Incyte Corporation (INCY) Earnings Call Transcript & Summary

Greetings and welcome to the Incyte Second Quarter 2026 Earnings 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 Alexis Smith, Vice President, Head of Investor Relations. Please go ahead, Alexis.

Thank you, and good morning. Welcome to Incyte's Second Quarter 2026 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 Suky, who will deliver our prepared remarks. Steven, Dave and Mohammed will also be available for Q&A. 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'll now hand the call over to Bill.

Thank you, Alexis, and good morning, everyone. At the start of the year, we laid out a plan to move insight from reliance on a cornerstone product to a company with multiple growth drivers. 6 months in, this transition is well underway, and we've made tangible progress. We've strengthened the core business, delivered key regulatory milestones, derisked and advanced our pipeline to late-stage development and added a novel Phase III hematology asset through business development. Let me expand on each. First, our business continues to perform above expectations. Total net sales growth was driven by increased demand and higher net sales across every product. Jakafi remains foundational to the company and delivered another strong quarter, keeping this product healthy as a strategic priority because it serves as a funding vehicle for the pipeline and new product launches. At the same time, our core business, excluding Jakafi continues to grow and is solidly on track to reach $3 billion to $4 billion in net sales by 2030. Importantly, this growth is not dependent on a single asset, but is supported by multiple products and near-term launches. We have the commercial capabilities, resources, infrastructure and management team required to execute successfully. The opportunity here is not simply the value of each individual product, but our ability to launch and scale multiple products in parallel. This capability will be a key driver of Insight's next phase of growth. Second, we achieved several of the key regulatory milestones we identified at the beginning of the year, including the approval and launch of Jakafi XR as well as the positive CHMP opinion of Opzelura in moderate AD with the final European Commission decision and Signature expected in the third quarter. In addition, regulatory reviews for povorcitinib in HS and Monjuvi in first-line DLBCL are underway with anticipated approvals and launches through early 2027. Third, we moved multiple assets into late-stage development. We launched Phase III studies for 989 in second-line ET, 734 in PDAC and 890 in CRC. We also have a catalyst-rich second half of the year with 10 data readouts across nearly all assets in our clinical pipeline, including data from our registration trial for Opzelura in HS and povorcitinib in PN. As these programs advance, we are gaining greater visibility into the potential shape of our growth profile beyond 2029. We also strengthened our hematology portfolio through business development. The Vega transaction added latarcibart, a potentially transformative treatment for Von Willebrand disease in Phase III development and a potential new growth driver for the company. Latarcibart expands our most important therapeutic franchise offers an attractive risk-reward profile and the transaction was structured to preserve balance sheet flexibility. It checked all the boxes we look for in business development. And as a textbook example of the type of deal that makes sense for Incyte. Taken together, Incyte is no longer dependent on one asset catalyst or blockbuster. We now have a solid core business, a series of near-term launches and a more mature late-stage pipeline supporting multiple avenues for future growth. Operationally, we're a stronger organization than we were a year ago. Our focus right now is execution, turning Phase III studies into approvals and approvals into successful launches. Turning to the quarter. Total revenue in the second quarter of '26 was $1.67 billion, up 38% year-over-year. Total net sales in the second quarter were $1.49 billion, representing 40% growth year-over-year. The increase was driven by continued demand across the portfolio and by a onetime noncash benefit from the CMS settlement. Excluding this benefit, total net sales increased 17%. This growth was broad-based with every marketed product growing year-over-year in both the U.S. and international markets. Jakafi sales in the second quarter were $817 million, up 7% year-over-year. Prescription demand for Jakafi increased 9% across all indications, MF, PV and GVHD, with PV being the largest growth driver. New patient starts remain strong. The prescriber base is stable and formulary coverage is broad, providing an important foundation for the Jakafi XR launch. A few comments on XR. The launch has 2 parts: coverage and adoption. On coverage, we're on track to achieve our year-end formulary goal of 50% to 70%, supported by recent wins at ESI, CVS, Optum and more than 10 regional plans. On adoption, we expect physician adoption to build gradually through the remainder of 2026 as coverage expands and physicians gain experience with XR with acceleration expected throughout 2027. Commercially, XR generated $10 million in sales in the second quarter, which primarily consists of initial inventory build. We expect XR sales to approach $40 million to $50 million for the full year, which is captured in our full year Jakafi guidance. Sales for our core business, excluding Jakafi were $671 million, up 127% year-over-year, excluding the onetime Opzelura benefit, sales grew 44%. This business is becoming an increasingly important part of how we transition Incyte through the LOE period and for long-term growth. Opzelura remains the largest contributor of our business outside of Jakafi, generating $450 million in second quarter sales. This includes $204 million of net product sales and a onetime noncash benefit of $246 million related to our agreement with CMS and the reversal of previously accrued balances associated with the resolution of Medicaid rebate litigation. In the U.S., sales, excluding the onetime benefit, were $161 million, an increase of 22% versus the second quarter of 2025. Demand here remains strong with prescriptions increasing 26% year-over-year, which outpaced the overall market, which grew 21%. New patient starts also remained strong with Opzelura capturing 46% of branded topical NBRx volume, a leading indicator of future growth and business health. The resolution of the CMS matter improves the economics of the business, resulting in a favorable change to our average selling price and gross to net profile. It effectively offset some of the investment we made to expand and maintain formulary access at the beginning of the year. As a result, prescription growth should translate more efficiently into net sales growth going forward. That said, we continue to view the pricing and reimbursement environment is dynamic, and so maintaining broad access and a disciplined gross-to-net profile remains a priority. Opzelura is in a stronger position today than it was a year ago. Demand is robust and access is broad. And while we're encouraged by this momentum, this is not a business we can put on autopilot. Sustaining growth will require effective commercial execution and continued focus on the access and pricing dynamics that support growth. Internationally, Opzelura sales were $43 million in the second quarter, up 34% year-over-year. Growth remains robust in vitiligo, where we see strong demand across markets. We remain on track for potential approval and launch of Opzelura for moderate atopic dermatitis in Europe during the third quarter. We expect modest revenue contribution in 2026 with momentum building through '27 as additional countries launch and reimbursement expands. We continue to view the international expansion of Opzelura as an important long-term growth driver for the franchise with the potential to deliver 2 to 3x the international sales today. Finally, in hematology and oncology, net sales grew 69% to $222 million. Niktimvo, Monjuvi and Zynyz were the biggest contributors to growth in the quarter. Niktimvo net sales were $60 million in the second quarter of '26, representing a 67% increase versus the prior year. The performance was entirely volume growth based, more than 300 new patients initiating therapy during the quarter and more than 1,200 patients treated. We currently hold approximately 1/3 of the third line plus market. Monjuvi net sales were $54 million in the second quarter, up 72% year-over-year. Growth was primarily driven by uptake in follicular lymphoma and international markets, including the recent approval and launch in Japan in the second quarter. Monjuvi is expected to have 3 sources of growth, relapsed/refractory DLBCL, follicular lymphoma and potentially first-line DLBCL. We expect the existing indications to remain incremental contributors while first-line DLBCL has the potential to become the largest growth driver for the franchise over time. Finally, Zynyz net sales were $50 million in the second quarter, a 4x increase year-over-year with rapid and robust adoption in SEAC across markets. In the U.S., Zynyz is becoming the leading prescribed regimen with over 40% share in first-line SEAC in just 12 months post launch. Now I'll turn the call over to Pablo.

Thank you, Bill, and good morning, everyone. At the beginning of 2026, we outlined ambitious development plans for the R&D organization, including 4 anticipated approvals, 2 new product launches, 7 key data readouts and the execution of 14 pivotal studies across our portfolio. As we have reached the midpoint of the year, I am happy to report that we have made significant progress and remain well positioned to deliver on the milestones we outlined. In the past 12 months, we have fundamentally changed the maturity of our portfolio, advancing multiple programs from early development into late-stage clinical trials while delivering regulatory submissions and approvals. Today, we have late-stage opportunities across all 3 of our core franchises, creating multiple opportunities for sustained long-term growth. All regulatory submissions, supporting our 4 anticipated approvals for 2026 are now complete. Jakafi XR was approved in the second quarter, representing the first of our 2 new product launches planned this year. In June, Opzelura received a positive CHMP opinion for the treatment of patients with moderate atopic dermatitis in Europe with an approval anticipated in the third quarter. If approved, Opzelura would become the first topical JAK inhibitor treatment available in Europe for moderate AD. Our submissions for povorcitinib in hidradenitis suppurativa and tafasitamab in newly diagnosed diffuse large B-cell lymphoma are under regulatory review with anticipated approvals and launches beginning later this year and into 2027. Beyond our regulatory progress, we deliver multiple important data readouts across hematology, oncology and dermatology, including registrational data for tafasitamab in first-line DLBCL and povorcitinib in vitiligo as well as additional data for 989 in essential thrombocythemia and myelofibrosis. At the same time, we expanded our late-stage pipeline with additional latarcibart and have advanced 13 of our now 15 planned pivotal studies with the remaining 2 stat initiations expected by year-end. Our teams continue to execute well against our development priorities, positioning the portfolio for both near-term value creation and long-term growth. Importantly, many of our highest value catalysts, including data readout and regulatory decisions remain ahead, positioning us for a catalyst-rich second half of the year. With that, I'll now turn to the pipeline. Our hematology strategy combines leadership in established disease areas with first-in-class mutation directed therapies designed to redefine treatment across graft-versus-host disease, myeloproliferative neoplasms and now bleeding disorders with additional latarcibart Von Willebrand's disease. In chronic graft-versus-host disease, we continue to advance axatilimab in 2 studies evaluating its potential use earlier in the treatment paradigm, including in combination with ruxolitinib and in combination with steroids. We remain on track to share top line data from the Phase II study in combination with ruxolitinib in the second half of 2026. Top line data from the Phase III study with steroids is expected in early 2028. We're also advancing a portfolio of molecularly targeted therapies for myeloproliferative neoplasms, or MPNs, focused on the underlying driver mutations of disease. Our PM strategy is built around targeting the underlying biology of disease through highly selective therapies directed against key disease-driving mutations, CALR in JAK2 V617F. Our portfolio includes 989, a mutant CALR monoclonal antibody in late-stage development, 784 are CALR by CD3 bispecific in an ongoing Phase I trial and next-generation programs in preclinical development. We continue to evaluate emerging data as these programs progress and prioritize those, we believe, have the strongest profiles and greatest potential for patients. As part of this assessment, we decided to discontinue development 058, our lead asset in our JAK2 V617F targeted pipeline and are no longer expecting to report data later this year. Based on the totality of the data to date, we do not believe the molecule demonstrate the profile necessary to become a differentiated therapy. Importantly, this decision is specific to 058 and does not change our conviction in JAK2 V617F as an important therapeutic target in PNs. We are prioritizing our next-generation JAK2 V617F targeted assets. We believe this next-generation programs provide a clear opportunity to realize the promise of electively targeting JAK2 V617F. These programs are progressing through IND-enabling studies, and we'll plan to share more information, including preclinical data by the end of the year. Turning to our most advanced MPM program, 989. The first and only mutation specific therapy to enter late-stage development in CALR mutated MPNs. Early in the quarter, at the European Hematology Association Annual Meeting, we presented additional Phase I data in mutant color policy patients with ET and MF. As this data has matured, we continue to see evidence supporting the differentiated clinical profile of 989, strengthening our confidence in both the ongoing Phase III program and the broader development strategy in MF. As mentioned earlier, our Phase III study is now underway in mutant color policy patients with ET who have received prior cytoreductive therapy. In MF, we remain on track to initiate a Phase III study in JAK-experienced patients in the second half of this year. We'll provide an update following the completion of regulatory discussions. Additionally, we continue to advance our Phase I cohort evaluating 989 as a first-line treatment for patients with MF, both as monotherapy and in combination with ruxolitinib. We expect to share data from this cohort along with additional data from the JAK ineligible cohort previously presented at EHA later this year. We also continue to advance a subcutaneous formulation of 989 and initiate a Phase I study in mutant CALR positive patients in the second quarter. In addition to our ongoing efforts, we recently entered a global collaboration and license agreement with Halozyme to evaluate the subcutaneous formulation of 989 using ENHANZE technology. This collaboration complements our internal subcutaneous development efforts and provides additional flexibility as we optimize the administration profile of 989 for future commercial use. Earlier this month, we strengthened our hematology portfolio through the acquisition of Vega Therapeutics, adding latarcibart, a novel prognose modulator in Phase III development for patients with Von Willebrand's disease to our late-stage pipeline. At the International Society of Thrombosis and Hemostasis Congress earlier this month, data from the multi-dose VIVID 3 study evaluated latarcibart in patients with VWD were presented during a featured oral session. And VIVID-3, latarcibart demonstrated an 81% median reduction in annualized bleeding rate across patients with different Von Willebrand's disease subtypes and bleeding types along with a favorable tolerability profile. With once monthly subcutaneous dosing, latarcibart also has the potential to significantly reduce treatment burden compared with current prophylactic therapies, which are typically administered 2 to 3x per week. Taken together, the efficacy tolerability and dosing profile, combined with its novel mechanism of action, give us confidence in the potential of latarcibart to establish a new standard of care. Our focus now is in advancing the Phase III VIVID-6 trial, and we remain on track to deliver top line data by early 2029. Turning to our oncology portfolio. All 3 of our lead solid tumor programs, 890, or TGFBR2xPD-1 bispecific antibody; 734, our KRASG12D inhibitor; and 667, our CDK2 inhibitor are progressing through pivotal development, reflecting the continued maturation of our oncology pipeline. In parallel, we continue to generate data in robust Phase I programs, exploring the potential of this asset across different indications, lines of therapy and combination settings, which will help inform broader development efforts. At the European Society for Medical Oncology Congress in October, we plan to present 4 rapid oral presentations, highlighting Phase I data across all 3 assets. This includes data 734 in first-line pancreatic and late-line colorectal, 890 in first line and late-line colorectal and 667 in recurrent ovarian cancers. These presentations will represent the most comprehensive clinical update we have provided across our leading oncology programs and includes substantially larger and more mature data ads than we have previously shared, providing greater insight into the depth of the clinical efficacy and overall safety and helping further define the emerging competitive profile of each program. For 890, 734, the presentation will include data in combination with chemotherapy and in patient populations directly aligned with our ongoing Phase III studies. At the same time, the breadth of data across all 3 programs will help inform potential expansion into additional indications and treatment settings. Now I'd like to turn to our IEI portfolio, where we continue to build a dermatology franchise across both topical and systemic therapies with multiple opportunities for continued expansion. Regulatory and clinical efforts for ruxolitinib cream and povorcitinib continue to progress. We remain on track to report top line results from our registrational Phase III program evaluating ruxolitinib cream in mild to moderate HS by year-end. If positive, this data could support the first topical therapy specifically developed for patients with HS and would further expand Opzelura's role across inflammatory skin diseases. For povorcitinib, we continue to execute a broad development and regulatory strategy designed to support a multi-indication franchise. Povorcitinib is under review for the treatment of moderate to severe HS, and we expect potential approvals in Europe in late 2026 and in the U.S. in the first quarter of 2027. In the first half of the year, we shared positive results from our Phase III program in vitiligo. Additionally, we remain on track to report top line results from our Phase III program in prurigo nodularis in the fourth quarter. By year-end, we expect to have delivered 6 registrational study readouts for ruxolitinib cream and povorcitinib across HS, vitiligo and PN, further strengthening our dermatology franchise spanning multiple diseases and treatment modalities. To close, we continue to make meaningful progress across our pipeline in 2026, delivering important clinical and regulatory milestones. Our portfolio is broader, more mature and increasingly diversified, and we expect an active second half of the year with multiple registrational data readouts regulatory decisions and development milestones across our 3 core franchises that we believe will further strengthen our long-term growth trajectory. With that, I'll turn it over to Suky for a financial update on the quarter.

Thanks, Pablo, and good morning, everyone. I'll begin with comments on our second quarter results and then turn to our updated full year outlook. As Bill mentioned earlier, total revenue in the second quarter was $1.67 billion, an increase of 38%, driven by strong product sales. Total net product sales were $1.49 billion, reflecting 40% growth versus the prior year. The increase was driven by strong product demand and a onetime noncash benefit of $246 million. Excluding the onetime benefit, total net sales increased 17% versus the prior year. . Total GAAP expenses for the quarter were $976 million, an increase of 42% compared to the prior year. The year-over-year increase result reflects a lower expense base in the second quarter of 2025, resulting from the Novartis settlement of $242 million. When we exclude the favorable adjustment in the second quarter of 2025, total operating expenses grew 5%. GAAP cost of goods was $105 million, representing 7% of total net sales. This is in line with our expectations, and we expect COGS to be between 8% to 9% for the full year. Our GAAP R&D expenses were $517 million, an increase of 4%, driven by continued investment in our late-stage development assets across hematology and oncology. Moving to GAAP SG&A. Expenses were $352 million, increasing 6% driven by prelaunch activities for [indiscernible]. We ended the quarter with $4.5 billion in cash and cash equivalents. This excludes the close of the Vega Therapeutics acquisition in July, which I'll provide more color on momentarily. Now turning to our outlook for the remainder of the year. We are updating several components of our existing guidance for the full year, including total net sales, which is driven by guidance updates to Opzelura as well as hematology and oncology in R&D and SG&A operating expenses driven by the close of the Vega acquisition and related incremental cost in the second half of the year. Starting with net sales, we are raising our full year 2026 total net sales guidance to [ $5.13 billion ] to [ $5.26 billion ]. For Opzelura, we are updating full year 2026 net sales guidance to [ $1.05 billion ] to [ $1.10 billion ]. Our new guidance reflects the previous guidance of $750 million to $709 million and the incremental estimated impact of $300 million to $310 million of net sales related to the CMS settlement. This impact includes 2 key components: versus a onetime noncash benefit of $246 million related to Opzelura net sales that was recorded in the second quarter. As a reminder, this amount is associated with the reversal of previously established accrual balances through the first quarter of 2026. Second, higher net sales from an improved gross-to-net profile in the second quarter through the fourth quarter. In the second quarter, the impact of U.S. Opzelura net sales was $15 million. This is a net impact after consideration of certain onetime prior year state-related liabilities that became effective at the conclusion of the CMS settlement. On a go-forward basis, we expect the impact to be approximately $40 million to $50 million for the second half of the year. Regarding our hematology and oncology portfolio. We are narrowing and raising full year guidance range to $860 million to $890 million based on strong performance in the first half of the year. Turning to operating expenses. We are updating our full year 2026 operating expense guidance. We are narrowing and raising our 2026 GAAP R&D and SG&A operating expense guidance to [ $4.915 billion ] to [ $4.995 billion ]. We're also raising total non-GAAP R&D and SG&A operating expenses to [ $4.625 billion ] to [ $4.695 billion ]. The new guidance reflects an increase of approximately [ $1.27 billion ] related to the upfront payment for in-process research and development and associated transaction costs. in tandem with approximately $50 million in ongoing Phase III development of latarcibart in Von Willebran'ds disease. To close, we are pleased with our performance for the quarter and for the first half of the year and remain confident in our outlook. With that, I'll turn the call back over to the operator for Q&A.

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

Congrats on the strong quarter commercially. Maybe this is mostly for Pablo. Just on the kind of CALR program and your regulatory discussions, can you maybe just review kind of what the major questions are still kind of awaiting resolution on that trial design in MS? How much of that is the endpoint, whether you can include something like anemia and some sort of composite versus how much of that is still outstanding dose selection work for particularly the type 2s and might, on that latter part, that take a little bit longer for type 1s versus type 2s and lead to kind of different trial initiation time lines?

Marc, thank you for the question. So when we think about the regulatory path in MF, there's basically 2 paths, right? One would be the standard, which I think we'll know about, which would include, SVR35 and TSS50 as end points or an alternative one, which will include other endpoints. Let me spend a minute on why we think the second is important to discuss with a field we thought and still think it's important to discuss with FDA. 99% is a complete novel mechanism of action, as we all know. And on top of delivering benefit as we saw the EHA data update that we provided on top of delivering benefit on SVR35 and TSS50, it delivers an extraordinary benefit on improving hemoglobin levels in these patients. Most of the patients treated, whether it's first or second line show increases in hemoglobin that are clinically significant. In addition to that, there's clear evidence of what we discussed as disease-modifying evidence, including reduction of malignant [indiscernible] bone marrow, reduction of malignant progenitor and peripheral blood, et cetera. So when you put all that together, we thought and still believe it's important to have a constructive dialogue with the FDA to see how we can incorporate some of these endpoints that reflect the benefit patients received from 989 and that reflect the mechanism of action 989 that they need to be reflected in the clinical trial design. We have initiated these conversations with FDA. They're going well. They'd be constructive. And as soon as we complete those, we will give you clarity on what the regulatory path will be first in second line MF, which we intend to start this year, and then as a result of that, we'll continue the conversation with the agency on first-line MF, which we will initiate next year. At this point, our intention is to conduct a study in MF in all comers, type 1 and non-type 1 patients. potentially with the differential dosing strategy, not quite like ET because in ET, we have a dose escalation, the rapid normalization of platelets allows it for a rapid dose escalation. In MF, we would start type 1 and non-type 1 patients at 2 different dose levels instead of doing the dose escalation. But that's where we are today with the planning of the study.

Our next question today is coming from Eric Schmidt from Cantor Fitzgerald.

Maybe a higher-level strategic question for Bill and team. Given you just on the Vega acquisition, how are you feeling about the breadth and depth of your pipeline? Do you have more capacity? And is there some sort of a target R&D as a percent of sales level that you might want to be spending at as we go into the Jakafi exploration?

Yes, it's a good question. Eric. A couple of things. As it relates to business development, and frankly, R&D, our job is to keep this product line and pipeline moving. And so I think you can never understate attrition in any business. And so we are actively looking at potential opportunities that meet or check the same criteria that Vega did. And I think that we have a very clear framework for doing business development. when we see opportunities that meet certain strategic and financial criteria, we can act quickly. Alternatively, if we don't, we're comfortable being patient. As it relates to R&D as a percentage of sales, I'd make a couple of comments there. We're not pursuing growth at all costs. Alternatively, where on the other hand, we're not solving right now for a fixed margin percentage. What I will tell you is if there's any margin compression in this business, let's say, as we get to 2029, there'll have to be a clear and positive correlation with materially increasing the risk-adjusted value of our pipeline. And right now, every line item in our P&L is either absorbing, offsetting or directly funding the growth strategy. As you know, in SG&A, we're funding product launches. And as it relates to R&D, 80% of our investment is concentrated on what we think are really smart investments. And if any of the investments that we're making, if the facts and circumstances around those investments change or performance is not what we are expected we stop making those investments. And as we get closer and we have more clarity on our pipeline, I think we're set up very well right now. I think when you look at the pipeline, there's 4 assets that have a high PTRS, and the potential to deliver outsized returns. That's povorcitinib, 989, G12D and VGA 039. Now that's not to say that there's not value in TGFb x PD-1 or CDK2. But the 4 assets I just mentioned have the potential to move insight way beyond Jakafi, which is ultimately what we're solving for. And so to wrap it up, 12 months of margin compression to set up 10 years of revenue and earnings growth, I think, is a smart calculation, and that's what we look at every day.

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

I wanted to maybe ask one quick one about the announcement in the last week about your global collaboration with Halozyme to use their ENHANZE drug delivery technology to help with 989. Can you maybe give us a little bit more color on what exactly you'd like to improve? And when you think this could move into a clinic and we could start to see data using this technology?

Thanks, Tazeen. Pablo, why don't you set up where we are the program overall and then get into Halozyme?

Certainly, I think let me remind you a couple of points that we made, which are really important about this program and the subcu development. We have completed a healthy volunteer work, and we are right now with the subcu existing subcu formulation in patients with ENHANZE. That's the status of the program. We have a clear path here to continue that program forward and by optimizing the existing formulation and the existing subcutaneous device for infusion, which is not wearable. As we discussed before, this is something that patients will have to apply for 15 to 20 minutes every other week to deliver the desired dose. That path is clear. We have discussions with FDA on a bridging strategy for that path that I just described. We thought it was important to continue to add optionality to this program. As you can imagine, the conversations with Halozyme have been going on for quite some time before signature of the agreement. And they're not related in any way to any data that has emerged from the ongoing subcutaneous development. We thought it was important to have an additional option to improve flexibility and potentially to improve the patient experience when it comes to subcutaneous formulation and administration of 989. So that's basically the plan we have in place. We're executing on the existing subcu plan with existing formulation, and we're adding another option now with the ENHANZE technology.

Our next question today is coming from Faisal [indiscernible] from Jefferies.

Can you set expectations for the G12D update that you're going to have at ESMO? And can you possibly give us some more perspective on how you think about competitive positioning and how you see your opportunity to differentiate within the class?

Great. Pablo, do you want to take the first part of the question?

Certainly, thank you for the question. So when we think about 734, our G12D inhibitor, I think we are convinced we have in our hands a highly selective, highly potent novel medicine that combines well with existing standard of care, which is in first line pancreatic cancer is chemotherapy, either FOLFIRINOX or Genmab. In that context, when we think about the development plan, our goal was to accelerate as much as possible development in first-line pancreatic cancer in combination with those 2 chemotherapy regimens. What we will do at ESMO is provide approximately 50 patients' worth of data half and half with Genmab and FOLFIRINOX with a fair amount of maturity, showing you where we are on efficacy and safety in that context. We think that's a really important derisking for the first line pancreatic cancer strategy that we're pursuing. Now the first -- the Phase III study in first-line pancreatic cancer is ongoing. As far as we know, based on public disclosures, we are neck connect with our competitors. We don't think we're behind. And our team is executing on that as fast as possible. Now let me add a little bit more context on the program because I think it's important, the breadth of how we're looking at this program in other indications. We're going to present data as well at ESMO of combination in colorectal cancer. We think that is a really important indication for G12D inhibitor. There's 2 basic ways to do it is late line in combination with EGFR inhibitors and in early lines in combination with chemotherapy and EGFR inhibitors. We'll show some of that data as well at the ESMO meeting. So when you start thinking about our G12D program, if things go well and the data that we present continues to derisk the program, you should think about it in a number of different -- a couple of different tumor types and in a couple of different lines of therapy, specifically in pancreatic cancer in first-line in combination with chemotherapy and potentially in the adjuvant setting as well and in colorectal cancer in late line in combination with EGFR inhibitors and potentially in earlier lines in combination with chemotherapy and EGFR inhibitors. So we'll talk about it at ESMO. We think the data will go in to present is a significant derisking event for this program in first-line pancreatic and potentially in colorectal cancer as well. Thank you for the question.

I would just add to what Pablo said as it relates to competitive positioning, I think it's unlikely that pancreatic cancer becomes a winner-take-all market. You rarely see that in oncology. I think, generally speaking, oncologists resist dependence on a single treatment. And so this is not, I believe, in either or calculation populations are different. There's various combination strategies that can be put in place. And I think at the end of the day, this will become about sequencing and matching the right drug with the biology. We believe a selective G12D inhibitor be used first in G12D patients and then a nonselective later. But there again, it's not either or. And what we do know is there's only 2 companies right now in Phase III studies with the first targeted G12D treatment in pancreatic cancer. And so whether you're first or early this for insight can be a real needle mover. And I think when you look at the data that we'll share at ESMO, you'll be reassured about the activity of this compound in terms of response rates as well as durability of response.

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

Congrats on all the progress, including closing the Vega deal. Based on everything you've learned, including feedback from KOLs at ISTH, can you comment on the potential for lutarcibart to expand beyond VWD? And eventually, do you think litarsibart can be the next Hemlibra? .

Jay, thank you for the question. I'm going to turn it over to Dave Gardner and let him make a few comments.

Yes. Thanks, Jay. Yes, we did get very favorable feedback both from KOLs and importantly, from the patient advocacy channel as well A lot of the discussion was around the impressive clinical profile thus far from latarcibart. But a secondary discussion did emerge around the treatment of bleeds and the urgency to use better prophylaxis to prevent bleeds in a broader set of patients. So coming out of ISTH, absolutely, we are emboldened by the feedback that if we deliver on the target product profile, there is potential to deliver a transformative Hemlibra like opportunity to these patients.

And Jay, if you think about it, there is a hemophilia A like population in Von Willebrand's brands. And that is a sizable pool of patients who are severe frequent bleeders. And if 039 comes out of Phase III, like David said, with a substantial reduction in the annual bleed rate and a good benefit risk profile, adoption in that group, which could be almost 10,000 people would turn this into one of the largest products insight would have. The most important thing for us to do right now is execute this Phase III program, maintain the quality of the data and then, of course, get it approved. But all of the substrate is there for this to be a large product. Thanks for the question.

Our next question today is coming from Derek Archila from Wells Fargo.

So given Niktimvo's IPS data, Phase II day is going to come from Syndax later this year, you guys have an opt-in. So just wondering if you could walk us through kind of the decision framework what sort of data thresholds may trigger an opt in how you kind of communicate that decision and just remind us of the split on the development costs that you decide to proceed.

Great. Thanks for the question. Pablo?

Yes, Derek, thank you for the question. The disclosure of the data since they're conducting the study would be done by Syndax. It would not be done by us. Obviously, they'll show the data with us. will discuss the results and depending how clear they are, it will take a little bit longer or not to make the decision to pursue the indication together with Syndax. When it comes to the existing agreement, it's the same type of agreement we have for other indications, both sharing the development costs and sharing economics. So there's no difference. And when it comes to the opt-in, I just want to make clear that if we decide to opt in, there's nothing to prevent us from doing so. So we really look forward to hearing the data from our colleagues at Syndax, but they will be the ones releasing those results.

Thanks for the question, Derek.

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