. I think that it's an indication that povo could work very well in this disease. We have not made an internal decision that -- yet as to whether to develop povorcitinib in atopic dermatitis yet, but it's certainly something we're contemplating.

Yes. It's Steven answering your question. So just to reiterate Pablo's remarks and remind you that our BET program was in the clinic a while ago in solid tumors. And then we've obviously pivoted to study myeloproliferative neoplasms. We've treated close to 200 patients to date. And in the clinical data set, which is the most powerful, as Pablo said, we have no concern as regards AML transformation or any concerns that we've seen in that regard. From a prior preclinical work on things like AIMS assay and genotoxicity, et cetera, we also have no issue, and we are aware of the issue with the competitor drug that was seen in preclinical work.

Maybe I can start on the uptick. I mean what we said, and you can see on the slide is that, in fact, there is an increase in the number of patients treated across all 3 indications in Q1 versus Q4, and there is a growth that you can see on the so-called paid-demand graph also that shows that versus last year there is a lot of growth in PV and GVHD.

Sure. I think, in fact, the new competitors, let's take [indiscernible] and momelotinib as examples, there -- as far as we can tell from all of our market research, from all of our experience working with hematologists, they're all being used in the second-line setting or maybe in patients that have very, very low platelets, for example. So we anticipate because of really the overall survival benefit of Jakafi, because of the tolerability of Jakafi, because of the symptom release of Jakafi, it's a great drug, and it will continue to be very useful to patients who have myelofibrosis going forward.

Vikram, it's Steven. So on your first question, just reminding of ALK2's mechanism felt to work through hepcidin inhibition and then ameliorate anemia by releasing iron and make it available for hemoglobin production. As we've already shown in multiple presentations, we can decrease subsiding levels. The question you get into, does this translate to some sort of clinical benefit? Just to remind you of the study, it has 3 groups, treatment group A, B and C. A was monotherapy, B was in combination with RUX, but those were in later-line patients. And the real focus right now, as you can see on clintrials.gov is treatment Group C, which is the treatment-naive group of patients to see in combination with RUX will help make an effect that will be of clinical benefit to patients, either by raising hemoglobin or preventing the decrease that sometimes occurs with JAK inhibition.

Vikram, it's Christiana. I'll take the second part. As we discussed on our last call, before we provide guidance for Opzelura, we are looking to have more real world data on utilization, especially for vitiligo. And data that goes beyond that first initial phase of therapy, which may represent a phase of experimentation by patients. So we are still early into the launch. We are still going through that initial phase of patients on therapy. So we're waiting for more real-world data before we are in a position to give you guidance.

I'll take the first part of your question, it's Barry. So for Jakafi, we continue to see myofibrosis -- the way I look at the myelofibrosis patient population, there's about 18,000 patients, prevalent patients with myelofibrosis. And because we're the market leader, because of the overall survival and symptom benefit that Jakafi provides, we will continue to think of patients as either being on Jakafi, which is most of the myelofibrosis patients or they have been on Jakafi or they will be on Jakafi. When they progress on Jakafi, then there's other options, fortunately, that are available to them. But going forward for 2024 and beyond, we continue to expect to be the market leader in first-line myelofibrosis. And I'll turn the call over to Pablo.

Yes. Thank you for the question. So in our CDK2 inhibitor program, we continue to be encouraged by the data that we've seen. And regarding your part of your question about what data we're going to reveal later this year, we're in the final stages of optimizing the dose for the CDK2 inhibitor program. Our idea will be later this year to provide a substantial clinical data set, including the dose selection for patients. Initially, the focus will be ovarian cancer, but not necessarily only over the longer term as well as we are starting combination trials in ovarian cancer, and we're continuing to enroll patients with breast cancer.

Thank you, Jessica. I'll take the Change Healthcare on Opzelura. What we see at the end of February that there was this cyber-attack reported pretty much caused the network interruption for a few weeks. So as a result, the Change Healthcare was unable to process the claim for a few weeks. When we looked at -- when we deep dive in the data, we saw a softer March when you look at the entire atopic dermatitis market basket that we monitor, and that caused an estimate of $4 million to $5 million negative impact from Opzelura in Q1. The good news for us is that we're monitoring April, and we see demand, weekly demand back on track to the levels we saw pre-cyber-attack and the more recently.

And Jessica, just on Jakafi, we may have actually had an impact from Change Health, but we don't know. We did have when it first happened some request from specialty pharmacies that wanted extended terms for payment. But we really can't see a big impact because most of the specialty pharmacies were able to switch over to the other system that provides the service for the specialty pharmacies.

And then just to address your question on povorcitinib in vitiligo, we have 2 identical Phase III studies ongoing STOP-V1 and STOP-V2 in patients 18 years or older with 5% or greater body surface area involvement of non-segmental vitiligo. It's a little tricky on the endpoints. But just to tell you, our primary end point for the FDA in the United States is actually identical. It's facial-VASI75 and Total VASI50. For other parts of the world, there may be a different primary endpoint. For example, in Europe, they're interested most in the Total-VASI50. So that leads to some of the confusion. But for our study, for the FDA, it's both Facial-VASI75 and Total-VASI50, together measured at week 52.

Yes. Matteo, can add to the comment. I mean the picture in terms of refill rate has been the following, is that -- in atopic dermatitis, we have observed a refill that is slightly north of 2 tubes per patient. And that's relatively stable. Now it's still increasing a little bit, but it is relatively stable.

Yes. The only comment that I can add is on -- just in this quarter, we're launching a very promising adherence program that we we're confident will impact -- will continue to impact the refill rate growth that we see across both indications, AD and Vitiligo.

Okay. So maybe starting, I'll take the first part about the European launch because, in fact, there is a lot of activities going on there. As you know, we launched in Germany and Austria. So that's the base that we have. Recently, we are part of Accès Direct, which is a French process where you can commercialize your product while you are negotiating the price. So what you see in the numbers today is that there are around $2 million that are recognized sales from France. And it's a sort of an estimate with a conservative price per tube that we are using to do that. But the process there is moving very well, and we anticipate by the second half of the year to be fully reimbursed and paid for at a good price in France.

Yes, sure. Thanks for the question. And we're very excited by the potential opportunity to help 2 million, 3 million children in the U.S. And we see data consistent with what we would expect. So pending FDA approval, we are excited by another contribution and tailwind to our top line. This is a patient population that maybe the parents will be a little more sensitive to our box warning, but at the same time, it's 2 million, 3 million patients and children that we potentially have the opportunity to help going forward.

On the business side, maybe, Christiana, you can...

Yes. Sure. So Salveen, as you commented on, we have a strong balance sheet, and we'll continue to have a strong balance sheet following the Escient acquisition. So as of the end of this quarter, we have $3.9 billion of cash. We don't have any debt, which obviously that could give us additional firepower. So that puts us in a position to be able to look at additional opportunities. And that's something that we are continuing to explore.

I can take that. I mean it's -- we have been speaking about acquisition and external opportunities, which is obviously one very clear goal for the corporation is to diversify our revenue in the future and to increase to the growth coming from the current portfolio that we have. So that's one option. And obviously, as we are doing with our Board, there are discussions about alternatives to that. But today, as you have seen with Escient, I mean, there are opportunities that are very much in the range of what we are looking for in terms of timing and in terms of therapeutic areas, and that would be of an interest. So we are basically looking at both.

Yes. So thank you for the question. So your observation is correct. We are moving more aggressively into targeted oncology and trying to shift away from immuno-oncology. And that's a journey that has started a little bit over a year ago, and we intend to accelerate in the future. The idea here is well-defined patient populations, large treatment effect ideally single-agent activity with early proof-of-concept, and that will allow us to have much more efficient drug development process to accelerate some of these programs.

So we haven't decided exactly the scope of the data disclosure for the mutant-CALR antibody later this year. What I can tell you is that plan is to combine the mutant-CALR antibody with Jakafi. And the idea there is, as you know, and we pointed out many times, Jakafi has a profound effect on symptom relief in these patients, which we believe, early in the management of the disease, could be very important even in the presence of a mutant-CALR antibody. The idea of mutant-CALR antibody here, as you know, is to transform -- is to change the treatment objective to really eradicate the malignant clone. But still a potential early treatment or induction with Jakafi could be very, very helpful for patients.

Okay. So I think the first question was about the efficiency of the spending. So as you see, I mean, we have in our P&L, we had a relatively -- this quarter, we had a very flat SG&A and a relatively slower growing R&D. And that's what we have been speaking about for years now is basically growing the top line at a faster rate than we are growing both components of the expenses and increasing leverage. So that's sort of happening. They are depending on the event on the quarterly, it's not always at the same rate, but it's clearly the direction that we are taking.

I'm happy to comment. Look, I think what we're building is an important portfolio of first-in-class or best-in-class in some cases, best-in-disease medicines in the - I would expand the questions in the inflammation space.

So Ren, it's Steven answering your question. So as Pablo said in remarks earlier this year, the XR process is underway with the regulators in terms of doing bioavailability and then followed by BE work. That will include stability. So it's about a 2-year process, which we expect to complete in a way in time for the LOE. And the idea there is obviously to have the once daily available in time. It doesn't change any of our FDC work. We can still do fixed-dose combination work with BET and ALKs. We need to do, and we continue to progress those.

We haven't provided specific guidance. I think we said 2025. So if I imply 2024, I apologize for misunderstanding but it's -- 2025 is the goal.

Thank you all for participating in the call today and for your questions. The IR team will be available for questions throughout the day. Thank you and goodbye.