The paragraph introduces the Incyte Second Quarter 2024 Earnings Conference Call and outlines the key topics that will be discussed. These include the company's financial performance, progress on the commercial side, pipeline transformation, and capital allocation. It also mentions the speakers who will be presenting and reminds listeners to consult the risk factors discussed in the company's SEC filings. Finally, it highlights the growth in total revenue and net product revenue, driven by the success of Jakafi and Opzelura.

During the second quarter, Incyte made strategic decisions to transform their clinical pipeline by acquiring Escient Pharmaceutical and focusing on high potential programs. They also completed a $2 billion share repurchase, showing their confidence in their pipeline and commercial business. Over the past year, their pipeline has significantly advanced, with potential transformative programs added and some immune oncology programs deprioritized. Jakafi net product revenues increased by 3% compared to the previous year, with paid demand increasing by 9%. Incyte has also raised the bottom end of their full-year 2024 Jakafi net revenue guidance.

The speaker discusses the performance of Jakafi and Opzelura during the first and second quarter of 2022, 2023, and 2024. They note that Jakafi has shown strong unit growth, with the largest growth coming from PV and GVHD. Opzelura has also seen a 52% increase in net product revenue compared to the same quarter last year, with continued growth in both atopic dermatitis and vitiligo. The speaker also mentions the progress made in securing reimbursement for Opzelura in Europe, with Germany and France contributing to the $11 million in net sales during the second quarter. Additionally, Opzelura was the first therapy to gain full reimbursement in France through a new process, which has accelerated patients' access to the medication.

The R&D organization at Incyte has been focused on accelerating the development of their pipeline to treat inflammatory diseases, MPNs, cancer, and graft-versus-host disease. They have made progress in delivering new medicines and plan to launch more than 10 high-impact drugs by 2030. They recently completed a strategic review and have decided to discontinue some programs in order to focus on those with the highest potential impact. They have a sense of urgency and plan to achieve important clinical milestones in the coming months, with a focus on inflammation and autoimmunity.

The company is evaluating the potential of ruxolitinib cream and povorcitinib for various new conditions, including pediatric atopic dermatitis, prurigo nodularis, Hidradenitis suppurativa, chronic spontaneous urticaria, and asthma. They have recently acquired two potential first-in-class medicines that could address a number of debilitating conditions. The company is also advancing the development of ruxolitinib cream for additional indications, including pediatric atopic dermatitis and prurigo nodularis. They are on track to file a supplementary NDA for pediatric atopic dermatitis in the third quarter of this year and are conducting a Phase III study for prurigo nodularis.

The study for ruxolitinib cream is enrolling well and results are expected next year with potential approval in 2026. Povorcitinib, an oral JAK1 inhibitor, is being evaluated in Phase III studies for multiple conditions and has shown promising results in a Phase II study for hidradenitis suppurativa. Data for povorcitinib is expected in 2025 and a potential launch in 2026. Incyte is the only company with potential options for both topical and oral treatments for certain conditions. The company also has two new IAI programs in development.

The company is pleased to have acquired two mass-related G-protein coupled receptor antagonists, which have potential in multiple indications. These antagonists target mast cells, which play a role in inflammatory diseases. The first-in-class medicine, 262, has shown promising results in clinical studies and has a good safety profile. It is currently being evaluated for chronic-inducible urticaria, chronic spontaneous urticaria, and atopic dermatitis, with data expected in the first quarter of 2025. These diseases are currently treated with antihistamines, but many patients do not experience symptom control, highlighting the need for safe and effective oral treatments.

The company is focused on developing new treatments for various conditions, including atopic dermatitis, cholestatic pruritus, and myeloproliferative neoplasms and graft-versus-host disease. They have a highly selective antagonist for MRGPRX4, which could potentially be the first targeted therapy for cholestatic pruritus. They also have ongoing programs for BET inhibitor and ALK-2 inhibitor, with plans to advance them into Phase III development and provide updates later this year.

The company has submitted a BLA for axatilimab for the treatment of chronic graft-versus-host disease and is awaiting FDA approval. They also plan to conduct Phase III and II trials for the drug in combination with other therapies. The company is also working on a first-in-class anti-mutant CALR monoclonal antibody for MPNs, with potential to modify disease outcomes. The Phase I studies are currently enrolling and data is expected in 2025. Mutant CALR mutations are present in a significant percentage of patients with MF and ET, while JAK2V617F mutation is the most common in MPNs.

The company is developing a JAK2-V617F inhibitor that selectively targets mutant cells and is expected to have positive results in 2025. They also have a robust oncology pipeline with a focus on first-in-class and best-in-class immunotherapy programs. Tafasitamab, currently approved for relapsed or refractory DLBCL, is expected to have Phase III results for other types of lymphoma this year. Positive top-line results were announced for two pivotal Phase III studies of retifanlimab, a PD-1/PD-L1 antibody, in non-small cell lung cancer and squamous cell anal carcinoma, with potential approval in 2025. The drug is also being explored for use in combination therapy.

The company has plans to meet with regulatory agencies to determine next steps and will share data on their potentially first-in-class small molecule, CDK2 inhibitor at a conference in September. They believe this inhibitor could be a foundational therapy for ovarian cancer and other tumor types with CCNE1 overexpression. They are also developing a potentially first-in-class, best-in-class KRAS G12D small molecule inhibitor and are on track to share initial data in 2025. Additionally, they have a bispecific antibody that targets the TGF-beta signaling pathway without causing unwanted side effects and has the potential to target multiple immunosuppressive pathways in various cancers.

The company's second quarter results show strong commercial execution and growth, with total revenues of $1.4 billion. This is driven by demand for their products Jakafi and Opzelura, as well as increased revenue from Monjuvi. The company expects to continue this growth with new molecular entities in their pipeline, and will share data from their Phase I program in 2025. The financial update shows continued demand growth for Jakafi and Opzelura, with net product revenues of $706 million and $122 million respectively. Europe also contributed $11 million in Opzelura net product revenues.

In the second quarter, the company expects modest contributions from Spain and Italy due to summer vacation. R&D expenses were $1.14 billion, including upfront consideration for the acquisition of Escient Pharmaceuticals. Excluding this, R&D expenses were $692 million, a 13% increase year-over-year. SG&A expenses were $306 million, an 8% increase primarily due to expenses related to the acquisition of Escient. Excluding this, SG&A expenses were flat year-over-year. The company's total operating expenses grew 8% and 5% in Q2 and the first half of the year, respectively, which is below the 9% growth in total revenues. In May, the company completed the acquisition of Escient for $783 million, with $691 million recorded under R&D expense and $20 million under G&A expense.

The company completed a $2 billion share repurchase program in June, demonstrating confidence in the future outlook and strength of their business. They repurchased and canceled 33.3 million shares, resulting in a decrease in cash balance and shareholders' equity. The company raised the low end of their guidance for Jakafi sales, and expects continued growth for Opzelura. They also updated their R&D guidance due to an acquisition and decision to discontinue certain programs. The company is reiterating their full year guidance for other products, COGS, and SG&A. The call is now open for Q&A.

Kripa Devarakonda asked a question about the pipeline restructuring during the earnings call. Pablo Cagnoni responded that the decision was not influenced by the recent results of retifanlimab's Phase III trials. The restructuring was based on data review of existing programs and promising data from earlier-stage pipeline. The company is excited about retifanlimab's potential as a PD-1 antibody for previously untreated squamous cell anal cancer. The next question was about Jakafi and the company's expectations for its share in myelofibrosis, specifically in new patients in the frontline setting. Barry Flannelly answered that the company expects minimal impact from competitors in the second half of the year and beyond.

The company is experiencing growth in patients for MF quarter-over-quarter and year-over-year, with new patients for MF increasing more than 2%. The main growth drivers are PV and GVHD, and the competition is mainly using drugs in the second-line setting. The next question is about the upcoming ESMO presentation on the CDK2 program, and the speaker explains that the initial focus will be on ovarian cancer. They expect to show data on dose escalation and different schedules for the CDK2 inhibitor.

The company will provide data and a development plan for their CDK2 inhibitor in ovarian cancer patients. They expect to have a range of doses and schedules, and the data will support further development. For their ALK2 inhibitor, they will continue to escalate doses to improve anemia in patients with myelofibrosis and will show more data at higher doses to determine a potential development path.

During a conference call, an operator introduces a question from David Lebowitz from Citi regarding the demand for the company's product PV and the impact of IRA on the numbers. Barry Flannelly, a representative from the company, responds by stating that the growth in PV is due to the efficacy of the product and recent data showing its effectiveness. He also notes that the changes in Medicare Part D have made oncology drugs more affordable for patients. The next question is from Eric Schmidt from Cantor Fitzgerald regarding the company's R&D spend and portfolio prioritization. The speaker, Herve Hoppenot, responds by mentioning the recent cut in some programs and the increase in R&D guidance for 2024, which is partly due to the Escient acquisition. He also addresses the industry's high R&D as a percent of sales and mentions that the company is constantly evaluating the appropriate level of investment in R&D.

The speaker thanks the question about R&D spending and explains that their first approach is to evaluate each project's financial potential. They have decided to stop some projects and seek partnerships for others, creating room for new projects. This, along with the completion of some ongoing projects, will help maintain a reasonable R&D spend and improve financial ratios. The speaker notes that there has been a consistent decrease in the percentage of revenue allocated to R&D and SG&A.

The company is expecting to see proof-of-concept data for their MRGPRX4 antagonist in PBC and PSC next year. They may use the data shared by Mirum as a benchmark, which showed a 2.3 point placebo-adjusted difference on the adult daily ICHRA score in PBC.

Pablo Cagnoni, CEO of Incyte, is excited about the company's program for pruritus control in patients with PBC and PSC. He believes that the safety profile of their programs, X2 and X4, is a major advantage. When asked about the company's most important pipeline assets in the next three years, Cagnoni mentions the potential of the X2 and X4 antagonists, the near-term CDK2 data reveal in oncology, the unique approach to TGF receptor by PD-1 bispecific, and the potential to change disease outcomes in MPNs with their mutant color and 617 programs. Overall, these are the areas where the company has the most excitement.

The speaker, Steven Stein, responds to a question about recent publications showing potential benefits of combining JAK inhibitors with PD-1 antibodies. He mentions previous unsuccessful attempts at using JAK inhibitors in combination with PD-1 and states that while there is renewed interest, there are no current plans for R&D in this area. The moderator then introduces a question from Evan Seigerman about the company's capacity for business development following a recent share repurchase.

The company has recently done a large-scale share repurchase, reflecting their confidence in the business outlook and excitement about their pipeline. This was made possible by their strong balance sheet and lack of debt, giving them flexibility for potential acquisitions. They have also gained preferred formulary placements for their product, Opzelura, which has contributed to their growth this year.

The speaker discusses the impact of Opzelura on CBS patients and the company's plans for the future. They also mention the acquisition of tafasitamab and the potential opportunities it presents for frontline and follicular lymphoma treatment.

The company is optimistic about the potential of their new indication for their product, Monjuvi. They believe it will add to the clinical profile of the product and potentially increase sales by a few hundred million. They also mention that Monjuvi has a unique ratio of efficacy and safety compared to other competitors. The company is also excited about the potential for Monjuvi in treating follicular and marginal zone lymphoma, as well as diffuse large B-cell lymphoma. The company hopes to improve outcomes and cure rates for these patients.

The speaker discusses the potential for success with a new drug in the competitive markets of diffuse B-cell lymphoma and indolent lymphoma. They believe the drug's profile will be appealing to physicians and patients. During the quarter, Opzelura saw growth driven by demand, and the gross to net ratio was in line with the previous quarter. The company is focused on net sales rather than gross to net, and will pursue opportunities to improve access and demand. The split between atopic dermatitis and non-segmental vitiligo is currently 60-40.

The speaker discusses the potential growth of the pediatric indication for Opzelura and its contribution to the overall atopic dermatitis business. They estimate that the pediatric indication could account for 10-15% of the business, similar to other therapies in the same space. The next question is about the Jakafi XR program and the speaker mentions that PK/PD data could be available this year. They also discuss the CALR and JAK2 selective programs and what a potential pivotal program could look like.

The stability of the company is expected to improve in the third quarter of the year, and they plan to file for approval of a new indication in 2026. The company is also exploring new treatments for CALR and V617F, which could potentially lead to a cure for these diseases. The company is also considering the development of tafasitamab for autoimmune diseases, but they are still in the process of making a decision. They are aware of the success of CD19 targeted therapies in this area.

The company is evaluating the potential of taf in AI and the competitive landscape, with an update expected later this year. They have a portfolio of 12 NCEs in development that could potentially offset Jakafi LOEs and provide growth beyond them. The IR team will be available for the rest of the day.

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