Incyte Corp Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Schmidt - Guggenheim Securities, LLC - Analyst : Hey, guys. Good morning. Congrats on a great third quarter and thanks for taking my question. I had one on povorcitinib. So just looking ahead to the upcoming Phase 3 data in hidradenitis early next year. So beyond top line success, do you have any thoughts on where you think -- where you want efficacy to shake out in order to be competitive with Humira and other market biologic? Is there a particular placebo-adjusted effect size that you're looking for to hit with povorcitinib? Thanks.

Question: Jessica Fye - JPMorgan - Analyst : Hey there. Good morning. Thanks for taking my questions. had a few on the pipeline. I believe earlier this morning, Novartis announced that longer follow-up time is needed to determine the regulatory path forward for their BET inhibitor. Curious how that impacts at all your thinking or development strategy for your BET. And then can you help us think about the potential development plans for povorcitinib and 262 in CSU? And just kind of where you see both molecules best fitting in the treatment paradigm? Thank you.

Question: Salveen Richter - Goldman Sachs & Company, Inc. - Analyst : Good morning. Thank you for taking my questions. Just regarding the Escient portfolio, could you just help us understand how you're thinking about development strategy here when you think about the different mechanisms addressing some of these diseases and how you see the differentiation playing out? Thank you. Unidentified Company Representative 1 Yeah. So we have two programs that were acquired with Escient: MRGPRX2 and MRGPX4. So MRGPRX2 is currently being developed in three indications -- chronic spontaneous urticaria. And I just highlighted where we are with that indication. We have an ongoing study with two dose levels versus placebo, 50 and 150; and the second study of 25 milligrams versus placebo. Once we have all that data, we'll decide next steps for chronic spontaneous urticaria. For the other two indications are chronic inducible urticaria, particularly focused on two of those, dermographism and cold-induced urticaria and atopic dermatitis. The reason why we like MRGPRX2 as a target is the excellent selectivity, not just for cell type, mast cells, but also mast cells specifically in the skin and connective tissues. And we think that should lead to an excellent safety profile and make this, perhaps, in some of these patients, the first therapy after patients progress on antihistamines in the case of urticaria, chronic urticarias, for example. So good evidence of efficacy, together with a very, very clean safety, we think it will make this a very important option for patients at that stage of the disease. The second program was MRGPRX4. This has been developed in patients with cholestatic pruritus, specifically primary biliary cirrhosis and primary sclerosing cholangitis. We know that X4 is a receptor. Bile acids and bile salts bind to it, and this is an important way in why these patients have intractable pruritus. We are conducting a randomized double-blind study in those indications. We'll have data in the first quarter of 2025, same as for MRGPRX2 program. And once we report all the data early next year, we'll give you clarity on the next steps.

Question: Eric Schmidt - Cantor Fitzgerald - Analyst : Well, thanks for taking my question and congrats again on all the updates. Maybe a commercial question for Matteo on Opzelura and the potential upcoming launch for pediatric AD in the second half of next year. How do you think you're doing with regard to formulary access and efforts to ensure reimbursement and what could be a pretty sizable marketplace? Thanks.

Question: Kelly Shi - Jefferies LLC - Analyst : Congrats on the call. Thanks for taking my questions. Curious for the Phase 3 trial ruxolitinib cream in the mild to moderate HS. What is the rationale for using (inaudible) and the primary endpoint on HiSCR75 over typically use the HiSCR50? Thank you.

Question: Matt Phipps - William Blair & Company, L.L.C. - Analyst : I had another question on 262. The clinical trial recently showed the addition of 25 mg arm to that CSU trial. Can you give us any rationale for that? I assume that is maybe not going to be included in the Q1 update? And also just thinking about the profile here, are you guys -- should we think most about I guess, competing with the recent BTK data as far as another oral? Or do you look at maybe some of the more effective treatments like the [KIN] inhibitors as far as efficacy goes? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:00PM, INCY.OQ - Q3 2024 Incyte Corp Earnings Call Unidentified Company Representative 1 Yes, Matt, thank you for the question. So the reason for the 25 is to have -- to explore the full range of doses. So as you point out, there's an ongoing study, 50 versus 150 versus placebo. That's the data that we're going to have in the first quarter of 2025. We decided in the meantime to start a second study with 25 milligrams versus placebo in order to have the full range of doses explored. So if we have positive data in the ongoing study, then we'll be ready with the 25 already running to be -- to get to a Phase 3 study faster. So that's the idea of the 25-milligram, to explore the full range of dose of 262 in patients with CSU. In terms of worry fits, I mentioned a few times before that we don't necessarily expect to send the same level of efficacy that you may have with the Kidd antibody. When you deplete all mast cells, which is what Kidd antibodies do, obviously, the efficacy is very strong. In our opinion, that comes with a series of side effects that have been well reported. I think with BTK inhibitor, it is a little bit cleaner in terms of safety profile. We think 262, if it shows positive data in CSU, will fit perfectly after antihistamines. Once patients progress in antihistamines, what we expect to be a very clean safety profile for a very convenient daily pill will be ideal for those patients before they need to try more aggressive alternatives. So that we continue to believe is a perfect fit for 262 in CSU.

Question: James Shin - Deutsche Bank Securities Inc. - Analyst : Hi, thanks for taking our question. For ruxolitinib creams HS Phase 3, what time point is the HiSCR75 being assessed? When I look at the pipeline slide, it shows the approval range starting around mid '27 time frame. So is Phase 3 HS data for rux cream expected in '26?

Question: Vikram Purohit - Morgan Stanley & Co. LLC - Analyst : Hi, good morning. Thank you for taking our question. So we had one on the oncology pipeline. For the Phase 1 data sets expected for the mutant CALR program and then also for the JAK2V617 programs in 2025, could you help us understand just the scope of those data releases that we could expect to see and how you'll be gauging success for these initial data sets? And if I could squeeze a question in on the base business. For Opzelura, could you just give us a sense of how utilization is tracking in terms of tubes per patient per year for both AD and vitiligo versus your last update? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:00PM, INCY.OQ - Q3 2024 Incyte Corp Earnings Call Unidentified Company Representative 1 Let me take the first one on the pipeline. So the mutant CALR antibody program is ahead of 617F. As we disclosed previously, the 617F program this year started in healthy volunteers to understand the formulation better. And then we advanced it into in myelofibrosis patients, and it's now in patients, but it's a little bit behind mutant CALR antibody. We expect both to have meaningful data available next year, but that data will be comprised as basically a fairly large number of patients with single agent, particularly for the mutant CALR antibody and some of the data also in combination. I think it's difficult to start putting numbers around what success looks like. What we've been consistent about is that what we expect to see in addition to obviously addressing some of the signs and symptoms of myeloproliferative neoplasms is to see some evidence of decrease in VAF or allele reduction with these medicines. And we expect that we will have that data next year when we decide the right timing to disclose to provide an update. Unidentified Company Representative 2 On Opzelura utilization, for AD, we still see over two tubes per patient per year. For vitiligo, we're beefing up the cohort we're following throughout the time to make sure that the cohort is meaningful enough and as well as we follow long enough to a very reliable number. What you see on the prescription side is that the growth rate is actually coming from new patients as well as refill. So we continue to improve over time. At the same time, we're increasing the focus on the overall adherence, and we have quite exciting programs kicking off this quarter and the first quarter of next year to actually put more emphasis on this part of support for our patient population.

Question: Derek Archila - Wells Fargo Securities, LLC - Analyst : Hey, good morning and congrats on the quarter. Just two quick ones. Just on 262. I just want to know if you've characterized the tryptase reduction you've seen with the agent in the earlier-stage trials. And then just on the base business, just in terms of what we've seen with Jakafi in the MF market, it looks like you're still driving new patient volumes. Just was wondering if that's more share gains or just the overall market growing? Thanks. Unidentified Company Representative 1 Let me take the first one on 262. So we are measuring tryptase in the ongoing trials. A word of caution, I think that the degree of the magnitude of tryptase reduction that we expect to see is not the same you'll see with depletion of mast cells by using a [KIN] antibody. I mean, it's just in the sense that if you deplete mast cells regardless of their location, you're going to have -- particularly those in circulation, you're going to have pretty dramatic risk in tryptase in circulation. What we address with 262 is MRGPRX2 in the mast cells in the skin. As a result of which, the decrease in tryptase that we may see, it's not going to be quite as dramatic. But we are measuring that and we will report it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:00PM, INCY.OQ - Q3 2024 Incyte Corp Earnings Call Unidentified Company Representative 2 Thanks, Derek. Yeah, as far as the myelofibrosis market goes, Jakafi, as we said, continues to grow. Total patients increased 4% in myelofibrosis. But in fact, yes, the overall market is growing. Patients are getting first line. They're starting earlier because now, you have multiple agents to go to after Jakafi and patients are being treated in the second line, third line and even fourth-line setting, which we had not seen before.

Question: David Lebowitz - Citi Investment Research - Analyst : Thank you for taking my question. Just following up on the Jakafi question. I understand that the step down in the catastrophic out-of-pocket costs are in the middle. They'll be at their lowest $2,000 per year next year. Has that played any role in the uptick in Jakafi growth in the current quarter? And then looking forward to later in the year, could you outline what type of data we might actually see at ASH? Unidentified Company Representative 1 So I'll take the first question and hand it over to Steven or Pablo. So yeah, so Jakafi -- well, what we always believe that Medicare Part D patients who are cancer patients, out-of-pockets should really not be a barrier to use. So really getting rid of the catastrophic coverage this year for patients on Medicare Part D was a very good thing. Going to $2,000 out of pocket next year is a very good thing and especially smoothing over the whole period of time. So patients out of pocket in any given month is better. But really, the growth that we see is coming from demand. And mostly as we've said, from polycythemia vera, and mostly, that's because physicians are starting patients earlier on Jakafi and polycythemia vera because of the results largely from MAJIC-PV, which demonstrates that patients will have thrombosis-free survival improvements when they start Jakafi and when they start Jakafi earlier. Steve?

Question: Marc Frahm - TD Cowen - Analyst : Hi. Yes, thanks for taking my questions. Just on 262, back to adding the 25-milligram dose, can you just talk about kind of what led to adding that? And was it informed at all by the AD trial, which I believe this market has completed as of over the summer. And then just when you get the data from those different dose levels in CSU, you obviously, you don't necessarily need to match the Kidd antibodies from an efficacy perspective given the potential for improved safety here. But what is that kind of minimum bar that would justify use of a branded drug after antihistamines in your mind? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:00PM, INCY.OQ - Q3 2024 Incyte Corp Earnings Call Unidentified Company Representative 1 Yeah. So let me -- first of all, the decision to start whether it is indeed a new study or it's part of the ongoing study, but it really is a totally separate cohort with 25 milligrams versus placebo, they had nothing to do with any data that we've seen from the program. We made that decision early in the process very soon after the transaction closed, and it was based on our desire to be ready for a Phase 3 study as soon as possible once we have data. That decision was made at that time. In terms of the bar, look, all the patients in the ongoing study are refractory to antihistamines. So basically, after that, the question is what's the best option for these patients? We believe in that context, obviously, showing efficacy over placebo and with what we believe will be an excellent safety profile will be sufficient for 262 to be the first option after antihistamines in some of the patients with CSU. We remain convinced that, that is the right place for this drug to be used, assuming obviously efficacy in the randomized trial.

Question: Brian Abrahams - RBC Capital Markets Wealth Management - Analyst : Hey, good morning. Thanks for taking my question and congrats on the quarter and all the progress. Maybe on the CDK2, I'm curious if there's any updates on the aspects that you're considering as you think about the next steps and pivotal plans into the upcoming FDA meeting and sort of how you're thinking about the balance between exploring late line versus maintenance? And then any more color around the companion diagnostic for that drug? Thanks.

Question: Andy Chen - Wolfe Research, LLC - Analyst : Hey, good morning. Thank you for taking the question. I'm curious if you can remind us the size of your sales force and how it's split across heme and derm and others. I'm trying to figure out if your SG&A would trend up as you get your topical into pediatric AD, into PN, and also your JAK inhibitor. Are you going to double down on the derm sales force? Or are you going to capitalize on the existing synergies? Thank you.

Question: Jay Olson - Oppenheimer & Co. Inc. - Analyst : Hey, congrats on the quarter and thank you for taking the question. Since you have a number of catalysts in the near term that could reshape the future top-line growth, can you talk about which one or two catalysts are most important and are there any gaps in your portfolio? And how are you thinking about business development strategy over the next year? Thank you.

Question: Gavin Clark-Gartner - Evercore ISI - Analyst : Hey, guys. Thanks for taking the question. Also had one on 262 in CSU. I'm just wondering how many patients are [Xolair-naive] versus experienced in the study? And if you think there could be any potential subgroups with greater efficacy, such as IgE low patients? Thank you. Unidentified Company Representative 1 So thank you for the question. So we're not going to provide any details on prior therapy in the study other than to say that all patients have refractory to antihistamines. In terms of the potential for certain subsets to have better efficacy, I'd rather not speculate at this point in time. Obviously, it's a very different mechanism for Xolair, which is, as you know, an anti-IgE antibody as opposed to 262. They work in a different pathway, but I'd rather not speculate at this point into the -- about the results, the future results of the study.

Question: Evan Seigerman - BMO Capital Markets - Analyst : Hi guys. Thank you so much for taking my questions. I'm just thinking about the ALK program readout in 4Q. I know you don't want to speculate too much, but maybe comment on kind of your confidence in the readout. It feels like this program has a few ups and downs despite the mechanistic rationale. Can you maybe highlight what gives you the confidence in the update and really in the program overall going forward? Thank you.

Question: Tazeen Ahmad - BofA Global Research - Analyst : Hi, thanks for taking my question. As you think about the HS opportunity, can you clarify for us how you think it would be different for rux cream versus povo? And also, do you have a sense -- I know it's still a little bit early, but in terms of usage of tubes for rux cream in HS, how do you think that will compare relative to what you have seen so far for AD and vitiligo? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:00PM, INCY.OQ - Q3 2024 Incyte Corp Earnings Call

Question: Kripa Devarakonda - Truist Securities - Analyst : Hey, guys. Thank you so much for taking my question and congrats back on the quarter. I had a question about the CDK2 program. I know some of the questions were already answered. But one of your peers just announced the discontinuation of their CDK2 program. I was wondering if you can help us understand how you see the competitive landscape given your data. And before you have the conversation with the FDA or before you move into pivotal trials, should we expect to see any additional data from either ovarian cancer or any of the other indications that you're investigating the drug in? Thank you. Unidentified Company Representative 1 Let me take that question. So in terms of competitive landscape, the competitive landscape for CDK2 is a little bit beyond the mechanism, right? I mean, we think when it comes to ovarian cancer, we are ahead in terms of developing a CDK2 program. We are -- we disclosed the data, as you know. We have over 200 patients treated. We explore a range of doses. We've seen clear evidence of efficacy and a very, very manageable safety profile. So we intend to start registrational studies next year, which I think that puts us in front when it comes to CDK2 inhibition in ovarian cancer and perhaps also in endometrial cancer. We're doing additional work in other indications. Now the company landscape is a little bit more complicated than just CDK2 because there's a number of ADCs being developed in ovarian cancer. Obviously, rituximab is approved for certain patients with full receptor alpha expression. There are other ADCs, the same target as well as additional targets for ADCs. I think that the two points I would make is, number one, there isn't complete overlap when it comes to populations, at least now with receptor alpha-positive patients. Perhaps for some of the others, the overlap will be it'll be more pronounced. But one of the reasons why we believe the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2024 / 12:00PM, INCY.OQ - Q3 2024 Incyte Corp Earnings Call maintenance study in combination with bevacizumab is very important for us in the long run is because that might be the perfect setting for an oral, convenient, well-tolerated molecules such as our CDK2 inhibitor. So while we intend to move aggressively into platinum-resistant patients to get a faster market strategy there, we believe the maintenance will differentiate our CDK2 program, not only from other entrants in the same target but also against ADCs.

Question: Ren Benjamin - JMP Securities - Analyst : Hey, thanks guys for squeezing me in and congrats on the quarter. I guess just when we think about the potential for positive Phase 3 data from STOP-HS1 and HS2, do you need even like longer-term follow-up data? Or do you feel that you can file kind of right away? And assuming an approval in 2026, how do you see this being used in relation to currently approved therapies? And what kind of market share do you think you might ultimately achieve? I know Steven has talked about greater than 300,000 patients, but how many patients do you think you might be able to treat?