Blueprint Medicines Corporation

At this time, I'd like to welcome everyone to the Blueprint Medicine second quarter 2024 financial results conference call. My name is Bruno, and I'll be operating your call today. 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'd like to ask a question during this time, simply press star followed by one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. please remember to limit yourself to one question. I'll now hand over to your host, Jenna Cohen. Please, you may begin your conference.

Thank you, Bruno. Good morning, everyone, and welcome to Blueprint Medicine second quarter 2024 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 Investors section of our website at www.blueprintmedicines.com. Joining me today are Kate Haviland, Chief Executive Officer, Felina Lee, Chief Commercial Officer, Christy Rossi, Chief Operating Officer, and Mike Lansdell, Chief Financial Officer. Swadna Muni, President, Research and Development, is 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. Your caution not to place any undue reliance on these forward-looking statements and Blueprint disclaims any obligation to update such statements. I'll now hand the call over to Kate.

Thank you, Jenna, and good morning, everyone. This quarter marks a milestone. one full year since the US approval of Avakit for indolent systemic mastocytosis. At the beginning of the year, we laid out that our top priority as a company is Avakit's launch execution. And we have delivered yet another very strong quarter of revenue, one that exceeded our own expectations as we continue to build this new rare disease market. This is one of the most exciting rare disease launches happening today. as each quarter makes Avakit's path to a greater than $2 billion peak revenue opportunity that much clearer. Our conviction in Avakit's multi-billion dollar market opportunity is based on the positive reception and adoption of Avakit we are seeing across physicians, patients, and payers as we successfully change the treatment paradigm for patients with SM. Avakit offers a unique and multidimensional value proposition a medicine that targets the source of SM, driving deep and durable benefits, while importantly, also being very well tolerated, enabling patients to stay on Avakit over the long term. As we increase the number of ISM patients on therapy, the cumulative effects of patients staying on therapy will be a significant driver of revenue this year and beyond. Today, we're raising revenue guidance based on our strong performance in the first half of this year. With a full year of launch now under our belts and our growing experience with the range of factors that drive our business, we have more confidence in this guidance and how we'll end the year. Felina will discuss these factors driving commercial performance in more detail in a few minutes. We have just started scratching the surface on reaching the patients with SM who could potentially benefit from treatment with Avakit. And we expect that Avakit will drive continued and sustainable revenue growth over the long term, enabling us to invest in our prioritized areas of research and development, focused in mast cell-driven disorders, where there is high medical need in large patient populations, and where we can leverage our expertise and infrastructure to drive the next phase of value inflection at Blueprint Medicine. We are pleased to have received IND clearance for Blue 808, our wild-type kit inhibitor, and we have initiated the Healthy Volunteer Study. We believe Blue808 has the potential to impact core biology across a number of mast cell diseases by targeting kit. Christy will review our progress to date across our entire portfolio later on the call. With a foundation of significant and growing revenue from Avakit, a next wave of therapies in our pipeline that address important medical needs and even larger scale patient opportunities, and a financial profile anchored by sustainable top-line revenue growth. We have the financial flexibility to invest in innovation, and we have compelling opportunities in our portfolio that will drive the next wave of value creation as we continue building Blueprint Medicine. Mike will add more color to our financials to close us out. With that, I'll turn it over to Felina for more detail on our commercial performance. Thanks, Kate.

In the second quarter, Avakit achieved $114.1 million in net product revenue, including $101.5 million in the U.S. and $12.7 million ex-U.S. Avakit revenue has grown by more than 185% year over year, reflecting our strong execution as we capture this unique rare disease opportunity. Second quarter growth in the U.S. was driven by continued positive trends across key business fundamentals, growth in patients on Avakit, driven by new patient starts and low discontinuation rates, high compliance, and continued upside in our commercial versus free goods mix. And our international team had an exceptional quarter. Let's take a closer look at what drove our business this quarter and what we expect to see for the rest of the year. We continue to see strong and steady growth in patients on Avakit driven by new patient starts and low discontinuation rates. We've seen a consistent pace of new patient starts over the first half of the year. These new patient starts are coming from an expanding Avakit prescriber base that continues to grow in breadth and depth. We continue to see low discontinuation rates consistent with a multi-year duration of therapy in ISM. Once patients start Avakit, They're staying on treatment. This will continue to drive our base of patients on therapy and be an increasingly important growth driver over time. Patient compliance also remains strong, further reflecting how the compelling clinical profile and pioneer is playing out in the real world. Second, free goods favorability was another source of strength this quarter, reaching an average free goods share of just below 20% since ISM launch. Our free goods share has been a significant source of strength in the first half of the year as the mix of patients on Avakit skews increasingly towards ISM and as the IRA Part D redesign has enabled more patients to access paid therapy. Finally, the strong trends we have seen in our U.S. launch are playing out in our international business. Our international team is driving strong performance with the ISM launch underway in Germany where the prescriber base is growing across both academic and community settings. And we're working to bring Avakit to market for ISM in additional countries in 2025, both through our own global footprint and through distributors. We're just getting started and expect our international business to be an important contributor to our growth going forward. Our year-to-date performance across key growth drivers has been strong, And our conviction in this blockbuster opportunity has never been stronger. As we enter the second half of the year, we expect continued strength across the business. And we're also keeping our eye on a few things, like seasonality, something common across our industry that we anticipate will impact the timing of patient starts. Our share of free goods, which we believe has stabilized and will remain at a steady rate for the remainder of the year. and the revenue impact of German pricing negotiations, which would be finalized at the end of the year. The most important part of seasonality, now that we understand it better, is that we don't expect it will impact annual performance. Patients are out there, and it's not a question of if, but when they'll start on Avakit. And once they start, we know they'll stay on for a long time. As we enter the second half of the year, We're focused on driving increased breadth and depth of prescribing and activating patients to seek treatment. Let's look at these areas next. As I mentioned, we continue to expand the breadth and depth of the Avakit prescriber base. Prescriber breadth is growing steadily across all specialties, including allergy. Prescriber depth is growing as first positive experiences lead to repeat prescriptions. For the first time this quarter, we're seeing prescribers with more than 10 patients on therapy with Avakit, and we see a clear trend of experienced prescribers broadening their view of who's an appropriate patient for Avakit. Long-term safety and efficacy data are highly motivating for providers and patients, which is why we continue to show that Avakit's clinical profile is durable with long-term follow-up data. This past quarter at the IACI conference in Spain, we showed that Avakit leads to deep and sustained symptom alleviation and a well-tolerated safety profile, now over multiple years of treatment. The chronic burden of ISM is often underappreciated, and a key part of our ongoing strategy is redefining expectations for control with patients and providers. Trying a new treatment is a big step for patients who are accustomed to managing their disease by limiting their daily activities, taking symptom-directed medications, and avoiding triggers. Patients living with ISM have made a lot of compromises. Oftentimes, they don't realize until after they've started Avakit how good their lives can be again, but they need to get ready to make that change. What we've been hearing in this first year of launch is that we are beginning to change the experience of living with ISM. Patients are sharing that Avakit is life-changing, enabling them to return to work, school, and family activities, reducing unpredictable symptom flares, and helping them feel better. And they're starting to tell each other about it. This patient-to-patient dialogue is very powerful, and we're scaling several key initiatives to enable this further. Building on the success of our virtual patient educational series, we recently launched our first in-person patient ambassador program in conjunction with the Mast Cell Disease Society's Mast Cell Con last month. Throughout that meeting, it was incredible to see firsthand the impact of patients sharing experiences with other patients. In closing, our first full year of launch has been highly successful and sets us firmly on the path to achieve a more than $2 billion opportunity for Avakit. We are proud of the effort our commercial and medical teams have put forward. We understand every step of the patient journey and the education and support patients and providers need. Our strategies are working and Avakit is making a difference. And we see a critical mass of both provider experience and patient activation that creates a nice compounding effect and bodes well for future growth. With that, I'll turn it over to Christy.

Thanks, Melina. In addition to the continued execution of the Avakit launch, we are focused on driving the next wave of innovation and growth at Blueprint Medicine. And today, I'd like to speak briefly about progress against our 2024 portfolio milestones. Let's start with the franchise we are building in mast cell disorders with Avakit, L-Anastinib, and Blue808. SM is a multibillion-dollar market opportunity, and we are committed to extending our leadership position and patient impact. Through our engagement with physicians and patients and the unparalleled depths of clinical data and real-world experience we have amassed, we have unique insights into the biology of SM and the next frontiers of innovation that can move us further towards our goal of eradicating this disease. We have been advancing L-anestinib, our next-generation KIT16V inhibitor, to the registration-directed Part 2 of the HARBOR study. We are on track to initiate part two of Harbor by year end. And as we do, we will be sharing more details about our plans. In addition, today, I'm happy to share that we've reached an important milestone in our efforts to bring blue 808, our wild type kit inhibitor, to a broad range of patients suffering from allergic and inflammatory diseases. We've moved blue 808 into the clinic with the initiation of our healthy volunteer study. and are eagerly anticipating initial data early next year. We believe this data could mark an important inflection point for the program, supporting our hypothesis that we can achieve tunable biological activity with a wide therapeutic window and enabling us to rapidly establish clinical proof of concept in a range of mast cell disorders, including and beyond urticaria. Our goal is to raise the bar on what a disease-modifying treatment can offer, considering the full patient experience, efficacy, safety, and the burden associated with administration. And we will share more about our development strategy in the second installment of our scientific webinar series planned for this fall. Mass cell disorders are the key pillar in our R&D strategy. In our second focus area of cell cycle inhibition, The clinical data we are generating with BLU222 is validating the importance of CDK2 as a target and gives us conviction that the next frontier in the treatment of breast cancer is the complete inhibition of the cell cycle achieved by targeting cell cycle regulators in combination. We believe that the optimal approach to bring BLU222 forward to patients is in the context of a partnership to maximize the transformative potential of this target and these discussions are ongoing. We are also making significant progress advancing cell cycle degraders, which are poised to represent the first development candidates out of our targeted protein degradation platform. This platform was established just a few years ago under Percy Carter's leadership and is already an integral part of our R&D engine across both allergy inflammation and oncology. With that, I will turn it over to Mike.

Thanks, Christy. Earlier this morning, we reported detailed financial results in our press release, and for today's call, I'll touch on a few highlights from the quarter. In the second quarter, total revenues were $138.2 million, including $114.1 million in net product revenues from sales of Avakit, and $24 million in collaboration, license, and other revenues. As Felina noted earlier on the call, we are raising our Avakit product revenue guidance and now expect to achieve $435 to $450 million in net product revenue in 2024. This guidance update continues to reflect our evolving view of the fundamentals driving the business. Patients on therapy, including a greater understanding of the role that seasonality plays in ISM, free goods favorability and its impact on revenue growth in the second half compared to the first half of the year, continued strength and compliance and duration of therapy, and the potential impact of the ISM price negotiations in Germany. First half growth trajectory was influenced by stronger than expected performance with upside across a combination of variables that drove results above the strong and steady growth that we have always expected. Throughout the year, we have talked about our philosophy in setting guidance and our goal of providing estimates that are relevant and reflective of our own expectations. We've also talked about the inherent challenges in setting guidance so early in a launch into a brand new market that we are building. I'm thrilled that our performance year to date has enabled us to raise guidance twice. And we are also now in a position to have better insight into the variables that will drive performance in the second half of the year and the range of likely outcomes on those variables. And this is reflected in our update today. Turning to expenses, our total cost and operating expenses were relatively flat at $181.2 million for the second quarter. And we anticipate that both our research and development expenses and our SG&A expenses will remain relatively flat for the remainder of this year. We remain in a solid financial position with $868.5 million in cash on hand. And with the ongoing success of the Avocate launch, and our commitment to manage operating expenses, we are in a great position to continue to drive long-term shareholder value. With that, I'll now turn the call back over to the operator for questions.

Operator? Thank you.

Ladies and gentlemen, if you'd like to ask a question, please press star 1 on your telephone keypad. That's star 1 on your telephone keypad. To withdraw your question, press star followed by two. And please remember to unmute your microphone when it's your turn to speak. Our first question comes from Savine Richer from Goldman Sachs. Savine, your line is now open.

Good morning. Thank you for taking my question here. With regard to the ISM launch here, now that you're a full year post-approval, How are you thinking of, you know, quarterly dynamics here? And could you discuss any impact you've seen to date from the Part D redesign and how this might evolve? And for your wild type kit, should we expect healthy volunteer data this year or early next year? And how are you thinking about the importance of this data set as it relates to PKPD, such as potential for flexible dosing? Thank you.

Thank you, Salveen, for the question. Felina, why don't you talk a little bit more about those quarterly dynamics and how we're seeing some of the Part D reform impacting that? And then, Fuad, if you can talk a little bit more about the Wild Typekit healthy volunteer data, that'd be great.

Hi, Salveen. First off, I think we're just really pleased with yet another strong quarter in our launch, and this has strengthened our conviction to the greatest degree I think we've ever had. really to see the degree of provider feedback, the growing prescriber base, and how activated patients are coming. These are the factors that will really portend towards the peak potential of AVA kit. Speaking to the quarterly dynamics, I think as we dig in and learn more about this chronic rare disease opportunity, one of the things that we're learning is to expect some seasonal dynamics, right? And so for patients with a chronic rare disease, Trying something new is really a big step, and they may be more hesitant to do that around times of vacations and holidays. We saw some of this dynamic last year around Q4, but more importantly is to note that the opportunity is absolutely there. The patient funnel is strong. There are a number of patients in need who are not well controlled, and it's not a question of if, but when they go on therapy. The timing of when they start depends on a few things. We talked about seasonal impacts. We talked about the timing of when they happen to have patient visits. Another component that's important is how they're feeling when they show up at that visit, which impacts the provider's ability to recognize the disease burden. And so importantly, the opportunity is absolutely there. It's not a question of if but when. If a patient doesn't start in August, they will likely start at a subsequent visit. And when they start, we know they'll stay on Avakit. These are the most important factors that give us confidence in that peak opportunity. To your question about Part D redesign, we've highlighted the proportion of free goods as one of the important fundamentals in our launch, and that with the strong execution of our team, we've been able to convert a number of patients over to access commercial therapy. We believe at this point that the proportion of free goods has stabilized. We've reached just under 20% on average launch to date, and we expect this to remain relatively stable for the rest of the year.

Maybe just one thing to add on that, Sylvain, is that as we think about ISM, really, you know, this is much more of an I&I type of footprint in terms of payer mix. These patients tend to skew younger, have more commercial payer, and so that's obviously part of the favorability that we're seeing as well. Fouad, do you want to move on to Blue 808?

Yes, thank you, Kate, Solveig. So I'm really very happy that the FDA review process was very smooth and that now the Healthy Volunteers study is up and running. We expect the SADMAP data to be available early in 2025. And it is an important milestone, an important inflection point for us to show the PK, the PD, and the safety data in Healthy Volunteers. We all know While Typekit as a target in chronic spontaneous urticaria or CSU, now in cold-induced urticaria has been already demonstrated. So showing a good profile that's consistent with our expectations from 808 will be really a major inflection point for us. So that data will be very important early next year.

Our next question comes from Brett Canino from Typhoon. Brett, your line's now open.

Thank you, and nice quarter. You know, one of the main discussions I still have is around how to think about the right eligibility proportion for Avakit. And there is this thesis, and you even talked about this, that this number is likely dynamic over time, where you might see that the threshold for use around disease severity declines with physician experience. So I'm looking at this, and you now have initial practices that have been installed for a year. You're highlighting that many of the practices have up to 10 or more patients on therapy. So I want to ask, what is your initial read? You know, what are you seeing on the ground of the type of patient that's starting therapy today at those legacy practices where there is good advocate experience? And what is your vision for where this eligibility number goes long term? Thank you.

Thank you, Brad, for that question. And it's a great question, as we really do see this as a growing overall pie. Felina, do you want to talk a little bit more about that?

Yeah, thanks, Brad. I think your hypothesis is really on point, and we really do see a trend towards providers with that first positive experience on Avakit where they're likely to select the one or two most symptomatic patients within their practice. We are really seeing a trend towards them broadening the lens on who's an appropriate patient for Avakit towards patients who may have, you know, one or two predominant symptoms that are significantly impacting their quality of life. You know, having interacted with a number of these providers firsthand into our field intelligence, we see multiple signs of that deepening, and we also see it reflected in our claims data as we look at the degree of symptom burden, ER visits, and other measures of disease severity what we're starting to see is a real trend towards that broadening lens of providers opening their minds to who's eligible for Avocate. And so we think that portends very well towards us achieving the peak opportunity.

And maybe just to add on to that, Brad, a couple of things. You know, one, to Felina's point, really almost every SM patient in the United States is eligible for Avakid. And, you know, we have such a broad label. And I think to Felina's point, what we're seeing is that both prescribers and patients are widening their lens on the benefits of treatment, which, you know, increasingly we're beginning to understand go beyond just, sort of resolution of symptoms, but really addressing some of the underlying drivers of the disease that we think could have longer-term implications for these patients. The other really interesting aspect of this market is sort of our increasing understanding that the prevalence may actually be underestimated and may be growing, right? So we know that the number of diagnosed patients has been growing over time. There's also increasingly data out there that suggests that the true prevalence of the disease could be twice what we thought it was. I think the dynamics are really interesting in how they will play out to drive what ultimately could be a peak potential that's even greater than what we've estimated to date.

Our next question comes from Mark from TD Cohen. Mark, your line is now open.

Thanks for taking my questions, and congrats on another strong quarter for Avakit. Maybe over the last year or so, it's been growing like 15, 20 million a quarter at least. Your guidance seems to assume quite a significant slowdown from that, I guess. And then all the commentary around huge patient population still to access and everything would be kind of pointing to the opposite. I guess, is there some sort of dynamic beyond just maybe people pushing out a month or two start because of summer vacations that is driving that? Was there some sort of stocking impact in Q2 or something else we should be thinking about? And then maybe longer term, you know, to the last point of Christie is that maybe this opportunity is even bigger than $2 billion. I guess, what do you need to see to, what needs to happen to kind of give you confidence that it is two and a half or three or something bigger than two?

Yeah, thank you, Mark, for the question. Felina, do you want to talk a little bit about how we've considered the range of variables that inform guidance? I mean, maybe I'll just clarify very quickly. There is no stocking impact, Mark. We actually, like we've mentioned this on other calls, where we actually have kind of guidance and contractual guidelines within our channel that doesn't allow for that. But maybe, Felina, you can talk a little bit more about how we're thinking about guidance in those range of variables.

Yeah, and I think maybe first off, Mark, to your question about what do we need to see, I think it's exactly what we're seeing, which is giving us that conviction in the peak opportunity and that we're marching along the path to achieve that peak. You know, I think it's valuable to sort of look to where we started this year and where we are now at the midpoint where our updated guidance represents, you know, a more than doubling of our revenue over last year. To your question more about the the dynamics and the growth rate. So certainly, I think the guidance provides the best signpost for the continued growth. As I've alluded to, this represents substantial revenue growth year over year. The guidance factors in a number of variables. And so we've talked about how it's patients on therapy, which is a function both of new patient starts and discontinuation rates, which have been very low, portending chronic durations of therapy. I think we've spoken a couple times to the potential for seasonal impacts, which we wouldn't be surprised to see around the times of the holidays. But, you know, importantly is that even if quarter over quarter is variable, it's the year over year that remains strong and puts us marching towards that impact. Other factors that are important, we talked about the proportion of free goods, compliance, and international, where we certainly see you know, potential growth and contribution there from our expanding geographic contribution.

Yeah, thanks, Mark. I, you know, just to reiterate what Felina said, first of all, just on the sort of dynamics, you know, We've had these conversations as we've talked about guidance for the year and how we think about quarter-on-quarter dynamics. This launch is not about one quarter versus the next. It's about the journey that we're on towards this incredible peak opportunity. I think what this year has demonstrated is that that opportunity is absolutely there. We are capturing it in big picture. We're in a place where we started the year with a guide of 360 to 390, and we've raised that So we really are very pleased with where we are right now and what that portends for future growth. In terms of what we need to see to raise the peak, you know, we have been strong in our conviction. I mean, I have seen this as a blockbuster opportunity going back to 2019. I think we have been on a journey building a market that, you know, from scratch, really. And so I think we're bringing everybody along with us as we demonstrate that that market opportunity is really there. We'll raise the peak as we feel it is meaningful to kind of bring everybody along and as we continue to execute the launch and really show that that opportunity is there. But some of the things we're going to be looking at are exactly the dynamics that Felina said, right? That broadening of the lens on who may be an appropriate patient to treat. the continued growth in diagnosed patients, where suddenly we're seeing, you know, the number of diagnosed patients in the United States approach our initial estimates of what the actual prevalence of the disease is. It would not surprise me to be in a place where we could see more patients diagnosed than, you know, the 32,000 estimate that we had at launch. And so I think you know, we'll continue to look at those dynamics. But, you know, this is really one of the most exciting launch opportunities that I've had a chance to experience in my career, where you have the first disease identifying therapy in a really serious, prevalent, rare disease.

Our next question comes from Michael Schmidt from Guggenheim. Michael, your line is now open.

Yeah, guys, good morning. Congrats from me as well on a great continuous advocate launch here. Just one more on that. So you mentioned, obviously, treatment duration being one very important growth driver here. And, you know, so when you think about patients, what do you see in terms of patients that are using the drug continuously versus perhaps in a more intermittent way? And what are you seeing for refill rate and how you're thinking about that dynamic longer term ultimately?

Definitely. Do you want to talk a little bit more about compliance and how we're seeing patients continue on therapy here?

Yeah. Thanks for the question, Michael. We're really pleased to see that that strong profile of Avakit from Pioneer is playing out exactly as we hoped in the real world. I think we've shared earlier that advanced SM duration of therapy is now trending to 25 months and longer. If we look at our ISM trends relative to that, patients who have started on therapy are trending towards an even longer duration of therapy with very few discontinuations consistent with a multi-year chronic duration of therapy in the real world. To your question on compliance, again, I think really pleased to see how high compliance remains in the real world, certainly towards the upper bound of analogs that we have seen. And we're really pleased to see all of these impacts. We think, as Kate alluded to, this is going to become increasingly important contribution to our growth as we march towards that peak opportunity.

Our next question comes from Ren Benjamin from CitizenJMP.

Ren, your line is now open.

Hey, good morning, guys. Thanks for taking the questions, and congratulations on an amazing quarter and the upping of guidance. Maybe for us, just, you know, the top 400 or 450, you know, docs that you're originally targeting, you know, how many are prescribing? And is the idea to get all of them to kind of 10 plus patients? Or, you know, is there, you know, kind of a strategy to also start expanding beyond the original number of targeted physicians as you go through this launch?

Yeah, thanks for that question, Ren. And hopefully you want to talk a little bit more about, you know, the strength we've seen in the breadth and depth here in physicians adopting AVA.

Yeah, Wren, maybe just to be clear, our adoption and our breadth has been tremendous, launched to date, and continues to grow. It's certainly not limited towards just the top 400 providers by volume. That top 400 snapshot, I think, is most important to illustrate the dynamics of deepening that we've talked about, and we're really pleased to see You know, that there are now providers who are treating more than 10 ISM patients. I think we would expect to continue to see deepening among those top 400. But importantly, the breadth and depth that we're seeing is far more expansive beyond this. You know, we see a growing number of hematologists, oncologists, allergists in the academic and community settings who are adopting Avakit. And in fact, we also see these dynamics of deepening happening across that entire tranche of providers who are prescribing, which we think just really reflects, again, the strength of the profile in the real world and how providers can become comfortable with Avakit and putting those repeat patients on therapy over time.

Our next question comes from Laura Prendergast from Raymond James.

Laura, your line is now open.

Hey, guys. Congrats on the great quarter. Two quick ones for me. First, I know they're obviously low, but what are the real-world discontinuation rates of advocates shaking out to be? And then for 808, how much of this clinical development is baked into your guidance for financial self-sustainability? You know, assuming once you have the healthy volunteer data, you'll probably want to move pretty rapidly into a phase two for CSU and possibly other indications.

Thanks for that question, Laura. Can you just comment on the discontinuation? And then, Michael, you take that question about how much we have allocated to wild-type kits.

Laura, I think as we've alluded to, in the real world, the discontinuation rates that we're seeing are very low. So once patients start on therapy, they're staying on therapy, they're doing that in a highly compliant way. These are patients who who have a very sticky preference, I think, when it comes to really balancing all of the things that they're doing in their lives to gain control over their disease, which includes sort of both the behaviors that they're taking to avoid triggers, as well as how they're taking medications. Turns out this is an extremely compliant patient population. And so, you know, mapping that over to some of the data I alluded to in IAKI, where we presented, you know, just strong and sustained symptoms, alleviation, sustained QOL benefit, as well as a very well-tolerated safety profile. That was seen over a median of two years and with patients on therapy as long as four years and ongoing. And so we absolutely expect this profile to be playing out in the real world as well.

And Mike, do you want to talk a little bit about wild-type kits? Yes, and then just with respect to kind of our financial guidance so to answer your questions are yes, like the development plan for wild type kit is baked into our guidance that we give about our confidence to be able to get to a self-sustaining financial profile. you know, our priorities, you know, as we look beyond Avakit, are to continue to allocate capital to high-value R&D opportunities like BlueAdoid that are going to drive our long-term growth rate. And so that is factored in. And obviously, we'll share more color on specific financial guidance, you know, as we get into that trial and see how the data plays out.

And to your point, Laura, I mean, you know, with the really strong proof of concept that targeting kit impacts core biology of disease that we've seen and that we believe it's really potentially the most promising way to improve patient symptoms and outcomes across a range of diseases, we're very excited about this Blue 808 program. And as we said, you know, I think this healthy volunteer data will be a significant inflection point for us that will help us think about, you know, how broad do we think this molecule could go? And that, you know, we're certainly going to look at that data to define, you know, we have it as an absolute priority for investment, as Mike said, And we will, you know, consider even going beyond that as we anticipate this data to be very strong.

Our next question comes from Mike Ols from Morgan Stanley.

Mike, your line is now open.

Hi, this is Rohit on for Mike. Thanks for taking our questions. On the ex-U.S. front, you mentioned expanding Avocate to additional countries in 2025. Can you just talk about the opportunity and expectations there?

Yeah, thanks, Mike. Christy, you want to talk about our international expansion?

Sure. Yeah. So, you know, we are really pleased with what we're seeing from our international business. We had a great quarter this quarter. Importantly, we're really in the beginning stages of bringing Avakit to patients globally and expect this to be a continued driver of top line revenue growth as we go forward from here. The nature of the business outside the US is that often pricing reimbursement is a gating factor and so launches tend to lag what we see in the United States. What we're seeing right now is primarily Germany launching an ISM, but a number of other markets continuing to launch an advanced ISM. We have a footprint throughout Europe. We also bring avocats to patients through distributors in Eastern Europe and other geographies. And so we have a great opportunity to continue to expand our revenue base. I'd expect ISM launches to start to come online next year, primarily in some of the other major markets beyond Germany, where we're actively engaged in pricing reimbursement procedures and sort of walking through that process now. So we would expect you know, as those come online, we'll be able to start to commercialize in a larger ISM opportunity. So bottom line is continue to expect, you know, that to be an important driver of growth and is certainly, you know, a contributor to that peak potential that we see for Avica globally.

Thank you. Our next question comes from Amit Fadiyah from Needham.

Amit, your line's not open.

Thanks. Good morning. Thanks for taking my question. I have two questions, one for Polina, and just a follow-up to Brad's question from earlier. Can you talk through the spectrum of severity of patients across, you know, the 32,000 plus patients, and is it a way to, in some way, objectively quantify and map these patients in terms of sort of that, you know, decreasing sort of threshold for treatment? You know, you've sort of done your patient activation efforts and gotten feedback from physicians. What's sort of your current thinking around that? And then I have another one for Becca.

Please go ahead. That'll be your second question, Ami, because we'll shut the line after.

Oh, sounds good. Just with regards to Blue 808, You know, is there some sort of a biomarker or metric that we should be looking for in order to understand the breadth of application of the data from the healthy volunteer study that we'll read out next year? Thanks.

Okay, thanks, Ami. So, Felina, I think the first question around the spectrum of kind of disease burden that we're seeing as patients are coming on Avacyn and how we think about that. And then for Blue808, Fuad, do you want to talk a little bit about how we're going to be looking at target engagement in the Healthy Volunteer Study?

Yeah, thanks for the question, Ami. I think as Christy alluded to, given the breadth of the label, you know, virtually all patients who are adults living with IFM are eligible for Avakit. And certainly, I think the dynamic we're seeing playing out in our launch to date is really starting with patients who tend to be on the more severe end of symptomology, but broadening towards an ever-widening lens on who is an appropriate patient. And we're seeing that, I think, both on the provider side as they gain experience, as well as on the patient side, as patients who are on that step of considering Avakit are encountering more of their providers gaining that experience, having comfort managing Avakit and identifying, you know, I have an opportunity to address these one or two symptoms that are really impacting my quality of life. I think importantly, you know, just the way we think about ISM2 is really, it's not just a static disease. It's not necessarily even just treating the symptoms that's important. This is a disease where you have too many mast cells, too many abnormal or mutated mast cells in the bone marrow and other organs of the body. That's leading to worsening of symptoms over time. That's leading progressively to impact on bone health and other elements of the biology. That's leading to potential for progression. And so I think one piece we're also seeing on the leading edge with key opinion leaders is really that urgency to treat ISM in an attempt to improve that natural history of the disease.

maybe just to add one thing on me is at the beginning of this year we did kind of as we look at at claims data which christie already kind of talked through how we believe that that's likely an under call of of what the overall um disease prevalence is but we said there's just about you know a little under 10 000 patients who would qualify as moderate to severe so those are patients that are kind of right in line with you know our pioneer clinical trial and so so if you think about 10 000 there plus this broadening aperture Really, we are just scratching the surface of this opportunity, and there are thousands of patients who could potentially benefit from Avakit, which again leads to our conviction on this peak opportunity. Foy, do you want to talk a little bit about Blue 808?

For Blue 808, the data that we'll see from healthy volunteers will cover obviously the safety, which is important, but also the pharmacology, pharmacodynamics, and we're looking at a wide number of pharmacodynamic markers in the healthy volunteer study. As we all know, when we talked about it at our past webinar a few months ago, wild-type kit as a target is really an ideal target to tackle type 2 inflammation or inflammatory diseases, and the range of applicability is pretty broad. The way we are thinking about it or the way we are tackling that and increasing our confidence in the opportunity for Blue 808 is really not only looking at biomarker, but rapidly looking at clinical, multiple clinical proof of concept as we finish the execution of the very early study that we just started. That will give us even an idea on the breadth of the diseases with type 2 inflammation diseases that we will go to with the Blue 808.

Our next question comes from Matt Begler from Oppenheimer.

Matt, your line is now open.

Hey, good morning, guys. Congrats on the print from us as well. Can you comment on whether there's been any net pricing increases quarter over quarter? And if so, could you break down revenue growth by price versus volume? This is a question that a few investors have asked us. Thanks.

Thanks for the question, Matt. I think that's an easy one. I can just take that. But, no, we have not had any quarter-over-quarter net pricing increases. So that's not one of the contributing factors.

Thank you. Our next question comes from David the Bot from CT.

David, your line is now open.

Hi, John. I'm for David. Thanks for taking our question. On Avokit, can you contextualize some of the trends you're seeing for prescribers at academic centers versus community centers? In the slides, it appears that the relative proportion of community docs has ticked slightly downward from the last quarter. So just, you know, any color there would be helpful. Thanks.

Yeah, Jen, thanks for the question. I think one of the things that we've been really pleased about is the participation of the community so early, even in the first quarter of our launch. But, Tufelina, do you want to talk a bit more about that split?

Yeah, sure. So, as Kate alluded to, I think really the breadth of prescribing is one of the most important lead indicators in a chronic rare disease launch like this one. We see that as a great, you know, sort of lead for continued growth and prescribing. The trend that you're speaking to in terms of academic and community, so I think first off, we've just been pleased to see broad adoption across all specialties as well as settings, academic and community, hematology, oncology, as well as an increasing number of allergists. You know, the trend that we're seeing this quarter, I think, probably speaks more to the extent of deepening that we're seeing, which is likely occurring more within those centers of excellence. But as I alluded to before, we're really seeing deepening along that entire curve of providers who have adopted Avakit. And so, you know, we expect both continued breadth as well as continued depth across all specialties and settings over time.

Our next question comes from Peter Lawson from Barclays. Peter, your line is now open.

Hey, good morning. This is Alex on for Peter at Barclays. Thank you for taking our question. Just on L-anestinib, just wondering if you could remind us how that molecule differentiates or improves on the profile of Avakit, and then how should we think about the time needed to complete the pivotal study? Thank you.

Thanks, Alex, for the question. Christy, do you want to talk about L-Nestib?

Sure. So, we're, you know, moving L-Nestib forward. It's our next generation KITC816B inhibitor. As, you know, we said before, it's another very potent selective molecule. You know, primary point of differentiation is around brain penetrance, although increasingly we know we don't think that's necessarily relevant in ISM. So, Our strategy is really to bring this forward in a way where we can really clinically differentiate and address where the disease is going in ISM. So we now understand the biology of the disease, the spectrum of the disease in a much deeper way than we did 10 years ago at Blueprint Medicines. And I think the frontier is really moved in terms of what the expectations are for treating patients and really moving towards that goal of really eradicating what is a very serious chronic disease in this patient setting. And so when we think about part two of Harbor, We're really being thoughtful in terms of how we bring LNF2NO forward to really demonstrate that differentiated clinical impact on ISM. And again, we'll be sharing more about that as we head into the end of the year.

Our next question comes from Andy Behrens from Lering. Andy, your line is now open.

Hi, thanks, and congrats on the numbers. Two questions for me. I was wondering if you could give us some insight into the 20% free drug number. I recall in Q1 of last year, you told us a bid over 5 million of the ASM revenues were from free drug purchased by charitable organizations. Can you give us the number this quarter? Do these patients have their drug purchased by charitable organizations? Are they ultimately converted to paying patients? Just trying to get a sense. whether they're expected to grow as the patient numbers increase in order to maintain this sub 20%. And then the second question would be, what percentage of the ISM patients escalate to 50 milligrams or higher? Thanks.

Thanks for the questions, Andy. Christy, do you want to take both of those?

Sure. Yeah, nice to hear from you, Andy. You know, we are, you know, as you said, you know, happy to see kind of the dynamics that we're seeing with free drug in this launch. And, you know, a lot of the evolution comes from the underlying dynamics in the patient population, right? So as Kate said, we are launching really more into a chronic immunology space with ISM, patients view younger, the pair mix is different. So we see more commercial patients and that naturally will help, you know, start to reduce our exposure to free drug. In addition, we see some benefit this year from the IRA redesign, which has limited patient out-of-pocket and basically means that more patients can afford to access paid therapy, whether that's on their own or with the addition of external sources of support that patients may find on their own. This dynamic is very different than what we saw last year that you're alluding to. The reason why we quantified and were able to quantify that dynamic last year was because it was in the setting of advanced SM, and we knew that that sort of tailwind was temporary and would unwind, right? So we knew that we had a proportion of patients who would access free drug, but unfortunately, or paid therapy, but would have to move back to free drug. In this case, what we're seeing is that patients who access commercial therapy, we expect that to be a permanent situation for as long as they're, you know, clinically, you know, indicated to be on treatment, which again, an ISM tends to be for long periods of time. So we expect that benefit to continue. As Felina said, you know, we think that the rate of free drug overall has reached a relatively steady state. So as we think about guidance going forward, we wouldn't expect that to be a big driver one way or the other.

You want to talk a little bit about what we're seeing in terms of the 50 milligram usage?

Yes. So we continue to report patients starting at 25 milligrams being the vast majority of patients we're seeing across SM. We really don't see a lot of utilization of 50 milligrams. Where we've seen it, it tends to primarily be utilized in centers of excellence where they're really treating the full spectrum of SM patients. And we know it's a spectrum, right? We see Patients from, you know, advanced to indolent. It's a very clinically, you know, heterogeneous patient population and that, you know, each patient need is unique. And so the fact that we have a range of safe and effective doses available for patients that prescribers can easily access is a huge strength of this profile. You know, one of the things we've learned about FM is that it's not a one-size-fits-all disease. It's not a one-dose-fits-all patient's disease. But for the vast majority of ISM patients, 25 milligrams is the right dose, and that's certainly what we're continuing to see in the real world.

Our next question and last question comes from Sudhan Loganathan from Stevens. Sudhan, your line is now open.

Hi, everyone. Good morning, and congratulations again on your great quarter. My first question is more big picture on your views on business development.

With the growing cash position and ongoing acceleration of the APICIT launch, do you have the appetite for bolt-on deals to bring in earlier late-stage clinical assets into the mix that may benefit from the groundwork that APICIT has set? Or is the focus still on developing the pipeline from the discovery stage kind of endeavors akin to what you're doing with the targeted protein degradation portfolio? And then secondly, on harbor studies, Do you anticipate there be any challenges with enrolling for ISM patients for the study with the effective advocate on the market for the same indication? Will there be any patients enrolled in this program that may actually be refactoring to advocate, you know, with that profile fit, you know, to test out there?

Thank you, Sudan, for the questions. And welcome. We really appreciate your kind of joining the Blueprint coverage team here. So in terms of those questions, You know, maybe Christy can start with BD and then Flo, do you want to talk about Harbor? But I think, Sudhan, one of the things that I think has been a strength of Blueprint Medicine in the almost, you know, nine years that I've been here is that we consistently think about business development both on the buy side and sell side as ways of achieving and optimizing our corporate goals and optimizing our business. But maybe, Christy, do you want to talk a bit more specifically on how we're thinking about BD?

Yeah. So as Kate said, I mean, this is to us a strategic lever to optimize the portfolio in terms of both inbound and outbound business development. We are constantly engaged on that front, scanning the external environment, looking for things that could be a fit, talking to strategic companies, again, both from an inbound and outbound business development perspective. We are very clear about what our priorities are. We've been very clear in terms of capital allocation, our time and attention and effort. It's very much from a clinical and commercial perspective, particularly. focused on advancing our mast cell disorder franchise. And that's really around continuing to execute the Advocate launch as well as the Advocate clinical development program, which continues to be prolific and generate a lot of important data, bringing LNF forward. And then very importantly, Blue 808, which as we said on this call, we are really moving towards, we think, an inflection point here as we get that phase one data and believe that we could advance you know, across a number of fronts to bring this forward to patients suffering from mast cell disorder. So that is our focus. And, you know, nothing from a BD perspective is distracting from that focus. But, of course, we're going to continue to look and, you know, open to things that make sense strategically, both from an inbound and outbound perspective.

And maybe just add one other thing is that, you know, we have been – We would be remiss not to talk about the fact that our discovery team has been prolific in driving innovation at Blueprint Medicines. I mean, I think we're now at 17 development candidates that come out of our labs. I think we're the only company that brought two candidates from our lab to FDA approval in less than 10 years. Our research and development teams are just absolutely top notch, top quality. And that just gives us an incredible opportunity to have that internal innovation engine that really enables us to keep a high bar as we think about external innovation. Fuad, do you want to talk about Harbor?

I mean, I'm going to build on the innovation team. I'm very happy to really say that our teams continue to innovate to really design a registrational strategy for Harbor that will differentiate LNS from AVEC. It's an answer to Christy's earlier point, major questions that are needed to be answered in many years from now. In terms of execution of L-anestinib and the availability of AVA as the standard of care today, we don't expect major challenges in terms of recruiting patients. First, because institutions that do clinical trials that really have that skill set and that performance aspect of at the same time doing clinical trials but also treating patients and they know how to do this. Also, I mean, the study will open in the U.S., and as we did with Pioneer, the study will also open in a number of international sites to support the recruitment and to also help patients from other countries to get access to L-anestinib trials. So we are very confident about our ability to execute L-anestinib Harbor Part 2 studies.

We currently have no further questions, so I'd like to turn the call back to the CEO, Kate Haverland, for closing remarks. Please go ahead.

Thank you, operator. And as we cross into the second half of 2022, we are in a tremendously strong position thanks to our people who are driving the success of Blueprint Medicines. I'm extremely proud of the hard work, contributions, and dedication of our entire team at Blueprint Medicines as we deliver on our commitment to patients with systemic mesocytosis and beyond. Thank you all for taking the time to join us today, and thank you for your continued support of Blueprint Medicine.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thank you.