Incyte Corporation (INCY) Earnings Call Transcript & Summary

Hello, and welcome to the Incyte Opzelura Approval Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Christine Chiou. Please go ahead.

Thank you, Kevin. Good morning, and welcome to Incyte's Conference Call and Webcast to discuss the FDA approval of Opzelura, which was announced yesterday. I have the pleasure of introducing Dr. Larry Eichenfield from the University of San Diego. He is Professor of Dermatology and Pediatrics, Vice Chair of the Department of Dermatology and Chief of Pediatric and Adolescent Dermatology at UC San Diego School of Medicine and Rady Children's Hospital, San Diego. He has also served as an investigator on some of our studies. Speaking on the call today from Incyte are Herve; Jim Lee, our Head of Development and Inflammation and Autoimmunity; and Todd Edwards, our Dermatology Business Unit Head. Barry and Christiana will also participate in the Q&A session. Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements and are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our 10-Q for the quarter ended June 30, 2021, and from time to time in our other SEC documents. We'll now begin the call with Herve.

Thank you, Christine, and good morning, everyone. Thank you for joining today's call to discuss the approval of Opzelura, the first FDA-approved topical JAK inhibitor for the treatment of mild-to-moderate atopic dermatitis inadequately controlled by topical therapies. This approval is an important milestone for patients and also for Incyte. Today marks the expansion of our commercial portfolio into inflammation and autoimmune diseases and adds an important potential contributor to diversification and growth. Opzelura is a first-in-class novel medicine, addressing a clear unmet medical need for patients suffering from atopic dermatitis who are not controlled by topical therapy. This unique positioning between current topical and systemic treatment has a potential to help the many patients who have inadequately controlled AD who could benefit from Opzelura's profound impact on inflammation and itch. Recently presented data, including follow-up for 1 year, shows that patients have the potential to achieve long-term disease control with the intermittent use of Opzelura, providing physicians with an important new therapeutic option. The unique topical cream formulation allows for targeting inflammation directly at the affected sites, providing significant and rapid itch relief, while also minimizing systemic exposure. A few weeks ago, the FDA provided an update related to oral JAK inhibitors treating inflammatory condition, which resulted from a review of an oral JAK inhibitor in treating rheumatoid arthritis. A class warning is also noted in our level. As a topical formulation with limited systemic exposure, Opzelura is a highly differentiated treatment compared to oral JAK inhibitor. With the strong safety and efficacy data included in our label, Opzelura is expected to deliver a significant benefit for patients with uncontrolled atopic dermatitis. We are excited to bring this much needed innovative therapy to patients suffering from eczema. With that, I would like to turn the call over to Jim Lee, our Head of Development for inflammation and autoimmunity. Jim?

Thank you, Herve, and good morning, everyone. I wanted to highlight some of the sections of the prescribing information for Opzelura. This slide describes the indication in dosing and administration for Opzelura. Opzelura is indicated for the topical, short-term and noncontinuous treatment of mild-to-moderate atopic dermatitis in nonimmunocompromised patients 12 years of age and older who are not adequately controlled with other topical therapies. In terms of dosing, the recommended dosage is Opzelura cream applied twice daily to affected areas up to 20% body surface area with total cream use not to exceed more than 60 grams per week. Slide 7 shows the 8-week efficacy data from both Phase III studies that is included in the Opzelura label. After treatment with Opzelura for 8 weeks, over 50% of the patients achieved clear or almost clear skin as measured by an Investigator Global Assessment or IGA score of 0 or 1, with at least a 2-point improvement from baseline. In addition, a significantly higher number of patients treated with Opzelura versus vehicle achieved a 4-point higher -- 4 point or higher improvement in itch reduction. Opzelura is the first and only approved topical product for atopic dermatitis to demonstrate a statistically significant improvement in the Itch NRS4 patient reported outcome. Next, let's discuss the safety. The safety data in our label shown here highlights the adverse reactions in greater than 1% of subjects in the randomized portion of the study through week 8 from our TRuE-AD pivotal program. The percentage of patients with treatment emergent adverse events is comparable between the Opzelura arm and the vehicle arm, with 27% and 33% of patients, respectively, experiencing a treatment emergent adverse event. On the next slide, we want to address the boxed warning, which reflects serious conditions observed in the safety review of oral JAK inhibitors. This review was initiated with the FDA review of an oral JAK inhibitor treating rheumatoid arthritis. We believe the safety data as well as the limited systemic exposure observed with Opzelura did not warrant a boxed warning. Despite the class labeling, we believe Opzelura, with its robust efficacy and safety profile, will deliver a significant benefit for patients with uncontrolled atopic dermatitis. In terms of addressing the components of the boxed warning, this slide shows the incidence of events during the vehicle control period of the Phase III studies. There were no non-melanoma skin cancer malignancies in the Opzelura arm during the vehicle control portion of the study. There was an elderly patient in the Opzelura arm who developed a skin cancer. This lesion was not in the treatment area. It was not felt to be related to treatment and the patient was able to continue in the study after treatment. Similarly, with MACE, there was one case in the Opzelura arm in the randomized portion of the trial, which again was not considered related to treatment due to the patient's history of multiple cardiovascular risk factors. Given the data and what is in our label, we expect that physicians will be able to see the differentiated safety profile of Opzelura and distinguish it from the rest of the class. In the next section, I want to review some of the data that is not included in our label. As a reminder, in the TRuE-AD studies, there was an 8-week randomized portion, at which point, patients on vehicle were allowed to be treated with Opzelura. Patients were then treated on an as-needed basis for an additional 44 weeks, similar to how they will likely be treated in a real-world setting. On this slide, you can see the effective long-term disease control in patients treated with Opzelura. Nearly 80% of patients achieved and maintained clear or almost clear skin, a goal of treatment, showing the ability of Opzelura to achieve a high level of disease control and stabilize patients disease with intermittent therapy. And with that, I would like to turn the call over to Dr. Larry Eichenfield.

Good morning, everyone. So I work out in San Diego, where I'm a Professor of Dermatology and Pediatrics and I work at Rady Children's Hospital as well, have a long-standing interest in eczema and atopic dermatitis. And have been asked to sort of review the treatment landscape in atopic dermatitis and really the clinical need, ending with why I think this drug will be so important in our clinical care. Little over the -- started off what I call the short story of atopic dermatitis. So this is a highly prevalent condition. We know that it's present in -- and developed in some 10% to 20% of children with a high prevalence in adolescents and pretty good data now in the U.S. of about 7% of adults also having it. And we'll discuss sort of the manifestations of eczema and because of those manifestations, it really brings a significant burden to affected individuals and also comorbidities, if you could just go back one slide. And associated -- or some of the other issues associated with atopic dermatitis, it has a variable course of severity. There are some patients who are very mild and there are patients who are very severe, and there's a lot of patients in between. And we'll also, as we go through some images of eczema, discuss the sort of differences between quantity of eczema someone has and severity. Atopic dermatitis also has different triggers in different patients as a mixed immune pathogenesis in many patients. And despite the availability of a variety of topical therapies, there's basically a high unmet need, both in terms of a desire for faster minimization amelioration of itch and for long-term disease control, which is really the model that we're going for with our care of eczema patients. Next slide, this starts off with sort of the core manifestations of atopic dermatitis. So first of all, you get the eczema rashes, oozing, crusting, scaling, redness, heat and pain associated with it. Itch is very much wrapped with atopic dermatitis, itch can propel further rushes through scratching, but itch is also a symptom complex that impacts the life of the individual. Dry skin and Xerosis is clearly a part of atopic dermatitis in terms of both the pathogenesis and drives some of the manifestations of the disease. There are some people who are born with inherent barrier dysfunction, meaning their skin is a little bit more open, because it's more open, it dries out because of evaporation that also makes the skin more vulnerable to things that get on the skin that stimulate the inflammation. But the inflammation is tantamount to the clinical aspects of the disease. And something that we need to have effective agents to manage. There's also secondary infections. Some of the images here show some of the Staph pustules or Impetigo type secondary infections that we have. And there's a chronicity to atopic dermatitis with -- in many patients at being recurrent, also a subset where it's very persistent and needs a continuous or discontinuous control model to minimize the impact on the disease. And then, of course, there are many patients who have intermittent flares that needs to be managed. Itch is clearly an important part of the manifestation of atopic dermatitis. We go to the next slide, you can see just some of the data points that have been collected. And in some data sets, patients report that 88% of days have itch associated, 69% in more moderate patients reporting that itch can be at least 12 hours a day. And this itch impacts on sleep disruption as well very, very commonly. Going to flip over to a few images on eczema. In clinical practice, we see eczema of tremendous variation on a daily basis. And you can see in the upper left, you have a pretty typical pattern of a localized arm lesion, you see redness, you see some crusting on the upper right, you see localized areas that are thickened and the middle image underneath just shows what we call acute eczema, where there can be oozing and crusting from eczema. Eczema in the Greek actually means to boil over where the inflammation causes oozing up to the surface. The next slide shows a moderate patient who has localized atopic dermatitis predominantly in a classic eczema body-fold area. I do think it's important to know that in clinical practice, unlike in clinical studies. The way we look at severity is a mixture of extent, but also the qualities of the eczema. So it's not just a body surface area eruption, we have plenty of patients with mild-to-moderate disease who have tremendously bothersome atopic dermatitis. The next slide, just to point out if there's facial dermatitis, you can figure out how that impacts the individual and how it can impact on social activities on the workplace. You can also see a localized eczematous eruption on the legs, again, showing some thickening. You can understand that there's inflammation here as well as dryness and you can overlay the concept of itch on top of it. Next one is one of my adolescent patients just showing that you can have diffuse involvement. You can see the redness that comes from inflammation as well. And the next slide just represents to not forget that there's a significant amount of discoloration that comes along with eczema as well with both brownish or whitish discoloration part of the burden that patients face with the disease as they go out into real life with their eczema, especially if it's not under control. So the pathogenesis of atopic dermatitis is pretty complicated, but I just wanted to emphasize that there's really sort of a unified perspective that we have. Inherently, in some individuals, dry skin or even if they're not inherent, if you have active eczema, it means that, that skin barrier isn't normal, so it doesn't protect the skin normally, and it has -- goes along with this tendency to get inflamed and to have itching. And these impact on cytokines and inflammation, the immune activation, and that, that immune activation impacts on the skin. So looking at atopic dermatitis, we know that there's going to be this immune activation that's going on and the set of cytokines. And it really creates a challenge for us to be able to control the immune system and immune infiltration in the skin. So should we want to target that inflammation either directly at the site, as we do with topicals or systemically? So the next question I'm going to ask is atopic dermatitis eczema, why does it matter? And this really gets the burden of the disease and something that we play through with patients in clinical practice. So I've set up a sort of circle or cycle of atopic dermatitis. And if you start at 9:00 o'clock -- 9:00 p.m., we start with the eczema the rashes, which I've shown you -- but right above that as you get to around 10, 11 is the symptom complex where you have frequent and intense itch. Sleep disturbance which, of course, is influenced by itch and pretty typically, patients can report problems getting to sleep and problems staying to sleep. This obviously can have an impact on all the aspects of someone's life. At around 1:00 o'clock, I've listed the atopic comorbidities because atopic dermatitis is associated with asthma, nasal rhinitis, food allergies, allergic conjunctivitis. And then we have a set of nonatopic, nonallergic comorbidities, which includes bacterial infections and other infections, mental health disorders, which I'll go to in a little bit more detail, but with anxiety and depression being seen very commonly in our eczema patients. And then other immune-mediated diseases and potential cardiovascular diseases to conflicting studies on that. Impaired quality of life then is really a consequence of a lot of the circle that I presented that can impact on daily activity, social functioning, life course decisions and then on school and work productivity. So whether it's a teen in high school who's not sleeping because of his eczema or someone at work either unable to go to work or not sort of being present and as successful at their work because of the secondary effects of the eczema. Next slide highlights what I call the sort of -- make sure that we stress that the impact of atopic dermatitis can be on the individual in many ways and also the family. In significant eczema, there's emotional distress, embarrassment and social isolation. This could happen even with mild eczema, when it's in areas that people can see like facial dermatitis or on the arms if someone's not wearing longer sleeves. Depression and anxiety, there's very strong data about higher rates of depression anxiety with atopic dermatitis. You can imagine issues with teasing and bullying in our teams, especially. A lot of patients, they don't have long-term disease control end up limiting their activities. For instance, if someone -- if heat and sweating impacts their eczema and flares their eczema, they can avoid their sports or if they just don't want to show off their lesions and fear of a trigger making their eczema worse. Sleep disturbance clearly is very much wrapped in to pruritus to itch, one of the reasons why we're looking for products that can do better at controlling itch. Sleep disturbance is clearly impacting school and work. And then the family data is pretty impressive. Maternal sleep disturbance is very common with atopic dermatitis, even in mothers of teens of adolescents with atopic dermatitis. So there can be an exhaustion effect beyond the individual. Now let's move over to what the landscape is for treatment in atopic dermatitis. And I'm not going to do an hour and 10 minutes talking to this about 3 minutes. There's a basic management schema for atopic dermatitis, which is good skin care, a gentle bathing, frequent moisturizer use. If there are known irritants or allergens, they're avoided because eczema skin can be sort of twitchy. There are some adjuvants such as antihistamines and bleach baths that are used with some individuals. When there's inflammatory eczema that's not controlled with moisturizers, which is most of atopic dermatitis eczema, we use anti-inflammatory agents and topical corticosteroids or our first line of therapy. The range in strength of topical corticosteroids is assigned over-the-counter hydrocortisone 01, we have topicals that are 2,200x stronger. And that feeds into concerns about their use in terms of secondary effects with skin thinning or absorption of corticosteroids and the effects. We have now three, nonsteroids that we've had since the both topical calcineurin inhibitors, which we saw at the beginning of the century with tacrolimus and pimecrolimus, and then PDE-4 topical crisaborole. And beyond the topicals, we do have -- in -- or a more severe patients, we do have our first biologic that's been approved dupilumab. Oral corticosteroids is the only drug that traditionally was approved until dupilumab, although they're not advised to be used because of side effects. And then traditional immunosuppressives that were hardly ever used in the United States because of their potential toxicity and then phototherapy. But in our basic management, there's been a tremendous clinical need in that our -- especially our -- we have issues with our topical steroids and our non-steroid have limitations. And they have limitations because of stinging and burning as side effects and they don't have especially strong efficacy as compared to the Opzelura data, although we haven't done head-to-head or with a topical corticosteroids. We just know that there's a limited efficacy in our nonsteroids to date, which brings us to sort of real-life situation of where we are with atopic dermatitis. And as a practitioner who's going to see a bunch of eczema patients later this morning, I know that there's a lot of undertreatment of atopic dermatitis. There's concerns, a lot of phobias with topical corticosteroids and topical calcineurin inhibitors. Their -- topical corticosteroids create concerns about skin thinning. And there are a large number of the PDE-4s definitely have tolerance issues with stinging and burning being a limiter in many patients. So we have limited efficacy in terms of nonsteroids. So we have the situation where we -- long-term disease control is the goal but we are very commonly not meeting that goal. And even though we've had our breakthroughs in systemic therapy for atopic dermatitis and other medicines being developed, most patients are going to be treated with topical medications with systemics being restricted for more severe patients. So having extension of medications in the topical realm that can bring that -- bring the desired long-term disease control is very important to us. So I want to translate this to how -- with the next slide, how will Opzelura fit into eczema care and I really think that will be an incredibly important drug for us and that it will have broad application and wide. Well, a lot of it comes down to looking at the efficacy and safety data. You heard a brief summary of the percentage of patients who made it clear to -- almost clear and the percentage of patients who had an incredible drop in their itch score from their baseline. And these are -- that's the pairing that we're looking for, right? Patients who were essentially clear and have a marked decrease itch. So the robust efficacy, I think, is quite important. And I believe that we don't have that level of efficacy from our other nonsteroids that we've had previously. It's one of the things that makes it so exciting and I think especially the impact on itch, itch so much drives the clinical process of the disease. Opzelura being a topical JAK inhibitor is not associated with skin thinning, I wouldn't expect to do that unlike topical steroids that are known to have that problem. And that limits topical corticosteroids on delicate skin areas like the face, where Opzelura, we have a chance to use it on all impacted areas. The data shows a consistent effect across different populations, which I think is important. It was studied a 12-plus and also in a population that was diverse in many ways. And I think we have this unmet need. We have both -- the most severe patients may go on systemic medicines, but there are many patients with mild-to-moderate disease. And this will be where Opzelura will fit in because of its efficacy and relative safety. So I won't be part of the question-and-answer period, but I thought I would just ask question that I think would be asked and then answer it, which is why do I think about the boxed warning? And how that might influence use among the primary market, which will be a dermatologist and then secondary other providers who might use it as well? And so to start off with the dermatology community, dermatologists have dealt with boxed warnings before, Isotretinoin or Accutane is a drug that has an impressive box warning and significant side effects, but it's the breakthrough medicine that has been used now for decades to fix acne and people recognize that doing a risk benefit and their experience in real use brings their ability to use that medicine. I think dermatologists are also quite skilled at trying to get a sense of the warning -- the boxed warning as we read it, is about oral JAK inhibitors and specifies oral JAK inhibitors. And I think they'll read through the rest of the prescribing information and get a sense of the warning. And remember the strong data about Opzelura, both efficacy and the safety data, which you saw briefly presented by Jim. And even what's in the box warning is different than seen in the Opzelura data and I think dermatologists are good at parsing that out and most importantly, being able to write the information to their patients because they know that we have an unmet need with atopic dermatitis. We're still quite excited about how that will fill in to bring more patients to a disease control over time to minimize the impact of eczema on those individuals. Now I'm going to turn it over to Todd.

Thank you, Dr. Eichenfield. I'm excited to be here today to share with you a high-level view of the commercial plan to ensure the successful launch of Opzelura, which has the potential to significantly help millions of patients in the U.S. suffering from inadequately controlled atopic dermatitis. Based on the compelling data from our Phase III program, and the feedback we have received from physicians and patients we are starting from a position of strength with Opzelura's highly differentiated safety and efficacy profile. Before I provide details on our strategy to drive product awareness and adoption, I want to remind you of the significant unmet need that exists in atopic dermatitis today. In the U.S., we estimate there are approximately 21 million patients that are 12 years and older living with atopic dermatitis, of which 5.5 million are drug treated. The vast majority are treated with topical therapies with approximately 10% of patients on systemic treatment. A small percentage of these patients are controlled with their current therapy. But for the large majority disease flares and itch continue to persist. In a recent survey of 600 patients, only 22% of patients reported that their AD is well controlled with current therapy. More than 40% of these patients said they experienced flares at least once a week, and nearly 50% of patients said they experienced AD-related cracks in their skin in the last month. Again, highlighting the impact this disease can have on patients' lives. For patients who have an inadequate response to topical steroids or topical calcineurin inhibitors and may not require or be eligible for systemic therapy, there has been a significant dearth of novel effective therapies. Prior to the FDA safety review of the oral JAK inhibitors, we showed dermatologists a blinded profile of Opzelura and 85% indicated they would likely prescribe this treatment to their patients. We tested the class boxed label hypothesis with dermatologists more recently, which resulted in dermatologists reducing their prescribing by approximately 15%. The importance of Opzelura as a new option for the treatment of atopic dermatitis is very clear. When you consider the differentiated value of Opzelura and understand the needs and wants of patients living with uncontrolled atopic dermatitis. When it comes to treatment, itch reduction is cited as the #1 treatment driver by dermatologists. Opzelura is the first and only approved topical therapy to demonstrate a statistically significant and clinically relevant improvement in 4-point or better reduction in itch. Second, both parties patients and dermatologists prefer topical formulations and Opzelura is a non-steroidal cream formulation. And lastly, patients want to have clear skin. In the true AD trials, more than half of patients achieved IGA skin clearance of 0 or 1 by week 8. Let's now move on to discuss our dermatology commercial team. We have recruited top talent from leading dermatology companies. These are high-performing experts in their field with significant experience within dermatology. In fact, 80% of our field-facing team were ranked in a 90th percentile for performance at their prior company. The average length of reps dermatology sales experience is 10 years with 100% of them having preexisting relationships with dermatologists. We also recruited dedicated experts and payer account management with deep experience in dermatology or similar specialties to swiftly garner preferred access for Opzelura. We are focusing our efforts on targeting dermatologists, NPs, PAs and high-priority allergists who write the majority of atopic dermatitis prescriptions. 78% of all market prescriptions for AD are written by the top 20% of dermatologists, NPs, PAs and allergists. We believe reaching these physicians will have the greatest impact to ensure Opzelura reaches the most relevant patients who need an alternative treatment option. We will be launching a comprehensive and targeted multichannel marketing campaign that will ensure we have broad and consistent reach that will generate high awareness of the compelling impact on itch and inflammation that can be achieved with Opzelura and also highlights the benefits of a topical formulation that is well tolerated and aligns with the dermatologists preferred treatment choice. We expect Opzelura will be available to patients by the end of the week of October 4. We have had multiple meetings with payers to discuss the unique attributes and value of Opzelura. I'm very encouraged by their engagement and keen interest in the asset. We believe Opzelura's payer value proposition is clear, and we will work with payers to finalize access agreements. At launch, we expect over 100 million lives to have variable access to Opzelura, and a smaller number would have a new-to-market block. In either event, we have support programs in place to ensure patients have access to Opzelura. As contracts are finalized, we expect the removal of new-to-market blocks, anticipate having attained, streamlined and sustainable access for patients by early 2022. Let's briefly touch on Incyte Tariffs. This program supports eligible commercially insured, underinsured and uninsured patients in the U.S. Upon launch, our IncyteCARES program will enable all eligible 80 patients access to Opzelura. For those patients who are commercially covered, our co-pay savings program offers an out-of-pocket cost as little as $10. For patients with prior authorizations or appeals, we have partnered with CoverMyMeds to assist dermatology offices and pharmacies and gaining access to Opzelura. We have a process in place to make certain commercially insured patients with no coverage have access to Opzelura. Finally, for eligible patients with no insurance or for those who may be underinsured our patient assistance program may provide free product assistance. Turning to Slide 39 (sic) [ 37 ]. In summary, Opzelura has the potential to address a significant area of unmet need for patients living with atopic dermatitis. We expect that Opzelura will reach a peak sales of at least $1.5 billion. This estimate assumes patients will use 3 to 4 tubes per year and is based on a WAC of $1,950 per tube. Our estimate also includes a typical dermatology gross to net of 25% to 50%, which takes into account several variables, such as patient assistance programs, negotiated rebates and co-pay programs. We'd like to note that we anticipate higher utilization of patient support programs, while we are waiting for Opzelura to achieve preferred access, and therefore, a higher gross to net during the fourth quarter of this year. Now I will pass the call back to Herve.

Thank you, Todd. So as you heard, we are well positioned for a very successful launch of Opzelura. This approval is a significant milestone for Incyte dermatology, and we have several additional near-term efforts to build on the opportunity with ruxolitinib cream. Earlier this year, we reported successful Phase III result of ruxolitinib cream in vitiligo, and we are excited to be able to share with you the 24-week data at EADV later this year. Based on these results, we are planning to submit an sNDA for ruxolitinib cream in vitiligo by the end of this year, positioning us for a potential launch next year. We also initiated a pediatric Phase III program in patient age 2 to 11 with atopic dermatitis, and we will continue to explore other indications that may expand the use of ruxolitinib cream to additional patient population in need. And now operator, please open up for Q&A with the Incyte team. Thank you.

[Operator Instructions] Our first question today is coming from Marc Frahm from Cowen.

Congrats on the approval last night. Jim, you reviewed kind of data support -- or supporting or not supporting the warning statements in the randomized portion of the 8-week trials. If you dig deeper into the label, there's some -- there's maybe some more data and some of the longer-term follow-up or maybe the vitiligo longer-term use randomized trial. That's -- or that some of those warning statements may actually be -- have happened within Opzelura experience. Can you kind of review what's happened in those longer-term follow-ups? And then related to that, maybe it's for you or for Todd. Just how do you expect these warnings in the indication statement of noncontinuous use to be implemented in clinical practice?

Sure. Thanks, Marc, for the question. And maybe I can refer to the -- our label. Hopefully, you had a chance to review it and specifically, Section 5, which is the warnings and precaution section. So if you want to or did go through each of the warnings and precautions, 5.1, serious infections. And again, the only thing that we've seen in the Opzelura trial that's highlighted there. is viral reactivation. We did see a few cases of zoster in the study. But remember that atopic dermatitis patients have a twofold increased risk of developing zoster. It's not clear that those cases were related to treatment. 5.2, mortality, we didn't see anything, malignancies lymphoproliferative disorders. You can see that the lymphoma specifically called out oral Janus kinase inhibitors. We did mention that we did see non-melanoma skin cancers in our studies. Please keep in mind that in many dermatology studies as a patient shows up, who hasn't seen a dermatologist, that a lot of times, they tend to show lesions to the doctor, to the investigator. So in the tRUE-AD program, which included the vehicle control period as well as the long-term extension, we had a total of 4 patients who reported basal cell carcinoma and squamous cell carcinoma is 6 events, so 1 patient had 3 lesions. And actually, all 4 patients, the lesions occurred in nontreatment areas. And so again, it's hard to imagine that any of those lesions were related to treatment. In terms of 5.4, the MACE events, again, you can see that there's no mention of Opzelura, specifically, or no mention of events in the trials. And in terms of the thrombosis we did report or we did see 2 cases of PE 1. I think it was a week 41 patient, there's a 61-year-old with a prior history of DVT and PE as well as a family history of DVT and PE. And; then in the lower strength, we had a case of a young female on a birth control pill that's actually known for having a higher risk of DVT and PE. And so those are the 2 events. But you can see that even FDA wasn't clear whether those events were related to treatment. In terms of the last warning precautions, that's relevant, lipid elevations. We didn't see any changes there. But thrombocytopenia, anemia and neutropenia. So we did have a handful of events during both the vehicle control period and the long-term extension. And all of them were not clinically relevant, meaning many -- most of those patients, I think most of the patients actually started at the low end. So if the hemoglobin was 10.6 at baseline and went down to 10.2, we didn't really feel those were clinically relevant. And none of those patients were symptomatic. They were not associated with any adverse event. And honestly, when we looked at the PK of those patients, there was no elevation. So there weren't associated with systemic exposure. But I think that if a patient has a history of anemia, if a patient has a history of thrombocytopenia, physicians should consider checking a baseline lab. And that's why the language as clinically indicated is in there. So those are the summary of the warnings and precautions. Hopefully, that answered your question, and maybe I'll turn it over to Todd to answer your second question.

Yes. Well, Marc answered your question. As mentioned in my prepared remarks, there are 5.5 million patients, 12 years in order that are drug treated for atopic dermatitis in the U.S. As mentioned, the 5.5 million, approximately 90% have been cycling on TCS and TCIs and the majority report that there's a disease that's uncontrolled. If you think about it, by the time patients reach the dermatologists, the majority have already failed 1 to 2 topical therapies. And these patients, when we talk to them, they're frustrated and they're yearning for new, innovative therapies that will provide that rapid sustained, long-term disease control such as Opzelura. And then we also believe that the dermatologists that they are well equipped to understand the box warning for Opzelura and be able to differentiate from the systemic therapies. As you're aware, dermatologists are very data-driven. And with our medical affairs teams, we will make certain that they are well equipped to be able to provide clarity relative to this class effect boxed warning and the value proposition of Opzelura to both the like patients and dermatologists.

Our next question today is coming from Tazeen Ahmad from Bank of America.

Congrats on the approval. Can you just give us a little bit of color on how we should think about the relative ramp of this indication, let's say, versus Jakafi. So you've talked about the $1.5 billion but for example, should we expect to see any kind of meaningful sale? You will launch in October. But just given all of the language that you provided about payers. Should we expect to see meaningful uptake over the next 6 to 12 months? Or is this something that could be much more gradual relative to Jakafi's uptake?

Yes. Thank you for your question. This is Todd. And we anticipate during the fourth quarter of this year to have, as mentioned, a higher gross to net due to the higher uptake of the patient support programs and co-pay cards. And so we would expect that to have an impact relative to revenue generation within the fourth quarter. Thereafter, as we roll into 2022 and are able to secure meaningful access with the payers and reduce the utilization of those programs, and that's when we expect the revenue to start to ramp.

And would you be in a position to start providing guidance on sales next year?

We -- at this point, we'll -- we are not providing guidance, and we'll wait to have more visibility on the ramp-up before we are in a position to provide guidance for the year.

Our next question is coming from Brian Abrahams from RBC Capital Markets.

Congratulations on the approval. Maybe a big picture launch strategy question. I'm curious how the end label, where there's clear delineation of the itch benefits, but also a lot of these JAK class warnings. Overall shapes your detailing strategy in terms of educational approach, types of physicians targeted on your investment prioritization into this launch. And does your launch assume that -- does your long strategy assume that the oral JAKs will come to market in AD?

Brian, it's Todd. So we do assume that the oral JAKs will come to market. And we -- relative to the launch as mentioned, that we're going to target the high-prescribing dermatologists, the NPs and PAs as well as the high priority allergists. As mentioned, these are the prescribers that will be riding the bulk of these prescriptions as we go forward. Furthermore, we have made certain that our team has had a curriculum to make certain that they are well prepared to be able to bring the value proposition of dermatologists to help them realize the uniqueness and how well differentiated Opzelura is for patients. Furthermore, and more importantly, as mentioned, we will make certain that our medical affairs team can really differentiate relative to safety such as earlier within Jim's comments. And to build to differentiate relative to a class effect boxed warning, versus a unique product boxed warning and to make certain that those patients continue to realize and providers that full value proposition of Opzelura.

Our next question today is coming from Srikripa Devarakonda from Truist.

Congratulations on the approval. So one of the restrictions in the label is being able to prescribe it in combination with other drugs? Especially given that some or many of these patients may have comorbidities, what sort of impact do you expect to see on prescription trends because of this restriction?

Sure. No, this is Jim, and I'll address that. So we don't see it as a restriction, it actually reflects how the study was designed, including the target patient population, the inclusion, exclusion criteria, et cetera. So it's essentially how we conducted and designed the studies. We want to test the monotherapy and there's really nothing or no reason to use it in combination with any other therapies for atopic dermatitis. So I think that is typically in a clinical practice setting, we're told by physicians that really, ideally, if patients can be treated with one product for their disease, for their condition, that's always better than trying to have them treat with multiple products. So I don't think it should have a significant impact. And again, we don't see it as a restriction.

Next question today is coming from Vikram Purohit from Morgan Stanley.

I just had one question on commercial. So you mentioned that you would expect patients to use 3 to 4 tubes per year in AD. So I was just wondering if you could speak about how you came to this estimate? And what sort of patient profile and frequency of use is implied in this estimate? And also, if at this point, you're disclosing how many grams of product is in one tube?

Yes. Thank you. And this is Todd, I'll answer that. So the nanograms in one tube is 60 grams. And if you think about our pivotal trials within the 8 weeks, patients were using that BID and then thereafter in a long-term extension, it was intermittent therapy. So when we look at the utilization of product within the pivotal trials and then give consideration to compliance. We believe that patients, on average, will use 3 to 4 tubes within a year.

Our next question today is coming from Cory Kasimov from JPMorgan.

I wanted to ask about the language on noncontinuous dosing. Based on the data you have in AD, I'm not sure it really have an impact but curious for any other thoughts there. And do you see read-through to vitiligo, which I believe are longer duration studies? Or is the frequency of use in intermittent dosing very similar with vitiligo that it is with atopic derm?

Yes. This is Jim. I'll address your question. So the dosing and administration section reflects how the clinical studies were designed. So we had basically a twice-a-day dosing for 8 weeks, and then patients were instructed to stop. And then for the following 44 weeks, they were instructed to treat as needed, meaning if they saw some redness skin irritation, then they can treat. So it's really a patient-focused, patient-directed treatment regimen. And that's what's reflected in our dosing and administration section in terms of the intermittent dosing. For vitiligo, if you take a look at our clinicaltrials.gov and hopefully, you'll learn more about it later this month. In the Phase III vitiligo studies, we tested or had patients treat themselves twice a day continuously. And so that's the way that clinical trial is designed. So we anticipate that, that will be reflected in the dosing and administration section for the Vitiligo sNDA label.

Your next question today is coming from Mara Goldstein from Mizuho.

Just to come back to that last question for a second. So to be clear, the intermittent dosing in the label is a function of trial design for dermatitis not any FDA concerns as it relates to the other warnings, the class label warnings that are on the label? And then secondarily, I'm just curious as to any potential read-through on GVHD, given the chronic nature of that disease? And if you could address that?

Sure. Let me -- this is Jim, and I'll address your first question. The short answer is no. The dosing administration section was all related to what we designed, what we did in the Phase III studies. But for the graft-versus-host disease, perhaps, Herve can address that.

So a question about the intermittent we -- Jakafi is used continuously in many patients with MF, PV and acute GVHD. So we don't see any kind of connection between this -- I mean, the label for the cream is really reflecting the use in the study, and we were expecting exactly what we have, which is the right way to use the product for atopic dermatitis, we don't see any connection with the GVHD indication.

And your -- just in your, I suppose, outreach to physicians, do you think that they understand that's the nature that the label really reflects the studies as opposed to any outstanding FDA concerns on the oral JAK?

This is Jim. Maybe I'll address it and perhaps Todd can also comment. And so I think -- so if you take a look at all topicals there are very few topicals that are dosed continuously, mostly because patients just can't do that. They stop after they feel better. So it's -- I don't think physicians will interpret the dosing and administration as a safety issue or safety concern. But we'll obviously clarify that. But I think prescribers, most dermatologists are well accustomed and used to this type of dosing.

And this is Todd. Just as a follow-on that, indeed, dermatologists do understand that this is the dose. I will mention that within the pivotal trial, within 8 weeks, I mean, these patients, approximately 50% of them have their -- rapidly have their itch and inflammation resolved. So thereafter, these patients move to intermittent therapy during the 44-week long-term study. So the short-term and noncontinuous chronic treatment very much fits within our study and within our label and also the way that dermatologists practice with these type of topical medications.

Your next question today is coming from Michael Schmidt from Guggenheim Securities.

This is Kelsey on for Michael. Congrats on the approval. How should we think about the line of therapy kind of given the approved indication in patients whose disease is not adequately controlled with topical prescription therapies. I guess would a patient need to try and fail topical steroids and topical calcineurin inhibitors? And then what about incoming topical agents that address non-JAK targets?

Maybe -- this is Jim. I can start by answering your question, maybe Todd can have some additional comments. But -- So let me just remind you in our clinical trials that almost 90% of the patients that actually had previous therapies with the vast majority of them with topical treatment. So topical calcineurin inhibitors, topical corticosteroids, even oral medicines. And so we actually -- even though we didn't build that into the inclusion exclusion. That's essentially what we saw in our clinical trials. And I think our label is a reflection of that patient population that we saw. And if you think about it, going back to Dr. Eichenfield's slide around the treatment of paradigm, most patients really are asked to try with emollients, they typically progress to other topical therapies. And so it makes sense that they should try topical corticosteroids, which is really the sort of the foundation of most atopic dermatitis treatments. And so we don't think it will have an impact. And in fact, I think it will select for that patient population that really needs and could benefit from Opzelura.

Yes. And just further, Jim. If you think about the standard of care today where patients are cycling on TCS or TCIs. And then there's -- from there to systemics and a lot of patients aren't eligible for those systemics nor do they want a systemic treatment. So we believe that with payers that they'll require the patient to fail atopical prior to being eligible for Opzelura. And so within that treatment paradigm, Opzelura just fits uniquely in between the topical steroid and the systemics. So it's uniquely fitted in there to be able to continue to provide that long-term disease control for patients. And I'll just mention this furthermore relative to our discussions with payers. They also see this unique value relative to when you look at the long-term disease control of patients, especially with intermittent therapy. And the benefit that Opzelura may have in delaying the time for patients to move on to more expensive systemic therapies.

Our next question today is coming from Alethia Young from Cantor Fitzgerald.

Congrats on the approval. Just want to talk a little bit about the -- you said the 25% to 50% gross to net. I just wanted to kind of get color on the breakdown kind of between commercial and any other kind of noncommercial breakup between that number? And then also I wanted to clarify, does that number -- is that number separate to like persistence and compliance assumptions? And if so, can you kind of give some color on persistence and compliance?

Yes. We're not going to provide guidance at this time during this call relative to gross to net.

Can you talk about the breakout between the commercial versus noncommercial and the market for atopics?

No. If you think about it, it's -- the vast majority of patients are commercially insured for atopic dermatitis just given the age of the patient population.

Our next question today is a follow-up from Salveen Richter from Goldman Sachs.

Congratulations on the approval. With regard to your questionnaire and the 15% reduction in prescribing due to the class boxed warning. Can you just provide more color here and whether that reflects some patients won't be appropriate or that physicians don't feel comfortable?

Yes. So we tested, it was a qualitative research with derm PPAs and those high prescribing allergists. And we proposed to them that if class boxed warning was placed on Opzelura, would you not reduce your prescribing of the product? And as mentioned, there was a 15% reduction in that prescribing. And I think what that tells is that the dermatologists and these prescribers, we just -- want to have a better understanding relative to the class black box. And how did that apply to Opzelura or not. And at that time, we didn't give that type of detail. It was just more class boxed warning.

We reached end of our question-and-answer session, and that does conclude today's webinar and teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.