Incyte Corp (INCY) — Q1 2026 Earnings Call Transcript

Thank you. Good morning, and welcome to Incyte's First Quarter 2026 Earnings Conference Call. Before we begin, I encourage everyone to go to the Investors section of our website to find the press release, related financial tables and slides that follow today's discussion. On today's call, I'm joined by Bill, Pablo and Tom, who will deliver our prepared remarks. Steven, Dave and Mohamed will also be available for the Q&A portion of today's call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I will now hand the call over to Bill.

Thank you, Alexis, and good morning, everyone. We're off to a strong start in 2026 with net sales up 20% year-over-year, driven by strong demand across our entire portfolio. In parallel, we advanced the pipeline with key regulatory and clinical milestones. We view 2026 as a year of strategic progress as we transition Incyte beyond a single cornerstone product toward a high-quality, growth-oriented portfolio across hematology, oncology and immunology. This progress will come from multiple sources, the continued organic growth from our commercial portfolio, the execution of life cycle launches of key brands, the advancement of a broad increasingly late-stage pipeline and a focused approach to business development. The sequencing and pace of execution here matters as these efforts are intended to lay the foundation for a future beyond Jakafi. During the quarter, the FDA accepted our regulatory application for povorcitinib in patients with moderate to severe hidradenitis suppurativa. The application was submitted ahead of schedule and is supported by a robust high-quality data set across both pre- and post-biologic patient populations. If approved, we believe povorcitinib should be a significant growth driver for Incyte as the first FDA-approved oral anti-inflammatory treatment for HS, a disease which affects more than 300,000 people in the United States. We also remain on track for several regulatory decisions this year, including Jakafi XR, which has the potential to generate meaningful sales and serve as an important sales bridge and Opzelura for moderate atopic dermatitis in Europe, a key future growth opportunity for the brand and our international business. Finally, we expect global submissions from Monjuvi in the first-line DLBCL in the first half of the year with approval and launch anticipated in early 2027. Across the pipeline, we continue to advance novel compounds that support our broader transition to a hem/onc and immunology company. The pipeline reflects a deliberate balance of risk and reward, combining programs with the potential for outsized returns alongside opportunities that can deliver incremental but highly reliable growth. This work is backed by an experienced clinical development and clinical operations team and consistent execution across trials. In hematology, we had a positive end-of-phase meeting with the FDA in the first quarter and are on track to initiate our Phase III study evaluating our mutant CALR antibody 989 in previously treated CALR-positive patients with essential thrombocythemia by midyear. This represents an important step as we continue to build a portfolio of molecularly targeted therapies, which Pablo will discuss in more detail shortly. In oncology, we now have four pivotal trials underway across colorectal, ovarian and pancreatic cancers, including the recent initiation of our G12D program in first-line pancreatic cancer earlier this month. These programs target areas of significant unmet need and represent meaningful long-term growth opportunities for the company. In immunology, we are advancing registration programs in mild to moderate hidradenitis suppurativa for Opzelura and moderate to severe HS, vitiligo and prurigo nodularis for povorcitinib. In addition to the regulatory acceptance for povorcitinib in HS mentioned earlier, today, we announced positive results from both Phase III registration studies in adults with nonsegmental vitiligo. These results will support a regulatory application in nonsegmental vitiligo expected in the first half of 2027. Over time, we believe the immunology portfolio at Incyte has the potential to become a significant contributor to the business, representing approximately one-third of total revenue by 2030. Finally, I want to take a moment to talk about management. At this stage of the company, our results depend largely on the strength of our management team — experience, judgment, decision-making and the ability to execute strategic plans. With that context, we have made several executive appointments. This morning, we announced the appointment of Suky Upadhyay as Chief Financial Officer. Suky brings deep experience leading large finance organizations, most recently at Zimmer Biomet and Bristol-Myers Squibb. We also announced the appointment of Pablo Cagnoni as President, Incyte and Global Head of Research and Development; and Steven Stein as Executive Vice President and Chief Medical Officer and Head of Late-stage Development. Additionally, Mohamed Issa was appointed as Executive Vice President and Head of U.S. Commercial, coinciding with the integration of our U.S. commercial operations into a single organization. Mohamed is an experienced executive with a track record of new product launch planning and operations. The new structure is intended to establish consistent standards and enterprise-level capabilities across analytics, market access, sales operations and patient services, creating a launch-ready organization in 2026. These capabilities can be leveraged across the portfolio to maximize the return on our commercial investments. Taken together, these appointments give us the management experience and operational oversight for the next phase of the company. Now turning to the quarter. Total revenue in the first quarter of 2026 was $1.27 billion, up 21% over prior year. Net sales in the first quarter totaled $1.1 billion, representing 20% growth year-over-year. Sales increased for every marketed product, both in the United States and internationally, and was driven by strong prescription and volume demand across the portfolio. Jakafi sales in the first quarter were $758 million, up 7% year-over-year. Prescription demand increased 6% with broad-based growth across all indications, MF, PV and GVHD. New patient starts remain strong. The prescriber base is stable and formulary coverage is broad, providing an important foundation for the Jakafi XR launch. We anticipate the approval and launch of XR in the middle of the year. Our immediate focus will be on securing adequate formulary coverage for XR over the next 12 months post launch. We estimate that XR can achieve 10% to 30% of Jakafi's business by 2029. We'll provide more insights on the launch in future quarters. Sales for our core business, excluding Jakafi, were up 63% year-over-year, with contributions across hematology, oncology and immunology. This business will be supported by four new product launches over the next 12 months including Jakafi XR, Opzelura for moderate atopic dermatitis in Europe, Monjuvi in first-line DLBCL and povorcitinib in HS. As we've discussed, our core business ex-Jakafi has the potential to approach $3 billion to $4 billion by 2030, reflecting the strength of the portfolio and continued execution. It is becoming an increasingly important part of how we transition the company for long-term growth. Opzelura continues to be the largest single contributor to the core business ex-Jakafi with sales of $143 million, up 20% versus prior year. In the U.S., sales were $106 million, an increase of 12% versus the first quarter of 2025. The underlying prescription demand for this business is strong, up 17% year-over-year, which is supported by the continued adoption of nonsteroidal topical therapies. Internationally, growth remains robust in vitiligo where we see strong uptake across markets. In the first quarter, sales totaled $37 million, up 56% year-over-year. Internationally, growth remains robust in vitiligo, where we see strong uptake across markets. As a reminder, Opzelura is under review by European regulators for moderate atopic dermatitis, and we expect approval and launch in the second half of the year. The moderate atopic dermatitis indication has the potential to contribute meaningfully to top line revenue beginning later this year. For full year 2026, we anticipate that roughly 80% of revenue will come from the U.S. and 20% from international markets. In Hematology and Oncology, net sales grew 116% to $204 million. Niktimvo, Monjuvi and Zynyz were the largest contributors to growth in the quarter. Niktimvo has now entered its second year following its launch in the first quarter of 2025. Net sales were $55 million in the first quarter of 2026, reflecting a strong consistent new patient start profile and solid persistency. We've built a broad growing prescriber base with virtually every BMT center in the United States using Niktimvo with all becoming repeat customers. Within 12 months, Niktimvo has captured 32% of the third line plus market. Finally, formulary and payer coverage remains strong for the brand. Monjuvi sales were $49 million in the first quarter, up 67% year-over-year. Growth was primarily driven by uptake in follicular lymphoma following approvals in the U.S. and international markets. Looking ahead, the potential U.S. approval in first-line DLBCL represents an incremental growth opportunity starting in 2027. Finally, Zynyz sales were $41 million in the first quarter with rapid and robust adoption in squamous cell anal carcinoma. Now I'll turn the call over to Pablo.

Thank you, Bill, and good morning, everyone. We have made strong progress year-to-date across our hematology, oncology and immunology franchises, delivering key regulatory and clinical accomplishments. Turning to hematology. We achieved several important milestones for 989, our mutant CALR monoclonal antibody, where pivotal development efforts continue to advance. Most notably, this includes the positive end-of-phase meeting with the FDA in the first quarter. As a result, we're on track to initiate the Phase III study evaluating 989 in patients with previously treated essential thrombocythemia midyear, a key inflection point for this program. Our JAK2 V617F inhibitor program, 058, continues to progress. During the first quarter, we initiated our Phase I dose escalation study evaluating the ASD formulation of 058 in MPN patients with a JAK2 mutation. Preliminary data in a modest number of patients is anticipated by year-end, which we expect will provide early evidence of clinical efficacy as well as an increased understanding of the viability of the ASD formulation for future development efforts. In parallel, we're progressing our next-generation compounds through preclinical studies. We remain confident in the underlying thesis that the inhibition of V617F will lead to positive clinical outcomes in patients with MPNs that harbor this mutation. Lastly, in addition to the previously announced positive top line data for tafasitamab in first-line DLBCL, we plan to present the full data set during a featured oral presentation at the upcoming ASCO Annual Meeting in June. This data supports global regulatory submissions for tafasitamab in first-line DLBCL with approval and launch anticipated early next year. Turning to oncology. During the quarter, Zynyz was approved by the European Commission for previously untreated squamous cell anal carcinoma, adding a second indication for Zynyz in Europe. In our pipeline, this month, we initiated a Phase III study evaluating our KRAS G12D inhibitor, 734, in combination with chemotherapy in first-line pancreatic ductal adenocarcinoma or PDAC patients. This marks a significant step for the program as it enters late-stage development in a setting with substantial medical need. Finally, in immunology, we have made meaningful regulatory and clinical progress advancing our late-stage portfolio. Notably, this includes the new drug application acceptance by the FDA for povorcitinib in moderate to severe hidradenitis suppurativa as well as the positive results of our Phase III registrational program evaluating povorcitinib in patients with nonsegmental vitiligo. I will now turn to 989. In the first quarter, we had a positive end-of-phase meeting with the FDA on the development program in essential thrombocythemia. The Phase III trial will evaluate 989 compared to best available therapy in both type 1 and non-type 1 mutant CALR positive patients with ET who are resistant or intolerant to at least one prior cytoreductive therapy. The trial will utilize a flexible dosing schedule starting with 750 milligrams IV every 2 weeks, with a single dose escalation option built in to allow for appropriate optimization based on early platelet response. The primary endpoint is durable complete hematologic response, DCHR, at week 24. The reduction of mutant CALR variant allele fraction from baseline will be evaluated as a key secondary endpoint in the trial, further underscoring the unique mutation-specific and potentially disease-modifying profile of 989. We're encouraged by the dialogue with the FDA and have a clear and executable path towards forward Incyte second-line ET with a Phase III study on track to initiate midyear. In parallel to ET, we're progressing our development efforts in myelofibrosis, or MF, where we are evaluating 989 as the first- and second-line treatment option. Data from our ongoing Phase I program will be shared throughout the year. We remain on track to initiate a Phase III trial evaluating 989 as a second-line treatment in mutant CALR-positive patients with MF in the second half of 2026, pending alignment with the FDA in the middle of the year. The Phase I cohort evaluating 989 as a single agent and in combination with ruxolitinib in patients with previously untreated MF is enrolling well. Finally, we initiated and completed a Phase I study evaluating a subcutaneous formulation of 989 in healthy volunteers, supporting our strategy to expand utility and improve convenience for patients. These results enable the initiation of a Phase I study in mutant CALR-positive patients in the second quarter. I will now turn to our oncology portfolio. Starting with 734, a KRAS G12D inhibitor, which is emerging as a very important pipeline opportunity for Incyte. The Phase III trial evaluating 734 in combination with standard of care chemotherapy, gemcitabine plus nab-paclitaxel or modified FOLFIRINOX in first-line PDAC is underway. More than 200,000 patients are diagnosed with PDAC with G12D being the most common driver mutation impacting 40% of patients. Today, there are no molecular targeted therapies for patients with pancreatic cancer and chemotherapy has been the foundation of care for decades. What we believe is particularly important is the combination profile of 734 with standard of care chemotherapy. To date, 734 has demonstrated a manageable tolerability profile when combined with either gemcitabine plus nab-paclitaxel or modified FOLFIRINOX without compromising chemotherapy dose intensity. Given how PDAC is treated in practice, especially in the first-line setting, that ability to combine effectively with both full dose chemotherapy regimens is critical. This is reflected in our Phase III development program. Our maturing Phase I data reinforces our conviction in this opportunity, which we view as increasingly de-risked. We plan to share efficacy and safety data from the Phase I study in combination with modified FOLFIRINOX and gem/nab in first-line PDAC patients in the second half of the year. The distinguishing feature of our development approach is the scale and depth of our Phase I clinical program where roughly 400 patients have been treated with 734 across PDAC, colorectal, non-small cell lung and other G12D-mutated cancers. This has allowed us to build a robust and comprehensive understanding of both clinical activity, safety and tolerability across tumor types and treatment settings, which is informing our development efforts. With a strong early clinical foundation and Phase III development now underway, our focus remains on execution as we advance this program that has the potential to become the first KRAS G12D-specific inhibitor approved in first-line PDAC. In parallel, we continue to evaluate expansion opportunities in additional G12D-driven tumors, and we plan to share more about our efforts later this year. Our oncology portfolio has reached an important inflection point with each of our core programs now in registrational development and actively enrolling patients. Pivotal efforts for A90, a TGF-beta receptor 2 by PD-1 bispecific, are underway. The Phase III trial evaluating A90 in combination with FOLFIRINOX and bevacizumab in first-line MSS colorectal cancer patients is ongoing. In the second half of the year, we anticipate sharing additional data from the Phase I study in combination with FOLFIRINOX in first-line colorectal patients as well as a combination with bevacizumab in previously treated patients with colorectal cancer. 667, our CDK2 inhibitor, is in pivotal development in patients with platinum-resistant ovarian cancer with Cyclin E1 overexpression, a biomarker-defined population with significant medical need. The MAESTRO clinical program consists of three studies: two ongoing trials, a Phase II single-arm study and a Phase III versus investigator's choice chemotherapy, and a planned Phase III study in the first-line maintenance setting, which we expect to initiate in the second half of 2026. Finally, in immunology, we have made significant progress advancing our late-stage development efforts for povorcitinib, our oral JAK1 small molecule inhibitor. This includes the NDA acceptance in HS and, as announced today, the positive results from our Phase III registrational program in nonsegmental vitiligo. In HS, last month, at the American Academy of Dermatology Annual Meeting, we presented late-breaking 54-week data from our Phase III STOP-HS program, which reinforced both the durability and the breadth of response associated with long-term povorcitinib treatment. Continuous improvements in clinical outcomes were observed at week 54 with up to 71% and 57% of patients achieving HiSCR50 and HiSCR75 respectively. Further, up to 29% of patients achieved HiSCR100, the most stringent endpoint in HS which represents a 100% reduction in abscess and inflammatory nodules count with no increase in draining tunnels. Up to 20% of patients achieved complete clearance of draining tunnels and nodules at week 54. Clinically meaningful improvements in skin pain, fatigue and quality of life measures, outcomes that are highly relevant to patients and clinicians managing this chronic disease, were also observed. Finally, from a safety perspective, both 45 and 75 milligram doses were generally well tolerated throughout the study, supporting the profile for chronic use in HS. This data supports the potential for povorcitinib to deliver symptom control and durable disease improvement in patients with moderate to severe HS, both before and after biologic therapy. With the regulatory application accepted, we look forward to working with the FDA towards a potential approval and launch in early 2027. Today, we also announced positive results from our Phase III program evaluating povorcitinib in adults with nonsegmental vitiligo. Our Phase III program is evaluating the efficacy, safety and tolerability of povorcitinib compared to placebo in patients with nonsegmental vitiligo across two identical Phase III studies, STOP-V1 and STOP-V2, for 52 weeks. The program enrolled over 900 patients including 456 patients who received a 30-milligram dose of povorcitinib. In both trials, povorcitinib achieved the primary endpoint of greater than or equal to 75% reduction in facial vitiligo area scoring index, F-VASI, from baseline to week 52, demonstrating statistically significant and clinically meaningful reductions in facial vitiligo compared to placebo. Statistically significant improvements were also observed in key secondary endpoint measures including total vitiligo area scoring index 50 or T-VASI50 at week 52. The 30-milligram dose of povorcitinib was well tolerated. The overall safety profile for 52 weeks is consistent with prior studies with no new safety signals observed. Across both studies, rates of treatment-emergent adverse events of special interest were low between 2% and 3% and similar between the povorcitinib and placebo treatment groups. There were no major adverse cardiovascular events. Only one treatment-emergent adverse event of venous thromboembolism was observed in the povorcitinib treatment group in a patient with multiple confounding risk factors, including smoking history, high BMI and intercurrent pneumonia. These results provide a clear and compelling path towards registration planned for the first half of 2027 and underscore the opportunity to add an oral alternative treatment for patients with vitiligo to our portfolio. We plan to share additional data from the trials in the second half of 2026. Povorcitinib continues to produce compelling data in immune-mediated dermatological conditions. We have seen success in translating early Phase II findings into larger registrational programs with now four post-Phase III trials across HS and vitiligo. As we look ahead, we expect data from our third indication for prurigo nodularis by the end of the year. In addition to povorcitinib, we are evaluating Opzelura in a Phase III registrational program for the treatment of mild to moderate HS with top-line results expected end of year. If positive, this result would support a supplemental new drug application in 2027. And if approved, Opzelura would provide the first topical treatment option for patients with HS. Our JAK/JAK1 franchise is well positioned to provide topical to oral solutions across mild to severe immune-mediated dermatological conditions, and we look forward to providing more updates this year. To close, we have a catalyst-rich year ahead with multiple late-stage data readouts, regulatory milestones and pivotal trial initiations across our three core franchises, underscoring the breadth, depth and maturity of our pipeline. With that, I'll turn it over to Tom for a financial update on the quarter.

Thanks, Pablo. As Bill mentioned earlier, our total revenues and net sales for the first quarter were $1.27 billion and $1.10 billion, respectively, increasing 21% and 20% from the prior year. Our GAAP R&D expenses were $516 million for the quarter, increasing 18% from the prior year, driven by continued investment in our late-stage development assets including our mutant CALR, G12D and CDK2 programs. Moving to SG&A. GAAP SG&A expenses were $328 million for the quarter, increasing 1% year-over-year. Ongoing operating expenses for the first quarter of 2026 increased 14% year-over-year compared to a 19% increase in ongoing revenues during the same period, leading to a continued increase in operating leverage and margins. We reaffirm our full year 2026 total net sales, R&D and SG&A operating expense guidance. Total net sales guidance for the full year 2026 is $4.77 billion to $4.94 billion representing a 10% to 13% increase from the prior year. This includes net sales expectations for Jakafi of $3.22 billion to $3.27 billion, Opzelura of $750 million to $790 million and hematology and oncology products of $800 million to $880 million. Total GAAP R&D and SG&A operating expenses are expected to be $3.495 billion to $3.675 billion for the full year. Finally, we anticipate cost of sales to remain relatively stable, representing approximately 9% of net sales. I'll now turn the call back over to Bill.

Thanks, Tom. In closing, we're off to a strong start to the year. Our core business continues to deliver durable growth. Our pipeline is advancing with multiple catalysts ahead, and we've strengthened our leadership team to support the next phase of execution. As we look ahead, we see 2026 as a year of execution with multiple inflection points across the business that we believe will further strengthen both our near-term performance and long-term growth trajectory. And with that, I'll turn the call over to the operator for Q&A.

Congrats on the positive data for povorcitinib for nonsegmental vitiligo. I wanted to ask as you prepare the next step, how do you see this coexisting with Opzelura in the commercial space? What's been your experience with marketing in this indication so far? And do you think that each of these drugs could be appealing for a different segment of vitiligo?

Yes. Thanks for the question, Tazeen. I'll make a few comments and then ask Mohamed, our U.S. commercial head, to also expand on how we're thinking about vitiligo. I think there's a real opportunity here with the FDA approvals of oral treatments to essentially unlock the vitiligo market in the same way that advanced systemic therapies unlocked atopic dermatitis and psoriasis. I think that these approvals will create awareness that vitiligo is a chronic inflammatory disorder. And I think that is important for everybody that's going to be in the market. This is definitely about medicalizing the condition. Frankly, I think Incyte does have an advantage in that we have a topical to oral solution. There is a natural sequencing that sets up in the vitiligo market and we're able to cover the waterfront with both Opzelura as well as with povorcitinib. And that's ultimately going to be, I think, the key to success here — we have the advantage of incumbency. We have direct ties to the providers. We know how they think about this condition. We understand the education that's required to increase the treatment rate — and we, of course, have interactions with payers on this front, too. And so I think it's going to be an important contributor to povorcitinib being one of the three indications that we're pursuing right now. Mohamed, do you have anything to add?

Really well said, Bill. Maybe just some context to the indications. We have reason to believe there's 1.5 million people living with vitiligo in the U.S. and only 20% to 30% seek treatment. A good portion of those patients, about 35% of them, have a body surface area less than 5% and those are going to be really good patient segments for Opzelura. You even have a patient segment between 5% and 10% BSA. That's also a target patient population for Opzelura. And then for patients with BSA greater than 10%, where systemic therapy is most likely, we estimate that total addressable market to be about $1.5 billion to $2 billion, which gives povorcitinib a great opportunity to address that need as well. And like Bill mentioned, having a topical-to-oral continuum for vitiligo and even HS, if both products get approved, puts us in a really unique position as Incyte to satisfy that patient journey from the beginning all the way to advanced treatment.

I appreciate all the color on 989. But I just wanted to check in, will 989's EHA update be mostly a check-the-box kind of update? Or will there be some new wrinkles to glean? And if I could sneak one in: I don't know if Suky is on the call, but Bill, you mentioned previously having expense discipline; what changes, if any, will Suky bring?

Great. James, you snuck in a second question, so there may be a penalty after the call. I'll let Pablo answer the first question.

Thank you for the question. The update at EHA is going to be pretty substantial. We have continued to enroll in these studies. We have longer follow-up and we have continued to deepen our translational understanding of the effects of 989 in patients with both ET and MF. So you should expect continued growth in number of patients. In ET, we'll have approximately 100 patients enrolled and we'll report data in those. For MF in terms of the second-line, we'll have about 45 patients, single agent, and about 15 to 16 patients in combination with ruxolitinib. And I think, first of all, the data has continued to evolve well. We think the durability is an important point. We think the continued tolerability of 989 in this patient population is very important. And we do think that you will continue to see how the translational part of the story continues to evolve with clear evidence of disease eradication and disease modification by 989 in patients with myeloproliferative neoplasms. So you should expect to see a lot more of that at EHA.

Yes. And as it relates to Suky, he has extensive experience at both large and small companies. We have a very strong finance department at the company. He's going to focus on the things that a CFO needs to focus on both strategically and operationally. You want to make sure that your budget planning process is efficient and sharp. You want to make sure that capital allocation decisions are made intelligently. There's, of course, a role in terms of setting up the right systems so that we can scale the company and we're really glad to have him. So thanks, James.

I guess, congrats on securing the 24-week DCHR endpoint in the pivotal ET trial. But just wondering if you can provide some more detail around the mechanics of dose escalation just in terms of the platelet response criteria that will be used to trigger that and then how that works from a timing perspective. And as a follow-up, given some of the flexibility here that you were given by the agency around the endpoint for ET, how do you think this reads into your ability to secure additional flexibility from the agency in the pivotal second-line MF trial?

Go ahead, Pablo.

Let me start with your last point because I think it's very important. We had a very constructive set of interactions with the FDA. We're very happy with how these conversations are going. I think they recognize 989 is a fundamentally different way to treat patients with MPN. It's truly not only a molecular targeted therapy but has the potential for disease modification, and that needs to be contemplated as we implement Phase III trials and as we select endpoints for these Phase III trials. So in terms of the conversations on MF, we believe that this will allow us to have a conversation with the FDA about defining endpoints in MF that truly reflect the effects of 989 in terms of normalizing hematopoiesis, which we think is a critical difference compared with existing therapies for patients with MF. We'll provide more updates on this later in the year, but we think that dialogue is going to be very constructive as it was in ET. In terms of your specific question about ET: if you remember the data we presented last year, 989 produces a very rapid normalization in platelet count that happens very soon after the first dose. By the end of the first cycle, about a month, most of the patients that will normalize platelets have done so. So we believe that an early dose escalation at that point for patients that are not early responders is the right approach to take into account the heterogeneity that we sometimes see in response. We believe that this approach will allow us to cover patients with all kinds of mutations and have a treatment effect across the board in patients with ET.

Great. Thanks for today's earnings update. We noticed the updated guidance for Niktimvo in the second half versus early 2027 for first-line GVHD. Could you talk about your expectation for that study? And given the move up in timeline, is there potential to accelerate the pivotal program in combination with ruxolitinib?

I just want to make sure your question is related to Niktimvo and the Phase II study with ruxolitinib?

Yes. The movement to the second half from early 2027 that you had previously guided to?

So the randomized Phase II study combining Niktimvo with ruxolitinib and comparing that with ruxolitinib and steroids accrued very quickly, well ahead of schedule. As a result of that, we'll have data before the end of this year, and that will help us define the rest of the regulatory strategy to bring Niktimvo to first-line chronic graft versus host disease patients.

On 989, trying to understand the implications of this flexible dose escalation in ET pivotal trial design for the MF indication. How do you think that plays out? Could this be a challenge if you have to titrate patients and some don't get the benefit unless they reach the 2,500 mg dose? And how would that be relevant if you're pursuing the first-line MF indication?

When you look at the data we presented last year, a substantial percentage of patients with ET respond by normalizing platelet count at doses well below the dose escalation of 2,500 milligrams. Based on that, we think that the starting dose of 750 milligrams IV every other week is the right way to start because many patients normalize platelets at that dose, and that alone will support achieving the primary endpoint of the study, durable complete hematologic response at 24 weeks. There is a percentage of patients that are less sensitive to 989, and for those patients, we thought one step up to 2,500 milligrams should cover the efficacy in that patient population. So we designed the study to address heterogeneity in this population. We believe the early dose escalation step is the right way to do it. The rapid effect of 989 normalizing platelets in patients who will do so will allow us to quickly make that determination. And as I mentioned, we had a very constructive discussion with the FDA and we reached agreement on this.

On 734, the KRAS G12D program: nice to see the chemo combo study now up and running in PDAC. Pablo, how do you think about pursuing other registration opportunities in PDAC perhaps with investigational therapies such as pan-RAS inhibitors? And how do you think about addressing other tumor types such as lung and colorectal cancers?

We're pleased with how the data are evolving and will have an update later in the year. The combination with chemotherapy demonstrated the ability to combine without compromising chemotherapy dose intensity, and we'll have more response and durability data later in the year. We have strong interest in adjuvant settings in pancreatic cancer and are deciding the right design; you'll hear more in the second half of the year. The absence of rash with 734 is an important advantage in the competitive landscape, making combinations with EGFR inhibitors like cetuximab very attractive in colorectal cancer. We have cohorts and plans for those combinations, which could involve cetuximab alone or cetuximab plus chemotherapy in different lines of therapy. We have also enrolled a cohort of patients with non-small cell lung cancer and will have data on that in the second half of the year. All this gives you an idea of how we're going to potentially expand this program later in the year, and we'll provide a comprehensive update when we present the updated data.

I'll follow up on 734. I just wanted to confirm that all studies have resumed enrollment following that temporary pause a month or so ago to review those pneumonitis events? And is a history of pneumonitis going to be an exclusion criteria for the DAWN-303 Phase III study?

Let me recap what happened. We reported four cases of pneumonitis in more than 350 patients treated across the program. Importantly, three of those patients were receiving 734 in combination with chemotherapy, and two of the patients had concurrent infections. An in-depth review concluded there was no signal that 734 produced pneumonitis in these patients. The Phase III study was never put on pause. What we did was amend consent forms and the investigator brochure; Europe implemented an administrative hold while those changes were made. Those documents have been amended and enrollment will reopen. Nothing ever stopped in the U.S. We have continued to enroll patients, and the implementation of the Phase III study continues apace without interruptions.

Curious on Opzelura. If you could comment on competition within the nonsteroidal topical market. Is that still a growing pie? Are you fighting for share just within the market ex-steroids? And on the long-term guide for Opzelura doubling, how important is it to have povorcitinib approved in those indications for having multiple tools within the tool bag?

Thanks, Judah. When you think about Opzelura over the next five years, there are three components to growth. First is organic growth—continued penetration of the atopic dermatitis and vitiligo markets. Second is the launch of the HS indication for Opzelura in mild to moderate HS. And third is the launch of Opzelura in Europe for atopic dermatitis, which could add $200 million to $300 million incrementally. It's reasonable to forecast Opzelura could approach roughly $1.3 billion by 2030. On competition in the U.S., I'm not focused on modest month-to-month share shifts. In the first quarter, our share of new patient starts in the United States was 46%. New patient starts were up over 30% year-over-year and were growing faster than the market. We had two to four times more new patient starts in the first quarter than any other branded topicals. The move away from steroids and topical calcineurin inhibitors to nonsteroidal branded topicals is a real tailwind. Opzelura offers superior skin clearance and itch relief relative to a TCI and is a better long-term option than steroid. As it relates to povorcitinib, that's upside. Offering a complete topical-to-oral solution for vitiligo and HS is an advantage and enhances our ability to serve the full patient journey.

Congrats on the quarter. My question is on 058 in the Phase I with the new ASD formulation. Can you talk a little more about how we should evaluate those results? When we see it in the second half, what are you looking for and how should we view it? Also, you have a deal with Prelude for a molecule for which you have an option. When will you decide between the two and how?

We are now in the clinic with the new formulation and will have an update before year-end. What we would like to see is that the new formulation achieves the exposures our preclinical data predicted were necessary to see a clinical effect. If we achieve those exposures, we will be able to confirm our conviction that inhibiting V617F with this pseudokinase inhibitor will deliver positive clinical outcomes in patients with MPNs. That's the goal for this year: deliver enough exposure with the new formulation to hit the target hard enough to show meaningful clinical outcomes. Regarding Prelude, we view that as a potential next-generation program. We have internal next-generation programs and an external Prelude program. The Prelude arrangement is a time-based option. We'll compare data from Prelude with our internal programs and the data from LEAD 058, and then we'll decide which program to advance.

Congratulations again on the data. I was curious about povorcitinib in hidradenitis suppurativa. Where do you expect earliest uptake to take place? Would you expect uptake in biologic-naive patients, post-biologic failures, or patients with specific disease features such as draining tunnels, pain, or a high inflammatory burden?

Thanks for the question. HS is tailor-made for an oral. The market is set up for sequencing from oral to injectables, and that's something that's been missing. Povorcitinib has the potential to be the first oral anti-inflammatory. We expect to have a broad label both in the pre- and post-biologic setting, which is a real advantage. Seventy percent of our clinical data is in pre-biologic patients. For early uptake, you could see patients who are currently on biologics who have active disease, insufficient pain relief, or injection fatigue as an early source of utilization. If you consider the biologic market size estimated at 50,000 to 75,000 patients, even capturing 10% of 50,000 annually would be meaningful revenue. But the key is that we expect to capture patients at two distinct inflection points: after antibiotics before biologics, and after biologics. Mohamed is preparing the launch and the organization is set up for success. Mohamed, do you want to add?

HS is a large and growing market with significant unmet need. The disease is debilitating, characterized by chronic pain, drainage and flares, and highly heterogeneous with multiple cytokine drivers. There are about 300,000 patients in the U.S., 200,000 actively seeking treatment, and only about 50,000 in advanced therapy. Povorcitinib is positioned to address this market as the first and only oral treatment with biologic-like efficacy across many treatment parameters that are highly debilitating. Competing in both the pre- and post-biologic settings, povorcitinib has the potential for peak sales somewhere between $500 million and $1 billion. At launch, you can expect opportunities to capture patients on both sides of that inflection point.

Congrats on the most recent clinical data with povorcitinib. I have a question on the ruxolitinib and mutant CALR combo with the first-line data expected year-end. Can you remind us of data that suggests any synergistic benefit? Given how entrenched Jakafi is in the myelofibrosis market, if CALR-mutant patients are doing well on Jakafi, where do you envision mutant CALR fitting — as a combo, a switch, or add-on?

Preclinically, we saw additive to synergistic effects combining 989 with ruxolitinib in CALR-mutated models. Importantly, while ruxolitinib controls symptoms and produces spleen responses, it shows very little, if any, disease modification potential in CALR-mutated patients. For example, spleen response rates with ruxolitinib in CALR-mutated previously untreated patients are approximately 20%. There is a clear need for something better for CALR-mutated patients in first-line MF. Jakafi can produce anemia and thrombocytopenia; 989 aims to restore normal hematopoiesis, eliminate malignant megakaryocytes from the bone marrow, and reduce CD34-positive mutant CALR cells in peripheral blood. That shift back to normal hematopoiesis has translated into improvements in anemia, spleen responses and symptom improvement in our data. When we put this whole package together, we'll show you end-of-year data in a larger group of first-line patients and present a regulatory strategy for 989 in first-line MF. We think effects of 989 and ruxolitinib are fundamentally different and potentially complementary.

Sounds like you've made a lot of progress with the 989 subcutaneous formulation, having completed the healthy volunteer study. I was wondering if you could tell us about the observations there and then the scope and dose range you'll be testing in the ongoing Phase I study in patients. Could the subcutaneous formulation potentially bridge to the pivotal program or will you need integration of the subcutaneous formulation into Phase III?

The healthy volunteer study results have allowed us to move quickly into patients. We're going to test a very broad range of doses that will cover all the potential doses we're using in the Phase III ET study and those we might use in MF. In terms of implementing this in Phase III studies, it's a question of timing. Speed is important to bring this medicine to patients with ET and MF as quickly as possible. We will not slow down the ET study to incorporate the subcutaneous formulation, and we're probably not going to delay the second-line MF study either. We'll have a bridging strategy on the back end. Our goal is to incorporate a subcutaneous formulation in the first-line MF study, and the current plan allows us to do that. We'll provide an update on both before the end of the year.

On 989: can you touch on the potential translatability of the ET design to MF as it relates to starting dose and the potential for an up-titration approach — particularly in the context of a potential six-month primary endpoint where we might be looking at SVR35 and TSS50 versus looking for an early platelet response like in ET?

The MF program discussion is a bit earlier stage and we need to spend more time with the FDA on the second-line MF study design. The agreement on step-up escalation in ET provides a framework that can inform MF, but the more important thing in MF is to have a constructive dialogue with the agency on the primary endpoint, which we intend to do. 989 is a fundamentally different therapy for MF — about normalizing hematopoiesis rather than nonspecific JAK inhibition that primarily improves symptoms and spleen size. That difference needs to be contemplated in the primary endpoint for MF. Conceivably, we could include a dose escalation step in MF to address heterogeneity, which could extend timelines slightly, but we'll discuss timing and design with the FDA at the appropriate time. Thanks, and congratulations on the move to Morgan Stanley.

Congrats on the progress. This one is for Pablo. If you frame the setup for EHA and the update there earlier, is the expectation we should see deepening responses in these MF cohorts at the update? I wanted to reconcile the eradication comment you made earlier.

You should expect data that continues to show the effect of 989 as a disease-modifying therapy. That will consistently demonstrate our ability to dramatically reduce, and in some patients approach elimination of, the malignant population of megakaryocytes in the bone marrow and in peripheral blood. You should see more translational data at EHA that supports this disease-modifying profile and deepening responses in the MF cohorts.