Q2 2024 Earnings Summary
- Incyte anticipates delivering more than 10 high-impact launches by 2030, including several new molecular entities, highlighting a robust and transformative pipeline.
- Significant progress on the CDK2 inhibitor program, with upcoming data at ESMO supporting continued development in ovarian cancer and potential expansion into other indications.
- Management's confidence in the company's outlook is demonstrated by a large share repurchase, enabled by a strong balance sheet with cash and no debt, allowing for further business development opportunities.
- Discontinuation of multiple pipeline programs, including the LAG-3 monoclonal antibody, TIM-3 monoclonal antibody, and LAG-3 by PD-1 bispecific, due to competitive landscape and being behind competitors.
- Potential reliance on future pipeline to offset loss of exclusivity (LOE) for Jakafi, with uncertainty about whether upcoming launches can compensate.
- Lack of positive translational data supporting combinations of JAK inhibitors with PD-1 antibodies, raising concerns about future oncology strategies.
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Offsetting Jakafi LOE and Growth
Q: Can you offset Jakafi loss of exclusivity and continue growth?
A: Yes, our investment in R&D aims to more than compensate for Jakafi's expiration. We have guidance for peak sales of $3 billion for Jakafi and are well on our way to achieving that. With 10 launches and 12 new chemical entities in development, each with meaningful potential, our portfolio provides a growth profile that goes beyond Jakafi's patent expiration.
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R&D Investment Strategy
Q: What's your approach to R&D spending and investment levels?
A: We assess each project individually based on financial rationale. Some programs have been stopped or are ending to make room for new ones. We're maintaining reasonable R&D spend with improving ratios over the next few years. Our focus is on prioritizing resources to high-potential programs in the pipeline.
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Tafasitamab Acquisition and Opportunity
Q: What are your thoughts on tafasitamab after acquiring full rights?
A: Acquiring full rights has changed tafasitamab's financial picture . We're facing two Phase III studies; positive results could provide significant opportunities . While not enormous in size, the brand could increase sales by a few hundred million dollars . Tafasitamab's efficacy with low safety cost makes it unique in the market .
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Pipeline Restructuring and LAG-3 Discontinuation
Q: Can you elaborate on the pipeline restructuring and LAG-3 discontinuation?
A: The restructuring was driven by data review and the progression of our early-stage pipeline. Retifanlimab data did not impact this decision. We discontinued LAG-3 programs due to the competitive landscape, as we're behind competitors with established programs.
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Share Repurchase and Capital Allocation
Q: Why did you choose a large share repurchase over acquisitions?
A: The share repurchase reflects our confidence in the business outlook. We saw a disconnect between the long-term value we see and the stock price, prompting the decision. Our strong balance sheet allows for both significant repurchases and financial flexibility for business development. We ended the quarter with $1.5 billion in cash and no debt.
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Key Pipeline Assets for Future
Q: Which pipeline assets will be most important in three years?
A: We are excited about the X2 and X4 antagonists from the Escient acquisition; they are potential first-in-class programs. The upcoming CDK2 inhibitor data is promising. Our unique approach with the TGF beta receptor by PD-1 bispecific could be a big differentiator. Additionally, our mutant CALR and 617 programs aim to change disease outcomes in myeloproliferative neoplasms.
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Jakafi Growth and Competition
Q: What are your expectations for Jakafi's share amidst competitors?
A: Jakafi continues to grow in myelofibrosis; total patients increased by 2% year-over-year. New patients increased even more. Competitor drugs are mainly used in the second-line setting. Growth in polycythemia vera is also strong due to the drug's efficacy.
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Opzelura Growth and Outlook
Q: Can you discuss Opzelura's growth and future expectations?
A: Opzelura's growth is driven by demand. The current prescription split is 60% atopic dermatitis and 40% vitiligo. We anticipate further growth with potential pediatric label expansion for ages 12 to 11 years in atopic dermatitis. We expect the pediatric indication to contribute 10–15% to our total atopic dermatitis business.
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CDK2 Program at ESMO
Q: What should we expect from the CDK2 data at ESMO?
A: We will present data on dose escalation of our CDK2 inhibitor in ovarian cancer at ESMO. The data supports further development. We will also provide a development path for the molecule in patients with ovarian cancer.
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ALK2 Inhibitor Data Expectations
Q: What are your expectations for the upcoming ALK2 inhibitor data?
A: Increased dosing has shown increased hepcidin inhibition. We'll present data at higher doses with more patients. We're assessing the development path to alleviate anemia from both disease and drug effects.
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MRGPRX4 Antagonist Program
Q: Is Mirum's data a benchmark for your MRGPRX4 antagonist program?
A: Yes, Mirum's data is a reasonable benchmark. We're excited about our program in primary biliary cholangitis and primary sclerosing cholangitis. Our X2 and X4 antagonists have shown great safety profiles. We'll provide an update early next year.
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Combining JAK Inhibitors with PD-1
Q: Any plans to combine JAK inhibitors with PD-1 for oncology?
A: Recent publications suggest potential synergy, but our past clinical experience was not successful. We currently have no R&D plans but will re-examine the possibility.
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Jakafi XR and CALR/JAK2 Programs
Q: Updates on Jakafi XR and CALR/JAK2 selective programs?
A: Pivotal bioequivalence data for Jakafi XR is expected in early 2025; approval anticipated in 2026. The CALR and V617F programs are in early stages but hold promise for disease modification. We may explore new regulatory pathways as these programs represent a new way of viewing the diseases.
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Tafasitamab in Autoimmune Diseases
Q: Thoughts on developing tafasitamab in autoimmune diseases?
A: We're conducting a full evaluation of tafasitamab's potential in autoimmune diseases. We're aware of the data with CD19-targeted therapies. We'll provide an update later this year.
Research analysts covering INCYTE.