Incyte Corporation

Greetings, and welcome to the Insight Third Quarter 2025 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. We ask that you please limit yourselves to one question and one follow-up, then return to the queue. If anyone should require operator assistance, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Alexis Smith, Vice President and Head of Investor Relations. Please go ahead, Alexis.

Thank you. Good morning and welcome to Insight's third quarter 2025 earnings conference call. Before we begin, I encourage everyone to go to the investor section of our website to find the press release, related financial tables, and slides that follow today's discussion. On today's call, I'm joined by Bill, Pablo, and Tom, who will deliver our prepared remarks. Steven, Dave, Mateo, and Mohamed will also be available for Q&A. I would like to point out that we will 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 hand the call over to Bill.

Thank you, Alexis, and good morning, everyone. On our last call, I told you I'd be taking a fresh look at the company with a focus on getting the core business right. our R&D priorities right, and our cost base right. This, of course, is a continuous process and one that is well underway and on track. In terms of the core business, my assessment has reinforced my confidence in the growth potential of our key products. As we announced today, we had a strong quarter with total revenues of $1.37 billion and product sales of $1.15 billion. This represents a 20% and 19% increase, respectively, versus prior year. The fundamentals around Jackify, Opsalora, and our Hemong business, Nictimbo and Monjuvi, namely, remain strong. Our job right now is to keep it that way and to identify effective ways to optimize the promotional strategies and investment for these products to drive future growth. Jackify Q3 sales reached $791 million, a 7% increase, with strong demand growth of 10% year over year. Growth was broad-based across all three indications. In MF, Jackify utilization continues to increase, and we are maintaining market share leadership despite competition. Growth in GVHD remains strong, supported by our portfolio strategy with Nick Timbo, which is helping identify patients across multiple lines of therapy. And PV is our largest growth driver, fueled by compelling magic PV data showing impressive thrombosis-free survival. Based on this momentum, we're raising our full year guidance for Jackify to a new range of $3.05 billion to $3.075 billion. Opsalura growth was exceptional in the third quarter and continues to be a significant contributor to revenue, with $188 million in sales, a 35% increase versus prior year. Of this, $144 million in net sales came from the U.S., which represented a 21% increase versus prior year. The increase was based on strong prescription demand across both indications and more favorable formulary placement at the three top PBMs. In July, we reorganized the Opsalura sales force into two dedicated sales teams, one for AD and one for Vitiligo, to ensure execution and sustained growth. The market for branded non-sterile topicals continues to expand at a 20% rate as more patients migrate off, and away from topical corticosteroids. Given the efficacy of Opsalura in terms of rapid itch relief and skin clearance, our broad prescriber base and formulary coverage were well positioned to take advantage of this market dynamic. Internationally, sales for Opsalura and Vitiligo totaled $44 million, representing a 117% increase from last year. France, Spain, Italy, and Canada account for over 80% of our sales and growth. And we plan to file an application for ruxolitinib cream in moderate AD in the EU by year end with a potential approval in the second half of 2026. Now, in its third quarter post-launch, Nictimbo continues to outperform expectations across all launch metrics. Sales in the third quarter totaled $46 million, an increase of 27% versus the second quarter. 90% of BMT centers have adopted Nictimbo, with all centers placing repeat orders year-to-date. Importantly, 80% of patients who started treatment in the first quarter of launch are still on therapy today. And we've captured 13% of the third line plus GVHD opportunity in just the first nine months on the market. In line with expectations, Nictimbo is primarily being used in the fourth line, with increasing preference and utilization in the third line. Feedback from BMT centers has been positive, with real-world efficacy and safety being equally as impressive as the clinical data. Finally, we're actively studying nictimbo in combination with ruxolitinib and steroids in earlier line settings. Our combination study with JAKIFI is designed to enable a steroid-free regimen in GVHD, which could shift the standard of care. And our combination study with steroids in the frontline setting has the potential to deliver benchmark efficacy and steroid steroid tapering. This franchise strategy has the potential to significantly increase our addressable market and strengthen our leadership position in GVHD. Our broader hematology and oncology portfolio also performed well this quarter. Sales for Monjuvi and follicular lymphoma and Zynas and SCAC both launched this year, saw strong growth, and contributed to our RAISE guidance. These products will be incremental contributors to our portfolio and collectively can deliver meaningful sales growth over the next several years. We have three important new product launches next year, Ruxolitinib XR, Opsilor AD in Europe, and Povacitinib in HS. I've completed a thorough review of the launch plans and believe these products have the potential to contribute significantly to Insight's future growth. Strategically, Bruxelit and Bexar, upon approval, offers the same therapeutic benefits of Jacify and a more convenient once-daily dosing regimen. The stability data are on track to be submitted to the FDA before end of year with an anticipated launch in mid-2026. As it relates to Opsalura AD, as mentioned, we plan to submit our application in the EU with an anticipated launch next year. Assuming approval, Opsilor has the potential to contribute meaningfully to future sales in the EU4 and Canada and to overall growth given its clinical and economic value proposition. With the moderate AD indication in Europe, we could potentially increase our international topical business by 2 to 3x over the next several years. And finally, povercitinib could be the first oral option for patients with HS, which is perhaps the most challenging disease in dermatology. It's a multi-cytokine disease. involving many pathways, making treatment more complex and results more variable. A treatment option like povacitinib, which has shown rapid pain relief and skin clearance scores of over 50%, will be very marketable. We believe there's a substantial opportunity in HS, which is the first step for POVO. Our ongoing developments in PN and vitiligo will come into focus next year. And if positive, further strengthen the position of POVO in our DERM portfolio. Together with Opsalura, we could provide a topical to oral offering for patients across HS, vitiligo, and PN. Launch activities for each product remain on schedule, including preparations for the sales force, payer engagements, and medical education initiatives. We'll share more details in early 2026. Turning to R&D. Our ongoing pipeline review is providing us with absolute clarity about which high-value programs are core to future growth and have the greatest potential to create value and outsize returns. We want to configure a balanced pipeline that is not consumed by either safe low-value projects or moonshots. We've set clear go-no-go criteria for moving key projects forward. We will invest and take calculated risks in key programs rather than thinly spreading investments across many programs. In other words, fewer, smarter investments versus diffuse spending. We'll fund what matters, and importantly, watch out for false positives and negatives. As it relates to our developing pipeline, the first call on capital is Hemonc. This is the central identity of the company and an area where we have differentiated knowledge and capabilities and an asymmetrical advantage. This includes targeted therapies for MPNs, including MCALR 617, our MCALR bispecific, and discovery programs. We have a window of opportunity here to trigger an innovation-based shift in MPNs from nonspecific symptomatic therapies like JAKIFI and HU to targeted mutation-specific therapies like 989. Next steps for 989 and 617 will be shared later this year and next year. In terms of our solid tumor program, the cornerstone of our cancer strategy is novel biological pathways, high incidence cancers with substantial medical need that miss the IO revolution, and immunotherapies and targeted therapies that can be used frontline in combination with standard of care regimens. As you know, we have three programs in early development, KRAS G12D for pancreatic cancer, TGF-beta by PD-1 bispecific, by specific for MSS CRC and CDK2 for ovarian cancer. Over the next several months, we will collect more data on these programs in terms of response rates, duration of response, and safety, particularly in combination with standard of care. We'll move forward without delay, providing our data continue to be objectively competitive, and we can be early to market and defend our position long term. Now, in terms of our operating expenses and overall cost structure, We're conducting a review of the entire business, which focuses on prioritization and data-driven trade-off decisions. Our objective is to manage costs, but not underfund critical initiatives and compromise growth prospects. We'll strike the right balance between financial discipline and long-term strategic investments, which can be achieved by controlling costs in low-value areas to free up capital, either for reinvestment in high-value opportunities or to improve margins. Our framework for the 2026 budget and beyond will be based on the following. First, define and ring fence our strategic growth drivers. This means the new product launches that I touched on, as well as key R&D projects, which we have earmarked as non-negotiable, fully funded programs. Once we protect the growth drivers, we're looking to control costs in areas that add less or minimal strategic value. From there, the savings we've identified and achieved will either be reallocated or banked. This will be a continuous process, not a one and done exercise. It's a mindset. As our business evolves, so will our resource allocation. Finally, business development. BD works when you have strong strategic leadership, high throughput, and a framework for rapidly triaging opportunities and making decisions, which requires a skilled search and evaluation team and a deep network. To be successful, we need to operate inside the loop in our focus areas. Accordingly, Dave Gardner joined Insight as Chief Strategy Officer in September, and one of his priorities is to build out this capability. He will play a central role in developing our long-term growth strategy and ensuring external business development opportunities and internal portfolio decisions are strategically sound and financially compelling. We will share more details about our strategic review early next year. Now I'd like to turn the call over to Pablo.