Incyte Corp (INCY) — Q3 2021 Earnings Call Transcript

Thank you, Kevin. Good morning and welcome to Incyte's Third Quarter 2021 Earnings Conference Call and Webcast. The slides presented today are available for download on the Investor section of our website. Joining me on the call today are Herve, Barry, Steven, and Christiana, who will deliver our prepared remarks, and Dash, who will join us for the Q&A. Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements and are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our 10-Q for the period ended June 30, 2021, and from time to time, in our other SEC documents. We will now begin the call with Herve.

Thank you, Christine, and good morning, everyone. I'm happy to report today on an important quarter for Incyte. But before we do that, I would like to take a moment to speak about the significant transformation our Company has undergone over the past two years. From the sub-quarter of 2019 to today, Incyte has more than doubled its number of approved products from 3 to 7 and has increased the number of approved indications from 5 to 12. A significant achievement for patients around the world. Within the same time period, quarterly product and royalty revenues have grown nearly 50% from $534 million to $778 million in the most recent quarter. The $778 million in product and royalty revenue for Q3 2021 does not yet reflect revenue contribution from our two most recent U.S. approvals: Opzelura in atopic dermatitis and Jakafi in steroid-refractory chronic GVHD. In addition, we expect further growth from the recent approval of Pemazyre in Europe and Japan, and Minjuvi in Europe. We have launches ongoing in Germany and will expand to other countries as reimbursement is secured. As we see on Slide 5, we have provided long-term guidance for some of these products, and there is significant upside to the current sales number. Within hematology-oncology, our MPN/GVHD franchise, which includes Jakafi and other innovations, is expected to surpass $3 billion in peak sales. Additionally, Minjuvi, approved for the treatment of relapsed or refractory DLBCL, has the potential to reach $500 million in this indication in the U.S. While we have not provided guidance for Minjuvi, Pemazyre, and Iclusig, these products represent additional growth potential and generate further value for our business. Turning to dermatology, over the past year, we have successfully established our dermatology commercial franchise in the U.S. Given the product profile of Opzelura and the talented commercial team we have in place, we are confident in the potential for Opzelura and we expect peak sales to reach at least $1.5 billion in the U.S. in atopic dermatitis. While it is still very early in the launch of Opzelura, the initial uptake has been strong, and Barry will be providing details in his prepared remarks. Looking ahead in two other areas of our portfolio, we are anticipating multiple regulatory decisions in 2022, including Ruxolitinib cream in vitiligo in both the U.S. and Europe, Parsaclisip in three non-Hodgkin's lymphoma indications in the U.S., as well as once-daily Ruxolitinib late in 2022 or early 2023. This 2022 regulatory decision, which closely follows multiple product approvals in 2021, positions us well for further growth and diversification of our product revenues in the coming year. Our partners are also making headway. With Novartis, ruxolitinib is currently under review in Europe and Japan for acute and chronic GVHD and capmatinib is under review in Europe for non-small cell lung cancer. In addition, Lilly is planning to submit an sNDA to the FDA for baricitinib in alopecia areata by the end of this year. If approved, these opportunities will provide valuable growth to our royalty revenues which have already surpassed $400 million during the first nine months of this year. As we've seen, 2021 has been an important year of commercial, clinical, and regulatory success for Incyte. With that, I will hand over to Barry to cover the individual product performance.

Thank you, Herve, and good morning, everyone. Jakafi sales grew 12% year-over-year to reach $547 million for the quarter. And we are reiterating our full-year guidance range of $2.125 billion to $2.17 billion. Jakafi was the first approved treatment in myelofibrosis, polycythemia vera, and steroid-refractory acute GVHD. And years later, it remains a standard of care in each of these indications. Growth across MF, PV, and GVHD continues to be strong. And as you can see in the list, new patient statistics have returned to pre-pandemic levels. With patients staying on therapy longer, and new patients coming in, the total number of patients on Jakafi continues to increase year over year. Myelofibrosis patients, comprising the largest proportion of patients on Jakafi, account for 45% of total patients, while polycythemia vera and GVHD patients account for 34% and 14% of total patients, respectively. At the end of September, Jakafi was approved for its fourth indication, for the treatment of steroid-refractory chronic GVHD. To put this recent approval in perspective, approximately 2000 patients with graft-versus-host disease are currently using Jakafi, the majority of whom have an acute form of the disease. There are over 14,000 patients in the U.S. living with chronic GVHD, of which half require therapy beyond systemic corticosteroids. We expect the recent approval to accelerate new patient starts with Jakafi. Turning to Slide 8, Monjuvi sales grew 22% sequentially to $22 million in the third quarter, with growth driven primarily by demand. We're seeing an increase in the number of total accounts across both academic and community settings, and there has been a swift shift towards adoption of Monjuvi earlier in the treatment paradigm. We now have a greater proportion of Monjuvi patients initiating therapy in the second-line, which should result in patients experiencing longer and more durable responses, leading to a longer duration of therapy. Feedback from healthcare professionals continues to be positive, with efficacy, duration of response, and safety being the key drivers of adoption. HCP awareness of Monjuvi's differentiated profile continues to increase, and the L-MIND three-year results have been well received by the physician community. As patients continue to return to the office, and as our reps continue to educate healthcare professionals on the clinical profile of Monjuvi, we're confident in our ability to build on this improving momentum. Turning to Slide 9. We are very excited to receive the approval of Opzelura, the first FDA-approved topical JAK inhibitor for the treatment of mild-to-moderate atopic dermatitis. Prior to launch, we had identified 11,000 dermatologists and high-priority allergists, the top 20% of which are responsible for nearly 80% of atopic dermatitis prescriptions. Our patient assistance programs are in place to help reduce the barriers to access for Opzelura, and our negotiations with payers are advancing well. To date, we have made significant progress with our stakeholders in the launch of Opzelura. Since our launch on October 11th, our field-based representatives have actively engaged with 76% of our target prescribers and have conducted 8,500 HCP calls in the first three weeks of launch, of which 95% have been conducted in person. We're also receiving a significant amount of interest in Opzelura from patients. In the first two weeks of launch, we have approximately 61,000 unique website users and this number continues to climb. Further highlighting the level of engagement from patients, there were over 1500 patient registrations for our Co-pay card program. And lastly, on the payer front, our discussions with PBMs, including the top three who account for nearly 80% of commercially insured patients in the U.S., have been very positive as they realize the value proposition of Opzelura. As a result, we expect to secure broad coverage in Q1 of next year. In the meantime, during this contracting period, we have multiple efforts underway to ensure patients are able to access their medications. Although it is still early in the launch, our efforts are translating into the first signs of a very successful launch. As you know, there are limitations to the accuracy of script data. It's important to note that IQVIA's capture rate of prescriptions is under-representative of actual demand, especially in the initial weeks of launch. Over time, the capture rate is expected to continue to improve. There are two different metrics that we're using to track performance, consisting of new brand new-to-brand Rxs and 867 data. New Rx data shown on the left captures the patients who are either new to the market or have switched to Opzelura. In the first two weeks of launch, there have been close to 1,000 new-to-brand prescriptions, with nearly two-thirds of scripts coming from patients who were previously on topical corticosteroids therapy. On the right-hand side, we're showing 867 data, which is the number of units of Opzelura 60-gram tubes that our wholesalers are shipping to pharmacies. While 867 data don’t translate directly into scripts, we believe it captures demand appropriately given the low level of inventory retail pharmacies typically hold for specialty dermatology products. Pharmacies order Opzelura when a prescription is received and approved by the patient's insurance or processed through our patient access programs. In its third week of launch, 1,115 tubes of Opzelura were shipped by wholesalers, bringing the total shipped since launch to over 2,200. Based on early data, we are now tracking towards 300 plus units shipped in the first four weeks of launch. Now I will turn the call over to Steven for the clinical update.

Thank you, Barry. And good morning, everyone. The third quarter brought numerous achievements on both the clinical and regulatory fronts. Starting with the three recent regulatory approvals. Minjuvi was approved in Europe for second-line diffuse large B-cell lymphoma in August. In September, Opzelura was approved in the U.S. for mild-to-moderate atopic dermatitis, and Jakafi was approved in the U.S. for second-line chronic graft-versus-host disease. In addition to these regulatory milestones and successes, we presented pivotal data from our Phase III TRuE-V studies of ruxolitinib in vitiligo at the European Academy of Dermatology and Venereology. The full dataset highlighted the significant improvements in facial and total body re-pigmentation seen in vitiligo patients after treatment with ruxolitinib cream. Also presented at the DADV was positive pivotal data for baricitinib, our partnered product with Eli Lilly in alopecia areata. These data showed that treatment with once-daily baricitinib, 4 milligrams was superior to placebo in achieving significant scalp hair re-growth at 24 weeks in adults with severe alopecia areata. We also announced a global collaboration with Syndax Pharmaceuticals, which is pending regulatory clearance to develop and commercialize exetilnimub, an anti-CSF1 receptor monoclonal antibody for chronic graft-versus-host disease and other fibrotic diseases. Lastly, we recently announced the acceptance of the Marketing Authorization Application for the European Medicines Agency for ruxolitinib cream in vitiligo. And yesterday, we announced that the FDA accepted the NDA for parsaclisib in three types of non-Hodgkin's lymphomas. We received priority review for parsaclisib in two of the indications, including for relapsed or refractory marginal-zone lymphoma in adult patients who have received at least one prior anti-CD20-based regimen and for mantle cell lymphoma in adult patients who have received at least one prior therapy. The PDUFA date for these two indications is April 30th, 2022. There will be a standard review for Parsaclisib in relapsed or refractory follicular lymphoma in adult patients who have received at least two prior systemic therapies with a PDUFA target action date of August 30th, 2022. Let me remind you of the efficacy across non-Hodgkin's lymphoma. In relapsed or refractory marginal-zone lymphoma, response rates seen and independently reviewed were 57% with a duration of response in PFS not yet reached. In mantle cell lymphoma, this was a 71% response rate with a duration of response of 9 months and a PFS of 11.1 months. And in relapsed or refractory follicular lymphoma, it was a 75% overall response rate with a duration of response of 14.7 months, and a PFS of 15.8 months. All this data is with the once-daily regimen of 2.5 milligrams. Remember this drug was designed to avoid hepatic toxicity associated with first-generation JAK inhibitors and thus we have seen low rates of liver toxicity with less than 5% rate of grade-3 ALT NAST elevations. In addition, cases of serious diarrhea and colitis were manageable and reversible. Turning to the next slide, the clinical development of Parsaclisib in Hemolytic Anemia continues to progress with the Phase 3 study expected to start by the end of this year. The study will evaluate the efficacy and safety of Parsaclisib versus placebo with a primary endpoint of durable hemoglobin response at week 24. Patients must have a diagnosis of primary warm antibody autoimmune hemolytic anemia, hemoglobin levels of 7 to 10 grams per deciliter, and a FACIT-F score of less than or equal to 43. This program represents another significant opportunity to address an unmet medical need, where there are currently no approved therapies for patients. Moving to our lumbar development program, we have multiple studies ongoing looking to improve upon the standard of care in myelofibrosis, polycythemia vera, and graft-versus-host disease. We expect data in our regulatory action for few of these programs by the end of 2022, including the NDA submission for the once-daily formulation of ruxolitinib. We also recently entered into collaboration with Syndax for axatilimab, an anti-CSF-1 receptor monoclonal antibody, which is currently being evaluated as a monotherapy in third-line chronic graft-versus-host disease. In addition, we will have the opportunity to evaluate axatilimab as a combination therapy with our JAK inhibitors, where the ultimate goal will be to arrive at a safe and effective combination that could lead to a steroids-free regimen for chronic graft-versus-host disease. Turning to dermatology and ruxolitinib cream in vitiligo, the Phase III TRuE-V data presented at EADV showed meaningful superiority to vehicle, with 30% of patients achieving a facial VASI 75 at week 24, which is in line with our Phase II results. As a reminder, F-VASI75 response in the Phase 2 trial continues to improve with ruxolitinib cream treatment, with an over 51% response rated week 52. We expect the 52-week data from the TRuE-V studies to be available in 2022. We are extremely encouraged by these positive results and the impact ruxolitinib cream may have for patients living with vitiligo, in the U.S. and in Europe. The MAA was recently validated by the European Medicines Agency, and the U.S. sNDA is in progress. Turning to Slide 18 in an update on our dermatology programs, we continue to focus on developing our dermatology pipeline with ruxolitinib cream and INCB54707, an oral selective Janus kinase-1 inhibitor. Multiple studies are ongoing with ruxolitinib cream in atopic dermatitis, including TRuE-AD3, a pivotal trial in atopic dermatitis in pediatric patients. In addition to our TRuE-V Program in vitiligo, we are also looking at 54707 in a Phase II study in patients with non-segmental vitiligo with a body surface area of greater than or equal to 8%. Additional studies for 707 are currently underway in other indications, including two Phase II trials in hidradenitis suppurativa and prurigo nodularis. We look forward to updating you on these programs next year. In closing, we had a very successful quarter with a number of clinical and regulatory accomplishments, including three approvals. The FDA acceptance of an NDA for Parsaclisib as a treatment for three types of non-Hodgkin's lymphomas and the EMA acceptance of the MAA for ruxolitinib cream as a treatment for vitiligo. Later this week, we invite you to join an analyst and investor call to discuss our RO PD-L1 program, including data for 86550, which was accepted for presentation at the Citi Annual Congress on November 13. With that, I would like to turn the call over to Christiana for the financial update.

Thank you, Steven. And good morning, everyone. Our total product and royalty revenue for the third quarter were $778 million, representing a 25% increase over the third quarter of 2020. Total product and royalty revenues for the quarter are comprised of net product revenues of $547 million for Jakafi, and $48 million for other hematology oncology products. Royalties from Novartis of $95 million for Jakavi and $3 million for Tabrecta, and royalties from Lilly of $87 million from Olumiant. The 12% year-over-year growth in Jakafi net product sales reflects higher patient demand across all indications and a continued recovery of new patient starts as we continue to emerge from the COVID-19 pandemic. The tripling of the Olumiant royalties is due primarily to the use of Olumiant for the treatment of COVID-19. Per our agreement with Lilly, for global net sales of Olumiant for the treatment of COVID-19, we're entitled to receive royalties equal to the base double-digit rates applicable to all global net product sales, plus an additional 13% royalty. Moving on to our operating expenses on a GAAP basis, ongoing R&D expenses of $331 million for the third quarter increased 11% from the prior year period, primarily due to the progression of our pipeline. Our SG&A expense for the quarter of $191 million increased 58% from the prior year quarter, primarily due to our investments related to the establishment of the new Dermatology Commercial Organization in the U.S. and the related activities to support the launch of Opzelura for atopic dermatitis. Our collaboration loss for the quarter was $9 million, which represents our 50% share of the U.S. net commercialization loss. This is comprised of total net product revenues of $22 million and total operating expenses including COGS and SG&A expenses of $40 million. Finally, our financial position continues to be strong as we ended the quarter with approximately $2.3 billion in cash and marketable securities. Moving on to our guidance for 2021, we are reiterating our revenue COGS, R&D, and SG&A guidance for the year. We remain confident in our full-year guidance for Jakafi based on our continued recovery of new patient starts and the approval in steroid-refractory chronic GVHD.

Hi guys. Good morning. Thank you for taking my questions. I'm going to focus on atopic dermatitis. So, it looks like out of the gate, as you mentioned, the metrics are looking pretty strong. Can you give us an idea of what are the physicians that are picking up use initially? Is there a particular patient population that you're hearing that doctors want to try this out on first, at least feedback from your sales force? And if you were to say right now, what is your biggest roadblock to pick up? Is it getting on insurance formulary or is it just trying to educate doctors on the product? Thank you.

Hi, it's Barry. Thanks, Tazeen. First thing I'd like to say is that I realize I said that we were going to ship, in my prepared remarks, 300 tubes of Opzelura in the first four weeks. And of course, I meant 3,000 tubes, which would actually make it on par or better than the last two launches in atopic dermatitis. So, we expect those 3,000 shipments to pharmacies to actually translate into more than 3,000 prescriptions in the first full four weeks of our launch. So, what patient population are they really looking at? It's just the indication, essentially patients who are 12 years or older. There's no difference. I've spoken to many dermatologists, and they're confident that they can use this drug in teens all the way up to older adults. So, the biggest roadblock, patient access is always an interesting problem at the beginning of a launch, but in fact, I think we're making great headway there. And as I said in my prepared remarks, I think we will in fact have broad coverage in the first quarter of next year. As you know, when new products are launched, particularly products like this in dermatology, sometimes the big PBMs will just block you for 6 months or more, and we think we can overcome that as quickly as possible. We've presented many times to payers across the country, big and small payers with our clinical data, and they're really impressed by the value that Opzelura will provide to these patients. So even though it is always a concern to worry about patient access, I think we're going to be fine in the relatively near future. As you know, in fact, when they start a new year is when you want to ensure that your formulary is fully blown out, and all of your customers know exactly what's going to be covered and what's on the formulary. So, we think at the beginning of the year, we'll have good progress there.

Thanks, Barry. And just to clarify, do you know how long it's taking from the time the doctor writes a prescription to the time the patient is receiving products in the early days of the launch?

I don't. It's very early. I can't give you medium or an average. Some patients are obviously having to have prior approval. Other patients go through our IncyteCARES Patient Assistance Program. I'm sure some patients are getting it very quickly and other patients it might take a few days, but I don't have an average for you yet.

Thank you for taking my question. I have a question about the MF dynamics overall. It seems that patient volumes for Jakafi in MF have been quite steady year-over-year, with much of the growth coming from other indications. Could you discuss what factors contribute to your future guidance regarding overall market dynamics across the indications? Additionally, I noticed you haven't elaborated much on the ongoing Phase 1-2 studies, and I'm curious about their status and your confidence in their potential to contribute to growth and durability in the MF indication. Thank you.

Sure, this is Barry. I'll start and then pass it to Steven for more details on their current status. As shown in the slide, what's remarkable about Jakafi is that the total number of patients using it consistently increases month after month and year after year, whether it's for MF, PV, or GVHD. The number of long-term MF patients is impressive. In fact, we've only tapped into about 50% of the market. Our main competition really lies in the watch and wait approach. Therefore, our challenge is to ensure that physicians fully recognize the survival benefits that Jakafi provides to myelofibrosis patients, and we know we're making progress. As I mentioned earlier, for Myelofibrosis, PV, and GVHD, Jakafi is the standard of care and it will remain so. The number of PV patients continues to rise year after year, and the same applies for GVHD, particularly chronic GVHD, which we expect to see significant growth in. Chronic GVHD patients have a higher prevalence compared to acute ones, and they generally remain on treatment for a much longer duration. Now, I'll turn it over to Steven.

Thanks, Barry, Brian. Thanks for your question. So let me deal with each separately. Firstly, I'll start with L2, which is a mechanism. Now, we have data in hand that we understand in more and more. So, if you look at iron metabolism in humans, hepcidin, the way it works is high levels of hepcidin inhibit iron absorption from the gastrointestinal tract and stop its release from macrophages. So, there's less iron available to make red blood cells. If you are able to inhibit that hepcidin pathway with an L2 inhibitor, iron's released and made available both from absorption and from macrophages to make new red blood cells. And we've shown that this compound does that from a mechanism action point-of-view. So, where we are, we're very excited about its potential. We're completing the monotherapy safety and then the combo safety, and then we'll be ready to make more decisions on the path forward in terms of more pivotal studies, which let me remind you will hopefully address both the anemia of the underlying disorder, which we think is iron-mediated, plus the anemia induced by ruxolitinib, which we also think is iron-mediated. If we achieve both of those, you'll get the safety aspect and less discontinuations when it works. And then maintain ruxolitinib dose and enhance efficacy. So, the program really has a lot of potential. We hope to have a recommended phase 2 combo dose ready to go early next year and then make those decisions. For the BET program, again, a compound we've had in our hands for a long time, years ago, we dosed it too much higher multiples in patients with solid tumors. The dose-limiting toxicity there, as we know with BET inhibitors was on-target in thrombocytopenia. We are now doing it at 20% to 25% of where we were before. Gathering monotherapy safety in myeloprolactinemia patients. And then combo safety, and they will again, just like with the old program, have to make decisions on where to go, looking at the competitive space as well. Would we be looking given its profile at sub-optimal patients, and in addition, would we consider first-line? So, those datasets for the monotherapy safety and the combo safety will be available in 2022. And as soon as we are ready and put up on clinicaltrials.gov, we'll be able to show you our clinical programs there, but we're comfortable with where they are at the moment. Thanks.

Hey, good morning, guys. Thank you for taking my questions. I wanted to go back to AbCelera. Now that you're early on in the launch and deep in discussions with payers, curious if you're thinking around expectations for gross to net have changed at all, how we should be thinking about this short-term, and then longer-term trends on this front. And then the follow-up is, as we think ahead to the anticipated approval of Opzelura for vitiligo, how did the tubes per patient likely differ for a typical patient in that setting versus atopic dermatitis? Thank you.

Hey, Cory, it's Barry. When we're thinking about the gross to net, we said in the past that in the long term we anticipate the gross to net to be 25% to 50%. In this quarter in particular, and then as we move into next year, the gross to net will be much higher just because of the NDC blocks and the patient assistance programs that we provide, the co-pay assistance. As you know, in this therapeutic category, over time, the use of those programs declines as there's broader coverage, so our gross-to-net will continue to improve. For vitiligo, or maybe I'll start it out and hand over to Steven, we know it's going to be greater. I think we've forecasted, perhaps we said, that we think in atopic dermatitis, 3 or more tubes will be used per year, 10 tubes per year perhaps for vitiligo. I forget exactly what the clinical trial was, how many tubes we got, but obviously, we want patients to use this for 24 weeks or 52 weeks, and we will see how much further after that. But I'll let Steven comment as well.

Thanks, Barry. Thanks, Cory. The data in my prepared remarks for the TRuE-V Phase III studies thus far have completely replicated the Phase II data in terms of the facial VASI75 at 24 weeks hitting in that 30% plus range. We know from the 52-week and 104-week long-term follow-up on our Phase 2 studies, that one of the phenomena with treating vitiligo is continued improvement over time. And in fact, most of the patients, the vast majority, elected to go on to long-term treatment in the long-term safety extension because of continued improvement. So what Barry is alluding to is continued use over time and over a one-year period. The current estimate is at least 10 to 11 60-gram tubes would be needed to achieve what I just spoke about. And then we will get more data in the second year as we continue to follow these patients. Thanks.

Hey, guys. Thank you so much for taking my question. So, with the approval of Opzelura in atopic dermatitis and the regulatory progress in vitiligo, it looks like the Dermatology Franchise is off to a great start now. You also have additional trials going on. Can you talk about how you're thinking about the future of the Derm Franchise? Given what you've already targeted, would you be looking for something to complement that? Or should we expect something more broad? Thank you.

Herve here, and then Steven will speak about the specifics of what's going on in dermatology and beyond dermatology with our current portfolio. I mean, the whole idea from the beginning was that we do research and discovery of new products somewhere in between immunology, inflammation, and cancer. So, some products are typically cancer products, but many of the products targeted-therapies type of product, antibodies, etc. But many of the mechanisms we are studying in fact have application outside of cancer. And that's where it started. What we see today when you look at the 10+ mechanisms that we are studying in early studies is that they can have applications outside of cancer. That's what we found with PI3-kinases that are in hemolytic anemia. That's what we see in many dermatology indications. So, the goal is really to continue on that sort of photos of science type of approach. And obviously, because dermatology of skin is the largest immune organ, we see a lot of applications in dermatology in the short-term, but it could also go into other types of inflammatory immune type of disease. So maybe, Steven, if you want to give everybody more detail.

Thank you, Herve, and Kripa, thanks for the question. Herve is right. The way we are viewing dermatology, and I'm glad you called it a franchise even from an R&D point of view, is absolutely not a one and done. There's lifecycle management of the cream itself ongoing, within atopic dermatitis, and some of the manifestations thereof, like chronic hand eczema, etc. There are still questions to be asked and addressed in vitiligo, including what happens with patients on for the long term with really good improvements in facial VASI 90 and beyond. And what happens with withdrawal in those situations? And then beyond those indications, as Herve was alluding to, given the mechanism of action of the cream in terms of JAK start pathway, there are a number of other indications that we're extremely interested in addressing, which are actually really easy to study in terms of time. So stay tuned. We view this now as a launch cycle management opportunity with a scale that we can address in a very, very efficient manner. And because dermatology has become really important to Incyte, both from an R&D and then a commercial point of view, it's beyond in terms of our other compounds. I alluded to in my prepared remarks with 54707, our relatively JAK-1 specific oral inhibitor, that there are other indications for which we already have really good Phase II data in Hidradenitis suppurativa. We have an ongoing Phase 2B there and approximately 200 patients that will deliver data next year, and then we can make a decision on what to do from a pivotal aspect. We studied that compound in Prurigo Nodularis. Again, the mechanism of action is very relevant there. And then in my prepared remarks for non-segmental vitiligo with body surface areas of total body surface area involvement of 8% or greater. We think the risk-benefit may well be favorable for an oral JAK there. So, you can see that our dermatology thinking from an R&D point of view is expanding in an appropriate proportional way and it's relatively efficient to do so. Thanks for the question.

Good morning. Thanks for taking my questions. So back to Opzelura, could you just give us any qualitative feedback you're getting on the launch and with regard to the safety profile and use in the context of which population would they be looking to use it? And then in vitiligo, is there any change to the outlook for market opportunity here?

Hi Salveen, it's Barry. Regarding the safety in a black box, dermatologists are very accustomed to explaining the difference between systemic and topical products to their patients. For most skin conditions, they prefer topical products. They understand that the safety profile for an oral JAK inhibitor differs significantly from that of a topical JAK inhibitor, and they are comfortable with that distinction. I've spoken with many dermatologists and received plenty of feedback, and there hasn't been any pushback on the types of patients they plan to treat with Opzelura. It's approved for individuals aged 12 and older, which aligns with their intended use. As for combination therapies, dermatologists sometimes cycle through various treatments when managing patients with atopic dermatitis, but we cannot predict their future approaches. Regarding vitiligo, this treatment is groundbreaking as it is the first drug approved for skin repigmentation. We believe that both patients and dermatologists will be eager to use it, given its unique treatment capabilities, and it has the potential to significantly improve the lives of hundreds of thousands of patients, if not more.

Thank you.

Thanks for taking the questions and congrats on the 3 Parsaclisib filings and acceptances. Can you comment on FDA's rationale for granting MCL and MZO priority reviews while FL received a standard review? And then on the last call, I think you mentioned the tumor-agnostic programs for cyclicity would transition to a molecularly defined approach. I was wondering if you have any more details on those plans? And then lastly, on Monjuvi. Can you talk about any impact that you're seeing from Polivy, especially as it moves to the front-line setting and any feedback from physicians in terms of how they compare those two drugs? Thank you.

Jay, it's Steven. Thanks for your questions. Regarding the acceptance of our filing for Parsaclisib, this is one of the most significant submissions I have been involved in, as we submitted all three indications simultaneously with the complete package. While these diseases fall under the non-Hodgkin's lymphoma category, they have distinct pathophysiologies and behaviors. This influenced the review cycles you mentioned. For both marginal zone and mantle cell lymphoma, due to the unmet medical needs, the FDA deemed them worthy of priority review based on the data we have. In the case of follicular lymphoma, the review was likely classified as standard because it's viewed as a more crowded space with less unmet medical need. Importantly, the FDA is interested in longer follow-up for the responders, which is extending the review cycle. Our goal is to move all these indications through the approval process simultaneously. However, if follicular lymphoma requires additional follow-up, that may lead to a separation in the review timelines. On your second question regarding Pemigatinib and the tumor-agnostic program for our FGFR inhibitor, we initiated a study for patients with various FGFR-driven arrangements. While early data from this program showed promising signals in areas like glioblastoma, which seems more driven by FGFR3, and some non-small cell lung cancer cases driven by FGFR2, we believe the chances of obtaining a broad tumor-agnostic indication are now more limited. Consequently, we found it more efficient to conclude the agnostic enrollment and focus directly on those two specific histologies. Therefore, we will be launching a Phase 2 study for glioblastoma multiforme, which is FGFR3 driven, and for non-small cell lung cancer, which is FGFR2 driven. For your question about Monjuvi, I will hand it over to Barry. Thanks.

Sure, Jay. Regarding Monjuvi's relation to Polivy, we are approved for the second-line treatment of diffuse DLBCL patients. We believe our product will continue to appeal to both patients and physicians. In fact, Polivy has experienced a sales decline over the last two quarters. We think this reflects our progress in the market, especially since Polivy is approved for third-line treatment while we are approved for second-line. If Polivy moves to the first-line treatment, we have yet to see the data, but we are confident that it would not affect us negatively. In fact, it enhances our confidence that our front-line trial will yield positive results for these patients. Even if they are in the first-line setting before we enter, we would still be the preferred choice for the second-line setting. Additionally, we believe that if their study demonstrates positive results in combination with R-CHOP, our study could also show positive outcomes with the same combination.

Great. Thanks for taking the questions.

Hi, thanks for taking my questions. To start with, I wanted to follow up with Steven on your comments about how you've engaged pathways, and whether you were focusing just on iron release or if you've observed increases in red blood cell counts in that mono-therapy trial. And for Barry, could you provide more detail on what you mean by broad access? Specifically, have any significant contracts been signed yet, or are we close to finalizing any arrangements that you can discuss regarding what types of agreements you expect in these final contracts?

Mark, it's Steven. Thanks for the question. We have not presented publicly data yet on hemoglobin improvement. Is that what you are asking directly? But we have demonstrated pre-clinically and then in-clinical samples that it's doing exactly what we wanted it to do from an MOA point-of-view in terms of iron dynamics in ferritin. We don't have the clinical endpoint yet on actual rise in hemoglobin and hope that will follow and we'll be able to present that next year to you. And then Barry can answer the second part. Sure. Negotiations with payers are ongoing, and we believe they are progressing positively. We expect to have broader access in the first quarter, as we are negotiating with both large PBMs and important regional payers across the country. I am confident that we will sign contracts in the near term. It's important to note that patients currently have access to the drug not only through our patient support program but also through reimbursement. Regarding broader access, we anticipate that this drug will be used following steroids, which is entirely appropriate. We believe we have a great opportunity for patients with mild-to-moderate disease transitioning from steroids to systemics. Many patients have already not responded to steroids, making them a suitable population for Opzelura. We feel assured about future market access and that patients are receiving treatment. We do not foresee any significant challenges regarding broad access. If there are any limitations, they align with our labeling, specifying that it should be used after prior topical therapies, which we find acceptable.

Hi, thanks for taking the question. Maybe just a little color on the sample program. What size of the tubes that are being given? And are there any mechanics that the physician has to go through before giving a sample? Just trying to get a sense for how confident you are at the samples that are going to be converted to paying patients.

I'm not exactly sure I understand your question, but the sample sizes are 5 grams, which means it's a very small tube. Healthcare professionals don't have to go through any procedures to use the samples.

Okay.

Okay? We just decided to do, in fact, was to temporarily suspend our sample program, that we had a report for the samples of a texture problem, so we just temporarily decided to stop the samples right now and that we will in fact investigate the root cause of any texture problem. Of course, we have to get the tube to be sent back to us. We have to verify lot numbers, that sort of thing. But we just thought it was the best thing to do at this point to temporarily suspend. Once we figure out what that report really means, then we'll see if we can restart the sample program again.

Hey guys, thanks for taking my questions. I just had a clarification on OPZELURA and then one on PEMAZYRE. On OPZELURA of the 3,000 tubes shipped that you mentioned, is there any expected inventory in stocking or is that expected to directly translate into prescriptions? And then on Pemazyre, I guess just thinking about market dynamics here in cholangiocarcinoma, given the sort of flattish sequential sales and how much additional growth opportunity you see in CCA? And again, help us understand the opportunity in non-small cell lung cancer and upcoming data disclosures for the Pemazyre program. Thanks so much.

Sure. Michael, so for the first one, the 3,000 tubes shipped, no, I don't think there's really much inventory. I think all of those tubes shipped to pharmacies will translate into prescriptions. The reason is simply that a drug like this, they don't keep on their shelf for a long period of time. They're going to make sure that, in fact, patients have insurance coverage or they have access to the drug before they're going to order this from the wholesalers. So, I don't think there's very much inventory there at all. Obviously, there's inventory at each of the wholesalers’ sites that will eventually go out to pharmacies. In fact, most of these pharmacies are independent pharmacies, so pharmacies that are very used to working with dermatologists, as that's their most of their practice. So that's actually very encouraging, because the dermatologists like to work with their local pharmacies that are experienced in working with dermatologists. As far as the hemagglutinin goes and the cell carcinoma market in the U.S., sure there are growth opportunities there. Obviously, we have a first-line study. Moving into the first-line study would actually mean a whole lot to us that we know that there are patients being tested for FGFR2 alterations and rearrangements, but there could be more patient tests. The more patients that are tested to identify that they might have this FGFR2 alterations, then they would be candidates for Pemazyre, so I think there is growth there but it is, as you know, a very small patient population. And as far as the lung cancer patient population goes, we'll have to see how many patients actually do have FGFR alterations in lung cancer. And we'll see what the future opportunities are there as we continue to roll out our studies.

Good morning, everyone. This is Rob Andrew on for Matt Phipps here. Just wanted to follow up on the earlier question that on the sample products and the potential issues there. How is that sample product actually different from the prescription product if at all? Are they produced separately and are there likely to be any issues with the commercial product at all? Thanks.

Yes, the samples are produced differently. It's a 5-gram tube that requires different pressure to fill. We created about 140,000 samples. Regarding the 60-gram tubes, we are reviewing all batches to ensure that if there is a texture issue, we can address it. We are following up on reports that suggest there might be a texture problem with the 60-gram tube. We are currently investigating that. We need to conduct a root cause analysis, and we have thousands of tubes in circulation. We'll need to retrieve those from patients or healthcare providers to analyze them and check the storage conditions. After completing this analysis, we will determine the next steps.