Incyte Corporation (INCY) Earnings Call Transcript & Summary

Okay. Hello, and welcome to this meeting with Incyte management as part of our 2021 Biopharma Strategy Series. I'm Mike Schmidt, senior biotech analyst with Guggenheim. And with us today, we have Incyte's CEO, Herve Hoppenot as well as Christiana Stamoulis, the CFO. Welcome, guys, and thanks for joining us today.

No, thank you for inviting us.

So Herve, maybe just starting out with a few general questions, and then I have a whole bunch of questions about the different products and pipeline assets. But starting out, as Jakafi continues to build a very strong commercial foundation for Incyte, could you just walk us through your long-term growth strategy and how it has evolved in recent years?

Okay. Yes. No, it's -- as I said, I mean, a lot of things are -- thank you for inviting us. A lot of moving parts these days, a lot of news flow. So obviously, the long-term strategy is to build a high-growth, diversified and leveraged biopharma organization in the long term. So that's fairly simple. The way we look at it is basically 4 categories. So one of them is what you are describing is Jakafi, the Jakafi franchise in the U.S., which is obviously in 3 different indications and where we have a lot of activities to replace Jakafi with better -- combination of better products that will expand that franchise over the long-term. We call it the LIMBER program. So that's one of the 4 categories. The second one is our hematology/oncology portfolio beyond Jakafi. And that's what we have been working on very actively with a lot of good results recently, where we had Pemazyre approved in multiple countries, where obviously, we have Monjuvi approved in the U.S., and Friday was recommended for approval in Europe where we have parsaclisib and a lot of products in the pipeline that are going to come over the next years to grow and expand that second part of what we call hematology/oncology beyond Jakafi. We have a new franchise that is starting, going to start very soon in dermatology where we have submitted the dossier at the FDA for atopic dermatitis with RUX cream, where we have positive Phase III with vitiligo that we announced and where we see another opportunity to expand and diversify beyond our oncology portfolio. And the fourth one is something that maybe is less visible, but there is a royalty stream coming to Incyte, and it's made of royalties on Jakafi outside of the U.S. and baricitinib and more recently on Tabrecta and on the rest of the portfolio outside of Japan, Europe and U.S. And this royalty stream in Q1 was 100 million, more or less, and it's growing, and it's obviously a key contributor to the whole P&L leverage that we are speaking about. So there are a number of new products that are now coming to the point of being commercially available. I spoke about pemigatinib. There is tafasitamab, Monjuvi, Monjuvi in Europe. We have RUX cream coming relatively soon in the U.S. And then in U.S. and Europe for vitiligo and parsaclisib that will be submitted in the second half of the year. So the way we are sort of looking at it is that for the next 5 years, there is what we call the LIMBER program for Jakafi, which is the life cycle management of that franchise and expansion of the franchise, and diversification in hemato-oncology, dermatology and expansion of the royalties we are receiving for the ex U.S. or ex U.S., Europe, Japan for some of the products. So it is a plan that has been obviously built over a number of years. And now we are starting to see the concrete realization of that with the approval of the new product, and I think it's a very exciting time to finally realize this diversification goal.

Great. And we'll touch on some of those areas in more detail in a little while. And then just in general, I guess, what is your -- how important is business development in your longer-term growth plan? And has your approach to business development changed? And if so, I guess, what areas do you think could potentially benefit from enhancement via in-licensing or acquisitions with Incyte?

Christiana, do you want to speak about that?

Yes, absolutely. So first of all, it's important to note that we do not depend on business development as a way to continue to grow the company, and that's very different than some of the other companies. We have, as Herve described, a very rich pipeline that provides a number of potential growth drivers for the future. But we are looking at business development as a way to supplement our internal activity. So we are looking at assets that we can bring in that are in the areas where we have expertise and we have capabilities and infrastructure that we can leverage and benefit from synergies. And bringing programs that would -- could add to growth and diversification in the mid-20s and beyond that range. So as we are looking at the potential patent expiry of Jakafi, obviously, we have a lot of activities internally to address this, but we are looking to supplement our portfolio with additional assets as well. In terms of areas of focus, as I mentioned, areas where we have expertise and capabilities, and that means MPNs, hem-onc broadly, and now, also dermatology. So these are priorities. And the strategy hasn't really changed and the objectives from what it was a year before.

Okay. And you obviously did, in line with Monjuvi a couple of years ago, when you think about the type of assets that you're looking at, are you actually considering commercial or near commercial-stage products? Or are you thinking more about enhancing the pipeline and with earlier stage R&D stage product candidates?

I would say, PoC level plus. So again, assets that could add to revenue growth and diversification in the mid-20s time frame. That's the priority. Of course, if there is an asset that we find very attractive that maybe earlier stage or a bit later stage, we'll consider that as well. But the primary focus is in mid-20s contributors.

Understood. Great. And then, Herve, just in general, in terms of the R&D strategy within oncology at Incyte, you've sort of pursued a strategy perhaps characterized as a fast follower approach. To what degree do you think the overall R&D strategy within oncology needs to change or will change perhaps versus staying the course?

No, it has changed. It is changing every cycle of decision in R&D, and it starts with a target definition, what are we going after. And as you know, we always had a mix of targets that are direct anti-cancer, targeting genetic abnormalities like FGF, and that's something that is obviously still of interest. We have a lot of small molecule and antibody or biologic ways of doing that. We have 3 technologies: small molecule, antibodies and bispecific, with our partnership with Merus. So we are looking at that. We are looking at immuno-oncology targets. And you saw recently the announcement of the IND for our adenosine franchise. In fact, it's more than a product. So it's a 2-way to be small molecule with CD73 antibody, and both of them are now in the clinic. So it's moving forward. And you have a situation where we have targets we have been looking at. We have, for example, a LAG-3 antibodies that we have developed. It's in Phase II. It's already combined with PD-1 from our own portfolio. And now we have basically information from what BMS has done, that tells us that maybe there is a potential positive outcome for that program. And we are looking at small molecule, PD-1, PD-L1 inhibitor that we believe could have a fairly high potential. And this is also now making progress in the clinic. We have an AXL/MER inhibitor in the clinic, which is a very unique product that also could have direct anticancer effect and immuno -- potential immuno combination candidates. So there is a lot of work that is somewhere between immunology, inflammation and direct anti-cancer targeting that is still producing what we believe are very interesting prospects. On top of it, we have added this concept that some of this mechanism can be used outside of cancer, and it ended up, in some cases or many cases, in dermatology, where we have obviously the atopic dermatitis and vitiligo, and we are looking at HS now. But it could be also in other indications like hemolytic anemia, where we have shown recently data with PI3 kinase delta. So there are basically 1 research around immuno inflammation cancer, and there are applications that goes into cancer, obviously, but also in other type of autoimmune disease. And that vision from a few years ago now is really taking concrete translation into clinical programs that we believe could have very good application over the next years.

On your LIMBER program around Jakafi, where you're looking at different Jakafi combinations. Maybe talk a bit about how those may fit into the broader strategy for life cycle management around Jakafi.

Yes, the idea around Jakafi. So Jakafi is start-up care in GVHD, in polycythemia vera and myelofibrosis. The bigger part of the franchise is in myelofibrosis. And what we believe is that there is room to improve clinically over the current efficacy and safety that you have with Jakafi. It was certainly a game-changer. It's a standard of care. It's used in a fairly large number of patients, but there are patients who cannot receive Jakafi because sometimes of blood count at baseline, there are patients who are not fully controlled by Jakafi in terms of progression of the spleen size or the [indiscernible]. And there are patients who have to stop because most of the time because of anemia as one of the leading side effects. So what we are looking at is basically 2 steps. The first one is to develop a once-a-day form of ruxolitinib, and it's very important, and you will see why. And that is already something we are planning to submit next year to the FDA. And then we are looking at potential combinations that could be improving safety and efficacy, efficacy with 2 mechanisms: PI3 kinase delta and BET. So both of -- the PI3 kinase delta program is in Phase III already in 2 groups of patients. One is a sub-optimal responder to Jakafi. So there are patients who are on Jakafi, but where we see symptoms and spleen potentially reemerging and growing and where we would be adding PI3 kinase delta to the same dose of Jakafi that patients are receiving, and we do it in first line. With BET inhibitor, as you know, there is a question about how can this mechanism help patients who are not doing well enough on Jakafi or in the first-line selling, and other companies are pursuing the same goals. So there, we are in the Phase I time of the phase of development, and we will be in combination with RUX next year and potentially going to pivotal study. On the safety side, there is a mechanism around hepcidin that we are studying with an ALK2 inhibitor. It's a very interesting approach because what it could do is help patients maintain a high dose of ruxolitinib, which we know has an impact on the outcome of the treatment for myelofibrosis by avoiding this dose decrease that are led by anemia. And what we believe that has been not yet fully established in the clinic, but very clear from our preclinical studies, is that by inhibiting ALK2, you can basically prevent some of these RUX -- I mean the anemia that is caused by ruxolitinib, or the anemia caused by the disease. Now what's interesting is that all of this new mechanism we are combining with ruxolitinib are once-a-day. So that gives you another reason why the once-a-day is very important because combining once-a-day with once-a-day for cancer is very important for safety reasons because you don't want to confuse the 2 components of the combination. And more importantly, it's also leading to the optionality of doing things, those combination with PI3 kinase delta or BET or ALK2, and that would be obviously very important from the commercial standpoint. So that all evolution of the so-called LIMBER -- beyond ruxolitinib LIMBER program is moving forward very well. We are in Phase III with delta. The once-a-day formulation could be submitted next year. And BET and ALK2 are still in the combination phase where they could go next year into potentially pivotal studies, depending on what we see in the Phase II. So it has been a lot of progress on that front. And I think it will really improve -- it will expand the franchise first because more patients can benefit from this treatment. And obviously, it will expand it in terms of time because all of these combinations have different patent life. So it will be certainly helpful from that standpoint to maintain a big part of the franchise beyond the 2028.

Great. And then just a quick commercial question on Jakafi, which was slightly impacted by COVID in the first quarter. But you did return to normal levels, I guess, in March and going forward. I guess, could you just discuss the continuation of that trend and return to growth of patient starts on Jakafi?

Yes. So the patient starts have been very meaningfully impacted. And we said that very clearly, starting in Q2 last year because of COVID. And that was, in large part, because patients who are not diagnosed. So it's a very sad story because there were patients who basically had some terms and did not see their physicians who were not -- not all of them, but there was a 20% more or less dip in the new patient flow. And that has been continuing a little less during the summer and then again in the fall. And what we have seen in Q1 of this year -- at the end of Q1, around end of February, is that the line of new patient flow going on Jakafi's started to cross the 2019 curve, which was the last unimpacted year that we had. So that's the recovery aspect. There are still a number of patients who, frankly, are somewhere out there in the community who I hope will be able to see the physician again and be able to be diagnosed and treated properly and for some of them with Jakafi. And what we anticipate is that starting in the Q2 a little bit and then Q3, Q4 is that we'll see a normalization that would lead us to a patient flow that will be stronger in the second part of the year. Remember that for Jakafi, the pool of existing patients is a large part of the total number of patients that are treated every quarter. So the patient flow has a little bit of a delayed effect on the way the revenue curve is growing. But what we see now is very positive, and we are very optimistic that we can get to the guidance that we have given for the year on Jakafi in the U.S.

And then you did mention the once-a-day Jakafi formulation and be bioequivalence there that was recently presented. I guess, how do you anticipate payers managing a conversion strategy ahead of the twice-daily composition of matter patent exploration in late 2027?

From the payer standpoint? Well, I guess, from the payer standpoint, it will depend on the price of the once-a-day versus the twice-a-day. I mean, frankly, we don't see it as a sort of a price game overall. So I think it will be a question of convenience for the patient. It will be a question of being able to convert patients from twice-a-day to once-a-day, I don't think it should be driven by the payers, frankly. It will be a clinical question, and it should be priced natural in a broad way. I mean, we have not decided exactly the numbers yet, but I don't see it as a price-driven kind of situation. As I said, I believe the evolution of the field will be a combination and we see that from our own pipeline with delta, BET, ALK2 and other mechanisms that could be emerging. But we see that from other companies who are combining their once-a-day product with RUX and it can be AbbVie with BCLX, so it can be a constellation with our BET inhibitor. And having a once-a-day to combine with could become very important for our patient's safety. So that's something I see will be adopted over the period between 2023 and -- excuse me?

I had some connection issues, I'm sorry.

Okay. So yes. So I think there will be substitution, and the new patient, hopefully, will be started on the once-a-day. There are some analogues of that, that you can look at. And you can see the curve of adoption is relatively predictable with the new patient flow -- and the convenience by itself is not a big deal. I think the ability to combine is going to become an important part of the choice.

Okay. Great. And then perhaps switching over GVHD where you recently announced that the FDA extended the [ review ] period for a chronic indication for Jakafi. Could you just remind us of the nature of the information request from the FDA and what your continued confidence level is in approvability?

No, we are very confident. I mean, the submission in chronic GVHD is based on a randomized Phase III studies that was designed with the FDA and is showing a clear benefit that everybody has seen. It has been -- it's data that has been presented. The FDA reviewer was looking at certain aspects of the definition of response and some co-medication information. So they did ask us to provide that, which was a fair amount of work to get it for them. And when they received the data, they announced that there would be a delay of 3 months, which, by the way, is the same thing happened for the acute submission. So it's not like totally unheard of and from that group. And we submitted the information, and we are fairly confident that it is a very active, very useful part of treatment for patients suffering from chronic GVHD. It's based on a large Phase III study, prospective, randomized, and it should be going through the rest of the review in the next few months, and we anticipate it could be approved in the second half of the year. I don't remember what the -- September 22 is a PDUFA date I'm told.

Great. And how should investors think about the additional incremental commercial opportunity for Jakafi within chronic GVHD over current sales?

So it's a tricky question because the coding for GVHD is very imprecise. So when we receive information of saying out of the GVHD patients treated with Jakafi, that many are acute, that many are chronic. In fact, there is a lot of uncertainty about that data. So with all of that caveats, what we think is that there are 10,000 patients, has a pool of patients suffering from chronic GVHD in the U.S. So it's far more than are treated today. So that tells you that there is room for expansion. The flow of new patients is more around 2,000, maybe per year. But chronic GVHD, as the name says it, is something that is not just limited to the first year after transplant. And we believe that there will be a good number of them. I don't know exactly the proportion that will be new patients being treated with Jakafi following the approval. So we see that as one of the driver for the continued growth, new patient flow for Jakafi over the next years.

Okay. And then on ruxolitinib cream, you obviously also [indiscernible] that the FDA extended the [ review ] period for the sNDA filing. Perhaps also help us understand the nature of the information request. And to what extent do you think this may have been driven by recent safety concerns regarding the broader oral JAK inhibitor class?

I think it's good. I think there is a clear review at the FDA of the JAK inhibitors, of which Jakafi is one of them. And where we have now several years and years of data, more than 7 years of data with pharmacovigilance, showing that the type of events that were driving the questions were not observed with Jakafi, ruxolitinib oral. And in the case of the cream, you saw that there are, in atopic dermatitis, placebo-controlled, randomized, 2 Phase III studies is not showing any kind of imbalance between the arm in terms of systemic side effect, which is very expected because the systemic exposure from using the cream is so low that, in fact, it's -- you shouldn't expect to see a lot of -- or any systemic side effect from that kind of exposure. So that's where we are. The question from the FDA were about subgroup analysis. So they wanted to see the data -- the existing data, no new data was requested. It was the existing data reanalyzed by age group, by dose because we have 2 dose in the study, 0.75 and 1.5, by mild or moderate, et cetera. So that's what we did. We submitted that to the FDA, and that was a lot of work, but it was done very swiftly. And the FDA also considered it to be a major amendment to the existing submission and the 3 months delay. So that's where we are. We don't have a lot of specific information of the way they are looking at this question of systemic exposure and potential for systemic effect of the RUX cream. What we know is that all the data we have provided and all the data we have in-house is showing that systemic exposure following usage of the cream is a fraction of what you observe when you use ruxolitinib oral that we have used now for 7, 8 years at doses that are very, very multiple of what you can see there. So that's the situation that we have. You know there is a review of baricitinib which is also submitted for atopic dermatitis, AbbVie and Pfizer. So all of that, I think -- all of these products, JAK1, for some of them are JAK1, 2 for baricitinib are now under review with the PDUFA date that is expected in the next few weeks.

And I guess, in your opinion, what is the likely class-wide black box warning for oral JAK inhibitors on some of those safety concerns? And to what degree do you believe this may or may not extend to ruxolitinib cream?

As I said, from the clinical data we have, there is no reason to have a new type of warning like a black box because what you see in large randomized Phase III study is that there is no placebo. In fact, in some cases, had the same number. So it was placebo-like safety profile on the systemic aspects. There were some local irritations that you saw in a small number of patients, but no -- nothing you could identify from these studies on the systemic side. So that will not justify having any kind of warning that you could have for systemic treatment. That being said, frankly, we don't know how the FDA will look at it. So I want to be definitive on that. We have no information from the FDA on that subject. So I think everybody can evaluate for themselves. What we know is that when we speak to the dermatology community, when we look at the benefit of using a JAK inhibitor in atopic dermatitis, it's very clear, and it's based on the capacity to heal the disease over a period of time and the very quick effect it has on itch, which is key to get the disease under control because itch is leading to scratching, it's leading to infection, et cetera. And so being able to use this power of JAK inhibitors in a topical formulation with a very low systemic exposure is something that remains very attractive for dermatologists when we speak to them. I mean, we are preparing for the launch. And that profile is something that is very attractive because there are a lot of patients who could benefit from it. And there are patients who have been treated with steroids, most of the -- not all of the time. In fact, for all of them, they are not eligible for Dupixent because Dupixent is a separate patient population, and they are in the mild to moderate categories, the ones that we have studied in our pivotal study. So we are very optimistic about the potential for RUX cream in atopic dermatitis.

Okay. And then EUCRISA from Pfizer, I believe, is the only branded product in the market right now. And Pfizer obviously has had growth issues of that product, especially given higher rebates, which have been a headwind for this product in general. I guess, how do you think about the magnitude of potential rebates and pricing for topical treatment in AD and potentially [ vitiligo ]? What's your confidence level to sort of be able to achieve growth in this largely genericized market?

Yes. I would say it's not a genericized market because what we are speaking about is how do you treat patients when, in fact, you have used already steroids, and they are not appropriate anymore because they don't work well enough or because of the face or neck or the type of location of the disease. I mean, we -- from our own studies, from speaking with dermatologists now in-depth over the past 6 months, there is clearly a patient group, and that patient group is not the genericized steroid kind of patient group. And they are not the Dupixent group either. They are somewhere in between. And there, there is a lot of room for payers to see why it's important to have a sequence of treatment that includes RUX cream. Before, patients would go to maybe some more expensive like systemic JAKS. I mean when you look at the sequence of treatment for atopic dermatitis, it would be very logical to be in that position after steroids and before the systemic treatment. We have very active discussion with the 3 top PBMs, insurers in the country. And we think there is a good possibility over time. It's always take a few months at the beginning of the launch, but to have access and at the same time, to have a reasonable pricing. Most of this access in this field is requiring an amount of rebate that is sort of a part of the way we have to look at it. I mean, there is a gross-to-net that is different from maybe some other therapeutic areas. But at the same time, it's not making the opportunity less attractive for us because I think it can be a very meaningful contributor to the growth of Incyte and the building of a new franchise beyond our oncology-hematology franchise.

Great. And then perhaps a question on Monjuvi. So the launch of Monjuvi in the U.S. also has underperformed perhaps relative to Street expectations given major headwinds through COVID and the pandemic. I guess to what extent are you seeing signs of recovery here as well? And at what point do you think sales growth will reaccelerate perhaps towards internal expectations?

No, I see it. And I agree, it has been challenging, and there were 2 reasons for that. One is the frequency of infusion of Monjuvi at the beginning of the treatment ended up being a source of questions because patients who have to take public transportation to go to the hospitals, they are suffering from lymphoma. I mean you can imagine, in the middle of COVID, it was not the most easy choice to make to go to Monjuvi at the time where everything was very complicated because of COVID. And our own field-based personnel could not visit on center, and they still cannot today for most of the centers. So that combined ended up giving us a curve -- a growth curve that was okay, but was not overwhelming in many ways. And we all see it the same way. What's going to -- at the same time, the profile of the product with 40% of complete response. And you saw in the latest publication that the complete response rate is not only in the short term, but after 3 years, many of these complete responders are still in complete response. So it's sort of an extremely long level of benefit for this patient with a chemo-free regimen. So it's not a CAR-T like YESCARTA this morning is publishing about new data. It's a very different group of patients because patients who are eligible for CAR-T have a specific profile. Here, we are dealing with many of the other patients who, in many cases, are not eligible for CAR-T, where we have a lot of growth potential. I'm meeting with our field team on a regular basis. And I must say, the last discussion we have are showing that there is a good chance we can have a good growth in the second half versus the first half, and put this product back on a trend that will be more in line with what everybody was expecting. So I think it will be -- the next 9 months will be very important to see how this can evolve. And then we had on Friday, the CHMP recommendation for Europe. So that's a big success. It's a great news for us because it will add another revenue line to the entire franchise. And so we are preparing now for what could be second half of the year launch in the first countries in Europe, where it's not the usual staggered launch where Germany is first and then followed by the other countries. And all of that is taking place. So it's a good story. So Monjuvi aspect that everybody needs to keep in mind is as a benefit in terms of response rate, long-lasting complete responses is something that is totally unique in the field. So it's a great profile.

Okay. Great. And then question parsaclisib, you mentioned earlier, the second half filing plans in lymphoma. And when we spend time with physicians, they have recognized the, I think, the potential of this drug. But how should investors think about the commercial opportunity for parsaclisib? And perhaps how it may be positioned relative to other treatment modalities within lymphoma?

I think where we start is going to be, obviously, in the refractory/relapsed setting in 3 different types of lymphoma. So it's follicular, it's marginal zone and mantle cell lymphoma. And the response rate that we have published, the last one are 75% in follicular lymphoma, it's 57% in the marginal zone and 71% in mantle cell with a good duration of response. So this is a very, very active product in that settings, where, in fact, they don't have a lot of other options. So we think it's a useful tool for physicians to manage what is a quickly evolving field because there are a number of mechanisms in there. So in terms of potential in that setting, I would say we need to take the number of patients. It's like 9,000 patients with follicular, 5,000 with marginal, 5,000 with mantle cells. So it's less than 20,000 patients probably that could be the target population, but you can imagine that even in that setting, there could be a good potential for a good product to be used in the salvage type of selling. And then we are going to see with additional randomized study, how it can be added to other mechanism earlier. One of them is tafasitamab, by the way. We are very excited about Monjuvi plus PI3 kinase delta because we think it can be an active mechanism. And there is some data showing that it could be. So that's one aspect of PI3 kinase delta. Just as a reminder, we have, obviously, the myelofibrosis program with Jakafi. Yes, I spoke about earlier, also with parsaclisib. And recently, we showed some very good data in hemolytic anemia also with parsaclisib, where we think there is a potential to have another indication. So when you look at what parsaclisib could end up being over the years, it may be a very good contributor to the corporation because it has multiple indications. It's very active. And we were able to identify a regimen that makes it in terms of tolerability, if not best-in-class, one of the best in the category.

Okay, great. And then a question on your oral PD-L1 inhibitor program. I believe [indiscernible] is presenting data later this year. Perhaps what investors' expectations should be around this data set and also how we should think about or how you think about positioning the oral PD-L1 relative to the products?

So it's a big question. I mean, you can imagine just the concept of saying, can we have a way to use the power of PD-1, PD-L1 inhibition with an oral product? I mean, it's opening a number of possibilities for every setting where injectable PD-1 is used alone. So when we -- when we say in lung cancer, [ AXL ] plus KEYTRUDA, in fact, we don't want to replace KEYTRUDA or the PD-1 in that setting of combining with chemotherapy because you don't need to, and frankly, it's better to use an IV product with chemos than to use an oral product. But then there is a consolidation phase where KEYTRUDA is used for a number of months. In fact, 18 months, in many cases, single agent. So same thing in adjuvant setting, same thing in many other type of use of injectable PD-1 today. So we look at that, and that's where we could see the benefit of using an oral product because of convenience. And also because of reversibility is that in case there is an on-target side effect, an immune-driven side effect, in fact, you can stop taking one of our products, 550, 380 or 218. I mean, 1 of the 3 products we have in the clinic today, and what you will see is that the effect is going away when you stop taking the product. So it has this power of being reversible. It has the power of being more practical. And obviously, we could combine it with oral products like in kidney cancer, where you could imagine VEGF and plus oral PD-L1 as being a very practical oral type of combination. So there are a number of ways where this project can evolve. Now we are at the stage where we are doing obviously, the proof-of-concept on efficacy. So you will see some of that when the data becomes available. But we are also optimizing the schedule of administration to find the best way to use this new mechanism because it's not the same way of getting to the same result. It's a dimerization of the receptor with internalization. So it has a different mechanism of action. And so by the end of the year, we'll get some of the first data. And now we have 3 products in the clinic. So it's not just 550. We have 2 backup products that are also in the clinic. And I think it's a very promising technology, in fact, because it could be used widely, and it has a number of unique features that makes it potentially very competitive.

And how are the backup products differentiated from 550?

So one of them is very much of an analog of 550, and one of them is a completely different backbone from the chemical standpoint. So that's why we had both so that we would have an alternative structure completely and we would have a derivative of 550 at the same time. We were always thinking that there could be application in cancer and outside of cancer. So we always looked at it as more than one product because then you can differentiate your clinical program, one for cancer patient or one for different application outside of cancer.

Okay. Then a question, Pemazyre has actually outperformed the initial Street expectations in cholangiocarcinoma. Could you remind us of your plans for growing Pemazyre longer term in perhaps in other FGFR-positive cancers?

So you know the -- I mean, the obvious development of FGFR inhibitors is, first, to identify patients who have the mutations where the target is here. So we have a very tiny, really, really small indication coming at some point called 8p11. So if you forget that because it's such a small number of patients, it doesn't really impact the whole thing. What we are looking at is that who are the other patients who could benefit. And we have a study where we are basically testing patient. We call it diagnostic study where we are testing patients for the type of fusion and the rearrangement that we are speaking about here. And then we are treating them with pemigatinib. And what we find is that they are beyond the usual bladder cancer. There are other type of tumors where there is a certain percentage of patients with the type of fusion rearrangement that would be a good target for Pemazyre, and that's what we are going to go after. So the way I would look at it is saying there is this cholangiocarcinoma program now that we are launching in Japan, Europe, U.S. and Europe. In fact, we are very proud of the first approval for Japan of this type of products, the first in Europe also. And where the number of patients, as you describe it, may be larger than what we had anticipated. So when we were calibrating a few months ago, we may have under shot a little bit the actual number of patients with cholangiocarcinoma because new patients are being diagnosed today because of the mutation. So it's a sort of a full circle of testing the mutation to identify patients with cholangiocarcinoma. And then we'll have this 8p11 MPN type of indication coming after that. And then hopefully, we will have new indications in different tumor types that we will be going into over the next few months. So we have been looking at the data from our agnostic study, and I think it will lead to other indication where potentially, it's a small percentage but where there are patients who can very clearly benefit from this treatment. So over time, I mean, I don't think Pemazyre will be the multibillion thing that is sort of, by itself, changing everything. But I think it can add up a number of indications where it will be one of the contributors to the franchise, this hematology/oncology franchise that I spoke about at the beginning.

Okay. And then perhaps one last question before we need to wrap up. But so among your earliest pipeline products, I guess, which -- within oncology, which of your earlier-stage pipeline drugs are you most excited about right now?

So in the earlier stage, so we have the adenosine program. We spoke about -- I think it's -- I think the averaging program is very promising. We have an excellent way to be small molecule and CD73 antibody. Both of them just cleared IND recently. So they are now in the clinic moving. We know exactly where we want to go with that. And obviously, you have the optionality to combine with a PD-1 inhibitor, like retifanlimab. So that will be some things that will have very broad application across a number of tumor types. So that's certainly something fairly promising. I think the oral PD-1 program is very interesting because it can also be very broad. AXL/MER is an interesting mechanism because we know it has the potential to be impactful for a number of patients. It's a tricky development. It was very slow because of -- we were afraid of the ocular toxicity. Now we are clearing that. So we are in a phase where it's accruing relatively well now, and maybe COVID was also not helping them very much. So that's the type of mechanism where I think it has the potential to be very impactful. And then there is LAG-3 the where we have an antibody. It's already well-established with our own PD-1. We have Phase II data, Phase I data of the 2 together. So that could be something else that becomes meaningful over the next few months. And yes, that's the way I would put it, is oral PD-L1, maybe adenosine program, AXL/MER and LAG-3 for what's coming next.

Okay, super. So with that, we'll need to wrap up. Herve and Christiana, really, thank you for the time. I hope it was helpful for people who listened to the call. And again, thanks for joining us today, and have a good start of the week.

Okay, super. Thank you.

Thank you.