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spk13: Good morning, my name is Drew and I'll be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicine's fourth quarter and full year 2023 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press start, followed by the number one on your telephone keypad. If you would like to withdraw your question, press start, followed by the number two. Please plan to limit your questions to one. Thank you. Jenna Cohen, you may begin your conference.
spk18: Thank you, Drew, and good morning, everyone. Welcome to Blueprint Medicine's fourth quarter and full year 2023 financial and operating results conference call. This morning we issued a press release which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at www.blueprintmedicines.com. Joining me today are Kate Haviland, Chief Executive Officer, Helena Lee, Chief Commercial Officer, Wadna Mooney, President, Research and Development, and Mike Lansdell, Chief Financial Officer. Christy Rossi, Chief Operating Officer, and Becker Hughes, Chief Medical Officer, are also on the line and available during 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 as outlined on slide three and are subject to a number of risks and uncertainties. These may cause our actual results to differ materially, including those described in our reports filed with the SEC. We're cautioned not to place any undue reliance on these forward-looking statements, and Blueprint disclaims any obligation to update such statements. With that, I'll now hand the call over to Kate.
spk02: Thank you, Jenna, and good morning, everyone. 2023 was a pivotal year for Blueprint Medicines as we successfully brought forward Avakit to become the first and only approved medicine for patients with indolent systemic mastocytosis, or ISM. As we enter 2024, Avakit will continue to be the foundation of our thriving business, with our early launch momentum putting Avakit firmly on the path to becoming a multi-billion dollar product. Our growing revenue also enables us to invest in additional compelling opportunities in our pipeline to drive longer-term growth and deliver even more transformational medicines in the future. To achieve our goals this year, we're focusing on three key aspects of the business. Let's start with Avakit's blockbuster potential and its ability to drive durable revenue growth for Blueprint well into the next decade. We know that the first few quarters of launch are critical in dividing the sales trajectory for a product. And we have driven a very strong first six months of results in this ISM launch, establishing the foundation for future growth. We have clearly demonstrated our ability to reach patients and drive revenue, achieving $204 million in global advocate revenue in 2023, an 84% increase over 2022. This compelling growth was primarily driven by the uptake in patients with ISM. who comprise about 95% of all patients with SM, a sizable rare disease patient population that we estimate at 70,000 prevalent patients in the U.S. and Europe alone. Today, we are pleased to provide 2024 Advocate Revenue Guidance of $350 million to $390 million, putting us on pace to nearly double our sales this year. This revenue trajectory is very similar to other notable rare disease product launches, such as Solaris and Jacopi, with additional similarities being a compelling new first-in-class medicine approved to address a significant medical need and building a new multibillion-dollar market. These similar attributes and, importantly, similar sales trajectory is why we believe the launch of Avakit in SM is one of the most exciting rare disease launches happening across the industry today. and we are just now scratching the surface. In 2024, our primary focus is on reaching more patients with SM in the US and also now in Europe with our EMA approval in ISM this past December. Avakit's compelling efficacy and safety profile coupled with the chronic nature of ISM mean that both new patient starts and the cumulative effect of patients staying on therapy for longer durations are important drivers of revenue this year and beyond. I will hand it over to Celina next on the call and she'll go into more detail on avocates performance in Q4 and why we expect our strong and steady growth to continue as we drive towards peak sales of greater than 2 billion. And yes, we are now pointing you all to a peak opportunity for advocates that is greater than 2 billion. For the past 12 to 18 months, since before our FDA approval on ISM, we have been citing a peak opportunity for Avakit of greater than $1.5 billion. Now, based on the strong underlying fundamentals that are driving our early sales trajectory and the rapid growth in diagnosis that has led to an expanding SM market, our conviction has grown that Avakit will be able to achieve peak global sales of greater than $2 billion. Now let's turn to our second area of focus. Advancing our portfolio targeting allergic inflammatory diseases where mast cells play a central role. Last month, I shared how we are focusing our investment in our most exciting research and development programs with opportunities to address high medical needs in large patient populations. And importantly, in therapeutic areas that play to our strengths by leveraging our expertise and our infrastructure. A primary area of focus for us this year is to advance our portfolio of approved and investigational programs targeting mast cell mediated diseases. Blueprint is uniquely positioned to drive novel science in this space. Because of our scientific leadership and targeting kit, and our proprietary insights into mast cell biology, an important area of science that has been historically underappreciated. With Avakit and L-amethamib, we are fully covering mast cell diseases driven by mutated kits. And this year, we are expanding into a much larger opportunity driven by wild type kits with Blue 808. We are particularly excited about the potential for Blue 808 to impact fundamental biology in a number of large diseases with significant medical need starting with chronic urticaria. We believe this program will move quickly with a higher than typical probability of success at this stage given our track record of translating our discovery expertise and targeting kit into clinical impact and now commercial success. Next week, we will have a huge presence at the American Academy of Allergy, Asthma, and Immunology meeting, often known as Quad AI, which is the largest allergy and immunology conference in the U.S. and taking place in Washington, D.C. this year. Later on the call, Fuad will go into more depth on what we will be showcasing at Quad AI as well as provide an update on our development stage portfolio. The third area of focus for us is maintaining a strong and durable financial position. Cash management will continue to be a priority area for us to focus on in 2024. And as we sit here today, we see a clear path to profitability through the combination of strong revenue ramp and disciplined operating expenses. which will result in significant decrease in operating cash burn in 2024 and beyond. Mike will talk more about our financial results and our approach to balancing disciplined capital allocation and investing at the same time in our compelling near and long-term growth opportunities. Business development will also continue to be core to how we build and optimize our business in a sustainable way. To that end, I'm very pleased to say that we have made significant progress on a deal that will enable Gavretto to continue to be commercially available to patients in the U.S. while minimizing the financial impact of Blueprint. We look forward to updating you in the near future once that deal is finalized. Now, I'll hand it over to Selena, who will go into more detail on our commercial performance. Selena? Thanks, Kate. Avokit achieved $204.2 million in net product revenues in 2023, representing 84% revenue growth over last year. Fourth quarter revenues grew 30% quarter on quarter to $71 million, with $63.6 million in the US. This growth was driven by several key factors. New patient starts, a decline in our share of free goods, low discontinuation rates, and high compliance. ISM is the clear growth driver. with the majority of new starts at the 25-nig dose. Starting with patients on therapy, we hit a major milestone in January with approximately 1,000 patients on Avakit in the U.S. We were looking to see if this would come in December or January and were encouraged by the strong demand we see coming into Q1. We're thrilled to hit this 1,000-patient milestone this early in the launch, and we're focused on driving continued growth. Today, we're setting revenue guidance that reflects the strong and steady continued growth we expect in 2024 as we get closer to realizing Avakit's blockbuster potential. Our guidance range of $360 to $390 million assumes another year of more than 80% year-over-year revenue growth at the midpoint. We have good insight into the fundamentals driving our revenue, namely new patient starts, compliance, duration, free goods, and our international performance. This range reflects the inherent variability in those fundamentals. With guidance now in place, we're going to move away from providing a quarterly patients on therapy number. We will continue to share commentary on how the launch is progressing. Looking next at persistence. We expected strong persistence in ISM based on Avakit's clinical profile and the chronic nature of the disease. And even though it's early days, All signs point to extended durations of therapy with low discontinuation rates and high compliance launched to date. What's been a surprise upside is how quickly we've moved the needle on our free goods share, dropping to approximately 25% as we grow the number of ISM patients on therapy. We have just reported our second strong quarter of revenue from our ISM launch. Let me tell you why we expect to sustain this growth in 2024 and beyond. Our commercial strategy is grounded in strong continued execution across multiple paths that will drive sustained growth in this market. First, we're ramping up our direct-to-patient marketing to further drive awareness and activate patients to seek treatment. The SM market is growing, and we've only captured a small fraction of it so far. Today, there are more than 20,000 diagnosed patients in the U.S. alone, and about half are not well controlled on symptom-directed therapies. We know this is a chronic market where patient preference is sticky. Once patients start Avakit, that positive clinical experience bodes well for chronic duration of therapy. Second, we're expanding Avakit's prescriber base across all specialties and settings, and we're nowhere near saturation. We are seeing strong receptivity to Avakit's profile among both hemlocks and allergists in the academic and community settings. Threats of prescribing is happening exactly where we want, as we're motivating more allergists to prescribe Avakit, and we're adding more prescribers at the top of the concentration curve. You can see this in the chart on the left, which shows early Avakit adoption among the top 400 SM providers. who see about 4,300 unique SM patients. We continue to grow the breadth of prescribing here in light green, and we're also beginning to see depth of prescribing with providers who have already started two, three, or more patients on therapy in darker green. As we expected, the first positive experience is leading providers to recommend Avakit to the next patients who are coming in for their scheduled appointments. Breadth of prescribing is an important lead indicator for long-term growth. We are highly encouraged to see prescriber breadth and early signs of prescriber depth at this point in the launch. Over time, we expect to see the cumulative impact of growing this motivated prescriber base together with activating more patients to seek what's possible with Avakit. That's why I'm so confident about our ability to both grow and capture this market. We understand the SM market better than anyone else. What activates patients to move away from the symptom-directed polypharmacy they're habituated to and try therapy designed to address the underlying driver of disease? What drives providers' urgency to treat? What influences their prescribing behavior? And how to ensure that access is seamless for patients and providers? We're making great headway to disrupt entrenched attitudes and behaviors about disease control and treatment and to drive patients and providers to take action. With two quarters of strong performance and our guidance today, we are in the early innings of a pioneering rare disease launch. We are exactly where we thought we would be, and we're delivering what we said we would deliver. As we've seen from the launch trajectory of other rare disease blockbusters, We are right on track to capture Avakit's peak opportunity of over $2 billion. With that, I'll hand it to Fuad to share what you can expect from Blueprint Medicines at Quad AI.
spk03: Thank you, Kalina. With more than 10 years of experience in systemic mastocytosis, we have built an extensive repository of knowledge to uncover insights into SM disease biology, our patients' journey of prescriber management of the disease spectrum from ISM to ASM. At Blueprint Medicine, we are redefining how SM is treated across a broad network of academic leaders and prescribers with whom we are not only expanding the frontiers of innovation in SM, but also in many other mass-driven diseases. With two oral presentations and seven posters, Blueprint will lead SM science and medicine at the 2024 Quad II Conference. The long-term efficacy and safety data from Pioneer will continue to establish Avakit as the standard of care and the only available option to treat the root cause of systemic mastocytosis. Additional data will include health outcomes measures and reduction in polypharmacy. Turning now to our pipeline. The extensive data we generated from Pioneer and from real-world evidence in SM, coupled with the regulatory experience we gained with AVA-Kit development, are enabling us to build a robust differentiated development path for LNS-DNA. Our next generation D816B mutated kit inhibitor. We very recently presented data showing L-Inestinib drives clinically meaningful symptom improvement across those levels with well-tolerated safety profile. We see a lot of potential with L-Inestinib as the core part of expanding our SM franchise. Mast cells are well-established key drivers for many allergic and inflammatory diseases where there is still a high medical need. However, their role as therapeutic targets for inflammation has often been underappreciated in our industry. At Blueprint Medicine, we are building on our expertise in mast cell biology to identify targets and develop therapies for a variety of mast cell-driven inflammatory diseases. Last month, we presented for the first time more detail on the preclinical profile of BLU808, a profile that met or exceeded all our key criteria. It is potent on wild-type kids, highly selective, and it has drug properties compatible with one's daily oral administration. Next week, we will also share compelling in vivo activity of blue 808 in models of mast cell activation and asthma that support our development strategy into the diseases and beyond. We are on track to submit an IND in the second quarter of this year, and then we will initiate the SADMAD study. Finally, on the solid tumor part of our pipeline, we are advancing our CDK2 inhibitor, BLU222, one of the most exciting programs that we have in clinical development. BLU222 is an important value driver for Blueprint Medicine and one that we are looking to move forward in the context of a partnership. CDK2 is a clinically validated cell target with the potential to impact a large patient population with hormone-positive, HER2-negative breast cancer. Blue222 has a very encouraging profile with a broad therapeutic window and best-in-class selectivity. Our goal is to pursue it in combination with approved CDK4-6 medicines to prolong breast cancer patients' survival. We have had significant engagement on this program with a range of potential partners and those conversations continue very productively. With that, I will turn the call over to Mike to review our financial updates.
spk14: Thanks, Hurad. Earlier this morning, we reported detailed financial results in our press release. For today's call, I'll touch on a few highlights. For the full year, total revenues were $249.4 million, including $204.2 million in net product revenues from sales of Avakit, and $45.2 million in collaboration and license revenues. Of these full-year revenues, $71 million of avocate net product revenues were recorded in the fourth quarter. In 2024, we anticipate that we will achieve $360 to $390 million in avocate net product revenues. We expect that the US-XUS avocate revenue split in 2024 will be approximately consistent with what we observed in 2023, as we launch first in Germany before expanding to other countries as pricing and reimbursement is negotiated. Today's guidance illustrates we are on the path to capturing Avakit's peak opportunity of $2 billion. This revenue growth, coupled with expense discipline and focused investment, is what is accelerating our path to profitability. We do not anticipate any material collaboration revenue from existing collaborations in 2024. We are nearing a path forward for Gavretto in the US and plan to provide an update next week to coincide with the termination date for our existing agreement with Roche. We continue to expect that the wind down of the Roche collaboration for Gavretto will result in significantly lower year-over-year operating expenses related to Gavretto and will have no material impact to our overall expense plans in 2024. Our total costs and operating expenses continue to decline and were $735.7 million for the full year and $177.1 million for the fourth quarter. We anticipate our R&D expenses will continue to decline in 2024 as we wind down our early-stage EGFR clinical programs, partially offset by increased investments in our programs for mast cell-mediated diseases, specifically blue 808. We expect only a small increase in SG&A expense as we gain operating leverage from our commercial infrastructure and continue to drive significant increases in revenues. Last month, Kate shared our vision for maintaining financial strength at Blueprint. We have a focused spending plan that allows for continued reduction in operating expenses, while also investing in opportunities for longer term growth. We have prioritized capital allocation towards a portfolio built around mast cell-mediated diseases, solid tumors implicated by cyclin-dependent kinase biology, and ongoing early research efforts, as we believe that these areas provide the best opportunity to drive long-term value. Entering 2024, we are in an exceptionally strong and durable financial position with $767.2 million in cash. We are commercializing Avakit globally, a first and best in class medicine that is growing revenues on the way to blockbuster status. We expect our operating cash burn to further decline in 2024, even as we advance our portfolio of high potential medicines like Blue 808. Our pathway to profitability is becoming clearer, solidifying our financial profile and our ability to generate long-term value. With that, I'll now turn the call back over to the operator for any questions. Operator?
spk13: Thank you. At this time, I would like to remind everyone, in order to ask a question, press Start, then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question today comes from Brad Canino from Stiefel. Your line is now open. Please go ahead.
spk11: Good morning, and congrats on the quarter. It would be great to hear a description of how the team viewed its overall approach coming into guidance here. And then what you believe this guide now represents about the opportunity. And then I've got to follow up. Thank you.
spk02: Thank you, Brad, very much. We really appreciate that. Christy, do you want to take the question on guidance?
spk16: Sure, Brad. So as Kate said, we now have two full quarters of experience under our belts with Avakit. And those two quarters have set an incredibly strong foundation for the trajectory that we see for this product. We also have a sense now based on those two quarters of what some of the key drivers are of revenue performance. And Felina walked through those, you know, things like new patient starts, duration of therapy, which increasingly in a chronic market like this is becoming a very important driver of revenue growth as we have a strong and growing base of patients on therapy. And then factors like compliance, et cetera, free drug rates. And so as we've understood those variables and we understand what reasonable ranges are around those variables, that's really informed our guide, which like other external milestones, et cetera, that we communicate, we're really putting out so that we can help everyone understand what we think is a reasonable expectation for revenue this year. One important factor is that we are not even 12 months into this launch. And so one of the things that we're understanding as we go through are some of the quarter-on-quarter dynamics and how those things will play in. Felina talked about, for example, seasonality in Q4. We know that Q1 is often a quarter, you know, in many, and pharma generally, where you see impacts around compliance, gross to net, etc. So we're understanding how those factors will also play in as we think about the quarter-on-quarter ramp through the year. I think the important thing is we pull back is that this guide represents more than 80% year-on-year growth, again, for Avakit. And it is very, very clear, if you look at the revenue trajectory that we are on, that we are very much marching down that road towards a $2 billion peak. The trajectory is very much aligned with what we've seen with other compelling rare disease launches. we feel like we're in an incredibly strong place and very much demonstrating with each quarter, the opportunity that we've been saying is there in essence.
spk11: Great. And then I want to ask on slide seven, which was a very helpful visualization of the proportion of practices where only one or two patients have started Avakit, but what were the key execution steps that got that disclosed minority of activated accounts to three to 10 patients? And How are you going to replicate that in the remaining majority that are at one to two? Thank you.
spk02: Thanks, Brad. Selena, do you want to talk more about that dynamic? Yeah, thanks for the question, Brad. You know, we're really encouraged this early in the launch to see both strong signs of growing prescriber breadth across all specialties and settings, so HEMOC, AI, and an even split across academic and community. That therein represents how well that real-world experience with Avakit's strong profile is playing out and the receptivity. To the point of what's leading providers with their first experience to put on two or more patients, it's really as simple as they start Avakit and can see that positive benefit. It brings it to life in these providers of what's possible with patients. And that is leading to further repeat prescribing and deepening in these accounts. From an executional standpoint, I would highlight the efforts of our team that have the greatest amount of promotional focus on the providers who are seeing the greatest number of SM patients. And it's really the strength of both our data analytics that inform that targeting, as well as the strong relationships that our team has forged with these top volume prescribers on the ground.
spk00: Thanks, and congrats again.
spk13: Our next question today comes from Salveen Richer from Goldman Sachs. Your line is now open. Please go ahead.
spk17: Good morning, and thanks for taking my question here. Two on the pipeline. For Blue 263, following positive data from the Part 1 portion of the Phase 2-3 trial, In ISM, the next key event is in the Part 2 trial. How will you demonstrate the differentiation of this asset relative to Avakit in that portion? And then separately on the CDK2 program, we are going to see data in the first half. Just walk us through your expectations, what you present, and the benchmarks here for success and differentiation versus the other CDK2 inhibitors. Thank you.
spk02: Yeah, thank you for the question, Salveen. And, you know, I'll hand it over to Fuad. But, you know, we look at LMS as being a really core part of how we're going to maximize the long-term performance of our overall SM franchise. And as we've said before, you know, Avocates sets a very, very high bar. So I'll hand it over to Fuad to talk about how we're going to be able to bring LMS forward in an innovative way.
spk03: Thank you, Salveen, for the question. We presented at ASH a few weeks ago very robust data on the activity in terms of improving the symptoms with the validated TSS tool, put an anesthetic in patients with invalid systemic mastocytosis. We also showed very good safety and tolerability profile. So the Phase II POC is very solid there. we are and we continue to gain scientific information from pioneer we show some of it at this upcoming quad ai meeting we have information from real world evidence we also gained a very robust experience from a regulatory perspective not only in the united states but also in europe and elsewhere so all these items are being put together to really put together a differentiated strategy to develop an understanding for what we believe ISM patients will be in a few years from now, not what they were back in 2016, 2017. And I think you will see this reflected in our development strategy as we start the registrational trials. For the CDK2 question, I think we're happy that the study is continuing the dose escalation in the phase one. We're mostly focused on the combination, as I mentioned in my prepared notes, on the combination with CDK4-6 medicines. We will be presenting the early safety data from the combination of ribosiclib and BLU222, all with the characteristic and the profile of this combination together. The goal there is really to show that as we go to hormone-positive HER2 and negative breast cancer The goal is to show that we can combine safely, and that safe combination will drive the efficacy in the short and the long term. So stay tuned for data coming from the VELA study.
spk00: Thank you.
spk13: Our next question comes from Mark Fram from TD Cohen. Your line is now open. Please go ahead.
spk07: Thanks for taking my questions and congrats on all the growth in the quarter. Maybe going to that slide of the patient per prescriber, can you maybe give a sense of what's the opportunity from the breadth side of just deepening at those existing 400 treaters versus the depth of that, but then what's the opportunity more at expanding out to many more um prescribers and kind of related to that guidance um implies at the midpoint maybe like 100 25 150 patients per quarter kind of being added to the franchise versus the recent trends been more like 200 so i guess maybe can you kind of square those yeah thanks mark um i'm gonna hit over felina i also just wanted to reiterate some of the points that christy made about the guidance right you know we are
spk02: We are six months into a launch. We have not had an opportunity to see a full year of ISM revenue, and we're, you know, continuing to get a sense of some of the seasonal dynamics, and we're incredibly excited that this guidance puts us on the trend line for kind of comparable rare disease products that have just created, you know, really compelling markets. But, Felina, do you want to talk about some of the specifics? Yeah. Hey, Mark. So to your question about sort of the opportunity that this represents, you know, when we look at the top 400 treaters by SM patient volume, collectively they're seeing about 4,300 already diagnosed SM patients today. There's substantial headroom to grow both in breadth as well as depth just within these top 400. So when we look at the penetration of Only about 20% of these top 400 have yet prescribed Avakit, and we see this growing steadily in that sort of light, clean curve on the top. You also see that substantial opportunity for deepening, and we sort of talked about how the first positive experience leads to repeat prescribing, and that's both recognition of the clinical benefit, which is leading providers to Think of Avakit for a broader range of their patients. You know, they typically start with a more severe symptomatic type of patient and they're broadening that lens over time. You know, it's also exciting to see the growth in allergy penetration within and beyond this segment as they become familiar with Avakit, accustomed to the access process, and then again are sort of, you know, phishing and identifying those next patients as they're coming in for treatment. And so I think that the take-home there is, you know, we see significant potential for growth as this continues to accumulate over time, both breadth and depth. To the second part of your question, pardon me, you know, this is not a sort of 125 to 150 per quarter story alone. You know, I think that the limitations of patients on therapy at the end of every quarter, you know, it doesn't tell you When those new patient starts are happening, what the duration of therapy is for these patients, and we've highlighted how much more important duration will be as a contributor going forward in this launch. You know, it's a rare disease. We're early. There's variability month over month. As Kate alluded to, we're learning those quarterly dynamics. And so I think a better lens to take is probably that moving average. as well as a breadth of factors that are contributing to that revenue guidance that Christy just highlighted. You know, I think taken together, we're really pleased with the first two quarters. And when we look at the other blockbuster opportunity comparators that Kate mentioned, we're well within the pack of the trajectory that they've been on towards realizing that blockbuster opportunity for Avakit.
spk07: Okay, thank you.
spk13: Our next question comes from Ren Benjamin from Citizens JMP. Your line is now open.
spk05: Hey, good morning. Thanks for taking the questions. Congratulations on a great quarter and an even more impressive guide. Can you talk a little bit about the trajectory in Europe and maybe what contribution of the guidance is coming from Europe? I know you mentioned in the prepared remarks the launch will start in Germany, but you maybe just talk us through the cadence of how the countries come online and and who's you know doing the actual selling and just as a follow-up you know you've talked now about the two billion dollar you know peak revenues how do you think about you know how long it might take to get to peak revenues thanks yeah man thank you for both those questions because you want to talk about about european the peak actually sure sure thanks jen um so we were
spk16: Pleased to see the European approval come through before the end of last year, as I think everyone knows. And even more pleased to see that we saw ISM patients being treated in Germany even before the holidays, which was great to see. So we're out of the gates in Europe and ISM. Germany is really going to be the primary market that's driving ISM this year due to the cadence of pricing and reimbursement. So other markets will start to come online, but I would expect that more towards kind of end of this year into next year i think the important thing is if we're thinking about from a revenue perspective certainly our guide does encompass international and that's yet another variable actually as we think about sort of the the you know the guidance range as that launch gets underway my general expectation is that if you look at the percent of revenue that the international business contributed to avakit say in 2023 it's probably going to be roughly in the same range as the U.S. continues to grow very robustly. So, you know, 10-ish percent plus or minus is, you know, probably not a bad assumption there to think about Europe. In terms of the peak, you know, I think, again, Kate mentioned, you know, we're on a very clear trajectory that I think looks a lot like other rare disease launches. The time to peak in those launches is You know, it varies, right? These are never markets that are sort of up to saturation within two or three years and then flattening. I expect Avakit revenue to, you know, drive growth for Blueprint for several years to come. You know, one thing that I think is often interesting about time to peak is that there is often a positive relationship between time to peak and what the peak is. So, you know, we just talked about, you know, our view of the peak kind of coming up to $2 billion today. If you look at markets like HAE, if you look at even Jacopi or Solaris, those drugs have continued to grow and the peak opportunity has also continued to grow because the market grows underneath the drug launch. And so we'll see what happens. It wouldn't surprise me if our view of the peak continues to evolve as we move through this launch.
spk13: Our next question comes from Michael Schmidt from Guggenheim. Your line is now open. Please go ahead.
spk09: Hey, guys. Good morning. Thanks for taking my question. I had one on blue 808, you know, as we sort of head towards quad AI next week. How do you think about the overall development opportunity for this oral wild-type kit inhibitor and Talk a bit about how you see potential for differentiation from biologics that are in development for a wild-type kit. Thanks so much.
spk02: Thank you, Michael. We're really excited about Blue 808. Fuad, do you want to talk a little bit more about that? Thank you.
spk03: Thank you, Michael. So what's your question? First, I have to say I'm very happy today to see a proof of concept. have been achieved by inhibiting wild-type kit with a strategy using monochrome antibodies. So the POC is there. Now, Blue808 is a small molecule TK inhibitor that is highly potent wild-type kit, very selective, which will have a promising safety profile as we run the SADMAP studies, I believe. It is a very flexible way to administer the drug. And it will be very simple to give compared to all the strategies. The most important thing that, in my opinion, will be a key inflection point for us in group 808 is the safety and pharmacology data that we will gather from the SADMAP. After that, I think the POC of white type could be a superior strategy of inhibition in CSU has already been shown in some phase two data. Beyond CSU, or chronic spontaneous urticaria, there is cold-induced urticaria, as we all know. But overall, mast cell, as I mentioned in my earlier remarks, has been really an underappreciated target in type 2 inflammation. And now that we started knowing this in our industry, I believe the opportunity to leverage blow-weight weight and wild type 2 inhibition overall in the number of inflammatory disorders, such as type 2 asthma, or MCAS, and others, will be very important. I think patients would, at the end of the day, like an oral agent that we can buy up and down depending on the need for their diseases.
spk12: Yeah, and thanks, Rod. I just want to add one thing. This is Becker. I get the question a lot about how a wild-type kit inhibitor might compare with what is currently being developed. I think one thing to remember is we're talking about a very wide spectrum of disease with different manifestations and different tissues and different levels of severity. And using a blunt instrument like an antibody that might eliminate a number of mast cells isn't where you want to go with a lot of these diseases. And so we think that a tunable solution that we can titrate to what each patient or patient population needs is the right thing in these diseases. The other thing to remember is that most of these approaches, whether it's BTK or antibodies, don't directly address the true driver of the mast cell, which is KIT. BTK inhibits activation and degranulation, but really doesn't address the biology of the mast cells. And even the antibodies that are active in asthma are really an orthogonal approach to the disease methodology. So really, KIT is the Achilles heel of these diseases.
spk09: Thank you.
spk13: Our next question today comes from Derek Archilla from Wells Fargo. Your line is now open. Please go ahead.
spk04: Hey, good morning, and congrats on the results here. Just two questions from us. You talked about kind of an increasing rate of diagnosis for ISM. So I guess I'm just curious, do you think current estimates might be still too low for the number of patients out there and I guess what inning do you think we are in in terms of the increasing diagnosis rate? And then just as a follow-up, any additional kind of quantitative color on the current discontinuation rate you're seeing? Thanks.
spk02: Thank you, Derek, for those questions. Maybe just starting with the epidemiology. I mean, we updated epidemiology at J.P. Morgan. We've seen really nice growth in the diagnosis of SM. That is predominantly ISM because advanced SM patients are have a smaller or less intense diagnostic odyssey just given the manifestations of that disease. And we're in very early innings on understanding the size of this market, and we anticipate it will continue to grow very substantially over the next set of years, just as Christy talked about what we've seen in other rare disease launches. So do you want to talk about the durability we're seeing and how that becomes such a big part of the kind of future value prospect of Avakit? Yeah, sure. Derek, we've been really pleased to see the clinical profile of Avakit really playing out positively in terms of real-world experience. Compliance has been really high. And while we're really early in the launch, but very low discontinuation rates, which bode well for chronic durations of therapy. with Avakit and, you know, at this point in the launch as we continue to add more patients, that duration and the cumulative impact of adding more patients and more patients staying on therapy is going to be, you know, a substantial contributor to the revenue growth going forward.
spk04: Understood. Thank you.
spk13: Our next question comes from Laura Prendergast from Raymond James. Your line is now open.
spk15: Hey guys, congrats on the big beat today. Very exciting to see. Just two questions for me. First, what is driving these new patient starts? Do you think it's more so from the patient awareness side or education from providers during routine visits? And then my second question is, as you guys think about the CDK2 partnerships, is this focusing on just partnering the blue 222 asset or are you more so thinking about partnering the whole CDK2 franchise, the next gen and the degrader you guys brought up with JP Morgan?
spk02: Yeah, thank you, Laura, for those questions. Felina, do you want to talk a little bit about how we see the drivers and new patient starts? Then Christy, we'll hand it over to you to talk about this development around CBK2. Yeah, thanks for the question, Laura. So, you know, we entered the launch already with strong awareness among our targeted HEMOCs and AIs. You know, initially the drivers, obviously some of the HEMOCs were coming in with experience with Avakit from advanced SM. That was what we shared in some of our very earliest adoptions. You know, what's honestly been really exciting to see is an expansion in the breadth of new prescribing in hematology, oncology as well. You know, they're motivated. They're so much more excited about ISM and the opportunity and the need here, as well as an increasing proportion of allergy immunology who are prescribing. So significant growth to date there, significant headroom to grow, as we've said. To date, you know, the majority of that growth has been driven by provider engagement. We've talked about how out of the gate we have made available a lot of really patient-facing initiatives. And, you know, J.P. Morgan, we shared that we almost doubled patient awareness of Avakit, which activates them to speak to their provider about it. But I would say with the patient activation, that's early days, and that's even more headroom to grow on that front. We know patients are a critical stakeholder in this type of chronic disease where they're a key part of that shared decision-making with their providers. And so this year, we're really embarking on deeper direct-to-patient initiatives to promote, increase the awareness of Avakit, and really encourage them to seek options that can give them better disease control. And we're excited to share more about that. And we're also doing that, I should say, in a very resource-effective way based on our deep knowledge of where these patients are going to look for information, learn about the disease, and engage with providers. And one thing I would just add to that is you know, nothing is as impactful to patients as hearing from other patients who've been on the therapy. And now, as we see here today, we're over 1,000 patients, estimated 1,000 patients in the U.S., and we see, you know, patients who are on therapy sharing those experiences in chat rooms and online, and we also have some more formalized programming around that where we can connect patients who are on Avakid with patients who are considering it as a therapy, which I think is going to be very impactful this year. Christy, do you want to talk about the CDK too?
spk13: Sure.
spk16: So as you said, you know, we have a significant amount of strategic interest in the target, right? I think the target is clearly now one that's going to be incredibly important to any company that wants to be a player in the breast cancer market going forward. You know, the focus of conversations from a BD perspective is has been on, you know, 222 certainly. We have a next generation asset that, you know, could be a part of those conversations. We're exploring and open to different possibilities there. But, you know, I think there's also a lot of interest in our degrader platform broadly. And, you know, we really look at that as, you know, essentially a different modality and approach to addressing this target. So, you know, we'll see how these conversations evolve. Certainly open to different collaboration structures, but our overall goal is really maximizing the value of the franchise in totality.
spk15: Great. Thank you. And just when can we expect to see more, you know, more information on this, the greater platform?
spk02: Do you want to talk a little bit more about that?
spk03: We are very happy with the rapid progress that we made on our degrader platform. As you may remember, we started this a little bit more than two years ago, and today we have a number of degraders in development. We mentioned CDK2 degraders in the cycli-independent kinase space, but this is only the tip of the iceberg that Kate shared at the JPMorgan conference. I think down the road you will see, you know, good degraders, CDK2 clearly, other targets are key targets in the treatment of cancer. And we will really give more timeline and guidance as we get closer and ready to share that type of information.
spk02: And I think one other thing to mention too is, and I know we said it in our press release, I mean, we're also doing quite a bit of work in the mast cell and looking at other mast cell-driven targets as well. And so stay tuned on that as we move forward.
spk13: Our next question today comes from Mike Ohls from Morgan Stanley. Your line is now open. Go ahead.
spk01: Hi, good morning. This is Rohit Ohn from Mike. Thanks for taking our questions. Can you just talk about the breakdown of your 2024 guidance? How much do you attribute to ASM versus ISM? And then can you talk about any trends you're seeing thus far for 2024? Thank you.
spk02: Yeah, Christy, do you want to take the guys? I mean, one thing I'll say about 2024 is that, you know, we're a few weeks in here where, you know, this is our first experience with the Q1 dynamic that Christy mentioned that you see often in pharma with ISM. So we're just, you know, teams working through that. We'll have to see how that plays out. But, you know, really the underlying demand from both new and existing patients appears very strong this year and very early days. Christy, do you want to talk about the guidance?
spk16: Sure. So as you all have heard us say many times, we don't break out revenue by indication. However, ISM is clearly driving our revenue growth, right? You know, we've seen that clear inflection upon the first two quarters of launch. And I think if you look at the revenue trajectory we're on, it's obviously that growth is coming from ISM. Felina shared that, you know, more than 70% of our new starts are coming at the 25 milligram dose, which is an imperfect, you know, sort of way of looking at ISM, but I think is a relevant data point that, again, just highlights that, you know, we're really seeing the growth coming from ISM and would expect that to continue well into the future as we capitalize on this, you know, $2 billion opportunity for Avakit. As Kate said, we are early in Q1. You know, the one thing I would highlight is we were really pleased to hit the 1,000-patient mark in January, right? So I think that speaks to certainly the continued demand that we're seeing in terms of, you know, new patient starts, et cetera, that we're seeing. There's other dynamics in Q1 that, you know, I wouldn't be surprised if we faced our first quarter of launch. Certainly in my previous experience, especially in these types of, you know, chronic immunology markets, You do often see, you know, hits around compliance, growth to net, and co-pay dynamics, et cetera. So we're only part of the way through the quarter. Obviously, we'll see how that all plays out. But Q1 is often more of a challenging one, just if you look at quarter-on-quarter dynamics of the year.
spk13: Our next question comes from Matt Beigler from Oppenheimer. Your line is now open. Please go ahead.
spk06: Hey, guys. Congrats from us as well. Can you give us more granularity on the prescriber mix? I think last quarter we saw around 25% of new scripts from allergists. Like, has that figure continued to increase? And also, what's the contribution of dermatologists and GI docs as well? Thanks.
spk02: Yeah, thanks, Ned. I'll hear that, Selena. I mean, we've been really pleased to see that that contribution from allergist immunology, which is a key prescriber target for us, has continued to grow. Selena, do you want to talk more about that? Yeah, thanks for the question, Matt. We do continue to see the allergist contribution grow. It's now over 30%, probably in the mid-30s. I think we had talked about 20%, 25% previously. We're really excited to be motivating this prescriber base. Among allergists, it's also adoption among the academic as well as the community setting. They're finding Avakit easy. They're obviously very attuned to the symptom management and the quality of life impacts of ISM on these patients and are motivated to try a disease-modifying option. Among DERM and GI, in our experience, DERM and GI is really much more of a referring specialty, whereas allergists, immunologists, and hematologists, oncologists are the primary prescribing And that really has been our focus to date from a promotional standpoint. For example, when you look at the top 400 treaters, that is completely dominated by HEMOC and AI, and that continues to be our primary focus to drive the adoption where we're most likely to see repeat prescribing. When it comes to DERM and GI, I would say they do play an important role in diagnosis and multidisciplinary care. And so we do have other sort of arms of educating to help these specialties identify patients. Yeah, and just to add to that, you know, our medical team has done a really great job here, actually, and they've been focusing on some of these other specialties to point this point, but making sure we're finding kind of the right, you know, medical dermatologists who actually have an interest in SM, see SM patients, and tend to be kind of part of those patients' journeys. And so, you know, at the full group effort here, but as the allergy immunology and hematology oncology are going to be the drivers of this opportunity for the foreseeable future.
spk06: Thanks again.
spk13: Our next question comes from Ami Sadia from Needham. Your line is now open. Please go ahead.
spk08: Thank you. Let me add my congratulations on the strong quarter and guidance. But I had a follow-up on guidance, and I'm trying to square away what are some of the variables as I think about what the guidance implies. It seems to be that in fourth quarter you had added more than 200 patients, and guidance implies roughly a little over 100 patients per quarter. So what are some of the other variables we should be thinking about? What's your assumption with regards to discontinuation of patients from the thousand patients that you have had in January, and then how should we think about duration of treatment, and is there any other sort of important variable we should be thinking about? Thank you.
spk17: Yeah, thanks, Ami. Christy, do you want to dive into guidance a bit?
spk16: Sure. So, you know, Ami, I would say the guidance does not imply that. And, you know, I would, I know Mark asked a similar question earlier. there's a range of assumptions on each of these variables that you can kind of think about to get into that guidance range. We're obviously thinking about a number of inputs here, right? So new patients prescribed, discontinuation rates, both of those things kind of impact net patient ads on a quarter, factors like compliance, what our percent of free drug looks like, et cetera. And then we talked about the international launch. So You could probably get to more than a thousand scenarios if you play with those variables, depending on the assumptions. And I think there's some people at Blueprint that have probably done that. But what's safe to say is that our first couple of quarters of launch and our experience there really set the foundation for sort of what are the key assumptions that we're taking forward. And certainly one of those is that we're going to continue to have very steady, consistent uh new patient starts and you know discontinuation rates that are that are very much in line with what we've been seeing which you know support extended durations of therapy that we think could be multiple years um and so that you know that is sort of the form of the foundation of our assumptions based on the last two quarters of of experience that was where we started and then you kind of think about reasonable ranges and assumptions around each of those things and that really informed how we got to the guidance range
spk13: Our next question comes from Peter Lawson from Barclays. Your line is now open.
spk10: Great. Thanks for the update and guidance and all the details. Was there anything that happened during 4Q or the beginning of 1Q that kind of changes the view that GST and ASM revenues should essentially be flat in 24?
spk02: Thanks, Peter, for that question. I mean, the answer is no, but I don't know if you have any more color. I mean, we've been very just as consistent. I mean, we have said for maybe 18 months now that just contributes about $8 million a quarter. That is steady, Eddie. That is even very, very consistent quarter over quarter for a long period of time now. The FSM continues to have growth, and it's just not the same growth rate as ISM. I just want to talk about that.
spk16: Yeah, the short answer, Peter, is no.
spk02: The launch is not flattening. I think that our guidance is the clearest signal of that, you know, with over 80% of growth at the midpoint and all leading indicators being very positive.
spk13: Our next question comes from Colleen Cousy from Bard. Your line is now open. Please go ahead.
spk02: Great, thanks, good morning, and thanks for taking our questions. So I think you talked about 20% of the past 400 docs based on volume have prescribed Avakit. So in those 80% of docs that haven't, can you explain what's been the hurdle for them and what might convince them to start prescribing Avakit? Yeah, so Selena, you should dive in here. Just to be clear, that's been since the ISM approval, just to be clear. We're trying to track here, like, physicians who see SM generally, but we're looking at the, we can't, as Christy has said, you know, and Felina, we can't really distinguish between advanced SM and ISM all the time based on diagnosis codes. We do look at the dosage, 25 milligram, as an imperfect proxy for that. So this is really looking at, you know, the physicians who have been prescribing since, you know, Q3 and Q4, right? So I don't know, Felina, if you want to tell us. Yeah, thanks for the question. You know, this is a market where the cadence, the timing of patient visits is a really critical factor, and when they're able to engage and have that conversation about indolent SM with their providers. And so, you know, I would say at this point, this early in the launch, we're actually really excited to have had penetration into 20% of this group with room to grow the adoption both within that group as well as broadening beyond to those who haven't. You know, I would say awareness among this group is very strong. They are all, you know, having personally engaged a number of these providers, they are all motivated, they are excited about Avakit's benefit-risk profile, and they're waiting for those next patients to come in and have that conversation. That's helpful. Thank you.
spk13: We are coming up on the hour and going to end the call. Ms. Haviland, I turn the call back over to you.
spk02: Thank you, operator. And I want to thank you all for taking the time to join us today and thank you for your questions. And we look forward to seeing you in the near term here, many of you, at Quad AI in Washington, D.C. And so have a great day and we'll see you soon.
spk13: That concludes today's call. You may now disconnect your line.
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