Incyte Corporation

Hello, and welcome to the Insight First Quarter 2023 Earnings Calling Webcast. 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, Head of Investor Relations. Please go ahead, Christine.

Thank you, Kevin. Good morning, and welcome to Insight's First Quarter 2023 Earnings Conference Call and Webcast. The slides presented today are available for download on the investor section of our website. Joining me on the call today are Irve, Barry, Stephen, and Christiana, who will deliver our prepared remarks, and Dash, who will join us for the Q&A. Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements and are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our reports filed with the SEC. We will now begin the call with Hervé.

Thank you, Christine, and good morning, everyone. So we'll be moving to slide four. And so in the first quarter, product revenue grew 14% year over year. The growth for the quarter does not fully reflect the strength of the underlying patient demand for JAKA-Phi and Opsilora, which I will discuss in the next slide. In hematology and oncology, the ongoing launches of Pemazir and Minjuvi ex-US drove the 17% year-over-year growth. We also received additional approval, including our first indication for DENISE in Merkel cell carcinoma in the US, and more importantly, the approval of Opselora for vitiligo in Europe with an excellent level. DENISE is available commercially in the US, and Opselora will be launched in Europe in the next few months, starting with Germany. Moving to slide five, taking a closer look at the Q1 dynamics that affected net sales in the quarter for Jackathai and Opsilor. Jackathai patient demand was strong across all indications, growing 7% on a year-on-year basis. On growth to net, we had the typical Q1 negative effect, with higher deductions due to an increase in Medicare coverage gap rebates and patient deductibles. We also had an increase in 340B purchases. Separately, channel inventories fell below normal level, resulting in an $11 million impact. Given the strong underlying patient demand, we are confident in our full-year outlook and are raising the low end of our guidance to a new range of $2.55 to $2.63 billion for the full year. Turning to OPCEL1, there are three components to fully understand the dynamics of the first quarter. we saw a continuation of strong trends in weekly prescription growth in the quarter. 60,000 new patients were treated with Opsalua. Second, as you can see in the TRX graph on the right, refills were being pulled forward in December, and this resulted in lower volume in the first two months of the year. And third, net price in the quarter was impacted by an increase in commercial copay and a higher Medicaid utilization. So the outlook is strong for both Jackify and Obserora as we expect to drive further growth throughout the year. Moving to slide 6. With our R&D pipeline growing and advancing, we have recently decided to concentrate our resources behind the project with the highest potential to drive our revenue growth in the next few years. These eight programs of first or best-in-class candidates have large potential with multiple indications, such as Opsilura, Povercitinib, and Oral PD-L1, or alternatively, they address a significant unmet need in an existing franchise like the Limber program with ALK2, BET, Axatilimab, and CALA. We are discontinuing six programs, including Parsaclizib in MF and one autoimmune hemolytic anemia, Axalmer, the 2-adenosine program, and Gitter. This concentration of our internal and external resources will increase speed and efficiency for the eight high-potential programs and allow us to further accelerate our promising early clinical programs like CDK2, TGF-beta PD-1 bispecific, and Oremolimab.