Incyte Corporation (INCY) Earnings Call Transcript & Summary

All right. Thank you. Good morning, everyone. Keep this train rolling here. My name is Cory Kasimov. I'm the senior large-cap biotech analyst at JPMorgan, and it's my pleasure to introduce our next company Incyte. Here to present for Incyte is the CEO, Hervé Hoppenot. And please note that following Hervé's presentation, there's a breakout just across the hall in the Georgian Room. So with that, turn it over to Hervé.

Guys, thank you. Thank you, Cory. Welcome, everybody, this morning. So first, let me say that I will be making some forward-looking statements in this presentation, and you should refer to our SEC documents. So what I would like to do is to start with the big picture on Incyte. And from the right of the slide to the left, what you see is that we have a very productive and innovative discovery team or teams in small molecule, in antibodies and in bispecific, we have a very full late-stage portfolio. And I will be speaking about some of this program in the next slides, not all of them, but it's providing us a number of short-term opportunity to add to the existing commercial products. And obviously, as you can see on the left, we have a very strong commercial success, financial profile. We have today, 4 different sources of revenue. We grew in Q3 at 24% versus last year. The long-term guidance for Jakafi remains around $2.5 billion to $3 billion at peak. And we had at the end of Q3, $2 billion in cash. So that's the sort of the picture of the company. And what I will do is to start with the momentum that we have on the top line. So this shows the sales or revenue for Incyte in Q3 in 6 different years. As you can see, the growth is coming from each of the 4 components we have for this revenue, but most of the sales are coming -- most of the revenue is coming from Jakafi. And Jakafi in this seventh year is still growing at, at 25%, but also the non-Jakafi U.S. rated revenue is starting to grow to a level now of around $100 million for that Q3 quarter. So it's becoming meaningful. Speaking of Jakafi in the U.S., there are 3 indications. It's important to remember that Jakafi was the first product that were approved for myelofibrosis, the first ever for polycythemia vera and the first ever for GVHD. So these 3 indications are indications where we have been changing the practice of medicine and as you can see on the right, the result is the patient numbers -- these are patients -- it's an evaluation of patient numbers, the best we can do to calibrate the number of patients ready for each indication, and the growth is coming from each of the 3 indications with around 5% year-on-year in myelofibrosis, which was the first indication we launched a number of years ago. It's 14% in polycythemia vera, and as you can see at the bottom, we received approval this year for -- in 2019 in GVHD, and in fact, that launch was very successful, and now GVHD is starting to contribute to the overall growth profile for Jakafi in the U.S. Speaking of GVHD, it's important to remember that we have a program in place to try to address the 4 categories of patients who suffer from GVHD, and some of them are steroid-naive, acute or chronic, and some of them are steroid-refractory, acute or chronic. In the past year, we achieved 2 positive studies with REACH1 and REACH2 in steroid-refractory acute GVHD but also, unfortunately, we had the trial failure with GRAVITAS-301, which was evaluating itacitinib in the steroid-naive acute GVHD setting. So if you think of the acute setting, we had great success in the steroid-refractory setting, and we didn't have success in the steroid-naive setting. As I explained earlier, I mean, part of -- we have the largest ever studies that we have done in this setting. And part of what's happening is trying to redefine the treatment of these patients. And I think for the acute setting, it's clear that with the data that we see that treating patients after steroid is probably the best strategy for JAK inhibition. In the chronic setting, we have ongoing studies, 2 of them, 1 in steroid-naive, 1 in steroid-refractory, and we will see results for REACH3 around midyear, slightly after midyear this year, in 2020, and we will see the results for the itacitinib GRAVITAS-309 in 2021. So that's the schedule for the next data point that we will have in GVHD. It's important on this slide to see that it's a very concentrated number of centers that are prescribing these products for GVHD. The other one doing bone marrow transplant. They are centers we have been partners with for the past 3 and 4 years, and obviously, we have a footprint today on the commercial side that allows us to be successful as you have seen on the previous slide. So that's for JAK and the Jakafi. Now we have 2 new product candidates under FDA review today on top of tafa, which is the news we gave this morning. So I'll speak about that later. But we have these 2 other products that are today under FDA review. On the left, you can see and -- pemigatinib, it's a FGFR inhibitor, where we have conducted successful studies in cholangiocarcinoma. NDA has been filed at the FDA and the PDUFA date is May 30 and we have also submitted to the MAA in Europe late in December 2019. So that review is ongoing. On the right is capmatinib, capmatinib is a MET inhibitor that was discovered by Incyte. It's partnered with Novartis. And it has -- as you can see from the waterfall, it has great efficacy in a subset of patients with MET exon 14 mutations, and it is also -- it has also been submitted to the FDA. It's under review. And the economics for Incyte are, as you can see on this slide, 12% to 14% royalty and around -- up to $500 million of potential milestones. So it's economically important for us. It's also a source of pride because we think it's a very important product that will be addressing a disease that you can find in 3% to 4% of patients with non-small cell lung cancer. So it's not a small, small group. So that's for the late stage; so we have Jakafi performance, we have products under review. I will be speaking about tafas, the new product we licensed this morning from MorphoSys. But before I do that, I want to give you a picture of the overall portfolio and the way we think about it. So we have been classifying these products, you can recognize some of the projects we have in the late-stage portfolio. I didn't give many details on the early stage. But what we did is classify them by date at which they will be impacting our revenue, and that's what we call the waves of growth because what we see is that we have a number of short-term opportunity on top of Jakafi existing growth. And then we have the window of 2022 to 2024, where we have a very large number of existing program with good proof-of-concepts that we believe, at least some of them or most of them will be able to contribute to our revenue in that time window. So what I will do today is concentrate on 3 of them. The first is tafasitamab, that is a product from MorphoSys that we just announced a partnership yesterday night or this morning. I will speak about LIMBER, which is our life cycle management program in myelofibrosis and polycythemia vera, and I will also introduce for you our dermatology franchise that has been evolving very quickly over the past few weeks. So first, tafasitamab collaboration. We announced yesterday night and early this morning that we have licensed the rights for ex US commercialization for this product. And we have a U.S. co-commercialization with a 50-50 profit split agreement with MorphoSys. Now what I would like to do is to put in perspective why this is strategically so important for Incyte. It is -- this product could become a very important source of revenue in the year from 2025 to beyond 2030, where, obviously, the growth of our revenue has been -- I mean, the target for our BD effort has been to contribute to the revenue in that window of 2025 and beyond, and this would fit very well. It's a product in the field of hematology, where we have established strong capabilities today, both in the U.S. and in Europe with Iclusig team and the European team and the Jakafi team in the U.S. where we will see a lot of synergies coming from adding a new product to our existing hematology portfolio, where we have relationships that are well-established with many of these hospitals treating non-Hodgkin's lymphoma and where we have ongoing program in non-Hodgkin's lymphoma in many of these hospitals. And that's the third point is that from the portfolio standpoint, we also see a lot of opportunities to combine with different products in our own portfolio, but specifically with parsaclisib, where the proof-of-concept has been made already that being able to combine tafa with the PI3K-delta is, in fact -- could be very efficacious and a very good combination. So we believe it's a great partnership. We think we can, together with MorphoSys, maximize the potential of this product in the U.S. and in Europe, based on a lot of the capabilities that each of the 2 companies have. And we believe for Incyte it's a very good fit to the portfolio in terms of where it will contribute and when it will contribute to the growth of the top line and the bottom line. Just a quick reminder of tafa. It is currently reviewed by the FDA. So it has been submitted in the U.S., it is a combination with lenalidomide in relapsed/refractory DLBCL and as you can see here on the results that have been published around this study is that the response rate is high, but more importantly, the complete response rate is very high. So we think in the field of B-cell malignancies, where CD20 ruxolitinib has been the standard of care, has been the driver of a lot of the combination strategies. What we believe that CD19 over time will become another target that will be required to be addressed by medication. And in that field, in fact, this product has a very good profile when you compare it to the other CD19 targeted therapies like CAT-19 or some of the ADCs against CD19. So it's a product that we think could have a medium and long term, very positive effect on our revenue and bottom line, but we also see a short-term opportunity based on the current submission that has been made to the FDA and the submissions that we are planning to make in midyear to the MAA in Europe. Now let me move to the second part of this portfolio that I wanted to address today, which is a program that we call LIMBER. So LIMBER is lingo we have been using that means leadership in MPN beyond ruxolitinib. And the idea is that we have a group of researchers, clinicians who are working on how to expand and the potential of our franchise in myelofibrosis and polycythemia vera. It is a franchise that, as you have seen in the first slide is growing very significantly, but where there is a lot of room where we could go beyond the patient population that we are treating today. And obviously, we could go beyond the Jakafi patent exploration that will be coming around 2028. So that's really the 2 objective of this program. It has 3 dimension. One is working on ruxolitinib itself and improving the PK profile of ruxolitinib, which could have potential important clinical effect, and I will speak about that because we have now a program for QD ruxolitinib. And we will have data in 2020, and we expect to be able to submit that to the FDA in the year following that. We have a number of combinations that we are doing, and in the combination field, obviously, there is a lot of subtleties in the way you need to combine with Jakafi, depending on the type of patients that you'll be selecting where we have a lot of knowledge, and we have a mechanism that we are combining with Jakafi that include PI3 kinase delta, you speak about it, it includes PIM, which is a different target and where we have earlier data, it includes bromodomain, the BET inhibitor from our own portfolio. And today, I'm also introducing another program, which is our ALK2 program that is already in the clinic that we are also combining with Jakafi. And then the third part is really the new targets where we are working internally very actively, but also with partners in identifying new mechanisms that could be used in myelofibrosis and polycythemia vera. So the most advanced of our program is parsaclisib PI3 kinase delta. If you remember last year, I showed data with the light blue curve here, which was basically looking at the spleen size for patients who have been on Jakafi at a stable dose for a long period of time. So it's a group of patients where Jakafi alone is not enough to continue to produce a response. And in that study, in fact, we had -- patients had to be on Jakafi for a period of 6 months prior to entering into the study. So it's a group of patients where the single effect of adding the PI3 kinase delta can be identified -- groups can be identified through the -- through the introduction after this 8 week period. And what we have done is we have changed dosing for the maintenance part to daily dosing. And as you can see, you can -- we can observe a continuous improvement in the reduction of the spleen size. So this program now is moving to pivotal studies. So this year, we are initiating a randomized study for patients who have been on ruxolitinib for more than 3 months, stable dose for more than 8 weeks. Patients who have an inadequate response to ruxolitinib. So that's suboptimal responders to the ruxolitinib, and we will be testing ruxolitinib plus parsaclisib with this daily dosing compared to ruxolitinib plus placebo. And that study will be starting this year. And obviously, it will be a very important addition to our portfolio if it were successful. There are 2 other combinations that we are testing in myelofibrosis. On the left is our BET inhibitor, bromodomain inhibitor where, as you can see from the preclinical data, there is a lot of good rationale to test it in combination with Jakafi. We have the studies and the IND has been cleared for the U.S. and where we are starting treating patients this year in the next few weeks. And on the right is our ALK2 inhibitor, and that's a very different prospective for the program because what we have seen is that anemia has been a limiting toxicity of Jakafi in -- for many patients. And -- what -- or it has been a source of those decrease because the higher dose of Jakafi, which we know is the most effective to treat myelofibrosis cannot be used for these patients. So we are developing an ALK2 inhibitor, and this is based on the ability of ALK2 inhibition to help -- on the pathway leading to this form of anemia that is related to hepcidin. And what you can see from the graph at the bottom right, is that the hepcidin effect is very dose dependent. And what we believe is that by combining a targeted JAK inhibitor like Jakafi with a targeted ALK2 inhibitor, we will be able to obtain, obviously clinically a better management of the potential anemia side effect of Jakafi. And this project is already in the clinic and will be moving into this proof-of-concept phase in the next year. So that's the timeline related to LIMBER. So once a day [ works ], we spoke about that as a QD formulation. We -- data should be expected in 2020, and the launch potentially could be, if successful, in 2022. P13 kinase delta, we are moving to pivotal trial, in 2020. And for PIM, BET, we are basically in the proof-of-concept phase. And as I described it, we have the ALK2 program also starting in 2020. So a complete group of programs that will help us continue to expand and prolong the life of our MPN and -- MPN franchise in MF and PV. So something I want to speak about is our dermatology franchise because that's something that came and developed over the past few months very positively. So atopic dermatitis, you know is a fairly large indication in term of number of patients. And if you look at the graph here, what we are trying to do is to -- for the U.S., so this is our U.S. number, is to speak about where we believe the JAK topical, so JAK cream, will be useful. So there is a group of patients who have severe atopic dermatitis, and we know they are treated with very effective drugs like biologics, and now some emerging oral JAK inhibitors. So that's not where we will be competing with our topical form of JAK. And then we know, on the other hand, that there are a number of TCS, TCI and topical PDE4s that are also used. Obviously, steroids is the mainstay of treatment for these patients. And as you can see, I mean, this is around 10 million people in this dark red part of the graph. So what we are targeting is that, obviously, we will not be fighting on that side of the severe to moderate, but we have an enormous potential for positioning what will be the first-in-class JAK topical in that indication, and we think it's something that will be very important. So a reminder of the data because that's what we will be -- that's the Phase II data, that was showing that in a randomized setting, the 1.5% BID, which is a dose -- 1 of the dose that is tested in our Phase III program compared to placebo is basically giving 39 -- 48 versus 10. So it's a large difference. This is the primary endpoint for our Phase III study. So IGA responders at week 8. So the Phase III study -- and -- so the Phase III studies are ongoing. In fact, they are concluding. And what we will see over the next few months is the result of the 2 studies of 600 patient each. The dose that have been tested are 0.75% BID and 1.5% BID. And as I said, the primary endpoint is the one that was tested in the Phase II. I must also say that the graph at the bottom left of the slide is very important because if you think of what makes this product different from most of the other products available is the fact that when you apply the cream to the lesion, there is an effect that is very quick, in a few hours, and each scale that was used and is part of the pivotal study, is showing how quickly you can have compared to vehicle, a change in the itching, which is the most important from the patient standpoint, one of the most important aspects of this disease. So large program, very short-term results will be coming in the next few months and what we believe is a large commercial potential. The second indication where we are studying ruxolitinib cream is vitiligo. It's an autoimmune disease. It's basically a destruction of melanocyte by the immune system. It can have a fair amount of impact on the quality of life of patients, and it's around 1.5 million patients in the U.S. There is no FDA-approved therapy for repigmentation. People are using today steroids, in some cases phototherapy, which is 3 times a week for 1 hour. And at the current state of the treatment of vitiligo. So what I would like is to show you some of the data that we have accumulated in our experience with ruxolitinib cream in vitiligo. On the left is a patient who has been treated during the entire treatment period with rux cream. So as you can see at day 1, the level of vitiligo that he had. And then at week 24, he had, in fact, already a response, 89% change in the endpoint. And obviously, that response was maintained up to week 52. So that's 1 example of the type of effect that the cream can have. On the right is a patient who was put on placebo for the first 24 weeks. And as you can see, there was no change in the pigmentation, and then was switched to the active product, rux cream, for the next weeks till week 52. And as you can see, she was obviously not a responder at week 24, but she became a responder in the following 6 weeks. So it's important to visualize the effect that this treatment can have on patients. So the data from the randomized Phase II study is here in front of you. So you can see the placebo response for VASI75, which is a 75% repigmentation of the skin is, in fact, 0. So there is no spontaneous remission of vitiligo. And as you see the different dose that we have tested, you can see a very meaningful effect, with 30% of patients at the 1.5% BID dose, going to 50% at week 52. And I think this 6 months to 1 year treatment and the continuous evolution of the benefit from using the cream is very important. And you can see that on the right with these patients who at week 24 was not a responder. So he was 1 of the non-responder at week 24. And in fact, became a responder between week 24 and week 52. So there are 2 Phase III study unrolling as we speak. The trials are underway. The primary endpoint is an endpoint that you can see that was used in the Phase II and the results are expected in 2021. We will be commercializing our portfolio in dermatology in the U.S. directly. So Incyte is creating a division for the U.S. to launch this 2 indications with atopic dermatitis and vitiligo in '21 and '22. And it's around 150 people who will be dedicated to dermatology in the U.S. And I want to just go back to the wave of growth, the different projects that we have in our portfolio. The 3 I spoke about. And also remind you that there are a lot of other projects that we are working on, specifically on the early portfolio that could have a very important impact in the next few years on the growth of the corporation. So a very strong number of projects coming soon. And frankly, a number of them are now very promising. So by popular demand, following last year's presentation where I was showing the way our R&D investment is -- is spread between the different projects. So we do it again this year. So you can see that R&D at Incyte includes discovery, technical operations, medical affair and clinical development. And if I take the same categorization by when these products are going to impact our revenue at the bottom. So 20% to 21% is pemigatinib. The short-term project like pemigatinib, GVHD and some of the tougher budget from our partnership with MorphoSys. So '22 to '24 is the window where most of the investment is going. And you can see how it is spreading between the targeted therapy, GVHD, the LIMBER program I spoke about dermatology, et cetera. And then the earlier program for 2025 and beyond. So let me finish with the news flow for 2020 -- for 2020. I think what's striking on this slide is the fact that we could have 3 FDA approvals this year. The 2 I spoke about of capmatinib and pemigatinib. They are under review at the FDA and following the announcement of this morning, the third one could be tougher in relapsed/refractory DLBCL. I would also point to the progress of the LIMBER program, where we have a number of milestones that we are planning to achieve this year. And obviously, the NDA submission for rux cream in dermatology, as I discussed, which could be a very important new revenue generator for Incyte. So I want to thank you for your attention, and I think we'll be meeting in the Georgian Room for Q&A. Thank you very much.

All right. So I think we're live. I'm Cory Kasimov from JPMorgan. We have the Incyte team here. When I hand over to Hervé, you can introduce who you have up here on the podium, and then we can go on with Q&A.

So we have our CFO, you want to…

Yes, it's Christiana Stamoulis. I'm the CFO of Incyte.

Steven Stein, the Chief Medical Officer.

And Mike Booth, Head of Investor Relations.

And Hervé Hoppenot, CEO.

All right. Great. So thank you, guys. And try to keep this as open as possible, just feel free to shout out your questions and you guys can repeat it for the webcast. But I'll start things off. And maybe just to begin with GVHD and sort of the outlook for this indication, how we should be thinking about it post the setback with itacitinib? And how much of this market do you think could be absorbed by Jakafi?

So I'll let Steven speak about sort of the clinical aspect of what's coming up. I mean the picture there was we have a plan, and the plan was trying to address 4 different quadrants of patients with GVHD in chronic and in acute steroid-refractory, steroid-naive. So you can think of it as a 2x2 matrix. We started, obviously, with acute and in there, we had 2 very successful program, REACH1 and REACH2. It led to FDA approval for Jakafi in acute steroid-refractory GVHD. And as I was just showing a few minutes ago, the uptake there has been extremely good. Then we have this program in steroid-naive in combination with steroids. So completely different concept is saying instead of starting with steroids, you, in fact, start with JAK plus steroids and what we saw, and that was the GRAVITAS-301 study disappointing is that, in fact, the benefit you get, which is probably there because you could see an effect on response rate, is not strong enough to justify doing this type of combination in the frontline. So what's happening in acute today is that based on the clinical data, patients will be receiving steroids first and then depending on the outcome. And as you know, many of them become steroid-refractory or steroid resistance, then the JAK will be added after the first induction with steroid alone. I think that is basically what these 2 Phase IIIs told us for that setting. In the chronic setting, it's a completely different situation, endpoints are different. The dose we are using are different. Maybe I will let Steven speak about the chronic setting.

Yes. The framework they got is a very useful framework to view it. Obviously, building on the success of ruxolitinib, our JAK1/2 inhibitor in steroid-refractory acute with the confirmation of the results and the full approval of the REACH1 and REACH 2 studies, we were looking at itacitinib in steroid-naive. And as Hervé said, it missed from a p-value point of view, there's still an effect of about 8 absolute percentage points of 74% for a 66% response rate but didn't hit that. So we're looking at the rest of the itacitinib program really carefully. We have an ongoing chronic study, which we're looking at carefully now. As Hervé said, different endpoints, 6-month response rate, different way of measuring the endpoint. It's NIH consensus criteria that do it by organ system, and we'll see if we have to make any changes to that study. One entity that doesn't fit in the 2x2 quadrant is the prophylaxis or preventive setting. If you look at -- globally at allogeneic transplantation, there are about 30,000 yearly. They've gone across the globe. Literally half graft-versus-host disease is about 50% currently. That may change with different preparative regimens. But if there's a way of predicting who will get it and the severity of who will get it and then trying to prevent it, that's another entity we're very interested in and looking at also with itacitinib. So we're dedicated to the whole spectrum. We think, obviously, JAK inhibition is really important in steroid-refractory settings, and we're still going to work a little bit more on the steroid-naive setting.

So what kind of changes would you consider from a protocol point of view for the ongoing chronic work with itacitinib?

I think, Cory, that's an excellent question. The current chronic studies GRAVITAS-309, it has about 250 patients. It was built, again, on an assumption for steroids of around 50% response rate, looking at about a 20% absolute improvement to 70% with itacitinib. For the 6-month response endpoint, that's different. And I think we have to look very closely given the data we have. Do we have to change the sample size? Do we have to look at a different absolute improvement? We will, as a matter of course for any big study, have data safety monitoring board and interim analysis built in, including on futility, but we may want to look at more efficacy looks with suitable alpha controls earlier just to manage that study differently. We haven't made decisions yet. At the moment, we said we've left the program unchanged, but we're very actively looking at it. I can't give you any specifics as we haven't made those decisions yet.

Okay. And then changing gears a little bit and thinking about the Phase III topical RUX data coming up for atopic dermatitis. Could you just sort of set the stage for that a little bit? And what you would look at as being clinically meaningful in that setting?

Yes. The program just enrolled really well, the TRuE-AD1 and 2 study, about 600 patients each. It's people 12 years and above. It's mild to moderate atopic dermatitis with body surface area of 20% or less. It covers the majority of the population. The proof-of-concept data is very strong. The endpoints used are the primary endpoints, something called Investigator Global Assessment. It's a scale of 0 to 4. You have to get a 2-point improvement to either 0 or 1 to hit that endpoint. And then as Hervé showed you in the actual data sets that enabled the study, the -- on that performed best in the proof-of-concept data, and it was the 1.5% BID arm in terms of strength. The Phase IIIs were done with 2 strengths, 0.75% BID and 1.5% BID, and they will deliver, in this half of the year, the data. If you look comparatively, the vehicle response rate is single digits here. It's obviously a cream vehicle so it has little to no response. And if you look competitively versus [ Eucrisa ], for example, the IGA numbers achieved are really encouraging and really great. It's hard to do complete cross-study comparisons, just to be fair, because some groups have to use different vehicles, they have to use an ointment vehicle versus a cream vehicle and then get higher vehicle response rates. But for ours, there's a very clear differentiator in the proof-of-concept data, and we'll see what these 2 large Phase IIIs deliver very soon. As Hervé pointed out on the podium a few minutes ago, another incredibly encouraging sign for patients, it's very meaningful, one of their dominant symptoms is itch, and they're really troubled by it. And with this formulation, the cream formulation and the JAK inhibition, they get resolution for the most part within 36 to 48 hours. So it’s quite dramatic. It's called an itch numerical rating scale, and we believe that may end up being another big differentiator for this drug.

Okay. And then talk about putting the cart way before the horse, as you don't have your data yet, but how do you think about or how should we be thinking about how you price something like this? Or maybe a better way to ask this is I think investors are having a difficult time understanding what the ultimate opportunity is in dermatology for Incyte. So maybe you can speak to that?

No, it's -- obviously, I cannot describe where the pricing will be done because, frankly, it's ongoing work. And there's a lot of ways you can look at it. The way we think about it is that we have 2 indications for the cream. We don't know yet if they will be treated with the same concentration of ruxolitinib in the cream. So that would certainly have a large impact. And for each of them, the number of patients is very high, but the duration of treatment is very different. Because the duration of treatment that we have for patients with atomic dermatitis per year is more around like 4 months when in fact, duration of treatment, as we showed for vitiligo is up to 12 months. So I think all of that will be taken into account. If you look at the comparators that you could use. And again, I'm not saying it's a price target in any way. But just the way you could think about it, in atopic dermatitis, Eucrisa in the U.S. is around $600 a month. So that's one dimension you can use in calibrating. In vitiligo, phototherapy is north of $1,000 month. So that would be things that we will take into account. And frankly, I look at the -- there is a price effect, but there is a volume effect in this forecasting model that we do that is very large. So the question at the end of the day is, do we have a product that can be used by a large share of these atopic dermatitis patients. And I believe a very large share of the vitiligo patients. And then that can drive the reason why we are so enthusiastic about this product.

Okay. And is there any read-through you take from Eucrisa's commercial struggles that you can learn from? Or as you think about the outlook for topical RUX, is it potentially price point? Is it just the cream itself and some of the issues that the patients have had -- or not the cream, but the issues...

What we hear, again, I'm relying on research that we have done in the subject. It's -- first, there are a large number of patients where dermatologists will prioritize a topical treatment versus a systemic treatment because they don't want to face either the issues with the biologics of potential side effects that you are seeing with oral treatment. So that's very clear. And then they go into Eucrisa or they use steroids or they use other type of a topical treatment. What we heard about Eucrisa is the burning effect that you can feel when you apply the cream is something that has been a limiting factor to the adoption of the product. We also believe, and it's not comparative to Eucrisa, but we also believe that the efficacy profile that we have is very strong. And we don't have that burning effect. In fact, we have exactly the opposite. It's a very soothing effect when you use it. And you know that from JAK inhibition in general. It is not -- it's mechanistically driven. And I think it will be very important. So that's really the way we look at it.

And then for Christiana, when you think about building out a new franchise at Incyte, how -- what are the expectations here in terms of what this does for the company spend going forward in margins?

So when you look at the commercial infrastructure that will be required for derm, we believe that it's going to be a very focused sales effort. There are 8,000 specialty derms that we'll be addressing. And the sales force that we expect to have is at around 150 of these. So given the potential size of the opportunity that we are looking and the focused spend, we believe that it could be very attractive from a profitability -- from a business model point of view.

When will you be able to share the first data from your Bispecifics platform? And do you believe this is [indiscernible] going forward?

Yes. So just to repeat the question because you didn't use the microphone. The -- is -- when will we share the data from our bispecifics platform. So we have a partnership with Merus, the opportunity to potentially do upwards of 11 different bispecifics. The first one in the clinic is MCLA-145. It's a PD-L 1 plus a 4-1BB construct. It's been doing really well over 2019 in terms of dose escalation, although we had to start very low because of the prior experience with the 4-1BB target and liver toxicity, which we haven't run into. So it looks like the construct may be doing exactly what we want it to do. We hopefully, probably sometime later this year, may be able to show you something. And then beyond that, there will be others going into the clinic over the ensuing years as we pick the payers to target. The second part of your question, do we believe it's important? Yes, very much so. We think that bispecifics will play a very important role going forward. We think they’ll potentially avoid some, not all, of the toxicities of CAR-T therapies. And also, obviously, we have a very different logistic process in terms of getting them to patients in terms of manufacturing, et cetera. So that's why we have that program going.

Just in terms of your combination therapies on top of RUX. Maybe you can talk about the new [indiscernible] prior 2 new updates and you've got prior for bromodomain inhibitor. So you've taken a new one into the clinic. And then you also have an ALK2. Can you speak to maybe what were in the bromodomain side of the new asset? And then maybe just a little bit more comment on the ALK2.

Sure. I mean the question is around combinations with RUX in myeloproliferative neoplasms. Again, as Hervé said on the podium, a little earlier, we have this program called LIMBER, which is life cycle management beyond ruxolitinib in myeloproliferative neoplasms, and it talks to our dedication to the entity and how well we know it. So we've had -- tested numerous combinations. The ones that we've been most advanced with to date are the RUX plus PI3-kinase data, which we presented a couple of times. Hervé just showed you on the podium again, how the change from weekly to daily dosing had sustained benefit in terms of spleen response and symptoms. So we'll be going into pivotal studies with that particular combination going forward. We've been really encouraged by the data and actually may lend itself down the pike if we develop our once a day successfully to a fixed-dose combination, for example. This year, with our own combinations, we'll get RUX plus PIM proof-of-concept data as well, and we'll read that out and see what to do with it going forward. In terms of the 2 you mentioned specifically, and let me just talk about the BET BRD program. We had a BET BRD program. We actually took 2 compounds into the clinic over the prior few years. They had toxicity, including on target toxicity in terms of thrombocytopenia. And we elected ourselves to put it on clinical hold a little over a year ago. What we've done is resurrected one of the programs. It's not a new BET inhibitor. With the FDA the hold has been removed. And we're dosing at a substantially lower dose, actually going to go into clinic at 4 milligrams. And following what's happening externally, obviously, particularly with the constellation CPI agent, our 4-milligram dose will mimic approximately the dose [ stay ] in the clinic at. So we'll do the monotherapy safety and then go briskly to combination there. We think ALK2, also an indirect readout for momelotinib, one of its mechanisms is through L2 inhibition decreases hepcidin levels, and that's probably the way it alleviates anemia. And we think it's better to do it with a compound that's dedicated specifically to doing that. So we have this ALK2 compound now, it's [ 9 2 8 ] is the compound number, and we'll do the same thing. We will go as quickly as we can to combination to see if we can change the tolerability profile because one of the main reasons rux is either not tolerated or people discontinue is in anemia. So there's the importance there. And then beyond that, we have other JAK1 combinations as well as well as other discovery efforts going.

Could you just talk to the safety profile of PI3-K?

Yes. No, that's a good question. Safety of PI3-kinase. There's obviously a class concern. So firstly, our agent’s a second-generation agent, the chemical structure is such that the second-generation agents have dialed out the liver toxicity, you don't see the transaminitis. The ongoing concern with long-term use of these agents is things like colitis, which can be life-threatening. What we've done is we have -- we've tried different doses and schedules, different induction doses. We've done weekly, different daily doses. It looks like to date with caveats on the patient numbers are still relatively low. And we seem to have dialed out the colitis, which would be really, really important going forward because these drugs are, even in lymphoma, are extremely active. You just have to weave the therapeutic ratio very well. So thus far, with the caveat on the patient numbers, we don't seem to be having that problem.

I wanted to ask you kind of a two-pronged question on business development and the outlook going forward. So I think the first 3 or 4 comments I got from investors today is that the group is going to get smoked because we have no major M&A. You guys would want to try to do something to help out there. So thank you for that. But can you talk, I guess, first about the strategic rationale of this deal that you announced this morning and also your appetite for additional business development going forward and kind of the bandwidth you have for that?

So the appetite for business development is obviously complementing what we have. I mean, we have a very strong internal discovery and development portfolio, but there is ways to improve on it or complement it. What we are looking for is diversification of all the revenue lines in the year following 2025. You can see the revenue now is growing at 24%. I mean so that part is I would say, is very successful thanks to the performance of the commercial team in the U.S. And what we are looking at -- and we have a number of new products coming in the '20 to '24 window, as I showed. What we are trying to do is to add to that in that window. And that's where the tougher opportunity came beautifully because it is exactly fitting that timelines. It's a product that has large potential. I believe CD19 inhibition will become an important part of treatment of B-cell malignancies, one way or the other. When you look at other CD19 targeted agents like CAR-T cells or like ADCS, et cetera, what you find is the clinical profile of tafa is those studies that they need in relapsed/refractory DLBCL is, in fact, very much -- very competitive to put it mildly. It has a very high complete response rate, and it has a very good tolerability profile. It's relatively easy to give. So that just told us that's the kind of product that will help our leadership in hematology, where we have field forces in Europe and in U.S., who are absolutely ready to take that program on top of what they are doing today. There will be some expansion, but it's very synergistic from the commercial standpoint. And in addition, in that case, what we saw is that there is a PI3 kinase delta, the same delta we are speaking about. In combination with the CD '19 that is leading to very high responses, small number, but very high responses in very refractory patients with CLL. So certainly, a lot of the stars are aligned, and we are basically saying, that could work really well for us. I think it will work very well for our partner MorphoSys because we'll be able to dedicate a very strong clinical, medical and commercial teams behind the product very quickly, which, obviously, maybe some others would not be -- have been able to do. So if we find another of that type, frankly, in the next 6 months, I think we'll have a look at it. Because I truly believe there is, in some cases, in this BD effort, there can be a lot of value creation for us and also for the partner. So that's a good case of that.

This is going to go maybe in the PI3-K efforts, you have data sets coming up this year as well, additional data sets from your maybe, single launch studies. And maybe what we can take from the profile that you're seeing in myelofibrosis to – when we look to non-Hodgkin's lymphoma when we look at the combinations with tafa. How should we think of the overall profile of PI3-kinase?

So the question is a little bit broadly about our PI3-kinase asset, 50465. We have 3 studies delivering data this year in follicular lymphoma, mantle cell and marginal. The pathway is incredibly important in all of those. We and others have already shown very high activity there. So it will be achieving the desired high response rates that are then durable and then taking those forward for potential accelerated approvals in the United States, particularly. They will need confirmatory studies there. It's the same comments I made earlier, by the way. We did induction of 20 milligrams daily for 8 weeks to get this sort of maximum efficacy effect and then down dosed to a much lower daily dose, either 5 or 2.5. And again, we seemed to have hit that therapeutic ratio we wanted, retaining efficacy but ameliorating the toxicity for the most part. So we're very encouraged by that. And we'll see combinations going forward. As Hervé just said, although it's a dozen patient data set combining with the CD19 antibody with idelalisib, in their case, MorphoSys, and now we'll repeat the experiment with ours, had a 90% response rate, 9-0 in CLL with a small number. So that's going to be a really importan combination going forward. And then obviously, as I said earlier, our MPN work as well. And then just to mention, it's not -- doesn't hit the radar screen, but we also have work ongoing in autoimmune hemolytic anemia with our PI3-kinase delta product as well, which is another unmet need post CD20 antibody there post rituximab. So it's quite a broad program.

For the QD RUX program, I believe Hervé in your comments, you said it could be more than just a convenience advantage over Jakafi. Can you talk about that a little bit how you potentially improve over and above the Jakafi profiles exists today?

So yes, the QD RUX, obviously, is important because it is also creating for us an opportunity to do combination with once a day products. So if you look at the logic of what we have been explaining, we have the delta, we have the BET. We have the ALK. So we have a twice a day Jakafi. Now we plan to have once a day Jakafi and suddenly you have basically the ability to match and to do fixed dose combination with many of these mechanism, which obviously would be extremely important from the commercial standpoint. So that's one of the aspects. The other aspect is convenience for patients, once a day is a little more convenient. And what we have shown, and I think we spoke about it last year, is that by changing the PK profile of the product from twice a day where you have 2 peaks per to a smoother PK profile, you could potentially have an impact on some of the side effects. And we spoke last time about anemia. So that's what we'll be looking at. The first step is to get it approved through a 505(b)(1) process. And certainly, we'd be looking at what we see in terms of safety from when that path had been done.

And then as we think about the evolving competitive landscape, have you seen any impact from fedratinib in these early stages, and the recent data from the latest Constellation, do you think that is something that helps our hurts Jakafi in the commercial market?

So on the fedratinib, I think it has been very clearly positioned as a drug to be used after Jakafi. It’s a [indiscernible] treatment. It's coming from all the positioning that was done by the commercial team promoting the product. It's also very visible in the pricing of the product. So I think that has not had -- and you can see it from the numbers and the growth of the number of patients with myelofibrosis, we don't think it had a meaningful, visible impact to our business. And your second question was -- also with Constellation, that's the combination with Jakafi. So that for us is not something that we see as a threat to Jakafi. It's really adding to the efficacy. In the best case scenario, and we have our own BET program. The way we look at the BET combination with Jakafi is that it may, in fact, increase the number of months of treatment by improving the efficacy of the combination. The goal here is to have improved efficacy.

Perfect. We got it. End it there. Thank you guys very much.

Okay. Super. Thank you.