Incyte Corporation (INCY) Earnings Call Transcript & Summary

Greetings, and welcome to the Ruxolitinib Cream Phase III Data in Atopic Dermatitis webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce Head of Investor Relations, Mike Booth. Please go ahead, Mike.

Thank you, Kevin. Good morning, and welcome to our conference call and webcast to discuss atopic dermatitis, the disease, the medical need and the Phase III ruxolitinib cream data presented yesterday at the Revolutionizing Atopic Dermatitis – Virtual Symposium. The slides used in today's webcast and those presented yesterday are available for download on the Investors section of incyte.com. I'm joined on the call today by Hervé and by Jim Lee, our Head of Inflammation and Autoimmunity Development. And we're also delighted to welcome Dr. Larry Eichenfield from the University of San Diego. Dr. Eichenfield is a world-renowned expert in atopic dermatitis. He is a -- he is Professor of Dermatology and Pediatrics, Vice Chair of the Department of Dermatology and Chief of Pediatric and Adolescent Dermatology at U.C. San Diego School of Medicine and Rady Children's Hospital, San Diego. Given the global COVID-19 pandemic, Hervé will begin the call today with a few opening remarks on business continuity and how Incyte is reacting to the current environment. Dr. Eichenfield will then provide us with some important context on the disease of atopic dermatitis and the evident unmet medical need before Jim shares data from the Ruxolitinib Cream Phase III TRuE-AD program. We will then open up for your questions. During the question-and-answer session, I ask that you limit yourself to one question and, if needed, one follow-up as this will enable as many of you to ask questions as time allows. I will also ask that we seek to split the Q&A session. First, asking questions related to atopic dermatitis and towards the end of the hour, transitioning to any COVID-19 topics you might wish to raise. Steven and Christiana will join us for the full Q&A session. Before we begin, I must remind you that safe harbor rules govern our remarks today and any forward-looking statements that we may make. And I therefore encourage you to review the risk factors detailed in Incyte's SEC filings included in our Form 10-K for the year ended December 31, 2019. In addition, I would like to caution everyone that the COVID-19 pandemic is an evolving situation, and it is still relatively early to be able to assess the full effects of governmental, business and social actions and policies and overall economic conditions on our business. Accordingly, it's important to keep in mind that our statements on this webcast speak as of today. We'll now begin the call with Hervé.

Thank you, Mike, and good morning, everyone. Thank you all for joining today's call. So before getting started, I would like to briefly address the ongoing COVID-19 pandemic. It's an unprecedented and very challenging time for people around the world, and our thoughts are with all of those impacted by the virus. I also want to thank our partners, our customers and all Incyte associates, who are working hard to ensure that all of our patients continue to receive their medicine. In terms of our business to date, we have not seen an impact on patients on Jakafi and Iclusig or on our supply chain and manufacturing processes. In terms of regulatory process, the 3 products that are currently under regulatory review at the FDA continue to move forward as expected, as does our plan for the NDA submission of ruxolitinib cream before the end of 2020. That submission will include the primary and secondary endpoint data that we are sharing with you today as well as long-term safety follow-up, which is currently being collected. In terms of clinical development, we will continue to act in the best interest of patients, and we believe that keeping our clinical trial program open and deferring enrollment decision to study investigator's and patient's health care provider is most beneficial to patients. That said, we anticipate that short-term effect may begin to emerge across different aspects of our clinical program. For example, while we expect ongoing monitoring of already enrolled patients to continue, new patient recruitment in certain clinical studies may be impacted. We also expect the conduct of clinical trials may vary by disease state and by severity of disease as well as by geography, as some regions are more adversely impacted. We are monitoring the situation closely and actively preparing and implementing contingency plans across our global study, such as sending drug direct to patients and adopting novel remote and telemonitoring tools as we seek to ensure continuity of care and data integrity for all participants in our studies around the world. Finally, last week, we announced that Incyte and Novartis are working together with the FDA to launch a global Phase III trial to evaluate the safety and efficacy of ruxolitinib to treat the cytokine storm associated with severe COVID-19. In these very sick patients, the hyperinflammatory response in the lungs can lead to respiratory distress and the need for mechanical ventilation. And we have both anecdotal clinical evidence and the strong preclinical rationale that JAK inhibition may have significant utility here. We are also seeking to launch an emergency expanded access program for these patients in the U.S., and we can assure patients currently taking Jakafi for its approved indication as well as those participating in clinical studies that we have ample supply of ruxolitinib for all our clients. I'll go to the next slide now, and I will end my introduction with a reminder of our ruxolitinib cream development activities and the time line for the expected NDA and subsequent FDA review in atopic dermatitis as well as the ongoing Phase III trials of ruxolitinib cream in vitiligo with data expected next year. It's now my pleasure to welcome Dr. Eichenfield to the call. So Larry, please go ahead.

Good morning, everyone. I'm Larry Eichenfield here. As you heard, I'm a dermatologist and pediatric dermatologist in San Diego. Wishes of health and safety for everyone around the country. We've converted a lot of our practice to teledermatology as we wrap up our hospitals for changes in practice. But I'm here to be a part of the presentation as Incyte rolls out some very great data that I think could be very helpful. I've had a long-standing interest in atopic dermatitis and take care of lots of patients across the ages with eczema. So what I will be doing is going through the landscape of atopic dermatitis and a clinical need, and then I'll be available for lots of questions on the disease state. So I'll be talking from a mixture of what I know to be this evolving field on eczema, but also translated taking care of patients and families across the ages with atopic dermatitis. So this is a short story sort of my summary points. This is a high prevalence disease. It's 10% to 20% in young children, 2% to 10% of adults. It has variable course of severity with a subset of patients with a lot of active eczema with secondary impact of the disease. It has significant disease burden as well as comorbidities associated with it. Historically, limited treatments beyond topical corticosteroids and still a high unmet need for long-term inflammatory disease control. Now what is atopic dermatitis? It's really a type of eczema. The term eczema is a broader term, but it's the most common type of eczema that presents with its typical morphology and distribution. It's an inflammatory skin disease with a chronic or persistent course and it manifests as eczema, and I'll show you some more images of sort of typical eczema that we see. It also relates to bacterial colonization and secondary infections. And the disease impact is multiplied by its associations with allergies, which include food and environmental allergies, asthma, hay fever as well as neuropsychiatric effects, which I'll mention in more detail. So first of all, eczema is a worldwide issue. We know that the eczema rates used to be and in nonindustrialized parts of the world around 4% to 5%, but they increased to 12% to 15% in many westernized or industrialized countries. And there is more data on persistent and/or adult onset atopic dermatitis as well. There's this whole experience in China, for instance, where they had rates of 4%, 5%, now in the major cities, 12% to 18% with a lot of adult onset atopic dermatitis. The reason isn't necessarily known. It may be a mixture of changes in environment, both avoidance of parasites or early stimulants that might affect the immune system development as well as pollution and other factors. We have pretty good data sets now that have come out in the last 10 years on rates in teens and adults. The disease can persist or you can get new onset disease in 5% to 7% of adults in the U.S. in recent estimates of atopic dermatitis. I added this slide because it's important. One of the takeaways that I want people to get is that there's a lot of atopic dermatitis that's mild or moderate, and then there's another set that's moderate to severe and that moderate group probably splits in half. But whether it be adults or children, we have a lot of mild-to-moderate disease and even though there's been a lot of excitement in the space of systemic therapies with biologics and some oral medications that have been approved and developed for more severe disease, it's still going to be -- it's still now and will still be in the next 10 years that most atopic dermatitis is going to be managed with the topical agents just goes along with the severity data on the population. So a few images to make sure you get a sense of what we're talking about. There's this variable severity with eczema, but eczema has this inflammation in the skin where you see redness of any of these photos. We know there's inflammation that's in that skin. There's, of course, also some degree of a -- of skin effect, and you can see both oozing and crusting as well as scale that develops from it. There can be a lot of bleeding in more severe disease, pigmentary changes, color changes that happen from the disease as well. And then you can get -- in more chronic cases, which is very common, we get what we call lichenification, you get thickening as well as erosion. So this inflammation in the skin creates the secondary changes, but a lot of this is tied to pruritus as well because you can have dry skin that causes pruritus, inflammation that causes pruritus and pruritus perpetuates this cycle. Before we go through a quick discussion of pathogenesis, I wanted to discuss a secondary consequence of disease in relationship to infections, and it's very common. With atopic dermatitis, there's increased bacteria in the skin, predominantly Staph, so we can get what we call impetiginized atopic dermatitis as well as increased rates of infections, even cold sore, herpes can cause something called eczema herpeticum. I evaluated 2 patients over the weekend with the teledermatology who were in the emergency room for possible eczema herpeticum. So secondary infection is a big consequence of the disease. The medical consequences of the disease, there are chronic rashes, there's pruritus or itch, which drives disease manifestations, and we're definitely looking for products that can help to control that itch infections, as mentioned. A lot of secondary consequence of disease is tied to sleep disturbance because that clearly has an impact on quality of life, work performance and is very much tied to pruritus. And then there's these set of what we call the nonatopic comorbidities. So we're talking about atopic dermatitis, but then there's a [ emergent ] of comorbidities that are also considered atopic or relatively allergic in nature, and this includes asthma, hay fever, allergic rhinitis, conjunctivitis, food allergy and then contact allergy, which is -- fits into allergic contact dermatitis, also known as occupational dermatitis. In these images you see a patient with asthma through some peanut butter up there, a common food allergen that can develop in patients with atopic dermatitis and then the bottom right showing allergic contact dermatitis where you get localized reactions to chemicals or metals on the skin, and that's the sort of patch testing, those little white things that we do as we try to figure out what particular allergens may be instigators of breakouts in atopic dermatitis. The rate of allergic comorbidities is really quite high across the ages, whether it be infants, children or adult with hay fever or allergic rhinitis, almost 50% of adults in more moderate-to-severe disease, at least 1/3 of even younger individuals with hay fever or allergic rhinoconjunctivitis. Asthma of about 40% as well. And food allergies as well can trigger a subset of atopic dermatitis that generally develops after the onset of atopic dermatitis. So these are things that are sort of secondary issues that bring up the importance of atopic dermatitis. The other thing we've recognized is the -- over the past decade is the mental health effects, neuropsychologic effects of atopic dermatitis, very high rates of anxiety and depression with more severe disease with 1 in 5 adults meeting diagnostic criteria for major depression. Literature on attention deficit hyperactivity, ADHD, when the first paper came out, we were little questioning. Maybe they were just fidgety kids. It was a JAMA paper, so really superb. We're still -- we were appropriately skeptical, but the data is really strong now that there are higher rates. And a lot probably ties to sleep disturbance and fatigue. So the way I put together a sense of that burden, if you start looking at 9 o'clock, okay, on this circle diagram, we have [ picture ] manifest with itchy rashes, signs and symptoms of the disease, which is tied to them and works clockwise to the symptoms with pruritus and frequent intense itch. Sleep disturbance very much associated with those findings in the itch, both falling asleep problems, staying asleep problems, which has a huge impact on quality of life. Atopic comorbidities, as mentioned, other comorbidities, including mental health, bacterial, viral and other risk factors of some immune diseases and potential cardiovascular impacts. And then, of course, the impact on quality of life, social functioning, life course and school and work performance have affected individuals. I've spent a lot of time on pathogenesis, but there is now a sort of a holistic sense of the pathogenesis of atopic dermatitis. There's some children who are born with barrier dysfunction, which is a lifetime thing. If we look at adolescents and adults, it's there as well, drier skin, more open skin, allows the skin to be more sensitized, which sets up the immune reaction that gives you these overactive cytokine production in the skin, which manifests as the rash. And you can see on this diagram that there are a set of mediators of the disease, especially the Th2 modulators and a variety of cytokines that are the targets. We'll be discussing later on in the data set how JAK inhibition can disrupt the inflammation in atopic dermatitis in IL-4, 5 and 13, 31, but these are mediators of the inflammation and itch in atopic dermatitis. So what sort of clinical needs are there? First of all, we start off with atopic dermatitis. Moisturizing is important because patients can have a dry skin tendency, and dryness also tends to increase the itch of atopic dermatitis, and we have many different approaches, but this does not handle the inflammation of atopic dermatitis that we see in most of our patients, and we generally then need effective anti-inflammatory therapy that hopefully will be antipruritic as well. Traditional mainstays are topical corticosteroids. We have about 70 different topical corticosteroids. They range in potency. They are used for acute flare management and intermittently for maintenance management. There are significant concerns worldwide of phobias with topical corticosteroids concerns because of steroid absorption, especially with higher potency agents as well as local effects with skin atrophy, stretchmarks, et cetera, that limit its use. And while we often try to have patients use topical corticosteroids and use them in regimens, there's a lot of concern, and they have to be managed so that we stay away from the side effect profile. Topical calcineurin inhibitors came out around the 2000, 2001 as nonsteroid topical agents, tacrolimus and pimecrolimus. They're officially listed as second-line therapy that can be used intermittently, not continuously, as we know they had concerns with labeling due to concerns about malignancy that were raised by the FDA. They have fair to good efficacy, not that strong. They are approved either for mild-to-moderate or moderate-to-severe atopic derm, depending upon what drug you look at, and definitely are limited by tolerance with stinging and burning, which can occur. The relative new kid on the block is topical crisaborole, which is a topical PDE4 inhibitor, used BID. Safety looks good. They recently had an expanded indication down to 3 months of age, but a lot of stinging and burning and, I'd say, limited efficacy, not that strong an anti-inflammatory for eczema. And so still in play. I think that's what the market was expected in terms of use, but that's sort of where we're at with it. There's reasons for that. Systemic therapy being niched for moderate-to-severe atopic dermatitis. Traditionally, we used very few systemic agents in patients in the United States. Methotrexate was the most commonly used, but was uncommonly used and not approved. We also used the cyclosporine, azathioprine, mycophenolate, lots of toxicity associated with them. Systemic steroids are most commonly used for sort of acute rescue therapy but not advised, and dupilumab now approved 12 plus as the first systemic agent, and I'm sure you're well aware of the evolution of systemic agents and the market relationship to this with both oral JAK inhibitors, specific IL-13 blockers, IL-31 blockers, and we could go in detail, but that's not really what we want to stress today because it's very important in clinical practice to understand that most eczemas mild-to-moderate that topicals will still handle most disease. And from a clinical perspective, there's a great need for more potent, well-tolerated nonsteroid. And if I could get a well-tolerated nonsteroid agent that really more effectively controls inflammation and effectively decreases itch, that's something that would be very, very exciting to the -- to patients and to the patients (sic) [ physicians ] who take care of them. I also think the market of atopic dermatitis is still relatively untouched. There's still a lot of work getting patients back into the office and to understand that we're sort of revolutionizing therapy with new tools that will allow us to establish more long-term disease control rather than just occasional flare control. I regularly see patients with lots of eczema on their skin and lots of the secondary consequences. And there's just unnecessary to have an expectation that we can fix it and get it under control. But with new agents, such as what Incyte is producing, we'll have more ability to do that. So I thank you for listening, and we'll have an opportunity for some questions. But at this point, I will turn over the material to Jim Lee, who can discuss the great results on the AD drug.

Great. Thank you, Larry. This is Jim Lee. I lead the Inflammation and Autoimmunity Group here at Incyte, and I have the pleasure of re-presenting the Phase III study results that were presented yesterday, if you can slide to the next slide, at the Revolutionizing Atopic Dermatitis Conference, the virtual meeting held yesterday, presented by Dr. Kim Papp, one of our lead investigators in the Phase III study. If you go to the next slide, please. Yes. So before I present the data, just wanted to remind people of the scientific rationale and previous clinical work that was done with RUX cream in atopic dermatitis. As Dr. Eichenfield mentioned, in terms of the pathogenesis of atopic dermatitis, I think we've learned some of the main culprits, specifically the Th2 cytokines as well as IL-31 that really drive both the inflammation and the symptoms of this disease. And we've learned over the years that a lot of that is driven by the JAK-STAT pathway, specifically JAK1. And we know that ruxolitiner cream -- or ruxolitinib, excuse me, has the ability to block those inflammatory pathways. So a few years ago, Incyte conducted the Phase II study in atopic dermatitis, where they looked at a number of different concentrations dosed twice a day and once a day for 8 weeks, and those results have been published in the Journal of Allergy and Clinical Immunology. And based on the results of those studies, Incyte conducted the 2 Phase III studies that I'm going to share with you today. So if you go to the next slide, please. It's the study schematic or the study design. We tested 2 concentrations, 0.75% and 1.5% RUX cream. And in the first 8 weeks of the study, we compared it to vehicle cream. And after week 8, which was the end of the vehicle control period, patients who were originally randomized to vehicle were re-randomized to either 0.75% cream or 1.5% cream. And in the 44 week long-term extension portion of the study, patients were instructed to re-treat when they had a flare. So when they either saw new lesions or felt the itch that drove their disease, they were instructed to re-treat and then treat until the itch went away or the lesions cleared. And we'll have results from the long-term extension sometime later this year, but today we're here to present the results from the vehicle control period. So if you could go down to the next slide and then one more, this summarizes the study endpoints that were looked at. The primary efficacy variable was the proportion of patients achieving an IGA, so an investor global assessment score of 0, 1 with a 2-point grade improvement from baseline or what we call IGA treatment success, or TS, at week 8. The secondary endpoints including the -- included the proportion of patients achieving at least a 75% improvement in their EASI score from baseline, EASI-75 and then the proportion of patients with at least a 4-point grade improvement in the Itch NRS score from baseline at week 8. The next slide summarizes the eligibility criteria. And essentially, this -- the criteria was almost identical to the criteria used in the Phase II study. The only change was the expansion of the age range. So in the Phase II study, adults were evaluated. In this study, we went down to age 12, so adolescents and adults. In terms of their disease severity, it was mild or moderate, so IGA-2 or 3, and the baseline body service area involvement ranged from 3% to 20%. In terms of key exclusion criteria, these are very common criteria used in most atopic dermatitis studies. So let's move to the patient demographics, summarized on the next slide. As you can see, the distribution of the demographics at baseline was very similar across treatment groups. So as I mentioned, this included -- the study included adolescents and adults. So we had about 80% of the patients were adults, the rest were adolescents. About 60% of the patients were female. And in terms of race, about 70% were white, about 23% black and the remainder were others and those others primarily were Asian -- people of Asian descent. And in terms of where the studies were done, about 70% of the patients came from the U.S. and Canada, and the rest 30% came from Europe. And the next slide shows the clinical characteristics of the patients. And again, as you see, the distribution was similar across treatment groups. But in terms of the clinical characteristics in terms of the body surface area involvement at baseline, it was around 10%. And in terms of the mean EASI score, we saw a mean EASI score of 8 across the groups. In terms of the baseline IGA score, about 75% of the patients were moderate, the rest were mild. In terms of the main baseline Itch score, it was 5 across treatment groups and the proportion of patients who came in with an NRS score of at least 4 or greater was about 2/3. In terms of the duration of disease, it's a population with long-standing duration, the median duration was around 16 years. And about 38%, 39% of the patients had facial involvement. And this is important because there are a lot of topical treatments where you really can't use it on the face at all or for very long periods. So the next slide summarizes the safety that we observed in the study. What we saw from a safety perspective was that RUX cream was well tolerated and was not associated with clinically significant application site reactions. Again, with a lot of topicals, you see high rates or modest rates of application site reactions, pain, itching, burning, and we didn't see that in either study. In terms of the adverse events, all treatment-related, treatment-emergent adverse events were mild or moderate in severity, and that was very, very good to see. And that we didn't see any adverse events that were suggestive of any systemic exposure. So in terms of the specifics, we see the overall rates of adverse events was around 25% to 30%. And in terms of those adverse events that were felt to be treatment related and, again, a much lower percentage. And in fact, if you see, it looks like the vehicle control-treated patients had the highest rates. And specifically to those application site reactions, as you can see there and, again, you see that it looks like the vehicle-control -- vehicle-treated patients had the highest rates of those application site reactions. In terms of discontinuation, you'll see in the next slide before I go there, the discontinuation rate was fairly low. And actually, the number of patients who discontinued due to adverse events was also very low. And again, you see the highest number of discontinuations occurred in the vehicle arm. And in terms of SAEs, or serious adverse events, again, a very small number, none of them were believed to be treatment related. The next slide shows the disposition of the patients that were randomized in both of the studies. So we had about 1,250 patients or subjects randomized. As I mentioned, the discontinuation rate was low. It was around 10%. And as you can see in the boxes themselves, the majority of those patients withdrew for personal reasons or were lost to follow-up. And so we had about 90% of the patients complete the studies. And so let's turn to the efficacy on the next slide. This is the primary efficacy variable, the IGA treatment success. As you can see, significantly more patients treated with RUX cream demonstrated or achieved the primary endpoint, the IGA-TS, compared to vehicle. As you can see, there's a breakdown here between the 2 studies. On the left, there's a TRuE-AD1 and as you see by week 8 in the 1.5% RUX cream arm, about 54% of the patients achieved this endpoint, 50% in the 0.75% arm and 15% in the vehicle. In the TRuE-AD2 study, on the right, about 51% in the 1.5% arm achieved the IGA 0 or 1 with a 2-point grade improvement, 39% in the 0.75% arm and 7.6% in the vehicle arm. So that was very exciting data. Well, how about the EASI-75, which is another very common efficacy variable, and that's shown here in this slide. And again, very similar pattern, where you see a higher response rate in the 1.5% arm and then both arms show statistical significance compared to vehicle. So in TRuE-AD1, 62% of the patients achieved an EASI-75 by week 8, 56% in the 0.75% arm and 24%, 25% in the vehicle arm. In TRuE-AD2, we see about 62% of the patients in the 1.5% arm achieved an EASI-75 score, 51.5% in the 0.75% arm and 14.4% in the vehicle-treated arm. In terms of the mean percent reduction in EASI score that's shown on the next slide. If you could slide to the next slide, that would be great. There we go. And oh, I think can you go back one? There it is. This is the EASI percentage change from baseline. And as you can see, this gives you a sort of a time course. You can see that 77% -- or excuse me, the EASI reduction in the 1.5% on TRuE-AD1 was 77%, in the 0.75% arm is 72%. And in TRuE-AD2, the EASI reduction in the 1.5% arm was 75% and a similar reduction was seen in the 0.75% arm, much higher than what was seen in the vehicle-treated patients. In terms of Itch, the next 2 slides, if you could go to the next slide, please, shows you the reduction in Itch. And as Dr. Eichenfield referred to, the inflammation is obviously a very important component that drives the pathogenesis. But what -- in terms of what the patient feels, it's really itch. And so we collected the Itch scores. This is the change from baseline in daily Itch NRS score. And as you can see, we see significantly greater reductions in Itch NRS observed with both active arms. And in fact, with the highest concentration, the 1.5%, we see the reduction as early as 12 hours after the first application of RUX cream. So as you can see, we're showing the first 28 days that itch continues to improve throughout the 8 weeks of the study. But as you can see, it's a very impressive reduction and more importantly, a very rapid reduction in itch with the mean EASI reduction in the 1.5% arm of 3.39 in the TRuE-AD1 and 2.88 in TRuE-AD2. If you could go to the next slide. The next slide summarizes one of the major secondary efficacy variables that were collected. And that's the -- if you go to the next slide, please. Yes. That is the 4-point improvement in Itch NRS. And this is important because this is what FDA has defined as a meaningful endpoint in terms of itch reduction. And as you can see, in both studies, we see significantly more patients treated with RUX cream demonstrated clinically meaningful reductions in their NRS score or at least a 4-point grade improvement in their NRS Itch versus vehicle. And by week 8, in TRuE-AD1, we see 52% of the patients in the 1.5% RUX arm are able to achieve this efficacy endpoint, about 40% in the 0.75% arm and 15.4% in the vehicle-treated arm. In the TRuE-AD2 studies, in the 1.5% arm, 50.7% of the patients achieved this endpoint, 42.7% in the 0.75% arm and 16.3% in the vehicle arm. So very exciting data as well. So if you could go to the next slide, I'd like to finish up the presentation to conclude and to provide the conclusions from what we saw on the study. So what we see in the study is application of RUX scream brought about a rapid and substantial and sustained itch reduction, which was very exciting to see for patients. In terms of the efficacy, RUX cream showed superior efficacy versus vehicle in all of the major efficacy endpoints. And in terms of the itch and the inflammation, I think this is the first time that we demonstrated a dual mode of action for RUX cream. It not only displays the anti-inflammatory activities you would expect with a JAK inhibitor, but also the anti-itch antipruritic activities. In terms of safety, again, we're very excited to see that the RUX cream was very well tolerated. We didn't see very many local systemic -- local side effects nor any evidence of systemic side effects. And so very excited about the data from both studies. We think that the data will support the application of RUX -- or excuse me, the submission of RUX, and we're hoping to move that forward later this year. So with that, I'd like to turn over the presentation back to Hervé.

Thank you, Jim. And so yes, the next step in the program is to get the long-term safety data. And when this is available to us, we intend to submit NDA seeking approval in atopic dermatitis before the end of this year. The last slide here summarize the commercial strategy and the exciting opportunities that we see for ruxolitinib cream in the U.S. If approved by the FDA, we expect to launch in atopic dermatitis late next year and in vitiligo in 2022. We plan to create a dedicated dermatology division, and we will be targeting our efforts towards 8,000 or so medical dermatologists using a specialty field model. Okay. So operator, that concludes our prepared remarks. Please give your instruction and open the call for Q&A.

[Operator Instructions] Our first question today is coming from Cory Kasimov from JPMorgan.

This is Gavin, on for Cory. We just wanted to understand the key barriers to commercial adoption for this product. And then we had one follow-up as well.

Hervé, you want to take that one, the key barriers to commercial adoption, and maybe Dr. Eichenfield, if you can add? Hervé, you're on mute?

Sorry. Okay. Sorry. I was on mute. No I think -- I mean, as you know, I mean, the number of patients we are potentially able to treat here is very large. These are patients who today have unsatisfactory treatment sometimes with steroids. So there is a question of really addressing that need. You can see the efficacy data in terms of itch and anti-inflammatory effect is really key to understanding why this product could be really changing the options for these patients. And as we discussed, our plan is to really work with medical dermatologists at launch for the first months, if not years, of the launch of this product to educate everybody on how it could be really helpful. On the other hand of the spectrum, when you go to the severe type of atopic dermatitis, obviously, using injectable antibodies is today one of the options. What we are also looking at is that for patients who have limited size of lesions that using a cream could be also a very good option. And as you can see from the clinical results, the lack of systemic exposure is leading to a very interesting efficacy-safety ratio for this strategy. So maybe Dr. Eichenfield, if you want to complement that from your experience?

Yes, certainly. I think that the -- when we see a new drug, maybe on the launch pad as a -- in the dermatologist and to a degree more primary care position. People are looking to see, okay, how would this complement what I have now? And is it going to have something different that's really additive. And that's -- so I think that's the hard part in rolling out is to make sure that there's -- that some -- a drug is bringing something new and novel and better as it fits its way in. What's very exciting about this data is that we don't have -- number one, there's very limited efficacy to the nonsteroid medicines that we use. They're just not that strong in terms of their impact on eczema. And the data set actually -- it's hard to know without living within these data sets, but the EASI score, the separation from the vehicle response to the active looks really, really good. Both the absolute EASI score decrease, the percentage change as well as the percentage of patients who get a lot better that EASI-75, meaning those people getting 75% better so with a nonsteroid, we don't have to worry about atrophy, you don't have to worry about steroids and cortisone absorption, there's -- this can be used across the spectrum of eczema. So patients with milder or more localized disease could use it as an alternative or in addition to regimens with topical steroids. More severe patients, they'd be able to prevent people needing systemic therapy or even in those on systemic therapy, where we -- even dupilumab, which has been a marvelous drug, there's a lot of surface area left on it. Across the spectrum, I think it can be taken up. So I think the novelty is the -- what looks like the relative efficacy. And the other thing is their topical side effect data is we're seeing stinging and burning that's higher in the vehicle, in 1 of the 2 studies or you're around the same. That's remarkable because of the drug is well tolerated, it also means there'll be a lot of excitement to people using it.

Your next question is coming from Marc Frahm from Cowen and Company.

Congratulations on the data. Maybe one just technical thing for Jim. In the patient disposition slide noted that for TRuE-AD1, the analysis was done on an ITT basis versus in TRuE-AD2, some patients were excluded. Can you kind of describe why some patients were excluded? And then also, if you did analyze TRuE-AD2 on an ITT basis, would any of the primary or key secondary endpoints like itch have lost statistical significance?

Sure, Mark. So you did notice that there were a decreased number in the efficacy analysis. And so during routine monitoring, a quality issue was identified at one of our sites in Europe. And we did a thorough investigation and it looks like there are some quality concerns around the data that comes from that site. So we've decided to actually move that site from efficacy analysis. And in fact, that analysis, by removal of the site, that actually lowered all of the top line efficacy in the RUX arms, but we felt it was the right thing to do. In terms of the imputation method that was used, this was the NRI. So we used the most conservative, which was actually what we used in the Phase II study as well. And when you take a look at the protocol analysis, actually, all the numbers go up. And so -- or if you use an LOCF, the values actually all go up, but we are actually sticking with the NRI analysis because it's the most conservative.

Our next question is coming from Brian Abrahams from RBC.

Congratulations as well on the data. Dr. Eichenfield had mentioned the many comorbidities -- the many morbidities associated with atopic derm like sleep disturbance, et cetera. So I was just wondering if you're seeing any concurrent benefits in these Phase IIIs on quality of life scores alongside the leasing the niche improvements as well as on SCORAD, which I know is important for Europe. And then just as a follow-up, your level of confidence that you'll be able to collect adequate reliable data in the long-term follow-up, just given the current pandemic and how you're managing through potential challenges there?

Jim, do you want to take that?

Yes, absolutely. So we did collect a number of additional PROs, including quality of life. That data is still being analyzed and collated and we'll present that data at a future scientific conference. In terms of the impact -- the potential impact, you're right, as we mentioned, we're monitoring the situation very closely. And we're putting into place and working with the sites to try to get the patients in within their visit windows. But right now, we don't have a full measure of what the potential impact is. But in terms of the specific long-term data, yes, we're still monitoring that, but the goal is to submit the NDA by the end of this year. And right now, we still have that on track. But obviously, everything will depend on what happens with the COVID-19 situation.

Our next question is coming from Salveen Richter from Goldman Sachs.

This is Andrea on for Salveen. Maybe just one for Hervé. As you think about the benefit that was demonstrated by both of the doses, how are you thinking about the regulatory path forward? Are you planning on seeking approval for both doses? Or how are you thinking about that?

Yes. Maybe Jim can speak about the regulatory. I mean, you saw from the data that, obviously, both doses are very effective. And it looks like on most of the endpoints that we have seen today, the higher dose is showing a little bit more efficacy, and there is really no difference in safety. So that's really what we see from the data. Now how the FDA is going to look at it, it's frankly something that I would say is difficult to predict. And I think the decision, at the end of the day, will be made together with the FDA. Jim, do you have any...

No, I think that's a great summary. Yes. No, I think that's right. I think we have the -- some additional analysis that are ongoing. We'll have the long-term safety data that will all come into play, obviously, in terms of the dose. But I think Hervé is right, it will be a negotiation with the FDA when we submit.

Our next question is coming from Alexander Duncan from Piper Sandler.

Could you provide any information on how much RUX cream patients used on average or on a percent DSA basis? And if there were any site-specific differences or types of lesions in terms of where RUX cream works better?

No, it's a great question, and we're still analyzing the data. We're still doing all of this sub-analysis including amount of drug, but all of that is being done now and it will be shared at a future scientific meeting as well as future publications.

Our next question is coming from Jay Olson from Oppenheimer.

I was on mute. Congrats on the data. Really impressive P values. If I could ask Dr. Eichenfield, could you describe the factors that would drive preference for a topical JAK inhibitor? And are they mostly related to the body surface area involved? Or do comorbidities also play a role like if patients present with atopic dermatitis plus asthma or food allergies, would that make you more inclined to treat with a systemic therapy? And then as a follow-up, can you talk about the systemic long-term adverse effects that are associated with high-dose topical steroids?

Sure. So there may be an evolving approach to considering comorbidities in the decision tree for systemic therapy. Yes. One of the issues that I think we've seen, Regeneron and Sanofi deal with dupilumab is they have a drug that's approved for more than one Th2-associated disease state, but they sort of had parallel programs and there's -- in the dermatology world, people are sort of aware of the comorbidities, but they don't necessarily want to manage them. So I don't think that makes a big in the play for a decision. For systemic, I think probably the biggest thing is that being able to bring different regimens in that will have more effectiveness where one could use nonsteroids and long-term disease control more effectively to the present ones, have their limitations and/or a mix and match between that, there'll be a subset of patients who can be really well taken care of with. The systemic effects of topical corticosteroids are -- really relate to the strength and quantity. The politically incorrect analogy is alcohol. And if someone says, I drink wine every night and a bottle last 5 months, I mean the why don't go bad, but I won't worry about the quantity imbibed. But the topical corticosteroids is the difference between an over-the-counter or lowest strength prescription topical corticosteroids which are 1% or 2.5% hydrocortisone, for instance, and 0.5% [Audio Gap] so numbers don't correlate clobetasol so that's 20x stronger. So you truly can get continuously in large quantities, then you could get absorption and what happens, cortisol producer, your adrenal glands stops working. It's a very uncommon clinical practice to have so much systemic corticosteroid yet that can occur. But a consequence of that is that there is underuse of corticosteroid, I'd say, because people are so fearful of it. And while it's great for us to encourage use of topical corticosteroids as part of regimens that [Audio Gap] is really having a move to other patients or a mix and match depending upon the disease severity, so we can bring long-term disease control. And I think that's where this product sits is something that -- probably something very exciting that will allow more patients to be managed effectively without the need for systemics.

Our next question is coming from Ren Benjamin from JMP Securities.

Congratulations on the data. Just one for Dr. Eichenfield. You have quite a few options on your hand, and I'm kind of curious, a newly diagnosed new patient comes into your clinic, just what is the kind of the gamut that you run through before you get to, let's say, prescribing a RUX cream or a Eucrisa? How many options do you go through? Is this kind of like a last ditch option that you give these patients? Or do you start moving them -- moving it up kind of front line? And then as a follow-up, maybe for Jim, you have 50% of patients that are not considered IGA responders. Do those -- any of those patients getting better over time? Or do you wind up switching them to other medications?

Okay. So the when-used question is something that I have to be honest, we're talking a lot to both people and company people. People often want to know, oh, is this first line? Can this be first line? And say don't pipeline as a label, I mean, as a verbiage because someone who comes in for nuance at atopic dermatitis [Audio Gap] they're probably going to get a cheap topical corticosteroid to see how quickly we can get the disease under control and then see what happens because whether it will stay -- come under control and then stay under control? Or is it one of those persistent cases where it keeps if they stop the topical corticosteroids, there is recurrence. And that's almost beside the point because there's so many who aren't managed by just a week or 2 of topical corticosteroids and a little topical corticosteroid now and that's -- if you had that, that would be -- that's one thing to patients where that regimen doesn't work. And so if I have a patient who's a new patient for me who has a history of use of topical steroids, which is usually the case, even if they're too little, it's very, very early. They may visit or second visit that we'll prescribe a nonsteroid like this in the regimen of care. And many times, it's the first time, especially, you have to realize that there's topical corticosteroids on the face issue around the eyes that can cause cataracts and very thin skin on the body. So a well-tolerated medicine that's not going to have that and yet can still control the eczema, very exciting. Yes. And the second question was, Jim, would you like to... Go ahead?

That's right. And the question was around the percentage of patients that weren't able to achieve the IGA score, IGA treatment success at week 8. So I think in the study schematic, I showed you that all patients were on active drug, either the 1.5% or the 0.75% beyond week 8. So we'll be able to collect those patients and see how many of those patients who didn't hit the IGA-TS at week 8 and how many of them are able to achieve that at subsequent visits. I will add, though, that this is the first time I think any product has been able to achieve an IGA 0 or 1 with 2-point grade improvement of in the 50s. I think -- and Larry, correct me if I'm wrong, but I think this is the best efficacy that any product has been able to achieve in an AD study. So I do just qualify the IGA at 50% as probably some of the best efficacy that's been seen so far. So just wanted to add that there.

Yes. I totally agree. The IGA score is -- the FDA approaches what percentage of people get like [Audio Gap] pretty clear, so a high bar. But if you look at -- that's why you look 5 or the absolute EASI decrease. In absolutes of 75% [ fact numbers ] an EASI score of around 8 is marvelous. You're down to really, really low numbers and I think showing a lot.

Our next question is coming from Vikram Purohit from Morgan Stanley.

So I have one for Dr. Eichenfield. I wanted to go back to a question on commercial considerations and thinking through uptake. So if the product is eventually approved, but is approved with a black box warning due to it being a JAK inhibitor. How do you think uptick would be impacted versus that the product were approved without a black box?

The easy answer is it's hard to know that. A lot more on what the sensibility is of the safety data that comes with it. Dermatologists are way more sophisticated now with what box warnings means since there are an expanded number of [ those ] that may have them. I think if the safety data for the drug itself does not show signs of systemic effect, no systemic immunosuppression, none of the side effect concerns that may get label for what you see with our oral JAK inhibitors or a RUX, if it's labeled, but that's not seen in any of the population, very comfortable using it. And I think that's -- I mean, we totally live in this world controlled of the additional side effect profile between topicals and systemic delivering efficacy locally to areas that are inflamed without taking the systemic approach to try to avoid systemic side effects. So I think it's the safety aspect of this, which looks so good, remains that way, it will allow them to move forward at least amongst the hands of most dermatologists. Now if there's a regulatory requirement for monitoring, that might be a big barrier, but I wouldn't foresee that happen.

Our next question is coming from Matt Phipps from William Blair.

This was kind of asked a little bit earlier, but just curious with this rapid response you see in skin involvement. Does that essentially mean that the amount of cream used, I guess, as in grams or such, will show a similar pattern, just assuming there'd be, I guess, much less volume being used by 8 weeks as opposed to when these patients start with about 10% PSA?

Sure. This is Jim. Let me just -- can you rephrase that? I'm just -- I want to make sure I want to answer your question. Are you asking around do you think the cream because it's topically applied directly onto the skin that, that is the explanation for the rapid response and its reduction?

No, sorry, just as far as volume being used and thinking about, ultimately thinking about pricing it versus a tube and how much patients are using and that just pretty rapidly -- that's rapid response leading to just the patients not needing as much volume over time to cover the surface area.

Sure. Yes. And so that's a fair question. In terms of the clinical trial, we're obviously providing instruction and we will -- we're looking at the compliance of the patient in terms of dosing. But I think maybe that's more of a question that I can ask Dr. Eichenfield to address in terms of patient compliance in the real world.

Yes. So well, first of all, patient compliance to real world is fairly measurable, but that's one of the issue partially because they're fearful of their medicines. What normally happens, I think with any of our topicals is that we'll start off with a higher quantity of use over the first week or 2 of the treatment. And then if you start to get -- if you're having a factivation, you start to get skin healing, then you'll decrease the quantity use as parts of areas heal. But many times, for many patients, we go into maintenance mode, what we call proactive treatment, sort of using the asthma model, where we don't -- we don't wait for patients to flare and start wheezing again before we treat to keep their wheeze away. So in atopic derma, there are these hot spots that may recur, you cool them down. Then they may use the drugs intermittently in that fashion, not the way this drug is studied at this point in the Phase III studies. So it's not as though people will turn off their use totally, but there will be a higher volume to use probably in the first few weeks, but that's because you're bringing healing of that portion of the skin. But over the long term, there should be continued use, not just for flare control, but in this long-term disease model.

Ladies and gentlemen, we have time for 3 more questions. Our next question is coming from Michael Schmidt from Guggenheim Securities.

This is Kelsey on for Michael. We were just kind of wondering if you could provide some of your thoughts around existing payer control in the AD space. And maybe kind of some color around your strategy to secure patient access.

Maybe...

The first part of it, I missed. I'm sorry.

That's okay. I can go back. Yes. Just kind of thoughts on existing payer control in the space and kind of your strategy to secure strong patient access.

Larry, do you want to talk on that or maybe...

I'll take it from my standpoint, which is -- and then I must turn it over to Jim for the real answer. So as a clinician, this is -- we spend more time in energy and staffing trying to get drugs approved. But it's usually, it's -- there are 2 ways of doing it. There's patient-by-patient and then there is group-by-group or payer-by-payer. And increasingly, as it's standardly used in regimens of care that we can get it approved. Now many times, they may require that someone's used a topical corticosteroid to get a nonsteroid, but that's not a problem as long as you document it. So there's advocacy that needs to be done, but that's pretty much part of the standard of what we do in practice.

Yes, I mean, like any new product, I mean, there is a phase where we will be working with the payers to try to see where they see this new product in -- the step edit program, what prior therapies they would need to see, et cetera. I mean, it's -- a very classic phenomenon is that as we go through the first month of the launch, there will be more and more availability of the product earlier in the disease. On the pricing side, we have not made a decision on where it's going to land. So that would be done later when we are closer to the launch date. But obviously, the goal is to have a product that will be widely available because we believe the benefit of this cream can be seen in a very large number of patients with atopic dermatitis.

Our next question is coming from George Farmer from BMO Capital Markets.

I wanted to talk a little bit about systemic exposure and whether you actually looked at that systemic exposure? And whether application of the drug, perhaps, on open lesions may increase any risk?

Sure. This is Jim. I'll take that. And I think Dr. Pat mentioned it during his presentation. We're still working on getting the PK data. So we did collect PK during the petrol period. That data is being analyzed and we'll share that at a future scientific conference. But if you take a look at the adverse event profile, clearly, there is -- it's hard to say or hard to see if that the systemic exposure was clinically meaningful as we didn't see any side effects associated with that. So -- and then in terms of the open lesion, we'll see with the PK data. But I will share with you that the PK was also done in the Phase II study and that data or that information was shared in the Phase II publication in the manuscript.

In the interest of time, we have time for one further question. Our final question today is coming from Tazeen Ahmad from Bank of America.

May be one -- congratulations on the data. Maybe one about on the question of commercialization. So on the competing drug that's on the market that's applied topically, one of the complaints that physicians have had is that patients sometimes complain that the cream can be messy. Now based on the comments that were made already on the call, is it your view that a cream is something that would be more attractive to patients who potentially have less of their skin involved in a breakout? Or do you still think that once the patient gets to a maintenance level that cream that he or she might need to use would decrease over time?

Dr. Eichenfield, do you want to take that one? And Jim, maybe a follow-up?

Sure. So first of all, we know -- you asked dermatologists, they prefer ointments over creams. Patients clearly prefer creams over ointments. And that's partially because the sort of gooeyness aspect of it really matters to them. Most patients recognize that there's a -- the part of their skin, that's not just the inflammation, it has dryness as well. So some degree of skin care is part of the sort of the obligation, but trying to make it as minimal as possible is what we're going for and what patients want. So people are going to be looking for efficacy a number one. Efficacy and whether it can be put in a regimen of care that's not going to create a burden to work. So you can -- which itself will decrease inflammation as well as decrease inflammation. People will use it in regimens of care. As I said, they might use less over time, but that's fine. We're going to have more patients who use more sort of proactive therapy, as I call it. Treating to keep inflammation from coming back, and that's fine. If they only need a small amount of product for that, that's marvelous because it decreases the burden. People are trying to minimize the disease, but they also want to minimize the work they need to do to do that. So you want an effective product that we’ve rated. I think that's very important. Jim?

Yes. And the only thing I have to add -- I think that's a really good description. I think the only thing I have to add to that is that our cream itself is very cosmetically elegant. It's vanishing, doesn't leave any tackiness or sheen. So I think patients will find it very acceptable from a cosmetic perspective, aesthetic perspective. So but I think Dr. Eichenfield's absolutely right. I mean, I think ultimately, it's really going to be finding something that works for the disease to provide that both the acute, but also the long-term control. And obviously, if you have a percent of your surface area involvement, a topical doesn't make a lot of sense because it's very impractical to lather yourself up of such large areas. But I think for the vast majority of AD patients, I think a topical product makes a lot of sense. And it's probably, as Dr. Eichenfield mentioned, in his presentation, still where the greatest unmet need is. So with that, I'll turn it back over to Kevin.

Thank you. We've reached end of our question-and-answer session. I'll turn the floor back over to Mike for any further or closing comments.

Okay. Thank you all for participating in the call today. The IR team and I will be available for any follow-up questions that you may have. I know we weren't able to reach all of the analyst questions that were polled for. I'm sorry about that. But for now, we'll close the call. Thank you.

Thank you. That does conclude today's teleconference and webinar. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.