The operator introduces the Incyte First Quarter 2024 Earnings Conference Call and turns it over to Ben Strain, who introduces the speakers and reminds listeners to consult the risk factors. Hervé Hoppenot, the CEO, announces that Matteo Trotta has joined Incyte as General Manager of the US Dermatology Business Unit. He then discusses the company's Q1 results, which saw a 9% increase in total revenue. Hervé clarifies the performance of both Jakafi and Opzelura, stating that Jakafi saw an increase in demand.

In the first quarter of 2024, Jakafi net product revenue was $572 million, with a 5% increase in total patients. The growth was driven by PV and GVHD. Inventory reduction had a negative impact of $55 million on net revenue, but the company is still expecting strong growth for the rest of the year. Jakafi maintains its leadership and market share in myelofibrosis. Opzelura net product revenues were $86 million, up 52% from the previous year. Weekly prescription trends show continued growth in both atopic dermatitis and vitiligo. US total prescriptions for Opzelura outpaced the total AD market, but the market was impacted by a cyber attack in March. However, there has been a rebound in filled prescriptions in April.

In the first quarter, the company has seen positive results since Opzelura moved to preferred position in the CVS network. They are on track to provide 10 high-impact launches by 2030, with many programs already de-risked. They have also announced an agreement to acquire Escient Pharmaceuticals for $750 million, which will strengthen their pipeline with two novel first-in-class medicines. In MPNs and graft-versus-host disease, they have initiated a Phase I study for a JAK2V617F inhibitor. This inhibitor selectively targets the mutant cells while sparing wild-type cells.

In addition to their anti-mutant CALR program, the company has also submitted a BLA for Axatilimab for the treatment of chronic graft-versus-host disease. They have also initiated a Phase I study for their KRASG12D inhibitor, which has shown promising results in preclinical models. The company is also focused on expanding their dermatology pipeline through the acquisition of Escient Pharmaceuticals, which includes a first-in-class medicine for blocking mast cell activation. This medicine has entered clinical trials and has been evaluated in Phase 2 studies.

EP262, a potential treatment for chronic spontaneous urticaria (CSU) and atopic dermatitis, has shown promising results in a Phase 1 study and is currently being evaluated in Phase Ib and Phase II studies. EP547, a potential treatment for cholestatic pruritus, is also showing promise in initial evaluations. Additionally, Ruxolitinib Cream has shown positive results in a Phase 2 study for Hidradenitis Suppurativa and a potential Phase 3 study is being discussed with the FDA. Povorcitinib has also shown positive results in a Phase II study for prurigo nodularis and a Phase III study is planned.

In the first quarter, the company achieved several clinical and regulatory milestones, including submitting a BLA for Axatilimab and expecting to submit an sNDA for Opzelura for pediatric atopic dermatitis. The company also expects to share data on their potentially best-in-class CDK2 inhibitor and the pivotal trial of tafasitamab later this year. Total revenues for the quarter were $881 million, with product demand growth for Jakafi and Opzelura partially offset by a reduction in channel inventory and typical Q1 dynamics.

In the first quarter of 2023, total royalty revenues for Incyte were $126 million, with strong demand for Jakafi driving the increase. Net product revenues for Jakafi were $572 million, with a 5% increase in total patients and the highest quarter paid demand since launch. Net product revenues for Opzelura were $86 million, a 52% increase year-over-year, driven by growth in new patient starts and refills for both AD and vitiligo, as well as early contributions from commercialization in Europe.

In the first quarter, Opzelura net product revenues were impacted by typical Q1 seasonality and a cyber-attack on UnitedHealth Change Healthcare unit. R&D expenses increased by 6% due to pipeline progression, while SG&A expenses decreased by 5% due to timing of marketing activities. The company will acquire Escient Pharmaceuticals for $750 million in an all-cash transaction, which is expected to contribute to revenue by 2029 and add $5 million per month in incremental R&D expense. The acquisition is expected to close by the third quarter of 2024 and add $20-30 million to R&D expenses in 2024. The company has a strong balance sheet with $3.9 billion in cash and no debt, allowing for consideration of additional opportunities. Full year 2024 guidance for Jakafi, other hematology/oncology products, COGS, R&D, and SG&A remains unchanged.

The operator opens the call for a question-and-answer session. The first question is from Kelly Shi, who asks for more information about Opzelura's gross to net and its performance in both atopic dermatitis and vitiligo. Christiana and Matteo respond, stating that the gross to net was at around 60% in the first quarter and that the split between the two indications is consistent at 40% for vitiligo and 60% for atopic dermatitis. They also mention that both indications are growing at a healthy pace. Kelly also asks about physician feedback on the topical ruxolitinib cream for Hurley Stage 1 and 2 HS patients, and Steven responds that the milder type of HS still represents a significant number of patients in the United States.

The company is optimistic about the growth of their drug Jakafi, despite upcoming changes in out-of-pocket expenses for patients. They have a small biotech exemption and believe that the reduced out-of-pocket costs for patients will actually benefit them. They also see growth potential in other conditions such as PV, GVHD, and myofibrosis. Physicians and KOLs have given positive feedback on the efficacy of the drug in treating mild stage HS. The company is currently working with regulators to get an appropriate endpoint for this condition.

During a conference call, David Lebowitz asked Steven Stein to comment on the projected growth for 2025 compared to 2024. However, Steven Stein was unable to provide further information and reiterated their confidence in reaching $3 billion by 2028. The next question was from Kripa Devarakonda about the impact of competition on Jakafi's share and the recent report of increased AML incidents in patients on the Jakafi/BET combo for a competitor. Hervé Hoppenot stated that there has been no impact on Jakafi's duration of therapy or discontinuation rates, and Pablo Cagnoni declined to comment on data from other companies.

The BET inhibitor program is going well and there are plans for a potential pivotal trial later this year. The company has seen no safety concerns in regards to AML transformation in patients with MF. A question was asked about the potential impact of Rinvoq's head-to-head study against Dupixent on the potential of povorcitinib in dermatology indications, and the company is encouraged by the data and considering developing povorcitinib for atopic dermatitis. Another question was asked about concerns regarding AML, and the company's response was based on the clinical data they have seen.

The company's BET inhibitor has not shown any genotoxicity in preclinical assays, and they have treated close to 200 patients with no concerns about AML transformation. They attribute the sequential downtick in total Jakafi demand to seasonal factors, and do not expect any impact on market share or patient persistence at this time.

In the paragraph, the speaker discusses the increase in patients treated with Jakafi in the first quarter compared to the previous quarter and the previous year. They attribute this growth to the normalization of free drug levels and the lack of impact from new competitors. The next question is about LIMBER and Opzelura. For LIMBER, the speaker mentions that they are expecting to see ALK2 POC data by the middle of the year and they define what would be considered sufficient for continued development of the program.

Steven Stein and Christiana Stamoulis address two questions regarding Opzelura. Stein discusses the mechanism of ALK2 and the ongoing study to determine its clinical benefit for patients. Stamoulis explains that before providing guidance for Opzelura, they are waiting for more real world data on utilization, particularly for vitiligo.

The company is still early in the launch of their product and is waiting for more real-world data before giving guidance. The growth of Jakafi is coming from GBHD and PV, and the company expects to continue as the market leader in first-line myelofibrosis. The CDK2 inhibitor program is showing encouraging data and the company is currently optimizing the dose for the program.

The company plans to release clinical data and a development plan for ovarian cancer later this year, with a focus on CDK2 inhibitors. They believe ovarian cancer is an important opportunity, despite competition from other companies. The impact of the Change Healthcare issue on Opzelura and Jakafi is uncertain. The Phase III studies for povorcitinib in vitiligo have a single primary endpoint of F-VASI 75, unlike Rinvoq which has two primary endpoints. The rationale for this decision and the potential outcome are unclear.

The company Change Healthcare experienced a cyber-attack in February, causing a temporary interruption in their network and resulting in a softer market for their product Opzelura in March. This led to an estimated $4-5 million negative impact in Q1. However, demand has since returned to pre-cyber attack levels. The impact on Jakafi is unclear, as most specialty pharmacies were able to switch to a different system. The company is also conducting Phase III studies for their product povorcitinib in vitiligo, with different primary endpoints depending on the region.

The speaker thanks the questioner for their question about Opzelura and their refill rates for patients. They mention that the refill rate for atopic dermatitis is slightly north of two tubes per patient and is stable, while for vitiligo it is increasing quickly but not yet at the steady state. They also mention that there are patients who are not complying with the treatment and they are working to improve this. The marketing team is launching an adherence program that they believe will impact the refill rate growth for both indications. The next question is from Salveen Richter from Goldman Sachs, who asks for an update on the ex-U.S. market.

The launch of Opzelura in Europe is progressing well, with Germany, Austria, and France already on board. The company is in the process of negotiating prices in Italy and Spain and expects to launch in these countries by the second half of the year. Smaller European countries are also being considered, but the pricing discussion in the UK may take longer. The company is seeing a positive demand for Opzelura in France. The pediatric uptake in the US is expected to happen after approval. The company also has significant balance sheet capacity and may consider meaningful M&A opportunities in the near future.

The company is excited about the potential to help millions of children in the US and expects a positive impact on their top-line pending FDA approval. They also have a strong balance sheet and are considering additional opportunities for growth, including acquisitions and other alternatives being discussed with the Board. They may also consider returning cash to shareholders through dividends or share buybacks.

The speaker discusses the company's focus on targeted oncology and their shift away from immuno-oncology. They mention their interest in opportunities that align with their timing and therapeutic areas, and their plans to leverage their oral PD-L1 inhibitor for their KRASG12D program. They also mention their excitement about the G12D program and their access to an advanced oral PD-L1 inhibitor for potential combinations. They state that their journey towards targeted oncology will continue to accelerate in the future.

The speaker asks about the potential release of data for a CALR-mutant antibody in early 2025, and whether it will be used as monotherapy or in combination with Jakafi for myelofibrosis and essential thrombocytopenia. The speaker also asks about the purpose of combining the antibody with Jakafi and whether the company would consider using its balance sheet for buybacks. The speaker also asks about the company's positioning in the dermatology space and where they hope to gain market share in the next five years. The speaker also mentions that data will be available for both MF and ET.

In response to a question about the company's pipeline, Hervé Hoppenot discusses their strategy of increasing leverage and growing the top-line faster than expenses. He also mentions that they are considering a buyback and Steven Stein comments on their portfolio of first-in-class medicines in the inflammation space. The next question is about the progress of Jakafi XR, to which no update is provided.

The company is currently evaluating their strategy for the future, including potential combinations with other drugs. They are also working on obtaining approval for a once-daily version of their drug. The data for tafasitamab in low-grade follicular and marginal zone lymphoma will be available in the second half of 2021, and in first-line diffuse large B-cell lymphoma in Q1 2025. The company is also considering the potential for using CD19 antibodies in autoimmune work. They expect the data for tafasitamab to be meaningful and look forward to the results.

During the Q&A portion of the conference call, a clarification was asked about the timing of showing CALR data. Pablo Cagnoni clarified that the goal is to show the data in 2025, not 2024 as previously implied. The operator then thanked everyone for participating and ended the call.

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