Incyte Q1 2023 Earnings Call Transcript

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Provided by Quartr
May 2, 2023

Key Takeaways

  • Incyte’s Q1 product revenues grew 14% year over year to $693 million, driven by 7% underlying demand for Jakafi and a 4.5-fold jump in Opselura net sales.
  • Despite Q1 gross-to-net headwinds and a temporary channel inventory drawdown, Incyte raised the low end of its full-year Jakafi revenue guidance to a new range of $2.55 billion–$2.63 billion.
  • The launch of Opselura continues to exceed expectations, with Q1 net sales of $57 million and growing dermatologists’ familiarity and patient activation through a direct-to-consumer Vitiligo campaign.
  • Incyte is consolidating its R&D portfolio around eight first- or best-in-class programs, discontinuing six projects to accelerate development and boost efficiency in key immunology and oncology assets.
  • The FDA issued a complete response letter for ruxolitinib XR over bioequivalence Cmin concerns, delaying its approval and necessitating further regulatory discussions.
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Earnings Conference Call
Incyte Q1 2023
00:00 / 00:00

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Operator

Hello, welcome to the Incyte Q1 2023 earnings call and 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 Chiou, Head of Investor Relations. Please go ahead, Christine.

Christine Chiou
Christine Chiou
Head of Investor Relations at Incyte

Thank you, Kevin. Good morning and welcome to Incyte's Q1 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 Hervé, Barry, Steven, 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 followed with the SEC. We will now begin the call with Hervé.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Thank you, Christine, good morning, everyone. We'll be moving to slide four. In the Q1, product revenue grew 14% year-over-year. The growth for the quarter does not fully reflect the strength of the underlying patient demand for Jakafi and Opzelura, which I will discuss in the next slide. In hematology and oncology, the ongoing launches of Pemazyre and Minjuvi ex US drove the 17% year-over-year growth. We also received additional approval, including our first indication for Zynyz in Merkel cell carcinoma in the U.S. and more importantly, the approval of Opzelura for vitiligo in Europe with an excellent label. Zynyz is available commercially in the U.S., Opzelura will be launched in Europe in the next few months, starting with Germany. Moving to slide five.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Taking a closer look at the Q1 dynamics that affected net sales in the quarter for Jakafi and Opzelura. Jakafi patient demand was strong across all indications, growing 7% on a year-on-year basis. Gross 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 inventory 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 billion-$2.63 billion for the full year. Turning to Opzelura. There are three components to fully understand the dynamics of the Q1.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

First, we saw a continuation of strong trends in weekly prescription growth in the quarter. 60,000 new patients were treated with Opzelura. 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. Third, net price in the quarter was impacted by an increase in commercial co-pay and a higher Medicaid utilization. The outlook is strong for both Jakafi and Opzelura as we expect to drive further growth throughout the year. Moving to slide six. 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 year. These eight programs of first or best-in-class candidates have large potential with multiple indications such as Opzelura, povorcitinib, and oral PD-1 or PD-L1, or alternatively, they address a significant unmet need in an existing franchise like the LIMBER program with ALK2, BET, axitinib, and CALR. We are discontinuing six programs, including parsaclisib in MF and warm autoimmune hemolytic anemia, axcalmer, the two adenosine program, and GITR. 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, TGFβR2×PD-1 bispecific, and orimalimab. With that, I would like to pass the call to Barry.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Thank you, Hervé. Good morning, everyone. Starting with Jakafi on slide eight. Patient demand for Jakafi was strong across all indications. New patient starts, which are a strong leading indicator for growth in future quarters, grew 8% year-on-year to reach an all-time high. Unit demand, as shown by the chart on the bottom left, shows good growth in Q1 versus the past two years. Turning to Opzelura. Net sales in the quarter were $57 million. On the right are total prescriptions as reported by IQVIA. Launch trends continue to be strong, with robust growth seen in both March and April. As we continue to drive further awareness and adoption of the brand, the number of dermatologists gaining experience with Opzelura continues to increase.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Turning to slide 10, I want to take a step back and recognize the significant achievements we have been able to accomplish with the launch of Opzelura. When reflecting on the first 18 months of launch, Opzelura outperformed other brands prescribed by dermatologists on a launch align basis. The rapid adoption of Opzelura highlights its compelling product profile and its ability to address significant unmet needs. In addition, we were able to secure payer access far quicker than any other recent launches in dermatology. Looking at slide 11. Momentum with Opzelura is strong, and we are continuing to see very positive trends in terms of uptake, awareness, and reception for the brand in vitiligo. We launched our first PV direct consumer campaign for vitiligo on February 12th this year, and early data supports the success we've had in just a few weeks.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Based on a survey conducted of approximately 100 dermatologists, NPs, and PAs, they indicated that nearly 20% of their vitiligo patients requested Opzelura and that 85% of those patients' requests are filled. This level of brand awareness and patient activation is substantially higher than almost every other product in dermatology offices. With our continued efforts, we believe we can reactivate a significant percentage of the diagnosed vitiligo patient population. Turning to slide 12. Opzelura uptake in atopic dermatitis is driven by its efficacy, and in particular by the impact on itch. This is the clear differentiator for the brand, and Opzelura is the only topical therapy with itch reduction in its label. To understand how quickly Opzelura can work in some patients, this past weekend at the Revolutionizing Atopic Dermatitis meeting, we presented data from our SCRATCH-AD study.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Results showed that patients were able to attain substantial itch reduction as early as 15 minutes after the first application of Opzelura and peak reduction after four hours. We continue to focus our efforts on driving refills and have implemented several new initiatives to further grow the brand. Some of these programs include patient relationship and support programs, as well as partnering with pharmacies to help with the education and to drive patient adherence. Lastly, on Monjuvi, Minjuvi, and Pemazyre on slide 13. Monjuvi sales in the quarter were $21 million, up 11% year-over-year, with community accounts making up the majority of the volume. Minjuvi sales were $7 million, and the product is now reimbursed in six key launch markets in Europe.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Pemazyre grew to $21 million in net sales in Q1, with $5 million coming from outside the U.S., where the launch is now ongoing in 10 key markets in Europe. With that, I'll turn the call over to Steven.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

Thank you, Barry. On slide 15 is a snapshot of a few of our programs, including our high-potential programs, as depicted in the red and blue boxes, segmented by estimated launch timing. Over the next six to 18 months, many of these programs will be expanding into new indications, new combination studies, and into pivotal trials. By focusing resources on these assets, it could allow for an acceleration of certain timelines and increased efficiency as we bring these innovative therapies to patients. We are well-positioned for growth and diversification, with multiple launches expected in the near to midterm. Moving to slide 16. We made significant progress across our high-potential dermatology programs. Opzelura was approved for vitiligo in Europe, and we presented new data for both Opzelura and povorcitinib at two major dermatology conferences.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

We also progressed into new indications, including prurigo nodularis with Opzelura and asthma and chronic spontaneous urticaria with povorcitinib. To highlight our dermatology portfolio in more detail, starting with Opzelura and the recent European approval on slide 17. The label was very favorable with regards to both efficacy and safety. The full indication is for the treatment of non-segmental vitiligo with facial involvement in adults and adolescents from 12 years of age upwards. This encompasses the majority of vitiligo patients in Europe, where roughly 85% of all vitiligo patients have non-segmental disease and where around 60%-80% have facial involvement. Regarding safety, the most common adverse reaction was application site acne. No black triangle was placed on the label, and the regulatory agency determined that the class effect identified for the oral class were not considered relevant for Opzelura.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

As such, the label does not include any special warnings or precautions as seen with the oral JAK inhibitors. Turning to slide 18. We recently initiated two phase III studies evaluating Opzelura in prurigo nodularis, a disease driven by inflammation and characterized by hard nodules and an intense itch. TRuE-PN1 and TRuE-PN2 are 52-week studies where patients will receive ruxolitinib cream or vehicle for 12 weeks, followed by a 40-week open label extension. The primary endpoint is WI-NRS, which is defined as a 4-point or greater improvement in worst itch numeric rating scale score from baseline to week 12. There is a strong rationale for Opzelura in prurigo nodularis, where we have seen promising early data and where there is already a regulatory precedent for approval with clearly defined endpoints.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

With no topical or oral therapies approved, we have a significant opportunity to help a large population of patients who are suffering from this disease. Turning to slide 19. We continue to expand the development of Opzelura into new indications, where it has the potential to provide significant value as either the first approved therapy or first topical therapy for patients living with these dermatologic conditions. Moving to povorcitinib on slide 20, we recently presented positive phase II results at the American Academy of Dermatology annual meeting, highlighting the effect of povorcitinib on repigmentation in patients with extensive vitiligo. Substantial repigmentation was seen with povorcitinib treatment and continued to improve with longer duration of therapy, with up to 36% of povorcitinib-treated patients achieving a facial VASI 75 by week 36. Based on these positive phase II results, we plan to move into phase III development.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

Being able to provide patients with an effective oral therapy to treat their vitiligo is part of our strategy to strengthen our leadership in vitiligo and to be able to provide multiple treatment options for patients across the entire disease spectrum. On slide 21, at the European Hidradenitis Suppurativa Foundation Conference, we presented phase II data showing that 52%-56% of patients treated with povorcitinib achieved a HiSCR50 at week 16. Perhaps even more impressive was that at up to 29% of patients on povorcitinib reached HiSCR100 at week 52, which is a 100% reduction in abscess and nodule count with no increase in abscess or draining tunnels relative to the baseline. This is a very high clinical bar of efficacy, and we were the first to ever present the achievement of HiSCR100 in HS.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

Based on the phase II results, we initiated two phase III trials, STOP-HS1 and STOP-HS2. Similar to ruxolitinib cream, we are building a portfolio for povorcitinib around the science, all while leveraging our extensive dermatology capabilities. As mentioned earlier, we are initiating two phase trials in moderate to severe asthma and chronic spontaneous urticaria. Given what is known about the involvement of the JAK pathway in the regulation of cytokines and Th2 cells, initiating a study in asthma is a logical next step for the development of povorcitinib. Likewise, we know JAK inhibition can modulate mast cell activation, including degranulation and cytokine production, both of which are drivers of chronic spontaneous urticaria. Moving to our hematology and oncology portfolio on slide 23.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

Looking at our high potential oncology programs, we continue to make progress in myeloproliferative neoplasms, or MPNs, with our ALK2 and BET program and axatilimab in chronic graft-versus-host disease. Our small molecule oral PD-L1 program is advancing into multiple phase II studies in combination with adagrasib, ipilimumab, and axitinib. For our early-stage assets, we recently presented data at the American Association for Cancer Research annual meeting for CDK2 and our newly disclosed bispecific TGFβR2×PD-1 antibody. Lastly, we recently announced the approval of Zynyz for Merkel cell carcinoma, which is currently in phase III trials in squamous cell anal carcinoma and non-small cell lung cancer. Turning to slide 24. We have several programs progressing in MPNs and graft-versus-host disease. Delgocitinib is in dose escalation.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

We are currently at doses of 400 milligrams once daily in combination with ruxolitinib, and we were adding a treatment arm for newly diagnosed patients. We continue to see signs of clinical activity, including decreased levels of hepcidin as well as hemoglobin responses, with no dose limiting toxicities to date. For our BET inhibitor, dose escalation is ongoing, where we are currently at doses of six milligrams once daily in combination with ruxolitinib. In monotherapy and in combination therapy, we have seen reductions in spleen length and volume, as well as improvements in both symptoms and hemoglobin, suggesting INCB57643 is an active compound. INCA033989, our mutant CALR antibody, is on track to enter the clinic later this year, and the study evaluating Cellenkos's CK0804 in combination with ruxolitinib continues to progress.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

Lastly, we expect results from the AGAVE-201 study later this year. Before moving on to the next slide, I did want to speak briefly on the CRL for ruxolitinib XR. The FDA determined that while bioequivalence was achieved in the area under the curve, or AUC, they had questions around Cmin and its correlation with efficacy. We will work with the FDA to determine the appropriate next steps, and we will provide an update at that time. Turning to slide 25. Preclinical data from our CDK2 and TGFβR2×PD-1 bispecific. INCB123667, our selective oral small molecule CDK2 inhibitor, is in a phase I dose ranging study in advanced solid tumors. CDK2 in complex with cyclin E is a cell cycle regulator, which when inhibited, has been shown to suppress tumor growth, mainly in cyclin E high tumor models in vivo.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

On the right is INCB33890, a TGFβR2×PD-1 bispecific, which has been engineered to avoid the known toxicity of broad TGFβ pathway blockade. 33890 has a 10-fold higher affinity for PD-1 than TGFβR2 and blocks TGFβ signaling in cells co-expressing PD-1, thus potentially protecting normal tissue. Preclinical in vivo data presented at ACR showed that 33890 has a greater antitumor effect than individual benchmark antibodies or a simple combination of these. Turning to slide 26. For the remainder of the year, we expect numerous data readouts and important strategic decisions for many of our high-potential programs, and we look forward to updating you throughout the year.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

With that, I would like to turn the call over to Christiana for the financial update.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Thank you, Steven. Good morning, everyone. Our Q1 results reflect continued strong revenue growth with total product revenues of $693 million, representing an increase of 14% over the Q1 of 2022. Total product revenues are comprised of Jakafi, other hematology oncology products, which include Iclusig, Pemazyre and Minjuvi, and Opzelura. Jakafi net product revenues for the Q1 were $580 million, which reflect continued growth in patient demand across all indications, partially offset by higher gross to net deductions as a result of both contributions to close the Medicare gap and commercial copay assistance, in line with prior years' Q1s, as well as an increase in 340B. The quarter was also negatively impacted by lower than normal channel inventory at quarter end, due to the timing of certain customer purchases.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Other hematology oncology net product revenues were $57 million, representing a 17% increase compared to the Q1 of 2022, driven by patient demand and partially offset by unfavorable changes in FX rates. On a constant currency basis, the other hematology oncology net product revenues grew by 22% over the prior year period. Finally, Opzelura net product revenues for the quarter were $57 million, representing a four 1/2 fold increase year-over-year, driven by increased patient demand and expanded coverage. This year-over-year growth was partially offset by an acceleration of refills at the end of last year and by higher gross to net deductions as a result of higher Medicaid utilization and higher commercial copay assistance, which is a typical Q1 dynamic. Turning to royalty revenues.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Total royalty revenues for the quarter were $115 million and are comprised of royalties from Novartis of $77 million for Jakavi and $4 million for Tabrecta, and royalties from Lilly of $34 million for Olumiant. Jakavi and Olumiant royalties for the quarter were negatively impacted by FX headwinds, while Olumiant royalties were also impacted by a decrease in net product sales of Olumiant for use as a treatment for COVID-19. Excluding the impact of COVID-19 related sales and currency fluctuations, Olumiant royalties increased 37% compared to the prior year period. Moving on to slide 30 and our operating expenses on a GAAP basis. Ongoing R&D and total R&D expenses were $404 million and $407 million, respectively, for the Q1.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Total R&D expenses increased 15% year-over-year, driven primarily by the progression of our pipeline, including the expansion of the clinical development program evaluating ruxolitinib cream in additional indications and the progression of povorcitinib into pivotal studies, and were partially offset by lower upfront and milestone expenses in 2023. Total SG&A expenses were $316 million for the Q1. SG&A year-over-year growth was driven primarily by promotional activities launched at the beginning of the year to support Opzelura in AD and in vitiligo and the timing of certain other expenses. Moving on to our guidance for 2023. As a result of Jakafi's strong demand growth, we are raising the bottom end of our full year Jakafi guidance range of $2.53 billion-$2.63 billion to a new range of $2.55 billion-$2.63 billion.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

We are affirming our other hematology oncology revenues, COGS, R&D, and SG&A guidance for the year. Operator, that concludes our prepared remarks. Please give your instructions and open the call for Q&A.

Operator

Certainly. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. One moment, please, while we pause for questions. Our first question is coming from Salveen Richter from Goldman Sachs. Your line is now live.

Salveen Richter
Salveen Richter
Managing Director at Goldman Sachs

Good morning. Thanks for taking my questions. Two questions here from me. One is, given the Q1 headwinds for Opzelura, where you saw an increase in commercial copay and higher Medicaid utilization, which led to the higher gross to net, how should we think about the gross to net for the rest of 2023? Maybe you could discuss the disconnect with the IQVIA scripts and whether this is driven purely by higher Medicaid utilization. Secondly, with regard to the CRL for QD Jakafi, what is your view on the base case on the path forward here? How does this impact the combo program with BET and ALK2 in terms of your registrational path?

Salveen Richter
Salveen Richter
Managing Director at Goldman Sachs

Would you run a phase III combo with BID Jakafi and then do bridging studies, or is there, or does the path you have ongoing kind of still, you know, stand on the forward? Thank you.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Hi, Salvin. It's Christiana. Let me take the first two questions on gross to net and IQVIA, then I will turn it to Steven. First of all, regarding Opzelura gross to net, there were two main factors that impacted gross to net in Q1. First one is the higher co-pay and deductibles at the beginning of the plan year. This is typical. We see it every, for every product in the Q1. Those deductibles and co-pays are higher, and we're paying them down, which are impacting gross to net. The second is an increase in Medicaid utilization. That was driven by the very rapid uptake that we saw for Opzelura across all 50 states. That increase in Medicaid utilization had two components that impacted Q1.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

The first one was the utilization that we saw for Medicaid in Q1. The second one is related to the actual claims for Q3 and Q4 received during Q1, which were higher than we were expecting, and therefore, there are certain true-ups related to those claims for Q3 and Q4 that are reflected in Q1. The average gross to net for the quarter was 60%. As we look at the average for the year, we continue to expect this to be at around 50%. The first factor, the higher co-pays and deductibles that we saw in Q1 are expected to come down through the course of the year.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

In terms of the Medicaid, even though the utilization will be higher, the true-ups that we saw in this quarter are not expected to continue at the same level in subsequent quarters. That's in terms of the gross to net. Regarding IQVIA, as we have discussed in the past, the IQVIA data is not fully reflective or accurate relative to our actual numbers. It's good to look at it directionally, but there are a couple of things that are happening with the IQVIA data. One is it includes free drug, and as we have discussed in this past, expect that that is at around 20% of the total scripts that you are seeing. The second is that there is an overestimation.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

We were expecting this to be at around 5%-10%, which is typical for newly launched products, but we see some variation in the level of overestimation during the quarter, and that can be as high as 20%. It's better to look at the IQVIA data more in terms of the trend.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

The trend, earlier, the trend is sort of reflecting the demand that we are observing ourselves. It's just that IQVIA is in fact overestimating a little bit by 10%-20%, depending on the, on the week.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

Salvin, in terms of your question on the CRL for ruxolitinib XR, as I said in my prepared remarks and, you know, the FDA was clear that we had met the area under the curve criteria for ruxolitinib XR versus IR, but had concerns on the lower Cmin, theoretical concerns that it may potentially impact efficacy. In terms of base case, it's hard to say right now how long it will take, but we're absolutely marching forward for the intent to get ruxolitinib XR approved, and we'll work with the FDA on the various options which may include modeling or some other work that needs to be done. We'll update you as soon as we know. It does not impact either the BET or the IL-2 program. Those continue to march forward, again, as I said in my prepared remarks.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

In terms of moving into pivotal studies, you are correct, we will proceed with the ruxolitinib IR with the intent to do bridging work on the back end to an FDC. Just to mention that the fixed-dose combination work is not impacted by anything to date, that continues to move forward for both BET and IL-2 as well. Thanks.

Salveen Richter
Salveen Richter
Managing Director at Goldman Sachs

Thank you.

Operator

Thank you. Next question is coming from Eva Privitera from TD Cowen. Your line is now live.

Eva Privitera
Eva Privitera
Director and Senior Research Analyst at TD Cowen

Hi, good morning, and thanks for taking our questions. My first is also on the gross to net and more specifically on the shift towards Medicaid. Do you expect this to continue into Q2 and for the rest of the year? Is this likely permanent?

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Hi Eva, it's Christiana. The Medicaid utilization or the uptake was faster than we were expecting. Now we have Opzelura available under Medicaid in all 50 states. The increase is not expected to be at that same level, but we would expect to continue to see those levels of Medicaid utilization. It go to the levels that, you know, we were expecting eventually, but the uptake was faster than we were expecting.

Eva Privitera
Eva Privitera
Director and Senior Research Analyst at TD Cowen

Great. Thanks. To follow up on the full year expectation for gross to net to be roughly around 50%. Given that Q1 was 60%, is the assumption correct that the rest of the year, the average should be around in the high 40s?

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

You would expect the gross to net to gradually come down through the course of the year.

Eva Privitera
Eva Privitera
Director and Senior Research Analyst at TD Cowen

Okay, great. Thank you.

Operator

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

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Hi, good morning. Thanks for taking our question.

Vikram Purohit
Vikram Purohit
VP and Equity Research Analyst at Morgan Stanley

We also had a question on Opzelura. We just wanted to get your updated thoughts on when in the coming quarters you might feel comfortable providing a breakout of sales and/or scripts between vitiligo and AD. Is guidance for the product, either total guidance or indication-specific guidance, something you would consider for this year? We had a follow-up.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Hi, Vikram. Let me start, I will turn it to Barry. In terms of the guidance for Opzelura, we want to see more quarters of the uptake before we can provide guidance for annual guidance for Opzelura. We are still early in the launch for vitiligo. We still want to see how fast patients will be activated and have more information on the refills before we are comfortable to provide guidance. Let me turn it to Barry for the script question.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Just vitiligo, as far as we can tell, at this point, as we estimated, it seems to be about 30% of the total RXs are related to vitiligo. The vitiligo growth is continuing and we'll have to have more time to figure out exactly how many vitiligo refills we'll have per patient. As we said in the past, we fully believe that on average over time, vitiligo patients should be receiving about 10 tubes.

Vikram Purohit
Vikram Purohit
VP and Equity Research Analyst at Morgan Stanley

Understood. That's helpful. For a follow-up, we had a question on the LIMBER ALK2 combination data expected in the H2 of this year. Could you just help us kind of characterize how many patients, what level of follow-up we could see, and what you would consider to be a good outcome here? Thank you.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Yeah, Vikram, thank you for the question. Just to separate each program and deal with it separately. You know, as I said in my prepared remarks, I'll deal with that first. It's really encouraging to see that both with monotherapy, we're seeing spleen volume reduction, symptom improvement, and hemoglobin response, and in combination with ruxolitinib as well. We aim at, you know, an appropriate meeting in the H2 of the year to show as much data as we can. It's hard to quantitate that for you right now because different meetings have different cutoffs. You can get a sense of where we are in terms of, you know, the combination dosing thus far. We'll proceed with registrational intent decisions, you know, by the end of the year sort of timeframe.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

For ALK2, you know, we're seeing both, again, in monotherapy, you know, good hepcidin suppression and some evidence of early hemoglobin responses and then in combination as well. It looks like, you know, we're gonna have to go to higher doses than we initially projected there. We have no dose limiting toxicity, that's good as well. The same sort of thing, hard to quantitate for you exactly how many patients we'll be presenting at the appropriate meeting the H2 of the year because of cutoffs, it's appreciable numbers, and we're able to enroll both studies well. The same intent to declare, you know, registrational intent programs in that timeframe as well, because both are proceeding well. Thanks.

Vikram Purohit
Vikram Purohit
VP and Equity Research Analyst at Morgan Stanley

Thank you.

Operator

Thank you. Next question is coming from Kripa Devarakonda from Truist. Your line is now live. Kripa, perhaps your phone is on mute.

Kripa Devarakonda
Kripa Devarakonda
Biotech Research Analyst at Truist Securities

Sorry about that. Thank you for taking my question. I have a couple of big picture questions. When I look at the pipeline mix right now, it seems like maybe it's this time of the, you know, time frame, but there seems to be a gradual switch towards inflammatory diseases, maybe a shift away from oncology. Even within oncology, the earliest stage programs seem to be more focused on biologics, with at least a few of the small molecule programs being discontinued. Is this just a dynamic shift or is it intentional? A question on the proposed EU legislation. I would love to get your thoughts on it and, if you think that it could potentially impact Incyte or if Incyte could be immune from it because of the market you target. Thank you.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Let me take some of that, and maybe, Steven can speak and Dash on the pipeline. Starting on the EU legislation, frankly, I mean, what we have seen is a proposed draft. It's not yet even close to be the final one. It has impact on exclusivity, which is obviously, you know, the key for the entire biotech industry. We live with patents and patent rights, and that will be the subject of our effort in Europe to make it work for us. I mean, Incyte is a company investing in R&D, and the only way we can be viable in the long term is with enough patent and exclusivity after that. That's the big picture.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

I frankly am not yet ready to speak about the specifics of it because it's a lot of work on our side to identify where we will specifically be impacted or not by the new legislation, which by the way, will take time to be implemented. I mean, it's not a very short-term thing. On the portfolio, it is clear that we have been moving resources into inflammation and dermatology, but not just dermatology. I mean, you heard the scope of the program we have for povorcitinib. We have remolimab coming also very soon. We have rux cream, which is in dermatology, and they are all three very important program.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

We are not moving away from oncology, but we are certainly consolidating our portfolio in immunology, and I think it's an important. You know, move for Incyte over the past few years of sort of becoming now a company that has two different franchises that are fueling the growth and the derm or immunology and oncology are coexisting. Remember, we have a lot of synergies in R and in research because a lot of the work we are doing there can be leading to products that can be used in cancer and could also be used in a non-oncology indication. Regarding the biologics, frankly, we have bispecific, we have antibodies, and we have small molecule. We treat them equally. There is no strategic goal of moving away from small molecule, for example, like you have heard from some other companies.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

In our case, we are totally committed to each of them. It just happened that some of the targets we are pursuing, and you saw that with, Kala, for example, are well suited for an antibody or biologic type of approach, and that's what's driving the mix between biologic and small molecules for today.

Kripa Devarakonda
Kripa Devarakonda
Biotech Research Analyst at Truist Securities

Great. Thank you so much.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Yes.

Operator

Thank you. Next question today is coming from Jessica Fye from JPMorgan. Your line is now live.

Jessica Fye
Jessica Fye
Managing Director at JPMorgan

Hey. Great. Good morning. Thanks for taking my question. A couple on Jakafi. First, where does duration of therapy with Jakafi and MF stand historically, and have you seen that evolving at all? Is there any change in duration of therapy baked into the 2023 guidance? I think you mentioned the change in inventory year-over-year. Was there a sequential change in inventory relative to the Q4?

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Sure. Jessica, it's Barry. In terms of duration of therapy for MF, it's about 21 months, as far as we can tell, but many patients are on drug. They've been on drugs since the phase II study. We haven't seen any change at all, particularly, you know, if there's a couple of drugs that might be used in the second line setting, we haven't seen it. The growth for MF for this quarter is the highest that we've seen year-over-year, quarter-over-quarter. And we'll let the inventory go question go over to Christiana.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Jessica, regarding the inventory, we ended Q1 with our channel inventory levels that were slightly below the low end of the normal range. The normal range that we see is two 1/2 to three weeks of hand of channel inventory. That had to do with the timing of certain customer orders. In terms of the impact when you look at this relative to Q1 of last year, the impact is at around $11 million. Q4, both this past year and the year before ended up being at the higher end of the range, but within normal levels. Again, this quarter, we fell slightly below the low end of the range.

Jessica Fye
Jessica Fye
Managing Director at JPMorgan

Thank you.

Operator

Thank you. Next question is coming from Brian Abrahams from RBC. Your line is now live.

Brian Abrahams
Brian Abrahams
Senior Biotechnology Analyst at RBC Capital Markets

Hi there. Good morning. Thanks for taking my questions. On Opzelura, can you talk about what you're observing with regards to refills in the past few months? Are you seeing refills normalize in March and April? What's your latest thinking on the average number of tubes per year patients will be getting there? With regards to Jakafi, I'm curious what you're seeing that prompted the raise in the lower end of the guidance range. Any differences in demand versus your expectations, changes in your expected expectations for competitive dynamics in the back half of the year or something else? Thanks.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Sure. This is Barry. Opzelura and then Jakafi. Opzelura, just in terms of, yes, in March and April, refills have normalized. We said in the past, and it seems to be holding up that refills account for at least 30% of the TRXs. That will continue. In terms of the number of tubes per patient, it differs obviously between AD and vitiligo. In AD, when we can follow a cohort of patients for at least 12 months, we can see that they average currently about two tubes per patient or a little above two tubes per patient. For vitiligo, we fully anticipate that patients will, in fact, be using many more tubes. We've projected or forecasted about 10 tubes per patient over time.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

We haven't been able to follow a cohort of patients for vitiligo patients to see exactly what the refills are, but we know they'll continue to increase. As far as Jakafi goes, the dynamics are there. I mean, in fact, we're growing at a good rate in terms of demand in the Q1 and going forward. I think as we said before, in terms of new patient growth, it's been the best that we've seen since the launch of the brand. We're very encouraged by that, and that generally carries through to the rest of the year. We're growing total patients and total demand in MF, PV, and GVHD. That's what led to the tightening of the guidance.

Brian Abrahams
Brian Abrahams
Senior Biotechnology Analyst at RBC Capital Markets

Thanks, Barry.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Yeah, Brian, on the refill, I think it is the key question for Opzelura. To put it in perspective, we had when we launched this calibration of saying it would be two to three tube for atopic derm, it could be up to 10 for vitiligo. What we are observing is that we are now north of two for atopic derm, so that's a good thing. It's evolving. It's a number that is increasing. Frankly, for vitiligo, we don't have enough patients treated over a 12-month period to know where it is. It is when you do the modeling, it is the one thing that is giving the curve a very different shape. A lot of the commercial effort we do today is obviously bringing new patients to their dermatologist, asking for Opzelura.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

The other side is refills and getting the refills done for vitiligo because that's what's going to impact the revenue for the next year.

Operator

Thank you. Next question is coming from Tazeen Ahmad from Bank of America. Your line is now live.

Tazeen Ahmad
Managing Director in Equity Research and Research Analyst at Bank of America Securities

Hi, good morning. Thanks for taking my questions. I have 2. Just to go back for a minute to gross-to-net. Is it still your expectation to exit the year at 50% gross-to-net? I know that you're expecting GTN to improve as the year progresses, but given where you started off with the Q1 results, how are you thinking about that guidance for the rest of the year? Secondly, as it relates to the LIMBER program, just with the retirement of your pursuit of parsaclisib, how should we be thinking about LIMBER going forward? Can you highlight some of the potential catalysts for that program in the nearer term? Thank you.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

Hi, Tazeen. It's Christiana. I'll take the first part of the question on gross to net. As I indicated, we do expect the gross to net to improve through the course of the year to come down from the 60% level that we saw in Q1 and to average for the year around that 50% level that we had indicated in the past. Again, some of the drivers in that contributed to the higher gross to net in Q1 are expected to improve through the year.

Christiana Stamoulis
Christiana Stamoulis
EVP and CFO at Incyte

That's both related to the higher deductibles and copays that system that we typically see in the Q1 of the year, as well as, the higher Medicaid utilization and especially the true ups related to actual claims, for prior quarters received in, this quarter.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Tazeen, in terms of LIMBER program, as I said earlier, both BET and ALK2 will deliver a recommended phase II, phase III doses in combination with RUX by the end of this year. Then we'll declare, you know, registration intent programs for both very important programs with different intents. Just, you know, BET both in terms of spleen reduction and symptom response, and then ALK2, the additive hemoglobin response from that. CALR will enter the clinic in the middle of the year and will declare itself in terms of safety and efficacy relatively quickly, given its mechanism of action. We can follow CALR allelic burden reduction. Then in graft versus host disease axatilimab, the AGAVE-201 results will come in as well and will hopefully be a filing opportunity in third line graft versus host disease.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

We'll continue the ruxolitinib XR work and work with the FDA on the path forward and continue the FDC work. Still a very active program underway with LIMBER. Thanks.

Tazeen Ahmad
Managing Director in Equity Research and Research Analyst at Bank of America Securities

Thanks. Can you clarify what would be good data for the BET study?

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

I think the idea is to get to the right therapeutic ratio in terms of BET. We know that the on target toxicity is thrombocytopenia and in combination with RUX to declare what the right dose is to use in combination. You know, you may see a dosing paradigm evolve that is platelet count directed and different doses being used depending on patients' platelet counts may be the right way forward for a BET combination. Stay tuned on that. Thanks.

Tazeen Ahmad
Managing Director in Equity Research and Research Analyst at Bank of America Securities

Okay, thank you.

Operator

Thank you. Next question is coming from Ren Benjamin from JMP Securities. Your line is now live.

Ren Benjamin
Ren Benjamin
Managing Director and Equity Research Analyst at JMP Securities

Hey, good morning, guys. Thanks for taking the questions. Can you give us an idea as to the split between Medicare, commercial, and the 340B hospitals and ultimately, you know, call it by the end of the year, what that split might be and what's frankly the ideal split for you guys? Then I have a follow-up.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

For Jakafi, you ask?

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Yeah, he means for Jakafi. This is Barry. For Medicare, we are a heavy Medicare drug, just because of the age of the patients and diseases that we're treating. It's about 50% that is Medicare. About 16% or so of our volume currently is going to 340B institutions, and mostly the rest is commercial, but it's, you know, it's a variety of things. Remember that, you know, included in the 340B is some commercial patients as well. It's really, that's, the rest is just, a little bit of VA and other government, ordering. It'll continue the same for the rest of the year. The 340B is it grows, and it's going to continue to grow for everybody.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

You know, it'll grow at a reasonable rate. We just had a little bit of a bump, this quarter, and that's why we pointed it out.

Ren Benjamin
Ren Benjamin
Managing Director and Equity Research Analyst at JMP Securities

Got it. Okay. Just switching gears, you know, to both Monjuvi and Pemazyre, you know, I'm trying to get a sense as to, sticking with Monjuvi, you know, the upcoming sort of inflection points when these trials might ultimately read out and at what point you kind of look at, you know, call it the new indications and either, you know, kind of assess whether this will be a commercial success or it's something that you know, ultimately write off. We saw some great data, I thought, at Pemazyre at ACR. Kind of curious what your plans are in terms of either doubling down on Pemazyre in some other tumor indications, or do you kind of feel the commercial opportunity is maxed out?

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

I'll take the development side to those questions, Ren, thank you. For Monjuvi, you know, both the follicular and the frontline diffuse large B-cell studies have enrolled incredibly well. We expect data on inMIND the follicular marginal zone trial, you know, in the H2 of next year and frontMIND the year after. Very important studies in the SERENA to get data on and I certainly feel will be important for patients there. Thanks for also pointing out the Pemazyre, pemigatinib data at ACR. You know, I think if you have tumors that are driven biologically by either FGFR1, FGFR2, or FGFR3, and that is the oncogenic driver, then, you know, perturbing that with a good inhibitor which Pemazyre is, you know, you can see results.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

We have ongoing work in glioblastoma multiforme where we are seeing activity there, and we'll see whether that translates to, you know, more fuller registration program down the line with massive unmet need there as well. Thanks.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Just in terms of the commercial potential for Monjuvi, obviously the, you know, the first line, diffuse large B-cell lymphoma is extremely important to us. You know, we think we have a good chance of succeeding there. Those patients are, you know, in a curative setting, so it's extremely important to us. The opportunity there is large. We're studying in a particularly high-risk population, which I think will benefit everyone in indolent lymphoma or follicular lymphoma. Again, there in the combination with, you know, R2, Rituxan and Revlimid, compared to our drug, Monjuvi and R2. You know, I think we have a good chance of succeeding there as well, and we have the opportunity to really take over that market share.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

As Steven said, you know, for Pemazyre, you know, it's a, it's a, it's a good product. There's, you know, few cholangiocarcinoma patients. Now we have an MLN indication. We don't really know how many MLN patients there are. It's a very rare tumor type, but in fact, as we have more physicians, clinicians, testing for FGFR1 rearrangements, we'll find out exactly how many MLN patients there are. As Steven says, we have ongoing work with Pemazyre, and we have hope that we can, we can bring some relief to patients with GBM.

Ren Benjamin
Ren Benjamin
Managing Director and Equity Research Analyst at JMP Securities

Great. Thanks, guys.

Operator

Thank you. Next question is coming from Evan Seigerman from BMO. Your line is now live.

Connor McKay
Connor McKay
Equity Research Senior Associate at BMO Capital Markets

Hi, this is Connor McKay on for Evan. Thanks for taking our question. Maybe just one on the Opzelura launch in the EU. Any nuances there versus the launch in the US, in terms of SG&A ex-expenses or expectations for uptake? Thank you.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Yes. I mean, first the EU, I mean, one of the news today is the quality of the label for Opzelura in Europe. It's a very good label. It's for vitiligo, so the sequence is very different from the US where we started with AD followed by vitiligo. There we are vitiligo first, and then additional indication will come in the future. We have a team in Germany for the next year or so, like 12 months. Most of the activity in Europe will be in Germany because that would be the place where we have reimbursement. It is, in fact, the coverage of the approval was excellent on multi TVs and the newspaper. It was something fairly noisy there and the team is getting prepared for launch that could be happening in July.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

That's the timing. In terms of SG&A or resources, and we have them in place, so you should not anticipate an increase in the next quarter that will be related to the launch of Opzelura in Europe.

Operator

Thank you. Next question is coming from Jay Olson from Oppenheimer. Your line is now live.

Jay Olson
Managing Director and Senior Analyst, Biotechnology at Oppenheimer & Co. Inc.

Oh, hey. Congrats on the progress, and thank you for this update. We have a question about the LIMBER program. What are some of the lessons learned from the parsaclisib studies, and is ALK2 now the top priority in your LIMBER program? What kind of patient numbers and duration of follow-up should we expect at ASCO on the ALK2 program? Thank you.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

Jay, Hi, it's Steven. Thanks. You know, I think, you know, in terms of the PARSO studies, obviously it's unfortunate that they did not meet the criteria to continue past their interim analysis in terms of futility. You know, in lessons learned, I mean, we always learn from studies and from patients. We learned, you know, how to enroll efficiently around the world, find these patients, and a lot of learnings on the operational side. You know, on the clinical side, we again had a, you know, a good phase II signal which didn't pan out in phase III and that, as you know, you know, happens about half the time in hematology oncology.

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

The important thing is just to do things efficiently and focus on doing the right things for patients and their families in terms of the shutdown of the studies, which we're doing now and then pivot into the other programs. Just to manage, you know, in terms of what you said, it will not be at ASCO in terms of updates, BET and ALK2. They're in meetings in the H2 of the year. As I said earlier, it's hard to be precise on patient numbers that we'll be able to present, but both the monotherapy and combination work has gone well. You know, we at doses with ALK2 around 400 milligrams in combo with Rux currently, no dose-limiting toxicities. We are seeing hemoglobin responses, but we can go higher. And that's what...

Steven Stein
Steven Stein
Chief Medical Officer at Incyte

We'll continue to dose escalate there and I can't give you precision on numbers right now in a meeting yet. Thanks.

Jay Olson
Managing Director and Senior Analyst, Biotechnology at Oppenheimer & Co. Inc.

Thank you.

Operator

Thank you. Next question today is coming from Michael Schmidt from Guggenheim Securities. Your line is now live.

Michael Schmidt
Michael Schmidt
Senior Biotech Analyst and Senior managing Director of Equity Research at Guggenheim Securities

Thanks for taking my questions. maybe just another follow-up on LIMBER. Steve, as you think about the ALK2 and the BET combinations, you know, how do you think those could be positioned perhaps relative to the emerging competitive landscape in the MF space where we have the navitoclax combo going on as well, and then potentially momelotinib coming in later this summer? Thanks so much.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Michael, I'll start. Some of my colleagues may add things afterwards. You know, I think there is still a, you know, unmet need there despite, you know, Rux being a fantastically successful drug and great for patients in terms of spleen symptoms and overall survival. Just to talk individually about the programs, BET addresses both spleen reduction and associated symptom improvement, and is clearly an active compound, you know, both with the competitor and with ours as well, as I just alluded to in my prepared remarks. We'll continue to progress, get to a recommended dose, and address those needs. ALK2 is a difference. Here it's about addressing the anemia component of the disease, both the underlying disease of myelofibrosis and potentially the drug-induced anemia from Rux as well.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Again, as I said in my remarks, we're seeing the directionally hemoglobin responses that we want, but we can keep going in terms of dose increases. I think it just 'cause you mentioned it in terms of momelotinib, you know, their MOMENTUM study is after Rux against danazol, and it probably works through ALK inhibition as well, as far as we can tell. It is not as good a JAK inhibitor as Rux, as we saw from the early SIMPLIFY-1 study where they were non-noninferior to Rux. You know, we expect, and we'll see what the FDA does, that they'll have a label post Rux there, and it's a, you know, different need for patients there in terms of that. I don't know if anybody else wants to add anything.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

Maybe I can say a word on the, you know, the picture is really JAK inhibitors are the backbone of all the combinations. There you see ruxolitinib is obviously the most important JAK to combine with because it has all these benefits and survival. There ALK2 and BET, the question is: where do you start introducing a combination versus a single agent JAK inhibitor? That's what we looked at with our suboptimal responder studies we were doing with parsaclisib. You can imagine that with a BET inhibitor, you could do the same type of positioning of just letting patients start on Jakafi alone and then go to the combination.

Hervé Hoppenot
Hervé Hoppenot
CEO at Incyte

With ALK2, there is another dimension, which is that it could be a very good combination partner in the first line, by definition, because it's not adding to the safety profile or the toxicity profile, and it could help, in fact, in term of anemia. BET and ALK are not really exactly at the same stage of disease progression in MF, and ALK2 could be used earlier than BET in many of the patients. We'll see. We'll do the experiments. We'll do the clinical trial. At the end of the day, that's what we are looking at. There is a question of can you treat patients with MF who are refractory to Jakafi with a non-JAK-based type of treatment? That's also something that for BET inhibitor we could we could test in the late late-stage setting.

Operator

Thank you. Next question is coming from Mara Goldstein from Mizuho. Your line is now live.

Mara Goldstein
Mara Goldstein
Managing Director and Biotechnology Analyst at Mizuho

Great. Thanks so much for taking the question. I just had two questions. The first, I'm curious about your thoughts on any potential change from a clinical either enrollment or trial process in the HS arena, given the pending approval for Cosentyx, at least in the US. I know it was just approved outside the US. I'm curious about the planned study for povorcitinib in asthma. Can you speak to where you think the potential opportunity is from a clinical context there?

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Sure. Thanks for the question. You know, we saw this povorcitinib data that again, I alluded to in my prepared remarks, at a meeting earlier this year, which was incredibly well received. As I said, with the first time ever reported HiSCR100 responses in terms of, you know, complete disappearance of abscess and nodules and no new fistulas. I think, you know, that data is driving enrollment in the phase III program in STOP-HS1 and STOP-HS2 incredibly well. I mean, a lot of interest there. I don't see any impact, quite frankly, from the approvals of biologics there, and a lot of excitement for the agent, and we expect to get those studies done very, very efficiently.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

Asthma, the pathophysiology here is again relevant JAK-STAT biology in terms of the cytokines that it affects beyond IL-4 and 5, IL-13 as well. Th2 biology. It's targeting the moderate severe plus asthmatics, so people who are on moderate plus doses of inhaled corticosteroids and long-acting bronchodilators and are still having exacerbations on a yearly basis, plus still have, you know, a subnormal forced expiratory volume. It's for the more severe patients who still having exacerbations, and that's the population we'll be targeting to get to proof of concept with povorcitinib in asthma. Thanks.

Operator

Thank you. Our final question today is coming from Gavin Clark-Gartner from Evercore ISI. Your line is now live.

Gavin Clark-Gartner
Gavin Clark-Gartner
Managing Director of Biotechnology Equity Reseacrh at Evercore

Hey, thanks for taking the question. For Jakafi and myelofibrosis specifically, roughly what % of patients are on the lower five milligram dose? Just wondering if you think these patients could be at higher risk from other JAK competition.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

I don't know exactly for how many myelofibrosis patients are on five milligram. What we do know is that maybe about 25% of the of the bottles that we dispense are five milligram tablets. As you can imagine, most of those are actually PV and GVHD patients. What's at risk in myelofibrosis? We continue to grow strong in myelofibrosis. We continue to go up in the treatment paradigm, meaning that newly diagnosed patients more often are coming on Jakafi, and therefore they're less anemic, and they're better able to gain a spleen response and a survival advantage in that particular setting.

Barry Flannelly
Barry Flannelly
EVP and General Manager of North America at Incyte

you know, regardless of whether patients were anemic or not, their survival benefit, spleen benefit, and symptom benefit remains the same as patients who were not anemic. That's what's most important. We think that, you know, any competitors that are coming will mostly be moved to the second line setting. We've seen that with fedratinib and pacritinib, we think that will continue just because of the advantages that Jakafi has for all patients, regardless of dose.

Operator

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor without over to Christine for any further closing comments.

Christine Chiou
Christine Chiou
Head of Investor Relations at Incyte

Thank you all for participating in the call today and for your questions. The IR team will be available for the rest of the day for follow-up. Thank you and goodbye.

Operator

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.

Executives
    • Christine Chiou
      Christine Chiou
      Head of Investor Relations
    • Hervé Hoppenot
      Hervé Hoppenot
      CEO
    • Barry Flannelly
      Barry Flannelly
      EVP and General Manager of North America
    • Steven Stein
      Steven Stein
      Chief Medical Officer
    • Christiana Stamoulis
      Christiana Stamoulis
      EVP and CFO
Analysts
    • Salveen Richter
      Managing Director at Goldman Sachs
    • Eva Privitera
      Director and Senior Research Analyst at TD Cowen
    • Vikram Purohit
      VP and Equity Research Analyst at Morgan Stanley
    • Kripa Devarakonda
      Biotech Research Analyst at Truist Securities
    • Jessica Fye
      Managing Director at JPMorgan
    • Brian Abrahams
      Senior Biotechnology Analyst at RBC Capital Markets
    • Tazeen Ahmad
      Managing Director in Equity Research and Research Analyst at Bank of America Securities
    • Ren Benjamin
      Managing Director and Equity Research Analyst at JMP Securities
    • Connor McKay
      Equity Research Senior Associate at BMO Capital Markets
    • Jay Olson
      Managing Director and Senior Analyst, Biotechnology at Oppenheimer & Co. Inc.
    • Michael Schmidt
      Senior Biotech Analyst and Senior managing Director of Equity Research at Guggenheim Securities
    • Mara Goldstein
      Managing Director and Biotechnology Analyst at Mizuho
    • Gavin Clark-Gartner
      Managing Director of Biotechnology Equity Reseacrh at Evercore
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