Incyte Corp (INCY) — Q4 2021 Earnings Call Transcript

Thank you, Kevin. Good morning and welcome to Incyte’s fourth quarter and full year 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 Hervé, 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 our 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 reports filed with the SEC. We'll now begin the call with Hervé.

Thank you, Christine. And good morning, everyone. On Slide 4, we had another year of strong commercial performance with product and royalty revenues growing 17% to reach $2.9 million, representing a CAGR of 24% over the past five years. We have been able to maintain this level of growth through continued commercial execution for JAKAFI, the launches of new products and new indications across the U.S., Europe, and Japan, and a rapidly growing royalty revenue stream. JAKAFI grew 10% for the full year and was up 15% in the fourth quarter, driven by the launch in steroid-refractory chronic GVHD and robust new patient growth in MF and PV. For the full year, our other hematology and oncology portfolio grew 40% year-over-year with a contribution from new product launches, including $69 million from Pemazyre and $5 million from Minjuvi. Our royal revenues grew 45% to $569 million for the full year. It's important to note that this growth does not yet include meaningful contributions from recently approved products, such as Minjuvi in Europe and Opzelura in the U.S. On Slide 5, as we look ahead to 2022, we have multiple opportunities for growth across our portfolio with our recently launched product, Opzelura, in atopic dermatitis; Pemazyre in cholangiocarcinoma; Monjuvi and Minjuvi in relapse or refractory DLBCL; and Jakafi in chronic GVHD. Later this year, we expect regulatory decisions in the U.S. and Europe for ruxolitinib cream in vitiligo disease that affects millions of patients and for whom there is no approved treatment for re-pigmentation. For our partner product with Novartis, ruxolitinib is under review in Europe and Japan for GVHD and capmatinib is under review in Europe for non-small cell lung cancer. Regulatory applications were also submitted by GV for baricitinib in the U.S., Europe, and Japan for alopecia areata. 2022 is a pivotal year with important milestones where we will develop and expand our pipeline, deliver on new data in key clinical programs, and continue driving uptake of our newly launched products and new indications. Before handing the call to Barry I want to say a few words on the launch of Opzelura and our expanding footprint in dermatology. A few years ago, we expanded our development capabilities into dermatology with the intention to bring ruxolitinib cream to market. We were able to implement a robust and successful development program for ruxolitinib cream in atopic dermatitis and vitiligo. Opzelura became the first topical JAK inhibitor approved in atopic dermatitis in the U.S. and has the potential to be the first FDA-approved product for repigmentation in vitiligo. We have since expanded our dermatologic clinical development pipeline to include multiple products and indications, and we established a dedicated commercial organization in the U.S. to support the launch of Opzelura. These efforts have been translating into a very successful launch thus far. We expect our dermatology franchise to become an important growth driver for Incyte, starting with Opzelura, which we believe can reach $1.5 billion in peak sales in atopic dermatitis in the U.S. alone. To share more details on Opzelura and Jakafi’s performance and outlook, I’d now turn the call over to Barry.

Thank you, Hervé. Good morning, everyone. We are very pleased with the performance of Opzelura thus far, and we are making significant progress with the launch on multiple fronts. Starting with the uptake of Opzelura, on the left-hand side is 867 data, which is the number of units of Opzelura, 60-gram tubes that our wholesalers are shipping to pharmacies. These data tie closely to prescriptions dispensed, given the low level of inventory retail pharmacies typically hold for specialty dermatology products. In the fourth quarter since launching on October 11, nearly 21,000 units have been shipped to pharmacies, and in January, nearly 11,000 units have been shipped. The demand for Opzelura in recent weeks continues to climb, and the trends are very encouraging. On the right-hand side is IQVIA data showing new-to-brand share for Opzelura in our market basket, which includes Dupixent, Eucrisa, Protopic, Elidel, and their generics. In the 16th week since launch, as shown on the chart, Opzelura is capturing over 10% of all new-to-brand prescriptions after steroid failures. Not shown on this slide are the refills, which comprise 15% of the total prescriptions as of the week ending January 28. The number of refills demonstrates the satisfaction that patients and physicians are experiencing and is a very positive indicator of the long-term potential of Opzelura. On Slide 9, what further excites us about the launch is the very positive feedback we are receiving from physicians who are prescribing Opzelura, supported by the most recent survey conducted in the field. Prescribers were asked how many atopic dermatitis patients they prescribed Opzelura to for the first time in the past month. They were also asked how many new patients they expect to treat with Opzelura in the next month. Results showed that there is an increased willingness to prescribe Opzelura, with physicians highlighting the efficacy, specifically the rapid itch relief and skin clearance, as well as the safety in a topical formulation as the top reasons for prescribing. There are millions of AD patients living with uncontrolled disease in the U.S., and there is enthusiasm from both physicians and patients to try a new, nonsteroidal topical treatment with a novel mechanism of action, with the expectation that patients will be able to find relief of their AD symptoms. On the payer front, I'm happy to report that contract negotiations have been progressing well. We now have base rebate agreements signed with two of the three largest GPOs. These agreements establish utilization management criteria and discount rates for approximately 55% of commercial lives covered under these two pharmacy benefit managers. For this non-NDC block business, PBMs and associated plans are now establishing policies to provide access to Opzelura. For the other 45% of covered lives under these two PBMs, we are in active contract negotiations to remove the new-to-market or NDC blocks. For the third PBM, negotiations continue to advance. These are important steps toward gaining full coverage for Opzelura for the millions of patients whose prescription services are managed by these PBMs. Turning to Slide 11, in the fourth quarter, our patient support program covered the vast majority of prescriptions, where we covered the full cost of Opzelura for many patients. As the coverage for Opzelura improves, the utilization of this specific program will decrease and will lead to an improvement in gross to net. Our co-pay mitigation program will continue and allow patients to lower their out-of-pocket costs to as little as $10. In summary, the strong launch of Opzelura has been driven by several factors. The product has a unique profile unmatched by any other topical therapy for atopic dermatitis, and we are launching into a market where there are millions of patients living with uncontrolled disease. Patients and physicians are reporting positive experiences and are requesting refills, and this cycle is fueling much of the momentum behind the launch of Opzelura, which is on track to be a significant growth driver for Incyte. Now turning to Jakafi. In the fourth quarter, Jakafi grew 15% year-over-year to $592 million. Patient demand continues to drive the uptake of Jakafi with robust new patient growth across all indications. In GVHD, patient growth was up 28% for the full year and up 39% in the fourth quarter, benefiting from the launch in the chronic setting and the transition of GVHD patients from our Expanded Access Program to commercial product. We expect growth of new patients to continue into 2022 and for the full year net product revenues to be between $2.3 billion and $2.4 billion. This guidance range takes into account the newly launched indication in chronic GVHD and continued recovery of new patient starts. Lastly, on Monjuvi, Minjuvi, and Pemazyre. Monjuvi sales in Q4 were $24 million. We continue to make progress with penetration into key accounts and increasing uptake of Monjuvi in the second-line setting. Full year guidance for 2022 of $110 million to $135 million for net product sales as recorded by MorphoSys takes into consideration the continuation of the momentum in Q4, new account penetration, and impacts from COVID. Minjuvi, which was approved in Europe in August of last year and launched in Germany, had net sales in the fourth quarter of $4 million. While it is still very early, we are encouraged by the initial uptake and expect Minjuvi to become a meaningful growth contributor as we continue to gain reimbursement in other European countries. Pemazyre grew to $69 million in net sales in 2021, with $10 million coming from outside the U.S. In the U.S., new patient starts continue to grow with the duration of therapy likely to drive performance. With that, I'll turn the call over to Steven.

Thank you, Barry. And good morning, everyone. In 2021, we made significant progress across our development pipeline with multiple clinical and regulatory achievements. We announced four product approvals that include Jakafi in the United States for chronic graft-versus-host disease, Monjuvi in Europe for diffuse large B-cell lymphoma, Pemazyre in Europe and Japan for cholangiocarcinoma, and most recently, Opzelura in the United States for atopic dermatitis. Further on the regulatory side, ruxolitinib cream is under review at both the FDA and EMA for vitiligo. Throughout the year, we delivered key clinical highlights as listed on the right, which include positive Phase 3 data for ruxolitinib cream in vitiligo and the initiation of a Phase 3 study evaluating parsaclisib in autoimmune hemolytic anemia following positive Phase 2 results. We also signed a collaborative agreement with Syndax for axatilimab in chronic graft-versus-host disease, which granted us the right to develop axatilimab as a monotherapy following treatment with Jakafi or in combination with the JAK inhibitor earlier in the treatment paradigm. And we shared data from our oral PD-L1 program, where we've demonstrated for the first time ever clinical activity with an oral PD-L1 inhibitor. Moving to Slide 16, as I mentioned, the sNDA for ruxolitinib cream in vitiligo was accepted for priority review by the U.S. FDA, with a PDUFA action date of April 18. Vitiligo represents another significant opportunity for our growing dermatology franchise. In the United States, there are currently 1.5 million people living with vitiligo and only 150,000 to 200,000 patients currently seek treatment due to a lack of effective treatment options. The quality of life for some patients with vitiligo can be poor, with one in four patients reporting depression and one in seven reporting anxiety due to their disease. Many vitiligo patients experience psychological, social, and physical impacts of vitiligo and represent the true unmet need where they may benefit from a new approved agent, like ruxolitinib cream. Now, to look more broadly at our dermatology franchise on Slide 17. Within our expanding dermatology portfolio, we are pursuing additional indications with ruxolitinib cream, including pediatric atopic dermatitis and chronic hand eczema. INCB54707, our JAK1 specific inhibitor, has been evaluated in vitiligo in patients with a larger body surface area of involvement greater than or equal to 8%, and is also in Phase 2 studies for hidradenitis suppurativa and in prurigo nodularis. We expect results from the vitiligo and HS trial in the second half of this year. There is significant potential with each of these indications where there are limited treatment options, and in some cases, no FDA-approved treatments. Slide 18 shows the opportunity for growth across our portfolio in MPNs in graft-versus-host disease. We expect an NDA submission in the first half of this year for once-daily ruxolitinib. Within myelofibrosis, we have multiple strategies focusing on improving upon the standard of care by either addressing efficacy or safety. In patients who have an inadequate response to a single agent, JAK inhibitors, combination therapy has the potential to improve efficacy, which we are pursuing through the addition of parsaclisib or a BET inhibitor. Our Phase 3 program evaluating ruxolitinib plus parsaclisib in inadequate responders and in the first-line setting for myelofibrosis is ongoing, and we expect results in 2023 for the suboptimal study. For patients who are on subtherapeutic doses due to anemia, these patients may benefit from the addition of an ALK2 inhibitor. We know that Jakafi has been a life-changing therapy for many patients with MF and PV. We believe we can use our expertise in this area to provide additional options to patients. We continue to work towards addressing the unmet need in patients with graft-versus-host disease with Jakafi and other therapies, including itacitinib, a JAK1 selective inhibitor, being evaluated in treatment-naive patients with chronic graft-versus-host disease, and as previously mentioned, axatilimab as monotherapy and potentially in combination with the JAK inhibitor. Turning to Slide 19, a number of updates are expected this year for some of our earlier stage pipeline. We expect updated data from our oral PD-L1 program later this year, which could allow us to make decisions on indication and lead program selection. Additionally, we expect data from the adenosine program for both our small molecule A2A, A2B antagonist and our CD73 monoclonal antibody later this year. As you can see on Slide 20, we're expecting multiple regulatory and clinical catalysts this year and we look forward to another very exciting year ahead. With that, I would like to turn the call over to Christiana for the financial update.

Thank you, Steven, and good morning, everyone. Our fourth quarter results reflect continued strong revenue growth with total product and royalty revenues of $813 million, representing an increase of 20% over the fourth quarter of 2020 and reflecting growth across products commercialized by Incyte and our partners. Total product and royalty revenues for the quarter are comprised of net product revenues of $592 million for JAKAFI, $51 million for other hematology/oncology products, and $5 million for Opzelura, royalties from Novartis of $96 million for JAKAVI and $3 million for TABRECTA, and royalties from Lilly of $66 million for OLUMIANT. This 15% year-over-year growth for JAKAFI net product sales reflects higher patient demand across all indications. The doubling of OLUMIANT royalties is driven primarily by the use of OLUMIANT for the treatment of COVID-19. As a reminder, for global net sales of OLUMIANT for the treatment of COVID-19, we are entitled to receive royalties equal to the base double-digit royalties applicable to all global net product sales, plus an additional 13% royalty. For the full year 2021, total product and royalty revenues were $2.9 billion and a 17% increase over 2020. Focusing now on Opzelura for the fourth quarter, the launch and volume of prescriptions have been strong. While we are negotiating with PBMs and payers to get Opzelura on formularies and remove the NDC blocks, we have been utilizing patient support programs to cover the full cost of Opzelura so that patients have access to the product. In the fourth quarter, Opzelura gross product sales of $58 million were reduced by 75% related to these patient support programs. In addition, other fees and discounts of 17% contributed to a total gross to net discount of 92% for the quarter. As a result of these reductions, net product sales for the quarter were $5 million. Moving on to our operating expenses on a GAAP basis. Ongoing R&D expenses of $345 million for the fourth quarter decreased 9% from the prior year period, primarily due to the ruxolitinib cream API-related costs incurred in the prior year quarter before Opzelura's regulatory approval. Ongoing R&D expense for the full year 2021 of $1.3 billion increased by 6% over 2020, primarily due to the progression of our pipeline. Total R&D expense of $473 million for the quarter and $1.46 billion for the full year 2021 includes upfront consideration of $127 million for our collaborative agreement with Syndax. SG&A expense for the fourth quarter of $226 million increased 35% from the prior year period, primarily due to our investments related to the establishment of our new dermatology commercial organization in the U.S. and the related activities to support the launch of Opzelura. For the full year 2021, the 43% growth in SG&A expense was also primarily related to the commercialization of Opzelura. Our collaboration loss for the quarter was $8 million, representing our 50% share of the U.S. net commercialization loss for MONJUVI. For the full year 2021, the total collaboration loss was $37 million. Finally, we ended the year with $2.3 billion in cash and marketable securities. Looking at the evolution of our P&L, you can see how over the past three years, the growth in our product and royalty revenues has exceeded the growth in our ongoing R&D and SG&A expenses, leading to increased operating leverage and reflecting our commitment to prudent management of our financial resources. As previously discussed, the uptick in expenses in 2021 reflects the building out of our dermatology franchise and the Opzelura launch. Moving on to 2022. I will now discuss the components of our guidance on a GAAP basis. For JAKAFI, we expect net product revenues to be in the range of $2.3 billion to $2.4 billion, which at the midpoint represents an increase of approximately 10% over 2021, driven by continued growth across all indications. We expect our gross to net adjustment for 2022 to be approximately 21%, reflecting expected continued growth in 340B volumes. As a reminder, the gross to net adjustments in the first quarter of the year are always higher relative to the previous quarter and subsequent quarters due to our share of the donut hole for Medicare Part D patients. For other hematology/oncology products, which includes Pemazyre in the U.S., EU, and Japan, ICLUSIG, and MINJUVI in Europe, we are expecting total net product revenues to be in the range of $210 million to $240 million, which at the midpoint represents approximately 23% growth over 2021. Due to the early stage of its launch, we will not be providing guidance on Opzelura, but I will provide some additional color around Opzelura gross to net for 2022 in a moment. As in previous years, we are also not providing guidance for milestones or royalty revenues. Turning to operating expenses on a GAAP basis, we expect COGS to range from 6% to 7% of product revenues. R&D expense is expected to be in the range of $1.55 billion to $1.59 billion, representing 18% growth at the midpoint versus 2021, excluding the impact of the Syndax upfront consideration in 2021. The growth rate primarily reflects expansion in our dermatology clinical development as well as investments in our LIMBER GVHD program, tafasitamab, and our PD-L1 program. We expect SG&A expense for the year to be in the range of $950 million to $1 billion, primarily reflecting continued support for the Opzelura launch. Excluding the impact of Opzelura-related costs, we expect SG&A expense to grow at a rate of less than 5%. With respect to our profit share for MONJUVI in the U.S., in 2022, we expect to be around break-even. As I previously mentioned, while we are not providing guidance for Opzelura due to the early stage of the launch, I want to discuss what you could expect related to our gross to net adjustment in 2022. As we finalize coverage with payers, we expect gross to net for Opzelura to be relatively flat in Q1 compared to Q4 2021, begin to decline in Q2, and normalize at a fully loaded gross to net rate of 40% to 50% between Q3 and Q4, depending on the timing of the removal of NDC blocks by PBMs and the discontinuation of certain patient support programs. Operator, that concludes our prepared remarks. Please give your instructions and open the call for Q&A.

Great. Good morning, thanks for taking my questions. So I had two on Opzelura. The first on reimbursement progress. I wanted to see if the 40% to 50% gross-to-net that you just guided to for late 2022 is expected to be the long-term gross-to-net you expect for the product. And secondly, while it's understandably early, I wanted to see what you might have learned on duration of use so far in terms of which areas of the body patients find most suitable for the product and the speed at which patients who have received refills have been working through tubes?

Hi, Vikram, it's Barry. I can answer your first question. The 40% to 50% is what we say for this second half of the year. When things stabilize, I can't really predict what the future is going to bring after that. But certainly, we know that the value of the product to patients, to physicians is high, and therefore, I think that we can continue to manage and work with the payers to ensure that we have a reasonable gross-to-net for the product. The second question is just hard to predict. I mean patients are using the product everywhere. They're using it on their hands, their face. A non-steroidal product like Opzelura is good to use on sensitive areas, including the face and other delicate regions. The refills are coming in and increasing each month. Most patients have gotten one tube so far, and maybe 15% of them have gotten a refill, and those refills will continue. We'll have more data for you in the future, particularly about refills, as that's a very important component of our continued growth. Regarding the areas of the body, they'll be using the drug on all areas where they have ongoing problems with eczema and atopic dermatitis.

Okay, understood. Thank you.

Hey, guys. Thanks so much for taking my question. Congrats on all the progress. Another question on Opzelura. Can you clarify how the patient journey and potential barriers to uptake and reimbursement might evolve as gross-to-net equilibrates by the back half of this year, and you shift from the current patient support programs to the co-pay assistance? I guess, I'm sort of wondering if we should expect any additional hurdles to adoption once we're through this initial launch period? And then secondarily, maybe just asking the prior question a little bit differently, I guess I'm curious how the 15% refill rate aligns initially with your expectations for the number of tubes patients would use per year granted, obviously, early days? Thanks.

As far as the patient journey goes, obviously, there are millions of patients that have eczema and atopic dermatitis in the United States. They've been cycling through low potency steroids, high potency steroids, and then TCIs. We don't really anticipate any future barriers whatsoever. We anticipate increased demand for the product, both from physicians and from patients because the more experience that they continue to have with the drug, the happier they are with it. While we may see a phase where coverage is being implemented, we will ensure that if a prescription is written by a dermatologist, the patient will be able to get it. In the early periods, we are helping with that. As coverage comes online, which is happening every day, we expect that gross-to-net will improve and that barriers will be removed if there are any. As for the refill volume, it's very early, and we actually believe that this will continue. Patients are coming back frequently, and I think you'll see the refill percentage continue to rise with the newly written prescriptions. Of course, as we move into vitiligo, things will improve even further, with new prescriptions going up and those patients returning for refills as well.

Great, thanks so much.

Hi, good morning. Thank you for taking my questions. A couple from me on Opzelura as well. Can you give us any kind of color on where the use is coming from in the early days? Are these patients naïve to any treatment before? Or are you seeing switches? And if you are seeing switches, where is that coming from? And then second question, as we think about when your gross-to-net will normalize towards the end of the year, how much do you think, at maximum, a patient will have to pay out of pocket beyond treatment? What kind of view do you have on elasticity of demand as it relates to what this co-pay should be? And can you give us an idea of what that range is? Thanks.

Sure. So Barry, again. The majority of patients are coming off of steroids. They have been prior treated with topical steroids, but we also see patients who have been treated with Dupixent, Eucrisa, and TCIs, coming off therapy or switching to Opzelura because they haven't received relief and now are getting it. This includes steroids and injectable biologics, and there are millions of patients that we can assist with this drug. Regarding out-of-pocket costs, we expect that no patient will have to pay more than $10 out of pocket. We anticipate that more insurance plans will cover the cost of the drug. Some have high deductibles, others low deductibles, and some will just have a $10 co-pay when covered by commercial insurance. Patients will not have to pay more than $10, which is what we guarantee. Many other drug companies manage patient out-of-pocket costs similarly, and those on different tiers will have different co-pays. It could average around $10 for Tier 1 or no co-pay, and between $60 and $70 for Tier 2 or Tier 3. It's rare to have a patient with an excessively high co-pay that we would need to address.

Okay. I’m asking just because as I think about your future gross to net to the question that was asked earlier, could this be a potential driver of your desire to make sure that the out-of-pocket is no more than $10? Did that play a role potentially in making your gross to net in the future a bit more variable than you expect it to be?

So Tazeen, the co-pay assistance is reflected in the 40% to 50% range at steady state that we've indicated.

Hey, thanks for the update and for taking the questions. Maybe a big picture question. Since Incyte has made a lot of progress diversifying the product portfolio beyond Jakafi. I was wondering how much of a priority do you place on geographic revenue diversification, especially since you’re expecting a lot of revenue growth from your dermatology business, which seems like mostly a U.S.-focused opportunity? Are there growth opportunities that you expect to expand your revenues beyond the U.S.?

Yes. Hervé here. A few years ago, we made the decision to build our own organization in Japan and Europe, and you can see the results starting to emerge. We have had Iclusig for a number of years, and now we have Minjuvi and Pemazyre launching in Europe. This will contribute to that diversification. We launched Pemazyre in Japan, which is still a small number today, but we also have a development organization there. We have partnerships in China that are very important and performing well. We are also signing distribution agreements that will give us another layer of diversification. The map for Incyte today includes Japan, Europe, and the U.S. for every project. This geographical diversification is essential because we know these studies are often applicable across the world. We intend to maintain this for the next few years with a significant focus on China, where we have several products already partnered and are evaluating how we could apply new pipeline products.

Great. Thanks for taking the questions.

Thanks for taking my questions. Just on the question a little bit more. Does that guidance of some kind of trajectory through the year contemplate the vitiligo indication? Or is that already kind of baked into some of these contracts, the ability to launch that more rapidly in terms of your reimbursement and things? Or should we expect a lot of free drug to come in and maybe have to adjust that guidance once that label is issued?

Sure, Marc, it's Barry. No, the guidance is inclusive of the vitiligo launch. When vitiligo is approved, we won’t need to go back to renegotiate contracts with GPO/PBMs again for Opzelura, but each of the plans have to write their own utilization criteria and add the drug to their formulary, which takes time. The good news is that the drug will be available once approved, and we will work with plans to have it included on their formularies as soon as possible. It won’t be an issue to get it available as we are able to have it throughout the country with GPOs.

Okay. Great. That’s helpful. And then maybe just as a follow-up in terms of some of the marketing activities, you initially launched with samples, which – I don’t know if there’s an update that you can provide on kind of the texture issue and the ability to relaunch those samples, and kind of the importance you see of getting those out there, Barry, and related to the marketing. On the guidance on the SG&A side, Christiana, in previous conversations, you and Barry have talked about a possible need for DTC ads here, is that already contemplated in the guidance or no?

Let me start with the last question, and then I’ll turn it to Steven to give you an update on the texture issue. In terms of the SG&A guidance, it does reflect all costs associated with commercializing, marketing, and supporting the Opzelura launch, including DTC. It's also worth noting that the guidance we provided for SG&A and R&D covers costs associated with both hemo and dermatology. The SG&A guidance fully reflects costs associated with Opzelura. However, the revenue guidance that we provided only covers the hemo part of the business, which excludes Opzelura.

Marc, it’s Steven. Regarding your texture issue, as you heard, we’re in the midst of a very successful launch, and we’ve maintained a healthy commercial supply for that. For vitiligo, the PDUFA date is April 18, and we want to ensure a healthy supply for that as well. Because of that, the manufacturing of samples will need to wait a little longer. We want to get it done as soon as possible, but we’re focusing on the commercial supply. We identified early that the texture issue was due to a small amount of crystal formation from the API. We are implementing process improvements to avoid this issue going forward. Some of these changes can be made within the NDA specifications that require immediate implementation, while others will require regulatory back and forth. As things stand, we have been able to maintain a very healthy commercial supply and will continue to focus on the AD and the upcoming vitiligo launches. We will manufacture samples as soon as we are able.

Great. Thanks. Very helpful.

Good morning, guys. Thanks for the question. This is Tiffany on for Cory. Just one other one on Opzelura. How confident is Incyte in reversing the NDC block for the second major payer plan? And in the case that that block isn’t removed, can you speak to the potential future impact on sales that you might anticipate?

Well, Barry again. We are very confident in removing the NDC blocks. We’re in advanced negotiations. The first step is signing base agreements so we can lock down all contract specifications. We know how to proceed going forward, having an understanding of base rebates, discounts, etc. The team is actively negotiating right now, and we are very confident. There’s a strong demand for this drug, and payers are eager to proceed as they don't receive rebates right now and they’re paying at WAC. While patients might encounter NDC blocks initially, we have processes in place to overcome those with prior approval. We’re optimistic about having those blocks removed because of the value proposition Opzelura offers to the patients, physicians, and payers. Most patients treated end up improving significantly; therefore, a strong demand for coverage is anticipated.

Got it. Thanks.

This is Kelsey on for Michael. Thanks for taking our question. Another one on Opzelura. I guess, clarifying on a prior question, what did you say was the anticipated contracting process for the label expansion into vitiligo? And then regarding the sales force, I guess, what’s being done there to kind of prepare for the launch? Thank you.

The contracting, as previously mentioned, won’t require us to go back to the PBMs we already have contracts with, and for the GPOs that we're currently contracting with for the full NDC block and vitiligo will be part of that process. The downstream plans nationwide will simply need to add it to their formulary, which will involve P&T committee decisions. Our market access team actively collaborates with those plans to get Opzelura on their formulary and have utilization criteria established promptly after its launch. They can also work with them now regarding vitiligo, showcasing the 2b data. In terms of the sales force, we are focusing on speeding up the AD launch, which is going very well. Everyone is excited, but we also have a dedicated team currently preparing for the vitiligo launch. We’ve been working with advocacy groups and patient organizations keen on obtaining treatment for vitiligo. The patient-focused drug development meeting that the FDA held on vitiligo highlighted the pressing need for a treatment like Opzelura, offering the first true drug that can support skin repigmentation and enhance the quality of life for patients with vitiligo. It’s the same sales force that is currently approaching the same dermatologists, and we won't be expanding our workforce. However, there are some investments in advertising and promotion that are accounted for within the SG&A guidance we provided this year.

All right. Great. Thank you so much.

Thank you all for participating in the call today and for your questions. We will be available for the rest of the day for follow-up. Thank you, and goodbye.