speaker
Operator

Good morning. My name is Kelly and I'll be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicine's first quarter 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 Q&A session. If you'd like to ask a question during this time, simply press star followed by the number one on your cell phone keypad. If you'd like to withdraw your question, press star followed by the number two. Please plan to limit yourself to one question. Thank you. Jenna Cohen, please begin.

speaker
Kelly

Thank you and good morning everyone. Welcome to the Blueprint Medicine's first quarter 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 by going to the investor section of our website at www.blueprintmedicines.com. Joining today with prepared remarks are Kate Haviland, Chief Executive Officer, Selena Lee, Chief Commercial Officer, Becker Hughes, Chief Medical Officer, and Mike Lansdell, Chief Financial Officer. Fuad Namuni, President of Research and Development, and Christy Rossi, Chief Operating Officer, are also joining our call and will be available for Q&A. Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements and are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our reports filed with the SEC. I'll now hand the call over to Kate.

speaker
Kate Haviland

Thanks, Jenna, and good morning, everyone. Last year we introduced our 2027 blueprint a five year growth strategy to achieve what we call precision at scale. What lies at the heart of that vision is our ability to scale our business operations as we execute on commercial launches advance our clinical programs and bring even more innovative compounds into the clinic. Our progress in the first quarter of 2023 has certainly shown that we are driving performance and are poised to deliver tremendous value in the years ahead. First, we delivered strong commercial performance in Q1. We achieved $39.1 million in Avakit net product revenue for the quarter, driven by growth and demand, as well as by strong execution that resulted in favorable dynamics in the proportion of patients on commercial drug. In a moment, Felina will discuss in more detail our continued success in driving Avakit uptake in Advanced SM. Second, we continue to advance our pipeline. We are resuming the Vela trial of Blue 222 after working with the FDA to expeditiously resolve a partial clinical hold within weeks. Our team's fast progress and coordination with the FDA emphasize how well we collaborate with regulatory agencies in the face of an ever-evolving regulatory landscape and the urgency with which we are working to bring our investigational medicines to patients in need. Third, we advanced toward key data inflection points for our best-in-class innovative investigational medicines. We announced that next month at ASCO, we will present dose escalation data across three of our development programs. Becker will share more about what you can expect at ASCO later on the call. Blueprint is distinguished by having a breadth of new product opportunities across our pipeline, and while at the same time, we are heading into a major commercial launch with the expansion of our Avakit label. We are now a couple weeks out from our PDUFA date for Avakit and Indolin SM. Our field teams are in the market delivering on pre-launch activities and are ready to support healthcare providers and patients upon approval. This approval will further solidify Blueprint's leadership in SM. As the cornerstone of our SM franchise, Avakit establishes the bar as both the first and best in class therapy for ISM. enabling our team to accelerate the realization of what we are confident will be a greater than $1.5 billion market opportunity. Now let me turn it over to Felina to discuss our commercial progress with Avakit and the confidence we have in our go-to-market execution.

speaker
Jenna

Thanks, Kate. Good morning, everyone. We had a strong first quarter, generating Avakit net product revenue of $39.1 million. including $34.9 million in the U.S. Let's look at the key sources of revenue growth in more detail. Half of this growth was due to greater demand and strength across several fundamentals in our Avakit-based business. We grew the number of patients on therapy, exiting the quarter with approximately 520 patients on Avakit in the U.S. We added over 70 new accounts, increasing the breadth of prescribing to nearly 460 accounts with Avakit experience. And we continue to capture more than 75% of new patient starts and switches. The remaining half of this growth we saw this quarter was driven by a reduction in the percent of patients on free drugs, as some patients were instead able to receive Avakit commercially. We expect this benefit to be temporary and the proportion of patients on free drug to return to more typical levels by the end of Q2. We've also completed the hiring and training of our expanded field team members who have been activated and engaging customers since the end of the quarter. With the full force of our highly experienced team in place, we expect to drive continued growth in advanced SM, and we are ready for ISM. The year is off to a strong start, giving us great momentum as we head into the ISM launch. We have never been so ready to unlock the opportunity and deliver for many more patients living with SM. Let's look to that next. We are just 18 days from our PDUFA date in ISM, and the energy at Blueprint Medicines is electric. Our team is ready, the market is ready, and patients are waiting for Avakit. We have shared previously the three pillars of our launch strategy, healthcare provider engagement, patient activation, and patient access. We have consolidated our ISM launch preparations across each of these three areas. First, provider engagement. Among HEMOCs and allergist immunologists managing patients with ISM, we have grown unaided awareness of Avakit to approximately 40% or double what you would expect from industry benchmarks. Our field teams have profiled and built relationships with hundreds of high-volume healthcare providers to identify patients in need who are most likely to initiate Avakit. Second, patient activation. It's Something, our unbranded disease awareness campaign, is drawing thousands of people who are signed up to receive more information about SM and Avakit upon approval. And third, access. Our patient support program, Your Blueprint, continues to secure industry leading times to fill. And the 25 mg dosage strength is already in the channel with broad payer coverage. These three strategic pillars also frame the performance metrics that we'll focus on to frame our launch progress post-approval. For provider engagement and patient activation, our goal is to drive to a decision to treat with Avakit. And to measure our progress, we'll look at prescriber breadth, particularly in allergist immunologists, as well as growth in the number of patients in therapy. In a chronic disease like ISM, Growth in patients on therapy is an important lead indicator of continued revenue growth. We'll also be looking to maintain strong patient access for Avakit, and we'll track payer coverage relative to label through the ISM launch. As I shared with our team at our national field meeting last month, the SM story is a blueprint story. We are the pioneers. The opportunity is there, and we're ready to deliver for patients. We have the right medicine, the right team, and we are ready to launch. And with that, I'll hand it over to Becker, who will share progress across our burgeoning portfolio as we prepare for OSCO.

speaker
Kate

Thanks, Valina, and good morning, everyone. Blueprint has an exciting pipeline of potential first-in-class and best-in-class therapies targeting CDK2, EGFR, and other key targets. We operate on the premise that if the preclinical profiles of our compounds are borne out in the clinic, multiple blueprint medicines could become future cornerstones of treatment. We continue to make progress towards that goal, and last week we announced the acceptance of data presentations at ASCO that will provide an update on dose escalation as we work towards defining recommended doses across three of our Phase I-II programs. First, we have our initial clinical data for BLU222, our selective CDK2 inhibitor focused on advancing treatment of breast cancer and other CDK2 vulnerable cancers. The data at ASCO will demonstrate evidence of monotherapy safety and pathway modulation. The safety profile is particularly important here as we anticipate that the maximal benefit of BLU222 will be in combination with other agents such as CDK4-6 inhibitors like ribocyclic. Following ASCO, we will continue enrollment in monotherapy cohorts and, in parallel, continue dose escalation of the combination of ribocyclib in breast cancer patients. Second, we have our initial clinical data disclosure for BLU451 in EGFR exon 20 mutant non-small cell lung cancer. These data will show safety and early clinical activity, including evidence of CNS activity. that reinforce best-in-class potential for Blu451. We're continuing to work through dose escalation cohorts to optimize a dose and regimen, and ADASCO will show progress to date. Third, we will present updated dose escalation data on Blu945, both as monotherapy and in combination with osomertinib in a heavily pretreated EGFR mutant patient population. A key focus of this presentation will be the safety and tolerability of blue 945 in combination with osomertinib. This tolerability is remarkable given the failure of previous EGFR-targeted combinations with other EGFR inhibitors and osomertinib due to additive wild-type EGFR toxicity. We are on track for our other important pipeline milestones as well, including nomination of a development candidate targeting wild-type kit for chronic urticaria in the middle of this year. We look forward to sharing more data next month as we reach these milestones and make progress towards our 2027 blueprint. With that, I'll turn the call over to Mike to review our financial updates.

speaker
EGFR

Thanks, Becker. Earlier this morning, we reported detailed financial results in our press release, and I'll touch on a few highlights from the quarter. In the first quarter, total revenues were $63.3 million, including $39.1 million in net product revenues from sales of Avokit, and $24.2 million in collaboration and license revenues. As Felina noted, we saw continued growth in Avokit demand that helped drive quarter-on-quarter revenue growth, as well as one-time free goods favorability that we expect to unwind in Q2. We are pleased with our progress earlier this year and are now updating our Avakit net product revenue guidance for 2023 to reflect the patient mixed favorability that we observed in the first quarter. We now anticipate approximately $135 to $145 million for our currently approved indications of advanced SM and GIST. Based on our PDUFA date, Q1 is our last full quarter of revenue prior to our anticipated ISM launch. As we have noted, we do not plan to issue guidance including ISM this year, as it will be too early in the launch to do so. We expect to see continued growth in advanced SM through this year, driven by patient demand. Our anticipated label expansion into ISM will be the main driver of Avakit growth in the second half of the year. Turning now to expenses, our total costs and operating expenses were $187.5 million for the first quarter. Financial discipline remains a priority for Blueprint, and we saw that play out as we showed quarter-over-quarter operating expenses decline for the third consecutive quarter. Similar to our expense guidance from last quarter, we expect a slight increase in operating expenses in the first half of the year related to launch preparations and clinical pipeline investments, and then expect a quarter-on-quarter OPEX to be relatively flat for the remainder of the year. In February, we announced that we are in the process of regaining development and commercialization rights for Gavretto from Roche. We do not anticipate any incremental OPEX impact in 2023 related to this transition. We have initiated a process to re-partner Gavretto as we believe that this is the best model to drive value going forward as we prioritize our focus on SM. We are in a unique position in that Avakit is a breakthrough medicine that has been significantly de-risked And Blueprint Medicines has a clean growth story as we continue to generate commercial revenue and make progress on multiple assets across our clinical pipeline. We remain in an exceptionally strong financial position with nearly a billion dollars in cash and a planned reduction in our annual operating cash burn, a trend that we expect will continue as we grow revenues and remain disciplined around operating expenses. This continued financial strength will help fuel our 2027 blueprint to achieve precision at scale and create transformative value for patients and shareholders. With that, I'll now turn the call over to the operator for questions. Operator?

speaker
Operator

Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your cell phone keypad. Thank you. The first question comes from Young of Jefferies.

speaker
Kate

Please go ahead. Could you talk about what types of patients in advanced SM population actually drove increased uptake and based on while you saw quarter over quarter, do you think third quarter last year is kind of a anomaly, kind of a seasonality that you might expect?

speaker
Kate Haviland

So thank you, Yoon. So I think what you're asking is, we lost the first part of your question, but I believe what you're asking is what was the mix of kind of the base growth in terms of advanced SM patients, and then just the dynamic quarter over quarter. And Yoon, I think what we've mentioned before is that advanced SM is very much a rare disease, and we're going to see lumpiness quarter over quarter. It's really kind of what we see over the course of a year that's going to be important there, and we're happy to see the dynamics that happened here in Q1 and to be able to raise our guidance to 135 to 145. But, Felina, do you want to talk about the mix in the advanced SM growth?

speaker
Jenna

Yeah, thank you. And so starting with the mix, we were really pleased to see growth across many subtypes of advanced SM. especially in the subset of patients who have SM-AHN, which is the most common subtype, where we saw a 15% growth in the market share of Avakit into patients with SM-AHN. To your question about quarter-over-quarter growth, you know, again, I'd say we were extremely encouraged to see 30% growth in Q1 coming out of Q4. As we've talked about, growth in advanced SM is something that we continue to see, albeit at a more measured pace than in the early stages of launch. But our greatest growth driver ahead is our pending ISM launch with approval, which we expect to be the most significant source of advocate growth going forward.

speaker
Kate

Thank you. Follow-up to ISM. So in the past, you mentioned that you were expecting a broad label from the FDA. I don't know if you want to make a comment as we get so close to the FDA action date, but is that still what you are expecting, broad label for ISM?

speaker
Kate Haviland

So, hey, Yoon, this is Kate. I don't think we've talked really about what we expect from a label perspective on ISM. And as you said, you know, this close to the action date, we don't really, you know, talk about the kind of the discussions we're having with the regulatory agencies. Things are on track. We're having a good collaborative discussion and, you know, we're on track for our PDUFA.

speaker
Kate

Thank you.

speaker
Jenna

Thank you.

speaker
Operator

Thank you. As a reminder, when preparing to ask a question, please press star followed by the number one. Please plan to limit yourself to one question. Thank you. Our next question comes from Selveen Richard of Goldman Sachs.

speaker
Selveen Richard

Please go ahead. Thank you for taking our question. Just one on the guidance. Are there any other underlying assumptions outside of patient mix that's driving the raise? And then just quickly on the ISM launch, could you just walk us through how you're planning to target the physicians that have the patients that are adequately controlled with the best supportive care? Do you have a mechanism in place for switching those patients? Thank you.

speaker
Kate Haviland

So thank you for the question. Just talking about the first part of your question, which is, was there a change in the mix? I mean, really, the... 30% growth that we saw was a composition of two different dynamics. One is the increase in the base business, which Felina mentioned in her prepared remarks, and the other was a shift in the free goods, the number of patients on free goods, which is a temporary shift. The team did a great job to find a way for the patients who would have traditionally been on free goods in Q1 to get into paid therapy just for the quarter. And so that was a very innovative thing our team was able to do and certainly provided tailwinds in the quarter. But the growth that we saw was, it's very much in line with what we've seen before. And there was really no change in patient mix and in line with how we thought about our previous guidance. Polina, do you want to talk about ISM?

speaker
Jenna

Yes, I think I heard your second question is really around how are we targeting providers who have patients in need and what are we doing to activate that urgency to treat and sort of move from symptom-directed polypharmacy alone to treatment with Avakit. And so really a key focus of our strategy is to target the highest volume AIs and hemoks. The top 350, as we've talked about, are treating approximately 1,500 already diagnosed moderate to severe ISM patients who today are actively engaging with the healthcare system, seeing their provider on average a couple of times a year. In addition to that, we have a substantial armamentarium of tools, right? So every territory is not created equal, and so where there are those high-volume centers, our ABMs are targeting them. They also have extremely powerful data capabilities, as we've talked about, in terms of patient journeys that are now equipped for them to be able to see those most severe ISM patients who are engaging with their providers. And on top of that, leveraging their local intel and relationships with customers. The second part of your question I think was around kind of how to drive that switching. I might reframe that actually as sort of activating for the urgency to treat with Avakit. And again, I think that's really a combination of conveying the burden of disease with providers and there's substantial literature on that front. And secondly, really engaging with patients and caregivers to activate them and let them know when a new treatment option becomes available.

speaker
Andrew Barron

Thank you.

speaker
Operator

Thank you. Our next question comes from Ren Benjamin of JMP Securities. Please go ahead.

speaker
spk05

Can you talk, just maybe quantify a little bit of the provider engagement stats that you mentioned? You know, you talked about growing unaided awareness, growing to 40%. Is that 40% of the top 350? I mean, what's the denominator that we should be thinking about? I guess ultimately as you get closer to launch, is this something that can go even higher to 60% to 80% or do you think this is kind of plateauing here? And just as a follow-up, can you just give us an update as to how payer discussions are progressing? Thank you.

speaker
Kate Haviland

Thanks for that question, Rand. We are really pleased with where we sit today and the receptivity of both the data coming out of Quad AI and just as Felina mentioned about how physicians are aware of this innovative medicine that is possibly coming to them. But Selena, do you want to talk about some of the details on that?

speaker
Jenna

Yeah. So I think the first part of your question was around the awareness metric. So again, I think we're just really encouraged to see unaided awareness at 40%. And that's really among the hemocks and the allergist immunologists who are actively treating ISM patients today. So including and beyond the top 350 providers. We saw a strong bump in this awareness coming out of Quad AI, especially among the allergist immunologists. And in addition to that, the aided awareness of Avakit is well above 60% at this point. So I would say it's certainly not plateauing. You know, there's further work to do as we get into sort of lower volume and out towards sort of the tail of treaters and referrs. The second part of your question, I think, was getting at access and sort of maybe what our expectations are in terms of access with payers upon launch. You know, so as we've said, based on our payer insights and sort of the current performance of what we see, we anticipate and will be really focused on maintaining strong patient access post-approval. You know, all five doses of Avakit are on the market, including the 25 milligrams. And we are certainly seeing strong reimbursement. There's one code for SM as well. So for the, you know, small proportion of scripts with ISM that we are seeing today, we are seeing those getting, you know, good coverage as well.

speaker
Operator

Thank you. Our next question comes from . Please go ahead.

speaker
spk17

Great. Thanks so much for the question. Congrats on the quarter. I want to ask on the ISM launch, really after meeting with physicians since Quad AI, hear your thoughts around the preliminary thoughts, I guess, around how ISM treatment durations may shape up in the real world. I particularly get questions on the 40% of trial patients that received less than a 30% symptom reduction after a year in If that cohort in the real world may be at risk for shorter durations. Thank you.

speaker
Kate Haviland

So, Brad, thanks for your question. And, Becker, can you weigh in on that?

speaker
Kate

Yeah. I think it's, Brad, it's important to remember that TSS score is not a binary measure. Patients derive benefit on their most positive symptom. Sometimes that includes the total TSS score going down. Sometimes it doesn't. But for most of the patients on the study, derived benefit. And what's really important is that patients at all TSS levels have remained on drugs for a very long time in the study, including the patients from part one that remain on after many years. So I don't think we're in a position yet to say what the duration is going to be. This is going to be

speaker
Kate Haviland

um you know lifelong treatment i believe for for many patients um and then we're going to continue to learn of all the ways that that ava kit benefits patients beyond what's measured by the tss score and i would just add brad i mean we've said this before is that when you see the the 96 of patients who are on ava and in part two roll over into part three and continue on therapy in the context of a clinical trial um you know with having to be part of a protocol I mean, I think that's really a testament, and patients really vote with their feet. We've also mentioned that as we've gone out broadly with this data, you know, the response rate criteria that we put in place is really not relevant to the AI community. It's certainly something that hematologists, oncologists are familiar with, and we certainly have strong data there that we can discuss with them, but AIs don't really think about that response rate as a metric by which they think about patient benefit, so.

speaker
Operator

Thank you. Our next question comes from Mac Fram of TD Cohen. Please go ahead.

speaker
Mac Fram

Good morning. This is Ernie Rodriguez for Mark. Congratulations on the quarter. Thank you for taking my questions. We just have a follow-up on the IVAC bid and the guidance. So you mentioned some of the growth came from a reduction in the percentage of patients on free drugs. I was wondering what exactly drove that and why do you think it would be temporary? So how should we think about it going forward? And then also wondering if you saw any off-label use of the drug, given that we're getting so close to the expected FDA approval in ISM. And then a second question on guidance. Have you guys determined how you plan to address advocate guidance once the label is expanded? Thank you.

speaker
Kate Haviland

Thanks for those questions, and appreciate that everyone has a lot of questions. We're going to try to keep this just given the queue. So maybe I'll answer your last two questions quickly, Ernie, and then we can get Felina to weigh in on how we thought about the growth. So no, we do not anticipate providing any additional guidance upon the ISM approval It's going to be early days in a launch, the first therapy ever approved in this disease state, so we will not be issuing guidance. And then we've had very little off-label usage at all. So that remains the same as it was last quarter. We have a few patients, but not many. So maybe, Felina, can you weigh in on how we've thought about the kind of growth and what happened with the free goods patients?