Bristol-Myers Squibb Company (BMY) Earnings Call Transcript & Summary

Good morning. This is Tim Power from Bristol-Myers Squibb, and you're all very welcome to our presentation at AAD 2021. As you know, we presented some really important data this morning for our TYK2 agent, deucravacitinib, and we're looking forward to discussing that with you today. And I'm joined for today's presentation by 2 speakers, Mary Beth Harler, our Senior Vice President for Immunology and Fibrosis, Global Drug Development; and by Chris Boerner, our Chief Commercialization Officer. Samit Hirawat, our Chief Medical Officer; and Giovanni Caforio, our Board Chair and CEO, are also joining me this morning for Q&A. And I'll refer you to this slide for our forward-looking statement. And with that, I'll hand over to Mary Beth to get the presentation started.

Thank you, Tim. Good morning, everyone. It's great to be here with you during AAD to discuss the important data we're presenting for deucravacitinib, including data from our 2 Phase III POETYK trials. We are very excited about the profile of deucravacitinib or deucrava, which we believe has the potential to become the new oral standard of care in psoriasis. Deucravacitinib has a novel mechanism of action, which is highly differentiated, creating a new class of medicine for the management of moderate-to-severe psoriasis, an area of clear ongoing unmet medical need. The efficacy is clearly superior to apremilast and comparable to that of first-generation biologics. Its favorable safety profile is consistent with its mechanism of action and differentiated from that of JAK inhibitors. Its favorable tolerability profile importantly, also offers patients fewer side effects than seen with apremilast, the current oral standard of care. Looking beyond psoriasis, we see the opportunity for broader applicability of deucravacitinib across a range of immune-mediated diseases, following the science and bringing innovation to patients. First, I'd like to remind you of the journey we've been on with deucravacitinib. Here, we have designed a molecule that very specifically targets and selectively inhibits TYK2 through a novel mechanism of action. We validated that selectivity in preclinical work comparing deucravacitinib to JAK 1 through 3 inhibitors, illustrating its differentiated profile. Importantly, we've now built a large body of clinical evidence across Phase II and Phase III studies in psoriasis and psoriatic arthritis, further demonstrating the selective profile of deucravacitinib without the changes in lab parameters or key adverse events seen with JAK inhibitors. These elements, the science, the preclinical data and now a robust body of clinical data form the basis of a uniquely differentiated new medicine. Let me point to a couple of things that are really important about deucravacitinib in terms of its mechanism. Deucrava uniquely binds to the regulatory domain of TYK2, locking the confirmation of the enzyme in an inactive state and inhibiting TYK2 and its downstream pathways of interleukin 12, 23 and type 1 interferons in a highly selective manner, avoiding inhibition of the JAK 1 through 3 pathways, and therefore, the adverse events observed with inhibitors of those pathways. Now let's start talking about the evidence. Turning to Slide 7. We've generated some very compelling in-vitro IC50 data, to demonstrate the selectivity of TYK2 inhibition via deucravacitinib versus nonselective inhibitors. Now there's a lot of information on this slide. So I'm going to focus on 3 key takeaways: number one, the concentration of our drug required to hit the TYK2 regulatory domain is very low, indicating that deucravacitinib is highly potent against the TYK2 regulatory binding site. Number two, conversely, we see minimal to no activity against JAK 1, 2 and 3. And last one, the JAK and JAK TYK inhibitors look exactly the opposite, strong objective data. Now we've talked about the unique mechanism of action and the science behind the molecule. Now let's talk about how we've tested and proven deucravacitinib in 2 large controlled clinical trials. Here, we're outlining our global Phase III studies, POETYK 1 and POETYK 2. Both studies measured 2 co-primary endpoints at week 16, PASI 75 and sPGA of 0 or 1, both important endpoints in psoriasis. As you know, PASI or the Psoriasis Area and Severity Index measures the severity of lesions as well as the percent body area affected. A PASI 75 then represents a 75% improvement from the baseline score. sPGA is the physician's global assessment of severity based on a scale of 0 to 5, where 0 or 1 is clear or nearly clear skin. Both studies included patients with moderate-to-severe plaque psoriasis, totaling over 1,600 patients combined. The studies were conducted in complementary regions of the world to account for differences in patient populations and to help ensure generalizability of the data. The study designs were identical up to week 24, at which point POETYK 2 included a randomized withdrawal segment in order to measure durability and time to relapse. While the primary endpoints were measured at week 16 versus placebo, both trials also compared against apremilast, the current oral standard of care. Turning now to the data from these studies. I want to highlight a couple of really important points related to the efficacy profile. First of all, both studies demonstrated very strong data with clear superiority of deucravacitinib versus both placebo as well as apremilast at week 16. Moreover, the benefits seen with deucrava continue to increase over time with the results of one of the studies showing close to 70% PASI 75 by week 24. Importantly, over 80% of patients who achieved a PASI 75 response at week 24 were still maintaining that level of response at 1 year. As expected, for sPGA of 0 or 1, deucravacitinib demonstrated clear superiority at week 16 versus both placebo and apremilast. The results remain durable continuing through week 24, as shown in both studies. Now the next slide reiterates the strength of deucrava's efficacy versus the existing oral standard of care. A superiority was clearly demonstrated across both studies at week 16. As mentioned, the benefit to patients increased over time, with results becoming even more impressive versus the current oral standard of care by week 24. And while we acknowledge that cross-trial comparisons have limitations, we believe this slide puts the strength of deucrava's efficacy into broader context, which is comparable to that of the first generation biologics. Turning to the next slide. Now there's a lot of information here, and I won't go into all of the details, but I'd like to make a couple of really important points. The first is the consistency of superiority across multiple endpoints, in fact, all but the last in our statistical hierarchies. These endpoints represent important measures of disease and importantly, benefits to patients. We saw deep responses with complete or nearly complete skin clearance, for instance, where deucrava met significance for PASI 90 versus both placebo and apremilast. Deucrava showed benefit in hard to target areas like scalp psoriasis, very bothersome for patients and where topicals are less effective. We saw continued durability with patients maintaining their response, not just through week 16, not just through week 24, but through 52 weeks of follow-up. Importantly, we also saw improvement in several patient-reported quality of life measures. For example, the Dermatology Life Quality Index or DLQI. Now let's turn to safety. You can see here an overview of our safety outcomes from the medical presentation for all 52 weeks studied. The headline here is that we have a very favorable safety profile with improved tolerability over apremilast and consistent with its mechanism of action as a selective TYK2 inhibitor. We observed adverse event and serious adverse event rates that were comparable overall between treatment groups. Specifically versus apremilast, we're seeing lower discontinuation rates due to adverse events. Now I want to draw your attention to the events highlighted in the purple box, which are specific tolerability concerns associated with the use of apremilast. As you can see, deucravacitinib had significantly lower rates of these events. Importantly, we observed no new safety signals with longer-term follow-up through week 52. Let's now turn to Slide 14. This is an important slide. What we're sharing here are the laboratory findings from POETYK 1 and POETYK 2. Now why are the labs important? They provide objective evidence of JAK 1 through 3 inhibition, particularly lipids, hemoglobin, liver function enzymes and other key parameters. These lab abnormalities show up early and consistently, and they require ongoing monitoring for patients receiving JAK inhibitors. With deucravacitinib, you can see there are no changes in these lab parameters: total cholesterol, hemoglobin, ALT, AST. Across each of these panels, no changes over time. Another very important piece of evidence substantiating deucravacitinib as a selective TYK2 inhibitor. Finally, I know some of you have had questions about other adverse events of interest. Put simply, our data is not showing a signal for any of these. In particular, we are not seeing a signal for VTE or MACE. Now I'm going to go through the bullets at the bottom because these are critically important. None of the serious infections with deucrava led to discontinuation. And in fact, the exposure adjusted rates of serious infections were similar across the treatment groups. Although we had cases of herpes zoster with deucravacitinib, none were serious, systemic or led to discontinuation. And once again, the exposure adjusted rates are low -- comparable, if not lower than currently available psoriasis medications. There were no cases of tuberculosis and no opportunistic systemic infections reported with the deucrava. There was a single serious adverse event adjudicated as a VTE, which occurred in a patient receiving deucrava, who had an aortic dissection complicated by pulmonary embolism. Now it's important to recognize that this situation is fundamentally different from a patient showing up in a doctor's office or in the emergency room with a sore leg and a deep vein thrombosis. What we're talking about here is a complication of another serious medical event. The investigator considered the pulmonary embolism unrelated to deucravacitinib. And in fact, after the patient recovered from repair of the aorta, he resumed treatment with deucrava and continue to enroll in the long-term extension study. So as we now back up a bit, I've now shared with you 4 key lines of evidence in support of deucravacitinib as a first-in-class, oral selective inhibitor of TYK2. Unique mechanism of action, very compelling in-vitro selectivity data, laboratory data showing no evidence of a JAK signature. And last but by no means least, a differentiated safety profile. Now let's step back even further. Let's think about what the deucravacitinib development program looks like as a whole and where we believe this medicine will work and where we're at with each program. As you can see, psoriasis is really just the beginning of the story for this molecule. We're already in the filing process for psoriasis and we'll be starting our Phase III program in psoriatic arthritis within the next couple of months. Later this year, we'll start to see whether or not inflammatory bowel disease, or IBD, will be in scope as well. Based upon the mechanism, we're optimistic. We're expecting to read out the Phase II data in ulcerative colitis as well as lupus later this year. And look forward to the readout for Crohn's disease as we get into 2022. So to summarize what we've talked about today. I have shared with you how deucravacitinib's unique mechanism of action and differentiated profile has been demonstrated across scientific, preclinical and clinical lines of evidence. The Phase III data show clear superior efficacy with a favorable safety profile and improved tolerability over apremilast, the current oral standard of care. Based upon this unique mechanism of action, we see the potential for deucravacitinib to help many more patients in the future across a range of immune-mediated diseases. This is a groundbreaking step for our company and for our patients. And with that, I'll turn it over to Chris to share with you our commercial perspective. Chris?

Thanks, Mary Beth. Good morning, everyone, and I'll pick up where Mary Beth left off. I want to quickly cover on 3 items. First, I'd like to highlight the commercial opportunity for deucravacitinib in psoriasis and how we're preparing to capture this opportunity. Second, I'll discuss the broader opportunity we have with deucrava beyond psoriasis. And then finally, I'll close out with how we see deucravacitinib fitting into a broader and very exciting immunology portfolio. So let's start with the opportunity that we have in psoriasis. As most of you know, this is a large market where physicians escalate their approach to treatment. And what that means is typically, patients will start with easier to use, but generally less efficacious topicals. Patients will then escalate to the only branded oral in the market, which is Otezla. And then finally, a relatively small percentage of patients will ultimately proceed to be treated with injectable therapies which, as you can see on this slide, generally have higher efficacy but carry a higher burden of administration and safety concerns. So when we talk to physicians, they will highlight that while this is a disease that has become increasingly crowded with new therapies, there is still significant need for oral therapies that deliver strong efficacy but are also safe and easy to administer. And it is into this market that we believe the data, Mary Beth just shared with all of you that enables deucravacitinib to become the branded oral of choice for moderate-to-severe patients. And I'd specifically highlight the efficacy profile that is clearly superior to Otezla, a favorable and differentiated safety profile and the ease of initiation with a once-daily oral formulation. So we are very excited for the opportunity that we have initially to compete directly against Otezla and then over time, expand the oral class by accelerating the switch from topicals and delaying injectable use. Now to deliver on these objectives, our focus at launch will be really on 3 things. First, we obviously need to sell the profile of deucravacitinib. That means establishing TYK2 as a novel pathway and then selling the clinical profile that is superior to Otezla across key efficacy and safety dimensions. Second, as we've discussed before, gaining rapid access is going to be key in this market. The teams have a very clear focus on this. And again, based on the data we have discussed today, we believe we have a very strong value story to tell with deucrava. And as we've discussed previously, we have a strong set of supporting services as a company in the access space. And then finally, this is a new area for BMS. And thus, we've been engaged in a significant capability build to ensure that we have the right team on board. And you can see some of the progress that we've made on that front over the last year and going into the first half of this year. So overall, we feel very good about where we are in launch planning, and we are incredibly excited for the opportunity to bring deucravacitinib to customers and to patients. Now as previously mentioned, psoriasis is the first of a number of potentially exciting areas for deucrava, including the 3 areas that are noted on the left of this slide. As you can see, each of these areas constitutes a large global market with significant commercial potential. And of course, assuming these programs continue successfully, we see deucravacitinib being in a position to play an important role across these diseases. Finally, deucravacitinib is a very exciting component of a rapidly growing immunology franchise that builds on our presence with Orencia in RA. As you know, we have Zeposia approved in MS and a PDUFA date in ulcerative colitis that is coming up in late May. We also potentially have a new product with cendakimab, which has initiated a Phase III program in eosinophilic esophagitis. So we have an exciting franchise with deucrava playing a very important role across potentially multiple diseases. I'll close on this slide. We're obviously very excited about the data, which we see us providing a very important step forward for patients with psoriasis. And we are very much looking forward to working through the regulatory process and bringing this very exciting product to patients. And with that, I will turn the discussion back over to Tim to begin the Q&A.

Thanks, Chris. We're going to go to the Q&A now. And just so you're aware, it might take a minute or so to get that connection established. And while we're doing that, we do have a hard stop at 11:30, some of the participants have something else they need to take part in. [Operator Instructions] And I'll remind you that we also have Giovanni and Samit here for Q&A, if needed. So maybe I go to the operator to go to our first question when we're ready.

Okay. Great. Can you guys hear me okay?

Yes.

Perfect. So just a couple of quick questions, and the first one is, in terms of expectations and sort of how you're going to approach FDA as it relates to questions around label and box warnings. It's been our view that the safety and efficacy looks an awful lot -- particularly the safety looks an awful lot more like a Stelara than it does necessarily a JAK inhibitor. That seems very consistent with your profile. But just wondering how it is that you believe we need to -- you need to approach the FDA with regard to a box warning and avoiding sort of the expectations of a JAK label. This doesn't look like a JAK product to us. Certainly, that's your stance. But we're just wondering what incremental supporting evidence would be required? And then my second question is really on the dose. It appears that you could potentially press the dose for incremental efficacy, you guys are using higher dose and have used a higher dose in psoriatic arthritis. So just wondering what kind of longer-term safety we're seeing there and when we're likely to see the data from the ulcerative colitis trial?

All right. Thank you. I got 3 buckets of questions there. So this is Mary Beth. Good to hear from you again, Seamus. Let's start with question one, which was really around how the FDA may respond to these data. We can't comment or speculate on what they may or may not do. But what I can tell you is that we are confident in the science and the strength of the evidence that has been generated across preclinical and now a robust clinical body of evidence to support a first-in-class oral selective inhibitor of TYK2. That's number one. Number two, in terms of dose, I'll take you back a few years. You may recall the Phase II study that we conducted, I don't know, about 5 years-or-so ago, a very robust dose-ranging investigation. What that allowed us to do was some really well done PK and exposure response modeling. That told us pretty clearly that 6 milligrams was really the dose we needed to take into Phase III. Frankly, beyond 6 milligrams, we didn't get much bang for the buck. And now as we look at these Phase III data coming out of POETYK 1 and POETYK 2, I think we've validated that hypothesis. And I would argue the same is true on the safety front. Now in terms of when we expect to see the Phase II data readout in ulcerative colitis, we're looking at that to come forward towards end Q4 of 2021.

I have the next question from Chris Schott.

Great. Thanks so much for the questions and the data today. I just have 2 questions on launch dynamics. We have a new mechanism in a competitive field. Should we be thinking about this as a more gradual ramp and a product that's going to take some time to get reimbursement? Or do you think there's an ability to tap into segments of the market here that are less served by existing therapies, and this could go faster? And then maybe a second question on just the approach to the market in terms of targeting Otezla versus injectables. Is this mostly a switch market where you're going to take patients who aren't at goal on something like a Otezla and target them? Or should we think about this more about new starts and patients maybe transitioning over from orals? Again, as we think about that initial launch kind of focus.

Thanks, Chris. I'll take both of those. First, let me just say at the outset, we're incredibly excited by the profile that we see here. We think, as Mary Beth has mentioned, that the efficacy is clearly superior to what we see with Otezla, and we've got a very favorable safety profile, certainly against Otezla as well as Ms. Mary Beth noted, against the JAK inhibitors. With respect to how we're thinking about the launch dynamics as we've discussed previously, obviously, getting access is going to be critically important for this brand. What we know, Chris, is that at launch, there will be a segment of this population that is going to be in plans that have open access. For those patients, we think we'll be able to move relatively quickly and getting those patients on therapy, certainly given this profile. For the remainder of covered lives, it's going to be important that we build volume over time. So that we can then subsequently work with payers in order to gain favorable access, and that will take a little bit more time. But overall, we feel very good about the story that we have, both with respect to talking to payers about the value and then also building that volume. In terms of the approach to the market, the initial approach is going to certainly be targeted on becoming the #1 branded oral of choice here. That's going to be going up against Otezla, given the data that we have. This is going to be a market where we will be targeting both switch patients as well as new patients. There's a fairly substantial dynamic patient pool that we'll be going after here. And then over time, as we said in the presentation, the focus will begin to shift to expanding the oral class, and that means speeding the time when patients switch from topicals onto deucravacitinib and then also potentially delaying the move into injectables. So that's generally the approach. But again, we're very happy with the profile that we have, both in the short-term as well as we play this out over the long term.

Next question is from Geoff Meacham.

Great. Thanks, guys, for doing the event and congrats on great data. I just had a couple. Just to follow on Chris' question. I know you don't see it very often in the I&I space, but is it worth it to do a formal switch study to some of the older agents and the newer agents just to kind of help reaccelerate or accelerate the initial trajectory. I'm not sure if that's worth the investment or not, but I want to get your kind of thoughts on that. And the second question is, if you could just talk a little bit more about the VTE, what kind of implications that may have, just go into a little bit more detail. I don't think that -- it's obviously a low frequency event. But I want to get kind of your perspective just in the broader context of what could be something that could dictate the labeling and potential black box or not.

Yes. Maybe I'll start, and then I'll switch it over to Mary Beth to talk specifically about the VTE event. What I would say is that we're very comfortable with the data coming out of POETYK in order to drive utilization here. Remember, we have superiority across efficacy and safety with respect to the oral standard of care today. So we feel very good commercially about our ability with the data in hand to be able to effectively drive utilization here. So that's the point from a commercial standpoint on switch. And then I'll turn it over to Mary Beth to speak to the VTE event. Mary Beth?

Yes. No, thanks, Chris. And as we discussed a few minutes ago during the actual presentation, the incidence of VTE was extremely low. In fact, I focused on a single event that occurred as a complication to another serious medical event. This is not something that we are concerned about. We see no VTE signal.

I have the next question from Tim Anderson.

Great. Can you hear me?

Yes, we can, Tim.

So a question on the development program from here. If I look at just on side-by-side comparison results versus Enbrel, it looks comparable versus other biologics, not as strong. So I think that was kind of expected. You ran a head-to-head trial versus Otezla. Would it make sense to run one versus these first generation biologics like Enbrel because you could quite possibly show better safety and tolerability on multiple different metrics. And it would certainly capture the value proposition of being an oral therapy. So that's the first question. And why not run that study? And then the second question is, what do you assume for timing of U.S. generic entry for Otezla? There's some uncertainty on those, but I'm guessing you've made your own assessment, from your own perspective of long-range forecasting. And it's obviously relevant to any oral therapies, such as yours.

Sure. Mary Beth, do you want to start with the development program, and then I can sort of chime in on how we think about positioning this versus biologics?

Yes. No, happy to, Chris. I think it's a great question. And I want to remind folks that as we were coming out of the gates with deucravacitinib in psoriasis, it made sense for us to start with apremilast as our first active comparator. Given what we understood coming out of Phase III, both in terms of a clear indirect superiority to apremilast and also comparability to that first generation of biologics, the more we've learned about this molecule, the more confidence we've gained. And again, I think you bring up a really good question. Last point I'll make before turning it back to Chris, is that we are in the process of thinking about the full range of options for life cycle development for this molecule in psoriasis. So much more to follow. Chris?

Yes. The only thing I would add on the development program is, Tim, we will also be supplementing the formal development program with a very robust real-world evidence generation program. And so we'll be able to glean insights from that data set as well. What I would say generally is with respect to how we're thinking about the commercial opportunity here is we see substantial opportunity right out of the gate in terms of establishing this brand. This product is the #1 branded oral of choice here. That means going up directly against Otezla for this moderate to severe patient type. And given the data that we have across efficacy, safety as well as the convenience of a once-daily administration, we feel very good about establishing this market and establishing deucrava as the branded oral of choice. And then as I mentioned before, over time, we'll have an opportunity to potentially expand that class. But I think as an initial focus, it will very much be in the oral space. And then we're not going to comment on the Otezla LOE.

Terence Flynn, I have you as our next question.

Great. Maybe could you just remind us of the incidence of VTEs and ATEs per 100 patient-years with the JAK inhibitor. So when we're looking at your rate just to be able to think about it in the context of that? And then maybe a question for Chris. Just the importance of not having that black box warning to achieving your commercial objectives. Obviously, you have you're very enthusiastic here, but how important is it not to have that black box warning? And then have you had the pre-NDA meeting yet with FDA?

Mary Beth, do you want to start?

Yes. And maybe I can take questions 1 and 3 and pass it back to you for question 2. So in terms of the exposure-adjusted incidence rates for VTE and ATE. I've already indicated that they are very low and comparable, frankly, to not only apremilast but to existing psoriasis medicines. For VTE, it is 0.21 per 100 patient-years. And remember why it's so important that we talk about exposure-adjusted incidence rates, it's because as is typical of immunology study designs, we had differing durations of exposure to our active treatment versus the comparators. So this is the appropriate way to evaluate these events. Again, VTE, 0.21. Again, consistent with existing medicines and consistent with background epi rates. For arterial events, again, a very distinct and separate type event -- of event comparable across all 3 treatment groups, 0.41, which frankly, is essentially the same thing we saw for placebo as well as apremilast. Now in terms of our pre-NDA meeting, we're obviously working towards that filing. I'm not going to comment on the date. But I do want to emphasize that this filing is a priority for beyond this. We are actively pulling this thing together and look forward to sharing more with you as milestones come to pass. Chris?

Hey, Terence, so yes, absolutely. Hopefully, you've gotten a good sense from Mary Beth and me that we are very excited about the safety profile and the data generally for deucravacitinib. We certainly believe strongly that the data and the science behind deucravacitinib are clear that this is a unique mechanism of action. It's very differentiated on the safety side from Otezla and certainly from the JAK inhibitors. We can't obviously comment on what the FDA is going to do, but we certainly think that the science is clear here. As for the commercial opportunity, we obviously plan our launches under various label scenarios. And I would just note with respect to the psoriasis market, generally, there are several blockbuster medicines that have black box warnings that you can find. And we have experience managing through the complexities of promoting in the context of a box warning. That said, we are very excited that the data that we presented today clearly show a profile that is differentiated on efficacy and safety from Otezla, and we're going to be ready to launch under any scenario.

I have our next question coming from Greg Gilbert.

Mary Beth, how do you view the competitive landscape in TYK2 R&D? And how much of a head start do you think you have? And Giovanni, if I could bring you into the fold and just ask you at a high level how the validation of this molecules has changed your thinking and your strategy around commercial, R&D end of step.

Thanks for the question, Greg. So let's stand back and remember, first of all, that BMS is well in the lead in terms of TYK2, not only development, but I would argue knowledge. I showed you a slide depicting in the in-vitro IC50 data, a couple of nonselective TYK2 inhibitors. So the JAK TYK inhibitors. That is -- we see that as a different class of medicine. I'll take you back to the fact that we consider deucravacitinib, a first-in-class oral selective inhibitor of TYK2. Now with respect to other potential selective TYK2 inhibitors, it's very, very early days. And frankly, we are years ahead of them in development. So I think we're feeling very good about where we're at and the differentiated profile that's coming forward.

Thank you, Mary Beth. This is Giovanni. Greg, to answer the second question. So let me say, first of all, I'm really happy about the data as well. It's great data. And it is not only a validation of our belief for deucravacitinib, but actually, in many ways, it's a validation of our strategy because remember that deucrava is one of the key pillars of the very strong pipeline we have and the plans we have to accelerate the renewal of the portfolio. So I think that the data that we're presenting today validates not only the opportunity that deucrava becomes a very large immunology asset potentially across multiple indications, but it also provides an important proof point with respect to our ability to continue to really execute well and accelerate the renewal of the portfolio. So it's a really important event. I'm very comfortable that we have the experience, the resources to expand and continue to grow the life cycle management of program for deucravacitinib in multiple indications. And from an R&D perspective, I'm really comfortable with that. And commercially, I think you've heard about the capabilities that we have and what we do going forward, continuing to invest to build a really strong platform for this. This is going to be an important medicine for us, and I'm really excited about it.

The next question is coming from Luisa Hector.

So I'm wondering outside of psoriasis, whether we -- I mean, we can now be more confident, I think, in the safety profile of deucrava. But mechanistically, could you remind us why you hope to see efficacy in UC, Crohn's, lupus, the very tough areas to crack? And maybe you could give us your and relative confidence in the potential positive outcome in these challenging indications. And then just to link this to your 2029 guidance, has your expectation for deucrava increased since you struck that guidance at the start of the year? And is it fair to assume that the sales in 2029 will still be predominantly linked to psoriasis?

Great. Thanks for the question, Luisa. I'll start and then pass the baton to Chris. You are correct. Okay. So I'm going to paraphrase a bit. We have a bold development program here, right, beyond psoriasis. As we think about where this molecule can go in terms of not only inflammatory bowel disease, but also lupus and potentially other indications. I'll take you back to the science. All of our planning to date, right, has rigorously followed the science. Recall, TYK2 is a mediator for 3 specific signaling pathways that drive a range of autoimmune disease: IL-12, IL-23 and type 1 interferons. Your question related to why we believe in IBD and why we believe in lupus. IL-12 and 23 are validated targets in both ulcerative colitis as well as Crohn's disease. So we're excited about what those data are going to read out. And again, remind you, towards the end of 2021 for our first peek at that in the Phase II ulcerative colitis study. Similarly, right, type 1 interferon validated target in lupus, right? So anifrolumab and others. There's actually quite a large body of evidence supporting type 1 interferons as an important target in lupus. Once again, we look forward to reading those data out towards the end of 2021, maybe over the line into 2022, but important milestones to follow. Chris, over to you.

Yes, Luisa. The guidance that we have, we think, is very much still the guidance that we would stick to, based on these data. And as for the sales mix, I would just point you back to the slide that was in the presentation that showed the opportunity we have across a broad range of autoimmune diseases and the sales later in the decade will be a reflection of both PSO and these broader sets of indications.

Our next question is coming from Andrew Baum.

Can I just push a little harder on how the FDA may assess safety and differentiate from the JAKs, just given how important safety is in displacing Otezla. Firstly, could you just quantify the number of VTEs. I think it's 3 versus 0 if I just do the math, so the one SAE VTE meant to others? And then second, coming from a mechanistic perspective, my understanding is the causality of ATEs is unknown. There is some sense of how and why the increased malignancy seen with JAK inhibitors may occur. But again, it's not tied to any individual JAK pathway and for what we know about TYK2 is intrinsically involved in signaling, even though you're not blocking it per se yourself, your -- the TYK's new pathway is involved. So I guess my -- how much reliance do you think the FDA will put on the fact that you have allosteric binding of TYK2 and you're not inhibiting JAKs directly given this interplay between the different receptor pathways.

Great. Thanks. This is Mary Beth. Excellent question. Of course, we cannot comment on how FDA will view this. What I will come back to once again, we have taken a very systematic approach to creating a differentiated molecule, which leverages the allosteric mechanism that you cite. We have tested that mechanism in preclinical and clinical settings, generating what I would argue is a very robust overall package in support of not only the differentiated mechanism, but the implications of that mechanism, all right? We are not seeing a JAK signature in terms of our laboratory profiles, okay? That's across Phase II and Phase III, very objective evidence. It is a predictable indicator of JAK pathway inhibition. Number two, right, I do think that we can look to, frankly, the natural human experiment. I'll remind you that there is a genetic polymorphism that render some people naturally deficient in TYK2. And for those people, there is not an increased risk of MACE or VTE, right? That's important information, right? So in totality, right, when we consider the scientific evidence, the real-world evidence, our belief is we're starting out from a very strong position in terms of making the case that we have a new class of medicine, a selective TYK2 inhibitor.

Andrew, the only thing I would add is we've obviously had the opportunity to share these data coming into this conference with a broad swath of key opinion leaders. And what I would say is on the safety side, there is remarkable consistency in how they see these data. First, with respect to Otezla, they commented on the low rates of serious AEs, the fact that you have lower rates of AEs that led to discontinuation. Notably, the ones that patients oftentimes will complain about: nausea, diarrhea, headaches, et cetera. And that, in general, the AEs leading to discontinuation was significantly less with deucravacitinib than what you saw with Otezla. With respect to the evidence on JAKs, again, they highlight that you're really not seeing the AEs that are most interested and most problematic with JAK inhibitors.

Yes. And...

I just wanted to confirm 3 versus 0.

Yes. Yes. No. No, thank you. I failed to address that in my comments. Okay. So you're good. You saw the information you needed?

No, I was just saying I just wanted its confirmation that it was 3 versus 0 with the 1 SAE being the dissection.

Yes. No. In fact, there were 2, not 3 events. And the second event was nonserious. It related to an IV catheter, an intravenous cannulation and a minor thrombosis after that. So again, overall, right? And I'll remind you, we had an adjudication committee to review all of these events across the POETYK 1 and POETYK 2 programs. We see no signal, no concerns regarding VTE, all right? I cannot emphasize that enough.

Our next question is from David Risinger.

So obviously, there's the concern whereby skeptics are of view that a JAK is a JAK and TYK2 is part of the JAK family. But maybe you could comment on whether people are looking at it far too negatively. Meaning, clearly, the Xeljanz news is concerning for the JAK class and the JAK inhibitors that are on the market carry risks that are generally described in the labels, but have not been fully elucidated the way that they're being fully elucidated with the oral surveillance trial that will still read out more data in the coming months. My question is, would the FDA -- and you can't speak on behalf of the FDA, but would the FDA want to show a differentiated label, specifically for your TYK2, given its profile, given its differentiated lipid results, et cetera, i.e., might the FDA want to steer doctors towards a safer agent than the JAKs. So is that an argument that you can make with the FDA? And is there any view on whether the FDA would actually want to support your notion that this agent is quite differentiated from the currently approved JAK inhibitors?

Sure. Mary Beth, do you have any -- do you want to start? Or do you -- I mean, I'm happy to weigh in here as well.

Yes. Maybe if we both go at it, right, very briefly. We've got a strong case based upon the science and the body of evidence that's been generated. And our goal is to take that forward to health authorities as clearly and effectively as possible to make the case for a new class of medicine. Chris, over to you in terms of why this is important for clinicians and for patients.

Yes. The only thing I would just add, I think we've really kind of hammered on this point already. The only thing I would add is simply that with respect to how the broad community is looking at this, is that the KOLs that we've engaged with already on these data are the same KOLs who have been weighing in on the broader discussions around JAK inhibitors. And these are the folks who very comfortable with the safety profile that they're seeing here. They view it as differentiated, both from Otezla and from the JAK inhibitors.

So operator, we might have time for 1 or 2 last questions.

And the next question we have is from Matthew Phipps.

Mary Beth, I was wondering if you could just comment on the rates of folliculitis and acne you saw in the trial, how impactful that might be to patients. And then, Chris, quickly, do you have data on the number of patients or percentage of patients who do switch therapies annually already as kind of a background rate?

Right. So very briefly, we did see folliculitis and acne, but the incidence was quite low on the order of about 2%. And a couple of important points. The vast majority of these, these were mild in nature, self-limited. And in fact, there was only 1 discontinuation across 1,600 patients were of the study data, and that was due to folliculitis. Chris?

Yes. I don't have the specific numbers on the switches on an annual basis. But what I would say is that there's a substantial dynamic patient pool, and those are going to be patients who are new patients as well as those are patients who will be switching therapies midstream because, as you know, in this market, first of all, there's -- it's a large market, it's about 2.5 million patients with psoriasis that are moderate-to-severe patients across the major markets. And the other thing that we've talked about previously is that these are patients who will cycle through multiple mechanisms of action over time, and so there's a sizable dynamic pool to go after here.

Dane Leone, you are our next question.

Congrats on the data set. So I'll keep it brief. Could you actually give us the PASI 90 number at week 16 across the different arms? And then in the Phase II pruritus wasn't a -- of interest in dose related. Could you just maybe state what pruritus looked like across the treatment arms in the study?

Yes. No, sure. So let's start with the PASI 90, and thanks for asking this question. So we are very pleased with the overall efficacy profile that we're looking at with deucrava. For deucravacitinib, across the 2 studies, we are looking at between about 30% and 35% of patients receiving deucravacitinib achieved a PASI 90 at week 16, all right? So that is versus 2% to 4% of placebo-treated patients and about 20% of apremilast. So very impressive results on PASI 90 at week 16. Now in terms of pruritus, I don't have that data right now, all right? What I can tell you is that we have combed through these data. And that is absolutely not rising to the top as a concern. I'll take you back to the point of overall tolerability, right? We see a substantially lower rate of discontinuation due to adverse events and tolerability concerns with deucrava versus apremilast, on the order of about 4.5% for deucrava versus about 12% for apremilast. That's a big deal when we're talking about the importance of maintaining a patient's medicine in order to control their disease.

Stephen Scala, you're our next question.

So what do you attribute the difference in efficacy between the 2 studies and why don't we have full efficacy data at 52 weeks? You showed data to 26 weeks, and then we just have bullet summaries to 52 weeks.

Yes. No, thanks for the questions. So first of all, right, it's normal to see some degree of variability in efficacy outcomes when you're talking about large Phase III studies. I'll remind you, right, we conducted POETYK 1 and POETYK 2 in complementary regions of the world. And we did that in order to account for different types of patients and to ensure generalizability of the data. Now your second question with regard to why we didn't see 52 week data, that stems directly from the study design of POETYK 2, which included a randomized withdrawal segment, okay? So that was by design. I'll take you back to the point that the totality of data generated here leaves no doubt, right, on the magnitude, the depth, the durability of this profile, all right, strong efficacy in combination with a favorable and in fact, more advantageous tolerability profile in an oral medicine, we see a very strong package.

Thanks. And operator, could we go to our last question, please?

Absolutely. The last question is going to be from Navin Jacob.

Great. Can you hear me?

You're a little odd to hear.

Just wanted to dig into lupus a little bit, obviously, in treating the space, big potential space with limited options, you somewhat addressed this, but wondering if you dig a little bit deeper in July, do you think TYK2 would be -- work there? And also if you could give us some color into the type of population that you're seeing within lupus and the study design, please?

Yes. So I'll just remind you of lupus -- remind about multiple indications we're studying in our broader development program. We're going after lupus because we know that there is a very important role for type 1 interferons in driving that disease. And part of the mechanism of action for deucrava is inhibition of type 1 interferons. Now we know there is extraordinary unmet need in lupus. We also know these are really, really tough studies to execute, all right? I'm not going to go into the details around the study design, but what I will say is that we have paid very close attention to the learnings that have accrued over many, many years, and we're applying those learnings to this program, and we look forward to sharing with you the data readout towards the end of 2021 or, as I said earlier, early into 2022. Thanks for the question.

Thanks, Mary Beth. We're out of time for today. If you've got questions, you know where to find us at the Bristol IR team. So thanks again.