Incyte had a successful second quarter, with product revenues growing 25% year-over-year and driven by Jakafi, Opzelura, and launches in Europe. Jakafi net product revenue grew 14% and Opzelura had net product revenue of $80 million. Additionally, Pemazyre and Minjuvi had a 30% growth in ex-US markets. Incyte also announced positive top line results from two of their high potential programs.

Incyte reported positive results from the TRuE-AD3 and AGAVE-201 studies evaluating ruxolitinib cream and axatilimab respectively. Incyte has also appointed Pablo Cagnoni as President and Head of R&D in order to maximize speed and productivity in research and development efforts. Incyte's net product revenues for the quarter were $682 million, up 14% year-over-year due to increased patient demand across all indications.

Jakafi saw a 5% year-over-year growth in total patient demand, with new patient starts up 9%. The launch of Opzelura has seen strong uptake and positive momentum, with U.S. patient demand increasing 16% and refills growing by 23%. Minjuvi's U.S. net product revenue was up 2% year-over-year, while outside the U.S. it saw a 198% increase. Pemazyre's net product revenue increased 14% year-over-year, with $5 million coming from outside the U.S.

In the Phase 3 TRuE-AD3 trial, ruxolitinib cream 0.75% and 1.5% met the primary endpoint in pediatric atopic dermatitis patients aged two to 12, with no new safety signals observed. The AGAVE-201 study evaluating axatilimab in patients with chronic graft versus host disease met its primary endpoint with the 0.3 milligram per kilogram dose achieving a 74% overall response rate, with 60% of responders maintaining their response at one year. Both drugs were well tolerated and full datasets will be presented at scientific meetings, with potential BLA submissions by the end of 2023.

Axatilimab is being trialed for use in chronic graft versus host disease, and Opzelura and Povorcitinib are being trialed for use in a variety of dermatological conditions. Povorcitinib has also been expanded into inflammatory and autoimmune diseases, and two Phase 2 trials have been initiated in asthma and chronic spontaneous urticaria (CSU). Povorcitinib appears to have efficacy in both Type 2 and non-Type 2 endotypes of asthma, and in CSU it inhibits multiple cytokines which may provide superior efficacy.

In the second quarter, Incyte achieved multiple clinical milestones in hematology and oncology, including their OP-2 and BET program, INCA033989, and axatilimab. Incyte is also advancing their small molecule oral PD-L1 program, INCB99280, which is an orally available PD-L1 targeted agent. This agent has a short half-life, reducing the burden of managing immune related toxicities, and can be taken at home, potentially offering improved safety and quality of life.

The INCB99280 is currently being studied in monotherapy Phase 2 studies for checkpoint inhibitor naive patients and cutaneous squamous cell carcinoma. It is also being studied in combination with axitinib and ipilimumab, and a neoadjuvant study is being conducted to evaluate it in combination with RP1. Additionally, zilurgisertib and INCB57643 are being studied for their potential clinical activity and safety. Dose finding work is ongoing for both compounds.

In Q2, total product revenues increased 25% year-over-year to $827 million, driven by strong performance of Jakafi and Opzelura. Jakafi net product revenues rose 14% year-over-year, and Opzelura net product revenues increased 384% year-over-year. Additionally, other dermatology/oncology net product revenue increased 30%, driven by patient demand and the recognition of $6 million of previously deferred Minjuvi revenue. INCA33890, a TGFβR2 by PD-1 Bi-specific antibody, entered the clinic and ouremolimab, an anti IL-15Rβ antibody, received IND clearance. Retifanlimab has completed enrollment in a Phase 3 non-small cell lung cancer study and a squamous cell anal carcinoma study. There are upcoming data readouts and other exciting milestones expected throughout the remainder of the year.

In the second quarter, total royalty revenues were $128 million, primarily comprised of royalties from Novartis for Jakafi and Tabrecta and royalties from Lilly for Olumiant. Opzelura's launch has been strong, with 2023 year to date net sales of $137 million, and net product revenues have grown at an average quarterly rate of 28%. R&D expenses were $401 million, representing a 15% year-over-year growth, and SG&A expenses were $284 million, representing a 12% year-over-year growth. Jakafi's strong demand growth has led to the company raising the bottom end of its full year Jakafi guidance to a new range of $2.58 billion to $2.63 billion.

Steven Stein addresses a question about MS development in the lumber program, acknowledging ruxolitinib's effectiveness in reducing symptoms and spleen size. He suggests that ALK2 may be a good option for preventing anemia development and maintaining ruxolitinib dose intensity, and that by next year they should be able to declare where they want to go with the program. He also mentions that the BET program has different tolerability issues.

In the Phase 2 trial of axatilimab, the dose response was unusual, which may have been due to SAEs and response rates. The 12 milligram dose showed dose-limiting toxicity, so the 10 milligram dose is being used for monotherapy. There is encouraging spleen response, symptom response, and occasional hemoglobin improvement. There is also a competitor reporting BET data later this year which will be closely watched. The CALR antibody is now in the clinic and could potentially be disease-modifying or even curative in the 30% of CALR patients.

Steven Stein and Barry Flannelly discussed the AGAVE-201 study, which had three different doses and schedule differences. The 0.3 milligram per kilogram dose resulted in 74% best overall response, the 1 milligram per kilogram dose resulted in 67% best overall response, and the 3 milligram per kilogram dose had more transaminitis. They are discussing the differences in response rate and tolerability with regulators to submit an early BLA by the end of 2023.

Kripa Devarakonda asked Barry Flannelly about Minjuvi in Europe. He explained that the overall profile of patients using Minjuvi in Europe is similar to the U.S., and that there is a larger group of patients who are eligible for Minjuvi due to its good safety and efficacy profiles. He also mentioned that CAR-T is being used in different European countries, but the uptake of Minjuvi is faster than what was seen in the U.S. Allison Bratzel then asked about the gross to net trends during the quarter for Opzelura, as well as the mix of atopic derm and vitiligo, and the refill and persistence rates in vitiligo. Lastly, she asked a question about the Replimune agreement announced the day prior.

Christiana Stamoulis and Barry Flannelly discussed the gross to net discount for Opzelura in Q2, which was 55%, down from 60% in Q1. They also noted an increase in Medicaid utilization and that vitiligo now accounts for 35% of total prescriptions. For atopic dermatitis, they expect two to three refills, while for vitiligo they expect an average of 10 tubes per year. Steven Stein then took a Replimune question.

Replimune is conducting a study of Cutaneous Squamous Cell Carcinoma using RP1, an oncolytic virus, and 280, an oral agent. The combination of the two is seen as an exciting potential, and the study is a proof of concept in the neoadjuvant setting. There was no mention of any outsized or large inventory purchases that contributed to Jakafi's 2Q sales base.

Christiana Stamoulis and Barry Flannelly answered a question regarding inventory and the FDA's CRL concerning QD RUX. Stamoulis reported that inventory was back within the normal range and represented $35 million in net sales. Flannelly stated that the CRL was a concern around Cmin at steady state, and there are two potential approaches for moving the program forward. The first approach involves modeling work and discussion with the regulatory agency, and the second approach may take longer.

Steven Stein outlines the progress of Jakafi's combination therapy of BET and ALK2, noting that BET is active in monotherapy and in combination, and that ALK2 is well tolerated. He also discusses the development of fixed dose combinations for both BET and ALK2, and mentions the potential use of CALR and CK0804 in the strategy.

The Cellenkos' 0804 effort is a different effort entirely, using umbilical cord T-reg cells to target the bone marrow. Early case studies have shown to change the natural history of myelofibrosis and potentially improve fibrosis, and have been safe. The idea is to be disease modifying with this therapeutic modality. Barry Flannelly commented on an increased demand for Opzelura, and that they have been seeing patients who have been seeking treatment all along for their vitiligo, as well as patients who had stopped seeking treatment starting to come on to Opzelura.

In Europe, Opzelura was approved and launched at the end of June and has seen a good uptake in Germany, which is the most important market for the year. The label in Europe is excellent and has no equivalent of a Black Box, unlike in the US.

Incyte and Syndax are planning to file a BLA for axatilimab and potentially commercialize it. For Opzelura, the free drug program and IQVIA projection are seeing no difference between AD and vitiligo, and Incyte is optimistic about its potential. The company wants to see a few more quarters of uptake and information on refills before providing guidance.

Incyte and Syndax have agreed to co-commercialize axatilimab in the U.S., with Incyte leading the filing activities and a 50-50 profit split. Outside the U.S., Incyte will be prosecuting all activities related to regulatory and commercial for axatilimab, while also paying a royalty to Syndax. Steven Stein also mentioned that the provorcitinib Phase 2 trial for prurigo nodularis is complete and data will be released later this year. The central issue for these patients is intense and severe itch, and an oral JAK inhibitor is being considered as a potential treatment option.

Steven Stein discusses how the regulatory path for a drug is established and that two Phase 2 studies for the drug are enrolling well. He also explains that they do not provide patient-by-patient enrollment updates. Lastly, he discusses the top-line data for axatilimab and how it might be positioned competitively in the third-line setting. He also outlines what they might need to see in order to advance the Jakafi combo study into a Phase 3 trial.

The speaker is discussing the potential of combining Ruxinaxa with another drug to treat graft versus host disease. They are hoping to move up the treatment paradigm by using two active drugs with no drug-drug interactions or overlapping mechanisms of action. It is unclear at this time whether the combination will be used in first or second line treatment, and the speaker will wait to see where the data leads them.

Barry Flannelly and Herve Hoppenot of Incyte discussed the growth of their drug Opzelura, noting that total RXs grew by 16%, and refills grew by 23%. They expect refills to continue to grow to more than 50%, and for AD patients to use two to three tubes and vitiligo patients to use an average of 10 tubes per patient. In terms of M&A, they have not specified a priority between I&I and oncology assets. In regards to the HS opportunity for povorcitinib, they reported a complete response and believe it is the first time ever a Heska 100 has been reported by a compound in this entity.

Inverse is looking to use its $3 billion in cash to diversify and grow its organic portfolio. This could be done through M&A, licenses, or business development. Specifically, they are looking for products that have the potential to contribute to the growth in the years 2025-2026 and beyond.

Incyte is looking into Perrigo nodularis as a potential opportunity. It is often not diagnosed and can have a massive impact on quality of life. The regulatory process has already been defined for DUPIXENT and the company is waiting for their Phase 2 proof-of-concept data. Ruxolitinib cream is also being studied for milder cases. Hervé Hoppenot was asked to comment on the second question regarding derm as a business and how it might fit into Incyte's portfolio.

Herve Hoppenot believes that dermatology has the potential to be a meaningful size and is developing programs for RUX cream to address various indications. He sees the potential of topical JAK inhibitors to treat these conditions and is also looking into developing povorcitinib for other indications. In addition, he is researching inflammation and immunology to apply to cancer and autoimmune diseases. Incyte is now building a commercial team in the US and Europe to help grow the dermatology portfolio over the next five years.

Barry Flannelly thanked everyone for participating in the call and for their questions, and the IR team will be available for follow-up. The teleconference and webcast was concluded, and everyone was thanked for their participation.

This summary was generated with AI and may contain some inaccuracies.