Incyte Corporation (INCY) Q4 FY2025 Earnings Call Transcript & Summary

Greetings, and welcome to the Incyte Fourth Quarter and Year-End 2025 Financial Results Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] It's now my pleasure to turn the call over to your host, Alexis Smith, Vice President, Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to Incyte's Fourth Quarter and Full Year 2025 Earnings Conference Call. Before we begin, I encourage everyone to go to the Investors section of our website to find the press release, related financial tables and slides that follow today's discussion. On today's call, I'm joined by Bill, Pablo and Tom, who will deliver our prepared remarks. Steven, Dave, Matteo and Mohamed will also be available for the Q&A portion of today's call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I will now hand the call over to Bill.

Alexis, thank you, and good morning, everyone. I'll cover two topics today. First, I'll give an overview of our performance in 2025, then I'll turn to our outlook for 2026 and beyond and the steps we're taking with our core business and pipeline to transition Incyte. As I touched on at JPM, there are several achievements in 2025 that stand out. First, our business exceeded expectations on three levels: total sales, Jakafi sales and our core business sales ex-Jakafi. Second, we fundamentally changed the shape and maturity of our pipeline. We moved multiple assets from early to late-stage development. We now have several outlier opportunities for the treatment of MPNs, pancreatic cancer, colorectal cancer and HS that have the potential to drive revenue, earnings and cash flow into the next decade. Finally, regulatory applications for Jakafi XR, Opzelura for moderate AD and povorcitinib for HS in Europe were submitted on a timely basis. The point here is we have much greater visibility into the potential growth profile of the company now than we did at the start of 2025. Everything we accomplished this past year commercially, scientifically and operationally has created the foundation for an inflection point in '26 and beyond. Now I'll speak to our performance in '25 and the outlook. for '26. Turning to revenue. The business performed exceptionally well this past year. Revenues in the fourth quarter totaled $1.51 billion, up 28% versus the prior year. For full year '25, revenue totaled $5.14 billion, up 21% year-over-year. This was driven by strong commercial performance and an increase in milestone and contract revenue. Net sales in the fourth quarter totaled $1.22 billion, representing a 20% increase versus the prior year. For full year '25, net sales were $4.35 billion, also up 20% year-over-year, exceeding both expectations and our guidance. Growth was broad-based with nearly every product contributing meaningfully. Focusing on our core business ex-Jakafi, sales totaled $1.26 billion, representing over $400 million in growth and a 53% increase versus 2024. Opzelura, NiktimVo and Monjuvi were the largest absolute growth contributors. This core business is expected to grow over 30% in '26 and has the potential to grow at a 15% to 20% 5-year CAGR and approach $3 billion to $4 billion by 2030. Now a few comments about the key products, Jakafi, Opzelura and our hematology and oncology products. Starting with Jakafi on Slide 9. Fourth quarter and full year sales exceeded expectations. In the fourth quarter, sales were $828 million, an increase of 7% versus prior year. Full year sales totaled $3.093 billion, representing an 11% increase year-over-year. Jakafi remains an integral part of our business and keeping it healthy is a priority. It continues to serve as a funding source for our pipeline and for future product launches. A few comments on the fundamentals of this business. First, prescriptions increased 11% in the fourth quarter and 9% for the full year 2025, despite a growing base and competition. Second, demand was up across all three indications. PV will be the largest and fastest-growing indication in '26. And with a penetration rate of only 30% versus 60% to 70% in frontline MF, it should be a reliable and significant source of growth going forward. And finally, formulary coverage for Jakafi remains excellent with near complete coverage across plans. In '26, we expect net sales to be $3.22 billion to $3.27 billion. Prescriptions are expected to grow at a high single-digit rate, representing mid-single-digit sales growth compared to 2025. In terms of Jakafi XR, we expect to receive an approval and launch in the middle of '26. Given this timing, the second half of the year will be mostly about formulary access and '27 will be focused on conversion. We'll share more about our launch plans in future calls. Now I'll turn to Slide 10 for Opzelura. Net sales in the fourth quarter totaled $207 million, an increase of 28% and full year net sales were $678 million, up 33% versus 2024. Growth was driven by increased penetration in the U.S. AD and vitiligo markets, where Opzelura prescriptions climbed 24% and 15%, respectively. The pediatric launch for Opzelura AD is off to a strong start in the United States with sales already annualizing around $30 million. Both dermatologists and parents are increasingly seeking nonsteroidal options for atopic dermatitis, driven by concerns about long-term steroid use. International sales for Opzelura in vitiligo doubled to $130 million in 2025. In '26, we expect sales of $750 million to $790 million, representing roughly a 15% increase at the midpoint. This estimate is based primarily on continued double-digit volume growth in the United States for AD and vitiligo, partially offset by price actions to expand formulary coverage as well as sustained double-digit growth internationally off of a larger base as we lap the strong full year launch for vitiligo in Europe. Most of the benefits of the moderate AD launch in Europe in the second half of this year are expected in '27 and beyond. As I've said, our aim long term is to nearly double the size of this business. The nonsteroidal segment of the AD market is growing 20% year-over-year, creating a significant tailwind as prescribing migrates from topical steroids to nonsteroid options. We still have a modest share of each of those segments, so there is substantial headroom for growth. In addition to this, our international business and new indications will serve as meaningful catalysts for the next phase of expansion. And now on Slide 11, we'll turn to our hematology and oncology products. Net product sales in the fourth quarter were $187 million, up 121% compared to prior year. Full year '25 sales were $583 million, representing an 83% increase compared to 2024, driven by Niktimvo, Monjuvi and Zynyz. Niktimvo finished its first year at $152 million. We achieved broad penetration and deep utilization of BMT centers, and we've reached more than 1,400 patients with 13,000 infusions. In line with expectations, Niktimvo is being used widely in the fourth-line setting with increasing preference in the third line. As it relates to Monjuvi, sales were up 20% versus prior year based on a strong launch in follicular lymphoma in the middle of 2025. As you know, we released data in January in frontline DLBCL, where Monjuvi plus lenalidomide showed a 25% improvement in PFS, improving on R-CHOP chemotherapy. which is a regimen that still accounts for 50% of the first-line DLBCL market. This year, we plan to present the data at an upcoming medical meeting, work to incorporate Monjuvi into appropriate guidelines and submit an sBLA in the first half with the potential FDA approval by early '27. Looking ahead, we've set our full year guidance for the hematology and oncology business at $800 million to $880 million for the year, representing approximately a 40% to 50% increase compared to our performance in '25. Now three takeaways about '26 that I'd like to reinforce before turning over the call to Pablo. First, our core business, excluding Jakafi, has the potential to be as large as Jakafi is today by 2030. A key part of that growth will come from product launches we expect late this year and early '27. I mentioned XR, Opzelura and Monjuvi earlier, so I want to make a few comments about where we are with povorcitinib. The NDA for povorcitinib in HS has been submitted, and we anticipate filing acceptance this quarter. As you know, HS is the first of potentially three indications, the others being PN and vitiligo. Povo has the potential to be the first FDA-approved oral treatment for HS. Here, we have an opportunity to capture patients at two critical inflection points. First, in the pre-biologic setting, a population with no FDA-approved treatments today. These patients are cycling through antibiotics and steroids that don't address the underlying disease biology. Second, in the post-biologic setting where IL-17s and TNFs are used, but where partial responses are common. An effective oral option could be transformative in both treatment settings. We will talk more about launch plans in future calls. Second, our pipeline has the breadth and depth to support top-tier growth and the potential of 2 to 3x our top line over time. In '26 alone, we will have 14 pivotal trials underway across 7 assets by end of the year and multiple data catalysts. Pablo will walk through the status of our key programs and the potential to double our business over time. And finally, we view BD as a multiplier, a way to extend and strengthen the core. We have the capacity to pursue a broad range of opportunities. Ultimately, the size and nature of any deal will be dictated by strategic fit and the potential for durable revenue, earnings and cash flow. Now I'll hand it over to Pablo.

Thank you, Bill, and good morning, everyone. As Bill mentioned earlier, in 2025, the pipeline reached a new level of breadth and maturity, setting up a materially different outlook for the company going forward. First, our approved portfolio and regulatory footprint broadened with approvals for Monjuvi in follicular lymphoma, Zynyz in squamous cell anal carcinoma and Opzelura in pediatric atopic dermatitis, alongside regulatory submissions for Jakafi XR, Opzelura and povorcitinib. Second, positive clinical data meaningfully advanced multiple programs, including Phase III registrational data for povorcitinib in hidradenitis suppurativa or HS, and early-stage results supporting pivotal development for the mutant CALR program in MF/ET, KRAS G12D in pancreatic cancer and TGF-beta receptor 2 by PD-1 bispecific in MSS colorectal cancer. In 2026, we will continue to build on this momentum through additional approvals, regulatory filings, pivotal data readouts and trial initiations. For our late-stage pipeline, we anticipate FDA filing acceptance for povorcitinib in HS this quarter, and we plan to submit an sBLA for tafasitamab in first-line DLBCL in the first half of 2026. With the submissions underway, we expect the potential approval and launch of four products in late 2026 and early 2027. The emphasis in '26 shifts to advancement across the portfolio as we expect 7 data readouts this year, including the positive tafasitamab data already shared in January and 14 pivotal trials underway across hematology, oncology and immunology by year-end. Together, this reflects a pipeline that is increasingly focused, more mature and positioned to translate scientific progress into meaningful impact and long-term value creation. Our hematology portfolio balances two priorities: expanding the addressable market of established products such as tafasitamab across the full spectrum of B-cell lymphomas and axatilimab in graft-versus-host disease and advancing novel therapies in myeloproliferative neoplasms via our MPN portfolio of targeted therapies. In GvHD, we're advancing Niktimvo in two first-line studies evaluating it in combination with ruxolitinib as well as in combination with steroids. Data from these trials are expected in early 2027 and early 2028, respectively. Our MPN pipeline remains a key area of focus where we're advancing three targeted therapies: 989, our mutant CALR monoclonal antibody; 784, our mutant CALRxCD3 bispecific antibody; and 058, our JAK2 V617F small molecule inhibitor. Each of these programs is designed to address a well-defined disease driver with the potential for disease-modifying activity and the opportunity to fundamentally change how MPNs are treated. Looking ahead to upcoming milestones, we expect to report Phase I data for 058 in the second half of this year and Phase I data for 784 in 2027. With that context, I would like to turn to Slide 17 to review our progress with 989 and the breadth of development efforts for this program. As a reminder, last year, we presented Phase I data evaluating 989 in CALR-positive patients with essential thrombocythemia and myelofibrosis. The data presented at EHA and ASH in 2025 reinforce the potential of our approach to directly target the oncogenic driver mutation, addressing both the underlying disease and key clinical manifestations. Importantly, the proof-of-concept results provide a strong foundation to advance 989 into pivotal Phase III development. We expect to initiate our Phase III trial evaluating 989 in second-line CALR-positive ET patients in mid-2026, following regulatory alignment in the first quarter. Turning to myelofibrosis. We expect to initiate a Phase III trial in second-line MF in the second half of 2026, following regulatory alignment midyear. In parallel, we continue to advance our ongoing Phase I study, which is enrolling second-line ET, second-line MF and first-line MF cohorts. We plan to share updated data in second-line ET and second-line MF midyear and new data from our cohort evaluating 989 as a monotherapy and in combination with ruxolitinib as a first-line therapy in the second half of 2026. Finally, we're advancing a subcutaneous formulation of 989. We aligned with the FDA on this development strategy last month, and we plan to initiate a Phase I study during the first quarter of 2026. In December, tafasitamab was approved in both Europe and Japan in combination with lenalidomide and rituximab for the treatment of adult patients with relapsed or refractory follicular lymphoma following at least one prior line of systemic therapy, further expanding its global footprint. In January, we reported positive top line results from the pivotal Phase III frontMIND trial, which evaluated tafasitamab and lenalidomide in combination with R-CHOP as a first-line treatment for newly diagnosed high-grade DLBCL with IPI of 3 to 5. The study met its primary endpoint of progression-free survival and achieved its key secondary endpoint of event-free survival by investigator assessment with no new safety signals observed. We plan to present additional data from the frontline study, including overall survival and subgroup analysis at an upcoming medical congress this year. Based on these results, the sBLA for first-line DLBCL remains on track for submission in the first half of 2026. If approved, Monjuvi has the potential to address the full spectrum of B-cell lymphomas. Turning now to oncology. Our oncology portfolio focuses on advancing novel therapies that target well-validated but historically difficult pathways in high incidence cancers, including colorectal, pancreatic and ovarian cancer. Starting with 890, our first-in-class TGF-beta receptor 2 by PD-1 bispecific antibody. Based on data we presented at ESMO and following alignment with the FDA, we initiated a Phase III study in December, evaluating 890 in combination with FOLFOX and bevacizumab compared to placebo in combination with FOLFOX bevacizumab in first-line MSS colorectal cancer patients. Next, 667, our CDK2 inhibitor, is being evaluated in patients with platinum-resistant ovarian cancer with cyclin E1 overexpression, a biomarker-defined population with significant medical need. The MAESTRO clinical program consists of two ongoing trials, a Phase II single-arm study and a Phase III study versus investigator's choice chemotherapy as well as a planned Phase III study evaluating 667 in the first-line maintenance setting in combination with bevacizumab. 734 is a highly selective KRAS G12D inhibitor that has demonstrated promising antitumor activity in G12D mutated solid tumors, including pancreatic ductal adenocarcinoma or PDAC. Last month, at ASCO GI, we presented new efficacy and safety data evaluating 734, both as a monotherapy and in combination regimens in patients with PDAC. At the planned Phase III dose of 200 milligrams a day, 734 as a monotherapy demonstrated a 37% overall response rate in a predominantly third line and later population with a disease control rate of 78%. In combination with standard of care therapies, 734 demonstrated a manageable tolerability profile when combined with both gemcitabine plus nab-paclitaxel and modified FOLFIRINOX without compromising chemotherapy dose intensity. Taken together, this data support the potential for 734 to be meaningfully integrated into frontline treatment for patients with PDAC. Earlier this year, we gained alignment with the FDA on the registrational program and are on track to initiate our Phase III trial in first-line PDAC in the first quarter of 2026. If approved, 734 would represent the first G12D targeted therapy for the treatment of patients with pancreatic cancer. With pivotal trials now underway for CDK2, TGF-beta receptor by PD-1 and KRAS G12D, our strategic focus is turning to how we can expand these programs across additional tumor types and clinical settings. Our objective is to broaden the potential impact of these programs and reach more patients over time. We expect to provide updates during 2026. Finally, in IAI, we have a JAK anchor franchise with topical to oral solutions across mild to severe immune-mediated dermatological conditions. First, an update with Opzelura. In early 2025, we shared results from the Phase III program in prurigo nodularis, where Opzelura met its primary endpoint, demonstrating statistically significant improvement in itch compared to placebo in one of two registrational studies. In January, we received FDA feedback indicating that an additional clinical efficacy study will be required to support registration for this indication. As a result, we have decided to pause further development of Opzelura in PN at this time. Opzelura is also being evaluated in a large Phase III registrational program as a topical treatment for mild to moderate hidradenitis suppurativa with results expected from the TRuE-HS1 and TRuE-HS2 trials later this year. Hidradenitis suppurativa is also the most advanced indication for povorcitinib, our novel JAK1 small molecule inhibitor. Earlier this year, we presented 24-week Phase III data that further reinforced the differentiated clinical profile of povorcitinib, demonstrating deep and sustained improvements across multiple key endpoints. Importantly, povorcitinib also showed a rapid and robust reduction in skin pain and draining tunnels, a defining symptom for patients and a critical treatment goal for clinicians. From a regulatory standpoint, we submitted the MAA to the EMA during the fourth quarter of 2025 and anticipate acceptance of the NDA filing by the FDA in the first quarter of 2026. Beyond HS, our Phase III registrational trials in vitiligo and PN continue to progress well. In vitiligo, we anticipate data from our two registrational Phase III trials, STOP-V1 and STOP-V2 in mid-2026. In PN, we anticipate data from our STOP-PN1 and STOP-PN2 studies expected by year-end. Finally, we continue to explore its broader potential with Phase II proof-of-concept data in asthma anticipated in the second half of 2026. Overall, 2026 is a pivotal year for Opzelura and povorcitinib with important key regulatory and clinical milestones across all evaluated indications. To close, we have a catalyst-rich year ahead with multiple late-stage data readouts, regulatory milestones and pivotal trial initiations across our three core franchises, underscoring the breadth, depth and maturity of our pipeline. We look forward to an exciting year of execution and to providing continued visibility as these milestones unfold. With that, I'll turn the call over to Tom for a financial update on the quarter.

Thanks, Pablo. As Bill mentioned earlier, our total revenues and product revenues for the quarter were $1.51 billion and $1.22 billion, respectively, increasing 28% and 20% from the prior year. For the full year, our total revenues and product revenues were $5.14 billion and $4.35 billion, respectively, increasing 21% and 20% from the prior year. Our GAAP R&D expenses were $611 million for the quarter, increasing 31% from the prior year. Our GAAP R&D expenses were $2.05 billion for the year. Ongoing R&D expenses increased 8% year-over-year, driven by continued investment in our late-stage development assets. Moving to SG&A. GAAP SG&A expenses were $390 million for the quarter, increasing 19% year-over-year. Our GAAP SG&A expenses were $1.38 billion for the year, increasing 11% year-over-year, primarily driven by costs associated with the U.S. oncology product launches in 2025 and timing of certain other expenses. Ongoing operating expenses for the full year 2025 increased 11% year-over-year compared to a 19% increase in ongoing revenues during the same period, leading to a continued increase in operating leverage and margins. I'll now turn the call back over to Bill.

Thanks, Tom. Before we close, I want to reiterate our revenue guidance and address our expense outlook for 2026. As mentioned earlier, we have set full year '26 revenue guidance of $4.77 billion to $4.94 billion, representing a 10% to 13% increase from prior year. This includes net revenue expectations for Jakafi of $3.22 billion to $3.27 billion, Opzelura of $750 million to $790 million and hematology/oncology of $800 million to $880 million. Sales for our core business ex-Jakafi will range between $1.57 billion and $1.69 billion, representing roughly a 30% growth rate at the midpoint in 2026. As it relates to expenses, I think we've achieved the right balance between maintaining financial discipline and ensuring we are not underfunding strategic initiatives or compromising our growth prospects. We will continue to get leverage out of this business where we can so that we can create financial breathing room to invest where it matters most. Ultimately, what we're solving for is the steepest possible growth curve post '29 and durable earnings and cash flow. We expect total GAAP R&D and SG&A operating expenses to be $3.495 billion to $3.675 billion in '26. At the midpoint, this represents a 4% increase versus prior year, driven primarily by targeted investments in our late-stage pipeline and launch readiness while maintaining tight control elsewhere. We expect R&D to be up roughly 10% from last year, consistent with advancing programs that we believe can meaningfully shape the company's future. 80% of our investment in R&D is concentrated in the 7 programs Pablo reviewed earlier. As it relates to SG&A, G&A will be down 10% compared to last year, while sales and marketing is modestly higher to support the key launches in the second half of the year. Together, SG&A will remain relatively flat year-over-year, reflecting deliberate reallocation rather than broad-based spending. Finally, we anticipate cost of goods to remain relatively stable in the 8% to 9% range of net sales. We have an excellent set of opportunities in front of us and a path to replace Jakafi. What matters most right now, like at any company is execution, getting things done, which means orchestrating product launches, running multiple Phase III trials to tight time lines and managing the business at a detailed level. With that, I'll turn the call over to the operator for Q&A.

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

Congrats on the progress. Maybe to start with Pablo for the CALR pivotal programs, just your latest thoughts as you've gotten into designing the Phase IIIs as to just kind of how to address the potential differences for 989 and dosing for some of the different CALR mutations to ensure full potency. Its best approach to start low, titrate up for those that need it or maybe prospectively kind of wrap people to different starting doses? Or is it just simplify things and max out dose for everyone. And then maybe just a quick clarifying thing on the commentary around Opzelura pricing. Just how much of that was driven by the entry into -- your entry into new markets and needing to access those versus maybe some of the competitive launches putting pressure on the existing indications?

Go ahead. Pablo will take the first one. Thanks for the questions, Marc.

Okay. So we're going to discuss this with FDA this quarter. So I just -- I'm going to try not to get too far ahead of ourselves. What we're proposing in principle for the ET second-line study, which we intend to initiate this half in the first half of 2026 is, first of all, the enrollment would be in all patients, patients with all types of mutations, both type 1 and non-type 1 mutations. And we're going to discuss with FDA a dosing strategy, which we think will address the differential potency of 989 across the range of mutations that you brought up in your question. We're confident that we have a good strategy. We're also going to discuss the primary endpoint of the study, which obviously will be some version of hematologic response, but the question there is the timing for the evaluation of the primary endpoint, which we would like to discuss with the agency. So all in all, I think we're in a good position. I think we submitted a good package. We look forward to interacting with the agency, and we'll provide an update later this year.

Okay. Thanks, Pablo. And Marc, as it relates to Opzelura, not a competitive issue. We take a very long-term view of Opzelura. We have exclusivity to the end of the next decade. We just launched a pediatric indication. We potentially could have an HS indication. The market is really moving, as you know, as I mentioned, prescribing migrates from steroidal topicals to nonsteroidal topicals. This was about improving formulary coverage for the long term at the major PBMs so that it's a frictionless experience for dermatologists and patients. And I would expect the impact on ASP in '26 to roll off in 2027 and beyond, we'll be providing fewer discounts in the future than we did in the past. That's it.

Next question is coming from Tazeen Ahmad from Bank of America.

Also one on Opzelura. So can you just give us your sense of what the uptake is in the current approved indications and the average number of tubes that are being used? We understand the importance of being on formulary, but we'd also like to get a better sense of how to better model sales on a go-forward basis.

Yes, I can break this down a little, Tazeen. First, the AD business is growing at almost 20% year-over-year. You saw that in our '25 results. And then you have a vitiligo business that's growing in the mid-teens. And roughly 60% of our business is AD and roughly 40% of it is vitiligo. I would also comment that we launched for pediatrics in 2025. And that business, when you look at prescription data on a weekly basis is already annualizing at $30 million. So when you're thinking about modeling Opzelura, that business is going to grow over the next 5 years at about a 10% CAGR. That's how I would think about net sales. The other piece of Opzelura that you have to think about is the international business. Now internationally, we finished '25 with $130 million in sales in vitiligo. We're launching for moderate AD in that same market in the second half of the year. Most of the benefit will be in '27. The AD market is 5x the size of the vitiligo market. So I estimate there's probably $300 million in incremental revenue for Opzelura internationally over the next 5 years. So we're going to -- we finished the year at roughly $700 million, give or take, just below. $300 million of that could come from the United States, driven by AD, vitiligo, and then $300 million internationally just by the -- just with the launch in moderate AD. What I haven't factored into this is if we get an indication for HS, for Opzelura at the end of 2027. Most of our growth will be volume. We expect some modest price actions over the next several years. I think most of the heavy lifting as it relates to securing formulary coverage and the investment in that is behind us. And that's how you think about this business. Essentially, you're going to grow at a CAGR of, call it, 10% to 15%. Thanks for the question.

Next question today is coming from Michael Schmidt from Guggenheim Securities.

This is Rosy on for Michael. Just some questions on frontline. I guess with Monjuvi succeeding in frontline DLBCL, Bill, you had mentioned that 50% of patients are receiving R-CHOP. But just can you help us understand how you're thinking about the overall opportunity for Monjuvi in the setting and just positioning versus POLIVY? And then a quick follow-up. I guess on the trial, with the IPI eligibility criteria, it seems like the trial would maybe have a higher enrichment of patients with a poor prognosis. So I guess in this context, how should we think about the PFS benefit that you reported? And are there any implications here for Monjuvi's potential use across a broader frontline population?

Great questions. I'll have Pablo answer the second question, and then we'll double back and answer the first question. Thanks, Pablo.

So you're correct. The study was focused on patients with IPI 3 to 5, and that is a group with the worse prognosis than what has been reported by some of our competitors in the frontline DLBCL setting. I also would encourage you, what we know today, obviously, as mentioned in the script, that about half the patients are still getting R-CHOP. And the recently introduced competitors in this space do not address the need of all patients with DLBCL. As you know, there's an entire subset of patients here with GCB DLBCL that are not currently addressed by one of the more recent entries in the space. We look forward to showing the full benefit of Monjuvi in this patient population. We think that the benefit in PFS that we reported is very competitive. As you know, the safety profile of Monjuvi is very well established in this context. So we'll discuss the results in more detail over the course of the year, but we're very encouraged by what we're seeing across the entire spectrum of patients with DLBCL with IPI 3 to 5.

Yes. I'll just make a couple of comments, and then I'll ask Mohamed, who runs Monjuvi to finish up. Right now, we're going to have by the end of '26, early '27 a 3-indication product. And we'll finish this year somewhere in the range of the mid-$200 million. With an indication of frontline DLBCL, and I don't see it as a fight to the death between POLIVY and Monjuvi, we have a very positive study in frontline DLBCL, clear separation in terms of PFS. It's simply an intensification strategy with Monjuvi being added to Len and R-CHOP versus a substitution or a replacement strategy with POLIVY. And so there's incremental revenue associated with Monjuvi that will support building this core business in 2030 to $3 billion to $4 billion. Mohamed, do you have anything to add?

Yes. Thanks, Rosy, for the question. First-line DLBCL represents the largest potential opportunity for Monjuvi with approximately 30,000 patients treated annually. And 50% of those patients, as was mentioned, are still being treated with R-CHOP today. And as Bill just described, Monjuvi is an addition to R-CHOP versus replacing R-CHOP. And as Pablo mentioned, full spectrum of efficacy across all different types of patients with the PFS benefit that's been communicated, I think, positions Monjuvi, not just for short-term growth, but continues to make Monjuvi a meaningful contributor, as you heard from Bill and others, around our growth story in 2029 and beyond. Thanks for the question, Rosy.

Next question today is coming from Eric Schmidt from Cantor Fitzgerald.

Maybe I'll ask about 890, your bispecific for colorectal cancer. Are we going to see any additional Phase I/II data in 2026? And does the pivotal study have an interim analysis?

Thanks, Eric. Pablo, Steven, do you want to take that?

Yes, Eric. So yes, you will see additional data over the course of the year. That program, as I mentioned in my prepared remarks, was initiated -- the Phase III study was initiated already. We're in the process of expanding the footprint. We have identified more than 200 sites globally to execute the study, and we look forward to sharing updated data both in combination with FOLFOX bevacizumab as well as other combinations that we are implementing for that program. So you'll see more data over the course of the year. We'll give more clarity on the specific timing of those as the year progresses depending on submissions to different conferences.

Next question today is coming from Salim Syed from Mizuho.

This is Erik Lavington on for Salim. So just wondering if we could get a little bit more color on the Opzelura in PN and why the FDA was asking for another Phase III or recommending it, if that has any read-through to the Opzelura in HS or if -- per chance might have to do with trial designs for HS, PN?

Great. Thanks for the question. Steven Stein will answer that for you.

Eric, thank you. You asked a few questions related to both PN and HS. So just in Pablo's prepared remarks, if you remember, we conducted two large Phase IIIs in prurigo nodularis. The study was positive and statistically significant. The second study just missed. Based on comments during the year that the FDA made, we approached them if the combined analysis could suffice to get across the finish line. Because we had conducted two studies and one was negative, they strongly recommended that an additional trial, a third study would be needed in this setting and would obviously have to be positive to get it across the finish line. So it's a unique situation where we had two studies, one positive, one negative. And as Pablo said, that's why the program is currently paused while we debate whether or not to conduct an additional study. There is no read-through to HS. In our HS studies, we're doing standard regulatory development. Again, two large Phase IIIs accruing very well. As you know, our proof-of-concept data is very strong there. And obviously, we want those studies to be positive and get across the finish line. And I don't know if Pablo wants to add anything else.

No, I will just add just a small comment on PN. While the second study did barely miss the primary endpoint of itch, it was very positive for the investigator global assessment of treatment success. So we're convinced that Opzelura has strong efficacy in patients with prurigo nodularis. As I mentioned in my prepared remarks, we paused further development there. We're discussing whether we do -- we will or will not do an additional trial to try to support that indication. I obviously agree with Steven. I don't think there's any read-through to the HS indication.

Next question is coming from Salveen Richter from Goldman Sachs.

Could you speak to the mCALR bispecific here? You've guided to Phase I data next year. Maybe tell us more about this asset and how it could be differentiated from your current mCALR program? And then on 617F, where we'll see initial Phase I data in the second half, what is your current level of conviction for this asset? And walk us through the profile you want to see here to make that go/no-go decision?

Thanks, Salveen. Pablo will take that.

Thanks, Salveen. So let me take first the CALR x CD3 bispecific program. So that study is really now accelerating. So we're very encouraged that the enrollment is going well. As you might remember, we designed our CALR x CD3 T cell engager bispecific purposefully with the CALR arm binding to a different epitope from our CALR antibody. The reason for that is obviously, if patients for some reason do not respond to the CALR antibody, there would be ideal targets for the bispecific. Now in terms of understanding where exactly we'll place the bispecific in the treatment paradigm for patients with MPNs, I think it's too soon for me to elaborate too much there. We believe that there might be some patients that require more potent approach or that require a molecule that produces faster responses or perhaps that after initial responses to the CALR antibody for some reason, progress. As we generate the efficacy data that we will have next year for the bispecific, we will get more clarity on what's the position in the treatment paradigm in patients with MPNs. As you know, and I reiterated at ASH last year, our goal by the end of the decade is to have a treatment solution for every single patient with MPN. That's why we think the bispecific could play a role. Now in terms of the V617F program, we remain fully convinced that if you hit this driver mutation, the V617F mutation patients in PN, if we hit it hard enough, we will get the same type of outcomes that we saw with the CALR antibody in MF and ET. This is a driver mutation. We have a small molecule inhibitor. We have very strong preclinical package that we presented repeatedly. And we believe that if we hit it hard enough, we will get the same kind of transformative clinical effects and molecular effects that we saw with 989. We just need to generate that data. We are now entering the clinic with a new formulation that we discussed recently, a solid dispersion formulation. We will have data later this year. And once we have that data, we'll tell you what the next steps of the program are.

And Pablo, also the key is that with 617F, we'll cover 3 MPNs, MF, ET and PV, not just MF and ET. And the mutation frequency, as you know, Salveen, is 2x, 3x what it is for CALR. And so you'd essentially with 617 cover 80% of MF and ET and PV.

Our next question today is coming from Jay Olson from Oppenheimer.

As you plan your KRAS G12D PDAC study, can you share your thoughts on the trial design? And how are you viewing the competitive landscape that's evolving in PDAC and potential advantages for your program? And do you plan to run any additional Phase III studies beyond PDAC?

I'm going to have Steven comment on the trial design, then I can come back with the competitive landscape and the expansion of this program. Go ahead.

Yes, Jay, thank you for the question. So as Pablo said in the updated at ASCO GI, we had that 37% response rate with very encouraging data on duration of response, potentially a read-through from duration of treatment to PFS. So we're really encouraged. I think the second really important point there was the ability to combine our 12D inhibitor with both standard of care chemotherapy regimens in the frontline. So gem/Abraxane plus modified FOLFIRINOX and the ability to deliver those regimens with the dose. So you can read through to that. Obviously, the study will go up on clinicaltrials.gov as soon as it's open, that we intend to do a first-line study in combination with both chemotherapy regimens. We'll stratify accordingly. It will probably be 50-50 percent approximately each use and then it will be a comparison to the chemotherapy with standard time-to-event endpoints. We may look at things along the way in terms of response rate, et cetera, but it's a time-to-event study in that setting. In terms of other studies beyond PDAC, obviously, this is a compound that we really like. I just alluded to the activity in PDAC. We have interesting activity in other tumor types where 12D is important like colorectal cancer and lung, et cetera. So stay tuned to developments there. And including in PDAC as well, there's potential to potentially do things like adjuvant or neoadjuvant studies as well, which we'll outline as soon as we're ready to do so. So it's an important compound to us. We may well be the first 12D to get across the finish line in terms of mutation-specific therapy in a large tumor with massive unmet need and the ability to combine with both first-line standards of care chemotherapy.

Thanks, Steven. And Jay, just regarding the competitive landscape, and I think this is true not just for 734 or G12D, but also TGF-beta x PD-1. Both these cancers, response rates are low, survival times are short, and there haven't been novel treatments in the frontline setting in decades. G12D as a target was the Everest of oncology. TGF-beta by PD-1, no one's cracked the code. Now we have to convert Phase I to Phase III. But I don't think this is about competition. These are the largest wide open white spaces in cancer. We could be first or early in pancreatic and we could be first and only in colorectal. And so right now, we have to execute this program and as Pablo talked about and Steven, expand these programs. And we have the capabilities and the resources to maximize both assets. If we ever needed a partner, we would think about that carefully, expand our geographic reach, and we would do it on our term. But we are sort of locked in on both of these. And I think competition is less important. Phase III execution is most important.

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

This is Madeleine on for Matt Phipps. On povo in HS, did the pre-NDA discussions with the FDA discuss the potential to include biologic-naive patients in the labeled indication?

Yes. Thank you for the question. I'll let Steven Stein answer it.

Yes. So obviously, our study included both populations, pre-biologic and post-biologic. In fact, about 33% to 36% of patients had biologic exposure. You saw the activity, which we updated during the year, showing extremely encouraging HiSCR response rate that increased over time, excellent pain control upwards of 70% of patients over time having little to no pain and excellent data on draining tunnel. And that includes -- is included in both populations. The post-biologic activity is a little higher. We submitted the NDA, as we alluded to in our remarks, and that will be by the end of this first quarter should be signed off by the FDA. And we are seeking a label in both populations.

Our next question today is coming from Judah Frommer from Morgan Stanley.

[indiscernible] on for Judah. We just wanted to get incremental color on expectations for the 989 readout in frontline MF later this year. What are you guys looking for in order to kind of move forward in that setting?

Pablo?

So by the second half of this year, we'll have a pretty substantial data set in patients with previously untreated myelofibrosis and that we're randomizing patients to 989 versus the combination of 989 ruxolitinib. So we'll have a very good idea of what the efficacy is in that population. Now let me make something very clear. I believe the data we have today with 989 that we presented at ASH that we have with 989 mostly in previously treated patients with MF, a little bit of naive patients that were not eligible for Jakafi. I am convinced that the efficacy and safety of 989 will support development in the first-line setting. We do need the data set that we'll present later this year in order to discuss with FDA how to design and implement the Phase III trials, but I am fully convinced that this medicine will be developable in first-line MF, and we'll give you more clarity later this year.

Next question today is coming from Andy Chen from Wolfe Research.

This is Brandon on for Andy. Regarding the XR, any preliminary conversations with payers on formulary access or early signs that give you confidence on the eventual launch here?

Yes, it's a good question. We absolutely have had conversations with every major PBM. Here's how I would think about it. I think that Jakafi is the perfect product for an XR formulation because if you think about it, it treats a chronic symptomatic disease, a twice-a-day drug with a 3-hour half-life. And we know that once-a-day formulations produce an adherence gain of 15% to 25%. So there is a medical reason why this product should be put on formulary. That's point number one. Point number two is we have to set a price that makes sense for the PBMs and the health plans for the patients and for Incyte. And there is a price point that's going to make sense. We think about it in three contexts. One is what is the net cost of the plan; two, what is the coinsurance and patient out of pockets and then three, what will be rebates. Now a new product, your goal is to get 80% to 100% coverage. With an extended-release formulation like Jakafi, you're probably not going to reach into that top tier of formulary coverage. But we should get enough formulary coverage to enable a conversion rate of 10% to 30%, pick the midpoint. Most of '26 will be about that. You'll start to see meaningful conversion in 2027. Thanks for the question.

Next question today is coming from Evan Seigerman from BMO Capital Markets.

When you're thinking about the Phase III HS data for Opzelura in 4Q, talk to me about how you plan to manage the placebo response for this trial and especially with it being tested in kind of the mild to moderate patient population, which you could have a more exaggerated dynamic with the placebo.

Thanks, Evan. Go ahead, Steven.

Yes, Evan, thanks for the question. You're right. So when you have a lower burden of abscess and nodules, you can get an inflated placebo response rate. The two ways we're managing that in the Phase IIIs are a larger study, a greater end and setting the minimum number of requirement on abscess and nodules, which should manage an artificial placebo response rate and then also looking at higher rates of HiSCR control like HiSCR755. So all of the above, larger study, a minimum number of abscess and nodules and a higher HiSCR control rate and then obviously two studies as well. And that's the main ways we're trying to control the placebo response rate.

Next question is coming from Derek Archila from Wells Fargo.

Just quickly, so how much revenue contribution from RUX XR are you really baking into the Jakafi guide? And I just wanted to clarify, so you highlighted 30% penetration for Jakafi in PV right now. I guess what level do you think you can get to before LOE?

As it relates to the guidance for 2026, there's no incremental revenue associated with XR in that number. And so we expect that Jakafi in '26 between MF, PV and GVHD will grow in the high single digits and there's going to be some modest price actions, and that gets us to the current guidance. When you think about this business over the next three years, the two indications that are growing at a double-digit rate, PV and GVHD. And I would look at this as a mid -- maybe mid- to high single-digit grower between now and 2028, the end of '28 when we actually transition and generics are introduced. I think it's the best way to model and think about the business. I think I've been pretty consistent about how to think about Jakafi. And as it relates to conversion, if we can pick up, take the midpoint 20%, you're going to have almost $0.25 billion sitting in XR when we get to the 29 here.

Next question is coming from Brian Abrahams from RBC Capital Markets.

So on 989, now that you have some alignment with the FDA, I was wondering if you could give us a sense of just the potential volumes and injection times that you're going to be testing for the subcu bioequivalence study? And maybe talk about the most probable path for integrating the subcu into the broader program and potential time lines there.

So let me make a couple of comments on the subcu development. And it's a little bit early for me to answer your question with a lot of precision. So let me try this. The study will test -- the first thing we need to answer is what's the bioavailability of the formulation that we're going to test subcu. We obviously have preclinical data, but now we need human data to really understand exactly what that is. So that's point number one. The second -- and as I mentioned, related to the first Phase III trial in second-line ET is we need to align with FDA, which we'll do this quarter on the dosing strategy for patients with ET. Once we have those two pieces of data, bioavailability of the subcu formulation and dosing strategy, I will be able to answer your question about volume and infusion time. As you remember, we signed a collaboration with Enable late last year, I believe in October of last year to use the enFuse device, which will allow very high volumes of infusions by the patients at home without the need to go to the doctor's office. It's a self-applied device. It takes about 10, 15 minutes, and the patient does it without any major discomfort. It's not a device that patients have to work continuously. They just do it at the time of the infusion and then they can remove it and throw it away. So we believe that, that device will give us the alternative to really have a very simple subcutaneous infusion experience for patients, pretty much regardless of the dose. But in terms of specifics, we need a little bit more data to fully answer the question. We'll have that data over the course of the year.

Our next question is coming from Stephen Willey from Stifel.

On the mutant selective JAK inhibitor, I know you've made some comments recently about IC35 being the exposure target that's needed to see clinical benefit. Can you just elaborate on why you think that's the right target exposure, if that's somehow limited by cross-reactivity on wild type? And just whether you think the new formulation can get you meaningfully higher than IC35?

Yes, it's an excellent question. So the reason for the IC35 focus with the 058 program is because that's specific to 058. It's not about the target. It's about the selectivity of the molecule that we have in the clinic. And that's what with the animal model data suggests that there is a window, the ideal window of selectivity between the effect on the mutant -- the V617 mutant and the wild type is around the IC35. So we believe that with the current formulation based on preclinical data, we should be able to achieve that level of exposure. That question will be answered relatively quickly over the course of this year, and we believe we'll then have clinical data in the second half of 2026. But the IC35 point is related to the selectivity of the molecule. Now -- as I mentioned, I think, towards the end of last year, and we reiterated at JPMorgan earlier this year, we do have backup programs in this space. We are fully committed to this target. We believe hitting this target hard will translate into clinical benefit in this patient. So whether it's 058 in the second half of this year, we'll provide clarity on addressing this target or one of the backup programs remains to be seen, but we're fully committed to answering this question.

Our final question today is coming from Kripa Devarakonda from Truist Securities.

I wanted to just get your expectations for povorcitinib in asthma with the Phase II readout coming up. And also, maybe you can help us understand where do you see a place for this drug in the therapeutic landscape? Is it prebiologic oral or for patients who are refractory? I know it's a little early ahead of the data, but any color you can give would be helpful.

Yes, I'll take the second part of your question, which I think relates to povorcitinib and HS, and then I'll turn it over to Pablo. I think the key here with povorcitinib, think about what's happening in the obesity market right now with an oral pill. There is a lot of energy around Wegovy. Now I'm not suggesting that HS is like obesity. But there's a couple of hundred thousand people in the United States being diagnosed and treated with HS. Only about 25% of those patients are taking an advanced systemic and the only advanced systemics available are the IL-17s and TNFs. There's 50,000 people. There's 150,000 people using products that are not approved for HS, antibiotics and steroids. Our ability to drive sales of povorcitinib is to get to that group, that 75% of the market, where they haven't advanced to a biologic, they're not getting complete control with an antibiotic or a steroid. So I think the path here is to get to this prebiologic population and 70% of our data are in that population. Povo is tailor-made for this group of patients, and I do expect that there'll be a great deal of trial and adoption. Once that happens, there's, of course, the post-biologic and half the people that are on IL-17 don't get a full response, and so there are going to be patients there. Next thing we have to do as a company is create an experience for patients and physicians and make it easy to get the product. And that means making sure we verify benefits, we get the time to first fill is really short. We clear PAs, and we reduce the abandonment rate. And if we do those two things, povorcitinib is going to be a major driver of revenue for this company in HS. And then, of course, you layer in PN and vitiligo, and we have a very sizable product. That's how I would think about it. If you want to turn to the asthma piece.

So look, we know from all the data that we've been generating over the past several years across a range of indications that povorcitinib is a very strong, very potent antiinflammatory medicine. In that context and knowing that asthma is an inflammatory disease, I think there's a strong rationale. There was a strong rationale when the study was started to develop povorcitinib in asthma, particularly in patients, obviously that don't respond to inhaled corticosteroids to a long-acting beta agonist and particularly in patients with low eosinophilic asthma. Now we are conducting a well-designed, randomized Phase II study. We will have the data later this year. And based on that, we'll decide next steps. But obviously, there was a strong scientific rationale to do that, and we look forward to sharing the data later this year.

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