The operator welcomes listeners to the Incyte Third Quarter Earnings Conference Call and introduces the speakers. Ben Strain, Associate Vice President of Investor Relations, encourages listeners to visit the company's website for related materials. Herve Hoppenot, CEO, discusses the company's double-digit revenue growth, successes in pricing and reimbursement, and progress in the pipeline. He also mentions the impact of inventory variation on Jakafi net sales and the continued growth of Opzelura in the third quarter.

The article discusses the financial performance of Incyte in the first nine months of 2023, with Opzelura being a key contributor to the company's growth. The company has made progress in securing pricing and access for their products, including obtaining Small Biotech Exception status for ruxolitinib and listing Opzelura as a preferred brand on formularies. In addition, Incyte has made progress in their clinical development efforts, with promising results from a Phase II study for their oral JAK1 inhibitor in patients with prurigo nodularis.

In the third quarter, the company had a strong presence at EADV, where they presented positive data for their Opzelura atopic dermatitis treatment in children and vitiligo treatment in adults. They also shared new data for their povorcitinib treatment in vitiligo. The company plans to release more data on their other key programs, including an update on their Oral PD-L1 program and combination data for ruxolitinib plus ALK2 and BET. They also have a new preclinical program targeting the JAK2V617F mutation. The call was then turned over to Barry, who discussed the company's commercial performance. Jakafi, the company's flagship drug, experienced increasing patient demand and achieved $1.9 billion in net sales for the year so far. The company is tightening their full-year guidance for Jakafi to a range of $2.59 billion to $2.62 billion. Jakafi is expected to continue growing, particularly due to its potential in treating polycythemia vera (PV) and its demonstrated thrombosis-free survival benefit.

The data on Jakafi shows that it has a significant impact on reducing the risk of major thrombosis in patients with PV, leading to earlier use and increased penetration in the market. Opzelura, a product for atopic dermatitis and vitiligo, has had a strong launch and continues to gain momentum with both physicians and patients. Its net product revenues have increased by 141%, driven by new patient flow and refills. The company remains optimistic about its long-term potential and is working on initiatives to drive new patient growth and adherence.

During the quarter, the company launched a new marketing campaign called "Moments of Clarity" featuring Mandy Moore to promote Opzelura as a nonsteroidal topical option for mild to moderate atopic dermatitis (AD) patients. The campaign received media coverage from top-tier outlets and the company is also focusing on DTC initiatives for vitiligo. The company has made progress in securing payer coverage for Opzelura, with 84% commercial coverage for AD and a 30% increase in coverage for vitiligo. The R&D organization is focused on eight high potential programs and aims to increase decision-making rigor, accelerate pipeline progression, and optimize resource allocation.

In this paragraph, the speaker discusses the progress of some of the company's earlier-stage programs, including a bispecific antibody that targets TGF-beta receptor 2 and PD-1, a monoclonal antibody for vitiligo, and a monoclonal antibody that targets the JAK2V617F mutation in myeloproliferative neoplasms. They also mention a novel anti-mutant CALR antibody that has potential to improve disease outcomes.

The company expects to file the IND by the end of 2023 and enter clinical trials in 2024 for their two potentially disease-modifying programs for MPN. They also obtained positive results from a Phase II study for povorcitinib in patients with prurigo nodularis and plan to initiate a Phase III study in 2024. In addition, they presented positive data from a Phase IIb trial for povorcitinib in patients with extensive nonsegmental vitiligo at a recent medical conference.

The results of the clinical trial for oral povorcitinib showed significant repigmentation in patients with nonsegmental vitiligo, and the effects were sustained even after treatment was discontinued. This supports the effectiveness and safety of povorcitinib for treating vitiligo and a Phase III study will be initiated by the end of the year. Povorcitinib has also shown promising results in treating hidradenitis suppurativa, with over half of patients achieving a HiSCR50 response at week-16 and up to 29% achieving complete resolution of symptoms at week-52. The Phase III studies for HS are progressing well and the company plans to expand the use of povorcitinib to other skin conditions such as vitiligo and prurigo nodularis. The company is also conducting Phase II studies for povorcitinib in asthma and chronic spontaneous urticaria. In addition, results from a Phase III study for ruxolitinib cream in children with atopic dermatitis were presented at a recent conference.

The data from the TRuE-V program showed that ruxolitinib cream was effective and well-tolerated in pediatric atopic dermatitis patients and could potentially be a better option than current nonsteroidal topical treatments. The long-term extension study also showed that prolonged treatment with ruxolitinib cream led to increased repigmentation in patients with vitiligo who initially did not respond to treatment. Opzelura is being developed for other indications beyond AD and vitiligo, where it could be the first approved therapy or first approved topical therapy for patients.

The company has completed enrollment in three Phase II studies and is currently enrolling patients for two Phase III trials for Opzelura in various skin conditions. They also have upcoming data readouts and milestones expected for the remainder of the year. In terms of financials, total product revenues increased by 10% year-over-year, with Jakafi net sales growing by 8% in the first nine months of 2023. There were fluctuations in channel inventory levels in the first two quarters, but by the end of Q3, they returned to the midpoint of the normal range. The decrease in inventory had a negative impact of $14 million on reported net sales.

The company's net product revenues for the third quarter increased by 141% year-over-year due to increased patient demand and expanded coverage. R&D expenses decreased by 2% due to a decrease in collaboration-related expenses. SG&A expenses increased by 1%. The company is tightening its guidance range for Jakafi and reaffirming other guidance for the year. The company expects data on a combination of Jakafi, ALK2, and BET in the fourth quarter. The company is considering the potential life cycle management of the combination and the positioning of each asset.

In Q3, gross to net for Opzelura was 54%, slightly lower than Q2 and Q1. The company expects it to remain around 55%, with any improvements depending on Medicaid. The company is working on once-daily dosing for ruxolitinib and will have data on ALK2 and BET combinations at the upcoming ASH meeting. These combinations aim to address anemia and shrink spleen volume in myelofibrosis patients. The company will continue to pursue these efforts before the LOE for ruxolitinib.

The company is confident in the competitive landscape for Jakafi in the treatment of myelofibrosis, as other JAK inhibitors have not made significant market share gains. The recent approval of momelotinib for a subset of patients does not pose a significant threat, as it failed in a direct comparison study with Jakafi and Jakafi has a superior overall survival advantage for all patients, regardless of anemia.

The speaker discusses the impact of the company's strong designation in the myelofibrosis market and the effectiveness of their drug Jakafi in managing symptoms and spleen. They also mention the pricing of their drug momelotinib and how it is expected to be mostly used as a second-line drug. The speaker then addresses a question about reimbursement dynamics for another drug, Opzelura, and explains that they have received preferred brand designation from Caremark and Aetna which will make it easier for patients to access the drug. They also mention that they are working on similar contracting with other payers.

The speaker discusses the success of Opzelura as a first-line therapy for atopic dermatitis (AD) and the negotiations with PBMs and payers for rebates and fees. They also mention that the negotiations will continue until 2025, but there is a possibility for changes to be made in order to make access easier for patients. The expected number of tubes per patient for AD is around two, while for vitiligo, it is still being evaluated.

The company will continue to track the number of tubes used for vitiligo treatment and will update investors as they gather more data. They are not yet able to provide sales guidance for 2024 due to the newness of the market. In terms of BET inhibition in myelofibrosis, the company is monitoring a competitor's ongoing first-line study with a primary endpoint of spleen volume reduction and a secondary endpoint of symptom improvement.

During the Q&A portion of the call, an analyst asked about the company's BET inhibitor, specifically in terms of its monotherapy data and ongoing combination work. The speaker responded by stating that they have seen positive results in spleen reduction, symptom response, and hemoglobin response. They also mentioned that they will have to wait and see how this data compares to their competitor's first-line study, and that they will provide further updates at the upcoming ASH meeting in December. Another analyst asked about the potential impact of moving up the formulary for their franchise on gross-to-net. The speaker could not provide a definitive answer, but mentioned the potential for improved net sales due to easier access for patients. Finally, an analyst asked about the impact of GSK's recent approval of Ojjaara on Jakafi. The speaker stated that they could not estimate the portion of MF patients on a suboptimal dose due to anemia, but did not see an increase in discontinuations or a decrease in new patient starts for Jakafi since Ojjaara's approval.

Barry Flannelly discusses the impact of Ojjaara's approval and sales on the company's performance. He also mentions that only about 5% of patients are at steady state on 5-milligram twice a day dose and that this is not a major concern. Steven Stein discusses the potential of povorcitinib in the treatment of vitiligo and other autoimmune indications. He notes that the drug has shown promising results in facial VASI scores and could complement the current Opzelura utilization opportunity.

The company will disclose the endpoints and doses for their upcoming clinical trials for a JAK inhibitor for vitiligo. The target population is those with extensive body surface area involvement, as the cream currently available is only indicated for those with 10% or less involvement. The company plans to begin the study by the end of the year. The JAK inhibitor has shown promising results in other dermatological conditions and is also being studied in asthma and chronic spontaneous urticaria. The drug has shown significant activity in these areas and will be moving into Phase III trials.

The speaker discusses the positioning of povorcitinib in the planned Phase III study and its target patient population, which includes those with severe itch. They are unable to provide more details on the study at this time. The questioner also asks about Medicaid penetration for Opzelura and the potential impact on Jakafi sales from polycythemia vera. The speaker responds that Medicaid patients make up about 14% of paid patients for Opzelura and that they expect growth in Jakafi sales from the new data and earlier patient starts.

The speaker discusses the potential impact of a new drug, 33989, on the treatment of myelofibrosis (MF). They mention that it may offer a viable alternative to JAK inhibitors and could potentially decrease the risk of malignant transformation in patients with mutant CALR and V617F. The regulatory pathway for approval is not yet determined, but the speaker suggests that surrogate endpoints may be used.

Steven Stein, a researcher, discusses the potential of new compounds developed by his team to target new areas of biology. These compounds could potentially eliminate mutant CALR, a neoantigen expressed in 25-30% of myelofibrosis and ET, and the V617F mutation, which is present in 50% of MF, 60% of ET, and 95% of polycythemia vera. This could lead to a new treatment paradigm that is disease-modifying and potentially curative. However, it is still early and more research is needed to ensure safety and efficacy.

An unidentified analyst asks a question about the potential for monotherapy or combination therapy in relation to the JAK2V617F mutation. The speaker, Pablo Cagnoni, explains that it is too early to determine the best approach and that more data is needed from ongoing studies. He also confirms that the CALR and V617F mutations are mutually exclusive. The analyst also asks about the split between AD and vitiligo in the third quarter, and Barry Flannelly responds that it is currently 60-40, with 60% for AD and 40% for vitiligo. The next question is from Reni Benjamin of JMP Securities.

Reni Benjamin asks about the competitive landscape in PN and HS and whether it could change before the Phase III readouts. Steven Stein explains that their oral agent is a differentiator and they have strong proof-of-concept data in both indications. Herve Hoppenot adds that they are still looking at opportunities outside the company and investing in their pipeline.

The company's revenue growth is outpacing its expenses, leading to increased cash flow. They are looking to continue adding to their growth through partnerships or acquisitions. The pace of their pipeline development is expected to offset the loss of exclusivity for one of their products. They are actively working on several programs, including XR, BET, ALK, and CALR/V617F, with the goal of obtaining FDA approval and demonstrating safety and efficacy.

The company is considering a rapid Phase III program, but it is too early to make a decision. They have a list of eight prioritized programs in R&D that will impact revenue in the near future, with the CALR program being the only one with a longer timeline. The povorcitinib program has had positive news and is in Phase III for one indication, with plans for additional indications. The company has a pre-submission meeting with the FDA for RUX cream in pediatric patients, and the only difference from adult submissions is the need to demonstrate safety under maximum use conditions. The company has completed this work and is discussing with the FDA.

The speaker states that they hope to submit their data in the first half of next year and are confident in its accuracy. The operator then concludes the call and thanks everyone for participating.

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