Blueprint Medicines Corporation

Good morning, my name is Nadia and I'll be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicine's third quarter 2024 financial results conference call. All lines will be placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keyboard. If you would like to withdraw your question, please press star followed by two. Please plan to limit yourself to one question. Thank you. Jenna Cohen, you may begin your conference.

Thank you, Nadia. Good morning, everyone, and welcome to Blueprint Medicine's third 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 today 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. Claude Namuni, 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 morning, we reported another strong quarter of Avakit revenue growth, adding additional momentum to our impressive year-to-day results and providing a strong foundation for us to drive long-term shareholder value creation in 2025 and beyond. Avakit's sales trajectory has given us the confidence to raise our revenue expectations significantly over the course of this year. and we now estimate that we will end the year between $475 and $480 million in product revenue. We are on a half-billion-dollar run rate in our first full year of ISM launch, placing Avakit firmly on the path to realizing its more than $2 billion peak revenue opportunity and positioning Avakit's launch in ISM to be among the most successful rare disease launches to date. To build a blockbuster medicine, we must demonstrate a significantly meaningful and differentiated clinical impact that transforms treatment paradigms and diseases with high medical need. This is so simple to say and not easy to do. At Blueprint, we have demonstrated that Avakit drives clinically meaningful, deep, and sustained symptom impact for patients with ISM. Now, over several years in the Pioneer study, with a consistent and well-tolerated safety profile. Treatment with Avakit is allowing ISM patients to reclaim control of their lives and is transforming the treatment paradigm in ISM. With continued long-term data generation and strong commercial adoption, we believe Avakit is setting up to be the durable market leader across the spectrum of both advanced and indolent SM for years to come. Building a blockbuster brand has never been easy, and it has only become harder as therapeutic areas have become saturated, as legislative, regulatory, and market access headwinds have strengthened, all on the backdrop of what has been a challenging macro environment in recent years. At Blueprint, we have successfully managed through all of these challenges. Our commercial and medical teams have done a tremendous job navigating the range of short-term quarterly dynamics we face, including the industry-wide dynamics all medicines face, the dynamics that are intrinsic to rare disease markets and launches, as well as the dynamics that are unique and specific to the SM market. While managing all these short-term dynamics, we have always maintained conviction and advocates more than $2 billion peak revenue opportunity. And we continue to be focused on building a foundation for long-term growth and delivering compelling results year over year. Bolina will talk in more detail about our commercial results shortly. Leveraging our leadership in SM and our deep expertise in mast cell biology, we are working to broaden our impact by addressing the significant medical needs of thousands of patients with Blue808, our wild-type kit inhibitor. We designed Blue808 to raise the bar on what a treatment for chronic urticaria and other mast cell-mediated inflammatory diseases can offer. by taking into account the full patient experience, efficacy, tolerability, and the burden associated with administration. We see the opportunity for Blue 808 as twofold, to command a large share of significant established markets and to drive further growth by expanding the treated populations in those markets. Christy will provide an update on the progress we have made across our portfolio later on the call. As we report our Q3 results today, Avakit's strong revenue ramp coupled with our disciplined investment and our most compelling product opportunities places us in a position to realize a significant decline in cash burn this year, while maintaining our focus on long-term growth and value creation. We are building a solid financial foundation for Blueprint's future. Mike will talk more about our financial results later on the call, and we look forward to to reviewing our portfolio priorities in early 2025. I will now turn it over to Felina to discuss this quarter's commercial performance in more detail.

Thanks, Kate. In the third quarter, Avakit achieved $128.2 million in net product revenue with $113.1 million in the U.S. and $15.1 million ex-U.S. This represents a 137% increase year over year and our conviction in this blockbuster brand has never been stronger. Our team's efforts are coming to fruition as we build this market, and Avakit's strong launch trajectory proves our success. Growth this quarter was driven by strengths in our key business fundamentals. First, we continue to see strong and steady growth in patients on Avakit, driven by new patient starts and low discontinuations. Growth in patients on therapy is driving Avakit's successful launch. At our last call, we anticipated seasonal dynamics around summer holidays might impact patient starts and compliance, but this turned out to be less of an issue than expected. Our team did a great job managing through these dynamics, resulting in strong demand towards the end of Q3. We have a large base of patients on therapy, and we expect this to continue growing. Compliance remained high, consistent with what we've seen, and trends in duration of therapy remained strong, demonstrating the real-world benefit patients see on Avakit. Second, our mix of free and commercial goods remains stable. Our average free goods rate since ISM approval is in the mid-teens and has stabilized over the past two quarters. We expect this to remain consistent for the remainder of the year. Finally, our international team delivered strong results this quarter, driving growth in advanced SM across several geographies and an ISM with the launch underway in Germany. Germany comprises the majority of international sales, and the ISM launch dynamics we're seeing there mirror what we've seen in the U.S. In the third quarter, strong growth in volume offset a lower price accrual from our planned German price reassessment process, which will be complete by early next year. We anticipate geographic expansion across both advanced SM and ISM to continue to drive growth in 2025 and beyond as we launch ISM in additional markets. Breadths and depth of prescribing are strong lead indicators of continued growth. This chart shows how first positive experience with Avakit leads to repeat prescribing among the top 400 providers by SM patient volume. But this is just part of the story. We're engaging with several thousand providers beyond the top 400, and adoption is growing across this broader range. As Avakid experience grows, we see new hemocks and allergists prescribing, with adoption evenly split across academic and community settings. These dynamics are exactly what you'd want to see in a strong launch, and they plant the seeds for continued growth. We've also seen the first examples of prescribing by additional specialties, such as dermatologists. For example, we're seeing cases where dermatologists can become the local SM champion, motivated to diagnose and move more patients to treatment. This dynamic bodes well, proving yet another opportunity to further grow the market and our ability to capture it with Avakit. Awareness of SM continues to grow across a broadening spectrum of specialists who touch the constellation of disease symptoms. We understand the SM market better than anyone else. What activates patients to start a therapy that targets the root cause of ISM? What drives urgency to treat among providers? And how to streamline access to therapy? Now, let's dive into some of our latest provider and patient initiatives. Our team recently launched a new branded campaign for providers designed to challenge the notion of well-controlled. along with resources that highlight the two-year safety and efficacy data we presented at the European Academy of Allergy and Clinical Immunology Conference. These data are valuable to providers considering Avakit, and Christy will share more on this. Having made progress educating the provider base and growing Avakit experience among hemlocks and allergists, we can now further expand on our direct-to-patient initiatives. We recently launched a patient campaign to raise awareness and spotlight how Avakit targets the source of the disease. We also launched a new patient mentor program, increased support for face-to-face patient events, and expanded our patient ambassador programs. We know that patients find it helpful to hear from other patients as they consider starting Avakit, and an educated patient is a catalyst for treatment. Our efforts with the SM community are working. Avakit is helping more patients every quarter, and we are continually enhancing and expanding our initiatives as we drive this launch towards its peak potential. I'll now turn it over to Christy to share more about our data generation efforts and near-term catalysts as we head into 2025.

Thanks, Selena. We've been treating SM patients with Avakit in clinical trials since 2016. and have spent the last eight-plus years amassing a significant body of evidence on its long-term impact across the spectrum of this disease. In advanced SM, we've been able to demonstrate significantly improved overall survival versus prior standard of care therapies. In an ISM, we know that HCPs and patients find longer-term data on the safety and clinical impact of Avakit meaningful and motivating in the setting of a chronic lifelong disease. We have continued to publish long-term follow-up data from the open label extension of the Pioneer study. Most recently, we presented updated data demonstrating that with median follow-up of more than two years and with some patients treated as long as four years, Avakit showed durable efficacy and a favorable safety profile. Safety data were consistent for a subset of patients who dose escalated to 50 milligrams once daily. reinforcing the flexibility that HCPs have to customize treatment based on the individual needs of their patients. What sets Blueprint apart, however, is not just the mountain of evidence we continue to amass with Avakid. Our team has developed a tremendous command of the SM market by being at the table with a broad group of healthcare providers diagnosing and treating patients every day. We have an unparalleled depth of knowledge and expertise across the continuum from research through development to commercialization, which affords us an evolved understanding of patient and provider needs over the long term. This creates a virtuous cycle where insight fuels innovation, enabling us to drive progress with Avokit and guiding us on how to deliver an evolved value proposition with L-Anestinib. our next-generation KIT-D816V inhibitor. And we're establishing this same virtuous cycle in mast cell disorders more broadly. It was insight and feedback from allergists that inspired us to pursue a potent, selective, and tunable oral wild-type KIT inhibitor, resulting in blue 808. And just last weekend at the American College of Allergy, Asthma, and Immunology meeting in Boston, I saw firsthand evidence of scientific exchange sparking new ideas and driving strategy and impact across our MassL portfolio. As we approach the end of what has truly been an exceptional year and look ahead to 2025, I'd like to touch on some of the near-term milestones and catalysts our team is focused on, starting with our primary strategic priority of advancing this MassL portfolio. This includes the successful global commercial launch of Avakid, which Felina discussed today. It also includes the advancement of Alanestinib, where we remain on track to initiate the registration enabling part two of the Harbor study by year end, and Blue808, which has been moving through a phase one study in Healthy Volunteers. We anticipate sharing this data early next year, including initial data on Blue808's safety profile, drug-like properties, and early biomarker responses that will help to inform how we think about the potential for broad disease impact. I hope you have a chance to dial in for the second in our series of science-focused seminars on November 14th, where we plan to talk more about the strategic development plans for our mast cell therapy franchise. Regarding our cell cycle portfolio, we have been closely tracking the emerging data sets, including those shared at ESMO, that continue to validate the promise of targeting CDK2. We are nearing the end of the combination dose escalation portion of the Phase 1 Vela study, and in parallel, we have also advanced our next generation programs, particularly our CDK2 degrader, more quickly than we originally expected. Given the significant investment and capabilities required to move into later stage breast cancer trials, We've been clear that we will not move blue 222 forward beyond the space of development on our own and have been engaging in strategic partnership discussions. Through these conversations, we are evaluating the emerging data from CDK2 inhibitors, as well as the profiles of our next generation assets to determine what may be the best in class approach and therefore what the optimal structure and timing of a potential partnership would look like. We anticipate sharing more about our plans and priorities early next year. In 2024, our team is executed to both drive exceptional top line revenue growth and prioritize our investments in our highest value programs, laying a strong financial foundation for sustainable corporate growth. I will now turn it over to Mike to discuss our financial results.

Thanks, Christy. Earlier this morning, we reported detailed financial results in a press release. And for today's call, I'll touch on a few highlights from the quarter. In the third quarter, total revenues were $128.2 million from net product sales of Avakit. And as mentioned earlier, we are raising our Avakit product revenue guidance and now expect to achieve $475 to $480 million in net product revenue in 2024. This updated guidance is based on continued growth in total patients on therapy, continued favorability and compliance and other factors, and stronger than expected performance outside of the U.S. Our gross-to-net margin remains stable in the mid-'80s, and our international business is on track to break even by the end of this year. Our total costs and operating expenses remain relatively flat at $177.2 million for the third quarter. We anticipate that both our R&D and SG&A expenses will remain relatively consistent as we close out the remainder of this year. As we look ahead to 2025, our capital allocation priorities remain squarely focused on investment in our mass cell portfolio. This is to ensure that we're capturing the clear opportunity that the SM market represents with the commercialization of Avocate and advancing our pipeline of other mass cell therapies to drive long-term growth in areas where our conviction around disease biology is clear. We plan to share more perspective on our 2025 capital allocation strategy early next year. We continue to strengthen our financial position with $882.4 million in cash on hand at the end of the quarter. And importantly, we've seen our cash burn drop significantly in 2024. And we expect this trend to continue in 2025, reinforcing our clear path to financial sustainability. With the ongoing success of the Avakit launch and our commitment to disciplined investment to drive growth, we are in a great position to continue to create long-term shareholder value. With that, I'll now turn the call back over to the operator for questions. Operator.

Thank you. At this time, I would like to remind everyone in order to ask a question, please press star, then the number one on the telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question goes to Mark Fromm of TD Cohen. Mark, please go ahead.

Thanks for taking my questions and congrats on another strong quarter. Maybe just on the ISM side to start, you're getting a meaningful number of patients out at six, 12 months now. Any type of reauthorization criteria you're seeing or any type of maybe headwinds we should expect in terms of discontinuation starting to kind of factor into the launch trajectory? And then as we get to the wild type kit inhibition data next year, just Can you raise kind of where you think the thresholds are of kind of target engagement to kind of induce a response? And do you really need to kind of hit those levels chronically? Or do you think more of a pulsatile or induction maintenance might be the best approach?

Thanks, Mark. So, Felina, maybe you can talk about what we're seeing in terms of authorizations for patients. And then, Fuad, I'll hand it over to you for more on Blue 808 and what we're expecting there.

Yeah. Hi, Mark. As you mentioned, we are seeing a significant and growing patient base of patients on therapy, and we expect this to continue to grow. In terms of reauthorizations, I think overall we are incredibly pleased with the strength of access that continues. We have secured and maintained strong payer coverage. We have not seen problems with reauthorization. In terms of the discontinuation rates, That remains very low, and as you know, I think the two things that continue to drive this launch is growing that strong patient base as well as our ability to retain patients on therapy. So we're really pleased to see the trends in duration of therapy, which really connect to the potential for long-term chronic treatment.

And Mark, thank you for the question on wild-type kit. As we all know now, wild-type kit is a very well-validated target, and we have seen a lot of good work from biologics there. I think developing a small oral molecule like 808 gives us the flexibility to really tune and titrate the development and the schedule of this molecule in a variety of diseases and allow us really to navigate between the inhibition of the activity and the degranulation of mast cell all the way to the depletion of mast cell. And I think having such a molecule like 808 gives us that flexibility. We are happy to work with this type of small molecules.

Okay, thank you. Thank you. The next question goes to Brad Canino of Stifle. Brad, please go ahead.

Morning. Great quarter. I would actually consider this to be the most aggressive guide you've provided in terms of implied growth and forward quarters. I think feedback I've gotten from investors, and I imagine what you've heard as well, is that some of the previous guides appeared a bit too conservative. Can you help us understand how your forecasting views and abilities have changed, particularly as you think about how to incorporate variables for the 2025 guidance coming up next year. Thank you.

Yeah, Brad, thank you. I mean, we're incredibly pleased to be at a point at this point in the year where we can now say that we're going to be, you know, nearing $500 million in revenue this year, which is a really tremendous place to be. And as you said, we've raise the guy we've also tightened the range to 475 to $480 million. But Chris, you do want to talk more about philosophy on guidance, which I know we've talked about before, but, and how we think about this for this year as well as next year.

Yeah. Um, thanks for the question, Brad. So, uh, you know, our, our philosophy throughout the year has been to try and look at the range of variables that influence revenue, um, provide our best estimates on how we think, you know, what the range of outcomes on those, those variables variables may look like. And then, you know, what do we think that could apply for revenue? You know, in the context of a launch into a category that did not exist before, a market that we are building for the first time, and, you know, the first disease modifying therapy in that market, which is an incredible privilege and such an opportunity, right? So many markets, you know, you're fighting for market share and trying to have patients switch off of therapies, and we are really building You know, an entirely new market opportunity, which is compelling, but has its challenges. And certainly, I think forecasting the first year of sales in that context can be a little bit difficult. We've definitely done our best and we are thrilled that we have exceeded our own view, frankly, of how these variables might fall through the year. We're now in a place where, you know, we're 10 months into the year. And so we are providing a guide essentially on Q4. Our ability to forecast how we will land one quarter is obviously much tighter than when we're looking at a whole year. And so, you know, this guidance really represents our best thinking on how we will end the year. And it's really as simple as that as we go into guidance for next year. you know, clearly we will now be more than a year, well more than a year into the launch. So we, you know, we know this market quite well. We're still, of course, forecasting, you know, new therapy at a new market, but I think have a good sense of some of the key variables that will impact. We typically set guidance, as you know, on our Q4 call, having some early experience next year with aspects like, for example, free drug in the context of the IRA changes will be really informative and helpful to us as we think about setting that guide. but philosophy will stay the same.

Great. Thank you.

Thank you. The next question goes to Ren Benjamin of Citizen JPM. Ren, please go ahead.

Thanks very much, guys, for taking the questions, and congratulations on a great quarter. Can you talk a little bit about the direct-to-patient ad campaign and the new patient mentor program? How does it, you know, potentially impact SG&A and How do you evaluate whether this is working or not? And if it isn't working, what are the other options that you have at your fingertips to grow market share?

Thanks, Ren, for the question. I think first and foremost, I think we're at such a wonderful place in this launch where we have critical mass, where it now makes a lot of sense for us to be kind of doubling down and pushing forward on some of these direct to patient campaigns and initiatives that Felina talked about. But Felina, do you want to talk a little bit about how you think about that relative to SG&A spend and the impact of these types of efforts as we look to kind of activate and educate patients.

Yeah, Ren, I think maybe just first off, starting at the enterprise level, we've talked about how our top priorities for investment in Blueprint's growth are really across our mass cell portfolio, including the Avikit launch, Elanestinib, and 808. And we will have certainly look to continue to find opportunities to invest where we see the most impactful benefit in terms of return on investment. And so in terms of how that translates into the Avakit launch, you've just seen with our updated guidance that we are well on the course to deliver nearly half a billion in revenue, firmly on the path to achieve that peak. Conviction has never been this strong. Now is the time for us to be leaning in further into these direct-to-patient initiatives Now that we have secured an activated and growing prescriber base that continues to grow, we have the opportunity to lean in and further engage and activate patients. Why that's important is we continue to see that challenging that notion of well-controlled is critically important to open patients' aperture to what may be possible in terms of starting on a disease-modifying therapy. While patients may have become acclimated to this sense of a new normal or sort of coping with the disease and restricting their behaviors and their activities, there's nothing more compelling than just hearing from another patient their experience on Avakit and what it can feel like, how transformative that can be to reclaim what that new normal is like. And so going into those direct-to-patient initiatives, both in terms of raising awareness talking about the importance of targeting the source of the disease and creating more of these opportunities for patients to hear from other patients will be a critically important component of continuing to drive in this launch.

Thanks, guys, and congrats.

Thank you. The next question goes to Michael Schmidt of Guggenheim. Michael, please go ahead.

Hi, this is Paul, and for Michael, thanks for taking our question, and congrats on the quarter. Just a quick one on AVK performance in third quarter. Was the sort of anticipated summer seasonality actively counterbalanced by efforts on your end, or did it simply play out less than expected? It would be great to hear your thinking on seasonality and ISM in general over the balance of the full 12 months now that you've had a year and a half on the market. And then my second one is just on blue 808 and early signals of activity that we might see. How do you think about some of the classic markers like mast cell depletion, tryptase reduction for the oral agent compared to what's been shown by the kit antibodies? And what's the right way to think about correlation between those biomarkers and clinically relevant endpoints like the urinary activity score? Thank you.

Yeah, thanks, Paul. There's a lot in that. So maybe, you know, Felina, if you could take the first piece, and then we'll hand it to One thing I would just say is that the commentary that we have been making around as we think about new patient starts since before we even launched is this is a rare disease and we expect there to be variability and lumpiness on a week-by-week type of basis. But over the longer perspective, we continue to believe there'll be strong and steady growth in patients on therapy. And the commentary made on the last quarter was that this is not about if patients start, it's about when. And I think what has been really clear is both of those things have played out exactly as we have described. So, Felina, would you like to talk more about that?

Yeah, so I think Kate teed it up really well. We've alluded to some of the short-term quarterly dynamics that can impact a particular quarter. We know that holidays have the potential to impact the timing of patient starts to go to the next visit. What we saw in the third quarter is that our team has done an incredible job managing through these dynamics. with a strong increase of demand through the back half of the year. But I think most importantly, sort of lasering out from the quarter to quarter is really that year-over-year trajectory. And we can see from the updated guidance, we are on a path to deliver over 100% growth year-over-year. And again, I think that places us firmly on the path of marching towards that greater than $2 billion peak.

And then, Flo, do you want to talk a little bit about Wild Type Kit and what we're thinking about from a biomarker and correlation perspective? Yep.

Thank you, Paul, for the question. We are developing this small molecule, as I said earlier, answering Mark's question with the idea that with a small molecule, we can really tune the dosing on the schedule to really navigate the wide range of the activity of the mast cell and target a number of type 2 inflammatory diseases. As Christy mentioned, we anticipate to report the data early from the SADMAP study early in 2025, and we look at overall subject safety. We look at our pharmacology. We expect the pharmacology to be a very good one and really allowing us to do the tunability and the titration that I talked about earlier. And we will report a number of biomarkers, including the level of tryptase. More specifically to your question, tryptase is a supportive hormone. pharmacodynamic marker for the activity of the agents and varies from disease to another. So we would like to see tryptase decrease in these healthy volunteers. We also know that in some more complex diseases where there is already POC like chronic urticaria, Tryptase is a part of the story, but in a much more complex environment. As an example, when we go to type 2 asthma, diseases are more complex than just, you know, looking at tryptase, but you can look at other markers. So we have the opportunity to share data with tryptase and be on tryptase.

And this is where maybe I'll just put a plug in again for our seminar coming up on November 14th, where we'll talk more about how we're thinking about 808 in our overall kind of development strategy in mast cells. Please do tune in if you can.

Thank you. The next question goes to Selveen Richter of Goldman Sachs. Selveen, please go ahead.

Thanks for taking our question. This is Tommy Young for Selveen, and congrats on the quarter. So to follow up from some of the previous questions on 808, overall, how de-risking do you think that the healthy volunteer data will be with regard to navigating a therapeutic window? And what's your view on the differentiation here from strategies such as MRG, PRX2, and then just one on ISM? As we look to 2025, maybe lay out some of the moving parts that we should be aware here, especially as XUS starts to play a larger role. Thank you.

Yes, thank you very much for the question. In full, we'll talk about 808, and of course, we'll be talking more about 2025, you know, on the Q4 call, but maybe because you can just give a high level on that, but yeah.

So from an annual perspective, our development strategy is really to target wild-type kit to fine-tune the mast cell and go to a variety of diseases. In terms of the risk to your question, if we look today at wild-type kit, POC, I think biologics did a very good job showing strong proof of concept in chronic urticarious continuous and also cold-induced. Therefore, the data that we anticipate to share early in 2025 will be a major inflection point for us and for patients to really benefit from what we hope and expect to be a good drug profile for 808. Now, there is a lot of room to improve on the overall therapeutic index for these therapies and we believe having a small molecule that we can fine-tune with completely different type of pharmacology from biologics will help us achieve such a goal not only in chronic urticaria but in a variety of diseases and as Kate mentioned earlier we will talk about these diseases at our seminar in a few weeks. Regarding your question on different mast cell targets, and you mentioned specifically MRGPRX2, there are a number of targets on the mast cell. We believe, and as the scientific community does too, that such a target is probably organ restricted, you know, potentially to the skin. And when we need to see more clinical data, because, I mean, it's a really data-free zone, if I can use this analogy. So on our strategy, by going to wild typekit, we know that we will target the muscle wherever it is, either in the lung or in the gut or in the skin. And so we believe going after the inhibition of wild typekit is a much broader strategy than other targets.

Yeah, and then Christy, do you want to talk a little bit about just on the high level, what we're thinking about 2025.

Obviously, we'll spend a lot more time with you all on this going into next year. Yeah, so we'll provide guidance, again, on the Q4 call. I think, you know, the variables that we'll be thinking about are going to be, you know, in broadly very similar to sort of what we've been talking about this year. You know, at a macro level, what's driving this launch is new patients starting on therapy and, you know, keeping those patients on therapy over time. And, you know, what Of course, it's becoming more and more important as we progress through the launches. You know, we now have a very substantial number of patients being treated with Avakit that we will be carrying into next year. And then, of course, growing from that base. You know, we'll have new markets coming on internationally, as you mentioned, as we negotiate pricing and reimbursement and move through additional launches. You know, every year has its own factors. I'm sure we'll talk a bit about free drug, IRA impacts, et cetera, as we get into next year and sort of see how the first couple months of the year play out. But, you know, the big picture, again, is that we are in the early innings of a launch with a substantial amount of room for continued growth. And, you know, look forward to providing more on that view as we get into next year.

Thank you. The next question goes to Derek Archila of Wells Fargo. Derek, please go ahead.

Hey, good morning and congrats on the updates here and on the quarter. Just two, one clarifying and then just one question. So just on 3Q relative to the second quarter, just in terms of the net patient ads, I guess, what does that look like Q over Q? And then I guess in terms of the seasonal, you know, factor here, Can you kind of just kind of, I don't know, give us some qualitative information on the magnitude and how it might impact 4Q? And then just on 808, you guys have been talking a lot about it on the call, very exciting. I guess, is your expectation tryptase reductions in line with antibodies and, you know, safety better than the antibody? Or how do you think the overall profile will look when all is said and done? Thanks.

Yeah, thanks, Derek, for the question. So, Felina, as we moved away from talking about kind of that projected estimated number on therapy at the end of the quarter last year, Derek, but we can certainly provide kind of qualitative commentary around how we're thinking about seasonality and what we've seen there. And I know we've touched on that, but Felina, do you want to kind of reiterate how you're thinking about seasonality?

Yeah, I think I would just reiterate by starting with the expectation that we continue to expect strong and steady growth in the number of patients on therapy. This is what we have always said. Um, there might be variations month to month based on factors like holidays. Um, we know that in Q4, for example, there are fewer business days. Um, but I think maybe going back to what Christie just articulated, um, you know, the most, the most important piece that's driving this launch is that continued growth in, in patients on therapy, strong and steady, um, you know, quarters are going to be more steady than months, uh, in a rare disease launch such as this one. And most importantly, the arc of that overall trajectory is that we're showing significant growth on a year-to-year basis, significant headroom to continue to grow, and we're really focused on marching towards that peak potential.

And I think, you know, Derek, now that we're kind of coming into the end of our first full year of launch, we have a lot of confidence around the dynamics that we see in any given quarter. And those are, as I said in my prepared remarks, dynamics that everyone faces and dynamics that are specific to rare diseases and those that are unique to SM. And I think we now have shown and demonstrated that our team is able to understand those and work through those in a very constructive way. You know, the goal here is to move towards a $2 billion plus product, and we're going to do that year by year, right? So that is our focus and will continue to be our focus. And then, Fuad, do you want to talk a little bit about Blue 808 and how you're thinking about that relative to what we've seen from some of the data that's come out from the antibody assumptions?

Yeah, I think clearly the data from the antibody approaches validates the target specifically in two subsets of urticaria, which is chronic spontaneous urticaria and cognitive urticaria, which is a really good thing. And as I mentioned earlier, this makes our SAD and MAD data reporting that we anticipate early next year extremely important and a major inflection point for patients and for blueprint medicine. Developing a small molecule in this area gives us the opportunity to really navigate the targeting of mast cell all the way from depleting the mast cell when we need to do that to inhibiting the activation and the degranulation without getting full depletion. It will allow us also to have a very good therapeutic index by, on one hand, having an activity on the disease and, on the other hand, not reaching that far and that deep to my myeloid progenitor to generate you know adverse events or toxicity that we don't need to it is very difficult to do with biologics we believe our strategy with a small molecule is very differentiated and will allow us to fine-tune and titrate and achieve these goals thank you the next question goes to mike old of morgan stanley mike please go ahead

Good morning. Thanks for taking the question and congrats on the quarter as well. Maybe just on the AVA kit, you highlighted sort of strength OUS and being better than expected. Maybe you could provide some more color there and how you expect those trends to sort of evolve as we get into next year. Thanks.

Yeah, thanks, Mike. We're incredibly pleased with how the international launch has been going and the team has done just a tremendous job. in terms of delivering well beyond expectations. And Christina, I don't know if you want to talk a little bit more about that international launch.

Yes. We were really, really pleased with the strength of the quarter. Of course, we talk a lot about Germany, which is the first out of the gate on ISM and where we've seen, as Felina said, dynamics that look very similar to the U.S. in terms of uptake, which has been really gratifying to see, including the prescribing coming from both academic centers and in the community. So very, you know, very similar dynamics. And in the quarter, what we saw was the strength of that uptake really overcoming, you know, some of the price headwinds that we had referred to. Of course, we're still working through the process with negotiations in Germany and we'll have, you know, a sense of where that lands. early next year. But, you know, the demand growth is really more than offsetting that, which has been great to see. And then, of course, we continue to see growth in other markets, which are still launching in advance of them. As we get into next year, we expect to see more of the major markets in Europe start to come online as we work through ISM pricing negotiations. So, you know, we've talked about international being an important driver of top line revenue growth. I expect that to continue. Of course, the U.S. will represent the lion's share of the opportunity in the short term. But, you know, we would expect international to continue to become, you know, a more and more important part of the opportunity. And certainly when we think about the peak, you know, we're excited about the potential we see both in the U.S. as well as outside the U.S.

And then one thing to add to that, in Mike's commentary, he mentioned that actually at the organization is going to break even and so this team is really driving kind of tremendous tremendous top line growth in a very financially efficient and disciplined way um so that is uh i think that's a great place for us to be great thank you thank you the next question goes to army fadia of needham army please go ahead

Hi, good morning. Congrats on the nice quarter. Two quick questions, firstly on LN estimate. With the part two of the Harvard study initiating by the end of the year, can you talk about how your development strategy differs from that of Avakit and how do you see it being differentiated from Avakit? And with regards to Blue 808, The tunability of a small molecule strategy, I think you've sort of talked about quite a bit in the Q&A. As we see the data from the Healthy Volunteer Study, a dose escalation study, how would you take that information and then think about the different diseases where you could apply it and maybe sort of what are some of the indications that you're thinking about taking it into some initial thoughts that would be helpful? Thank you.

Yeah, thank you, Ami. And I think maybe we'll start, I'll hand, Christy can talk a little bit more about LNF-Fib and Flood will take the question about Blue 808. I think just stepping back for one moment is that the position we're in at Blueprint Medicines with Avakit, you know, becoming the standard of care and a durable leader across advanced SM and ISM, and then the opportunity we now have to bring LNF-Fib forward to really maximize the longer-term performance and innovation across the SM franchise is really a unique and incredible position. Do you want to talk a little bit, Chrissy, about how we're thinking about bringing LE forward to do just that?

Yeah. So, you know, as Kate has said, our strategy with L-anestinib is really to extend, you know, a franchise that we think is incredibly important both for patients and for Blueprint as we get into, you know, really the next decade and beyond. This is an opportunity that we are growing into, and we think we have a significant amount of headroom in SM to continue to grow. Our expectation is that Avakit will be you know, the durable market leader for quite some time and will be growing, you know, for years to come. And the value of L-Nestinib is really to be able to bring a therapy that delivers additional differentiated clinical impact over the long term so that we can continue to drive growth in the franchise into, you know, the latter part of the next decade. And so, you know, we will be initiating part two of Harbor. We'll obviously share more about what the design of that study looks like, but we know that the only way that you get to extend the value of a franchise like this is by delivering clinical differentiation. You know, we understand more about you know, the full manifestations of the disease now and much more about that than we did, you know, five or 10 years ago. And so I think our ability to measure clinical impact and really demonstrate what a targeted therapy can do in this space is different now than it was when we started the pioneer study. So, you know, in terms of what the actual design of Harbor will look like. We'll obviously have more to say about that as we open the study. And again, I would point everybody to our MassCell webinar that we have scheduled on November 14th, where we're planning on sharing more about our development strategy across our MassCell portfolio.

Thank you, Christy, and thank you, Amy, for the question. So your first question is really how With the data from the SADMAD study, help us understand the tunability profile of 808. I would say, as we all know, SADMAD study, we are exploring a number of doses and variety of cohorts of patients over time, and we are also looking at pharmacodynamic markers. So when we look at the totality of the pharmacology and the data in healthy volunteers at the variety of doses of a different level of inhibition and their impact on the pharmacodynamic marker, it will give us really a good understanding of how can we can develop tunable and titrable schedules for a variety of diseases. For the second part of your question on what is the breadth in terms of number of diseases and what other diseases we'll go to, I think we're targeting type 2 inflammation in a broad way. We'll have the opportunity in a few weeks from now at our seminar to talk really about these diseases and how we think about them. But you can think about really targeting a broad variety of type 2 inflammation, how we will do it, and as we mentioned in the past, is through some or a number of POC cohorts or studies to really early on see the activity across a wide range of diseases and start step-by-step de-risking 808 toward the selection of a major indication for registrational development.

Thank you. The next question goes to Markus Schweider of Oppenheimer. Marcus, please go ahead.

Hi, this is Marcus. Thank you for taking your questions. You've shown already some nice preclinical data on asthma. Is it fair to say that this will be one of your focus there?

That's a great question. Obviously, type 2 asthma, more precisely, is one of the key type 2 inflammations. We'll be looking at the range of these diseases. Obviously, I think in a matter of a few weeks, we'll be able to get a little bit more specific about the diseases. But I mean, it is safe to say that many diseases in the type of inflammation range or area will be part of our thinking.

Thank you. The next question goes to Peter Lawson of Barclays. Peter, please go ahead.

Great. Thank you. Thanks for the update. Really appreciate it. On slide six for your data around breadth and depth, I thought it was an interesting dynamic, the number of physicians with greater than 10 patients. Just wondering if you could kind of talk through that, if there's

room to grow there if this is how it if that's how it kind of plateaus out or if there's ability to grow beyond greater than 10 patients and if these are centers of excellence thank you yeah thank you for the question peter and and as felina has as we've as we've been saying this kind of across the launch the breadth and depth dynamics that that we're seeing here have just been a tremendous strength in in the launch and and that that graph is a snapshot of some of the some of the providers But, Felina, do you just want to talk about our opportunity, as I know that we continue to believe will drive quite a bit of depth as well?

Yeah, Peter, to your question, I think the bottom line is significant headroom to grow across all metrics and measures that we see across this market in both providers and patients. So if we look at our provider base, so we're really excited to see the uptick in the number of providers who are treating 10 or more patients. Again, even within those top 400 providers, substantial headroom to continue to grow and treat more patients on therapy within those top 400. As I said on the call, that's just a tiny part of the picture. There are many additional providers across that top 400 as well where we continue to see growing breadth as well as depth. And we haven't even really yet explored the potential of additional specialties such as dermatology and others who are treating the broader constellation of patients based on their symptomology. So bottom line, significant headroom to grow. And, you know, we're confident that places us on a path to achieve really more than $2 billion peaks.

Thank you. The next question goes to Laura Prendergast of Raymond James. Laura, please go ahead.

Hey, guys. Congrats on the great quarter. You know, so I know you said you expect free drug dynamics to generally remain steady below 20% or mid-teens, as you said, on average. But are you seeing or do you expect any month-to-month or quarter-to-quarter variability in these dynamics? And then just a quick second question for me. Any guidance on how to think about gross margin moving forward?

Thanks. Yeah, so thank you, Laura, for those questions. Felina, do you want to talk about how we're thinking about free drugs as we close out this year? Like, of course, we know this is all resets in 2025, and as Christy mentioned, we're going to be paying close attention to that in January as we look at the impact of the rest of the IRA. But, Felina, how do you want to think about it for the rest of this year?

Yeah, Laura. We've talked about how, launched today, the proportion of patients on free drug has reached the mid-teens. That has been relatively consistent over the past couple quarters, and we expect that to remain consistent through the end of this year. As Kate alluded to, I think one thing we'll want to keep our eye on is this resets next year due to the changes in sort of Part D from the IRA. And really at this point, we have such a substantial patient base on therapy that small changes in these factors like free drug can have impacts on revenue. So another piece to look at, along with all the other variables that Christy alluded to that will influence how we think about 2025.

And Mike, do you want to talk a little bit about the gross margin question that Laura had?

Yeah, thanks, Laura. Yeah, just with respect to gross margin, First of all, we think we are in a solid position with Avakit. We have relatively low cost of goods sold, and so we expect our gross margins to be high and remain really relatively stable at this point in the launch, that we have enough volume coming through. We do see some variation due to sales of product to partners like Seastone. So quarter to quarter, you might see some variability, but fundamentally, we expect margins to be stable and strong.

Great. Thank you very much.

Thank you. The next question goes to David Lebowitz of Citi. David, please go ahead.

Thank you very much for taking my questions. I have two for you. First, on physician mix. In the past, you've broken down the academic versus community doctors. If you could just update us on that, update us on that in case I missed it. And then number two, I just wanted to ask about Elanestimib and the HARBOR II trial. It's being studied in ISM. I know it's getting underway soon. A competitive therapy out there is studying it, but also in ISM and smoldering mastocytosis. And I'm just curious as to why it would be ISM only as opposed to including ESM patients. Thanks for taking my questions.

Yeah, thanks, David, and maybe, Selina, you could just talk about the mix of physicians, and then I'll hand it to Buad to talk a little bit more about LNS-MIB and how we're thinking about the kind of inclusion criteria there.

Yes, so one of the most important leading indicators is the sort of prescriber base, which continues to grow for Avakit. We see that across all specialties and settings. So in terms of the mix, continues to be pretty evenly split between the academic and community setting. We continue to see additional hemox as well as allergists, immunologists trying Evakit for the first time. And as they have that first positive experience, going on to repeat prescribe and really broadening the lens on the patients that they see as addressable for treatment. And importantly, we're really encouraged to see the growing interest and receptivity from a broader range of specialties as well. We alluded to an example in dermatology, and we see potential there for continued growth and interactions to really grow this market and move more patients towards treatment.

And David, to your question on the design of HARBOR Part 2, our Pivotal Registrational Study, I think as Christy mentioned earlier, over the last many years, we have been really working with the SM overall community on this disease all the way from Indoland to advance and see and explore all the spectrum of the subtypes of this disease. And we have a good understanding of SM as a disease, not only from subtypes of patients, but what really patients and physicians will be looking for in the next many years. I think all these data and this knowledge is factored in our development. We'll be able to share more in the next weeks and months on On these data, smoldering to your specific question, as we all know, is a very, very small group of patients, about 2% or 2.5% of the SM and clearly dedicated studies for these. Patients are very difficult to execute, but it is a group of patients that are very interesting that we know very well, including, you know, the way we work and our data are influencing the changes of definitions of this disease with the expert community.

Thank you. We have time for one more question before the top of the hour. The next question goes to Sudan Loganathan of Stevens. Sudan, please go ahead.

Hi, thank you for squeezing me in and congrats on the great quarter and taking my questions. With the strong launch trajectory for Avakit and the market know-how that you've established, do you have any interest in M&A or other business development activities to bolt on any late-stage assets that can benefit from the synergies that you have with Avakit's market that you've established? Or is the focus kind of looking towards capital allocations into the in-house pipeline that you're developing with LMS NIV and 808 and maybe some other areas that you're interested in.

Yeah, Steve, thank you so much for the question. And I think, you know, we have just the tremendous kind of benefit at Blueprint Medicine to be able to drive our growth organically. And our research team has been over the, since our founding, you know, 13-ish years ago, it has had a tremendous productivity in bringing forth innovative new molecules against targets of interest. And so our focus and our capital allocation is really on internal programs. between Avakit, LNS, and Blue808 has this potential to go very broad. Those are really where we're prioritizing how we think about capital. There's a lot going on in our own labs that we don't talk about with all of you. And so as those progress, we look forward to be able to discuss those. We're always out talking to everybody from a BD perspective, and that is to optimize our own portfolio and how we allocate our own dollars and thinking about how we can partner on our programs. And also if there is anything externally that would make sense. But really our focus is internally and really driving that operating leverage both based on and financial efficiency to continue to bring innovation forward for patients who have significant medical needs.

Thank you. That concludes today's Q&A. Ms. Kate Haviland, I turn the call back over to you.

Thank you, everyone, for joining us today. As we come into closing out 2024, really, Avakit's strong revenue ramp, coupled with our disciplined investment and our most compelling product opportunities, as we just talked about with the last question, has put us on a path to drive sustainable growth while we enhance long-term shareholder value. And we're setting up for a very, very exciting 2025 at Blueprint Medicines, and we look forward to, in a few short weeks here, talking more about that when we kick off the year. Thank you all, and thank you for your continued support of Blueprint.

Thank you. This concludes today's conference call. You may now disconnect.