This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk07: A question and answer session will follow the formal presentation. In the interest of time, we ask you to please limit yourselves to one question. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the conference over to Ben Strain, Associate Vice President, Investor Relations. Please go ahead, Ben.
spk13: Thank you, Kevin. Good morning and welcome to Insight's second quarter 2024 earnings conference call. Before we begin, I encourage everyone to go to the Investors section of our website, find the press release, related financial tables, and slides that follow today's discussion. On today's call, I'm joined by Irve, Pablo, and Christiana, who will deliver our prepared remarks. Barry, Stephen, and Mateo will also be available for Q&A. I would like to point out that we'll be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I will now turn the call over to Hervé.
spk00: Thank you, Ben, and good morning, everyone. So during the second quarter of 2024, we made significant progress across the business with strong performance on the commercial side, driven by JAKAFI and OPCERA, transformation of our pipeline, where we made important decisions on our clinical programs, and capital allocation where we closed the Essient acquisition and completed the large share repurchase. Looking at Q2 revenue, total revenue grew 9% year-over-year, exceeding $1 billion, while net product revenue grew 10% driven by the continued success of Jackathai and Opselora, which I will detail in the following slides. We continue to make strategic decisions that are transforming our clinical pipeline And during the second quarter, we closed the acquisition of Essien Pharmaceutical, which added two first-in-class medicines to our IAI portfolio. Additionally, we are intensifying our focus on and concentrating resources on those high-potential programs, which have the largest impact for patients and for Insight. We also recently completed a large $2 billion share repurchase, further highlighting our excitement and conviction in our clinical pipeline, and commercial business, while retaining a strong balance sheet for potential further business development activities. Over the last 12 months, our clinical pipeline has significantly advanced, and we are on track to deliver a number of best-in-class and or first-in-class differentiated medicines in areas where there are no or limited treatment options. When comparing our pipeline today on slide six to where we were just seven months ago, We have added potentially transformative clinical programs, including KRAS G12D, TGF-beta PD-1, MRGPRX2, and X4, and we have deprioritized some of the immuno-oncology programs, including TIM3 and LAX3 antibodies, LAX3 PD-1 bispecific, and the oral PD-L1 program. Pablo will describe this pipeline transformation in some details and will provide clarity on the potential timing of data availability. Moving to slide 7, Jakarta net product revenues were $706 million, up 3% year over year. Paid demand increased 9%. As a reminder, the second quarter of 2023 benefited by approximately $37 million from channel inventory, which explains the 3% growth of net sales versus the 9% growth of actual demand. Based on the strength in demand seen during the first half of the year and anticipated growth for the balance of the year, we are raising the bottom end of our full-year 2024 Jakarta Net Revenue Guidance to a new range of $2.71 billion to $2.75 billion. Turning to slide 8. and looking at Jackify total paid demand by indication during the first quarter of 2022, 23, and 24. As you can see, unit growth continues to be strong. MF is stable year over year, with modest growth in this quarter, and the largest growth coming from both PV and GVHD. Jackify continues to maintain its leadership in MF. Based on market research, discontinuation rates have remained stable in the first line selling over the past several months, with minimal impact from competitors. These trends have been consistent with our expectations. Moving to Obcelora on slide 9. Total Obcelora net product revenue in the second quarter were $122 million, up 52% when compared to the same quarter last year. The weekly prescription trend, as shown on the right of slide 9, reflects continued growth of Obcelora in both atopic dermatitis and vitiligo, and U.S. total prescription for Opselora grew 34% year-over-year, while refills grew 50% year-over-year. From an access perspective, we continue to see encouraging results since Opselora moved to earlier positions in certain commercial plans, demonstrating a positive impact to net sales following the improved access. Moving to slide 10, during the second quarter, we made continued progress on the reimbursement of Opselora in Europe. Obcelura is now reimbursed in Germany, France, Italy and Spain, and the 11 million in net sales during the second quarter were mostly driven by Germany and France. We expect Spain and Italy to start contributing to revenue beginning in Q3. As shown on slide 11, Obcelura was the first therapy to gain full reimbursement in France through a new process called Accès Direct. This process has accelerated patients' ability to obtain Opsilora while pricing negotiations were ongoing and were reflected in the increase in revenues seen in Q2. And I will now turn the call over to Pablo.
spk24: Thank you, Hervé, and good morning, everyone. Since joining Insight one year ago, the R&D organization and I have been centered on accelerating the transformation of our pipeline to expand our leadership in treating patients with inflammatory diseases, MPNs, cancer, and graft-versus-host disease. By harnessing a culture of rigorous decision-making, intense focus, and excellence in execution, we have made considerable progress in advancing our goal of delivering best-in-class and or first-in-class differentiated medicines in areas where there are no or limited treatment options. As a result, we anticipate delivering more than 10 high-impact launches by 2030, several of which are new molecular entities. As I've mentioned, we recently completed a strategic review of our pipeline to focus resources on programs with novel biology that hold the highest potential impact for patients. Based on available data, the evolving treatment landscape, and the evolution of our internal pipeline, we have decided to discontinue a number of programs, including our oral PD-L1 programs, our LAG-3 monoclonal antibody program, our TIM3 monoclonal antibody program, and our LAG3 by PD1 bispecific program. These data-driven decisions will enable us to fully realize the potential of our pipeline by delivering significant value to patients and our shareholders. With a strong sense of urgency, we plan to achieve a number of important clinical milestones in the coming months. We will advance the development of 12 new molecular entities and we will achieve up to seven pivotal readouts as well as eight readouts that will provide proof of concept and new indications for existing programs or for new molecular entities. In the next few slides, I will highlight a number of these programs. In inflammation and autoimmunity, we continue to expand the breadth and novelty of our pipeline and expect to deliver multiple data sets beginning this year and beyond. We continue to evaluate the potential of ruxolitinib cream and poversitinib across several new indications, including pediatric atopic dermatitis, prurigo nodularis, hydradenitis suprativa, chronic spontaneous urticaria, and asthma. With the recent acquisition of Essien Pharmaceuticals, we have added two potential first-in-class medicines that aim to address a number of debilitating conditions, including chronic spontaneous urticaria, chronic inducible urticaria, atopic dermatitis, and cholestatic pruritus. We believe that with introduction of these new medicines for these conditions, we will see a greater number of patients seeking treatment who are currently underserved with available therapies or who are currently not receiving treatment. On slide 16, We continue to advance the development of Rux liniment cream beyond AD and vitiligo to additional indications where it can provide significant value as either the first ever FDA approved therapy or first approved topical therapy for patients living with these dermatologic conditions. Based on the positive phase three data in pediatric atopic dermatitis, the supplementary NDA submission is on track to be filed in the third quarter of this year with a potential approval in 2025. which could provide an effective non-steroidal topical options for the two to three million pediatric patients with AD in the U.S. In the most severe cases of this inflammatory disorder, pediatric AD may interfere with development, emphasizing the importance of delivering this medicine to these children as soon as possible. Now turning to slide 17. We're currently conducting a phase three study evaluating ruxolitinib cream in patients with prurigo nodularis. a chronic skin disorder that presents as multiple firm nodules commonly located on the extensive surfaces of the extremities and that are intensely pruritic. This study is enrolling well and we're on track to report results from the pivotal study next year with a potential approval as early as 2026. With no topical therapies currently approved for PN and over 100,000 patients on treatment, we see this as an important additional option for patients and a significant opportunity for ruxolitinib cream. As shown on slide 18, we're continuing to execute a broad development plan for poversitinib, our oral, small-molecule, highly selective JAK1 inhibitor. Poversitinib is currently being evaluated in Phase III studies in hadronitis suprativa, vitiligo, and prurigo nodularis, and in randomized Phase II proof-of-concept studies in asthma, and chronic spontaneous urticaria, with data in both expected in 2025. Pulvercidinib has already demonstrated outstanding efficacy and safety in a randomized Phase II study in moderate to severe H. suprativa, an extremely painful inflammatory disease. As a reminder, we reported that at week 52, up to 29% of patients experienced a high score 100 response, which is complete resolution of all manifestations. Provercidinib also had rapid and profound impact on reducing pain, as highlighted in the chart on the bottom of slide 19, and represents the first potential oral therapy for the treatment of HS with the opportunity to change the current standard of care. The two Phase III studies, STOP-HS1 and STOP-HS2, are rolling quite well, given the strong Phase II data and the limited number of effective treatment options. We anticipate phase three data in early 2025 with a potential launch in 2026. With ruxolitinib cream and povacitinib, we believe we will be the only company to potentially provide both a topical and oral option for a number of indications, expanding their momentarium of effective therapies for certain conditions, including HS, vitiligo, and prurigo nodularis. Moving to slide 20 and our two newest IAI programs. We are pleased to have closed the Essien transaction and now add two mass-related G protein-coupled receptor antagonists, or MRGPRs, to our pipeline, with significant potential in multiple indications. MRGPR antagonism is a specific novel mechanism for blocking mass cell activation independent from IgE and has been a high-priority target to our IAI pipeline as a paradigm-changing therapeutic approach. Mast cells play a central role in initiation and perpetuation of inflammatory responses, and their dysregulation can contribute to the development and progression of many inflammatory diseases. 262 is a first-in-class medicine which entered the clinic in January of 2023 and is currently being evaluated in three proof-of-concept clinical studies. By blocking the activation of mast cells, 262 holds great promise across a broad range of mast cell-mediated diseases, as a once-daily oral treatment, potentially devoid of the side effects observed with other therapies. As a reminder, in a Phase I healthy volunteer study, 262 was well-tolerated, had low interpatient PK variability, and achieved exposures well above predicted efficacious levels. We believe the excellent safety profile, along with the potential for compelling efficacy, could be a key differentiator for this program. 262 is currently in a phase 1B open label study in chronic inducible urticaria or SINDU and in a randomized phase 2 study in chronic spontaneous urticaria or CSU with data for the studies expected during the first quarter of 2025. Marked by painful and pruritic hives, SINDU and CSU are currently treated with antihistamines, but nearly 50% of patients do not experience symptom control, which can lead to anxiety, depression, and inability to work and social isolation, underscoring the need for safe and effective oral therapeutic options. 262 is also currently being evaluated in a randomized Phase II study in atopic dermatitis, and data for this study is also expected during the first quarter of 2025. There is continued need for additional safe and effective oral treatment options in AD, and we believe success in this indication could further build on our leadership in AD. 547 is a highly selective antagonist of MRGPRX4, a cell surface receptor expressed on neurons in the dorsal root ganglia that is activated by bile acids, bilirubin, and other heme metabolites, and thought to be a key mediator of the often intense and relenting pruritus experienced by patients with cholestatic liver disease. 547 has the potential to become the first targeted therapy for cholestatic pruritus, lacking the side effects observed with other approaches. A randomized double-blind study is being conducted in patients with cholestatic pruritus due to primary biliary cirrhosis, or PBC, or primary sclerosing cholangitis, or PSC, with clinical proof of concept anticipated also during the first quarter of 2025. Moving to MPNs and graft-versus-host disease on slide 24. We highlight there a number of ongoing programs where we have the goal of developing new transformative therapeutic options to build upon the significant impact JAK-FI has had on patients. For our BET inhibitor, dose escalation is ongoing, both monotherapy in combination with ruxolitinib, and we have reported reductions in spleen length and volume, as well as improvements in both symptoms and hemoglobin, suggesting this is an active compound. We plan to advance this program into Phase III development and expect to provide an update later this year. For Xelogazirib, our ALK2 inhibitor, we have observed early signals of clinical activity in patients with myelofibrosis through hepcidin reduction in monotherapy and in combination with ruxolitinib. Xelogazirib was well-tolerated with a favorable safety profile and continues the dose escalation. We plan to provide an update later this year. As previously disclosed, we submitted a BLA for axotilimab for the treatment of third-line chronic graft-versus-host disease late last year based on a positive randomized Phase II study. In February, the filing was accepted for priority review, and we anticipate an FDA decision in late August. We are excited by the possibility of bringing a new treatment option to patients with this devastating complication of hematopoietic stem cell transplant. Additionally, We anticipate initiating a Phase III trial in combination with steroids and a Phase II study in combination with ruxolitinib later this year. Building on JAKIFI, which is the foundational therapy for MF and PV, we are concentrated on improving outcomes in the near term by combining JAKIFI with other therapies as well as through approaches that have disease-modifying potential and that can significantly expand the addressable patient population to more than 200,000 patients. Our novel first-in-class anti-mutant cholera targeted monoclonal antibody has the potential to eradicate the malignant clone in patients with mutant cholera positive MPNs and to significantly modify disease outcomes. 9A9 binds with high affinity to mutant cholera and inhibits oncogenesis in cells expressing this oncoprotein and antagonizes cholera oncogenic functions. resulting in selective inhibition of JAK-STAT signaling only in cholera-mutated cells with no effect on normal cells. This selectivity results in the specific killing of tumor cells harboring the mutation and is suggestive of the potential to alter the cause of the disease in patients with cholera-mutant MF and essential thrombocytemia. Mutant cholera mutations are present in approximately 25 to 35% of patients with MF and ETs. The Phase I studies are currently enrolling, and we are on track to share data in 2025. As a reminder, the JAK2-V617F mutation is the most common somatic mutation in MPNs and is present in 55, 60, and 95% of patients with MF, ET, and PV, respectively. Unlike ruxolitinib, which inhibits both wild-type and V617F mutation-positive cells, O5-8 selectively binds to the JAK2-JH2 site, disrupting the V617F-induced conformation and thus allowing selective inhibition of mutant activity in the JAK2 receptor while sparing well type, making our JAK2-V617F inhibitor a potentially transformative therapy for patients with PV, MF, and ET. Data for this program is expected in 2025. Moving to our oncology pipeline on slide 29. We continue to build a robust portfolio with increased emphasis on first-in-class and our best-in-class and novel immune oncology programs with a potential for large treatment effects. Tefacitimab, currently approved in combination with denalidomide for patients with relapse or refractory DLBCL, is on track to deliver phase 3 results in follicular lymphoma and marginal zone lymphoma later this year, with a potential approval in 2025. while Phase III data for first-line DL-BCL in combination with R2-CHOP is expected next year. Today, we unveiled positive top-line results from two pivotal Phase III retifanlimab programs. Retifanlimab met the primary endpoints in both the squamous cell anal carcinoma and non-small cell lung cancer Phase III studies. In non-small cell lung cancer, we saw a statistically significant and clinically meaningful improvement in overall survival. and squamous cell anal carcinoma, we observed statistically significant and clinically meaningful improvement in progression-free survival. Both studies show retifalimab was generally well-tolerated and no new safety signals were detected. Retifalimab could represent the first-ever PD-1 or PD-L1 antibody approved for the first-line treatment of patients with SCAC. We believe that RETI Family MAM also has substantial strategic values in combination therapy with other programs in our pipeline and we look forward to sharing the full results of these studies at an upcoming medical meeting later this year. Additionally, we plan on meeting with regulatory agencies to determine next steps and look forward to providing additional clarity in the coming weeks and months. Our potentially first-in-class small molecule CDK2 inhibitor has shown evidence of clinical activity demonstrating partial responses or stable disease in patients with CCNE1 overexpressing tumors. We expect to share this data as well as the development plan at ESMO in September. We believe our CDK2 inhibitor could be a foundational therapy for patients with ovarian cancer as well as other CCNE1 overexpressing tumor types. KRAS mutations are one of the most common genetic abnormalities in cancer, especially lung, colon, and pancreatic cancers. A potentially first-in-class, best-in-class KRAS G12D small molecule inhibitor 734 is a potent, selective, and orally bioavailable KRAS G12D inhibitor that has shown excellent efficacy in several preclinical models. With no currently approved G12D targeting agents, 734 could address an important patient need as the KRAS D12D mutation is found in 40% of pancreatic ductal adenocarcinoma, 15% of colorectal cancers, and 5% of non-small cell lung cancers. Our phase one clinical trial is enrolling well, and we are on track to share initial data in 2025. The TGF-beta signaling pathway plays a complex role in cancer biology and progression with different functions in early and late stage cancer cells. Early generation therapies have been unsuccessful due in large part to the toxicity associated with systemic pathway inhibition. With our bispecific antibody inhibiting PD-1 and TGF-beta receptor 2 signaling on T cells, we have precisely tuned the binding arms against PD-1 and TGF-beta receptor 2, which we believe will result in the complete inhibition of TGF-beta signaling without the unwanted on-target effects. Our TGF-beta receptor 2 by PD-1 bispecific antibody has the potential to target multiple immunosuppressive pathways across a number of cancers, and if successful, could represent a meaningful contributor to our growth. We expect to share data from the Phase I program in 2025. In closing, this slide summarizes the considerable number of milestones across 2024 and 2025 that will continue the transformation of our pipeline, with a strong focus on new molecular entities with the potential to make an indelible impact on patients. With that, I would like to turn the call over to Christiana for the financial update.
spk19: Thank you, Pablo, and good morning, everyone. Our second quarter results reflect a strong commercial execution and continued growth with total revenues of $1.04 billion, up 9% versus the same period last year. Total product revenues of $907 million in Q2 were driven by demand growth for Jakafai and Opsalura and increased revenue contribution from Monjuvi following our acquisition in February of the global exclusive rides to Tafasitama. Total royalty revenues were $137 million, up 8% compared to the second quarter of 2023, driven by an acceleration in the demand for Jakavi. Turning to Jackify on slide 38, Jackify net product revenues were $706 million for the second quarter. Net product revenues reflect continued demand growth with pay demand up 9% year-over-year, driven by growth in PV, GVHD, and MF. Year-over-year net sales growth was lower than the underlying demand growth due to higher channel inventory levels at the end of Q2 last year. At the end of Q2 2024, channel inventory was within normal range. Turning now to Opselura on slide 39, net product revenues for the second quarter were $122 million, representing a 52% increase year-over-year, driven by growth in new patient starts and refills across both AD and vitiligo in the U.S., as well as continued contribution from the commercialization of Opselura for vitiligo in Europe. In the second quarter, Europe contributed $11 million of OBSELURA net product revenues, driven by continued uptake in Germany and France. We expect contribution from Spain and Italy to start in Q3, with modest contribution in that quarter due to the impact of summer vacation in Europe. Moving on to slide 40 and our operating expenses on a GAAP basis. Total R&D expenses were $1.14 billion for the second quarter, reflecting the upfront consideration paid for the acquisition of Asian pharmaceuticals. Excluding the impact of the upfront consideration related to Asian and other upfront and milestone payments, total R&D expenses were $692 million, representing a 13% increase year over year due to continued investment in our late-stage development assets, the assumption of Morphosis share of Tathasitama development costs, and the timing of certain expenses. Total SG&A expenses were $306 million for the second quarter, representing an 8% year-over-year increase, primarily driven by $22 million of expense related to accelerated vesting for certain ASEAN stock awards and severance payments in connection with the acquisition of the company. Excluding the impact of the upfront consideration related to the acquisition of ASEAN, SG&A expenses were flat year over year. Excluding the impact of upfront consideration and milestone payments, in Q2 and in the first half of the year, total OPEX grew 8% and 5% respectively, which is below the 9% growth in total revenues, indicating continued improvement in operating margins. Turning to slide 41, as previously discussed, in May we completed the acquisition of Asian Pharmaceuticals for total consideration of $783 million, including Asian's net cash on the balance sheet at close. The allocation of the total consideration resulted in a one-time expense of $691 million recorded under R&D expense and $20 million recorded under its J&A expense. The remaining balance was allocated to certain assets and liabilities on the balance sheet. During June, we completed a $2 billion share repurchase program, reflecting our confidence in the future outlook of the business, the strength of our commercial product portfolio, and the clinical development pipeline. In total, we repurchased and canceled approximately 33.3 million shares of our common stock, representing 14.8% of our total outstanding shares of common stock, for $60 per share. The share repurchase resulted in a reduction in our cash balance and corresponding decrease to shareholders' equity. Moving on to our guidance for 2024, as a result of Jakafai's continued strong performance in the first half of the year, we are raising the low end of our Jakafai guidance from $2.69 billion to $2.71 billion. For Opsalura, we expect continued growth in the second half of the year With the typical dermatology product seasonality reflected in Q3 demand and net product sales, as a result of a lower number of patient visits during the summer vacation month. Moving to R&D guidance, as a result of the acquisition of ACN, we are updating our guidance for R&D expense, excluding the impact of the upfront consideration paid, to a new range of $1.76 to $1.80 billion. While our strategic review of our clinical portfolio and decision to discontinue select programs does not have an impact on R&D expenses in 2024, it creates room to aggressively pursue and invest in the development of our priority assets, and at the same time, control the future growth of R&D expenses. Finally, we are reiterating our full year 2024 guidance for other hematology oncology products, COGS, and SG&A. Operator, that concludes our prepared remarks. Please give your instructions and open the call to Q&A.
spk07: Certainly. We'll now be conducting a question and answer session. As a reminder, we ask you please limit yourselves to one question, then return to the queue. If you'd like to be placed into question two, please press star one on your telephone keypad. One moment, please, while we poll for questions. As a reminder, please limit yourselves to one question, then return to the queue. Our first question today is coming from Kripa Devarakonda from Truist Securities. Your line is now live.
spk17: Hey, guys. Thank you so much for taking my question, and congrats on the quarter. I have a question about the pipeline restructuring. Can you drill a little bit more into the key determinants of the pipeline restructuring? For instance, two questions. One is the oral PDL1. You had seen data. You had multiple candidates. How much did the retifanlimab data that you have from the phase three trials recently impact this decision? Thank you. I'll get back in queue.
spk24: Yes, thank you for the question. This is Pablo. The retifanlimab data did not have an impact on the pipeline restructuring. As I mentioned in my prepared remarks, the restructuring was driven primarily by two things. Data review of the existing programs, the programs that we terminated, PDL1, TIM3, LAC3, and the bispecific LAC3, as well as the continued progression and promising data that we're seeing from the earlier stage pipeline that is now becoming mid-stage and will start delivering important milestones in the next 18 months. So it was unrelated to the RETI family mob pivotal phase results. We are excited about those results, particularly the anal cancer data that we think, as I mentioned in my prepared remarks, could potentially represent the first PD-1 antibody for previously untreated squamous cell anal cancer.
spk06: Thank you. Our next question today is coming from Michael Schmidt from Guggenheim Partners.
spk07: Your line is now live.
spk08: Hi, this is Paul Jang. I'm from Michael. Thanks for taking our question. Ours is just on Jacobi, and if you could comment on some recent trends. I know you mentioned PV and GVHD as key drivers, but What are your go-forward expectations for Jaxify's share in myelofibrosis, specifically in new patients in the frontline setting? You know, you mentioned some minimal impact from competitors. Would you expect that to remain the case going into the second half of the year and beyond? Thank you.
spk10: Hi, Paul. It's Barry. Thanks for the question.
spk09: So, as Hervé said, in fact, we're growing total patients for MF quarter over quarter, year over year. We're up 2%, and in fact, new patients in a quarter for MF were up more than that. In fact, we continue to see growth of MF, but PV and GBHD are really the main growth drivers. If you're asking about competition, in fact, we think those drugs, procritinib and momilotinib, are being used in a second-line setting for the most part.
spk06: Thank you. Next question is coming from Brian Abrams from RBC Capital Markets.
spk07: Your line is now live.
spk16: Hey, guys. Good morning. Thanks for taking my question, and congrats on the continued progress both operationally and commercially with the pipeline. I guess speaking of the pipeline, as we look towards ESMO and the CDK2, I was wondering if you could talk a little bit more about, I guess, what we should be looking for, I guess, how definitive a data set you expect to have in terms of patient numbers of the go-forward dose, and what you're hoping to show to be optimally, over time, to be optimally impactful and competitive in ovarian, and also to potentially expand into breast cancer and other indications which may be more competitive. Thanks.
spk24: Certainly. So we look forward to updating you on the progress of our CDKT program at ESMO in a couple of months. As I mentioned in my prepared remarks, our focus initially is ovarian cancer. That doesn't mean we're not doing work in other tumor types, another CCNA1 overexpressing tumor types. But the focus of this initial update will be ovarian cancer. And what we expect to show during the ESMO presentation is a dataset that captures the dose escalation. We tested a range of doses with our CDK2 inhibitor and different schedules as well. And we'll provide data that we believe supports the case to continue the development of CDK2 inhibitor in patients with ovarian cancer, and we'll provide as well as the data update, a development path for this product, for this molecule in patients with ovarian cancer going forward. So it will be data update. We have range of doses, different schedules, and the data supports for the development, and we'll show you a development plan as well.
spk06: Thank you. Our next question is coming from Vikram from Morgan Stanley. Your line is now live.
spk21: Hi, good morning. Thank you for taking our question. We had one on limber. So for the ALK2 inhibitor data expected in the second half of the year, could you walk us through what your expectations are in terms of the volume of data we may get, the amount of follow-up, and what you're setting as the threshold for deciding on next steps for the program? Thank you.
spk22: Yeah, hi. It's Steven taking your question. So, you know, in terms of its mechanisms of action, it inhibits hepcidin, which then helps in terms of ion release and hemoglobin production. You know, we've shown in prior data sets that as we increase dose, we get increasing hepcidin inhibition with some variation in the hemoglobin response, which is why we've continued to dose escalate because we've had more room to do so. You know, in terms of treating myelofibrosis, there's both disease-related anemia as well as potentially drug-induced anemia from suppression of cytokines like erythropoietin. So the idea is to try and attend to both of those and improve patients getting anemia either from the disease or from the drug, and we'll continue to escalate. And we'll show more patients with more data at higher doses and then potentially look at are there development paths there that will be potentially addressable by the compound in those settings by alleviating anemia from the disease and the drug. So, it's just an updated data set at higher doses.
spk06: Thank you.
spk07: Next question is coming from David Lebowitz from City Airlines, not live.
spk26: Thank you very much for taking my question. Could you comment on the demand for PV at this point going into next year? How much impact has IRA had to this point in the numbers?
spk10: Hi, thanks for the questions, Barry.
spk09: So PV, we believe, actually is growing because of the efficacy of the product on the disease. And in fact, the most recent data from Magic PV showed that long-term efficacy for Jackify for those patients is quite good. And we believe that that has spurred the uptake of PV and of Jackify and PV patients. Obviously, the IRA and the elimination of catastrophic what patients have to pay in a catastrophic coverage area helps all patients, helps all patients who are on particularly oral chemotherapy drugs. So we're excited about that. We're glad that that's finally happened. And next year, 2025, will even be better when out-of-pocket for patients on Medicare Part D will only be $2,000. So the growth really is coming from the efficacy of the product. And we're glad that changes happened to Medicare Part D to make all patients oncology drugs more affordable for patients.
spk07: Thank you. Next question is coming from Eric Schmidt from Cancer Fitzgerald. Your line is now live.
spk03: Thanks for taking my question. It's on R&D spend and the portfolio prioritization. I guess on the one hand, you know, you've cut some programs. On the other hand, you're ticking up your R&D guidance for 2024. I presume that's in part because of the Eshin acquisition. But When you think kind of big picture and strategically around how much a company like Insight should be investing in R&D, I do think you're still at the industry high in terms of R&D's percent sales. What is your sort of solution to what a proper investment is in R&D at this stage?
spk00: Eric, thank you for having me here. Thank you for the question because it's obviously something that has been sort of driving a lot of our thinking in the past few months. I mean, our first approach to R&D spending is a project-specific financial rationale. So if you take any of these projects that Pablo went through, and there are 12 NCEs there, You can look at, does it make sense to develop it? Is that an investment that is reasonable for a product of this type? And you can go through the list from 12D to TGF Beta to, obviously, 617F and Calar. And each of the projects is first submitted to that test of saying, does it make sense, independently from the rest of the portfolio, to develop this product? And, obviously, we came to that conclusion for the projects that are moving forward and either because of certain data or because of the competitive situation, we came to the opposite conclusion for some of the projects that we listed today. So that's the first thing. And then the second one is, is that something that Insight can do by ourselves or should we look for other sources of financing for this project or partnering if we believe that it's something that we cannot do by ourselves. And that's where we came with this list of projects where by stopping some of them, we are creating room for the new project. We are also seeing some of the historical projects coming to an end, like Retif and Limab, and we will see a decrease of the investment in Tafasitamab over the next few months as we are finishing the Follicular study and the next year will be the end of the first line study So there is a movement where some projects are decreasing some projects are being stopped and all of that is creating room to as was described by Christiana basically maintain or reasonable and expand within with improving ratios and what crystal adjust said is as you see in The evolution of the P&L, we have been consistently improving the ratios with a decreasing percentage of revenue in R&D and in SG&E. So that's the big picture. It's going to happen at a pace that is over the next few years. It's not like one-time events where suddenly there is a big change in the number. But a lot of the spirit of what was described today is Prioritize resources to high Potential program in the pipeline and I hope you could see from Pablo's discussion that there are a number of them and at the same time You know stop programs where we are not in a good competitive position or the data is not confirming what we were expecting at the beginning of the program Thank you next question is coming from James Shin from Deutsche Bank your line is now live
spk14: Hi, good morning. For the LAG3 assets, was it lack of differentiation from existing assets that led to discontinuation? Any color on what you saw or did not see from the LAG3s would be helpful. Thank you.
spk24: Yes, thank you for the question. The most important point, I think, for the LAG3 programs, both the monoclonal antibody and the bispecific, was the competitive landscape, quite honestly. You know, we are behind In both cases, far behind our competitors, there's a LAC3 obviously approved in combination with PD-1, and there's at least one bispecific LAC3 that is well ahead of us already in randomized trials. So that was the main determinant. When it comes to data, we'll decide what is the right time and setting to disclose some of the data that we've seen with those programs.
spk06: Thank you. Next question today is coming from Jessica Pfeiffer from JPMorgan Chase.
spk07: Her line is now live.
spk20: Thanks for taking my question. Looking ahead to the proof of concept data for the MRG PRX4 antagonist in PBC and PSC coming up next year, should we think about the data shared by Merum in PBC as a potential benchmark you would like to meet? I think they showed around a 2.3 point placebo-adjusted difference on the adult daily ITRO score in PBC. And then if I could think in a bigger picture one, just for Pablo, now that you've been at Insight for about a year and have had some time to get to know the pipeline better, where do you think investors should spend more time? And what do you think will be the company's most important pipeline assets if we look out, say, three years from now?
spk05: Thanks.
spk24: I think we are excited about that program, particularly the continuous need for better pruritus control in patients with PVC and PSC. Particularly with PSC, there's really no good alternatives out there that have been approved. So the benchmark for Mirum is a reasonable place to start. One of the things we like about both X2 and X4, by the way, about 262 and 547, is a great safety profile we've seen so far. So, stay tuned. We'll provide an update early next year. When it comes to the second part of your question, if you look at slide 14, and it's hard to pick favorites from that slide, I think that I am very excited about some of the programs in our earlier pipeline. I think that if you go vertical by vertical, I think, obviously, the acquisition of the With both the X2 and the X4 antagonists, those are potential both first-in-class programs that address a number of potential indications. I think in oncology, the near-term CDK2 data reveal is something that we're very excited about. And I think that when you look at our TGF beta receptor by PD-1 bispecific, we have taken a unique approach to those two pathways that we think could be a big differentiator. And MPNs, of course, I have to mention are mutant collar and 617F programs, both of which are not just first in class, but they're a unique way to address patients with MPNs and potentially change disease outcomes by changing the natural history of the disease. So I think those are the areas where I would say today we have the most excitement inside the company. And I would add by investigators outside the company that is shown by how quickly some of the studies are accruing.
spk06: Thank you. Next question today is coming from Jay Olson from Oppenheimer and Company.
spk07: Your line is now live.
spk23: Oh, hey, congrats on the quarter, and thanks for taking the question. There are some recent publications showing synergistic efficacy from combining JAK inhibitors with PD-1 antibodies. Can you please share your takeaways from those publications, and does Insight have plans to develop a JAK inhibitor such as in combination with PD-1 antibodies for oncology? Thank you.
spk22: Yeah, Jay and Steven, thanks for the question. There were two simultaneous publications that were intriguing, showing that potentially JAK inhibition can modulate the T cell environment in a positive way and enhance checkpoint inhibition. However, our own experience in the past has not been as successful clinically. So I don't know if you remember, but years ago we tried JAK inhibition on its own in several solid tumors based on an inflammatory hypothesis with C-reactive protein. And unfortunately, those endeavors were negative. We also did some work, an investigative-initiated work in combination with PD-1 with JAK inhibitors. Although we didn't have clinical data, some of the translational data didn't show the right directional changes in T-cells. But, you know, you are correct in that those two simultaneous papers has reignited some interest and we'll relook at it. But no current R&D sponsored plans there.
spk23: Thank you.
spk07: Thank you. Next question is coming from Evan Siegerman from BMO Capital Market. Your line is now live.
spk15: Hi, guys. Thank you so much for taking my question today. You know, with your, you know, recently completing the large-scale share repurchase, how much capacity do you have left for further business development? Maybe walk us through some of the rationale of doing such a large-scale share repurchase versus, say, doing a larger acquisition to bolster the pipeline.
spk19: Hi, Evan. It's Christiana. So, first of all, the share repurchase that we did reflect the confidence that we have in the outlook of the business, both driven by the progress on the commercial front, but also very much so by the evolving pipeline and all the the excitement behind the programs that Pablo discussed. So we saw a very big disconnect between the long-term value that we see in the company versus what has been reflected in the stock price. That's the decision to do the sherry purchase. The size of the sherry purchase was enabled by the fact that we have a very strong balance sheet and we were in a position to both do a big sherry purchase and at the same time retain financial flexibility for more BD if we choose to do so. So we've ended the quarter with one and a half billion in cash. We don't have any debt, which gives us additional firepower to be able to pursue BD if we decide to do so. As you saw today, we have a very exciting pipeline, so there is a lot of focus on moving forward our internal programs, but we are in a position to opportunistically bring in additional opportunities if we believe these are opportunities where we can add value.
spk06: Thank you. Next question is coming from Mark Fromm from TD Calendarline is now live.
spk11: Hi, this is Alex. I'm from Mark. Thanks so much for taking my question. For Opsalura, could you quantify the impact of the preferred formulary placements you achieved for 2024? And do you view these contracts as having been successful so far? And would you maybe expect to negotiate any additional deals for the 2025 plan year? Thanks.
spk01: Hi, Alex. Matteo here. Yes. So the preferred position that we gained this year in CVS was one of the key contributors to the OBSALURA growth that we're experiencing this year. In addition to that, obviously, we're seeing patients on CVFs benefit from an easier and improved accessibility to OBSALURA. And it gives also insight the opportunity to better execute the support programs that we have in place for all the commercial eligible patients. In terms of expecting for the future, we have a plan for 2025, which we are executing in while we speak. We'll continue to bring up some new data that we have, very interesting from a PBM and PEO perspective, the real-world evidence of Obsoluta, and we expect that we continue to improve our access going forward and utilization management wherever it's feasible and possible, with always keeping in mind that every step we take in that direction will have to be improving our net sales line.
spk06: Thank you.
spk07: Next question is coming from Ren Benjamin from Citizens J&P. Your line is now live.
spk04: Hey, guys. Thanks for taking the questions. I guess I'd love to get your latest thoughts on Pathos Cinemab now that you've acquired the rights to that asset. How you're thinking about it and what the market opportunity is for frontline, you know, as well as follicular and MCL, especially given everything that you've learned from the relapsed refractory DL-BCL market and kind of the challenges there. Thanks.
spk00: I think maybe I can start and Barry can speak in more detail. I mean, the picture on tafacitamab obviously was, the financial picture of tafacitamab was changed when we basically got for free the full rights for the product. I mean, that was the transaction at the beginning of the year. Where it puts us now is facing the two phase three studies that we have ongoing. We will have very soon, in the next few weeks, the result of the follicular lymphoma. Assuming if it's positive, it would obviously give us an opportunity. It's not enormous in size. It's fairly competitive, but there is a lot of upside for the brand at the stage where we are on this new indication. It would be a large randomized study, so it will add to the clinical profile of the product across all indications. So that's the first step. And then there is a first line coming in 2025 where, if positive and depending on the size of the benefits that is observed, could have a larger potential for the brand. I think the positioning of Monjuvi and Minjuvi in Europe and the U.S. is really driven by the fact that the efficacy that you see is at a very low cost in terms of safety side effects. So that's the ratio of efficacy, safety that we observe with Monjuvi is very unique compared to the rest of the competition, and it has space that I think will, you know, depending on the data that we see, will be important. It's not going to be a brand that is in the multi-billion range, but it's going to be a brand that can increase by a few hundred millions, and I think it will be a good contribution to the portfolio.
spk09: Yeah, I mean, Herve really said it all, but we are excited about follicular and marginal zone. There's combined, there's about 12,500 patients that are treated in those settings, and the second line plus setting. So, yes, it's competitive, but particularly for flicker lymphoma, R-squared is currently the market leader in the second-line setting in flicker lymphoma, and obviously adding TAFA to it, we hope to improve the outcome for patients. And in the first-line setting for diffuse large B-cell lymphoma, when we have that data next year, and hopefully the addition of TAFA to R-CHOP will actually improve the lives of patients. In fact, you know, we're hoping to obviously improve cure rates, and there's 30,000 patients in our frontline diffuse large B cell lymphoma patients, and then our study is really concentrating on IPI-3 and higher. So anyway, so the opportunity for us is there, as long as the data is what we hope it to be. I think we'll have success, as Hervé said, but in both situations, diffuse large B cell lymphoma and in indolent lymphoma. It's a very competitive market, but we think we have a profile of a drug that physicians and patients will want to use.
spk07: Thank you. Next question is coming from Kelly Shee from Jefferies. Your line is now live.
spk12: Hi, good morning. This is Clara. I'm for Kelly. Thanks for taking our question and congrats on the quarter. So just a quick one on Opsilura. Could you help us understand the growth-to-net trend during the quarter, and how should we think about it in the upcoming quarter? And what is the kind of latest mix you're seeing between Povic-Durin and Vialigo, and how are you thinking about the pediatric uptake in 2025? Thank you.
spk19: Hi, Clara. It's Christiana. Let me take the first part of the question regarding Opsilura and growth-to-net. So, growth to net in Q2 was broadly in line with where we were last Q2, so the growth really was driven by demand here. In terms of going forward, as we have discussed in the past, we are not focusing on growth to net in isolation, but on net sales, and that is where the focus is. If there are situations where we believe that There is an opportunity to improve positioning, to improve access by giving some additional discount, and that would lead to disproportionate increase in demand and therefore net sales. We are going to pursue it, but looking at gross net in isolation is not something that we will be doing and providing separate forward guidance for gross net.
spk01: Yes, and I can take the other two pieces, Matthew, here. One is the split between atopic dermatitis and non-segmental vitiligo, which is currently 60-40. And it's a great indication for us because when we see the split being consistent, the growth is coming from both indications. And then the third piece of your question, I believe, was on the sizing and potential of the pediatric indications. We see definitely that one, the potential label expansion of OBSELURA for patients 12 to 11 years old in atopic dermatitis, a driver of continuous growth. The patient population is quite sizable. We see 2 million patients with AD in the age range and mostly treated with TCIs and TCS today. So great opportunity for us. And in terms of sizing, we see the contribution to our total AD business in the future from pediatric indication in the range of 10%, 15% of their business, which is fairly in line with what we see from other therapies in the same space for the same age range.
spk06: Thank you. Our next question today is coming from Andrew Behrens from SBB Securities.
spk07: Your line is now live.
spk25: Hi, thanks, and it's Lyric Partners. We're glad to have moved beyond that stage of our existence. But a couple of questions. I was wondering if you could give us some color on the JACUP IXR program. It seems as if you could have the PK PD data this year, and should we plan on getting an update ahead of the stability data? And then for the CAL-R and JAC-2 selective programs, I know it's early, but what do you think a pivotal program would look like? Would the endpoints be similar to Jacobi with SVR35 rates, and would you have to compare to Jacobi head-to-head, or would you start in later stages of the disease and move forward? Thanks for taking my questions.
spk22: Steven, thanks for your question. On Jacobi XR, as Pablo had in his slides, he pointed to the pivotal BE data, the bioequivalence data, coming in the early part of 2025 next year. And then as the stability delivers towards the sort of third quarter, that's when we would file that indication, should everything be directionally correct, and then get an approval in 2026. So that's, you know, within what we said, we would deliver for XR, and we await that pivotal BE data for which the study is starting very soon. For CalR and V617F, again, to expand on Pablo's comments, you know, it's still early days with both programs, obviously in dose escalation with enormous promise in terms of a totally new mindset around disease modification dash potentially cure because of eradication of the malignant clone. And in those entities, I mean, it's still early days, we'd have to discuss with regulators, is there a completely another way of viewing the diseases and not look at the traditional JAK inhibition pathway for SVR35 and total symptom score in terms of eradicating the clone and removing the malignancy and the associated morbidity from it, there are potentially other regulatory pathways which we'll explore at that time. So thank you for bringing it up because it could be a completely new way of thinking about those entities.
spk07: Thank you. Our next question is coming from Gavin Clark Gardner from Evercore ISI. Your line is now live.
spk02: Hey, guys. I just wanted to ask another question about tafacitumab. What are your latest thoughts on developing in autoimmune diseases and how are you making that decision?
spk24: Thanks. Yes, thank you for the question. So, look, as I mentioned, when we acquired full rights for teflacitamab early this year, and knowing that we have a near-term pivotal readout as well as another one next year, it led us to rethink a little bit about whether the level of investment in that program is adequate. And quite honestly, we're in the middle of that process. We're obviously aware of all the data with CD19 targeted therapies and autoimmune disease. We're conducting a full evaluation as well as interactions with external scientists to really understand, A, what's the opportunity for TAF at this point in AI from the mechanistic point of view? What's the competitive landscape? What does it look like? And what are the remaining opportunities that we can go after with a reasonable and prudent level of investment? So we're doing that evaluation literally as we speak. We'll have an update probably on that later this year.
spk06: Thank you. Our final question today is coming from Salveen Richter from Goldman Sachs.
spk07: Your line is now live.
spk18: Good morning. Thank you for taking my question. On the back of the portfolio prioritization and the estimate acquisition, do you feel comfortable at the current time that you can offset Jackify LOEs and grow beyond as well? Thank you.
spk00: Thank you, Salveen. Maybe I'll take that. I mean, it's obviously the world... purpose of our investment in R&D is to more than compensate for what could be the expiration of the current product. So you can look at, you know, the size. I mean, the guidance we have on Jacketify that has been there for a number of years is around $3 billion as peak sales. So we are very much on the way to get there. And when you look at the number of projects, we are speaking of 10 launches in the next few years. We are speaking of 12 NCEs that we have in development. I mean, that would be each of them with a potential that is meaningful. That would be certainly way more than what we need to just compensate for JAKA5. So the view, and obviously it will depend on the clinical success we have with this project, But the view is that today our portfolio is very much giving us a gross profile that goes beyond the JICA 5 patent expiration.
spk07: Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.
spk13: Thank you all for participating in the call today and your questions. The IR team will be available for the rest of the day. Thank you and goodbye.
spk07: 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.
Disclaimer