Q3 2020 Incyte Corp Earnings Call

Hello, and welcome to the insight Corp, third quarter 2020 financial results Conference call.

Operator: Hello, and welcome to the Incyte Corp third quarter 2020 financial results conference call. At this time, all participants are in a listen only mode.

This time, all participants already with throwing mode.

Question and answer session will follow the formal presentation.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mike Booth, Head of Investor Relations. Please go ahead. Thank you, Kevin.

If anyone should require operator assistance, please press star zero under telephone keypad.

As a reminder, this conference is being recorded.

Now my pleasure to turn the call over to Mike Booth head of Investor Relations at Incyte. Please go ahead Sir.

Thank you Kevin Good morning, and welcome to insights third quarter 2020, <unk> earnings conference call and webcast.

Mike Booth: Good morning, and welcome to Incyte's third quarter 2020 earnings conference call and webcast. The slides used today are available for download in the investor section of incyte.com. I am joined on the call today by Herve, Barry, Steven, and Christiana, who will deliver our prepared remarks, and by Dash, who will join us for the Q&A session. During the question and answer session, I ask that you limit yourself to one question and, if needed, one follow-up question, as this will enable as many of you to ask questions as time allows.

The slides used today are available for download on the Investor section of insight Dot com.

I'm joined on the call today by they Bury Stephen in Christiana, who will deliver our prepared remarks and <unk>.

Josh who will join us for the Q and a session.

During the question and answer session I ask that you limit yourself to one question and if needed one follow up this will enable as many of you to ask questions as time allows.

Before we begin I'd like to remind you that some of the statements made during the call today afford looking statements, including statements regarding our expectations for 2020 guidance the commercialization of our products and our development plans and expectations for the compounds in our pipeline.

Mike Booth: Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements, including statements regarding our expectations for 2020 guidance, the commercialization of our products, and our development plans and expectations for the compounds in our pipeline, as well as the development plans of our collaboration past. These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our 10Q In addition, I would like to caution everyone that the COVID-19 pandemic is an evolving situation, and we may therefore be unable to assess the full effects of governmental, business, and social actions and policies and overall economic conditions on our business. Accordingly, it is important to keep in mind that our statements on this webcast speak only as of today. We'll now begin the call with...

One is the development plans of our collaboration partners.

These forward looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially including those described in our 10-Q for the quarter ended June Thirtyth 2020, and from time to time in our other SEC documents.

In addition, I would like to caution everyone that the COVID-19 pandemic isn't evolving situation and we may therefore be unable to assess the effect.

Other mental businesses, social axis of policies and overall economic conditions on our business. Accordingly. It is important to keep in mind that statements on this webcast speak as of today well now begin the call with me.

Thank you, Mike and good morning, everyone.

Herve Hoppenot: Thank you, Mike, and good morning, everyone. In the third quarter, we saw continued strong growth within our commercial business, and we progressed our clinical portfolio on both the development and regulatory fronts. Commercial performance across the business was strong. Our product and royalty revenue grew 16% to $621 million. Due to Jessica Fye, as well as an increasing contribution from new product launches and from royalty, Shaka Fye's sales grew 13% year-over-year to reach $488 million, with growth seen across all three indications. Jacques Havilland and Olumiant's royalties grew 17 and 32%, respectively, totaling nearly 100 million in revenues for the quarter.

In the fourth quarter, we sold.

The strong growth, we do not work on my phone business on par with our clinical <unk> both developed month right.

Very good well I got three products.

Commercial performance across the business with strong.

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Revenue grew 16% to 621 million.

Driven by <unk> as well as an increase in contribution from new product launches I'm from royalties.

Sacrifices group something profound yoga, you reached 488 million with growth seen across all three indications.

Check out <unk> and everything else, so royalties grew 17 and 42% respectively.

But I didn't know the hundred million in revenues for the quarter.

Hi significant momentum in the first week, so lots of moving the U.S. I am pleased to say that because I know the media, which was launched at the end of April.

Herve Hoppenot: There is significant momentum in the first weeks of the launch of Monjuvie in the U.S., and I am pleased to say that Pemazir, which was launched at the end of April, has outperformed our initial expectations. The application seeking approval of Staph Acetamab in relapsed or refractory DL-BCL is under review in Europe, and applications seeking approval for Pemigatinib in cholangiocar It has been a busy quarter for Baracitinib development. Siding data were recently presented from the ongoing evaluation of baratzitinib in patients with severe alopecia areata, and Lily's Development Program for this indication includes two phase 3 trials. If approved, Baracitinib may be the first JAK inhibitor to be approved for alopecia areata. And in October, it became the first oral JAK inhibitor indicated for the treatment of moderate to severe atopic dermatitis following its approval by the European Commission.

Outperformed our initial expectations.

Yep allocation picking up we're going to see the mob in relapsed or refractory disease yen is under review in Europe and application seeking approval then you get the need to encourage them to go see them a under review in both Europe and Japan.

It has been a busy quarter for boxes do you need to give it up on the exciting. They thought were recently presented from the ongoing evaluation of boxes and maybe there's something we see the artificial lift though.

And these development program in this indication includes two phase three trials.

If approved boxes. They may be the first maybe talk to be approved for artificial lift, though I mean, the barbell boxes. They begin to from a lot of that can be indicated for the treatment of moderate to severe atopic dermatitis. Following its approval by the European Commission.

This represents a new potential source of revenue for inside.

Herve Hoppenot: This represents a new potential source of revenue for Incyte. And with Lili, we also announce positive data from the ACT2 trial of baracitinib in COVID-19. From our I.O.

I mean, we see D.. We also know what did you do them from the <unk> to try and boxes, maybe in 19.

Well my what are your portfolio or was it the results were presented from I've tried it but if it did the revenue from de mob in squamous cell carcinoma and from my work dermatology portfolio. We ship what do you see the preliminary efficacy and safety results.

Herve Hoppenot: In our portfolio, positive results were presented from our trial-evaluated retifandimab in squamous cell enol carcinoma, and from our dermatology portfolio, we share positive preliminary efficacy and safety results for our oral JAK1 inhibitor 54707 in Hydradenitis Superativa, H.S. H.S. is a chronic skin condition caused by inflammation and infection of the sweat glands.

Well I was honored to track why do you need to fight for seven let's sit on.

In the Hydrant Tonight, just to draw up to about it yet.

She is a chronic skin can do some caused by inflammation and infection of the sweat glands.

We also presented results from the phase three program.

Herve Hoppenot: We also presented pooled results from the Phase 3 through 8D program of Roxolyte lip cream in Atopic Dermatitis. These results are indicative of why we are so excited by the potential of our dermatology portfolio and why we are establishing a new dermatology franchise for Incyte. Incyte has deep expertise in immunology within our drug discovery team, and we have leveraged our cross-program knowledge of the JAK-STAT pathway to develop innovative medicines to treat autoimmune disorders. We are now developing science-based therapeutics for the medical dermatology community, and we have multiple first-in-class candidates that we believe can deliver important benefits to patients. Our Dedicated Dermatology Development Group continues to execute with precision and speed, as evidenced by the rapid advancement of RockScream in recent years, including the successful Phase III program in atopic dermatitis and the recent completion of recruitment into the pivotal VT-LIGO program. We are also building our U.S. commercial organization.

Obama works <unk> cream in atopic dermatitis.

These results are indicative of why we are so excited by the potential of I won't comment the GE portfolio.

Wow why do we are establishing a new dermatology franchise for insight.

Insight has deep expertise in immunology, we do not want drug discovery team and we have leveraged <unk> cost problem, though that it was the best way to develop innovative medicines to treat autoimmune disorder.

We are now developing science based topics for the medical Dermatology company team.

Multiple first in class candidates that we believe can deliver important benefits to patients.

Well did you get it done but to give it up on group.

Didn't used to execute with precision and speed up as evidenced by the rapid advancement of work screaming in recent years, including the successful phase three program you have to be done what they do and the recent completion of recruitment into the people that did you like go call Rob.

We're also building our U.S. commercial organization.

Did you expected acceleration of regulatory timelines.

Herve Hoppenot: The expected acceleration of regulatory timelines through the use of the Priority Review Voucher gives us added momentum here, and I'm very pleased to say that we have been able to recruit some exceptional talent as we continue to build our dermatology team. I will end my introduction by reminding you of the tremendous progress we have made so far in 2020. We have announced multiple positive pipeline developments since the beginning of this year, as shown by the checkmarks on slide 6. And looking forward, we have five important updates to come over the next two months. We expect to submit the NDA for rotulatinib cream at the end of the year and to initiate the first phase 3 trial in the Limber program. Important translational data from 86550, our oral PD-L1 inhibitor, is going to be presented at CIDC next week, and we are also expecting a busy HASH conference in early December. At ASS, our presentation will include an oral presentation of the rich, free data from rock salinity in chronic GVHD, as well as a series of updates from the Parthak Lizib Citadel Program in several different non-Onscreen Lab formats.

The use of the priority review voucher sales.

Gives us added momentum here and I'm very pleased to say that we have been able to recruit some except park that on as we continue to build a well done with those you Jim.

I will end my introduction by reminding you of the tremendous progress we have made so falling 2020.

We havent announced multiple positive pipeline development since the beginning of this year as shown by the check marks on slide six.

I'm looking for a while we have five important of that to come over the next two months.

We expect to submit the NDS for Ruxolitinib, creating an end of year, though and we initiated the first phase three trial in Limbo program.

You booked some fish are due from 8655, Oh I want our PDL, one and it's always going to be pretty lucky that since you next week.

Also expecting a busy ash conference in early December.

At ash or what percentage of that would include the North Korea competition lives or which treat these from looks like maybe in chronic gvhd.

As well as a series of updates from the perfect. It seems that that program instead of all the different I'm not getting enough for Myles.

And we also intend to host this stuff going on on the seventh of December to provide highlights from the contracts.

Barry P. Flannelly: And we also intend to host an investor call on Monday, 7th of December to provide our highlights from the conference. I will now pass the call over to Barry for the commercial overview. Thank you, Herve, and good morning, everyone. In the first nine months of 2020, Jackify sales increased 17% versus the same period in 2019, and we continue to see good demand for Jackify across all three indications. The continued strong performance in the year to date has enabled us to tighten our sales guidance for Jackify to a new range of $1.91 to $1.94 billion.

Oh, no Pensacola of up to Barry for the commercial value.

Thank you everybody and good morning, everyone in the first nine months of 2020, Jacobite sales increased 17% versus the same period in 2019, and we continue to see good demand for Jack Fi across all three indications that continued strong performance in the year to date has enabled us to heighten our sales guys.

This project to a new range of $1.91 billion to $1.94 billion.

On the right hand side of the slide you can see the evolution of the portion of patients by indication.

Barry P. Flannelly: On the right-hand side of the slide, you can see the evolution of a portion of patients by indication. Myelofibrosis patients still represent the largest portion of patients on JAKOFY, but the numbers of polycythemia vera and GVHD patients on JAKOFY are increasing and now comprise 33% and 13% of total patients, respectively. Slide 10 provides additional color around new patient growth for Jacopi. The chart on the left shows that over 90% of total patients are ongoing patients from prior periods. And this pool of ongoing patients continues to grow quarter over quarter. However, as we have previously disclosed, new patient starts were down significantly in Q2 this year, as we felt the effects of COVID-19 due to total patient visits being down. Following this transient decline in Q2, there was a partial rebound in new patient starts in Q3.

Fibrosis patients still represent the largest portion of patients on Jack a fine but numbers of polycythemia Vera.

And gvhd patients on Jack if I are increasing and now comprise 33% and 13% of total patients respectively.

Slide 10 provides additional color around new patient growth projects.

The chart on the left shows that over 90% of total patients are ongoing patients from prior periods and this pool of ongoing patients continues to grow quarter over quarter.

As we have previously disclosed new patient starts were down significantly in Q2 this year.

As we felt the effects of COVID-19, due to total patient visits being down.

During this transit decline in Q2, there was a partial rebound in new patient starts in Q3.

Barry P. Flannelly: Turning now to the Monjuby launch progress, we are very pleased with the performance of Manjubi, generating $5 million in the first few weeks since its launch in mid-August. With our colleagues at Morphosis, the commercial and medical teams have been driving increased awareness of the benefits of Monjuby, and we are now the market leaders in terms of share avoidance. Field activity, participation in educational presentations, and inclusion in the NCCN guidelines are all contributing to the increasing awareness of Monjuvi within the He-Monk community.

Turning now to the mine duty launch progress.

We're very pleased with the performance of mine, Judy generating $5 million in the first few weeks since launch in mid August with.

With our colleagues at morphosis, the commercial and medical teams have been driving increased awareness of the benefits of mine Julie and we are now the market leaders in terms of share of voice.

Yield activity participation educational presentations and inclusion in the NCCN guidelines are all contributing to the increasing awareness of mine Judy within the team I'm community.

Feedback thus far has been very positive with physicians highlighting the importance of one GB depth and duration of response and its sabre favorable safety profile.

Barry P. Flannelly: Feedback thus far has been very positive, with physicians highlighting the importance of MUNJUVI's depth and duration of response and its favorable safety profile. We have built strong momentum for MUNJUVI within both the academic and community settings, with greater than 200 accounts having now been ordered. We are seeing a sizable uptake by he-monks in the community, which now accounts for approximately 65% of total prescribers, a trend that

We have built strong momentum for mine Julie within both the academic and community settings with greater than 200 accounts, having now ordered we're seeing a sizeable uptake I came on in the community, which now accounts for approximately 65% of total prescribers.

Trend that we anticipated.

Our market access team have also made significant strides since launch achieving nearly 90% formulary approvals in our top 30 accounts.

Steven H. Stein: Our market access team has also made significant strides since launch, achieving nearly 90% formulary approvals in our top 30 accounts. Turning to Pemazir, which we launched in the second quarter, we have been very pleased with the rapid adoption of this new medicine, this novel medicine, with $8 million in sales generated in the third quarter. Broad access to FGFR testing has contributed to this rapid patient adoption, and we have seen good uptake of Pemizer nationally with over 200 patients treated since launch. The high refill rate also suggests that appropriate patients are being identified via this testing as they continue on Pemizer therapy. I'll now turn the call over to Steven for our clinical update. Thanks, Barry, and good morning, everyone.

Turning to pension zero, which we launched in the second quarter. We have been very pleased with the rapid adoption of this new medicine, if novel Medicine with 8 million in sales generated in the third quarter.

Broad access to actually if our testing has contributed to this rapid patient adoption and we have seen good uptake opinions here nationally with over 200 patients treated since launch.

Hi, refill written rate also suggest that the appropriate patients are being identified via this testing as they continue on and is your therapy.

I'll now turn the call over to Steven for a clinical update.

Thanks, Barry and good morning, everyone.

I'll start that Ruxolitinib clean program.

Steven H. Stein: I'll start with our Roxalytinib cream program. Initial data from the Phase 3 trials presented earlier this year at RAD showed that ruxolidinib cream resulted in significantly higher Investigator Global Assessment treatment success and eczema area severity index 75 scores for ruxolidinib cream versus viacom. At EADV in October of this year, pooled analysis of the two Phase III trials was presented. These pooled results reinforce the efficacy profile of roxalatinib cream as it relates to IgA-TS. EZ75 and rapid, substantial, and sustained itch reduction in patients with atopic dermatitis.

Initial data from the phase three trials presented earlier this year and Rad showed that Ruxolitinib cream resulted in significantly higher investigator global assessment treatment success, and eczema area severity index, 75 scores or Rex cream versus vehicle.

And even up to above this year pooled analysis of the two phase three trials were presented.

These pooled results reinforce the efficacy profile of Ruxolitinib cream as it relates to our G.H.T.S. easy 75, and the rapid substantial and sustained introduction in patients with atopic dermatitis.

Newly presented data at EEI TV showed that patients on ruxolitinib cream or say experienced significantly better sleep quality sleep death death and restoration.

Steven H. Stein: Newly presented data at EADV showed that patients on ruxolitinib cream also experienced significantly better sleep quality, sleep depth, and restoration. These results further highlight the potential for ruxolitinib cream to become an important treatment option for atopic dermatitis patients. We are on track to submit the NDA for atopic dermatitis at the end of this year and intend to use our priority review voucher, which should accelerate the FDA decision. The priority review voucher is expected to shorten the FDA review period by four months. Therefore, we could expect an FDA decision in June next year if all goes according to plan, as opposed to October of 2021. Our Phase 3 program for Vitaligo is now fully req., and we expect results in the first half of 2021.

These results further highlight the potential for ruxolitinib cream to become an important treatment option for atopic dermatitis patients.

We are on track to submit the Indiana topic in atopic dermatitis at the end of this year and intend to use our priority review voucher, which should accelerate the FDA decision.

The priority review voucher is expected to shorten the FDA review period by four months.

Therefore, we could expect an F.D.A. decision in June next year, if all goes according to plan as opposed to October of 2021.

Our phase three program for very long ago is now fully recruited and we expect results in the first half of 2021.

Given the accelerated timelines for the use the priority review voucher. There is also the potential of an acceleration of the Vitol Iga program because an earlier decision on the atopic dermatitis anyway may allow for consequently earlier submission of the San Diego <unk>.

Steven H. Stein: Given the accelerated timelines for the use of the Priority Review Voucher, there is also the potential for an acceleration of the Vitalaga program because an earlier decision on the atopic dermatitis NDA may allow for a consequently earlier submission of the SNDA for vitiligo. Staying within our dermatology development... We announce positive initial data for 54707, an oral JAK1 inhibitor, and patients with moderate to severe hyperadrenitis supertiva, which is a chronic skin condition where inflammation and infection near sweat glands can result in painful abscesses, sinus tracts, and scarring on the skin. The Phase II trial evaluated three doses of 5-4-7-0-7 versus placebo, each of which was taken daily for eight weeks, followed by a 30-day safety follow-up. Preliminary efficacy was seen in a reduction in the number of abscesses and inflammatory nodules, termed the AN count, which results were seen as early as week one, as well as reductions in skin pain.

Staying within that Dermatology development group, we announced positive initial data for 5.707, an oral JAK one inhibitor in patients with moderate to severe height or not a super Tivo, which is a chronic skin condition, where inflammation and infection near sweat glands, and resulting painful abscesses sign.

Tracks and scarring on the skin.

The phase two trial evaluating three doses of 547 or seven versus placebo each of which were taken daily for eight weeks, followed by 30 day safety follow up.

Preliminary efficacy was seen in a reduction in the number of access and inflammatory nodules termed and count which with results seen as early as week, one as well as reductions in skin pain.

547, or seven was well tolerated no treatment discontinuations due to treatment emergent adverse events and we have already initiated a larger 200 patient phase Twob study.

Steven H. Stein: 5.4.707 was well tolerated with no treatment discontinuations due to treatment-emergent adverse events, and we have already initiated a larger 200 patient phase 2b study. We are excited by the global opportunities for Taphocytomab. Slide 17 reminds you of our broad development pipeline, which covers several non-Hodgkin's lymphomas in both the first line and the relapsed or refractory setting. We have multiple pivotal trials in preparation across various indications, including first-line diffuse large B-cell lymphoma and in relapsed or refractory follicular. We also expect to initiate our proof-of-concept trial, Turn into our I.O.

We are excited by the global opportunities for Taf, instead, a map and slide 17 remind you of our broad development program, which covers several non Hodgkin's lymphoma is in both the first line and the relapsed or refractory settings.

We have multiple pivotal trials and preparation across various indications, including first line diffuse large b cell lymphoma, and in relapsed or refractory Follicular lymphoma, we.

What do you expect to initiate a proof of concept trial evaluating toughest at a map in combination with our Pithree kinase Delta inhibitor post the close of which the final protocol is in preparation.

Turning to I O portfolio at ESMO in September this year, we presented phase two results from podium to or to evaluate in radio fandom app in squamous cell carcinoma.

Steven H. Stein: port. At ESMO in September this year, we presented Phase 2 results from Podium 202, evaluating red ephandlumab in squamous cell anal carcinoma. The disease control rate of 49% and median duration of response of 9.5 months were well-received. We are opening a phase 3 trial for retifanilamab in patients with squamous cell anal carcinoma.

The disease control rate of 49% median duration of response of 9.5 months were well received we are opening a phase three trial for Medifast allomap in patients with squamous cell carcinoma.

Slide 18 also remind you the status of the other indications we are pursuing for write a fan demand as well as an important clinical translational data well be sharing from age six 550, oral PDL, one inhibitor, which it should be presented at SITC see next week.

Steven H. Stein: Flood 18 also reminds you of the status of the other indications we are pursuing for retifanilamab, as well as the important clinical translational data we'll be sharing from H6550, our oral PD-L1 inhibitor, which is to be presented at SITC next week. The translational data are from actual clinical specimens taken during the ongoing trial, and we will be able to share with you the data showing, for example, the degree of PD-L1 inhibition and T cell changes illustrative of immune modulation with 86550. We expect to provide more fulsome clinical safety and efficacy data from this ongoing trial during the next year. And we are also initiating a new Phase II trial in patients with treatment-naive, PD-1-sensitive tumors as we continue to move forward with this important project. I will end my section on our development projects addressing COVID-19. With Lilly, we recently announced positive results for baricitinib in the ACTT2 trial in hospitalized COVID-19 patients. In combination with Remdesivir, Baristidinib reduced time to recovery. Improved clinical outcomes and showed a numerical decrease in mortality compared to remdesivir alone. These results were most pronounced in patients receiving oxygen.

The translational data off from actual clinical specimens taken during the ongoing trial and we will be able to share with you. The data show in for example, the degree of PDL, one inhibition and T cell changes illustrative of immune modulation was 8655 zero.

We expect to provide more fulsome clinical safety and efficacy data from this ongoing trial during the next year and we also initiated a new phase two trial in patients with treatment naive PD one sensitive tumors as we continue to move forward with this important project.

I will then my section on our development projects addressing COVID-19.

With Lilly, we recently announced positive results for Baricitinib in a CTG to trial in hospitalized COVID-19 patients.

Combination with Graham disappear arison that reduce time to recovery improved clinical outcomes and showed a numerical decrease in mortality compared to Ram deserve your line.

These results were most pronounced in patients receiving oxygen.

Based on these data Lilly has submitted baricitinib to the FDA for potential emergency use authorization and regulatory discussions remain ongoing.

Steven H. Stein: Based on these data, Lilia submitted Varisitnib to the FDA for potential emergency use authorization, and regulatory discussions remain ongoing. For RUX Alitnib, we recently completed enrollment in the RUX COVA trial, and we expect top-line results from this trial by the end of this year. With that, I would like to turn the call over to Christiana for the financial update. Thank you, Steven, and good morning, everyone. The financial update this morning will include GAAP and non-GAAP numbers. For a full reconciliation of GAAP to non-GAAP, please refer to slide 27 in the backup section of the deck and to the press release we issued this morning.

Ruxolitinib, we recently completed enrollment of the rocks covert trial and we expect topline results from this trial by the end of this year.

With that I would like to turn the turn the call over to Christiane It for the financial update.

Thank you Steven and good morning, everyone. The financial update. This morning will include GAAP and non-GAAP numbers for a full reconciliation of GAAP to non-GAAP. Please refer to slide 27 in the back of six of the deck and to the press release, we issued this morning.

Moving to our results for the third quarter revenue growth continued to be strong with total product and royalty revenues of $621 million, representing an increase of 16% over the third quarter of 2019.

Christiana Stamoulis: Moving to our results for the third quarter, revenue growth continued to be strong, with total product and royalty revenues of $621 million, representing an increase of 16% over the third quarter of 2019. This reflects growth across both products commercialized by Incyte and those commercialized by ARPAC. Total product and royalty revenues for the quarter are comprised of net product revenues of $488 million for Jaka Fye, $26 million for iQlusive, and $8 million for Pema Thawar.

This reflects growth across both products commercialize lane tied and those commercialized by our partners.

Product and royalty revenues for the quarter are comprised of net product revenues of $488 million for Jackup high.

The $6 million for Iclusig and $8 million for pentair.

Royalties from Novartis of $68 million for Jakafi, and $1 million or Capex and royalties from E. Lee of $29 million.

Christiana Stamoulis: Royalties from Novartis of $68 million for Jacobi and $1 million for Tabrekta, and royalties from Lilly of $29 million for Olumi. Total costs and expenses for the quarter of $559 million, on a non-GAAP basis, include $120 million related to the purchase of an FDA priority review voucher fully expensed under R&D, which we intend to use to accelerate the FDA review of Raxolitinib cream for the treatment of atopic dermatitis, and $21 million of upfront consideration and milestones related to our collaborative agreement. Excluding the impact of these expenses, our total cost and expenses increased by 15% over the prior year.

Hello again.

But on cost and expenses for the quarter of $559 million on a non-GAAP basis include 120 median really that's related to the purchase of a nifty a priority review voucher fully expensed under R&D, which we intend to use to accelerate that FDA review of Ruxolitinib cream for the treatment.

Okay, then with I'd and $21 million upfront consideration and milestones related to our collaborative agreements.

Excluding the impact of these expenses I thought on cost and expenses increased 15% over the prior year quarter.

Ongoing R&D expense for the quarter was $268 million on a non-GAAP basis, representing a 7% increase from the prior year quarter.

Christiana Stamoulis: Ongoing R&D expense for the quarter was $268 million on a non-gap basis, representing a 7% increase from the prior year quarter. This increase was primarily due to our 55% share of the global and U.S.-specific development costs for facetamide and the clinical trials of raxolitinib as a potential therapy for COVID-19, and was partially offset by the timing of other developments. SG&A expense for the quarter was $106 million on a non-gap basis, representing an 18% increase over the prior year quarter.

The increase was primarily due to our 55% share of the global and you asked specifically about admin costs.

And the clinical trial, so for Ruxolitinib as a potential therapy for COVID-19, and was partially offset by the timing of how their development activity.

SGN a expenses for the quarter was $106 million on a non-GAAP basis, representing an 18% increase over the prior year quarter.

This increase was primarily due to an increase in commercialization efforts related to Jackup I didn't say much there.

Christiana Stamoulis: This increase was primarily due to an increase in commercialization efforts related to Jaka Fye and Teymazir, the preparation for the potential commercialization of Raxolitinib cream, and the timing of certain efforts. Collaboration loss for the quarter was $15 million, which represents a 50% share of the U.S. net commercialization loss for Monjuva. The total U.S. net commercialization loss of $30 million for Monjuvi is comprised of total net product revenues of $5 million and total operating expenses, including COGS and SG&A expenses of $35 million.

Financial for the potential commercialization of Ruxolitinib cream and the timing of certain expenses.

Well operational loss for the quarter was $15 million, which represents our 50% share of the U.S. net commercialization of loss for one Julie.

Did you ask Ned commercialization loss of $30 million from on Julie's comprised of both on net product revenues of $5 million and total operating expenses, including Cogs NSG M&A expenses of $35 million.

Our financial position continues to be strong as we ended the quarter with $1.7 billion in cash and marketable securities.

Christiana Stamoulis: Our financial position continues to be strong as we ended the quarter with $1.7 billion in cash and marketable securities. Moving on to our guidance for 2020, based on the continued strong performance of JACA-PAI in the first nine months of the year, we are tightening our JACA-PAI full-year guidance to a range of $1.91 to $1.94 billion. This implies net Jakafi revenues of between $489 and $519 million for the fourth quarter of the year.

Moving on to our guidance for Twentytwenty based on the continued strong performance of Jackup high in the first nine months of the year were tightening our jackup by full year guidance to a range of 1.9 to one to one point $94 billion do.

This implies net jackup high revenue of $489 million to $519 million for the fourth quarter of the year.

This range reflects some uncertainty associated with the resurgence in COVID-19.

Operator: This range reflects some uncertainty associated with the resurgence of COVID-19. Therefore, we are reiterating our guidance for both R&D and SG&A. As a reminder, the R&D guidance excludes the $805 million upfront consideration related to our collaboration with Morphosis and the $120 million expense related to the purchase of the FDA priority review voucher. Operator, that concludes our prepared remarks. Please give your instructions and open the call for Q&A. Certainly, when I'll be conducting a question and answer session, if you'd like to be placed in the question queue, please press star 1 on your telephone. As a reminder, we ask that you ask one question, and if you need one, then follow.

We are reiterating our guidance for both R&D and as Jamie as a reminder, the R&D guidance excludes the $805 million upfront consideration related to our collaboration with Workforces and then contract when $10 million of expenses related to the purchase of the FDA priority review voucher.

Operator that concludes our prepared remarks, please give your instructions and open the call for you any.

Operator: Once again, that's Star One, and you will hear a conference. One moment, please, while we poll for questions. Our first question today is coming from Corey Kazimoff from JPMorgan. Your line is now live.

Operator: Great. Good morning, guys. Thanks for taking the question. I guess I'll start with the obvious.

Barry P. Flannelly: Barry, can you just talk a little bit more about the real-world physician feedback that the field teams have been getting on MUNJUVI since launch? Is there anything that you're particularly surprised or pleased by relative to your prevailing expectations in these admittedly very early days? Sure, Cory, thanks for the question. It's actually been very good. You know, I've participated in a number of advisory boards, you know, lots of our interactions now are virtual, of course, but, you know, I think most physicians, most hematologists would choose Montjuvi as being the preferred second-line agent for most of their patients with diffuse large B cell lymphoma. So we're very happy. We think our trends will continue to grow in the right direction, and I think it's going as well as it possibly can. And even with COVID, for example, our sales representatives and medical representatives in the field have actually been able to communicate and get into their accounts and talk about the benefits that Montjuvis provides. Alright, great to hear, thanks a lot.

Going as well as it could possibly go and even with Covidien. For example, the the our sales representatives and medical Representatives in the field have actually been able to communicate and get into their accounts.

And talk about the benefits that not to be it provides.

All right great to hear thanks, a lot for taking the question.

Thank you next question is coming from Brian Abrams from RBC. Your line is there a lot.

Operator: Your next question is coming from Brian Abrahams from RBC; your line is now live. Hi guys, thanks so much for taking my question and congratulations on the continued progress. I was wondering if you could, and maybe this is a question for both Christiana and Barry, I was wondering if you could speak to the acquisition of the Priority Review Voucher in Atopic Durham and, I guess, how you were thinking about a potential return on investment in the context of what an initial launch trajectory could look like and the potential pricing strategy there. Thanks. Hi, this is Christiana.

Hi, guys. Thanks, so much for taking my question and congrats on the continued progress.

I was wondering could you maybe just a question for those Christiana and Barry I, just wonder if you could speak to the acquisition of the priority review Boucher in a topic Durham and I guess, how you're you're you were thinking about potential return on investment and the context of what an initial launch trajectory could look like and the potential pricing strategy there. Thanks.

Hi, This is Chris and I. Thank you for the question. So on the biotech that if you bought your Ass. Stephen described we eat provides us the potential to accelerate sales there all the time line to market for rock Scream, both for 80 and if it did I go so for 88 children. They FDA review.

Christiana Stamoulis: Thank you for the question. So the priority review voucher, as Steven described, it provides us with the potential to accelerate the overall timeline to market for Raxacrim both for AD and vitiligo. So for AD, it could shorten the FDA review period by four months, from 10 months to six months. And then, if the AD review is completed earlier than under the normal 10 month period, it gives us the possibility to subsequently submit vitiligo for review earlier than we could otherwise do.

Period by four months from 10 months to six months and then if Haiti. If they need review is completed earlier than under the norm out is that in my experience. It gives us the possibility to haptic one case that meet the <unk> VP liable for a review earlier than that.

Would otherwise do so given the potential opportunity, we see with the rock screen in both safety and to meet the legal then met needs that we see in both indications getting a rock scream to market earlier than we would otherwise has cooled a under the normal times.

Barry P. Flannelly: So given the potential opportunity we see with Raxacrim in both AD and vitiligo, the unmet needs that we see in both indications, getting Raxacrim to market earlier than we would otherwise could under the normal timelines for review timelines, it's something that we see very attractive and was easily supporting the investment we made in the PRV. And just to add, you know, I think we're completely ready to go as a new dermatology business unit. We're excited about the potential that RUX Cream will offer to a whole range of patients with mild to moderate disease. And, you know, as far as pricing and launch trajectory are concerned, we think it's going to be very good. Pricing decisions haven't been made yet.

Mine site review timelines or it's something that we see very attractive and was that easily supporting they the investment we made in the PRB.

And just to add I think were completely ready to go as a new dermatology business unit.

Operator: Great, thanks. Your next question is coming from Salveen Richter from Goldman Sachs for Linus and me. Hi, everyone. Thanks for taking the question. This is Andrea on behalf of Salveen.

Operator: Maybe another question on the new product launches. Could you speak to what you're seeing with Pemizer and any initial thoughts on what the drivers of momentum have been that have surpassed your expectations? Sure, Andrea. Thanks, Barry.

Barry P. Flannelly: You know, the drivers of momentum are simply that this is the first targeted therapy available for patients with FGFR2 fusions or rearrangements. Really, these patients had nothing after second-line therapy, so testing has been easier than we expected, next-gen sequencing, identifying the right kinds of patients and getting the drug to them at the right time. Patients are not only accessing the drug, but they're staying on the drug, at least for the time being. Obviously, it's very early, but yes, we're quite pleased with the number of patients we have and the number of patients that are coming back. Kevin, next question, please.

Number of patients we have any amount of patients that are coming back for refills.

Kevin next question. Thank you. Our next question is coming from everything from Credit Suisse. Your line is alive.

Operator: Yep, thank you. Hi all, thank you so much for taking my question and really congratulations on the continued progress. So, it's really clear that dermatology is the focus for you now. Can you provide some color reasons why you opted to invest?

Well. Thank you so much for taking my question and really congrats on the continued progress. So it's really clear that dermatology is a focus for you now can you provide some color as why you opted to invest and build your own dermatology franchise. I know there have been questions about whether or not you will do it in house or partner out and how large is this kind of commercial force expect it to be.

Operator: I know there have been questions about whether or not you were going to do an in-house or partner out, and how large this kind of commercial force is expected. And I have one follow-up there. Maybe I'll take that, Herve, over here.

And then I have one follow up there, maybe I'd because I've ever here.

Thanks Sarah.

As you know I mean, we have been sort of following the product sales of products led us into dermatology.

Herve Hoppenot: Thanks, Herve. As you know, I mean, we have been sort of... Following the product, so the product led us into dermatology, where, if you remember, we had studies in alopecia areata. In fact, that was the first study we did, and then we had studies in atopic derm and VT LIGO. I think what Changed Our View From finding a partner and getting royalties for this, we realized the profile of the product in atopic dermatitis is, in fact, very much superior to what you have available today, and the number of patients is potentially very large, and then we also realized, probably over the past two years, that the benefits we are providing in vitiligo are very unique.

Well as you remember we had studies in Alabama Sharia dialog Thats are the first to study we did and then we had the.

Studies in that the Biederman vitiligo I think what.

Changed our view.

From finding a partner on getting royalties for this is when we realize the profile of the product in atopic dermatitis is in fact very.

Very much superior to what you have available today.

And the number of patients is potentially very large and then we also realized it was probably over the past two years.

That the benefits we are providing in vitiligo is very unique to the delay goal is not just a cosmetic issue it's a life.

Herve Hoppenot: Vitiligo is not just a cosmetic issue; it's a life issue, and we can reverse it for some patients. So when we came to the quantification of what it meant, we saw this opportunity in the U.S. as being very meaningful for our goal of growth and diversification. So that's where we said we could potentially do it ourselves. We have a team we are putting in place. I think I described it in the past as 200 people, more or less, something of that size.

Got you and we can reverse for some patients.

As a disease that is the.

Hurting them.

So when we came to the quantification of what it meant we sold this opportunity in the U.S.

As being very meaningful for our goal of growth and diversification.

So that's where we said we could potentially do it our self we have a team we are putting in place I think I described it in the past as 200 people more as something of that size.

Andy it's in good.

It's in good shape to being built now over the next six months with the.

Herve Hoppenot: And it's in good shape to be built now over the next six months with a priority voucher. And I think it's an opportunity for Incyte to have literally a new franchise. It's not changing our attention or taking our attention away from cancer and immunology and hematology. It's literally a separate team.

Priority voucher and the and I think it's a it's an opportunity for inside to have little year, New franchise, it's not changing our attention of taking our attention from cancer and immunology and hematology is fleet audio separate teams. So there will be two legs now.

Steven H. Stein: So there will be two legs now that will basically driving the growth of Incyte starting in 2021. One of them will be what we call the IAI, immunology, and dermatology, and the other one will be cancer. And frankly, there is no real change in the investment or energy that we put behind our cancer hematology portfolio. It's just an addition to what we had before. Now, for the rest of the world, we are still in a situation where we think we will have... Partnership for Asia and the last part of the world for the cream, and in Europe, we are looking at what makes the most. And one quick follow-up there. Beyond Topical Rucks, do you expect 5-4-7-0-7 to be the next key asset in the franchise? Hi, it's Steven.

That will be basically driving the growth of insight.

Starting in 2021, one of them will be the we call. It the idea immunology dermatology and the other one will be cancer and frankly, there is no real.

Challenging our.

Investment our energy that we put behind our cancer.

Metallurgy portfolio is just an addition to what we had before now for the rest of the World. We are still in the in the situation, where we think we will have.

Partnership for Asia, and the last part of the of the World for the cream and in Europe. We are looking at what makes the most sense.

And one quick follow Theres beyond topical rocks do you expect on five four 707.

To be the next key asset in the franchise.

Yes, Hi, it's Steven.

As you saw it it's another JAK inhibitor, we have in our portfolio, it's relatively Jack one selective.

Steven H. Stein: As you saw, it's another JAK inhibitor we have in our portfolio. It's relatively JAK1 selective. We're currently developing it in higher adrenaline suprativa because we believe, based on research we've done, that there remains an unmet need there because the available drugs aren't as effective as patients want them to be. And we're very encouraged by our early data, which I showed you, in terms of abscess reduction and skin pain relief. So it's an important entity to study with a compound that is clean for that indication.

We developing it currently in higher do not a super T. There. We believe based on on research. We've done that there remains an unmet need there they available drugs aren't as effective as patients want them to be and we're very encouraged by our early data, which I showed you in terms of absolute reduction and skin pain relief.

So the.

It's an important entity to study with a compound that is clean for that indication.

Steven H. Stein: Beyond that, what we do with the compound still needs to be determined. Yeah, there are additional indications for WorkScream we are also looking at. So, the way we see it is that there is a developing portfolio that is evolving. And, at the same time, if you look at eczema and vitiligo, we have two very large opportunities that are just in front of us, where we will have the first in class, we will have the first Jack topical, and in the case of vitiligo, it will be the first medicine to be approved for this patient, Excellent. Thank you so much for the call.

Beyond that what we do with the compound still needs to be determined.

Yes.

Additional additional indication for work Scream. We're also looking at so the way we see it is that there is a developing portfolios that is evolving.

And at the same time, if you look at XOMA and VTI go we have two very large opportunities that are just in front of us where we will have the first in class will have the first Jack a topical and because of the drag which would be the first medicine.

To be approved for these patients. So they are two very important short term growth driver and then there is obviously other products that will be or other indications that will becoming a subsequent it.

Excellent. Thank you so much for the color very helpful.

Operator: Very helpful. Thank you. Our next question is coming from Tazeen Ahmad from Bank of America. Your line is now live. Hi, good morning.

Take our next question is coming from Tazeen Ahmad from Bank of America. Your line is alive.

Hi, good morning, Thanks for taking my call.

Steven H. Stein: Thanks for taking my question. Just wanted to get some color on what data points we could expect from the Citadel program that, Hi Tazeen, it's Steven. I think you're asking for a little bit of color granularity on the Citadel program at ASH. As you can see, at a high level, the program continues to advance in terms of maturity of data. We have data being presented there in terms of an oral presentation in marginal zone lymphoma, and then further presentations in terms of mantle cell and follicular lymphoma. And the mantle actually is broken down into different presentations with prior BTK inhibitors and then the lack of prior BTK. In totality, the data continues, in our view, to be extremely encouraging. The response rates have been maintained over time, and they're independently reviewed response rates are keeping with what they should be in those different entities.

Just wanted to get some color on what that is for the actual citadel programmers.

Hi to zenith, Stephen I think you're asking for a little bit of color granularity on the Citadel program at Ash.

As you can see it at a high level that the program continues to advance in terms of maturity of data we have data being presented there as in terms an oral presentation in marginal zone lymphoma, and then further presentations in terms of man.

Steven H. Stein: And then, very encouragingly, the duration of responses held up, and progression-free survival as well. So, you know, we're encouraged by the totality of the data set, and this is exactly what we wanted. We wanted to have those response rates, and now with further follow-up, to be able to show that they're both durable and give you appreciable median progression-free survival. So we're on track in the U.S. to submit an NDA, hopefully in the second half of 2021, and that's where we are with that important program for delta in lymphomas. Beyond that, Delta has other indications we're pursuing.

Steven H. Stein: Obviously, in myelofibrosis in combination with ruxolitinib, we started our Phase III trial there as part of the LIMBA program. And then also, just to mention, in autoimmunity and inflammation, we're also studying it in autoimmune hemolytic anemia. So, a very comprehensive program for a very active compound, in our view. Thank you. Our next question is coming from Michael Schmidt from Guggenheim. Your line is now live.

Steven H. Stein: Hey guys, good morning. Thanks for taking my questions. I had one-on-one juvie with the application now being under review also by European regulators. I was just wondering if you had any prior interactions with the EMA and, you know, what your confidence level is and potential accelerated approval in Europe. There's been a few rejections recently of oncology products based on single-arm studies. Yeah, Michael, it's Steven.

I had one on one juvie with the application now being under review also by European regulators I was just wondering if you had any prior interactions with the he may and you know what your confidence level is and potential accelerated approval in Europe. They have been a few a few rejections.

Recently off off oncology products based on saying that I'm study.

I collect Stephen Thank you for your question, you know and we correct and we've always pre faced European regulatory discussions on single arm studies has been more difficult as you just alluded to you know some recent examples in areas, where they have declined approvals in in certain entities for Tampa sit in the map itself.

Steven H. Stein: Thank you for your question. You know, and we correct and we've always prefaced European regulatory discussions on single-arm studies have been more difficult, as you just alluded to, you know, some recent examples in areas where they've declined approvals in certain entities. For Taffer-Sitnamab itself, you know, as Herve even said up front, you know, there, and then Barry, furthered by the real world experience, there's a very, obviously, a very strong data set, a very high complete response rate, and the median duration of response for the CRs continues to improve. You know, in the update, the CRs were not even reached, but the median for the combined with PRs was 34 months.

You know as they are they even set up front you know there and then Bury further by the real World experience. There's a very obviously, a very strong dataset to very high complete response rate that median duration of response for the Crs continues to improve you know in the update does he also was not even reached but the median for the <unk>.

Bond with P. Ours was 34 months. So we think that represents you know very appreciable efficacy combined with the safety profile. This horrible obviously, our job is to convince European regulators of that given and you know the Singalong study and the real world evidence, we have from from remind to say, there's a discernible treatment effect.

Steven H. Stein: So we think that represents, you know, very appreciable efficacy combined with a horrible safety profile. Obviously, our job is to convince European regulators of that, given, you know, the single-arm study and the real world evidence we have from Remind to say there's a discernible treatment effect that's appreciable, and that, you know, we'd like you to approve it, given that. And we're in that process now, and all I can tell you is that it's going well. I mean, it's marching through the different days 120, et cetera, questions that we need to have. And we'll see how it goes with them. You know, it's hard to give you any further color other than that.

That's appreciable in that you know, we'd like you to approve it given that and we are in that process now and what I can tell you is it's going well I mean, it's marching through the different day, 120th sexual questions that we need to to have and we'll see how it goes with them you know it's hard to give you any further color other than that.

Perfect. Thank you and then just on on the first line. The plan first line D. O D. C. A regulatory study you know looking at the Astra from first mind it looks like both a combination smoky look very safe Uhm is there anything else that you're looking for in the first mind started before completing your plans for the.

Steven H. Stein: Perfect, thank you. And then just on the first line, the plan first line, the DLBCL regulatory study, you know, looking at the abstract from first mind, it looks like both of the combinations look very safe. Is there anything else that you're looking for in the first mind study before completing your plans for phase three? on size and those sort of things, endpoints, etc.

Yeah, it's three.

Oh, thank you for pointing it out so you're right. The abstract is is live now for the safety component to first mind, which looks at Tampa, plus or chop or tapa lane, plus or chop and you'll be right. On interpretation is the same as yours that there's a comparable safety for both and and we've already announced publicly that we go in.

The head thus with the <unk> chop combination in the first line study and then we just working out the final details with with regulators on size and and those sort of things and points et cetera, but will be ready to go soon and obviously, a very important study not only to us but to the community.

Steven H. Stein: But we'll be ready to go soon. And obviously, a very important study, not only to us but to the community in terms of FirstLine Diffuse B-Cell Lymphoma to try and improve the cure rates from RCHOP. Great. Thanks, Steven.

In terms of first line to fish be show lymphoma to try and improve the cure rates from our chop.

Great Thanksgiving.

Becker. This question is coming from J also from Oppenheimer. Your line does that lives.

Steven H. Stein: Thank you. Our next question is coming from Jay Olson from Oppenheimer. Your line is now: Oh hi, thanks for taking the questions. I appreciate the comments on the Pemizer launch. Seems like it's outperforming your expectations.

Oh, hi, thanks for taking the questions I.

I appreciate the comments on the <unk> launched seems like it's outperforming your expectations and I was wondering I know you only promoted for Cholangiocarcinoma, but are you seeing any spontaneous use in bladder cancer or other tumor types. Thank you.

Barry P. Flannelly: And I was wondering, I know you only promote it for cholangiocarcinoma, but are you seeing any spontaneous use in bladder cancer or other tumor types? Thank you. Not that I'm aware of, Jay.

[noise] you know not kind of aware of J, we really haven't dug into it all that much. It seems that just about every patient that I'm aware of it comes in is four cholangiocarcinoma.

Barry P. Flannelly: We really haven't dug into it all that much. It seems that just about every patient that I'm aware of comes in with cholangiocarcinoma. You know, occasionally we'll get a request for an individual patient for an individual IND for some tumor type or another, but it's very rare. Great, thanks for taking the question. Thank you. Our next question is coming from Mara Goldstein from Mizuho.

You know occasionally we'll get a request for an individual patient for an end of July N D for some tumor type or another but.

It's very rare.

Great. Thanks for taking the question.

Baker next question is coming from Mara Goldstein from Israel. Your line is that a lot.

[noise] [noise] yeah.

Steven H. Stein: Yes, just to follow up on that question. The announcement to discontinue the studies in bladder cancer, does that affect...? www.kenhub.com, Mara. Hi, it's Steven. Your question was breaking up a little bit, but I think you just wanted some thoughts on our strategy in bladder cancer with our FGFR inhibitor. I think if you step back and you look at how bladder cancer, particularly metastatic bladder cancer, is evolving with new data sets, with checkpoint inhibitors, with EV from Seattle Genetics, you know, clearly there's a change now in the treatment paradigms and treatment course in life. Therapy in bladder cancer. And what we want to do is literally do that. You know, we feel, in conjunction with our advisors, that our current first-line study thus becomes irrelevant given how care standards are changing. And we obviously have stopped recruitment there.

Go up on that question, Yeah announcements to just continue to study and bladder cancer Uhm.

Oh.

Yep.

The study that you're looking at for this.

<unk>.

Mara High it's Steven question was breaking up a little bit, but I think you just wanted some view on on our strategy and bladder cancer with with Ifr inhibitor I think if you step back and you look at how bladder cancer, particularly metastatic plan that again.

Is evolving with new datasets with checkpoints inhibitors with Evie from Seattle Genetics, clearly, there's a change now in in the treatment paradigms and treatment cause some light therapy and bladder cancer and what we Wanna do is literally do that you know we feel that al in conjunction with advice.

Is is that our current first lawn study desk becomes irrelevant given how care standards are changing and we and obviously have stopped recruitment then we re looking at the bladder programming totality looking at the biology, particularly just to give you. Some granular detail you know given eevees effect in Nekton Express in.

Steven H. Stein: And we're re-looking at the bladder program in totality, looking at the biology, particularly just to give you some granular detail, you know, given EV's effect on Nectin expressed in bladder cancer, we want to ascertain whether FGFR-3 on its own is a separate driver in this setting, and if it is, you know, how that will play with our FGFR inhibitors. And we're busy doing that preclinical work to understand the biology right now. But this doesn't change, you know, our strategy for PemiGatinib in the agnostic program, which is recruiting very well, nor in the myeloproliferative neoplasm 8P11. But we feel the bladder is evolving enough that we need to step back and understand the biology there. Okay, thank you, I appreciate it, and George Farmer from BMO Capital Markets, your line is now live. Hi, good morning.

Bladder cancer, we want to ascertain whether if TFR three on its own as a separate drive it in the set in and if it is you know how that will will play with Howie Jafar inhibitors, and we busy doing that preclinical work to understand the biology rock now this doesn't change you know our strategy for pay me Gatineau.

Agnostic program.

Recruiting very well nor in the myeloproliferative neoplasm 811, but we feel bladder is evolving enough that we need to step back and understand the biology there.

Okay. Thank you I appreciate it.

Thank goodness.

Coming from George Foreman from BMO capital markets. Your line is alive.

Barry P. Flannelly: Thanks for taking my questions. Nice to see the rebound in new patient starts with Jackafy. COVID.

Barry P. Flannelly: Where do you see that going forward? And could you comment on your progress with Jack? Sure, George, I'll take that.

Barry P. Flannelly: So, you know, new patient starts have actually, especially within the last two weeks, even come back to almost pre-COVID levels. So we're happy with that. If you recall, in the first quarter, in fact, our new patient starts were extremely pleased with, and until COVID hit, we looked like we were going to have a very, very good year. So we're hoping to get back to that number of new patients on each of the indications. Of course, we're looking forward to approval for steroid-refractory chronic GVHD sometime next year, and we really think that this is going to be a great benefit for patients. We know that there is, you know, the prevalent population in chronic GVHD is fairly high compared to the acute steroid refractory GVHD patients. So we really believe that there's an opportunity for more growth there.

Barry P. Flannelly: And we share the patient's longer duration of therapy when they're treated for chronic GVHD. So we're looking for that approval. Yeah. And thanks, Barry.

Steven H. Stein: Steven, just to add a little bit, you saw the abstracts go live yesterday, and REACH3 is an oral presentation at ASH. And again, now, you know, a second large study, randomized study in GVHD that's positive. So it's a good achievement, obviously, for the drug and really important for patients. You know, if you look at the totality of the data in the abstract, it shows superior efficacy versus best available therapy with a higher response rate, longer failure-free survival, and better symptom improvement. What's not in the abstract but will be presented at the actual meeting is also the best overall response at any time, just to try to give you comparative data for other agents.

For drugs for the Dragon really important for patients and if you look at the totality of the data in the abstract it's superior efficacy verse best available therapy with a higher response rate longer failure free survival and better symptom improvement what's not in the abstract but will be presented at the actual median is also best overall response at any time.

Just to try and give you a comparative data to other agents. So it's an important oral presentation at ash and is very said our intent is to get the submission in as soon as possible given that.

Steven H. Stein: So it's an important oral presentation at ASH, and as Barry said, our intent is to get the submission in as soon as possible, given that. Great, thanks very much.

Great. Thanks very much.

Thank goodness question is coming from cause it that kids from tell when you're lying isn't alive.

Christiana Stamoulis: Thank you. Our next question is coming from Kenneth Atkins from Cal, and your line is now live. Hi, thanks for taking my question. For your JAK1 inhibitor, 707, what do you think you need to show in hydranolitis in DAFATE-2B to have a compelling profile there versus standard? Yeah, Kenneth. Hi, it's Steven again.

Hi, Thanks for taking my question for your Jack One inhibitors seven what do you think you need to show [laughter] and I don't know lettuce in the debate to be to to have a compelling profile there versus standard of care.

[noise], Yes, Kenneth high it's Steven again, thank you. So it's a it's a disease as we were outlining in our formal presentation that has you know a lot of morbidity for patients given this apsis formation in different skin falls on in the body, obviously TNF inhibitors are licensed and you.

Steven H. Stein: Thank you. So it's a disease, as we were outlining in our formal presentation, that has, you know, a lot of morbidity for patients given this abscess formation in different skin folds in the body. Obviously, TNF inhibitors are licensed and used there with, you know, not the efficacy that I think patients fully want. So the idea was here to try, given the biology of a relative JAK1 agent, to try and get further improvements in abscess formation, sinus tract, etc. We use, so you've got to be really careful of what you do, cross-trial comparisons here. For this data set, we use what's called an AN count.

Steven H. Stein: And we believe that's the best way to measure patient benefit here, but there are other endpoints that are used in other studies. So, particularly for TNFs, there's HI, and SCI.

Steven H. Stein: CR that's used, which is a greater than 50% reduction in AN count, but no increase in new lesions. So it's a combination thereof in terms of the lesion improvement, plus ways of measuring clinical benefit and morbidity in patients. And that's why it's a very stepwise development.

Steven H. Stein: We're now going to phase 2B with a 200 patient study, and we're likely to then need a phase 3 program to get it across the finish line. But we're told repeatedly by people in the area that there remains this unmet need here, and that's what we're going to try and address in phase 2B, that we have enough efficacy to get there in terms of AN count reduction. It's up full time.

Operator: Thank you. Our next question is coming from Andrew Berens from SVB Lyric. Your line is now live. Thank you very much. Again, this is again Lee or Andy.

And Andy just a quick question regarding the.

Operator: Just a quick question regarding the atomic jackpot, the topic of the jackpot. So how do you see the opportunity in more severe atomic dermatitis patients once it's proven? Do you see that more in combination with other systematic treatments, or it's monotherapy? Thank you. So, thanks, Gang Li.

Tommy Jack fly on the topic of Jack Jack fight so.

So how do you see the opportunity more severe atopic dermatitis patients once its approved do you see that more in combination with other systematic treatment or it's a it's a monotherapy. Thank you.

Barry P. Flannelly: So, I think there's an absolute, well, if you look at our studies, TRUE-AD1 and TRUE-AD2, you see there's a high proportion of patients with moderate disease. So we think when we look across trials, we could have an opportunity there, but we really think it's going to be the best drug available for patients, you know, from steroids all the way up to biologics. So we think we have a clear opportunity there. But if it's going to be used in the future with biologicals, like Dupixan, for example, we'll have to wait and see. Obviously Dupixan is often used with topical steroids now because you have to have some local control for particular parts of the skin, their disease. So it could happen in the future, but that's certainly not our indication.

Operator: We didn't study patients with severe disease, but we do believe that there is a wide range of patients who will absolutely benefit from Ruxcreme. Thank you. Our next question is coming from Steven Willey on behalf of Steve Clear. Your line is now live.

Steven H. Stein: Yeah, good morning. Thanks for taking the question. Maybe one for Steven, I guess.

Steven H. Stein: How should we just be thinking about the go-forward dosing strategy for parseclusive and some of these B-submalignancy subtypes? Um, I know the hash abstracts kind of highlight a little bit of a response rate delta between the weekly. Daily dosing, which I think also appears to be a little bit tumor type and maybe a lot of therapy dependent. So we expect that you're going to be pursuing kind of a different dose, some of these different subtypes, or would you expect to have one that kind of covers the whole gamut of these simulations? It's a good question, and thank you for it, because we did spend a little bit of time trying to work out, you know, the optimal dose and schedule to get the therapeutic ratio we wanted in terms of the efficacy and safety benefits that we wanted to weave.

Expect to have one that kind of covers the whole gamut of of Ah be some malignancies.

That's a good question and and thank you for doing cause we did spend a little bit of time trying to work out you know the optimal dose and schedule to get the therapeutic ratio. We wanted in terms of the efficacy and safety benefits that we wanted to leave you know for the class it's had a bit of a rock.

Steven H. Stein: You know, for the class, it's had a bit of a rocky run over the years, starting off with Adelisib early on, and particularly people were concerned about longer-term toxicity and things like colitis. But we knew from the get-go the drug was incredibly active, so we wanted to work that out, and we spent some time doing it. So where we are now is where we think is the optimal way of doing it, and you'll see in the abstracts, you know, the totality of the information. But we start off at a high dose, 20 milligrams daily for the first eight weeks, and the idea there is to maximize efficacy. You know, these patients, when they respond, they respond early and quickly. So the vast majority, if not all, of the responses, happen in that time period.

He ran over the years, you know starting off with idealists up early on and particularly people were concerned about longer term toxicity and things like Coladas. We knew from the get go that drags incredibly active so we wanted to work that out and we spend some time doing it so where we are now is where we think is the optimal way of doing it and.

You'll see in the abstracts, you know the the totality of the information, but we start off at a high dose 20 milligrams daily for the first eight weeks in the idea there is to maximize efficacy you know these patients when they respond they respond early and quickly. So the the vast majority if not all of the responses happened in that time period, and then we step back and we looked at all.

Steven H. Stein: And then we step back, and we looked at, after that, weekly maintenance versus daily, and again looked at both retention of efficacy then as well as safety. And it turns out that it is best for us to switch to daily dosing and not weekly maintenance. So if you look at the totality of the data there, you retain efficacy. We get the durability of response and PFS we want, but we've also been able to tone down some of the toxicity with that regimen. So I think going forward from a regular point of view, obviously, we're going to have to work with regulators around the world here. You'll be looking at 20 milligrams induction for eight weeks followed by the daily schedule thereafter.

After that weekly maintenance first daily and again look at both.

Retention of efficacy, then as well as safety and it turns out that that's best for US is afterwards to switch to the daily dose and and not the weekly maintenance. So if you look at the totality. The day to day, you retain efficacy we get into the durability of response and PFS, we want but we've also been able to tone down some of the the toxicity with that regimen. So I think.

In forward from irregularly point of view, obviously, you're going to have to work with regulators around the world Yeah, you'll be looking at 20 milligrams induction for eight weeks followed by the daily schedule there after.

Great. Thanks for taking my question.

Steven H. Stein: Great, thanks for taking the question. Thank you. Our next question today is coming from the line of Matthew Phipps. Your line is now: Good morning, this is Rob Andrew on for Matthew Phipps here. So maybe just on the Early Stage Programs with the BET and ALK2 inhibitors. Just getting started here.

Thank goodness question today is coming from the line of Massachusetts. Your line is that a lot.

Good morning. This is a robot and we also <unk>.

So maybe just on the in those days programs that not too inhibitors, just getting started up here uhm, maybe what what what are the expectations uhm with those programs given them monotherapy dosing <unk>, we can really looking to safety profile.

Steven H. Stein: Maybe What are the expectations with those programs given the monotherapy dosing? Are we clearly looking for a safety profile acceptable for Jack and Fye combinations? Steven, thank you for your question. So, I'll separate them out because BET has a slightly different history.

Acceptable justify combinations or one of the expectation that thank you.

Stephen Thank you for your questions I'll I'll I'll separate them out because that has a slightly different history. So if you look at.

P R D.

Steven H. Stein: So, if you look at BET-BRD, this is a compound we had in the clinic a few years ago, primarily targeting solid tumors and working on a slightly different hypothesis around MYC inhibition. And we were at multiples at the dose we are at now. You know, we were at 12 to 16 milligrams, whereas we're at 4 milligrams now.

Steven H. Stein: And what we saw there in that program a couple of years ago was on-target toxicity in terms of thrombocytopenia, as well as some other worrying toxicities. So, we had put ourselves on a clinical hold at the time for that compound. And then what happened over the ensuing year with BET, as you saw the data from Constellation and CPI come forward, and we knew, by the way, the biology was relevant in myelofibrosis, and we think there is something to that data set, and there is clearly an effect from adding BET therapy to ruxolitinib. So, we revitalized our own program there. We worked with the FDA to come up with what we think is a safe starting dose to avert a lot of the toxicities, modeled off what we saw happening in the external world, and we've restarted the program. What we have to do is demonstrate monotherapy safety, which we're doing now with the BET, and we expect that to be the case given the doses we're using, and then quickly go to combination with r So, that's the story behind BET.

Steven H. Stein: In terms of ELK2, you know, this is a very exciting program to us. We think the anemia seen in myeloproliferative neoplasms, particularly myelofibrosis, is mediated through the hepcidin pathway, building a little bit on the myelolitinib data there, as well as the anemia seen with the use of JAK inhibitors. So, we're trying to ameliorate that anemia of the underlying disease plus potentially the JAK-induced anemia so that you can maintain dosing and, in fact, as a corollary of that, actually increase efficacy as well because you can stay on the combination. So, again, the idea is to get to ELK2 monotherapy safety pretty quickly and then start the combination very soon with both. You know, ELK2, in terms of its mechanism of action, may have utility in anemias across the board, in terms of hepcidin inhibition, so that's something we're interested in. And then there are some entities where solid tumors may have underlying genetic mutations that may be amenable to this as well.

Steven H. Stein: So, it's a very interesting program, a very interesting mechanism, and we're going fast. Yeah, just to add one more thing, because I didn't just study a rare disease, which is also mediated by the FOP program, which is a condition where you get premature bone formation in soft tissues, a lot of morbidity from it, and sometimes early death as well. It's a rare entity, but again, it's something we are committed to doing as well.

He but again, it's something we committed to do in.

As well so we will have an FOP program as well with the L. to agent.

Steven H. Stein: So we will have an FOP program as well with the L2 agent. Thank you. Our next question today is coming from Aiden Kuzemov from The Benchmark Company. Your line is now live. Thank you for taking my question. I have one about dermatology.

Thank you. Our next question today is coming from eating whose them off from the benchmark company. Your line is now live.

Thank you for taking my question I wanted both dermatology, so given relatively high vehicle responses. Thanks.

Barry P. Flannelly: So given relatively high vehicle responses, 10 to 20%, what would your self-speech to a dermatologist be? Thank you. Well, Aidan, this is Barry.

To 20%, so what would be your sales speech to dermatologists, especially when we hypothetical they compare rock scream to other standards of care and not a set of the vehicle. Thank you.

Barry P. Flannelly: First of all, I think that our response from the TRU-AD1 studies and the TRU-AD2 studies is very good, and the difference, the delta, between the active drug and the vehicle is very good. And as compared to other therapies, well, oral therapies that may be coming, oral JAK inhibitors that may be coming for atopic dermatitis, obviously, you're suppressing the entire immune system when you take an oral drug, so that doesn't seem to be the best way to go about it. We have a great JAK inhibitor that's topical that you can apply right to the area that's most effective, so we think that's an advantage for us. And as far as just some of the evolving data that might be coming from other topical JAK inhibitors, we've seen the data so far, we don't see any reason to be concerned about it, and there are still some questions about their dose-response for those therapies. So our sales pitch is actually we've had many interactions with dermatology, very positive interactions with dermatologists, and they feel very strongly that this is a drug that they've been looking for, Ruxcreme. So, you know, I think it'll be a relatively straightforward approach.

Well it and this is Barry I first of all I think that our response.

Operator: We'll talk about the science, and we'll talk about the benefit that it offers to patients who are really suffering from this autoimmune disease, atopic dermatitis. Thank you. Thank you. Our next question today is coming from Vikram Purohit from Morgan Stanley. Your line is now live.

Barry P. Flannelly: Good morning, thanks for taking my question. I had a follow-up question on real-world use for Monjuvi. So, to the best of your knowledge, has there been much or any off-label use of Monjuvi in combination with another agent like Vendamustine? Or has it so far primarily been in line with the labeled use in combination with lenalidomide? Yeah, so Vikram, you know, I don't, well, it depends on what you call it off label.

How does it so far primarily been in line with the label to use in combination with a lenalidomide.

Yeah. So vikram you know I I don't well it depends on what you call off label certainly we've been used in a whole variety of places I relapsed refractory for a second line and plus you know obviously, we're studying to drug in combination with and the most.

Barry P. Flannelly: Certainly, it's been used in a whole variety of places, relapse refractory, for second line, and plus, you know, obviously, we're studying the drug in combination with bendamustine in the future. So we'll have multiple other studies that we have a chance to see what different combinations, including parseclysib, that we'll try to study the drug with in the future. So we're excited about that.

<unk> in the future. So we'll have multiple other studies that will have a chance to see what different combinations, including parts of Clifford that will try to study the drug with in the future. So we're excited about that but I think that most hematologist oncologist or most excited about what Stephen was talking about before about our complete response rate.

Steven H. Stein: But I think that most hematologists and oncologists are most excited about what Stephen was talking about before, about our complete response rate and how high that is in the long duration of response that continues to get better. So the combination of Len plus Monjuvi right now has both the efficacy and safety profile that most physicians who treat diffuse large B cell lymphoma are looking for. Okay, understood. And as a follow-up question, I had a question on the Ash Abstract on the First Mind Safety Data. So I believe that abstract mentions that we could see some initial efficacy data during the presentation at Ash. To the extent you can discuss it, could you describe a little bit about what we can see there and what we should make of it and how we should interpret it when thinking about Manjubi in the first line setting?

Steven H. Stein: Yeah, the entire intent of the abstract and presentation is safety. And that's what I'll point out. And, you know, just to be maybe a little bit repetitive on my earlier comments, given that the safety of the combination of TAF and LEN-RCHOP was very similar to TAF-RCHOP, given that you have to aim for cure here and maximize cure rates, you know, it became automatic then that TAF and LEN-RCHOP was the way to go in terms of the first line study. I think, you know, given the intent of safety, that's where you should focus on what the presentation will be about.

Steven H. Stein: And then obviously, we'll have to wait for a large first line study to deliver. Okay, understood. Thank you. Thank you. Our final question today is coming from Malithi Young from Cancer, Your Line. He's now live. Good morning. This is Leon from Alethea.

Operator: Thanks for taking our call. Maybe just one on your PD-1 program. How does your Phase 2 data that you presented at ASML match up with standard care? And can you just remind us of your strategy in the PD-1, Unknown Speaker? Are you looking at crowded? Are you looking at, you know, indications that sort of last forever? Are you looking at combination? Yeah, thank you.

Looking at you know indications that sort of less developed I'm looking at combinations or both things.

Steven H. Stein: So, you know, again, to step back, we acquired this compound to use on its own and then in various combinations, which we needed for within our own program, and that's what we've been doing. At the same time, the intent was obviously to get it registered, and we had up front the NISH tumor approach in squamous cell anal carcinoma, Merkel cell carcinoma, and MSL high endometrial, and those studies have all enrolled well, and this is the data you see coming to fruition. In terms of squamous cell anal carcinoma, the benchmark is the Keynote 158 study from Pembroke, but the mature data set where the Pembroke overall response rate was 11%. You can see, you know, our response rate is a little bit north of that territory in the 13, 14% range that's independently reviewed.

[laughter]. Thank you. So it's a you know again to step back and you know we acquired this compound to use on its own and then in in various combinations, which we needed for within our own program and that's what we've been doing at the same time. The intent was obviously to get it registered and we had a.

Upfront initial chimera approach in squamous cell carcinoma, Merkel cell carcinoma, an MSR high endometrial and those studies of all enrolled well and this is the data you see come to fruition in terms of squamous cell carcinoma. The benchmark is the keynote 158 study from pain.

Steven H. Stein: In addition, you know, there's a subgroup of patients who are HIV positive with this that have that unmet need and were addressed in our study, which hasn't been addressed in other studies. So we're very encouraged, obviously, by that data set and thus initiated phase three, and it's right in the territory of what's seen just to be repetitive with other PD-1 inhibitors in this entity plus other entities that are very similar, like cervical carcinoma. Beyond the NISH tumors, we have an ongoing lung program that's now initiated globally, a lung study, and then, as I said, you know, we continue to utilize retifanilamab with various internal combinations.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further or closed questions. So, thank you all for participating in the call today and for your questions. Of course, Christine and I will be available for the rest of the day, and we look forward to engaging with many of you in the coming weeks at Investor and also at medical conferences. For now, though, thank you again, and goodbye. Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation.