Incyte Corporation

Hello, and welcome to the Insight first quarter earnings 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. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Christine Cho. Please go ahead.

Thank you, Kevin. Good morning and welcome to Insight's first quarter 2021 earnings conference call and webcast. The slides used today are available for download on our website. I'm joined on the call today by Herve, Barry, Stephen, and Christiana, who will deliver our prepared remarks, and by Dash, who will join us for the Q&A session. Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements and are subject to a number of risks and uncertainties that may cause our results to differ materially, including those described in our 10-K for the year ended December 31st, 2020, and from time to time in our other SEC documents. We'll now begin the call with Hervé.

Thank you, Christine, and good morning, everyone. In the first quarter of this year, we continue to execute on our strategy to drive further growth and diversification. We entered the year following a strong 2020 where we were able to increase revenue by 24% and achieve multiple regulatory successes, including three product approvals. We continue to deliver across our portfolio in the first quarter. Our revenues grew 6% year over year to reach $605 million, with growth driven by new product launches and royalty revenues of $100 million. Q1, which is typically a quarter impacted by a higher growth to net and forward purchasing patterns in the U.S., was further challenged by the ongoing pandemic. Total patients on JacaFi grew year over year, and in March, new patients started to recover to pre-COVID levels. The launches of both Monjuvi and Pemazir continue to progress with good uptake from both academic and community physicians. Barry will provide additional details in his remarks. We made significant progress across the clinical and regulatory landscape, with PEMASI approved in both Europe and Japan, becoming the first internally discovered product to be globally commercialized by Insight. We also have three regulatory applications under priority review at the FDA, as well as two applications under review in Europe, potentially increasing our sources of revenue in the near term. Last month, we presented updated data for ROX-CREME at the American Academy of Dermatology meeting, including the two-year data from our Phase II vitiligo trial and updated pooled results from our Phase III true AD program in atopic dermatitis, with each highlighting the exciting potential of ROX-CREME as a treatment for these two indications. We also announced with our partner Lilly two positive pivotal trials for baracitinib in alopecia areata. If approved, baracitinib could be the first FDA-approved therapy in alopecia areata. Looking ahead over the next one to two years, we have the potential to undergo a significant transformation here at Insight with several expansion opportunities as new products and new indications are launched across the U.S., Europe, and Japan. These include Roxcrim in atopic dermatitis and vitiligo, Roxalitinib in chronic GVHD, Safacitamab in relapsed refractory DLBCL in Europe, Parsaclizib in multiple types of lymphomas, and QD Roxalitinib in MFPV and GVHD. As we look at our key business objectives for the year, we have three priorities. First, to grow our existing revenue base by driving new patient starts for JakaFi and accelerating the uptake of Monjuvi and Pemazir. Second, to expand upon our revenue base by successfully launching new products and new indications. We expect several regulatory decisions before the end of this year. And third, to continue to progress our late-stage pipeline as well as our earlier-stage program. The call to Barry. I'd like to now take a minute to speak about our ESG initiative, which we call Global Responsibility, and which was launched in 2019. Since then, we have increased our ESG disclosures and improved upon our objectives. In this slide, we list a few key accomplishments among our five priority areas, and I'd like to specifically highlight our efforts on the environmental front. In an effort to reduce our environmental impact, we offset 100% of our 2019 measured carbon emissions in the U.S. through verified reforestation carbon credits in partnership with the Arbor Day Foundation. Looking ahead, we have set a goal to achieve carbon neutrality through a combination of absolute reductions and offsets by 2025. With that, I'll hand it over to Barry to cover the individual product performance.

Thank you, Hervé, and good morning, everyone. Decify net sales in the first quarter grew year over year to $466 million. As you may recall, first quarter growth in 2020 was 22% year over year, due in large part to growth in patient demand but also to a one-time increase in purchasing due to concerns over COVID-19 restrictions. Our Q1 net sales growth this year was impacted by the pandemic, a higher growth to net, and forward purchasing patterns. Patient demand growth of 2.3% in Q1 was softer than normal, due primarily to the decline in new patient starts since the beginning of the pandemic. The graph on the right shows monthly new patient starts from 2019 to the end of 2021. In the first quarter last year, new patient starts were higher versus prior year, but then significantly declined in Q2 and Q3 of 2020. This loss of new patients impacts total patient growth in subsequent quarters and explains part of the slow growth in Q1 of this year. We are seeing a gradual return of cancer patients to oncologist offices And as you can see, by following the red line, new patient starts are now at pre-COVID levels. So, due to patients returning for their treatments, our representatives being able to have face-to-face meetings with oncologists, our improved gross to net for the rest of the year, and our anticipated launch in chronic GVHD, we expect strong growth in the second half of this year. Therefore, we are very confident in our full year outlook for Jackify and are reaffirming our guidance of $2.125 billion to $2.2 billion. Turning now to slide 10, the launch of Pemezir continues to perform well and has exceeded our initial expectations and we continue to see an increasing use in the second line setting. Since launch, the rapid adoption of FGFR2 testing by oncologists has facilitated the identification of appropriate patients for treatment with Pemizir, and as a result, we see a continuous flow of new patients. We launched Monjuvi with our partners Morphosis in the third quarter of last year, and our teams demonstrated their ability to launch an injectable drug in a difficult environment. Our field teams continue to generate awareness amongst physicians of the strong efficacy and safety profile of Monjuvi and we have maintained a leading share of voice near 50%. We are seeing encouraging growth in the number of purchasing accounts which has risen by over 25% since Q4 of 2020 to over 500 at the end of March. Looking ahead, we expect an acceleration in the adoption of Monjuvi in the second half of this year as oncology offices reopen patients' diagnosis and treatment rates normalize, and our field teams are able to fully educate oncologists on the benefits of Monjuvi with in-person meetings. Our focus now and going forward is on continuing to grow our market share in the second-line setting so more patients can benefit from Monjuvi earlier in their treatment plan. Additionally, at ASCO in June, we'll be presenting important three-year follow-up data from the L-MIND trial which will provide additional insights into the use of Monjuvi and Len in patients with relapsed refractory diffuse large B-cell lymphoma. Turning our attention now to ruxolitinib cream in atopic dermatitis. We recently conducted a survey of key external experts and payers assessing their perspective of ruxolitinib cream. Physicians and payers perceived ruxolitinib cream to be differentiated from other topicals and systemic therapies from both a safety and efficacy standpoint, and noted improvements in itch as the most impactful for both physicians and patients. In a separate survey of nearly 300 dermatologists, results show that ruxolitinib cream has a significant opportunity to address a large unmet medical need in the treatment of atopic dermatitis, and that physicians have a high willingness to prescribe. Our dermatology field force is fully assembled, and we are ready for a rapid launch upon approval. Turn to slide 13. Earlier this year, the FDA hosted a vitiligo panel in which patients living with the disease spoke on various subjects, including how vitiligo has impacted their quality of life and the lengths to which they go to seek treatment. Again, highlighting the need for a novel and effective therapy such as ruxolinib cream. I'll now turn the call over to Stephen for a clinical update.

Thank you, Barry, and good morning, everyone. Starting with ruxolitinib cream, over the past year, we have presented data from the TrueAD program highlighting the safety and efficacy of ruxolitinib cream in atopic dermatitis. At the American Academy of Dermatology conference in April, we presented additional pooled analysis from the two Phase III studies demonstrating ruxolitinib cream's impact on efficacy metrics such as itch, sleep, and other quality of life measures across multiple subgroups. In patients living with atopic dermatitis, the cycle of itching and scratching can lead to infections or disruptions in sleep. And these results further highlight the potential for ruxolitinib cream to become an important therapeutic option for these patients. Turning to slide 16. We previously showed at EADV in 2019 Phase II results for ruxolitinib cream in vitiligo at 52 weeks. At AAD this year, we presented updated 104-week data from the Phase II vitiligo program showing treatment with ruxolitinib cream produced substantial repigmentation of vitiligo lesions through 104 weeks of treatment. Nearly three-quarters of patients who received ruxolitinib cream 1.5% BID for 104 weeks achieved a facial VASI 75, and nearly 60% achieved 90% clearance of vitiligo lesions on their face by week 104. There were no treatment-related serious adverse events reported, and ruxolitinib cream was well-tolerated throughout. We are excited by the potential of ruxolitinib cream in vitiligo and look forward to sharing with you the results of the Phase III TrueV program, which should read out in the second quarter. On slide 17, a reminder of the broad clinical development program for tafacitimab in combination with other therapies, including our PR3 kinase delta inhibitor, paraclisib, across several non-Hodgkin's lymphomas in both the first line and relapsed or refractory settings. In MIND, a pivotal trial evaluating tafacitimab plus R-squared in relapsed follicular lymphoma is ongoing, and we expect to initiate another pivotal trial, front MIND, in first-line diffuse large B-cell lymphoma in the second quarter. Top MIND, our proof-of-concept study of tafacitimab in combination with paraclism, is expected to initiate in 2021, and our proof-of-concept study in collaboration with Zencore is expected to start later this year. Turning to the next slide, we continue to progress our limber development program. Once daily ruxolitinib data is in-house, and we expect data release at an upcoming medical conference, followed by an NDA submission early next year. Our paraclista plus ruxolitinib combination trials are progressing, and our BET and ELK2 monotherapy dose escalation trials are ongoing, with planned initiation of combinations in the second half of this year. On the right side of the slide are results from a turpentine-induced anemia mouse model. Turpentine was used to elicit an inflammatory response, which acutely increased the levels of hepcidin production and thus anemia. As can be seen in the chart, anemia developed in mice injected with turpentine, and when given in conjunction with ruxolitinib, hemoglobin levels were further reduced. The pink data on the right side showed that ELK2-treated mice, when given with ruxolitinib, had less severe anemia as demonstrated by the improved hemoglobin levels. In closing, we have made significant progress within our key development programs in the past year, and we expect another busy year for Insight with multiple potential approvals and regulatory submissions throughout the year. With that, I'd like to turn the call over to Christiana for the financial update.

Thank you, Stephen, and good morning, everyone. Our total product and royalty revenues for the quarter were $605 million, representing a 6% increase over the first quarter of 2020. Total product and royalty revenues for the quarter are comprised of net product revenues of $466 million for Jacopi, $26 million for iClusic, and $30 million for Pemazir. Royalties from Novartis of $66 million for Jacavi, and $2 million for Tabrecta, and royalties from Lilly of $32 million for Olumian. Jacavi net product revenues in the first quarter of 2021 were impacted by the decline in new patient starts since the beginning of the COVID-19 pandemic, forward purchasing in the first quarter of 2020 in advance of the annual resetting of copay obligations, and the typical higher gross-to-net adjustment in the first quarter compared to the other quarters during the year due to the impact of the Medicare Part D coverage gap or donut hole. The 1% year-over-year growth in Jaka Finet product sales also reflects the higher patient demand and forward purchasing late in the first quarter of 2020 driven by concerns that the COVID-19 pandemic could cause potential supply disruption. The decrease in our closing net sales in the first quarter of 2021 from the prior year quarter also reflects the impact of COVID-related forward purchasing in the prior year, partially offset by positive currency effects. Despite the impact of the COVID-19 pandemic on patient demand, we remain confident in the outlook for the year and our ability to continue to grow revenues through our existing products and new product launches like Pemazir and Tabrecta. Moving on to our operating expenses on a gap basis, ongoing R&D expenses of $295 million for the first quarter increased 6% from the prior year period, primarily due to cost to support the continued progression of our pipeline program. Total R&D expense for the first quarter of $307 million decreased 72% from the prior year quarter, which included the upfront consideration of $805 million for our collaborative agreement with Morphosis. Our ongoing SG&A expense for the quarter of $141 million increased 27% from the prior year quarter, primarily due to our investments related to the establishment of the new dermatology commercial organization in the U.S., and the related activities to support the potential launch of raxolitinib cream for atopic dermatitis, as well as the timing of certain expenses. Total SG&A expense for the first quarter of $154 million includes a $30 million reserve related to a settlement in principle in connection with the December 2018 civil investigative demand from the US Department of Justice. Our collaboration loss for the quarter was $10 million, which represents our 50% share of the $20 million U.S. net commercialization loss for Monjuvi. This is comprised of total net product revenues of $15.5 million and total operating expenses, including COGS and SG&A expenses, of $35.5 million. Finally, our financial position continues to be strong as we ended the quarter with approximately $2 billion in cash and marketable securities. Moving on to our guidance for 2021, we are reiterating our revenue, COGS, R&D, and SG&A guidance for the year. We remain confident in our full-year guidance for JakaFi based on the recent recovery of new patient starts and the potential approval later this year in steroid refractory chronic GVHD. Operator, that concludes our prepared remarks. Please give your instructions and open the call for Q&A.

Thank you. And now to conducting your question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. We ask you to please ask one question, then return to the queue. Once again, that's star 1 to be placed in the queue. In the interest of time, we ask you to please ask one question, then return to the queue. Our first question today is coming from Mark Fromm from Cowan & Company. Your line is now live.

Hey, yes, thanks for taking my questions, and thanks for the slides. Barry, you gave a lot of detail on Jackify, new patient starts and the trends there, and kind of why you have confidence that things are going to improve through the rest of the year. Can you give a little bit more color on the Monjuvi side of things and why you're so confident? It would seem that that indicate DLBCL would be a little less susceptible to kind of pushing off appointments, diagnoses, and starting therapy than some of the indications Jackdye has.

Thanks for the question, Mark. Yeah, so, you know, in diffuse large B-cell lymphoma, obviously these patients are sick. They need to get therapies. Nevertheless, we know that from claims data, that patient visits are down by about 10%. Nevertheless, our reason that we're optimistic about Monjuvi is because Monjuvi-Len combination is a very good combination. Every time we talk to oncologists, hematologists, they're very excited when they see the profile. Our challenge is to continue to educate healthcare professionals, hematologists, oncologists, specifically about the benefits that Monjuvi-Len combination gives. You can see the two-year update and the duration of response just keeps getting better at 34 months. We'll have an update at ASCO for a three-year follow-up of the L-mine data. Again, the safety and efficacy are there. I just don't think because of the pandemic, we hadn't been able to educate, to get in front of treaters of diffuse large B-cell lymphoma as much as we want to. But now we know that the offices are opening up again, not fully. But they are opening up again, and our field teams will be able to get in front of them and share with them what we think is exciting data for Montuvie LEN.

And how do you see – there's a new entrant coming into the market as well. How do you see that playing out?

Well, it's going to improve in the third-line setting. We're the only regimen that's approved in the second-line setting. You know, we'll see how Lonca does. You know, we know from feedback from our hematologist oncologist that, you know, the profile that they see from Anjuvi Len seems superior to other regimens, possible regimens that they have. We know that other antibody drug conjugates like Lonca have cumulative toxicities, so that could be a problem. The other entrants that are potentially coming all have their own toxicity problems, whether it's effusions or cytokine release syndrome. So we think really the safety and efficacy of Monjuvi-Len will stand up and will be the first choice in a second-line setting.

Thank you. Our next question today is coming from Tazina Mott from Bank of America. Your line is now live.

Hi, good morning. Thank you for taking my question. I wanted to focus mine on RuxCream. You guys will have data coming up soon for Goodaligo, and I wanted to get a sense of what data we should expect at the top-line press release and what is the expectation for what should be considered clinically meaningful data. And then for the atopic dermatitis indication, I just wanted to get a sense of whether you have started any kind of label discussions with the agency. Thank you.

Cezine, it's Stephen. Thank you for your question. So on Ruxcream, as you allude to, we expect both Phase 3 to get the readout during this quarter, this half of the year. We expect it to replicate the Phase 2 data we've seen. You just saw the 104-week update, including the continued... repigmentation that's seen over time, especially you saw that facial data, you know, even the 90% rate now getting, you know, greater than 60% of patients achieving that. And, you know, there's very little spontaneous remissions of vitiligo, as you saw in our data we presented to date. You know, placebo rates are negligible. The studies are large because to require a safety database not to hit the efficacy numbers. So we have a profile that we've already seen now in Phase 2 with a two-year update that is of enormous benefit to patients should they elect to be treated for it. And then you couple that with an extremely tolerable safety profile. From an atopic dermatitis point of view, we don't discuss regulatory interactions. It's gone as expected. We're very comfortable where we sit. And we, you know, remain on track for achieving everything we need, hopefully by the PDUFA date. So that's how, you know, we're comfortable in that regard. Thank you.

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

Hey, guys. Thanks so much for taking my question. So another question on topical rocks. The feedback from KOLs has been had some, I guess, some questions around or unknowns around the durability of effect of typical topical AD drugs. And I'm sort of wondering if you could remind us what data you guys have produced or plan to produce that might help improve perceptions around this durability question and what kind of education is going to be important to ensure that topical RUX is utilized as a chronic rather than a bridge to biologics. And then just maybe as a corollary to that, you know, I know you don't give sort of a blow-by-blow of what the ongoing regulatory discussions are, but just bigger picture, just curious, the degree to which the FDA's ongoing safety review of the JAK class, the oral JAKs in atopic derm, ties into the regulatory discussions there, generally speaking. Thanks.

Ron and Stephen, thank you. You know, in terms of atopic dermatitis, again, you know, from the data we've already shown publicly on a few occasions, you see, obviously, you know, the effect in terms of investigative global assessment, eczema area severity index, you know, being about the best presented to date in mild to moderate atopic dermatitis. But you couple that with the itch response, which is, you know, in our view and our opinion leader's view, outstanding and also occurs rapidly. So you get patients having their dominant symptom resolved pretty quickly and then the resolution of the skin effect. In terms of the durability of effect, we expect and what we've seen is patients treat to remission and then sort of go off the drug and then restart it again in terms of when they get recurrence because it's a chronic condition and of the symptoms, including itch or the skin effect. We estimate, you know, from the clinical data that we've seen on the study, that somewhere around, you know, three to four 60-gram tubes a year would be used, but it's hard, you know, to see what will happen in the real setting because then patients won't be in the clinical trial and obviously, you know, will be managed by physicians in their own effect. that will give you a sense of the durability of response, and that's from the clinical trial setting. In terms of, you know, to be repetitive on the labeling and discussions in the FDA review, we just, you know, as a rule, don't speak about them and, you know, refer to the FDA in that regard. But to be repetitive, we're very comfortable where we are with the review. It's progressing well. And, again, our goal is to finish this by the PDUFA date. Thanks.

Thanks so much, Stephen.

Thank you. Next question is coming from Vikram Puri from Morgan Stanley. Your line is now live.

Great. Thanks for taking my question. So I had two on the LIMBUR program. First, for once a day RUCs, you previously mentioned that you expect EAB data in the first half of this year. So I wanted to see if that data set is going to be presented publicly. And regardless of whether it's public or an internal readout, What constitutes success for this data set? And then secondly on limber, it looks like there's a Phase II study expected to start soon evaluating idacitinib as part of the limber program. So I was just wondering if you could speak a bit about the rationale for studying this drug in this setting. Thanks.

Vikram Hyatt, Stephen again. You are correct. So the RUX-XR once daily program has progressed well. It's a relatively preset route in terms of bioequivalence and bioavailability testing of the different tablet strengths. We've completed that. We have it in-house. And we follow the FDA guidance on what needs to be achieved comparable to the RUX that's used in the clinic in terms of area under the curve. There's very strict guidance on what you have to come within to meet that, and then we have that data in-house. Yes, we do expect to have a public presentation of the data this calendar year at an appropriate meeting and forum, and we'll give that to you. The other rate limiting step there is just stability. So once we completed the BA and BE, all the strengths are laid down for 12-month stability. As soon as that completes, then we expect to proceed with filing very early next year. And what should be about a 10-month review period, we should have an approval if everything goes well right before the end of 22, early 23 sort of time period if you work that out. But again, to be repetitive, we will present the data publicly to you this year. Itacidinib is interesting. It's a relative JAK1 agent compared to ruxolitinib, which is more JAK1, JAK2. And we're trying to leverage that effect in terms of its cytopenias to see if we can have some benefit in myelofibrosis patients who require... a modulation of the effect in terms of less JAK2 and less cytopenias. So it'll be tested in a phase two setting there for the appropriate patients to see if we achieve proof of concept with this drug. Just let me remind you, it has ongoing work in multiple other settings, including cytokine release syndrome, including bronchiolitis obliterans, and including some other work as well in inflammation and autoimmunity. So that's not the only program it's been used for. Thanks. Oh, and sorry, also I should mention ongoing chronic GVHD work where we're doing some dose ranging work, which we'll get data in towards the end of this calendar year. Thanks.

Got it. Thank you.

Thank you. Our next question is coming from Andrew Burns from SVB Learning. Your line is now live.

Hi, thanks. I also have a question about the Limber programs. As some of them start to advance, I was wondering if you could give us any qualitative comments about which you're most excited about. And then I could sneak another one in on Jackify. Are you seeing any commercial competitive impact in MF?

So I'll start on the Limber program, Andy, and then hand it to Barry for your second question. So remember, firstly, it's important to us, Limbaugh. I mean, Barry has spoken about RUX. It's enormous benefit to patients, the value it brings to patients and then to the company and shareholders as well. So this is an internal effort that's cross-functional and appropriately large, directed at many different areas. So you have the once-daily program we just spoke about and its importance there for once-daily alone, plus optionality potentially on fixed-dose combinations with other once-dailys down the line, should we decide to do that. Then the second pillar, you know, it's all the combination work, and you ask, you know, more specifically what we may be more excited about versus others, and I'll come back to that in a second. But just to mention, you know, the third pillar of the program, which we're more quiet about because it's preclinical, in terms of discovery research work in both MF and PVERA, where there are other potential targets which we may end up pursuing, and Dash in his research endeavors are looking at those, plus with various collaborators. Just to come back to that middle tier and the combos. So the RUX PASA program, both registration-directed Phase 3s are open. Sites are already being initiated and are screening patients. Just to remind you, there's a suboptimal setting where patients have had at least three months of ruxolitinib, eight weeks of stable dose, but are not having sufficient benefit in terms of spleen reduction or symptoms, and are then randomized to continue RUX versus RUX plus paraclisib in that setting, and that study's open. And then the first-line study of RUX plus paraclisib versus RUX alone in first line, looking typically at a 24-week spleen volume response of 35% or greater. We also then internally have our BET program, which this half of the year is looking at monotherapy safety, and then we want to initiate combinations with RUX in the second half of this year. Just also to remind you, this is not a new drug to us. We had it in the clinic a few years ago where we were dosing at multiples of where we were now. looking largely at solid tumors and MYC inhibition. So we already have an experience with this compound of 100-plus patients or more in that setting, and we want to keep accelerating that. And then as I had my prepared remarks, the third program is the ELK2 program, very little bit of a different mindset. It probably works, as we illustrated, through hepcidin inhibition and ameliorating the anemia program, which has a two-fold effect. It'll ameliorate potentially the anemia of myelofibrosis itself plus the ruxolitinib-induced anemia. And then not only that, should that be successful, that's one of the principal reasons patients discontinue ruxolitinib. So if we can ameliorate that, you'll get the added benefit of continued rux use and the efficacy thereof. So that's also an exciting program. So I'm not giving you a priority list because they all have slightly different nuances and The one most ahead is obviously paraclisib in terms of registration studies underway. The other two, we want to complete the monotherapy and combination safety this year and present data to you next year. I'll hand it to Barry for your second question.

Yeah, so Andrew, so for competition in MF, the only drug that's approved besides Jacify is fidratinib from BMS, and it's only being used second line, if at all, and BMS just reported their Their earnings and really the drug has been flat since launch, so no. And in fact, one of the reasons we're encouraged as we continue through 2021 is MF patients grew very nicely from Q1 compared to Q4. So patients are coming back to the office, patients are getting treated, new patients are getting started on Jackify that have MF.

Great. Thanks for all the color guys. Appreciate it.

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

Hey, good morning, guys. Thanks for taking my question. Your press release mentions you're advancing or you advanced the 707-JAC-1 candidate into a Phase II in vitiligo. Can you just talk about the motivation here and what you see as the potential benefit of having this if RuxCream works in this indication and how you might be able to improve upon it or are there commercial considerations to think about to have a different compound? Thank you.

Yeah, Corey, thanks for the question. It's Stephen, and thanks for bringing that up. So 707 is another in-house JAK inhibitor currently being used in higher adrenitis supratevia, also a different profile to RUX, maybe, you know, in terms of more relative JAK1 effect versus JAK2. And it's good you bring this up because there's a spectrum of disease, if you will, in vitiligo that goes, you know, from mild to moderate to much more severe patients. where in the latter setting, in the more severe, you know, there may be more of a tolerance both from the patient point of view and regulator point of view for a different risk-benefit profile and need for a, quote-unquote, more potent effect should this work. So the idea here would be to get, we think, JAK inhibition, or we know from the cream, you know, is really effective therapy, and I just showed you in my prepared remarks 104-week data, but perhaps with an oral having, you know, a different... profile and potentially a more potent effect with, albeit a different risk-benefit profile, is worth testing. And in that way, we would look after vitiligo, you know, as an entity in completeness, in a more holistic manner, and be able to offer patients both a topical treatment for their illness and then also potentially an oral treatment for more severe settings. And that's the idea behind that.

Okay. Very helpful. Thank you.

Thank you. Our next question is coming from Salveen Richter from Goldman Sachs. Your line is now live.

Good morning. Thanks for taking my questions. On the Ruck screen, could you just talk about the progress on the Salesforce build out here and, you know, potential pricing strategies and updates on payer discussions? And then separately, just thoughts on, you know, given what we're seeing here with competitor jacks on the regulatory front and read through for your class.

Thanks, Alvin. So on the Salesforce, so I think what we said up front was that the DERM team, whether it's medical affairs, sales, market access, is complete. So they're all on board. They're being trained. Some have already been trained already. The medical affairs team has been working for a long time now on having their discussions with external experts and learning more about their preferences. As far as the price goes, we don't talk about price at this point, but we have had ongoing meaningful discussions with payers, including the top three PBMs that cover 80% of the lives in the United States. They've been very productive. They've been very interested and impressed by the clinical data that's been presented to them from the true AD1 and 2 studies. So, you know, we're very encouraged about that. You know, the oral JAK inhibitors, obviously they've been delayed, but, you know, we think the advantage of a topical JAK inhibitor like ruxolitinib cream with the profile that it has in all atopic dermatitis patients is really an advantage for us because of the safety and, of course, the excellent efficacy.

Thank you. Thank you. Our next question is coming from Michael Schmidt from Guggenheimer Line. He's now live.

Hey, guys. Good morning. Thanks for taking my question. Perhaps one on Parsec, let's say, where you are potentially filing for approval later this year as well. My question is, are you planning to file in all three indications simultaneously? What are potential gating factors to filing? And lastly, I guess, how How do you think the drug will be positioned in these lymphomas, perhaps, relative to other treatment options? What has the feedback perhaps been from physicians, how they might incorporate the drug in that treatment paradigm?

Yeah, Michael, it's Stephen. Thanks for the question. So, again, you know, the data sets with paraclisib in non-Hodgkin's lymphomas are in three different entities, follicular lymphoma, relapsed refractory, marginal zone lymphoma relapsed refractory and mantle cell lymphoma relapsed refractory. You know, we've updated at a few meetings now the independently reviewed response rates, which are extremely robust and durable, and albeit in single-arm studies, you know, with long progression-free survivals. So we really like the efficacy profile of the compound. And then the tolerability, you know, with the second generation DELT inhibitors now largely dialing out the liver effect and then acceptable profile in terms of, you know, the other effects you see with DELT inhibitors. So the intent in the U.S. is to file all three indications in follicular, marginal zone, and mantle cell lymphoma together. We still are working out the filing approaches in the other regions. We operate in Europe and Japan, but we feel that it has a competitive profile there as well. There's no other gating effect. It was merely the requirement to have a year's follow-up on the last responders, which is typical in these settings, and everything's progressing well on getting that file in in the second half of 2021. In terms of how we'll be positioned in lymphomas versus other options, you know, as you indirectly allude to, you know, it's an area where there's chemotherapy, there's other targeted therapy with BTK inhibitors, BCL2 inhibitors, there are CAR-T therapies, you know, as we earlier in the course said, antibody drug conjugates as well. And, you know, again, these are not – these data sets are not first-line settings. They're relapsed refractory settings. I think physicians will look at the efficacy and tolerability data on its face and use it appropriately there. You know, there's a little bit of a cloud over the area now early on in terms of idealistic data and some of the toxicity seen in combination that needs to be overcome. But now with a few DELT inhibitors out there showing – really robust data in B-cell lymphomas, different tolerability profiles, physicians getting used to it again, you know, we feel and we hear in that people will use it appropriate to the data sets. Thanks.

Great. Thank you, Steven.

Thank you. Next question is coming from Alethea Young from Kansar Fitzgerald. Your line is now live. Hey, guys. Thanks for taking my question.

I just want to talk a little bit about how, like, you know, some of the initial payer work you've done, kind of how they think about kind of realizing value between vitiligo and topical – sorry, atopic dermatitis. I just wonder if there's kind of a greater value proposition put on kind of the efficacy that has been seen so far in vitiligo versus AD. Any thoughts you have there would be appreciated. Thanks.

Thanks, Althea. So for – Atopic dermatitis, you know, out of the payers, the discussions we've had so far, I think it's the efficacy and safety is compelling. They really think of it as, you know, the possibility of using a drug from newly diagnosed patients all the way up to biologics. They're always asking about can they delay the use of biologics or systemic therapies, so they're very encouraged by that. In vitiligo, I think that they're beginning to understand that it's an autoimmune disease, vitiligo is, that needs to be treated. And treating with a topical therapy like ruxolitinib cream that will be safe and effective is the best way to go. Whether one is better than the other in terms of value, it's very difficult to say. I think that ruxolitinib cream... is going to be an excellent drug for atopic dermatitis, and it could be life-changing for vitiligo.

Great, thank you. Thank you. Our next question today is coming from Sri Kripa, from Truva Securities. Your line is now live.

Thanks. Thank you so much for taking my question. Staying on dermatology, you know, that we're so close to the producer date. And you have talked a little bit about your launch preparedness, but I was wondering how soon after a potential approval can patients expect to have access to the drug? What steps does that entail? Finally, you know, once the drug launches, what sort of metrics can we expect you to provide to us so we can understand and model the launch curve appropriately? Thank you so much.

Thanks, Kripa. So how soon will I have access to the drug? Right away, as soon as we possibly can get it out. It should be just a matter of a few days before we're able to ship it out to the wholesalers, and wholesalers can ship it out to the pharmacies. So it'll be as rapidly as we possibly can, just a matter of days, if not a week. So what metrics can we provide for the curve? You know, you'll be able to follow the new Rx data and the TRx data, you know, on a weekly basis, just like many people do for every prescription drug out there, so you'll see that. We think there'll be a rapid uptake for the drug. You know, our growth to net may be impacted at the beginning, and it'll continue to improve over time, but we think that the total Rxs and new Rxs will grow week after week, and you'll be able to follow that just like we will.

Great. Thanks. That was helpful. And then if I can sneak in one more question. Following up on the limber program, you're doing a phase one trial with your bed inhibitor. What is the bar you have internally for you to take it forward into phase two with a combo? Or are you comfortable enough that you do plan to initiate the phase two combo in second half?

Hi, Kripa. It's Stephen. So the real bar is purely safety in the beginning. And again, just to be repetitive, we mentioned we had this drug in the clinic a few years ago for quite a bit at multiples of the 4 milligram dose we're now at. We are treating above 10 milligrams. And we withdrew it because of a lack of efficacy in solid tumors plus a safety profile around thrombocytopenia. We then, you know, watched this field evolve, you know, modeled, did some modeling on the Constellation 610 compound and worked out, you know, that a much lower dose may be effective in myelofibrosis. So we're now using the four milligram dose in a phase one just to document that safety, principally, you know, an acceptable profile in terms of thrombocytopenia, then quickly, you know, do a smaller number of patients with raxolitinib, again, to document the safety aspect. At that juncture, you know, round around the end of this year, early next year, we will have choices to make, which we're not there yet, which is what you alluded to, how aggressive to be. Do we then, you know, have to repeat or want to repeat, you know, Phase II proof of concept work, or will we be comfortable enough, given the arena, to be more aggressive and go, you know, straight to Phase III or registration-directed studies? And we will make that decision once we see the safety profile of the combination.

Great. Thank you so much. And also, whoever made the decision, thank you so much for playing the Star Wars music before the earnings call started. So thank you.

Thank you. Our next question is coming from Matt Phipps from William Blair. Your line is now live.

Thanks, Tristan. My question, impressive 104-week vitiligo data shown at the recent AAD meeting, but there was a notable decrease in the valuable patients there, some patients withdrawing from the study. I guess the reason we're giving it the long follow-up, but if you just look at the patients that completed 104, you know, what percentage of those were responders at week 52? Just wondering if there's a bias in these response rates at week 104 by patients not responding being the ones that chose to withdraw from study.

Matt and Stephen, I'll have to get back to you on the second part of your question. I don't have in front of me a match on the 52-week versus 104-week data, but I do want to make some points. So whenever you have a study and you decide to lock a database, you'll have what's in that database at that time, and there will be, by its nature, potentially missing data or missing visits, and that's partly what you're seeing. In addition, and I think you're indirectly alluding to this, You know, when people have that degree of improvement, they may elect for various reasons in the extension phase not to go on to the extension because they're satisfied where they are at at the time. These are things we have to work out given, you know, the impressive efficacy we see with the drug over time. For me, the major message, though, is, and it's also, sorry, one more thing I want to say, there is a little bit of a COVID impact on the longer-term study and people, for example, wanting to come back to a clinic for a formal visit when it's not really needed for the primary endpoint. But for me, the major message of the study, which is really interesting in terms of the biology, is you get continued improvement over time. And we think there's a two-fold effect happening there. The melanocytes are are repopulating the area. They're present there. Plus the T cell suppression is probably largely gone and could be long lived. And you're seeing this continued improvement over time, which is just fascinating. At least the remaining questions to ask is when you withdraw therapy, how long, how durable that is. Will treatment be reneeded, et cetera. And all those experiments we'll conduct and will be ongoing here at Insight as we understand this further. But it really somewhat surprised us in a good way to see, you know, that even at two years later, you're still getting an increase in the rates. But your comments noted on smaller patient numbers down the pike.

Thank you. Thank you. Our next question is coming from Ben Benjamin from J&P Securities. Your line is now live.

Hi. Good morning, guys. Thanks for taking the questions. I'd love to focus on pemigatinib for a quick second. Can you just talk us through maybe the longer-term strategy and the other indications that you're moving forward with and any feedback that you might have from sales on how this continued growth, especially given the competitive environment, is going to continue? And maybe just for Stephen as a follow-up, The two big data points I guess I have written down are Elmine data at ASCO and the BAB data for Once Daily Rux sometime later this year. Is that primarily the main ones or are there other key updates that we should keep in mind? Thank you.

So I'll answer the clinical development part of your questions. Barry will talk about the sales performance question embedded there. So just to talk about our first indication in second line, Calangio carcinoma, which, as Hervé said, is now globally approved in Europe and Japan as well, and our first internally discovered global product. And then Barry showed you the excellent uptake on the launch so far in a rare entity. However, again, in a good way, given now there's other targets beyond FGFR2 like IDH, more and more of these patients are getting molecularly profiled, more and more discovering that they FGFR2-driven. And additionally, there's an awareness now beyond cholangio that one of the most common entities in carcinoma of unknown origin is potentially cholangiocarcinoma. So when that entity gets molecularly profiled and is FGFR2-driven, there's a feeling that may be cholangiocarcinoma and lend itself to treatment with pemigatinib. Remember, as part of our accelerated approval, we have an ongoing first-line study, so that's critical in terms of life cycle management. It's against first-line chemotherapy in terms of gemcitabine and cisplatinib. And if you look in other entities where you have a molecular profile that ends up being an oncogenic driver that drives a particular tumor, so look at melanoma with BRAF, MEK, etc., you see this, or even lung cancer with EGFR, you see this migration to earlier line settings in terms of a targeted therapy, and that's the idea behind first-line cholangio, plus obviously a very different tolerability profile versus chemotherapy. We have an ongoing large tumor agnostic study that is enrolled well that looks at, not to belabor the molecular side of this, but fusions, rearrangements, amplifications, and then any other potential driver. And there are three different buckets there. And there's optionality around that as we gather the data now to either pursue potentially a two-magnostic setting if there's a strong enough signal, or to look at a particular histology or two where there may be a driver there and then to do standalone work in that setting. So those are very important endeavors to us that we'll be focusing on this year from a a clinical development point of view with pemigatinib. We don't think bladder cancer is the way to go, as we've said on prior calls, largely because of how the environment has changed there in terms of treatment paradigms and the use of EV earlier and earlier plus checkpoint inhibitors. So that's the pemigatinib lifecycle side, and Barry will speak about the performance side. Just on the data releases that we spoke about, So as Barry said, we'll have the very important three-year follow-up on the Elmine study with continued results, particularly on duration of response at ASCO. I should have said the bioavailable and bioequivalent data with ruxolidinib XR, the intent is actually to present it in an appropriate forum or publish an appropriate forum this half of the year. And then obviously the idea is also Since we have it, to also present the vitiligo phase 3 data, incredibly important for topical RUX. Barry, I'm going to speak about the performance side of PEMI.

Sure. So, Ren, yeah, so, you know, we're very happy with PEMISER's performance so far. You know, I think when you launch into a, you know, a tumor type, a disease area where there is no other therapies, you know, sometimes you actually don't really know how many patients are out there. Stephen alluded to carcinoma of unknown primary. Some of those patients may, in fact, be cholangiocarcinoma patients. Some of them might have the FGFR2 rearrangement or fusion. So that's what I think we're experiencing is that there might have been more patients than our initial assumption, around 800 to 1,000 patients in the United States. And then the duration of therapy, it turns out to be longer than perhaps we anticipated, both from the study and from our just estimates. in the regular patient population. So that's very encouraging that patients are getting therapy, they're getting tested, getting therapy, staying on therapy, and I think that helps us if, in fact, we do have competitors in this space in cholangiocarcinoma with FGFR2 alterations because, one, it's nice to launch first, and then it's nice to launch with an excellent drug like Pemazir. So we're all prepared for any competition, but we still think that patients will ultimately benefit from starting a drug like Pemazir with its efficacy, safety, and duration of therapy that we can offer.

Thank you. Our final question today is coming from Jay Olson from Oppenheimer. Your line is now live.

Oh, hey, guys. Thanks for taking the question. I'm curious about your priorities for business development this year, and specifically, could you comment on any plans to seek a commercialization partner for topical rocks in Europe? Thank you.

So in terms of the BD priorities, first of all, for us, the objectives have not changed from what we have discussed in the past. So we continue to look for assets that would contribute to growth and diversification in the mid-20s plus time frame and where we could leverage our expertise, our existing infrastructure to develop and commercialize them. So these have remained the same. In terms of RAC Scream in Europe, as we have indicated in the past week, we are in the process of determining what is the best way forward there. Also, from a timing point of view, we are going to wait for vitiligo data before we file for regulatory approval, and therefore, we have a little bit more time before we finalize our decision. So, we should be finalizing it in the next few months, and we can follow up on that at that point.

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

Thank you, operator, and thank you, everyone, for joining us on the call today. We'll be available for questions following this call. Have a great day.

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.