Incyte Q4 2024 Earnings Call Transcript

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Provided by Quartr
February 10, 2025

There are 18 speakers on the call.

Operator

Greetings, and welcome to the Incyte Fourth Quarter twenty twenty four and Full Year Financial and Corporate Update Conference Call and Webcast. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ben Strain, Associate Vice President, Investor Relations. Please go ahead, Ben.

Speaker 1

Thank you, Kevin. Good morning, and welcome to Insight's fourth quarter and full year twenty twenty four earnings conference call. Before we begin, I encourage everyone to go to the Investors section of our website to find the press release, related financial tables and slides that follow today's discussion. On today's call, I'm joined by Herve, Pablo, Christiana, who will deliver the prepared remarks. Matteo and Steven will also be available for Q and A.

Speaker 1

I would like to point out that we'll 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 the SEC filings for additional detail. I will now hand the call over to Herve.

Speaker 2

Thank you, Ben, and good morning, everyone. So we delivered another strong year with twenty twenty four total revenues growing 15% versus 2023 to reach EUR 4,200,000,000.0, continuing the steady growth we have delivered since 2020. In addition to the consistent performance of Jakafi in 2024, we saw strong growth from our non Jakafi revenue, primarily driven by Occello, highlighting our continuing revenue diversification. Moving to Slide six. 20 20 four Jakafi net sales were $2,800,000,000 growing 8% versus versus the prior year with growth coming from all indications.

Speaker 2

OccelloRAR saw strong continued momentum in 2024 growing 50% to $5.00 $8,000,000 driven by both new patients and refills in AG and Vitiligo in The U. S. And expanding our reimbursement outside The U. S. We expect Occellua to continue to be a key contributor to growth in the next year.

Speaker 2

Our cash flow remains strong, which allowed us to complete a 2,000,000,000 share repurchase during 2024, while maintaining a strong balance sheet. We ended 2024 with $2,200,000,000 in cash and no debt. We are in a very strong financial position with growing revenues and a robust pipeline that will deliver a number of very exciting readouts in 2025. Last month, we and our partner Syndax announced that the FDA approved NIktinvo in nine milligram and twenty two milligram vial sizes paving the way for the commercial launch. This medicine is now available in The U.

Speaker 2

S. And the commercial launch is underway. Nictimvo is the first anti CSF1R antibody approved to target the inflammation and fibrosis associated with chronic GVHD. And we are excited to bring this new therapy to the approximately six thousand patients who are currently treated after second line therapy in The U. S.

Speaker 2

In addition to the launch of NICTIMBO, the sNDA for Ruxolitinib cream in pediatric atopic dermatitis was filed with the FDA and we are on track for potential approval in the second half of twenty twenty five. With two million to three million pediatric patients in The U. S. Suffering atopic dermatitis, we see significant opportunity for oseltinib cream with its compelling efficacy in controlling each to address an important need for this patient population. We submitted pivotal study results to the FDA for both tafacitamab in follicular lymphoma and ratifanumab in squamous cell anal carcinoma and anticipate approvals for both in the second half of twenty twenty five.

Speaker 2

These product launches are expected to begin contributing to revenue in the near term with the potential to collectively generate EUR 1,000,000,000 in incremental revenues by 2029, further diversifying our revenue. We anticipate all four products to be available in 2025, and we will be leveraging our existing commercial infrastructure established for Jakafi, Opezelora, Monjuvie and Pemazir to support the launches of these new products or indications. Moving to Slide nine, an update of the fourth quarter and full year 2024 commercial performance for Jakafi. In the fourth quarter, Jakafi net product revenue grew 11% year over year to $773,000,000 and grew 8% for the full year to $2,800,000,000 Total patients increased 10% in Q4 when compared to the same quarter in 2023. Importantly, growth is being seen across all indications, but with particular strength in PV with this indication now accounting for thirty five percent of the patients on Jakafi.

Speaker 2

We expect continued growth of Jakafi in 2025 and expect the full year net product revenue for 2025 to be in the range of $2,925,000,000 to $2,975,000,000 Turning to Slide 10 and looking at Jakafi, total pay demand by indication during 2022, '20 '20 '3 and 2024. As you can see, unit growth remains robust. Myelofibrosis showed growth again this quarter, while the most significant growth was seen in polycythemia vera. We expect PV to become the largest contributor for Jakafi over time, supported by the data from the MAGIC PV study, which underscores the benefit of early intervention with Jakafi and its impact on thrombosis free survival. Moving to Occello on Slide 11.

Speaker 2

Occello net product revenue in the fourth quarter was $162,000,000 up 48% when compared to the same quarter last year. And this was comprised of $138,000,000 in The U. S, driven by growth in AD and Vitiligo new patients and retail and 24,000,000 ex U. S. Driven by growth in Germany and France.

Speaker 2

Total 2024 full year net revenue grew 50% versus 2023 to reach $5.00 $8,000,000 In The U. S, the annual prescription trends for 2022, '20 '20 '3 and 2024, as shown on the right of Slide 11, reflects continued year over year growth of Opselor from both atopic dermatitis and Dtiligo. We anticipate continued growth of OCELLORA in 2025 and expect the full year net product revenue to be in the range of $630,000,000 to $670,000,000 On Slide 12. So 2025 will be a year of defining catalyst that will provide an inflection point for Incyte. As you can see highlighted on Slide 12, every program has meaningful milestone expected in 2025.

Speaker 2

This includes four potential launches collectively providing important near term revenue potential, where the launch of NIKTIMPRO is already underway, as I just highlighted. Additionally, we plan to initiate at least three Phase III studies, including our BET inhibitor, ROCKSCREME in mild to moderate HS and our CDK2 inhibitor in ovarian cancer. We expect 2025 will be a data rich year with four pivotal data readouts, including ruxolitinib XR, which Pablo will highlight shortly. More importantly, we expect seven early stage programs to generate informative data, which we believe have the potential to transform the company. Before I hand the call over to Pablo, I would like to provide a leadership update for our commercial organization.

Speaker 2

After a remarkable decade of dedicated service to Incyte, Bioflameli has decided to retire from his role as Executive Vice President Head of U. S. Oncology. We are pleased to announce that Mohammed Issa assumed Barry's role in January, and Mohammed has successfully led U. S.

Speaker 2

Commercial teams in oncology, immunology and neuroscience, most recently at J and J. I will now turn the call over to Pablo.

Speaker 3

Thank you, Irvin. Good morning. As we highlighted a year ago and we summarized on this slide, we remain on track to deliver more than 10 high impact launches by 02/1930 from programs across the portfolio. On Slide 15, I would like to quickly highlight some of the key accomplishments during 2024 and I will then cover some of the milestones expected in 2025. We had a number of important regulatory achievements in 2024, including the approval of NIctimbo for third line plus chronic graft versus host disease and three submissions to the FDA with expected approvals later this year, including OBSOLLUR in pediatric atopic dermatitis, retifanlimab in SCAC and tafacitumab in relapsed or refractory follicular lymphoma.

Speaker 3

We disclosed data from our CDK2 inhibitor and BET inhibitor programs and provided pivotal study plans for both, which we anticipate initiating this year. We continue to evolve with R and D focus with intent of increasing the rigor of our decision making, accelerating the progression of our pipeline and optimizing our resource allocation. Through the fourth quarter of twenty twenty four, we presented data at the American Society of Hematology Annual Meeting or ASH from both our BET inhibitor program and Phase III results for tafacitumab in patients with relapsed or refractory follicular lymphoma. The Phase III results of tafacitumab in follicular lymphoma were presented at late breaking session and showed that the study met its primary endpoint by demonstrating a statistically significant and clinically meaningful improvement in progression free survival. This was to our knowledge the first study to validate the combination of an anti CD19 with an anti CD20 monoclonal antibodies in patients with follicular lymphoma.

Speaker 3

Tefacitimab was generally well tolerated and safety was consistent with its known safety profile. This data had been submitted to the FDA and approval is expected in the second half of twenty twenty five. For our BET inhibitor, we shared additional data from the ongoing dose escalation study as both monotherapy and in combination with ruxolitinib. These results show reductions in spleen volume as well as improvement in both symptoms and hemoglobin. As highlighted on this slide, we plan to advance this program into Phase III development as a monotherapy in the post JAK population and we look forward to providing additional details later this year.

Speaker 3

Moving to Slide 18, we are continuing to execute a broad development plan for povarsitinib, our oral small molecule highly selective JAK1 inhibitor. Povarsitinib is currently being evaluated in Phase III studies in Heteronitis suppurativa, vitiligo and prurigo nodularis and in randomized Phase II proof of concept studies in chronic spontaneous urticaria and asthma with data for both expected in 2025. Ovircitinib has already shown encouraging efficacy and safety in a randomized Phase two study in patients with moderate to severe hidradenitis suppurativa, a highly painful inflammatory condition. As highlighted on this right side of the Slide 19, povarsitinib showed significant responses by week twelve, including improvements in high score fifty, ninety and one hundred. Additionally, polversitinib demonstrated a rapid and significant reduction in pain offering the potential to transform the current standard of care for this disease.

Speaker 3

The two Phase three studies, STOP HS1 and STOP HS2 are fully enrolled and we expect to have Phase three data in the first half of this year. Turning to the mutant color antibody program on Slide 20. The publication detailing our mutant color monoclonal antibody was was recently featured on the cover of Blood highlighting the importance of this innovative medicine. This antibody was developed entirely by Incyte and unlike Jakafi, the mutant color antibody has the potential to eliminate the mutant clone and normalize hematopoiesis in patients with cholera mutated essential thrombocythemia or myelofibrosis, potentially leading to a functional cure. We look forward to sharing data from the ongoing proof of concept studies in both ET and MF later this year.

Speaker 3

Turning to Slide 21 and Ruxolitinib XR. We're pleased to announce that a bioequivalency study of Ruxolitinib fifty five milligrams extended release demonstrated the once a day formulation to be bioequivalent to twice a day ruxolitinib. Bioequivalence was achieved for both AUC and Cmin and the geometric means ratios falling within the 80% to 125% bioequivalence reference range. We have reviewed this data with the FDA and with their agreement plan to submit for approval by the end of the year once stability studies are completed. As mentioned, 2025 will be an important year for Incyte with over 18 key milestones including four new product launches, four pivotal trial readouts, at least three Phase three study initiations and seven proof of concept study results.

Speaker 3

As you can see on Slide 22, we have already achieved two of these milestones that we first highlighted just last month with the launch of NIKTYMVO and bioequivalency data for Ruxolitinib extended release. We look forward to sharing additional updates on this milestone over the course of 2025. And with that, I would like to turn the call over to Christiana for the financial update.

Speaker 4

Thank you, Pablo, and good morning, everyone. Our fourth quarter twenty twenty four results reflect strong commercial execution and continued growth with total revenues of $1,200,000,000 up 16% versus the same period last year. Total product revenues of $1,000,000,000 in Q4 were driven by strong demand growth for Jakavi and Opsilura and increased revenue contribution from MONJUVY as a result of the acquisition of FullRights to tafacitamab in 2024. Total royalty revenues were $159,000,000 up 6% compared to Q4 twenty twenty three, driven by increased demand for Jakavi. Turning to Jakavi on Slide '26.

Speaker 4

Jakafi net product revenue was driven by strong patient demand growth across all indications. In the fourth quarter of twenty twenty four, net product revenue increased 11% year over year, driven by a 9% increase in total demand and a 14% increase in paid demand. For the full year 2024, net product revenue increased 8% versus 2023, driven by a 7% increase in total demand and a 9% increase in pay demand. Recall that in Q3 and Q4 twenty twenty three, we saw a significant increase in the number of Medicare Part D patients receiving free product. As we anticipated, these patients returned to pay demand in 2024.

Speaker 4

As a result, year over year pay demand growth exceeded total demand growth in both the fourth quarter and full year 2024. Turning now to Opselura on Slide '27, total net product revenue for the fourth quarter was $162,000,000 representing a 48% increase year over year driven by growth in new patient starts and refills across both AV and Vitiligo in The U. S, as well as continued contribution from the commercialization of OXELURA for Vitiligo in Europe. In the fourth quarter, ex U. S.

Speaker 4

OXELURA net product revenue was $24,000,000 For the full year, net product revenue was $5.00 $8,000,000 representing a 50% increase year over year and ex U. S. Net product revenue was $61,000,000 Moving on to Slide 28 and our operating expenses. Total GAAP R and D expenses for the fourth quarter were $466,000,000 an increase of 5% compared to the same period in 2023 due to continued investment in our late stage development assets and timing of certain expenses. For the full year 2024, ongoing R and D expenses excluding the Asian acquisition upfront consideration and other one time expenses increased 14% year over year as a result of increased investment in our late stage programs.

Speaker 4

As we wrap up the clinical developments of certain of these programs as well as the development activities of discontinued programs, we anticipate the reduction in investment in those programs to partially offset the increased investment in other programs, which would allow us to control future R and D expense growth. Moving to SG and A, total GAAP SG and A expenses were $327,000,000 for the fourth quarter, representing an 11% year over year increase, primarily as a result of Insight now recording Monjuvia related sales and marketing expenses in The U. S. Following the acquisition of Global Rives to the program in 2024, as well as the timing of consumer marketing activities and certain other expenses. For the full year 2024, total GAAP SG and A expenses increased 7% year over year as a result of us now recording Monjuvie related sales and marketing expenses and investment in the launch of OXELURA in Europe and the preparation for new product launches in The U.

Speaker 4

S. Finally, total ongoing R and D and SG and A expense for the full year increased 10% versus a 15% increase in total revenues, leading to an increase in operating leverage and margins. Moving on to 2025, I will now discuss the key components of our guidance on a GAAP basis. For Jakafi, we expect net product revenue to be in the range of $2,925,000,000 to $2,975,000,000 well on track to achieve our long term guidance of over $3,000,000,000 by 2028. We expect net product revenue growth to be driven exclusively by continued demand growth by Merlin PD and be partially offset by lower net pricing as a result of IRA imposed price increase caps and continued growth in 340B volumes.

Speaker 4

As in previous years, we expect the gross to net adjustment to be higher in the first quarter of the year relative to the previous quarter and subsequent quarters due to higher deductibles that are primarily impacting Q1. For OpeLura, we expect total net product revenue to be in the range of $630,000,000 to $670,000,000 driven by continued demand growth in AD and Vitiligo in The U. S, initial contribution from the potential launch of OXELURA for pediatric AD expected in the second half of the year and increased contribution from OXELURA for Vitiligo in Europe. In the first quarter of the year, we expect to see again the effects of typical Q1 dynamics on net sales due to planned deductibles resetting at the beginning of the year and the impact of holidays, medical conferences and other events on dermatology product sales. As a result, Q1 OXELURA net product revenue is expected to be below the previous quarter, consistent with what we saw in 2024.

Speaker 4

For other oncology products, we expect total net product revenues to be in the range of $415,000,000 to $455,000,000 This includes contribution from both the current approved indications for Iclusix, Xyxtinvo, MONJUVY, MINJUVY, PEMAZER and ZYNIZE as well as the launches of Monjuvie NFL and ZYNISSE in CAC anticipated in the second half of twenty twenty five. Turning to operating expenses on a GAAP basis, we expect COGS to range from 8.5% to 9% of net product revenues. The increase in the COGS rate is driven by certain manufacturing related expenses and the impact of our profit share agreement with Syndax for Nictimbo in The U. S, as Syndax's portion of the profit share will be reflected in COGS. R and D expenses are expected to be in the range of $1,930,000,000 to $1,960,000,000 primarily driven by the progression of our pipeline.

Speaker 4

We expect SG and A expenses for the year to be in the range of $1,280,000,000 to $1,310,000,000 Operator, that concludes our prepared remarks. Please give your instructions and open the call for Q and A.

Operator

Certainly. We'll now be conducting a question and answer session. Our first question is coming from Michael Schmidt from Guggenheim Partners. Your line is now live.

Speaker 5

Hey, good morning. Thanks for taking our question. This is Paul on for Michael. We have two on the pipeline. First on OXOLORA, can you set some expectations for the upcoming Phase three in prurigo nodularis?

Speaker 5

What's the bar here given there's no topical therapies available? And then secondly, just on the CDK2 program, are there any plans to provide another clinical update on the Phase one ovarian cancer study, perhaps with longer follow-up at the expansion dose levels? And what are the gaining factors to formalizing a pivotal study dose selection? Thank you.

Speaker 3

Certainly, good morning. Thank you for the questions. Let me take the second one real quick. For the CDK2 program, as we discussed earlier this year, we plan to initiate pivotal trials this year. And as we discussed, that will be in platinum resistant ovarian cancer.

Speaker 3

We've taken a dual approach there with a single arm study for what we hope will be accelerated approval in The U. S. As well as a randomized trial that we will provide more details over the course of the year. So that program is advancing rapidly and we will provide an update later this year as you asked. The second part of the question in terms of RuxCream and prurigo nodularis, as you know, the Phase three data are coming in this half.

Speaker 3

And I think what in terms of setting the bar, when you look at the Phase two data and the improvement both on the global assessment of itching as well as the WNRS endpoint, we think that if we are anywhere in the Vicinia what the Phase two trial showed, this is going to be a very important addition to the remamentarium for patients with prurigo nodularis. The availability of a topical for patients that have perhaps less severe disease than those that may require systemic medicines such as povarsitinib, we think it's going to be very important. So we want to be somewhere and as we all know from the extensive safety track record of RAC SCREAM, it's a very, very well tolerated medicine. So if we're anywhere near what the Phase II result showed, I think we're going to be it's going to be very important contribution for patients.

Operator

Thank you. Next question is coming from Tazena Maad from Bank of America. Your line is now live.

Speaker 6

Hi guys. Good morning. Thanks for taking my questions.

Speaker 4

As a relates to OXOLURA, can

Speaker 6

you give us a sense of how you got to guidance for this calendar year? Specifically, how were you thinking about the number of tubes that are going to be used for the two approved indications? And then maybe one question on Povor for the HS data that's due in the first half of this year. What would you consider to be not only statistically significant but also clinically meaningful data? Thanks.

Speaker 4

Hi, Desen, it's Christiana. Regarding the Opehleura guidance, first of all, when you look at the guidance range that we provided, the $630,000,000 to $670,000,000 for the year, it represents a 24% to 32% year over year growth. As we indicated in our prepared remarks, this is driven by continued demand growth in AD and Vitiligo and also reflects the potential launch of OXELURA in pediatric AD in the second half, a contribution in that from that indication and continued increased contribution from Europe. The range that we provided primarily reflects variations in the patient mix as well as in the level of patient activation rate and adherence in Vitiligo and then level of contribution from Europe. In terms of the tubes, the level of tubes, that's especially around the Vitiligo is reflected in the level of patient activation rate and adherence.

Speaker 4

We are seeing an increase in the average number of patients that are sticking with therapy and therefore refill their a expect to continue to evolve as we pursue additional initiatives to help patients, educate patients and help them appropriately use Vitiligo, the absolute route for Vitiligo. And that is reflected in the guidance range that we have provided. Finally, the other thing again to keep in mind as you think about the guidance and how do you Q1, as I mentioned in my prepared remarks, always tends to be lower than the previous quarter and the subsequent quarters. We saw that in 2023. We saw it in 2024 when we expect to see the same dynamics in 2025.

Speaker 3

Let me take the second part of the question. So look, the first and most important thing is obviously to have a positive study or two positive studies and that, as you know, means statistical significance for the primary endpoint, which in this case is high score 50 at week twelve in the two hydronitis supertiva studies for povo. Now beyond that, I think that when one looks at the Phase II results with the povarsitinib study and you look at the totality of the data and that is effect on high score fifty, seventy five, 90 and one hundred as well as a strong effect on pain improvement that the study showed together with the safety profile when the Phase II was very clean. In that study there were no thrombotic events in the high dose pogo arm. There were no patients that discontinued due to adverse events in the pogo arm.

Speaker 3

So I think that the profile that we've seen in Phase II and we realize there's always a little bit of contraction in Phase III or a little bit of the results can change a little bit, but we believe the overall profile that we saw in Phase II, if we are somewhere in the vicinity of replicating those results in the Phase three studies, we think we have a very competitive profile with povracitinib and heteronitis suppurativa.

Operator

Thank you. Next question today is coming from David Lebowitz from Citi. Your line is now live.

Speaker 7

Thank you very much for taking my question. Given the IRA out of pocket has moved to its go forward levels of 2,000 per year, Can you run us through what the process is that a patient must go through to actually ensure that the cap is put in place? What steps do they need to take? And how long do you think it might be until the benefit of that starts showing up in sales?

Speaker 4

So the cap for the out of pocket this year is reduced to 2,000 a year. Patients do have an option to have this spread through the course of the year in equal payments. There is a process that they would have to go through. We expect that it would take some time for them to figure out that process. So we may not see the immediate benefit right away, although we expect to see a continued benefit from the lower out of pocket as we saw in 2024.

Speaker 7

Thanks for taking the question.

Operator

Thank you. Next question is coming from Jessica Fye from JPMorgan. Your line is now live.

Speaker 8

Hey guys, good morning. Thanks for taking my questions. A couple on Povo in HS. So I think north of sixty percent of the patients in your Phase three trials are biologic naive. Are you going to seek a label that includes biologic naive patients or do you expect it will be labeled for post biologic patients?

Speaker 8

And then within the trials, are you powered for both the biologic naive and experienced subgroups? And is there anything you can say about the powering assumptions there?

Speaker 3

Yes, Jess. So as you point out, we haven't disclosed a specific percentage, but roughly directional that's correct in terms of biologics, not even biologically exposed patients. Prior exposure to biologics, it's a stratification criteria in the Phase III trials. We expect to analyze the data based on prior exposure to biologics. I'm not going to comment on the full powering.

Speaker 3

Obviously, the studies are powered on the basis of assumptions around the primary endpoint and the key secondary endpoints for the study. So we'll discuss the results in more detail. And obviously in terms of labeling discussions, we'll see what the data looks like and we'll discuss with FDA at the right time.

Speaker 4

Hey, Pablo, can I follow-up on

Speaker 8

one of the responses to I think it was Tazeen's question? When you said, if you show something that's close to what you showed in Phase II, that would be super competitive. Because I think the Phase II deltas on high score 50 differed a little bit if you look at the sixteen week versus the twelve week time point. And I think in Phase three, it's a twelve week. So when you say close to Phase two, do you mean close to the twelve week cut of Phase two or close to the sixteen week?

Speaker 3

Yes, you're correct. So if you remember, the placebo subtracted high score 50 at week 12 is twenty eight percent and at week sixteen is seventeen percent in the Phase two studies. That's I think what you're referring to. Look, we selected week 12. It's a key one of the key differences I think when you look at the POBA data and not just in HS but also in PN for example is how quickly it works.

Speaker 3

And that is very important for patients with painful or intensely, provisionous diseases like HS and PN. So that's the importance of the week 12. My comment was referring roughly to replicating the profile that we saw in Phase two. I don't want to set a number. We're running the Phase three studies to have clarity on what the actual benefit of pobracitinib is in large Phase three studies just.

Speaker 3

So any the number the specific percentage that we see is not something we're going to comment on right now, but a profile that is consistent with the Phase II is what we expect to see in the Phase III.

Operator

Thank you. Next question today is coming from Salveen Richter from Goldman Sachs. Your line is now live.

Speaker 9

Good morning. Thanks for taking my question. Just a follow-up here on povo. With regard to the Phase two data and we saw this drop from week twelve to week sixteen, could you just speak about the read through to this trial and the risks that may play out there? And then also in your 2025 guidance, just speak to us about how you model for Part D redesign for Jakafi?

Speaker 9

Thank you.

Speaker 3

Certainly, I think, look, the clinical trials, particularly in diseases like HS, but they have a placebo effect, as you know, you're going to see some movement on the efficacy endpoints in the efficacy curve over time. What we saw in the Phase two as both you and the previous colleagues pointed out was that from week twelve to week sixteen, there was a drop in the placebo subtracted response with the povo in the povo arms. It's probably variability and noise related to clinical trials. We are not concerned about that. The studies are well powered to demonstrate what we believe is a statistically significant difference between povo and placebo.

Speaker 3

And we think we'll see not only a statistically significant, but a clinically meaningful impact of povo and the primary endpoint, which is high score 50 at week 12, as well as the key secondary endpoints, which include obviously other levels of clinical benefit and other time points in this study.

Speaker 4

Regarding your second question, Salveen, on the impact of the Medicare Part D redesign on gross to net for Jakavi, We do expect to see some savings in Medicare Part D since our contribution to the donut hole will now be replaced by 1% participation to the catastrophic coverage given that we have the small biotech exception. However, these savings would be offset by continued increase that we see in 340B.

Operator

Thank you. Our next question today is coming from James Hsin from Deutsche Bank. Your line is now live.

Speaker 5

Hey, good morning guys. I just wanted to follow-up on Poverse top HS1 and two Phase three trials. How will you disclose this data? Will we get a press release with high score top line followed by full data at a metal conference? And then any update on the X2 program for CSU?

Speaker 5

Thank you.

Speaker 3

So on Provo4HS, our plan is once we have the data is to disclose in our press release and almost certainly we have a call to discuss the results with investment community. On February, I don't have an update at this point. We are still completing the evaluation of the events that we described late last year in the preclinical findings in the toxicology and we'll provide an update later this year.

Operator

Thank you. Next question is coming from Vikram Poort from Morgan Stanley. Your line is now live.

Speaker 10

Hi, good morning. Thanks for taking our questions. We had just one on the proof of concept data sets expected for new and KELR and then also for JAK2B617Si related this year. Could you just help us kind of frame what we can expect to learn and what you're setting at the bar for successfully these datasets and what the hurdles going to be for moving these programs forward? Thank you.

Speaker 3

So let me start with mute and call our. So as you point out, we'll have proof of concept data this year for both patients with ET and MF that will come over the course of the year. What we expect to see and just to first of all, let me tell you a little bit about what you're going to see and it's going to be a substantive amount of data. We expect to have data different dose levels, with some amount of follow-up in order to have clarity on some of the important measures of success for these programs. Obviously, we discussed over the past few months the importance for this program not only to show an impact on the traditional endpoints on patients with myeloperifitive neoplasms such as blood counts, symptoms, spleen, etcetera, but also to see some early evidence of allele reduction, which we think it's an important measure of success.

Speaker 3

This is not going to be obviously definitive data, but we want to have some evidence that a mutant color antibody in patients with ETN MF can show some evidence of a reduction. So that will all be part of the update. Six seventeen F, if you recall, started in the clinic later. We started dosing patients with MF in the third quarter twenty twenty four, so it's a little bit behind. We intend to have an update this year and the same points apply basically to that program.

Speaker 3

We would like to see impact not only a traditional endpoint, but some early evidence of a lead reduction in that program as well.

Operator

Thank you. Next question today is coming from Mark Fromm from TD Cowen. Your line is now live.

Speaker 11

Thanks for taking my questions. Maybe to start one nuance question on Stop HS. Just probably you mentioned earlier, you have often these trials do have a little bit of a decline in treatment effect from Phase two to Phase three. In HS specifically, we've seen kind of changes in antibiotic use and how that's treated with SAP, maybe drive some of that effect. Can you remind us just how antibiotic use is being treated, was treated in Phase two and how that may or may not differ in the Phase three trial?

Speaker 11

And then for Christiana, on the OBSOLLARO guidance, can you break down some of the assumptions there on U. S. Versus ex U. S. Growth just given the kind of label changes that are happening, but also increasing reimbursement outside The U.

Speaker 11

S?

Speaker 3

Let me take the first part of the question. So first of all, the use of antibiotics in the Phase III is treated the same way as it was in the Phase II. So let me just remind you what that is. Patients are not allowed to be on systemic antibiotics at study entry. Over the course of this study, if patients are started on systemic antibiotics for a flare, that's treated as a non responder.

Speaker 3

Now if patient is started on a systemic antibiotic for a completely unrelated reason, that is not treated as a non responder and that's consistent with the Phase two.

Speaker 4

In terms of the OXELURA guidance, the guidance that we have provided is global and it does reflect increased contribution from Europe. In 2024, the contribution was primarily driven by Germany and France. And in 2025, we expect continued contribution from those two countries, but also now increased contribution from Italy and Spain. We are not going to be breaking down the guidance between the two regions.

Operator

Thank you. Next question is coming from Kelly Hsieh from Jefferies. Your line is now live.

Speaker 12

Thank you for taking my questions. I have two. Firstly, can you share a little bit more color on KRAS-two twelve program? In terms of POC data, what kind of like sample size and also tumor indications could we expect? And also based on the preclinical data achieved so far, do you think it hints any potential differentiation from other competitive G12D programs?

Speaker 12

And for Paul, just quickly want to confirm, for the high score of 75, 90 and one hundred, do you plan to show at a twelve week follow-up only or actually both twelve and sixteen weeks follow-up? Thank you.

Speaker 3

So let me thank you, Kelly. So in terms of KRAS, so the indications here as that have been the focus for us are pancreatic cancer and colorectal cancer. And specifically in pancreatic cancer, we're trying to accelerate enrollment because obviously has become a very competitive space. We're fully aware of what competitors are doing. We believe based on the profile here that we have for clinically, which is highly selective and potent G12D inhibitor that if we accelerate this program, we can still compete in the space.

Speaker 3

Now it will come down obviously to the efficacy and safety that we see, but when we look at the data from our competitors, we think that particularly as you move to early lines of therapy in combination with the chemotherapy, there's still space for a highly selective, well tolerated C12T inhibitor. So we look forward to discussing data later this year, but that continues to be our view. In terms of what we're going to disclose for the povo HS studies in terms of other endpoints, that's not a decision that we've made at this point. Obviously, we'll have to communicate the overall results of the study as I answered a little bit earlier here. But whether we add a number of other endpoints to that release, we haven't decided.

Operator

Thank you. Next question is coming from Brian Abrahams from RBC Capital Markets. Your line is now live.

Speaker 13

Hey, good morning. Thanks for taking my question. Maybe on the BED inhibitor, can you talk about the role you foresee for that in a post Jakafi monotherapy setting? And then what's your latest thinking on the frontline development path? What are you looking for out of the treatment that you've combo data to move forward and are we still looking for results from that this year?

Speaker 13

Thanks.

Speaker 3

Certainly. So on the second line, look, I think that today as we know, eventually as good as Jakafi is for patients with myelofibrosis, eventually all patients progress and they need a better treatment options when they progress. Obviously, in addition to the BET inhibitor, we're developing the mutant color antibody and the V617F inhibitor. But in the relatively near term, we think that the BET inhibitor can provide a very good treatment options for patients with M after progress after Jakafi. That's why we are accelerating that second line program as much as we can.

Speaker 3

And we disclosed the basic design at ASH and you'll hear more of an update later this year. In terms of first line indication for the bet inhibitor, what we need are more data. We need more clarity on the safety profile and the impact on endpoints that has a combination with Jakafi in previously untreated patients. We showed an update at ASH, which we think is very encouraging in terms of the ability to combine our BEAT inhibitor with Jakafi and the impact on spleen, symptoms and importantly the impact that we saw on hemoglobin in the presentation that we gave at Ash. So we're still encouraged by the data.

Speaker 3

I think we need additional data to make that decision and to have another conversation with FDA on a potential first

Operator

study. Thank you. Next question today is coming from Jay Olson from Oppenheimer. Your line is now live.

Speaker 14

Hey, congrats on the quarter and thanks for taking the question. For Ruxolitinib XR, also congrats on achieving bioequivalence. Can you just talk about your plans to commercialize RuxXR and also the timeline for a fixed dose combination with your bet inhibitor? Thank you.

Speaker 2

So maybe on the commercialization, I mean, the timeline is basically we are now waiting for the end of the stability study to submit to FDA by the end of this year. So that will it's a response to a CRL. So it's a slightly different time line than we should be commercializing in 2026, which if you look at the window it gives us versus the 2029, first generic of twice a day is around two point five years. And obviously, the goal of that during that period is to have as many patients as possible being treated with once a day as a single agent as Jakafi is used today in most indications, in most patients. Now related to the first line study and the BED combination, obviously, the whole program depends on what Pablo was just speaking about, which is a profile of the first line combination.

Speaker 2

And also, if you think about it, of how the rest of our portfolio in MPN is evolving with the CALA and the six seventy net. So none of that has been firmly decided yet, but that's probably going to be happening over the next year or so on how we can put it in combination with our BET inhibitor on

Operator

that. Thank you. Next question is coming from Eric Schmidt from Cantor Fitzgerald. Your line is now live.

Speaker 9

Great. Thanks. Two questions here. This is Imogen on for Eric. The first one on Povo and HS.

Speaker 9

You shared about the high score fifty, twelve and sixteen week. I guess in terms of high score 75 as well, could you share any ranges of what you think would be meaningful and competitive data there in the evolving landscape? And then the second question is on the tafacitumab first line and DLBCL study. What do you see as meaningful data there over the RTOPLAN arm? Thanks.

Speaker 3

Okay. So on the first one on Povin HS, I'm going to have to give a similar answer to what I've given earlier, which is obviously you want to see statistical significance for the primary endpoint. The key secondary endpoints obviously are not similarly powered, but they are important endpoints to show a clear difference with placebo. I don't think it's productive to really set a bar for what we have to clear. If you look at the data from the Phase II study with a 20% at week twelve and 13% placebo subtract at week sixteen for povo, I think those are really strong results in the context of prior data releases in patients with HS.

Speaker 3

So if we are in the vicinity of those results, I think that's going to be a very important contribution. In terms of top line first line, the first line DLBCL study, as you know, this is a curative setting. So even a small impact on the primary end of the study, I think could be really, really important. And if you look at recent benchmarks such as the POLIVID data, which showed a modest impact on PFS, it still has led to a substantial adoption of that in frontline patients. So I think it's a very clear indication where modest improvements could lead to a potentially wide adoption because you're talking about potentially curative therapy.

Operator

Thank you. Next question today is coming from Matt Phipps from William Blair. Your line is now live.

Speaker 15

Yes, thanks. Two for me. One, can you maybe just remind us on the learnings from the robust trial that were incorporated into front mind? Where do you think you can succeed when that trial failed? And then for the mutant calor program, is that just going to be monobit therapy this year or could we also get some Jakafi combo?

Speaker 8

And can

Speaker 15

you remind us pre clinically if you saw any differential activity between type one versus type two mutations in CALAR? Thank you.

Speaker 3

So in terms of

Speaker 2

the mutant

Speaker 3

CALAR antibody, we haven't really decided, we have initiated a combination with Jakafi. The specific details of what we're going to disclose, we haven't really decided, but it's possible that we'll disclose some Jakafi combination data. It's an important part of the development plan. As we've discussed previously, we don't necessarily commit to a combination development for the mutant color antibody, but it's possible that because of the really rapid and strong impact of Jakafi on patient symptoms, particularly as you know as well as other endpoints, a short induction with Jakafi combined with mutant color and then a long term maintenance therapy with mutant color antibody could be a treatment paradigm. But none of that has been decided.

Speaker 3

We'll discuss the development plan, the future development plan for the mutant color antibody when we disclose the data. What we have disclosed into this Type one, Type two is that these two types of mutations are very different in the structure in the gene. And what we've discussed previously was that the affinity for the antibody for type one to type two is pretty different. In terms of what we expect to see in the clinic, we'll discuss that when we have the data results, but it's possible that we have a different level of activity patients with different types of mutations.

Operator

Thank you. Next question is coming from Andrew Berens from Leerink Partners. Your line is now live.

Speaker 10

Thanks. Congrats on the big quarter in 2024. A couple more on Jakavi XR. I don't think you commented on the Cmax, wondering how that would increase the dose to boost the Cmin. And is there anything else that's getting approval other than the stability studies?

Speaker 3

So in terms of XR, so look, you cannot replicate the Cmax with a once a day formulation compared with twice a day formulation. The FDA understands that, and that was not the purpose of the study. So that what you have to meet is obviously the AUC at steady state and the C MEN at steady state. As we disclosed in the slide deck, both of those endpoints were met. The only gating factor is the stability studies.

Speaker 3

As I mentioned in my prepared remarks, we have discussed the results of the study with FDA and we have an agreement with them on the stability studies necessary for the resubmission for the response to the CRL and we expect that that will be done before the end of the year.

Operator

Thank you. Next question is coming from Andy Chen from Wolfe Research. Your line is now live.

Speaker 16

Hey, thank you for taking the question. So on Povo HS again, can you talk about specific protocol differences between your trial and other trials, especially from IL-seventeen antibodies? What have you learned from other trials? And what might you be doing differently to amplify your efficacy here? And then also in your base case scenario, are you expecting only the high dose to be approved or both doses?

Speaker 16

Thank you.

Speaker 3

So you know and it's difficult to get into specific difference between studies because we don't have all the details of every protocol that's out there. We think that the design of the Phase three studies is consistent with the way our competitors are studying patients with tetranata supraativa. We designed a Phase III to have a slightly higher percentage of patients with HARLEY III as opposed to HARLEY II. That was an important point that we wanted to emphasize in order to reduce the placebo effect since it's harder in patients with more advanced disease. And that was an important point that we wanted to emphasize.

Speaker 3

I think that there were a couple of things that we did as well as we were careful in selecting sites. We run a series of trainings with the sites which was consistent what we did in the Phase II to make sure that the way these patients are assessed by the investigators is consistent what we did in Phase II. So we try to replicate in Phase III as Phase II. So we try to replicate in Phase III as much as we did in Phase II. And obviously as I mentioned earlier, the primary endpoint we selected based on the Phase II data.

Speaker 3

I think that was an important lesson in order to really see how quickly we can provide benefit to patients with a week twelve improvement, which also was the best endpoint for us in our Phase two study. In terms of the dose, when we have the data we'll discuss with FDA, obviously, yes, it's possible that both doses are positive, we will lead to a broader label with different rates of doses, but we'll discuss that when we have the data with FDA.

Operator

Thank you. Next question is coming from Salim Syed from Mizuho. Your line is now live.

Speaker 11

Hi, thanks for taking our question. This is Eric on for Salim. So just looking at modeling Jak5 through 2025, just wondering how we should think about the change, the growth versus 2024 and how we should think about that through the year if it's more loaded in first half, second half, anything like that? Thank you.

Speaker 4

So the guidance range that we provided implies a year over year growth of 5% to 7%. In terms of how to model it through the year, remember that Q1 always is the lowest quarter and lower than the prior quarter. And this is because of the reset of the deductibles at the beginning of the year, which on the commercial side, you would expect to continue to see this year. And even on the Medicare Part D, unless patients get to spread it through the course of the year, it will continue to have more of an impact in the first quarter of the year. So expect Q1 to be the lowest quarter and lower relative to Q4 of twenty twenty four.

Operator

Your next question is coming from Evan Seigerman from BMO Capital Markets. Your line is now live.

Speaker 17

Hi guys. Thank you so much for taking my questions. Two for me. Just walk me through some of the initial assumptions for the pediatric OBSELRIRA launch. What does this initial uptake curve look like and how much is factored into your guidance?

Speaker 17

And second, kind of a hypothetical here, would you ever consider adalimumab head to head trial in HS versus poho given that you want to establish yourself as a systemic standard of care in this market? I'm just thinking as this is a biosimilar market, you're coming in as a branded, and it could help you kind of getting a leg up here? Thank you. Yes, Matteo here. I'll take the AD Pizza launch.

Speaker 17

We're very excited about the opportunity that we have there to help these patients between two and 11 years old also because the very vast majority of them are still uncontrolled and pretty much on steroidal therapies. Obviously, in the second half of the year, we will see the initial uptake from the indication contributed to our net sales. But overall, in terms of sizing at peak, we think that that opportunity would represent anywhere around 1015% of the total atopic dermatitis of Soluva business.

Speaker 3

Let me take the second one. We have not discussed in the past whether to conduct a head to head study with adalimumab. There's a couple of points there. First of all, we let's wait to see the data for the HS1 for the two HS studies that are coming. Once we have the data in hand, we'll make decisions about future development.

Speaker 3

The challenge with the data that has been reported in the past with HUMIRA and when you discuss this between physicians is that while the response that has been reported was high and which has not been replicated since the original study, the drug failure on NUBIR is relatively fast. Patients seem to progress, patients with HS seem to progress relatively quickly. So this is one of the reasons why HS has become such an important market, such an important indications for a number of companies because there's a fair amount of dissatisfaction with the data, with the results in the real world with HUMIRA. So at this point, we haven't made a decision to go ahead to that study future development in HS, we'll discuss it after we have the data.

Operator

Thank you. Next question is coming from Ash Farma from UBS. Your line is now live.

Speaker 4

Great. Thanks for taking my question. Just one, so on FOWO and I just wanted to understand

Speaker 17

what is your view of the potential upcoming readouts from competitors? You have senorilikimab and RIMBO. How would that impact your value proposition for FOWO in this market?

Speaker 3

Thanks. So, at risk of being repetitive, so if we look at the Phase two data we've reported in a number of places, both week 12, week 16 and the totality of the data across all the endpoints has score fifty, seventy five, 90 and one hundred and pain response, we think we have a very competitive profile with Povo. Assuming everybody has a certain level of correction from Phase II to Phase III, We believe that when you put together all the efficacy data together with the safety profile we saw in the Phase two that we have a very competitive profile with biologics and certainly with Rimbach.

Operator

Thank you. Next question is coming from Kripita Varikonda from Truist Securities. Your line is now live.

Speaker 4

Hey guys, thank you so much for taking my question. On Jakafi, it seems like TB is primarily driving growth. Can you talk about the patient population where you're getting uptake and what the expectations are in terms of growth? Is it primarily through new patient adds or duration on therapy as well? And beyond, RoxXR and the V617S inhibitor, any additional life cycle management plans for your footprint in PV that seem to be growing?

Speaker 4

Thank you.

Speaker 2

Yes, I can speak. I mean, as you see, I mean, PV is of the three indications is the one that is growing the fastest. And it is driven by earlier treatment and that's based on the data we have shown that by treating early, you can basically reduce the incidence of thrombosis. So basically, help patients have a longer thrombosis free survival. And that was the magic studies that we have been sharing with physicians over the past year and it has been driving this adoption that we are seeing in PV as well as the change in the Medicare co pay for the Medicare patients, which is also helping in PV.

Speaker 2

So we as we said in the prepared remarks, we think PV will become the largest of the three indication over time, driven by this new patient this new earlier patient flow and the duration of treatment we are observing in PV. Regarding the overall portfolio, obviously, V617F mutation is the cause of ninety percent eighty percent to ninety percent of PV cases in The U. S. So that will be the key driver of the next generation of products for Incyte.

Operator

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments.

Speaker 1

Thank you all for participating in the call today and for your questions. The IR team will be available for the rest of the day for any follow-up. Thank you and goodbye.

Operator

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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Earnings Conference Call
Incyte Q4 2024
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