Incyte Corporation (INCY) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Incyte's conference call and webcast to discuss Opzelura in vitiligo approval call. [Operator Instructions] As a reminder, today's conference is being recorded. It is now my pleasure to introduce your host, Ms. Christine Chiou, Head of Investor Relations. Thank you. Please go ahead.

Thank you, Donna. Good morning, and welcome to Incyte's conference call and webcast to discuss the FDA approval of Opzelura for the treatment of nonsegmental vitiligo, which was announced Monday, July 18. Speaking on the call today are -- from Incyte are Herve; Jim Lee, our Head of Development in Inflammation and Autoimmunity; and Todd Edwards, our Dermatology Business Unit Head. Barry, Steven and Christiana will also participate in the Q&A session. I also have the pleasure of introducing Dr. Seemal Desai, a Board Certified Dermatologist in private and academic practice in Dallas, Texas, and clinical assistant professor in the Department of Dermatology at the University of Texas Southwestern Medical Center. 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 reports filed with the SEC. We'll now begin the call with Herve.

Thank you, Christine, and good morning, everyone, and thank you for joining today's call. So I'm on Slide 4. Yesterday, we announced the FDA approval of Opzelura for the treatment of adolescents and adults living with nonsegmental vitiligo. With this approval, Opzelura becomes the first and only approved treatment for repigmentation of vitiligo in the U.S. This is a momentous event for patients who have been suffering from this disease, which can often have significant consequences on patients' lives. We are incredibly proud to be the first company to provide an approved treatment option for vitiligo patients to regain their natural pigmentation. Turning to Slide 5. We are making significant progress with our dermatology pipeline. We have obtained 2 important FDA approvals for Opzelura in less than a year and we continue to pursue additional indications that may expand the use of ruxolitinib cream to other patient populations in need. Additionally, we are developing our oral JAK1 inhibitor, 707 in HS, vitiligo and prurigo nodularis, all of which are in Phase II. There is significant potential with each of these indications where there are limited treatment options and, in some cases, no FDA-approved treatment. Moving to Slide 6. So we are establishing a high-growth dermatology franchise with multiple new opportunities for growth over the next 2 years. In addition to the launches of Opzelura in atopic dermatitis and vitiligo in the U.S., we could see a launch in Europe in the first half of 2023. Opzelura has the potential to be a substantial growth driver for Incyte and the addition of new indications and new products like 707 will continue to solidify our dermatology franchise and allow us to significantly leverage our commercial operations. With that, I would like to turn the call over to Jim.

Thank you, Herve, and good morning, everyone. Before moving into the highlights of the vitiligo label, I want to touch on the pathogenesis of vitiligo that causes depigmentation and also provide an understanding of the unique way in which Opzelura works to help repigment the skin in patients living with the disease. Vitiligo is an autoimmune disease and its pathogenesis can be attributed to several different factors. The dysregulation of the immune response, specifically the activation of skin CD8-positive T cells appears to play a major role in vitiligo pathogenesis. This T cell activation causes the destruction of melanocytes and subsequently leading to the depigmentation of the skin. The cytokine interferon gamma plays an important role in the activation of the CD8 T cells, and its effects are mediated through the JAK-STAT pathway. Opzelura is a topical JAK1/JAK2 inhibitor, which works on the JAK-STAT pathway to block or suppress inflammatory cytokine signaling. By modulating the inflammatory response, Opzelura can create an environment that allows melanocytes to gradually regenerate, leading to the repigmentation over time. Turning to Slide 11 and the highlights from the prescribing information. Opzelura is indicated for the topical treatment of nonsegmental vitiligo in patients 12 years of age and older. The recommended use for Opzelura cream is to apply a thin layer twice daily to affected areas up to 10% body surface area or BSA. For reference, 1% BSA is the equivalent of the palmar surface of the hand, excluding the thumb. Looking further into the key features from the prescribing information. Opzelura is approved for continuous use anywhere on the body, including in sensitive areas, and there are no limits to the duration of treatment for vitiligo. The 52-week efficacy data, which has been included in the label, demonstrates the continued improvement of repigmentation with longer duration of treatment. Additionally, the label notes that a satisfactory patient response may require treatment with Opzelura for more than 24 weeks and, again, highlighting the importance of staying on therapy. Slide 12 shows the 24-week efficacy data from both Phase III TRuE-V studies. After treatment with Opzelura for 24 weeks, nearly 30% of patients demonstrated a 75% or greater improvement facial VASI or F-VASI75. And roughly 15% of patients were able to achieve a 90% or greater improvement in facial VASI. On the next slide is the 52-week efficacy data from the open label portion of the TRuE-V trials, which clearly shows that a higher proportion of the patients responded with longer duration of treatment. Now moving on to the safety on Slide 14. The vitiligo safety data in the label shown here highlights the adverse reactions in greater than or equal to 1% of subjects treated with Opzelura through week 24. The continuous use of Opzelura cream over the 24-week period was well tolerated and was not associated with any new safety signals. Application site acne was the most common adverse event, and did not result in any study discontinuations. With regards to serious adverse events, the frequency was low with none considered to be treatment related. And lastly, there were updates to the JAK class language in the Warnings and Precautions section. In this update, the box warning provides clarification as to the source of the JAK class warning, which now references a large randomized post-marketing safety study in RA patients with oral JAK. Over the next few slides, I will share a few photos of patients and the results that illustrate what some patients can experience over time with Opzelura treatment. On Slide 15, we have a 56-year-old male patient with disease duration of 21 years who had significant facial repigmentation at week 24 and continued improvement at week 52. On Slide 16 is a 14-year-old patient with similar results. And again, the repigmentation appears to be closely matched to their unaffected skin. As we know, Opzelura cream demonstrates not only facial VASI response, but also total VASI response. On Slide 17, we have a 66-year-old patient who has had vitiligo for 54 years. The repigmentation improved with continuous treatment, and her total VASI score changed from 9.60 at baseline to 0.76 at week 52. On Slide 18, this is a 37-year-old patient with disease duration of 8 years with significant repigmentation response at week 52. She was shown to have repigmentation of the vitiligo on her hands, which is typically a very difficult area to treat. And lastly, I would like to end on Slide 19, which shows facial VASI response by study visit from our pivotal program. What I really want to draw your attention to is the response times in patients that were seen in the clinical trials. You can see here that at week 12, almost 50% of patients achieved at least a 25% improvement in facial VASI from baseline, demonstrating the early response seen in many patients. The vast majority of patients experienced an improvement in repigmentation with 9 out of 10 patients achieving a facial VASI25 by week 52. This demonstrates that improvements in repigmentation were observed in most patients with continued treatment beyond 24 weeks. And with that, I would like to turn the call over to Dr. Seemal Desai, a leader in the field of dermatology and a recognized expert in the treatment of vitiligo.

Well, thank you again for that kind introduction, Jim, and it's really a privilege to be here with the team to talk about such an exciting development in the world of vitiligo, and as was mentioned, my specialty and focus in dermatology is in the management and treatment of pigmentary diseases and my practice, in particular, focuses on vitiligo. So this is certainly very, very exciting for both my patients and for me, both as a physician expert in treating the disease and the family member of someone who suffers from vitiligo, this is equally, if not more, impactful. And just to recap, let's talk through a few things we know about this disease and where we're at in our understanding on the pathogenesis of vitiligo. This is a disease that I would say is not rare. And one of the important things to realize is that the prevalence of vitiligo in the United States and Europe is between 1% and 3%, depending on the data you read. So this is not something that is -- you see 1 case a year or 2 cases a year. This is fairly common. And most often, this can happen in patients from a variety of different agents. Now over half of the patients who suffer from vitiligo tend to show signs before the age of 20. However, this can be seen in pediatric patients, adolescent patients, young and old adults and equally distributed amongst male and females. And here are some examples you can see of disfiguring vitiligo in patients with skin of color where certainly this has a profound psychological impact, looking at the discordance both in natural skin tone and the depigmented white patches in other areas of the body as well as you can see. Now let's move to the next slide. Here, you see an additional amount of clinical images. Now this is a disease that can affect small body surface areas, large body surface areas, small areas in circular patterns, auricular patterns, the hands, the neck as shown here. Keep in mind that vitiligo is one of these diseases that I tell my patients can technically affect any part of the body. And the tough part for many patients who suffer from this to understand is there's no way to predict which part of the body surface area is going to be affected. I've had patients who have localized small disease for many years, and then I have patients who have very large body surface area as well. Now I will point out that here you see the picture of the bilateral dorsal hand and acral vitiligo or acral vitiligo on the hands and feet, I would say, are the most difficult challenging areas to repigment. And that's because those areas tend to lack a lot of hair follicles where the pigment melanocytes can return from. This is really exciting because Opzelura, really, for me and my practice, has been a game changer for treating patients with vitiligo, and I'll talk about that in just a few moments. Let's move to the next slide. Here again, you see a clinical image. Now in this case, this refers to what I alluded to earlier, widespread disease. Look at the truncal involvement, the large patches on the central chest, the abdomen. And if you think about how to treat this patient who is suffering with widespread involvement, you can imagine that it's going to be something that is not only going to be psychologically challenging for the patient, but also can be challenging for us as the dermatologist because you're going to have to figure out multiple modes of therapy. Of course, there's a variety of different treatment options in our therapeutic armamentarium, such as narrowband UVB, excimer laser phototherapy, combination prescription-based medications, which up until now have been off label. And with the FDA approval of Opzelura, we now have a historic step in our journey to curing this disease one day, which is the first ever FDA-approved treatment to repigment vitiligo, which is why this is so exciting. Now with this in mind, let's talk about the impact of vitiligo on patients on the next slide. I will tell you that vitiligo has been associated with a variety of psychological impacts and burdens of disease. This is a very stigmatizing challenging condition. It's very tough to treat, as I've mentioned. And it's important to keep in mind that many of these patients oftentimes lose hope. And so to now be able to share with my patients that we have an FDA-approved therapy, a brand-new mechanism of action in the world of vitiligo, which up until now has been studied in off label, but now is something that I can prescribe to my patients with data and with confidence and with excitement, I think, is going to be something that really allows our patients to have a lot of hope. And that's one of the things that myself as a vitiligo specialist and many of my other dermatology colleagues who I lecture to around the world need to be able to share with these patients is that there is hope, and we're reaching a point in our vitiligo research journey where there's exciting treatments that are now available and hopefully more to come. So with that being said, let's move to the next slide and talk about management of vitiligo. There are lots of different ways to treat these disease. You can do everything from topical treatments with topical steroids, topical calcineurin inhibitors; now with Opzelura, topical JAK inhibitors with the ruxolitinib 1.5% cream. You can do systemic steroids to stabilize active disease, use phototherapy like narrowband UVB and excimer laser, surgical modalities. And also for patients who are suffering from this psychologically, as I've mentioned a few times already, psychiatric and psychological involvement is something that I do employ in many of my patients as well as in families because this is a disease, depending on from what culture you're from, what part of the world you're from, there are lots of sociocultural implications to developing vitiligo. So it's always important to analyze the patient's desire and ask the patient what part of your body bothers you the most. Is there an area of your vitiligo that you're more concerned about? Is there an area that you're not concerned about that you just learned to live with and really don't want to have treated. It's very important to customize the regimen for the patient. And that's where I think Opzelura really plays an important role in both my practice, up until now off-label. And now I can say I'm doing an FDA-approved therapy for the first time ever for this disease. So let's move to this slide entitled Opzelura in vitiligo. This is really groundbreaking. And Opzelura is a therapy that really offers our patients so much hope, repigmentation in typically difficult to treat areas, including the hands, precision of color match of repigmentation, robust results early in the treatment process and the fact that this is not a steroid. It can be used on the face and other sensitive areas. This is nonsteroidal. In addition, we have prescription flexibility. Keep in mind, when you read the package insert, we have flexibility in duration of treatment. We have flexibility in the fact that we can use with phototherapy. We have flexibility in the fact that this can be used on a variety of different body surface areas. We have flexibility in the fact that this can be used monotherapy. And so what's really exciting for me, both as an investigator who is involved in the clinical studies as well as a clinician specializing in this disease, is that I'm now able to offer my patients something that's nonsteroidal with no limitations on body surface area because I can use it on the face and other sensitive areas. And I can potentially treat these patients monotherapy with an FDA-approved cream like Opzelura. So let's move to my final slide and kind of wrap this up. Opzelura is a game changer in our treatment armamentarium for vitiligo. And it is in my mind, for my patients in my practice, going to be and has become the first-line option for the majority of the vitiligo patients seeking therapy. And it's important to think about this in the context of using this in less than 10% body surface area per the package insert in areas that are most likely to respond and benefit such as the head and neck. But remember earlier I mentioned, the hands are extremely difficult. Well, guess what, you can also try this on the hands or the feet. And in clinical trials, we were one of the investigator sites this did work on acral vitiligo. I think it's important to set expectations for patients. These are my experiences as a vitiligo expert. But keep in mind, patients have been waiting a very long time for an FDA-approved therapy that actually works, that delivers results, that has a scientific basis and mechanism with this JAK inhibition of actually repigmenting their disease. So I couldn't be more excited about this. And I hope that this brief clinical overview has been helpful as we continue to share the message about Opzelura and its role in treating vitiligo and repigmenting that's very devastating and challenging condition. So with that, I'd like to thank everyone at Incyte for inviting me. I hope that this was helpful to all of you joining in, and I'll turn it back over to the team.

Thank you, Dr. Desai. I'm very excited to be here today to provide a high-level overview of our plans for the commercial launch of Opzelura in vitiligo. We have heard from Dr. Lee and Dr. Desai about the impact this disease has on patients and I want to take a moment to share with you a brief testimonial from a patient about his experiences, both living with vitiligo and with Opzelura treatment as a participant in our clinical trial. Operator, please play the video. [Presentation]

These challenges are often associated with a psychological burden, with many patients reporting depression, anxiety, stigmatization, suicidal thoughts and loss of self-esteem. Until now, there has been no approved therapies for repigmentation and a treatment that have been available today have significant limitations. Despite this, there are 150,000 to 200,000 people living with vitiligo in the U.S., who are actively seeking treatment. Slide 31 shows a representation of what has been a typical vitiligo patient's treatment journey. At the beginning of the treatment cycle, dermatologists are likely to set expectations with regards to treatment outcomes for their patients. Over the next 6 to 12 months, a patient may try topical therapies, phototherapy or a combination of both and may feel anxious or unsure of what to expect. Many patients are often left with feelings of high treatment burden and/or unsatisfactory responses from their treatments. While some patients will seek more aggressive options like systemic therapy or choose to stay on topical therapy indefinitely, the majority of patients end up frustrated, disappointed and discouraged. They may cycle through additional therapies, be told there are no other options or may stop seeking treatment altogether. Patients often believe nothing will be effective for their disease and they resign themselves to living with vitiligo. We have an unprecedented opportunity to break this treatment cycle to offer patients a new therapy with proven results. As Jim showed earlier, repigmentation improvement occurs in the majority of patients treated with Opzelura by week 52. The cream, which is light, nongreasy and easy to apply, was well tolerated and can be used continuously, including on sensitive areas. The uniqueness of Opzelura's profile offers physicians a novel effective therapy to treat vitiligo, and we believe it will truly change the treatment landscape for physicians and significantly improve the treatment experience for patients. Moving to Slide 33. I would like to touch on our launch strategy, starting with physicians. Based on a survey of over 250 physicians treating vitiligo patients in the United States, the top treatment goal reported was repigmentation of affected skin. The substantial improvement in both facial and total VASI with Opzelura was demonstrated in the largest positive randomized clinical trial in vitiligo and our dermatology team will be able to share these compelling efficacy data with physicians. Similar to our launch in AD, we are focusing our efforts on dermatologists, where the majority of vitiligo patients are diagnosed and treated. There is near complete overlap between our vitiligo and AD targets. Of our high decile dermatologists, many of whom are top targets for both indications, over 70% of physicians have written a prescription for Opzelura in AD. Satisfaction rates of both prescribers and patients remain very high, which may benefit in the adoption of Opzelura in vitiligo. When we surveyed a sample of 100 physicians, roughly 90% indicated a willingness to prescribe Opzelura for vitiligo regardless of previous experience with Opzelura. Additionally, these physicians believe that roughly 80% of their entire vitiligo patient population are appropriate candidates for Opzelura. We'll be launching a comprehensive multichannel marketing campaign that will ensure broad and consistent reach to effectively drive awareness and educate physicians on the approval of Opzelura and its unique clinical profile. Turning to Slide 34. Our strategy with patients involves engaging those who are actively seeking treatment, whether they are newly diagnosed or existing patients, as well as those who may have given up hope for an efficacious option following years of disappointing results. At launch, we will have an active media campaign to drive awareness, including a strong presence on a variety of social media platforms where we know patients are seeking information. We are also working with patient advocacy groups and are launching with a robust offering educational resources, co-pay mitigation and other support programs to drive access to Opzelura. With regard to timing of more traditional TV, DTC, we expect to start early next year once all regulatory time lines are met post launch. Turning to Slide 35. We continue to make significant progress on the payer front with Opzelura. We have now signed contracts with the 3 largest PBM/GPOs covering nearly 80% of all commercial lives. With these contracts, we have been able to establish coverage for Opzelura. Payers must now assess the Opzelura vitiligo labeling to establish utilization management criteria for vitiligo patients. We are fully prepared for a very successful launch in vitiligo. And with that, I will pass the call back to Herve.

Thank you, Todd. And -- so I'm on Slide 37. So as you have heard, we are well positioned to drive further growth of Opzelura. We are in a unique position to be launching the first ever approved therapy for repigmentation in vitiligo and with a very good lever. Vitiligo represents a large market opportunity in the U.S., and we believe Opzelura will change the course of treatment for many patients. For our launch in vitiligo, we expect to capitalize on the success we have seen in atopic dermatitis. And with our established dermatology commercial team, we will be able to leverage the existing relationships with physicians and payers to build upon the excellent progress we have made thus far. This approval marks an important step for Incyte dermatology in becoming a large established and successful franchise, and we will continue to look for avenues to maximize the opportunity with Opzelura as well as with 707. And now operator, please open up for Q&A with the Incyte team. Thank you.

[Operator Instructions] Today's first question is coming from Brian Abrahams of RBC Capital Markets.

Congratulations on the approval. So the data has, of course, shown substantial improvements that continue into 52 weeks, and the label makes it clear that the best results may take more than 24 weeks to achieve. So I guess, first off, for Dr. Desai. I'm curious, your expectation for how patient individuals with vitiligo are going to be for the repigmentation process and what proportion of your patients you expect are going to stay on beyond the initial 6-month assessment time points and, ultimately, use the drug beyond a year and chronically. And then, I guess, for the company along those lines, any new work you expect really to do from a commercial standpoint to educate around the benefits of longer term use, which is, of course, distinct from the atopic derm use patterns. And given some of the reception -- the favorable reception you're hearing in the market research, whether we should be expecting a bolus of patients to accelerate the current launch into year-end or if this is going to be more of a long-term contributor indication.

This is Jim Lee. Dr. Desai is not able to join us on the Q&A. Perhaps, I can address your first question and turn it over to Todd for your second question. So we anticipate that the duration of treatment will really depend on the patient's motivation. I mean in the clinical trials, the vast majority of the patients stayed on the therapy. I think you saw that from the patient video. And in terms of the duration, we have an ongoing study, where patients are continuing with another year of continuous therapy, and the results look very good. And hopefully, we'll be able to share that sometime next year. But from a clinical trial perspective, the vast majority of patients continued with ruxolitinib cream therapy.

Yes. Thank you, Jim. And, Brian, in reference to your question about the commercial work that needs to be done to distinguish vitiligo, relative to patients, we want to ensure a best-in-class experience from the start. So our tactics first focus on priming people with vitiligo for effective and productive conversations with their HCPs. And then we want to ensure that potential patients are able to access Opzelura with ease, while also understanding that gradual repigmentation process and that it will take time. So tactically, this is going to be supported by opzelura.com website and a CRM experience, who will be engaging patients through e-mail, text and direct mail. In addition to that, we'll have the active media campaign and social media. Furthermore, to continue to support patients on this journey, we've created a mobile tracking application along with a habit tracker and patient journal that can be accessed through opzelura.com website or a direct mail with a QR code to help patients understand what that journey looks like, treatment expectations and the need to make certain that they stay compliant with Opzelura throughout that journey. And in reference to your bolus of patients for vitiligo, as mentioned, we have a really unprecedented opportunity here with the uniqueness of Opzelura. And you think about the size of the opportunity, it is actually quite large with 1.5 million patients being diagnosed. However, it's difficult to predict the speed of launch or whether there will be a bolus of patients. Because today, as mentioned, there's 150,000 to 200,000 patients who are currently seeking the treatment, and these patients may be more inclined to see their dermatologist or to become aware of Opzelura. However, as mentioned, there are others who have stopped seeking treatment, and it may take time to become aware of the therapy, schedule a visit with their dermatologists and then make a decision to seek treatment or not.

The next question is coming from Tazeen Ahmad of Bank of America.

Congrats on the second approval for Opzelura. I just wanted to ask about how this new approval is going to impact the discussions that are underway already for Opzelura getting onto formulary. So you do have a couple of moving parts. I think scrips this quarter for AD might indicate that you're in process of shifting some patients in AD over from free drug to paid status. So for the companies that you've negotiated with where they will reimburse Opzelura, will that be for both indications or will vitiligo need to be separately discussed? And then secondly, I guess, if you were to compare the 2 launches, what would be a specific hurdle to vitiligo that you may not have faced for atopic derm?

That's a really good question, and there are separate moving parts relative to the access. So as mentioned, we have signed the contracts with the largest PBMs and GPOs, which cover nearly 80% of the commercial lives. So I just want to remind you that these contracts cover the end market 60 g tube and are not indication-specific. Thus, Opzelura NDC blocks are in the process of being removed. And for the payers, we anticipate the next step would be able to review the label for vitiligo and then manage the prior authorization and utilization management criteria for a vitiligo patient. This can take anywhere from a few weeks to several months. And then relative to what that means for a vitiligo patient is for a vitiligo patient where a payer has a current vitiligo policy in place today, that patient will need to access vitiligo through a prior authorization process. And if that Opzelura is covered under that policy, it's very likely that, that patient's Opzelura will be covered. If the PA is denied, then we have a program in place today for PA denied to make certain that, that patient has access to Opzelura to be able to have a trial of the product, which we believe will lead to rapid adoption. And then relative to hurdles of vitiligo that we didn't face in AD, I think one of our largest hurdles is activation of the patients. When we give thought to the number of patients that have been frustrated and disappointed with the current treatment options that have been in the market, we need to make certain that we can reach out, create awareness to those patients and to have them actively seek treatment through their dermatologist.

The next question is coming from Kripa Devarakonda of Truist Securities.

Congratulations on the approval and also the broad label. I know you touched upon it a little bit, but Dr. Desai talked about how patients had given up hope. What do you think it will take to get these patients to actually come back to the clinic and seek treatment? And he also talked about how important it is to customize therapy. Our research suggests that patients typically focus on hands and feet. Based on the data that you've seen from the trials, what are your expectations?

This is Jim Lee. Maybe I can address your second question regarding the customization. So Dr. Desai mentioned, the thing that drives patients or most impacts them is the depigmented areas on the visual areas like hands, the feet, the neck and the face. And so we studied all of those areas in the clinical trials. There was no limitations in terms of anatomic site and we saw a good gradual response, obviously, in all the areas. The face is always the fastest to repigment and the hands -- as Dr. Desai mentioned, the hands and the feet are the slowest. But we did see a response in all of the areas. And so I think that data will provide important information for the physician to discuss potential treatment with their patients. And as Dr. Desai mentioned, there's no therapy available for these patients. And so we believe -- we're very happy to offer something up. And I think we believe that these patients will seek -- talk to their doctors and see if Opzelura is the right treatment for them. And maybe I'll ask Todd to address your first question.

Yes. So for the patients, what it will take to have them to come back to therapy. If you think about it, these patients have had no viable treatment option since their time of diagnosis. And so there's a significant unmet need with these patients in the market. And I think what's going to compel them is to really start to understand that there is now a very meaningful treatment option that is available that has proven clinical data and has demonstrated results for vitiligo patients. And so it is our task then to make certain that we can create that awareness to that patients, which, as mentioned, we are going to engage patients where we know they seek their information, to inform them, to educate them and then to provoke them to seek that appointment with their dermatologist.

Great. And if I can ask a follow-up question. In the longer run, given the competition you've seen in atopic derm for Opzelura and given that you're the first approved drug for vitiligo, do you see vitiligo being a larger market or a greater focus for your derm franchise compared to atopic derm?

This is Christiana. We believe that vitiligo represents a very significant opportunity given the number of patients, so you have 1.5 million diagnosed in the U.S. And the fact that there are no other efficacious therapies available and no therapies that have been improved for repigmentation. Having said that, at this point, we are not going to be giving guidance on how big we see this opportunity. The reason for this is that there are no -- until now, there were no efficacious therapies available for patients. And as a result, only a small number of patients, 150,000 to 200,000, were seeking treatment. We believe that this will change now that we have Opzelura approved for vitiligo. And you heard Dr. Desai calling it a game changer. But we want to see more data on the launch, on how patients are coming in, on utilization in real life before we tell you more about how big we see this opportunity being in the long term.

[Operator Instructions] Our next question is coming from Jay Olson of Oppenheimer.

Congrats on the approval, and thank you for the update. My question is logistical. Can you tell us if you'll be breaking out Opzelura revenues or scrips by indication so we can track the progress of the vitiligo launch? And then related to that, what lessons did you learn from the launch of the atopic dermatitis that you can apply to the vitiligo launch?

Yes. So it's Todd. So at launch, we will not be breaking out the prescriptions by indications. We'll need some time to be able to see how reliable the available data is and to assess that. And then in reference to what some of the lessons learned relative to the AD launch and to this -- to the vitiligo launch is, one, relative to payer access and how that resonates with an HCP and their understanding, not only of the access, but what is the process. And what I mean by the process is the prior authorization process. And how do we make it a smooth transition, not only for these physicians but also for the patients as they go through that prior authorization process and understanding what needs to be accomplished, the timing to do that and to access their Opzelura. Furthermore, it will be different in vitiligo as it will be for AD because at the AD launch, we had no access. And a majority of the business was NDC blocked. As you're aware, we made great progress for the -- for Opzelura. And so for the vitiligo patients, it will be more about the prior authorization process and how do we enable that process to support them and their providers.

The next question is coming from Salveen Richter of Goldman Sachs.

Congratulations on the approval here. The label allows for continuous use, but what are your expectations on duration of use in the real world? And what has doctor feedback been here?

This is Jim Lee. Maybe I can address the first part of your question. So in terms of the duration of use, we anticipate that the patients will treat for a long time. And the reason I say that is in the clinical trials, we saw a very good compliance over a year. As I mentioned earlier, we have an extension study for an additional year. And we've seen a very high rate of compliance of patients who wanted to continue therapy. Ultimately, the duration will depend on the patient and what they're expecting in terms of the repigmentation. So it's hard to say what patients will want in the marketplace. But in the clinical trials, we had a very high compliance rate with extended duration of treatment.

Yes. And this is Tod. Relative to your second question about doctor feedback, the doctor feedback has been incredibly positive relative to Opzelura and vitiligo. Doctors have been challenged in providing their patients viable treatment options. And it's been a frustrating experience, not only for the patient but also for the provider, to be able to meaningfully treat them. And so they have a product now that has demonstrated data with proven results that it will help provide a meaningful treatment option for patients. The doctors are incredibly excited, very optimistic and are eager to initiate therapy on patients.

The next question is coming from Cory Kasimov of JPMorgan.

Curious if there's any reason to expect any material differences in relative gross to net for vitiligo versus atopic derm or for this added indication to impact that trajectory in a meaningful way?

No, we are not assuming any meaningful impact to gross to net for this indication.

The next question is coming from Michael Schmidt of Guggenheim Securities.

I had another one on the label, maybe for the physicians. That language about 10% body surface area, how will that affect the use of the drug? And perhaps comment about what percentage of patients has impact in more than 10% of their body surface area.

This is Jim. So no patients with greater than 10% body surface area were allowed in the study. But we know the vast majority of patients have 10% or less body surface area involvement of the vitiligo. So that was really the intent of the clinical trial design based on input from vitiligo experts. The vast majority of the patients have 10% or less. And so part of the reason is if you have extensive involvement, it's harder to treat with a topical therapy for an extended period of time. And so we wanted to really focus on the patients who were amenable and targeted -- targets for topical treatment. And so -- again, our data shows that 80% of the patients out there with vitiligo have 10% or less. And so it's great to be able to offer a topical treatment for these patients.

The next question is coming from Marc Frahm of Cowen and Company.

Congrats on the new approval, as well as, Todd, congrats on getting the third PBM/GPO under contract earlier this quarter. Now that you have that in place, you mentioned you're working through the utilization management process for AD. I guess, maybe could you give us a sense of where that is? Like what percent of lives -- of those 80% of the lives that are covered by the PBMs and GPOs are covered by utilization management decisions already? And how quickly do you think vitiligo can kind of catch up to that process given that the contracts over top are already in place? And as those decisions come in place, what type of restrictions are you expecting in terms of either starting therapy or also to kind of continue in that chronic phase?

Marc, it's Christiana. On the AD data and where we stand with covered lives, et cetera, we will be providing an update on our second quarter earnings call in a few weeks. So we'll not be addressing any updates on AD at this point.

Yes. And this is Todd. In reference to the vitiligo and the utilization management criteria, we did an assessment across the payers and PBMs to evaluate the percent of medical policies that are currently in place for vitiligo, and there's approximately 55% of the payers do have policies in place today. However, some of those policies will need to be updated after the payer has the opportunity to review the vitiligo label. Prior to the approval, our medical affairs team has been intensely engaging the payers to inform them relative to the clinical value of Opzelura, and we've had very productive conversations with them. So for a vitiligo patient where the payers do have policies in place and will cover Opzelura, those patients will need to go through a prior authorization process. Now what that prior authorization process could look like, it could be currently what the status is for Opzelura today, could be a single or double step edit through a TCS and/or a TCI. However, as payers evaluate the label and update those medical policies and establish specific prior authorization and utilization management criteria, that could likely change. Because there is no other FDA-approved products in the market, the prior authorization of step edits could be that Opzelura is a first-line therapy and/or it could include a trial of a TCS or TCI.

The next question is coming from Vikram Purohit of Morgan Stanley.

This is Gospel on for Vikram. So we have 1 question. So Incyte has previously guided to 10-plus tubes of use per year for vitiligo. Does that guidance still stand?

Yes. This is Jim Lee. Yes, it does. We still believe that on average, patients with vitiligo will use approximately 10 tubes per year.

The next question is coming from Ren Benjamin of JMP Securities.

Congratulations on the approval. Can you just comment a little bit on the interactions with dermatologists to date, not -- I guess, whether or not they would prescribe vitiligo, I think you mentioned 90% would. But do they have patients that they are either already treating or patients that they've seen that have vitiligo? And roughly, how many of those physicians do you think would start prescribing right away?

Yes. This is Todd. So as mentioned, there's approximately 150,000 to 200,000 patients that are being treated today for vitiligo. So we expect that those patients will keenly become aware of Opzelura and ask questions relative to the dermatologist about that as a treatment option and think that will happen fairly quickly. Relative to...

How many -- as a proportion of physicians.

Proportion of physicians, my apology -- proportion of physicians that will prescribe vitiligo. So as mentioned, with our target overlap for AD and vitiligo was 98%. And then when we did a survey of physicians, 70% of those physicians stated that they would prescribe vitiligo -- excuse me, Opzelura for the vitiligo patients. And so we expect with this being the only FDA-approved treatment option and there has been no other treatment options available that dermatologists will be eager to start patients on this therapy.

The next question is coming from Evan Seigerman of BMO Capital Markets.

This is Conor MacKay on for Evan. We just have 1 question. The revised indication for Opzelura suggests that usage beyond 24 weeks is acceptable in patients who have a satisfactory response. Would you just be able to expand a little bit on what you mean by satisfactory?

This is Jim Lee. So in terms of the satisfactory response, that's guidance to the physician. And so it says the physician and the patient should select or decide if they want to continue treatment or not beyond the 24 weeks. And that's really all -- it's over that language is intended for, it's really to assess patient's response at 24 weeks. And the patient, in the rare instance that they are not responding at all, obviously, they should reconsider the continued use of Opzelura. But as the 52-week data shows in the label, I think you'll see it shortly, the vast majority of the patients continued to improve. And so we anticipate that most of the patients will treat beyond 24 weeks.

The next question is coming from Matt Phipps of William Blair.

This is Rob Andrew on for Matt Phipps. Congratulations on the approval here. You mentioned earlier in the call some updates on the specificities in the safety label related to kind of mortality being in the setting of rheumatoid arthritis with oral JAKs. Also, it looks like there were some updates in terms of kind of malignancies and thrombosis more specifically related to Opzelura. So maybe you can just discuss those a little bit. I know we lost Dr. Desai here for the physician perspective. But how do you anticipate that, that's going to affect the kind of patient prescriber thought process on Opzelura here? And then just secondly, I don't think on Slide 6, there was any mention of AD in Europe. I know the plan had always been to launch vitiligo first there. But just wondering if you could address European plans for an AD launch as well.

This is Jim Lee, again. So let me address the questions around the updated safety labeling. So as I mentioned in the presentation, the box warning was updated to reflect the standardization of the language for the JAK class to specify the source of any of the adverse events that were reported in an RA study. So in terms of the specific updates, we really didn't have specific updates from or changes from the AD label. There were some events that were reported in the vitiligo clinical trials, but we believe that they were not related to treatment. But we disclosed all of the events that occurred and the updated safety section is indicative of the data that we collected in the Phase III program. In terms of the European question, I'll turn it over to Herve.

Yes, maybe I can take it. So the submission in Europe is in vitiligo. The expected review time would lead to end of the year or somewhere there depending on some review delays or not, but somewhere by the end of the year. The reason why we wanted vitiligo is very clear, is because there is no approved therapy. So the pricing, which in Europe can be volatile, would be easier if we have an indication where there is nothing else approved. In terms of AD, we have not given up completely. We are looking at what could be potentially indications that will be limited in some way and would allow us to have the same price as what we expect to get in vitiligo. But as of today, there is no submission in atopic dermatitis.

Yes. And this is Todd, relative to your question about the box warning. So physicians will give consideration to the box warning and other factors to be able to make an informed treatment recommendation. Specific to Opzelura for vitiligo, I think some of those key considerations will be the unmet need as well as the availability of any other viable treatment options. And then finally, that there were no new safety signals with continuous use of Opzelura in vitiligo and it was well-tolerated profile with the most common adverse event of acne.

Thank you. Ladies and gentlemen, we have gone through all of our questions for today. We would thank you for your participation and interest in today's topic. You may disconnect your lines to log off the webcast at this time, and enjoy the rest of your day.