Syndax Pharmaceuticals, Inc. (SNDX) Earnings Call Transcript & Summary

Good day, and welcome to the Syndax Niktimvo FDA Approval Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Sharon Klahre, Head of Investor Relations for Syndax. Please go ahead.

Thank you, operator. Welcome, and thank you all for joining us at this exciting time to discuss the FDA approval of our first-in-class CSF-1R therapy in cGVHD, Niktimvo, the brand name for axatilimab for the treatment of patients with refractory chronic and chronic GVHD. I'm Sharon Klahre, and I'm joined today by Michael Metzger, Chief Executive Officer; Dr. Neil Gallagher, President and Head of R&D; Steve Closter, Chief Commercial Officer; and Keith Goldan, Chief Financial Officer. For the question-and-answer session, we'll also have Dr. Peter Ordentlich, Chief Scientific Officer; and Dr. Anjali Ganguli, Chief Strategy Officer. This call is being accompanied by a slide deck that has been posted to the Investor page on the Syndax website. You can now turn to our forward-looking statements on Slide 2. Before we begin, I would like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by statements as a result of various important factors, including those discussed in our Risk Factors section and in Syndax' most recent quarterly report on Form 10-Q as well as other filed reports with the SEC. Any forward-looking statements made today represent our views as of today, August 14, 2024, only. A replay of this call will be available on our website, www.syndax.com following its completion. With that, I'm pleased to turn the call over to Michael Metzger, Chief Executive Officer of Syndax.

Thank you, Sharon, and thank you to everyone for joining today's call to discuss this very exciting milestone for Syndax and our partner, Incyte, but most importantly, for the chronic GVHD community. Starting with Slide 4. We are thrilled that the U.S. Food and Drug Administration has approved Niktimvo for the treatment of chronic graft-versus-host disease or chronic GVHD after the failure of at least 2 prior lines of systemic therapy in adult and pediatric patients weighing at least 40 kilograms, the equivalent of roughly 88 pounds. The approval dose is 0.3 milligrams per kilogram every 2 weeks. Niktimvo is the first and only FDA-approved treatment for cGVHD that binds the colony-stimulating factor 1 receptor, or CSF-1 receptor on monocytes and macrophages to reduce inflammation and fibrosis. The approval of Niktimvo represents a major breakthrough for the chronic GVHD community. Following the launch of this product, clinicians will be able to offer appropriate patients, a drug that targets a distinct pathway and demonstrates broad and durable responses in patients who have failed at least 2 prior lines of therapy. Recall that Niktimvo was granted Priority Review and Orphan Drug designation by the FDA, which speaks to the tremendous promise that Niktimvo holds for patients suffering from chronic graft-versus-host disease, a debilitating disease. Beyond our first indication, we have a robust clinical development strategy that we believe will support potential label expansion and Niktimvo's multibillion dollar potential. With the approval of Niktimvo, the first of Syndax' medicines to be approved, we are on track for an historic year with the anticipated approval in the fourth quarter of our second drug, revumenib, our first-in-class menin inhibitor in relapsed or refractory KMT2A rearranged acute leukemias. As we have highlighted previously, we see many unique opportunities for commercial synergy between our first 2 medicines. Moving to Slide 5. Together with Incyte, the leader in the GVHD space, we have been preparing for successful launch of Niktimvo in the U.S. We see it as a strong advantage to have Incyte as our partner, considering their ability to leverage their existing commercial infrastructure, deep understanding of the cGVHD market and long-standing relationships with clinicians and major centers where chronic GVHD patients are treated. The Incyte team will lead the commercialization of Niktimvo in the U.S. in close collaboration with our team. Incyte will provide 70% and Syndax 30% of the sales efforts in the U.S. Today's approval is for a 50-milligram vial of Niktimvo, the vial size that we used in our AGAVE-201 pivotal trial. Based on the efficacy seen at the 0.3 milligram per kilogram dose, the lowest dose tested in the AGAVE-201 trial, we, together with our partners at Incyte, determined that 9 milligram and 22-milligram vial sizes would optimize the quantity of antibody provided per vial and minimize product waste. We have developed 2 new vial sizes and anticipate launching them in the fourth quarter of this year or the latest in the early part of the first quarter of 2025. Outside the U.S., where Incyte has exclusive commercialization rights, Incyte is in discussion with regulators. We look forward to providing further details on the path to bringing this important drug to other regions outside the U.S. on a future call. Beyond the third line, we and Incyte firmly believe that Niktimvo could also serve as a meaningful therapy in earlier lines of cGVHD and are committed to exploring its full potential. In support of these efforts, Incyte plans to initiate 2 frontline combination trials of Niktimvo in the second half of 2024, including a randomized Phase II combination trial with Jakafi and a randomized Phase III combination trial with steroids. Beyond cGVHD, we believe Niktimvo has strong potential in additional fibrotic diseases where monocytes and macrophages play a key role. This includes idiopathic pulmonary fibrosis or IPF, an indication where we are currently conducting a Phase II trial. Before I turn the call over to Neil to discuss the label and supporting data, I'd like to take a moment to express our gratitude to the patients, families, investigators and study staff who participated in the clinical trials that generated the evidence supporting the approval. I also want to recognize all the people at Syndax and Incyte who made this important milestone possible through your hard work and dedication to patients. With that, I will turn the call over to Neil. Neil?

Thank you, Michael. The approval of Niktimvo represents an important key option for patients suffering from GVHD, who are not responding well to available therapy. Chronic GVHD is a debilitating and difficult-to-treat disease that affects about 50% of patients who undergo allogenic stem cell transplant. It can affect many organ systems, resulting in significant morbidity and impaired quality of life. For instance, patients can have significantly restricted joint mobility that can interfere with everyday living, severe eye symptoms, skin rashes and lung fibrosis with risk -- consequent risk of infection. Many chronic GVHD patients cycle through the current standard of care therapies for better symptom control as their disease progresses, with nearly 50% of patients progressing to third line. Niktimvo, an anti-CSF-1R antibody, uniquely targets and inhibits the monocytes and monocyte-derived macrophage access, known to play a key role in both inflammatory and fibrotic mechanisms of chronic GVHD. Moving to Slide 7. I will briefly review some of the highlights of the U.S. prescribing information for Niktimvo. Niktimvo is indicated for the treatment of chronic GVHD after failure of at least 2 prior lines of systemic therapy in adults and pediatric patients weighing at least 40 kilograms. The recommended dosage is 0.3 milligrams per kilogram administered as an intravenous infusion over 30 minutes every 2 weeks until progression or unacceptable toxicity up to a maximum dose of 35 milligrams. The approval of Niktimvo is based on data from the AGAVE-201 trial. As shown on Slide 8, AGAVE-201 is a randomized open-label trial that was conducted at 121 sites in 16 countries, including many major transplant centers in the United States. The trial evaluated Niktimvo as a monotherapy in patients aged 2 years or older with active chronic GVHD defined by the 2014 NIH Consensus Criteria who had received at least 2 lines of -- 2 prior lines of systemic therapy and required additional treatment. Concomitant use of -- with corticosteroids, calcineurin inhibitor or an mTOR inhibitor were allowed but not required. The primary endpoint was overall response rate by 6 months, which included complete or partial responses according to the 2014 NIH Consensus Criteria. The trial evaluated 3 doses with 0.3 milligrams per kilogram every 2 weeks resulting in the highest response rate and the optimal safety profile. On the next slide, I will review the results in patients who received this dose in the trial, which is the data that formed the basis for the approval of Niktimvo. As shown on Slide 9, 79 patients received 0.3 milligram per kilogram dose every 2 weeks in the trial. The median age is 50 years, median time from diagnosis was approximately 4 years and 57% of patients had 4 or more organs involved. Patients received a median of 4 prior lines of therapy. Many of those patients have failed recently approved therapy. 72% had received prior treatment with ruxolitinib, 34% with ibrutinib and 20% with belumosudil. In contrast to the population in the ROCKstar trial, who received the approved dose of belumosudil, AGAVE-201 enrolled patients with a significantly longer median time since diagnosis approximately 4 years compared to only 2 years in the ROCKstar trial. The population in AGAVE also had more severe chronic GVHD, more lung involvement and more exposure to standard of care therapies like ruxolitinib and ibrutinib. As previously reported, the AGAVE trial that is primary endpoint of overall response rate by cycle 7, day 1 or 6 months. Moving to Slide 10. The overall response rate was 75% within the first 6 months of treatment. This result is particularly impressive given, as I just mentioned, how heavily pretreated patients included on the trial were. Patients responded rapidly with a median time to response of 1.5 months. The median duration of treatment was 10.3 months with a range of 0.5 to 28.6 months at the time of the data cutoff. The median duration of response described in the label is 1.9 months, which is the same as the median duration of response described on the belumosudil label. This duration of response is calculated from first response to progression, death or new systemic therapies to chronic GVHD. The criteria for progression were met if there was progression from the best response in any individual organ even if the patient's new organ score was still an improvement compared to the score at baseline. Importantly, the label reflects an estimated -- that an estimated 60% of responders maintained response for at least 12 months but if they did not start any new systemic chronic GVHD therapy [ in their lives ] at least 12 months following response. A measure that we believe more accurately reflects the clinically relevant durability of response to Niktimvo. On Slide 11, you can see a high-level summary of the safety data included in the label from the 79 patients who received 0.3 milligrams per kilogram every 2 weeks. As previously reported, Niktimvo was well tolerated in this heavily pretreated patient population. Adverse reactions leading to dose reduction or permanent discontinue were low at 8% and 10% of patients, respectively. Of note, Niktimvo is a monoclonal antibody, and therefore, there is no reference to drug interactions in the label. Turning to Slide 12. As you may recall, additional results from the pivotal AGAVE-201 trial were presented in a plenary session at last year's American Society of Hematology Annual Meeting, underscoring the practice-changing potential of this differentiated medicine. The results showed that Niktimvo produced robust responses across all organ studies, including complete responses in a heavily pretreated population. Responses were notable in difficult to treat organs such as lung, joints, fascia, gastrointestinal tract and skin. On Slide 13, we see that robust responses were also observed across all patient subgroups in the trial, including response rate, 75% or greater in patients who had received prior FDA therapies including belumosudil, highlighting the distinct mechanism of action of Niktimvo. Building on the presentation at ASH, we look forward to publishing the pivotal data in a top-tier medical journal later this year. With that, I will turn the call over to Steve to provide an overview of the commercial launch plans. Steve, to you.

Thank you, Neil. This is a very exciting time for the organization as we stand on the cusp of bringing a much needed new option for refractory chronic GVHD in a second product revumenib for relapsed or refractory KMT2A rearranged acute leukemia to patients pending the FDA's upcoming decision. This remarkable progress would not have been possible without the talent and the dedication of our employees and partners. So thank you to everyone. We'll turn now to Slide 14. We estimated that there are approximately 17,000 patients on treatment for chronic GVHD at any one time and the majority of whom are refractory in cycle through therapies for better symptoms control as their disease inevitably progresses. We believe there are about 6,500 patients progressing to later lines of treatment after 2 previous lines of therapy, consistent with our label, this will be our target population, which represents an attractive initial opportunity. For instance, in the 3 years since the launch of REZUROCK, another drug with a third line indication, net sales continue to grow and are annualizing at nearly $500 million. We estimate that the total addressable market for third line treatment in the U.S. is between $1.5 billion to $2 billion, which assumes that patients will remain on therapy for over 12 months. And that Niktimvo is priced at a premium to approve therapies for chronic GVHD based on its product profile and Part B reimbursement. Despite the availability of approved products, many chronic GVHD patients still have inadequate response to these treatments or they have disease manifestations that aren't fully addressed and some do experience tolerability issues. From our interactions with physicians, including the excitement we saw and heard and felt after the AGAVE-201 data was presented in a plenary session at last year's ASH meeting, it's clear that physicians are eager to have a new option for patients. In market research, clinicians find the response rate observed in difficult-to-treat organs and the durability of response as particularly notable. With Niktimvo's compelling product profile and supportive and strong label, we believe that we will be able to capture a sizable portion of the commercial opportunity. Beyond the third line setting, we plan to study Niktimvo in earlier line settings for chronic GVHD and other diseases where we believe its anti-fibrotic and anti-inflammatory mechanism is highly relevant, such as IPF, which represents an even larger opportunity. Moving to Slide 15. Now to enable successful launch, we and our partners at Incyte will be focused on establishing Niktimvo as the optimal therapy for patients with chronic GVHD after failure of at least 2 prior lines of therapy. In connection with this objective, we will focus on establishing Niktimvo as a differentiated treatment strategy that uniquely targets the monocytes and macrophages that impact both the inflammation and fibrosis that is often seen in chronic GVHD. We'll also focus on securing broad payer coverage and removing barriers to access for both patients and providers. To set us up to achieve our launch objectives, we and Incyte have been working to build awareness of the role of CSF-1R signaling and the monocyte macrophage cell lineage in chronic GVHD through appropriate scientific exchange with clinicians including the robust presence the AGAVE-201 data set had at ASH last year. Earlier this year, the Incyte team also launched a multichannel educational campaign to raise awareness of this new and important pathway. Turning to Slide 16. We're preparing for a targeted launch of Niktimvo, and I'm absolutely confident that we've got the right team in place to support a successful launch. On the Syndax side, we brought onboard a very experienced and skilled sales force to support both revumenib and Niktimvo, given the highly overlapping and effective call point. The caliber of the Syndax field team is high with an average of 22 years of experience, primarily in hematology and oncology and an average of 6 product launches. Syndax will provide the equivalent of 30% of FTE sales effort for Niktimvo on the Incyte side. They also have a very experienced field force with deep, deep relationships with the clinicians who treat chronic GVHD in the centers where they practice their relationships and expertise and leadership will be invaluable to the success of the launch. With regards to targeting at launch, there's roughly 200 important transplant centers in the U.S. Within that universe, Syndax and Incyte teams will prioritize effort at the top centers with the highest patient volumes where there is the greatest opportunity for rapid uptake. Once Niktimvo is commercially available, health care providers will be able to order it through major specialty distributors in the U.S. Moving to Slide 17 and the payer front. The Incyte market access, medical teams have been engaging payors on chronic GVHD. Payors recognized the significant morbidity and mortality associated with refractory chronic GVHD and the need additional treatment options and the role of the CSF-1R pathway. Now that Niktimvo is approved, the Incyte team will continue to engage with payors with the aim to expedite formulary decisions and drive broad coverage. Moving to patient support, Syndax and Incyte are both deeply committed to supporting patients and their caregivers and ensuring access and adherence to Niktimvo. At the time of product availability, eligible U.S. patients who are prescribed Niktimvo will have access to IncyteCARES, a comprehensive program offering personalized patient support, including financial assistance and ongoing education and additional resources. With respect to pricing, we plan to share more details about that closer to the time of product availability. The price will reflect the clinical and economic value of Niktimvo and will be informed by Incyte from extensive payer research and Incyte's deep knowledge of the chronic GVHD market. As a benchmark, approved chronic GVHD therapies have an average monthly wholesale acquisition cost or WAC in the range of $16,000 to $18,000 when you take into account an estimated 25% to 35 -- 30% of patients on REZUROCK acquired double dose. The adjusted price of that product is really in the $20,000 to $25,000 a month range. I now want to turn the call over to Keith, who will discuss some of the financial considerations.

Thank you, Steve. In collaboration with Incyte, we're preparing for the anticipated launch of the Niktimvo in the fourth quarter of this year and at the latest in the early part of the first quarter of 2025, with meaningful revenue expected to build in the first part of next year. While sales data feeds for Niktimvo will be shielded, Incyte will report net sales on a quarterly basis for Niktimvo. And jointly, we will aim to provide meaningful launch metrics, including prescriptions, prescriber and patient data. Ahead of the launch, I wanted to remind you how Syndax plans to recognize revenue for Niktimvo. Turning to Slide 18. You've seen an illustrative example of accounting for sales in Niktimvo and not intended to provide any margin or other guidance. We'll record 50% of the commercial profit defined as net product revenue minus the cost of sales and commercial expenses. During a period where there's net commercial profit for Niktimvo, as in the top example of the slide, our 50% share of the net profit will be recognized on our P&L as collaborative arrangement revenue. During the period where there is net commercial loss for Niktimvo, as in the bottom example of the slide, 50% of the net commercial loss would be included in operating expenses designated as a separate line item called share of collaboration loss. We also have various global commercial and regulatory milestones up to $450 million that we could receive from Incyte. These would be recorded in milestone revenue on our income statement. And in connection with the FDA approval, we earned a milestone of $12.5 million from Incyte, which covers their portion of milestones due to UCB for filing approval under our license agreement. As a reminder, research and development expenses, including regulatory and CMC are shared [ 55-45 ] in the United States and our 45% share is included in our income statement as part of our reported R&D expense. Outside of the U.S., Incyte is responsible for 100% of the development and regulatory expenses, and we're entitled to receive milestones plus a double-digit royalty on ex U.S. sales. I'll now turn it back to Michael for some closing thoughts before we move to Q&A. Michael?

Thank you, Keith. The FDA approval of Niktimvo marks a major milestone in our journey to becoming a leader in the delivery of first and best-in-class oncology medicines. With this first approval, we have transitioned to a commercial company, which is a very significant achievement. And we are getting -- we are just getting started because we anticipate being able to announce a second approval in the fourth quarter for our menin inhibitor, Revumenib, for the treatment of relapsed/refractory KMT2A acute leukemia. Given our track record of successfully advancing differentiated medicines and our strong financial position, we are confident that we can make a major impact on patients and create long-term value for our shareholders. Slide 19 shows the upcoming milestones that we anticipate, will drive the next exciting phase of growth for Syndax. And with that, I'd like to open the call for questions. Operator?

We'll now begin the question-and-answer session. [Operator Instructions] Our first question comes from Anupam Rama with JPMorgan.

This is Priyanka on for Anupam. Congrats from all of us for the approval of Niktimvo. Just a couple of quick questions from us. Are there any gating factors for filing for the 2 smaller vial sizes? And also, how large is the target physician population that focuses on heavily refractory setting?

Sure. Thanks for the question. Appreciate your -- congratulations as well. So in terms of filing for the new vials, I think it's a short process. We expect to be able to complete in the fourth quarter with approval coming then or slightly into the first quarter of next year, providing a range on that. And it's really related to picking up some stability data on the new vials and getting the new vials into the label. That's the extent of it. And maybe I'll ask Steve to address your second question.

Yes, happy. So I think the second question, which is around the size of the target physician population, and it's pretty targeted. It's pretty small. There's well under 200 treatment centers that are important for transplant in the United States. And in fact, it's super concentrated where 35 constitute about 50% of the patient population. If you look at the physician audience, it's also pretty small, it's about 2,000, which is not very big. I think it enables us to broadly cover the market in a pretty efficient fashion from a Syndax standpoint. As mentioned, we've got 30% of the sales efforts. So we'll probably call it under [ 700 ]. But it's a tight-knit community. Incyte already has relationships with all of them. And frankly, we do just because of the overlap with revumenib. So we think we can support that audience pretty quickly and ultimately support patients right out of the gates.

The next question is from Chris Shibutani with Goldman Sachs.

Great. Congratulations as well. A real milestone after many years, Michael and team. The usual launch metrics and trajectories, can you just comment, number one, how reliable will third-party data sources be as far as tracking prescription trends. Number two, always with new product launches, there tends to be some element of net reported revenue that has some inventory component. Maybe if you can help us understand the cadence and the level that would be appropriate to think about. And then number three, ultimately, how do you see you're thinking about perhaps giving some guidance at all? I know initially, it's difficult but what factors would you need to bear in mind before you and Incyte felt comfortable about giving some visibility into this trajectory and perhaps maybe 25-year sales.

Yes. Thank you so much, Chris. Appreciate that. All right. So maybe first question on launch metrics, maybe I'll turn that over to Steve, and then we'll go from there. Steve?

Yes, happy to. And thanks for the question, Chris. I think the question is specifically how reliable third-party data sources be. There won't be a lot of data out there, to be honest, it's a specialty distribution method. I think Incyte also, historically doesn't make a lot of stuff public. So there's not going to be, I believe, a ton out there, but I'm sure you guys are pretty crafty to figure out some of the business. I think ultimately, as it gets closer to what ultimately be sharing things we see in market sales and number of accounts prescribing, but I don't think there'll be a lot behind there. And that was the first question. I can answer the second and third Michael.

Yes, go ahead. Thank you so much, go ahead. Or may be Keith net revenue inventory.

Well, I was just going to add, actually -- yes, I'll take the second part and maybe just add to Steve's comment on the first. I did comment, Chris, in my prepared remarks that we are going to be shielding the data that's often available for purchase. That was a joint decision along with our partners at Incyte. But we're going to want to give you your colleagues on the sell side and the buy side as well, access to information to let you guys know how the launch is going. So we'll look to provide more clarity as we're able to and probably give you more information as we closer launch. But I think at a minimum, you could expect us to provide, like I said in my remarks, at a minimum, sales units, estimated number of prescribers and patients on the product. And like I said, you'll have net sales data that will be coming from Incyte and that kind of goes into the your second question, which, If I read correctly, was really a gross to net question, looking at how shifting inventory levels and wholesaler, et cetera, is going to impact that reconciliation of gross to net. That's a question really for our partners at Incyte. They are the one that are going to be providing and reporting on net sales. So I can't comment on how they're going to present that data, sorry.

The next question is from Phil Nadeau with TD Cowen.

This is Ernie Rodriguez for Phil. Congratulations on the approval. Two quick questions for us. We -- when we did our physician checks after the data, they expect more enthusiasm about you seeing the drug earlier in the treatment paradigm and we were wondering if you are expecting off-label use earlier in the lines and if you -- if that is so, then do you expect that reimbursement would be an issue or your feedback from payors is positive on that front. And then another question is on the 70-30 split on the sales effort between Syndax and Incyte, is that split done like what goes into that? Do you -- are you guys dividing it geographically? Or is there a particular type of center that you will be targeting? Or how does that -- how should we think about that?

Yes. Thank you for the two questions. I'll actually take the first one myself and then I'll give the second one to Steve. So in terms of treating earlier in the treatment paradigm, I think what's interesting about chronic GVHD is that notwithstanding the fact that there are drugs now that have labeled indications, specifically Jakafi second-line steroids given first-line, our drug Niktimvo and REZUROCK are now third line, drugs are used in different ways by the physicians, and so they don't all correspond with their labeled indications at every instance. So we've seen that obviously before the approval of Niktimvo. And so when we've talked to physicians, I think their enthusiasm seems to suggest that they could use it in different ways, not only as a third-line agent. So we, of course, will be promoting on label, but we are making the drug available and physicians will have the opportunity to use it, how they see fit. And in terms of reimbursement, I think we've talked to payors about the potential use of the drug. And I don't think we really have a comment about how they would view off-label use. We expect the drug to be covered and the team will be engaged and Incyte is obviously very experienced with that. But in terms of off-label use, I don't think we would talk much about that at this point. And then maybe, Steve, do you want to cover the 70-30 split and how that works?

Yes, absolutely. It's a good question. And they'll just be overlap. I mean this is, as I mentioned, I think the earlier question on the size of the audience, it's pretty small. It doesn't take a whole lot of FTEs to cover full audience. And I think the beauty for us at Syndax is it's -- there's complete call overlap -- excuse me, meaning we're calling on the revumenib targets who also happen to be Niktimvo's targets. So it keeps us on the same call point. And in those centers, you'll likely also have an Incyte representative that is there. So it's overlap, its greater coverage, as you can imagine, in these transplant centers, particularly the bigger ones, there's multiple physicians. There's doctors, there's nursing staff, there is reimbursement. There's other supportive care. So I'd say it takes a village to cover this and will be in that same village as the Incyte team is.

The next question is from Peter Lawson with Barclays.

Congrats on the approval. Just as we think about pricing, when do you think you're locking on pricing? Is that when you get new vials into the label? And are there any concerns we should be thinking about as you move into the new vials?

Sure. Thanks, Peter, for the questions. Yes, maybe, Steve, do you want to talk a little bit about pricing and timing there?

Yes. And I think the simple answer is when the vials are out, those are ready to go, that's when the price will come out, and we won't issue it before that time.

Right. And yes, sorry, go ahead.

No, I think you were going to say the same thing. Any concerns that we should be thinking about as you kind of move to the new vials, any...

Yes. No, no, no, not at all. Look, I think the new vials, the same substance in a smaller vial, right? We started with a -- in the trial we used a 50-milligram vial. We're switching to a [ 22 milligram and a 9 ] milligram ] same substance, smaller vial. We just have to go through the bit of work to get it into the label and make that change. But we don't see anything of particular concern that would be worth mentioning. We think it's pretty straightforward.

And then final question, just on the safety profile. I know last time you had a number of patients with grade 3 and above AEs at around 18%. What was it for the label? I didn't see it in the label. Has that changed in any way versus the prior data?

Neil, do you want to address that question, please?

Yes. So Peter, the question was the 18% is referring to what?

That was referring to grade 3 treatment-related AEs in the prior data set, I didn't see that in the label.

No, they don't report treatment-related AEs in the label. So what I can say about the adverse reaction data in the label is that, I mean, there may be some minor differences because you might get a certain data point shifting by one point or -- in either direction compared to what we presented at ASH. But overall, the safety profile is entirely consistent -- as described in the label is entirely consistent with what we previously described. And as you know, discontinuation rates are very low with this drug. Discontinuation [ cases versus ] adverse reactions are very low with this drug and that's also described in the label. So the safety profile hasn't changed from what we previously described.

The next question is from Brad Canino with Stifel.

Congratulations on this landmark. As we think about the REZUROCK analog near [ $500 ] million a year, do you have a rough estimate or a way to think about the proportion of third-line patients that are currently not treated or not satisfied with REZUROCK treatment? And then for one of the other levers of market expansion, which is treatment duration, how do you think about your treatment duration expectations for axatilimab compared relative to what you know for REZUROCK in the real world?

Yes. Great questions, Brad. Thank you. So first question, the analog of REZUROCK doing $500 million and our thoughts on that. So maybe I'll turn that over to Steve to give a little bit on that one? And then the second one we'll have maybe Anjali respond to. Steve ?

Yes. No, it's a good question. I mean -- and the label is similar. I mean, I think where we'll start will be later line patients like REZUROCK has. And they've actually moved a little bit earlier line over time, which I think is to be expected. We know through market research, there's probably in any onetime half patients that are being treated, given a prevalence of around 17,000 patients a year. There's 6,500 that fall into that third line space that are always looking for another -- for something else. So I think that's certainly what we'll be pulling from. I think the interesting thing about REZUROCK as an analog, I'm not sure anybody would have predicted 4 years ago or 3 years ago when the drug launched that it would be as big as it is. But I think it speaks to size of the market. It's ready for disruption. I think, you'll see that in Niktimvo as yet another disruptor. I think more patients, the expectations will only increase, which I think will lead for more opportunities for the drug as it enters the market.

And Anjali, do you want to address the treatment duration expectations?

Sure. Yes, happy to. I mean I think what we saw in the trial was 50% of patients on treatment out past the year. This was a fairly late line patient population, patients who had 4 prior therapies and disease for 48 months. We don't necessarily expect that like in normal oncology treatments where you see patients reducing their duration of treatment with lines of therapy as you get into later lines of therapy. Obviously, in this setting, it really seems like you need to find what's going to work for patients. And so even we think that's probably a base case. And as we get to more patient exposure, its potential to increase the duration. We've definitely had a number of patients on for a significant period of time. So we'll see -- we'll be collecting the real-world data, but we think that 12 months is not a -- is a fairly good median estimate to begin with. We also envision with our partners at Incyte moving this into earlier lines and in combination and doing things to potentially impact the course of the disease. Could you use a CSF-1R inhibitor to prevent or fibrosis before it gets too severe and really improve outcomes for patients. And I think that would also make a big difference.

The next question is from Michael Schmidt with Guggenheim.

This is Paul on for Michael. Congrats on your approval too. Could you just speak a little more about your confidence in potentially taking share from REZUROCK? What are the key differentiators and factors that have stood out that would need the physicians to choose Niktimvo earlier than REZUROCK as they're perhaps second-line or third-line agents. I know you have highlighted specific organ responses, for example. So just wondering what's reflected in your most recent physician conversations?

Paul, thanks for the question. Steve, why don't you jump into that one?

Yes. Sure. Well, I think some of it, Paul, I mean, I think [indiscernible] just start the patient population that Neil described that we studied, heavily pretreated population, 70% had seen -- had been on prior Jakafi treatment, 25% to 30% have been on REZUROCK and a good amount on IMBRUVICA. So despite the very severe nature, I think the results that Neil also described were very, very good. And I think we'd expect to see that in practice. The effects that we see were meaningful. They were durable. And in some cases, the drug worked pretty quickly. And we know that physicians are really excited by this from all the market research that we've done. I'd say the other piece, and I think Anjali just went into that because of its mechanism of action as an antibody could enable safer combinability and can extend its promise to deliver disease-modifying effects, which she somewhat described in even earlier-stage patients. So those are the things we see, and I would just amplify some of the comments I previously made on the market and the desire for newer, for better and different treatment options to treat patients who we know are highly symptomatic and suffering from a chronic illness and are really looking for new treatment options.

The next question is from Yigal Nochomovitz with Citi.

Great. And let me add my congratulations to the team as well. One big picture question and then one technical one on the vials. Big picture one is, could you comment, at least in broad brush strokes when you think you might be able to get to profitability given the profit split with Incyte profitability on the product specifically in Niktimvo.

Yigal, thanks for the question. I'll turn it over to Keith to comment on timing of profitability, potential profitability, yes.

Yes, you could probably anticipate our answer that we're not going to be giving guidance on that right now other than to say we're excited for the launch for all the reasons that Steve has mentioned. And from a commercial profitability perspective, I just wanted to add a note that the commercial split includes any profit -- any royalties that we owe UCB, who we licensed the product from. So it will be the net sales that our partners report at Incyte, that will be on their P&L, less cost of sales, which includes cost of goods sold plus the royalty less all combined commercial expenses of both parties, including our 30% effort. That all gets loaded into the commercial expense. The bottom, you can call it a commercial profit, and then we'll pick up that 50% of that commercial profit. Any period that we're in a profitable profit position that will be top of our P&L collaboration revenue. And if there's a period where we are in a loss position, that will be, like I said, down in the OpEx reported separately as a share of collaboration loss.

Okay. And then my question on the vial. So you said -- I think, Michael, you said [ 9 milligram and 22 milligram ]. So this is question, the lightest patient is 40 kilograms, so that's 12 milligrams drug. And then the max dose is 35 milligrams, neither of those is 9 milligram or 22 milligram. So can you just help us understand a little better why the choice is at those specific values for the vials given the way that the patients or the weight of the patients must be some reason there.

Yes, yes, for sure. So maybe, Peter, if you're on the call, maybe want to address that?

Yes, thanks for the question. Basically, the way that the modeling and such was done around the weights and the dose of the 0.3 milligram per kilogram that 22 milligram was felt to represent sort of an average that accommodates a range around that average weight. And then the 9 is available for some of the heavier patients to get to the combining those two to get closer to that 35-milligram cap.

Okay. And then there's a subcu version, as I understand, that's in development. Is that also going to have different volumes to sort of mimic what you're doing with the vial sizes? Or would it be different?

Yes. Thanks for the question, Yigal. I think subcu, you're right, is in development, working closely with Incyte to do that. We'll have more to say about how that will work in terms of quantity of drug that goes into the subcu. But I think you should assume that it will line up well with our 0.3 milligram to maximize the dose and reduce any kind of product waste that we could have. So I think we're trying to make sure that they -- that anything we do for subcu aligns well with what our label doses is 0.3 milligram.

Okay. And just one more clarifying one. You used a 50-milligram vial in the studies, but the max dose is 35 milligram. So that was just to have a buffer or I just was trying to understand that why you had excess.

Right. Because we had 3 different doses. Remember, we had 0.3 milligrams per kilogram every 2 weeks, we had a 1 milligram per kilogram every 2 weeks, and we had a 3-milligram per kilogram every 2 weeks, and so it accommodated all doses, that's why...

Yes. Sure. Okay. That makes sense.

Great. Anything else?

The next question is from Kalpit Patel with B. Riley.

And many congrats on the first approval here. First, on the -- one clarifying question on the pricing. I think you mentioned on the call that it's premium pricing. Is that premium pricing relative to REZUROCK? And if so, what specifically do you believe would warrant premium pricing, considering that the top line ORR and the time on treatment was they were largely overlapping between the 2 drugs in their trials?

Yes, Kalpit, thanks for the question. I'm going to turn it back to Steve, so he can address that.

Yes. No, it's a good question, Kalpit. And I think it seems easy, I think compare I mean these trials were obviously not done comparatively, so it's difficult to compare. And I think what you're often working against in today's environment with the IRA and having to be a bit more, will say, strict on pricing because of the environment. So drugs that were priced a few years ago, which REZUROCK wasn't hit the market, there's really inability to raise the price. It's hard to connect it to. I will say based on the pricing work that we've done with Incyte. Incyte has strong ties for the payer community, and they are leading this. And we talked about the 30% effort with the sales force, but it is Incyte's market access and payer team that is going to drive this through payors. So between the confidence that they have, the pricing work that we've done, we believe we can price at some premium over REZUROCK. I mentioned the WAC is below [ 22, ] but the actual average price because of double dosing, which is somewhere in the 25% to 30% range puts the drug anywhere in the $20,000 to $25,000 range. So real price when we do, we think it will be in that range, a little north of it, but more to come down the road once the product is available.

And maybe one question for Keith. What milestone payments are we expecting from Incyte for this approval, if any? And what additional milestones should we keep in mind for the next 12 months?

Yes. Thanks, Kalpit. So in the prepared remarks, I did comment that we received $12.5 million from Incyte for the approval. We also commented that the total milestones under our agreement that we reported back in 2021 -- December 2021 when we announced the deal was $450 million. So we haven't broken those out. Those redacted from the original filings other than to say. They would be based from a regulatory and development perspective. They would be what you would typically think about approvals, major events such as this one. And then there's -- additionally, there's commercial milestones as well for hitting certain revenue thresholds.

Congrats again.

The next question is from Justin Zelin with BTIG.

Congrats on the approval here. So with the approval today and a bit of time until the launch, could you talk to launch preparation activities that can be done now through the end of the year. And second, I'm assuming that payer formulary additions and coverage will need to take place after the new vials and pricing is available. But just correct me if I'm wrong there. And last, if you have the expected insurance split in the target indication.

Sure, Justin. Thanks. These are probably all questions. Steve can knock off in terms of our preparation, payer coverage and your last question as well. So Steve, take it away.

Yes. Absolutely. So in terms of what do we do to launch, I think Incyte is already there. They've pretty much developed this, the chronic GVH and the acute GVHD market. So profiling has already taken place. We're actually in some of these accounts anyway. As I mentioned, we're about 1/3 of the target audience that's ultimately covered just based on revumenib coverage. So there's more of that. We'll have an opportunity, obviously, post approval to talk about the drug. I know we've given a time, as I said, Q4 as a potential launch date. So I think it will build up some excitement. We'll be able to share appropriate information, particularly when asked about the drug. And I think it will get physicians thinking and patients thinking about what could be for them once the drug is available. So if anything, I think it will just create stronger uptake at the time approval. The second question around when does payer coverage happen? It will start once we lock in price since the [indiscernible] which is really locked down to when the vials are available and ultimately on market. So that's when things will start. But obviously, we can talk to payers now about the product. It's clinical attributes. So we're hoping your formulary coverage generally takes somewhere between 9 and 12 months. There's a chance that, that gets accelerated just because of that gap between approval and ultimately, time and market. And in terms of insurance split, this is more of a commercial audience. It's probably 60% commercial, 30% Part D, and the rest of that is going to be Medicaid.

The next question is from Jason Zemansky with Bank of America.

This is Cameron Bozdog on for Jason. Congrats on the update. So as you look towards moving earlier in the treatment setting, I'm curious what you've been hearing from your prescribers regarding interest here. In terms of combos, is there maybe one either Jakafi or steroids that have received interest. And then maybe thinking about optionality beyond GVHD, what other fibrotic indications outside of IPS could make sense here?

Sure. Thank you, Cameron. Appreciate the question. So maybe, Anjali, do you want to talk a little bit about moving earlier in the treatment paradigm and our plans there, and then we can address your second question about other fibrotic indications, which we're thinking about.

Yes, sure. So thanks, Cameron. As you know, Incyte is gearing up to initiate 2 studies, one in combination steroids and one in combination of Jakafi. I think the steroid combination addresses how physicians are treating patients today and the combination with Jakafi is starting to think about how you can move treatment in the future away from steroids and potentially access both major pathways, driving the disease progression to shut down and inhibit the disease over time without -- and minimize the use of steroids potentially, eliminate the use of steroids. So that's kind of how we're thinking about this evolution, some of -- meeting them today and helping achieve sort of the goals of tomorrow.

Right. And I guess the second question about other diseases. I think, as you know, Cameron, we're conducting a trial in IPF, which is obviously a fibrotic disease and where there's a large unmet medical need. We've -- GVHD has actually been a very fruitful area for us to, pursue not only because the drug is so active in these patients, but also looking at the individual organ systems within GVHD and the effects on those organs, it kind of gives us a window into other diseases, IPF being one, but there are several that we could pursue probably a little early to say what those are, but I think you could probably look at our results and see where we're having differentiated results we might want to pursue development in the future. So I think it's a really positive development, obviously, to have a drug that's as potent and active in fibrotic disease as this one is. And hopefully, IPF is just one of several indications we're working with Incyte in the future.

This concludes the question-and-answer session. I'd like to turn the conference back over to Michael Metzger for any closing remarks.

Thank you, operator. I'd like to close by thanking everyone again for joining us today. We are absolutely delighted to have received approval for our first novel medicine and look forward to rapidly building on its success with the anticipated approval and launch of revumenib. We thank you all for your continued support, as always, and I wish you a great evening.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.