Incyte Corporation

Greetings, and welcome to the Insight Corporation fourth quarter year-end 2020 earnings conference call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mike Booth, head of investor relations. Please go ahead.

Thank you, Kevin. Good morning, and welcome to Insight's fourth quarter and full year 2020 earnings conference call and webcast. The slides used today are available for download on the investor section of insight.com. I am joined on the call today by Irve, Barry, Stephen, and Christiana, who will deliver our prepared remarks, and by Dash, who will join us for the Q&A session. During the question and answer session, I ask that you limit yourself to one question, and if needed, one follow-up, as this will enable as many of you to ask questions as time allows. Before we begin, I'd like to remind you that some of the statements made during our call today are forward-looking statements, including statements regarding our expectations for 2021, including our financial guidance, the commercialization of our products, and our development plans for the compounds in our pipeline, as well as the development plans of our collaboration partners. These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially. including those described in our 10Q for the quarter ended September 30th, 2020, and from time to time in our other SEC documents. We'll now begin the call with Hervé.

Thank you, Mike, and good morning, everyone. So 2020 was a year of strong growth for products commercialized by Insight and those commercialized by our collaboration partners. Total product and royalty revenues grew 18%, fueled by continued growth demand for jacafi, which grew 15% year over year, and revenue from other hematology and oncology products was up 46% versus the prior year, benefiting from a strong launch of Pemezir and good performance from iQZ. The launch of Monjubi is progressing well as we continue to observe market share gains. Royalties were up 28% to nearly $400 million, with Jacavi up 23%, Alumiant up 38%, and the launch of Tabrecta now contributing to our royalty revenues. We also received over $200 million in milestone payments during 2020, resulting in an increase of 24% in total revenues year over year. Turning to slide five. In 2020, we presented positive data from several pivotal trials and submitted seven regulatory filings, and we expect to have decisions on all of these during this year. These decisions include the potential FDA approval of JAKAFI in chronic GVHD, retifanlimab in scrimacel and L-carcinoma, tafacitamab in DLBCL in Europe, and pemigatinib for cholangiocarcinoma in Japan and Europe, where we recently obtained a positive CHMP opinion. We are also just a few months away from the potential approval of roxalitinib cream in atopic dermatitis and the expected SMDA submission for vitiligo. I will now pass the call over to Barry for additional details on product performance as well as our commercial preparation for the launch of roxalitinib cream.

Thank you, Hervé, and good morning, everyone. Jackify performance was excellent in 2020, with revenues growing over $250 million and to reach $1,940,000,000. The demand for Jackify remains high with the total number of patients being treated continuing to grow across all three indications. We are also encouraged by the partial recovery of new patient starts in the third and fourth quarter of 2020. For 2021, we expect strong Jackify growth as we reach a normalization of oncology visits with a broader availability of COVID-19 vaccines. The potential approval of Jackify and steroid refractory chronic GVHD would represent its fourth indication and an additional important growth driver. The range of Jackify guidance we have provided today for 2021 of 2,125,000,000 to 2,200,000,000 reflects the ongoing impact of COVID-19, especially in the first half of the year, as well as the expected increase in the gross to net adjustment with the largest impact coming in the first quarter. Turning to slide eight, the launch of Pemizir has gone quite well, as we have been able to capitalize on our relationships and experience in oncology. Since launch, over 300 physicians have prescribed Pemizir. As expected, community-based oncologists are driving adoption, and testing patients for FGFR2 alterations is going smoothly. Given the refill rate, We know that appropriate patients are being identified and are being treated with Pemizir. And it is very gratifying to know that we have been able to bring this much needed therapy to a previously underserved patient population. The launch of Monjuvi is progressing well. Sales in the fourth quarter reached $17 million versus $5 million in Q3. We believe the strong safety and efficacy profile of Monjuvi is resonating with physicians, and as expected, we are seeing good utilization in the community setting. Since our Q3 update, the number of accounts purchasing Monjuvi has more than doubled to over 400, and we are also seeing good uptake from the vast majority of our top 100 key accounts. According to market research in BMT and eligible diffuse large B-cell lymphoma patients, the Monjuvi-Len regimen is the most used treatment in the second-line plus patient population. Turning to slide 10, we submitted the NDA for ruxolitinib cream for atopic dermatitis in December last year, and we expect a regulatory decision mid-year. There are an estimated 21 million atopic dermatitis patients age 12 and above in the United States. of which approximately 5.5 million receive prescription therapy today. The number of prescriptions for the treatment of atopic dermatitis has grown significantly in recent years as new therapies are introduced. However, only approximately 20% of patients report their atopic dermatitis is controlled with their current treatment, highlighting the significant unmet need that currently exists. We expect the initial uptake of ruxolitinib cream to be driven by specialists in medical dermatology and allergy. Our team has identified approximately 11,000 high prescribers who collectively account for approximately 80% of total prescriptions written for the treatment of atopic dermatitis in the U.S. Over the past several months, we have been able to recruit an exceptional team with significant experience in successfully launching dermatology products in the United States. We expect a fully recruited field team of 150 FTEs by mid-April, which is optimal to reach these high-volume prescribers. I'll now turn the call over to Steven for a clinical update.

Thanks, Barry, and good morning, everyone. In 2020, we made significant progress across our development pipeline, as shown on slide 12. Some highlights include positive results from our pivotal trials of ruxolitinib in chronic graft-versus-host disease, Ruxolitinib cream in atopic dermatitis, Redifanilamab in squamous cell anal carcinoma, and Parseclicib in non-Hodgkin's lymphomas, with each study forming the basis for regulatory submissions in their respective indications. We also announced multiple product approvals, including Pemazire in the Monjuvian United States and Tobrecta in the United States and Japan, and a new indication, Folumin, in atopic dermatitis in both Europe and Japan. We also recently announced the positive CHMP opinion for pemigatinib, a crucial step towards bringing the first targeted therapy to European patients with cholangiocarcinoma. As you can see on slide 13, we are expecting multiple regulatory actions during 2021, with seven expected approvals and six additional submissions during the year. For ruxolitinib, we expect an FDA decision for Jacify in chronic graft-versus-host disease, and our partner, Novartis, is expected to submit JAKAV for acute and chronic graft-versus-host disease in both the EU and Japan during the first half of 2021. Within hematology and oncology, we await an EMA decision for tafacitimab in diffuse large B-cell lymphoma, and an FDA decision for radifanilamab in squamous cell anal carcinoma. We expect pemigatinib to receive European approval in cholangiocarcinoma, following the recent positive CHMP opinion. We also have a submission under review in Japan. Later this year, we plan to submit an NDA for paraclisopmonotherapy in non-Hodgkin's lymphoma, based on the pivotal Citadel trials. Within dermatology, we expect an FDA decision for ruxolitinib cream in atopic dermatitis in June. and we'll look to submit an SNDA in vitiligo shortly thereafter, assuming our Phase III program in this indication is successful. As you can see, it is shaping to be a very eventful and exciting year ahead for INSIGHT in terms of clinical development and regulatory action. Slide 14 provides a brief overview of the Limber Clinical Development Program. Once daily, ruxolitinib is the furthest along with potential FDA approval before the end of 2022. We have multiple combinations planned and in development with PI3 kinase delta, BET, or ELK2, which we believe have the potential to significantly improve outcomes for patients living with myelofibrosis. As you can see on the right-hand side, we expect the patent protection for many of these novel assets to extend well into the 2030s. Moving to slide 15. This year, with our partner, Morphosis, we intend to initiate two Phase III trials. FrontMind is expected to enroll approximately 900 patients and will evaluate the combination of tafacitamab plus lenalidomide and RCHOP versus RCHOP alone in first-line diffuse large B-cell lymphoma. InMind is expected to enroll approximately 600 patients and will assess the combination of tafacitamab plus R-squared versus R-squared in patients with relapsed or refractory follicular or marginal zone lymphoma. We also plan on initiating two proof-of-concept trials in non-Hodgkin's lymphoma, investigating tafacitamab in combination with our own PI3 kinase delta inhibitor, paraclisib, and in combination with lenalidomide and plamotomab, a CD20-CD3 bispecific antibody. Moving to slide 16. We recently announced the acceptance under priority review of the BLA for retifanilamab. The BLA was submitted based on the results from Podium 202. data from which were shared at the ESMO Congress last year, and the PDUFA date has been set at July 25th. We've also been informed that the FDA expects to convene an advisory committee meeting as part of the review process. This slide also gives me an opportunity to remind you of our development strategy for retifanilamab. The first part of the strategy is to develop retifanilamab as monotherapy in certain niche indications where accelerated approvals are available. And other registration-directed trials beyond squamous cell anal carcinoma are ongoing in Merkel cell carcinoma and MSI-high endometrial cancer. We also have an ongoing global phase three study in lung cancer, which of course offers a much more substantial potential opportunity. A key part of our development strategy is related to the utility of having an in-house PD-1 antibody, which gives us the option to run numerous internal clinical combinations with other assets within our immuno-oncology portfolio, including Axelmer and adenosine 2A, 2B, where there's potential for synergistic activity and enhanced efficacy. With that, I would like to turn the call over to Christiana for the financial update.

Thank you, Stephen, and good morning, everyone. Turning now to our financial results, Our fourth quarter results reflect continued strong revenue growth with total product and royalty revenues of $680 million, representing an increase of 17% over the fourth quarter of 2019, and reflecting growth across products commercialized by Insight and by our partners. Total product and royalty revenues for the quarter are comprised of net product revenues of $517 million for JakaFi, $29 million for iClusic, and $14 million for PemaZir. Royalties from Novartis of $87 million for Jacavi, and $2 million for Tab Recta, and royalties from Lilly of $31 million for Orloumian. For the full year 2020, total product and royalty revenues were $2.46 billion, an increase of 18% over 2019. Total revenues for 2020 of $2.67 billion increased 24 percent over 2019, reflecting the higher product and royalty revenues and an increase in milestone payments from our collaborative partners for the achievement of development, regulatory, and commercial milestones. Moving on to our operating expenses on a GAAP basis, ongoing R&D expenses of $380 million for the fourth quarter increased 23% from the prior year period due to our 55% share of the global and U.S.-specific development costs for tafacitamab and product supply-related costs to support the potential launch in 2021 of raxolitinib cream as a treatment for atopic dermatitis. Ongoing R&D expense for the full year 2020 of $1.24 billion increased by 10% over 2019 also driven by the impact of our 55 percent share of tafacitamab development costs and raxolitinib cream product supply-related costs. If raxolitinib cream is approved, the product supply cost expensed in 2020 will ultimately contribute to lower cost of goods sold for a period of time subsequent to the product launch. As a reminder, our total R&D expense of $2.2 billion for the full year 2020 includes the upfront consideration of $805 million for our collaborative agreement with Morphosis and $120 million of expense related to our purchase of an FDA priority review voucher utilized to accelerate the review of raxolitinib cream in atopic dermatitis. SG&A expense for the fourth quarter of $167 million increased 23% from the prior year period due to the timing of certain expenses. For the full year 2020, SG&A expense grew 10% compared to 2019, driven by an increase in sales and marketing spend to support the commercialization of Pemazir in the U.S. and to prepare for the potential launch of Rax Cream in the U.S. Our collaboration loss for the quarter was $12 million, which represents our 50 percent share of U.S. net commercialization loss for Monjuvi. For the full year 2020, the total collaboration loss was $43 million and was comprised of total net product revenues of $22 million and total operating expenses, including COGS and SG&A expenses, of $107 million. Finally, we ended the year with $1.8 billion in cash and marketable securities. Looking at the evolution of our PLNL over the past five years, you can see how the growth in our product and royalty revenues has exceeded the growth in both our ongoing R&D expense and SG&A expense, leading to increased operating leverage and reflecting our commitment to prudent management of our financial resources. Moving on to 2021, I will now discuss the key components of our 2021 guidance on a GAAP basis. Given the expansion of our commercial portfolio, we are providing 2021 net product revenue guidance for Jaka-Fi and as a total for other hematology oncology products. For Jaka-Fi, we expect net product revenues to be in the range of $2.125 to $2.20 billion which at the midpoint represents approximately 12% growth over 2020, driven by continued growth across all indications. We expect our gross net adjustment in 2021 to be approximately 18%, with the adjustment in the first quarter of the year being higher relative to the previous quarter and subsequent quarters. For other hematology oncology products, which currently include iClusic in Europe and Pemazir in the U.S., we are expecting total net product revenues to be in the range of $145 to $160 million. As in previous years, we are not providing guidance for milestone or royalty revenues. We are also not providing revenue guidance for any potential new product launches during 2021, or for Monjuvi in the U.S., which was recently launched and which we are commercializing together with our partner, Morphosis. Turning to operating expenses, we expect COGS to range from 6% to 7% of net product revenues. We expect R&D expense to be in the range of $1.35 to $1.39 billion, representing mid-single-digit growth at the midpoint versus 2020, excluding the impact of the morphosis upfront consideration and the PRV in 2020. RSGNA expense guidance includes the investment related to the establishment of the new dermatology commercial organization in the U.S. and the related sales and marketing activities to support the potential launch of raxolitinib cream for atopic dermatitis. The expansion of our sales and marketing activities in Europe to support the potential launches of Pemigatinib for cholangiocarcinoma and Afacitamab for DLBCL. And the establishment of a commercial organization in Japan to support the potential launch of Pemigatinib for cholangiocarcinoma. As a result, in 2021, we expect GAAP's GNA expense for the year to be in the range of $735 to $775 million. Excluding the impact of these investments, we expect our SG&A expense for 2021 to remain flat compared to 2020. I will now turn the call back to Hervé for further discussions of the year ahead.

Thank you, Christiana. Slide 24 provides a list of the important updates we expect in 2021. This includes pivotal trial results for Roxazutinib cream in vitiligo as well as the approvals for Roxolitinib Cream in Atopic Dermatitis, Retifendimab in SCSE, and Jacafi in Chronic GVHD. So before moving into Q&A, I want to take a minute to let you all know that Mike Booth will be leaving Insight at the end of the month ahead of his planned return to the UK. Mike's role as head of IA at Insight will move to Christine Cho, who joined us in 2019 and who has been working very closely with Mike as part of a planned transition. I want to take this opportunity to thank Mike very much for all of his contribution to Insight over the past seven years, and we all wish him well in his future endeavors. With that, operator, please give your instruction and open the line for Q&A.

Certainly. When I'll be conducting a question and answer session, if you'd like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Once again, that's star 1 to be placed in the question queue. One moment, please, while we poll for questions. Our first question today is coming from Vikram Parit from Morgan Stanley. Your line is now live.

Great. Good morning. Thanks for taking my question. So I wanted to touch on the dermatology franchise. And I had two questions for RuxCream in advance of the phase three vitiligo data that we're going to be getting over the next couple of months here. So first, could you characterize for us any key differences between the phase two and the phase three? of patient populations that you're looking at for vitiligo? And then second, how should we think about which portion of the vitiligo patient population that RuxCream could be most suitable for? How are you thinking about segmenting this patient population? And where do you think RuxCream is going to be most valuable?

Vikram, hi. It's Steven. I'll take your question. In terms of the question on the translatability of the phase two to the phase three, Given the magnitude of the size of the Phase 2, the geography we conducted it in, and the eligibility criteria, we actually expect there to be no differences in population or in outcome. We expect the read in the Phase 3 to be of similar efficacy magnitude to the Phase 2 and the safety to be the same. I'll just share the one nuance on the difference is we, in Phase 3, limit the body surface area of vitiligo patients with depigmentation to be up to and including 10%, whereas in the phase two, we're a little more liberal and allowed up to 20%. But that is the only difference. We expect no other differences in outcome and in read-through of the population. In terms of vitiligo itself, it's probably a much more common disease than everybody realizes. If you look at the United States, You know, there's several million, quote-unquote, sufferers with vitiligo. Not all of them view it as a disease, and not all of them want treatment. But currently, given the available therapies, about 100,000 to 150,000 people, we estimate, seek different treatments, including steroids, phototherapy, which is reimbursed as well. And they're not very effective in terms of... you know, ameliorating the disease and improving it, and nothing to the degree we saw in the Phase II with topical rucks. There's also, as you know, a large psychosocial component to the condition with people often depressed from it as well. So we expect it to work in the same population as the Phase II. It will include the majority of sufferers with vitiligo, particularly on the face and hands. And, you know, that's the label we'll aim for should the phase three be as positive as we expect it to be. Thanks.

Got it. Thank you. Thank you. Our next question is coming from Michael Schmidt from Guggenheim.

Your line is now live. Hey, guys. Good morning. Thanks for taking my questions. I had a few on the ruxolitin cream launch coming up here as well. Maybe, could you help us understand how far in are you with your launch prep in AD, especially when it comes to, you know, interactions with pairs around pricing and market access? And my follow-up question would be, in context of the recent post-marketing safety data emerging from CellGems, I was wondering how you think this may potentially affect utilization of oral JAK inhibitors more broadly and across indications and how that might position ruxolitinib cream and NAD in that context. Thanks so much.

Hi, Michael. It's Barry. I'll take the first part of your question, and I'll hand it over to Stephen for the second part of your question. But as far as the preparation goes for the launch, it's going very well. You know, we started off at Insight with an excellent clinical development team that's very experienced in dermatology and immunology. We built a medical affairs team in the U.S. that's outstanding and has deep experience in dermatology and immunology. Now we're building out the sales force, and we built out an excellent market access team, again, that has deep experience in immunology and dermatology. We have had interactions with payers across the nation, with advisory boards, and we'll begin the process of negotiations with the payers in the very near future. So we think the launch's preparation is right on schedule. Steven?

Yeah, Michael, thanks for the question. You know, given the ZELJAN's non-inferiority data versus TNF therapy, particularly in RA patients, particularly looking at venous thromboembolism, malignancy, and then major adverse cardiac events, You know, you asked a question on the read-through to RUX itself and then, I guess, potentially to topical RUX. You know, we've been with RUX on the market since 2011, so we have many, many thousand years of patient exposure, including with our partner, Novartis, as well as long-term follow-up on our clinical trial programs. So let me just talk a little bit about the clinical trial programs. If you look at the comfort data in MF, now with... five years of follow-up on those studies, there's been no signal for any of those events that are worrying in that particular exposure. In polycythemia vera, the response studies, that is a prothrombotic disease, also now have five years of published follow-up, and we've looked across the board at thromboembolic events, cardiac events, and malignancies there. And in fact, on the treated arms, the rates are lower in both the primary treated arm, the crossover arm, versus the best available therapy arms there. So it's in keeping as well with our market experience that we're not seeing a signal for any of those events as we asked to on a yearly basis by regulatory authorities. And just to remind you, you know, RUX cream has no warnings or black box for any of these. Topical RUX itself, as we have in two published papers now, one in AD and one in vitiligo, you know, showing that the bioavailability of the cream is about 4% to 7% of that applied, on average about 5%. And those are two published papers, one in AD and one in vitiligo. And thus, you know, the effective oral exposure there is very small and not at pharmacologically relevant concentrations. So given, you know, the parent compound itself not having an issue, Rux cream having that sort of bioavailability and our safety from those clinical programs, we don't expect any read-through there at the moment.

Great. Thank you.

Thank you. Our next question today is coming from Corey Cosmo from J.P. Morgan. Your line is now live.

Hey, good morning, guys. Thanks for taking my question. I'll stick with the same line of questioning here on Ruck's Cream. And Barry wanted to follow up with your comments on the pending launch for AD. And given everything you've said so far, what do you see as the key impediments in this kind of market introduction? And how should we be thinking about the heavy lifting required here versus perhaps some of that potentially low-hanging fruit you could relatively quickly capture given the the data, the mode of administration, and the number of patients who just aren't benefiting from existing meds. Thank you.

Hi, Corey. Well, you know, as far as impediments go, I don't really see very many impediments. We think we're really in a very good situation. You know, we think we really can help patients with mild to moderate eczema, atopic dermatitis, from steroids all the way up to Dupixent, to biologics. So we think that there is a broad range of patients who will be very happy to use a cream like Rux cream as opposed to using systemic therapy that may in fact suppress their immune system in general. So we're very excited about it. We know that in talking to dermatologists across the country that when they look at the data, from TruAD1 and TruAD2, they're very excited. They've never seen anything like this that has, you know, targeted, that is a targeted therapy that's topical that has biologic-like activity. So we think that the safety and efficacy we've demonstrated so far in TruAD1 and TruAD2 is going to help the uptake and patients throughout the United States.

Great. Thank you very much.

Thank goodness. Question is coming from from Truist. Your line is now live.

Hey, guys. Thank you so much for taking my question. Staying on Ruck's cream, I was wondering what sort of conversations have you had around the NDA that you filed with the FDA following your submissions? Have you had any further conversations? And also, can you talk about your strategy for Rux cream in pediatric populations? Can we expect it to be similar between atopic derm and vitiligo? Thank you.

Kripa, hi. It's Steven. Thanks for your question. You know, we don't talk in detail about any ongoing conversations with regulatory authorities. But I will tell you, as we've said publicly, The submission went in successfully in December. We utilized a priority review voucher that will give us a six-month review, and we expect an action in the middle of the year on that. Given that it's now early February, it's still early days of that submission and review, and it's going exactly as expected. It's in 12 years and above, the true AD studies, which covers the majority of the population Barry was talking about with atopic dermatitis. However, there is a population that is younger that does also have atopic dermatitis, and we have a commitment to continue to study that. We have to do more safety-enabling work in the pediatric population to enable those studies to look, for example, is there any bone effect, et cetera, as you look at young ages. And we've got through those hurdles successfully, and we'll determine this calendar year, you know, given that the Phase 2 is successfully completed, you know, what sort of Phase 3s we'll be conducting in conjunction with regulatory authorities to address the population two years and above and conduct those studies. And we'll let you know as soon as we have those studies in place. But it's going well.

Great. Thank you.

Thank you. Our next question today is coming from Brian Abrams from RBC Capital Markets. Your line is now live.

Hey, guys. Thanks so much for taking my question. First off, I just want to thank Mike for all his help throughout the years and wish him well in his next endeavors and offer congratulations to Christine. Maybe shifting gears to Manjuvi, I'm curious if you could talk a little bit more about how that's being used in the real world, in particular where it's fitting in relative to CAR-T and what you may look towards to further the reach in academic settings where I would imagine cell therapy and investigational treatments like bispecifics are more available in addition to the community setting, how important that's going to be to continue the current uptake momentum. Thanks.

Sure, Brian. Well, you know, the uptake of Monjuvi, like I said, is going very well in this second line plus patient population. You know, like any new therapy that launches, you know, you end up starting in later line therapies, third and fourth line therapies, for example, and we continue to try to move patients, try to move physicians up into the second line setting because we think that's where the patients will benefit the most. You know, our uptake at launch was mostly in the academic centers, and we do follow the academic centers that actually have CAR T therapies available to them, and we're actually doing very well. Patients who are referred to academic centers for CAR T therapy sometimes get there and they're actually not eligible for CAR T therapy, so then they need another therapy to choose. As we progressed with our launch, More and more of the community oncologists are taking up Monjuvi, and that's surpassing the number of patients who are being treated in the academic center. But we still have some of the largest centers in the country that are using this regimen of Monjuvi and Len. As far as bispecifics go, we don't know that that's a problem necessarily yet. And in fact, we think that the safety and efficacy profile of Monjuvi will match up very well to any of the new therapies that might be coming next year. As far as the CAR T therapies go, again, you know, physicians will choose their patient population based upon their ability to tolerate the side effects of the CAR T therapies. So generally, it might be younger patients who are healthy that they might select for those therapies. But again, that's a limited number of centers around the country. So we think that Monjuvi has a long way to go with treating patients with diffuse large B-cell lymphoma.

That's really helpful, Culler. Thanks, Barry.

Thank you. Our next question is coming from Tyler Van Buren from Piper Sandler. Your line is now live.

Hey, guys. Good morning. Thanks for taking the question. Just had another one on Monjuvi. You talked about the successful launch and the uptake in the academic community settings and market share gain. So curious to hear your latest thoughts and if you believe Monjuvia could be a billion-dollar product in the existing indication or if you need the front-mind and in-mind studies to be successful. And I noticed that B-Mind wasn't mentioned in the presentation and barely mentioned in the press release, so just curious to hear if that was like a deliberate deprioritization of what's going on there.

So, Tyler, I'll just take the first part of your question and hand it over to Stephen about BeMind. But, you know, what we said several times in the past is that in the current indication, Monjuvi could reach $500 to $750 million. And, you know, we'll, as we continue to develop more combinations and move up to the frontline setting, and that's $500 to $750 in the U.S., by the way. So anyway, that's where we're at, and I'll hand it over to Stephen for Beemind.

Just a word. If you look at the worldwide sales for Monjuvi in second-line DLBCL, assuming it's 500 to 750 in the U.S., it would be around a billion or north of that for the world.

Tyler Hyatt, Stephen. In terms of your question on B-Mind, it's just that it's an ongoing study. There are no changes to it, and there are no news updates. It's a very relevant study. It's comparing to bendamustine rituximab, which is a regimen used in that particular setting, and studying the utility then of a CD19 antibody in tafacitumab there. We hopefully will have data on that study if the events track as expected in 2022, but just that it had nothing new to report.

Great, thanks so much.

Thank you. Our next question today is coming from Alethea Young from Cantor. If it shows your line, is that live?

Hey, guys. Thanks for taking my question. And also, Mike, congrats on being one of the greatest IRs out there in the biotech field and keeping us in check. I did want to ask two questions. One, just about your thoughts on your PI3 kinase with the approval of TG Therapeutics yesterday. And how do you think about positioning in that market after them? And then also, I just wanted to get kind of your perspective on the adenosine access of the CD73 PD1 combination. Is that something that you would use in non-small cell as a potential option? Or how do you think about like non-small cell combinations with your PD1 things?

Alicia, hi. It's Steven. Thanks for the question. You know, I think the umbralisib approval from TG Therapeutics is good for patients. Obviously, you know, we are believers in the PI3 kinase delta class. We think it has, you know, somewhat of an unfair overhang, you know, from idealists of years ago and that many have now addressed many of the untoward side effects. So, you know, we view that as a positive outcome. It doesn't in any way impact our plans in terms of where we go with the Citadel studies and the filings this year, hopefully in follicular marginal and mantle cell lymphoma. If you look on the face of it, you know, with many, many caveats on cross-trial comparisons, but our independently reviewed activity in all those indications, follicular marginal and mantle cell, is higher than that reported with drugs like umbralisib, again, with lots of caveats. So we're very encouraged by the efficacy we've seen with paraclisib and obviously are proceeding with our plans. Tolerability is important as well. And obviously, you know, we looked at their label and their discontinuations versus ours, et cetera. And we, again, you know, think the class has been somewhat unfairly burdened by prior products. We like both our efficacy and safety profile. And we see, again, to be repetitive, no impact. In terms of switching, you know, to earlier programs, you spoke about adenosine and the adenosine-targeted compounds. We have one in the clinic already, a small molecule A2A, A2B inhibitor that's open and enrolling that we announced at J.P. Morgan. We also said, you know, we'll be following very shortly with a CD73 antibody that will inhibit adenosine production higher up in the pathway. And Hervé showed in his presentation that the two together, at least in a preclinical model, are synergistic. We also feel that this is potentially an area where you may require triplet therapy and you'll have to add checkpoint on top of it, PD-1. It's too early to say where these will be going in terms of histology. Lung would always be of interest, particularly in lung patients that don't respond to current IO therapies. So that'll remain of interest. I'll just remind you also that both the adenosine program and the CD73 antibody or in-house programs, and we're very, very proud of them.

Thanks. Thank you. Our next question today is coming from Tazina Maad from Bank of America.

Your line is now live.

Hi, good morning. Thanks for taking my questions. As you approach the RuxCream launch, I just wanted to get a little bit more color on how you're thinking about How the growth margin for RuxCream, let's start with Atopic Derm, might differ from the growth margins that you see for Jacify? And then as a quick follow-up.

So in terms of the COGS for RuxCream, the guidance that we provided on COGS, the 6% to 7%, does reflect RAC Scream as well. In the near term, as we indicated, we have been billing on the supply of API for RAC Scream, and that would result in COGS being lower as we use up the supply that we have already expensed in 2020, which was reflected under R&D.

Okay, so would you expect that once you have a second indication that that COGS would continue to improve?

So the COGS that we have, the COGS benefit from the API that we have already expanded will take place over a period of time starting with the launch and then obviously we'll go back to more normalized levels. So as we use What has already been expensed, it would be reflected in lower COGS.

Okay. And then as it relates to how physicians are viewing RuxCream now, just kind of based on you can't officially market it, but how are you thinking they understand the difference between RuxCream and Eucrisa and where the benefits of RuxCream might be?

Hi, Kansians. Barry, I'll try to handle that. Well, I think, as I said before, that the physicians we've spoken to, and there's many across the country, all the dermatologists see the TruAD1 and TruAD2 data as really something unique. They really like, dermatologists really like using topical therapy, and they see this as the most effective topical therapy that they've seen ever. So, you know, Eucrisa had, you know, some disadvantages to it when it launched. Certainly, it actually burns on application and doesn't seem to be that effective. You know, the side effect profile is pretty good, but I think physicians, dermatologists have turned away from it, and they're very excited about what they see so far from RuxCream.

And so, Barry, if it does get approved, Do you think that it would have a steep uptake or do you think there still would need to be some physician education initially?

Well, there's always physician education that's necessary as well as perhaps patient education, but we think that the uptake is going to go very well.

Okay, thank you.

Thank you. Next question is coming from Salvine Richter from Goldman Sachs. Your line is now live.

Good morning. Thanks for taking my question. Could you remind us where the QD formulation of JAK-FI study stands from the Limber Initiative? And then, Hervé, if you could just give us your kind of updated thoughts on business development strategy as you look to 2021 and beyond. Thank you.

Sylvain Hyatt, Stephen. I'll start. The once daily formulation of ruxolitinib continues to go well. The bioavailability and bioequivalence work is being completed. We're now in stability and we need 12 months of stability to complete to then put the submission in. We would expect a 10-month review from that and thus expect an approval before the end of 2022 if everything goes smoothly. We are within, you know, everything expected. in terms of the strict guidance required on BABE. So we're hopeful this will be, you know, a successful submission.

So, Sylvain, regarding BD, in fact, looking at what we did this year in 2020, last year, is a good way maybe to see what we are, how we are approaching the BD strategies. We had a deal like Morphosis where, It was very complementary with our portfolio. You can see we have combinations that we are doing now with Partaclizib. There are a lot of synergies on the commercial side, both in Europe and in the U.S. So if there are opportunities looking like that, I think it would certainly be interesting to us to continue to grow our revenue line and to diversify. So that would be one... One aspect, we also did a technology deal with a company called Selencos, and that was about myelofibrosis. So you can imagine also that we are looking at opportunities that we'll be adding to our internal portfolio as part of the Limber program. And in general, the way we are thinking about it is if there are products that could be available online, that would be fitting with our hematology, oncology portfolios, that would be the priority. And if there were opportunities that are also providing additional revenue to our dermatology team in the U.S., it could be also something that we look, but mostly on a different timeline, as we will be launching first atopic dermatitis this year and then vitiligo next year. So There is no urgency to add to that in the short term. So I would say in the short term, hematology, oncology, maybe over a longer period of time we could be looking at immunodermatology and the type of assets we are looking at are products that will be launching between 2023 and 2026.

Thank you.

Thank you. Next question today is coming from Morrow Goldstein from Izuhu. Your line is now live.

Yes, thanks so much for taking the question. Just a follow-up, perhaps, on RuxCream and just trying to understand a little bit around the dynamics of launches. As most derm products are associated with some type of support, couponing program and the like. And so I'm curious as to what your thoughts are on that. And also, one of the areas that the company hasn't touched on in a while is Jackify in PV and some of the efforts pre-COVID to enhance that patient population. I'm wondering if you could touch on that as well.

Sure, Mara. I'll try to answer both of those on RuxCream and then on Jackify in PV. So, you know, we have plans in place, just like many products that you see, particularly in dermatology, but, you know, throughout the United States for newly launched products, where we're going to ensure that when a dermatologist, when a physician prescribes RuxCream, that it's as easy as possible for the patient to obtain it. So that begins first with market access, working with PBMs and payers to make sure that there's as few restrictions as possible, as few prior approvals as possible. And then once we get to the pharmacy counter to be able to help the patients with their co-pays and deductibles through, as you say, a couponing program or other ways for us to manage that. As far as Jackify goes, Jackify in PV goes, Jackify continues to grow in PV faster than it does in MF. And even though MF continues to grow, the total number of patients continues to grow. I suppose our biggest activity that we're doing in PV, well, is first talking about the long-term follow-up of the response studies, which are very, very important. Over time, the data just continued to get more impressive. and look better, but also we had our disease awareness campaigns around polycythemia vera and the number of patients who are suffering because of the symptoms that they undergo when they're getting PV. So we're very encouraged about the future of JAKIFY in polycythemia vera, as well as our other indications, but as you indicated, it's a pressing need for those patients to make sure that they have the most effective therapy to take care of their symptoms and their hematocrit.

Okay. Thank you. Thank you. Our next question is coming from Mark Fromm from Cowan & Company.

Your line is now live.

Hi. Thanks for taking my questions, and let me offer my congratulations also to Mike to the next step in his career. Maybe, Barry, with... And your comments and Stephen's comments, there certainly are people who do get reimbursed today for off-label use of various products. But we also hear from consultants that a number of plans consider this to be a cosmetic indication. Barry, what's your sense as to what percent of the relevant population already has this covered and recognized by their plan as a true medical and a reimbursable condition? And then kind of what efforts do you need to do between now and launch to grow that number?

Well, I'm not sure I can tell you what number are currently covered for therapies because there aren't very many therapies. Stephen talked about phototherapy. That's one way. You know, other topical therapies may or may not be reimbursed, but I think it's You know, Stephen talked about the, you know, the millions of patients in the United States, somewhere between 2 and 4 million patients that have vitiligo, but maybe only 150 to 200,000 patients are seeking therapy. And that's because, in fact, there aren't very many effective therapies. We do have to continue to educate both payers. I don't think we really have to educate dermatologists very much. Dermatologists know that this is an autoimmune disease that drastically impacts patients' lives. So having a therapy like RuxCream for vitiligo, we think, can greatly enhance the quality of life for those patients. And it's essential upon us to educate payers that this is not a cosmetic issue, that it is an autoimmune disease, and that the responsible thing is actually to pay for it.

Are there some kind of similar launches that have happened historically that you'd point to that have kind of faced the same type of dynamic?

Well, that comes to mind. So, you know, I think there's lots of diseases that we come across that haven't had, you know, payers wanting to pick it up. You know, you might even say eczema, for example, when older products were launching, they might have thought that this is something that's not important, but in fact, you know, it impacts patients' lives very much, where they don't want to go out of the house and where, you know, they're suffering not just itching and staying awake at night, but of course, even bleeding and infections. So that's one example. I'm sure there's many other examples where education of payers and prescribers is very important, and we think that is vitiligo, but we think that we can manage to overcome that hurdle.

Great. Thank you.

Thank you. Next question is coming in from Evan Siegerman from Credit Suisse. Your line is now live.

Hi, all. Thank you for taking my question. I just want a quick shout-out to Mike for everything over the past couple of years. You will be missed. So I wanted to ask on the LIMBER program, you know, while it might be early, can you characterize kind of maybe some demand or potential feedback you've gotten on the QDRUX option among both physicians and patients. And what do physicians really want to see from this QD formulation in terms of efficacy to potentially switch patients from the current Jacopi?

Evan, hi. Thank you. It's Steven. I'll start. Others may want to add comments. You know, the LIMBA program itself is an umbrella program. It has numerous pillars. The formulation work was one of the pillars. Obviously, you know, once daily has potential compliance improvement over twice daily, although in oncology, you know, people tend to do very well with twice daily. But that was one of the efforts behind it for those people who would potentially benefit from that. Additionally, you know, it does give us down the line very important optionality on fixed dose combinations. should we develop, you know, for example, PI3-delta or BET or ELK2 as a once-daily, it could lend itself to be combined with a once-daily ruxolitinib in one FDC. So that would be really, really important from that. You know, after we pursue the 505B route through bioavailability and bioequivalence, finish the stability file, and hopefully have it approved at the end of 2022, we could look at things that may be be slight differences in the clinical profile of the once daily. For example, just by its very nature from a pharmacokinetic point of view, it'll have a lower peak, a lower C max. If that is one of the causes of anemia from the drug, which we think it is, it may tend to have a lower rate of anemia with the once daily, which would be of benefit in MF patients because that's one of the reasons they discontinue and then allow patients to stay on drug longer in their as a direct result, actually enhance efficacy as well. So there are lots of aspects to the program. It's stepwise. It's about getting approval first, which may lend itself to compliance, optionality on fixed-dose combinations, and potentially an upside on ameliorating anemia.

Thanks. Excellent. Thank you.

Thank you. Ladies and gentlemen, we have time for two more questions. Our next question is coming from Ben Benjamin. From J&P Securities, your line is now live.

Hey, good morning, guys. Thanks for taking the questions. Congratulations on an amazing quarter, great guidance, and congrats, Mike, as well. Maybe just starting off the limber program, you know, this is probably for Stephen. Can you just talk a little bit about, you know, these two phase three trials that are ongoing, maybe the timing as to when we might see readouts and how the optimal dosing, you know, was determined for both Ruxin and Parcyclosib? And maybe just as a follow-up, Herve mentioned Fallen Coast. I'm just kind of curious, you know, what was the rationale to lead to this collaboration? Is there an unmet need that this collaboration seeks to address, or is it more just, you know, trying to find a best response rate in MPNs and MPNs?

Yeah, Ren, it's Stephen. Thanks for your question. So, you know, again, back to the limber program, we just spoke about in the prior question about the first pillar around formulation work. The second pillar is around, you know, important combination work with combinations that either enhance efficacy or enhance safety like the ELK2 or both because, you know, you ameliorate anemia with ELK2 and you can stay on rocks. The DELTA program that you alluded to has two very important phase 3s that are open site initiations ongoing now. One is a suboptimal setting for patients who have had at least three months of ruxolitinib but have not had an adequate response in terms of spleen or symptom control and are then randomized to RUX plus DELTA in that setting, PR3 DELTA versus RUX alone. The dosing, because you asked the question specifically, is for RUX itself. Obviously, we know optimal dosing and how to titrate based on potential safety issues like thrombocytopenia. The delta dosing came from proof-of-concept work we did in prior patients who had inadequate responses to long-term RUX. And that's how we determined that the 5 milligram was active there, as well as had a tolerable profile. And that's what we're using in both the suboptimal study and the first-line study, which are now open and site initiation is ongoing. In terms of selling costs, it's a completely new mechanism of action. There's some enticing small clinical anecdotes. It's umbilical cord-derived regulatory T-cells that they have a way to enrich for CXCR4, which are then regulatory T cells that would then hone to the bone marrow. And they've shown in a small number of patients who are heavily pretreated, some enticing data of clinical response, drop in allele burden, and maybe even some fibrosis improvement. It's very early. We like the way the deal's structured because we go in with a small upfront We finance the proof-of-concept work, and then we have the option to take it up. And we really, you know, it's exciting. It's an off-the-shelf umbilical cord with a completely new MOA. So that's the drivers behind that one.

Thanks.

Thanks for taking the questions. Thank you. Our final question today is coming from Jay Olson from Oppenheimer. Your line is now live.

Oh, hey, thanks for taking the question, and thanks to Mike Booth for all his help over the years. Maybe just to continue on the theme of your limber program, I appreciate the progress there. And I was wondering if you could provide any details on your BET inhibitor and what level of incremental benefit for the combination of BET inhibitor plus RUX versus RUX alone would be clinically meaningful on SVR35 and TSS? Thank you.

Yeah, Jay, it's Stephen. Thanks for the question. So just a reminder, this is not a new compound. It's a compound we had in the clinic years ago that we dosed more than 100 patients in a very solid tumor mind frame at the time. We were trying to drive MYC inhibition with our BET inhibitor. And we treated, as I said, north of 100 patients We had adequate inhibition, but we had a lot of on-target toxicity in terms of thrombocytopenia and not much efficacy in solid tumors. So we put that program ourselves on hold or on the shelf, so to speak. And then obviously, you know, externally the field involved, CPI 610 showed data. There's monotherapy in MF patients in second-line setting and then in combination with RUX in the first-line setting. that we think has an interest in signals. So we reinvigorated our program. It's up and open now for enrollment. And the idea is this calendar year in the first half, hopefully COVID behaves, but is to get monotherapy safety. And then in the second half of this year, get the combination safety with RUX with our own bet inhibitor. And then potentially, you know, go ahead with pivotal studies. You ask, how does it differentiate? So we were able to, with external data to model a completely different dosing scheme from our prior one. We had about one-third to one-quarter of the dose who were in the clinic before. We've looked at the external environment, and we think that'll weave the therapeutic ratio in terms of effect, because we know it's effective in MF with our own data preclinically as well, and then not have unacceptable rates of thrombocytopenia. But it's not a different bed inhibitor in any way in terms of targeting otherwise. And then we'll make bigger decisions once we have the safety data at the end of this calendar year. Thanks.

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further closing comments.

Thanks, Kevin. Thank you all for your time today, for your questions, and also, of course, for your kind words. You'll all be in excellent hands with Christine, I'm sure, and both of us are available for the rest of the day for any follow-up questions. But for now, thank you all very much, and goodbye.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.