Syndax Pharmaceuticals - Q1 2024
May 8, 2024
Transcript
Operator (participant)
Good day, everyone, and welcome to the Syndax first quarter 2024 earnings conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Sharon Klahre, Head of Investor Relations at Syndax Pharmaceuticals.
Sharon Klahre (Head of Investor Relations)
Thank you, operator. Welcome, and thank you all for joining us today for a review of Syndax's first quarter 2024 financial and operating results. I'm Sharon Klahre, and with me this afternoon to provide an update on the company's progress and discuss financial results are Michael Metzger, Chief Executive Officer, Dr. Neil Gallagher, President and Head of R&D, Steve Kloster, Chief Commercial Officer, and Keith Goldan, Chief Financial Officer. Also joining us on the call today for the question and answer session are Dr. Peter Ordentlich, Chief Scientific Officer, and Dr. Anjali Ganguly, Chief Business Officer. This call is accompanied by a slide deck that's been posted on the investor page of the company's website. You can now turn to our forward-looking statements on slide 2.
Before we begin, I'd like to remind you that any statements made during the call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in the company's most recent quarterly report on Form 10-Q, as well as other reports filed with the SEC. Any forward-looking statements made represent our views as of today, May 8, 2024 only. A replay of this call will be available on the company's website, www.syndax.com, following its completion. With that, I am pleased to turn the call over to Michael Metzger, Chief Executive Officer of Syndax.
Michael Metzger (CEO)
Thank you, Sharon, and good morning, everyone, and thank you for joining us on the call today. I'd like to begin by welcoming Steve Kloster to the call. Steve joined us in March as Chief Commercial Officer. He brings over 30 years of commercial experience to Syndax, which includes establishing winning teams and leading successful product launches. Steve is building on the excellent framework that was in place prior to his arrival, and we are already benefiting from his keen insights as we prepare for commercialization. In the quarter, we made significant progress on executing against our corporate strategy. As you can see on slide three, we achieved several significant milestones this quarter, including securing priority review from the FDA for both the revumenib NDA filing and the axetilimab BLA filing.
We also completed enrollment in the NPM1 AML cohort of AUGMENT-101 pivotal trial, bringing us one step closer to expanding the market opportunity for revumenib. We look forward to reporting data from the initial trial in the fourth quarter of this year, which could serve as the basis for a supplemental NDA filing in the first half of 2025. These accomplishments set us up for an eventful 2024 that we expect will include two full U.S. regulatory approvals, NPM1 pivotal data readout, additional combination data for revumenib in KMT2A and NPM1, initiation of a pivotal trial for revumenib in frontline KMT2A and NPM1 acute leukemia in combination with venetoclax, as well as the initiation of two combination trials for axetilimab in frontline chronic graft-versus-host disease.
As we approach our expected approvals, we are working to ensure that we are fully prepared to successfully launch at any time during the third quarter, with an ability to reach all patients in need as rapidly as possible. Steve will provide additional details on our launch preparations later in the call. Syndax has a differentiated profile as a small-cap biotech with two first and best-in-class drugs on the cusp of their potential first approvals. Notably, revumenib has a potential second significant indication and near-term expansion opportunity in relapsed or refractory NPM1 that meaningfully extends the target patient population in acute leukemia. This is unique in a launch year as it quickly broadens the market opportunity for revumenib in the relapsed or refractory setting to up to 6,500 patients.
Multiple opportunities beyond the initial relapse or refractory indication exist for both assets, and trials are ongoing that can drive significant long-term value for these franchises for years to come. We are well-funded with $522 million in cash as of March 31, that we expect will provide significant capital through 2026. Our current balance sheet not only supports our planned commercial launches and clinical trials, but also allows us to expand beyond our core registration indications and pursue select business development opportunities. I'll now ask Neil to provide an overview of the pipeline. Neil?
Neil Gallagher (President and Head of R&D)
Thank you, Michael. In the first quarter, the NDA filing for revumenib, our highly selective menin inhibitor, was granted priority review by the FDA for the treatment of adult and pediatric relapsed or refractory KMT2A-rearranged or KMT2Ar acute leukemia, and issued a PDUFA target date of September 26th, 2024. The filing is being reviewed under the Real-Time Oncology Review, which provides a more efficient review process and has historically led to earlier approval timelines. The submission is based on data from the pivotal AUGMENT-101 trial, outlined on slide 4, where single-agent revumenib induced a high percentage of blast-free responses in heavily pretreated KMT2Ar acute leukemia patients, thereby enabling many of them to undergo potentially curative hematopoietic stem cell transplant and to continue revumenib monotherapy following transplant.
We've also completed enrollment in the final pivotal cohort of the AUGMENT-101 trial of 64 adult relapsed or refractory NPM1 AML patients in March, and expect to report the pivotal results from this population in the fourth quarter of this year. I'll take a moment to review the phase I data on slide 5 that underlines our confidence in the pivotal results for patients with relapsed or refractory NPM1 AML. Multiple presentations generated by us in both the relapsed or refractory and frontline settings have highlighted the consistency of menin inhibition across NPM1 mutations and KMT2A rearrangements, and we see the enthusiasm building for revumenib in NPM1. The phase I NPM1 data that we've reported supports our conviction that revumenib could be an important treatment for this AML population.
In the phase I part of AUGMENT-101, 50% of NPM1 patients achieved an overall response, and 36% achieved complete remission or CRh with partial hematologic recovery. Importantly, all patients with the CR/CRh were MRD negative. Consistent with the KMT2Ar population, revumenib also enabled a high percentage of NPM1 responders to proceed to transplant, 43%, and responses have been durable. This is despite many of the patients having failed prior venetoclax therapy and prior stem cell transplants. It's worth noting that revumenib has been well tolerated in patients with relapsed or refractory NPM1 AML. In the phase I, there were no grade IV or V QT prolongation events, no patient experienced greater than grade II differentiation syndrome, and no patients discontinued due to treatment-related adverse events.
We believe that revumenib will form the backbone of treatment for patients with both KMT2Ar and NPM1 acute leukemias. Our clinical strategy extends beyond the initial relapsed or refractory populations and into the frontline and post-transplant maintenance settings, including combinations with approved therapies. We have several combination trials ongoing with different standards of care across the continuum of patients, including in the fit and unfit settings that are listed on slide 6. Investigators presented data from multiple phase I combination trials, including BEAT-AML, SAVE-AML, and AUGMENT-101 during the American Society of Hematology Conference in December, demonstrating revumenib's ability to safely and effectively combine with the standards of care. We expect to provide updated data from these trials later this year. In the first quarter, we initiated another phase I combination trial with standard of care intensive chemotherapy, also known as the 7+3.
Beyond acute leukemia, we're investigating the opportunity to expand to solid tumors. Our proof-of-concept signal-seeking phase I clinical trial in metastatic colorectal cancer is ongoing, and we expect to provide an update on the progress of the dose escalation phase of the trial, later this quarter. Turning to axetilimab on slide 7. Also in the first quarter, the BLA filing for axetilimab or CSF1R antibody was granted priority review by the FDA for the treatment of chronic graft-versus-host-disease or chronic GVHD, after failure of at least two prior lines of systemic therapy with a PDUFA date of August 28, 2024. The submission is based on data from the pivotal AGAVE-201 trial, where treatment with a single-agent axetilimab led to an overall response rate, or ORR, of 74%, with 60% of responders still in response at 1 year.
Importantly, axetilimab has a differentiated mechanism of action from currently approved therapies for chronic GVHD. It is the first investigational chronic GVHD agent to target inflammation and fibrosis through the inhibition of disease-associated macrophages. We're excited about the opportunity to expand axetilimab into the frontline setting in combination with the standards of care and that other fibrotic diseases where monocyte macrophage lineage plays a key role, including idiopathic pulmonary fibrosis or IPF, where we are currently enrolling a phase II clinical trial. The team has been working hard to increase awareness of the compelling revumenib AUGMENT-101 and the axetilimab AGAVE-201 data ahead of the respective potential approvals.
In April, investigators presented pediatric data from AUGMENT-101 in a plenary session of the American Society of Pediatric Hematology/Oncology that further supports the consistency of the data across the groups. Also in April, investigators presented additional analyses from AGAVE-201 at the European Society for Blood and Marrow Transplantation Congress, highlighting axetilimab's impressive clinical activity in fibrosis-dominant organs, which, as I mentioned earlier, is a key point of differentiation. We have an ambitious publication plan underway, and we look forward to detailing more of the clinical benefits of axetilimab and revumenib to the prescribing community. I'll now turn the call over to Steve to talk about preparation for our planned commercial launches and the market opportunity. Steve?
Steve Kloster (Chief Commercial Officer)
Thank you, Neil. This is an exciting time to be at Syndax, and we're looking forward to launching two first-in-class and meaningfully differentiated agents this year. As Michael indicated earlier, we'll be ready to launch both revumenib and axetilimab in the third quarter, and we've made significant progress so far this year to prepare ourselves and the market to realize the full potential of these medicines for patients, for healthcare professionals, and the company. Our key focus areas are highlighted on slide eight. Our pre-commercialization strategy has focused on developing an efficient, effective, and purpose-built infrastructure to support the business and prioritize relationships with important external stakeholders in the healthcare provider as well as the payer space to accelerate uptake at launch.
For revumenib, our pre-launch activities have been centered around disease awareness, mechanism of disease education, and market access, as well as ensuring patient support services are in place at the time of launch. The customer-facing leadership team has been in the field for some time and focused on disease state awareness and building relationships with healthcare providers. The team is actively profiling accounts, understanding workflows, and identifying the patient journey at the largest and most influential academic centers in the country. This has allowed us to have important conversations with healthcare providers and other healthcare organization decision-makers, and gain valuable insights on the market, which has helped us define our outreach strategy. We launched our non-branded campaign last year, focused on improving the knowledge and understanding around the role of menin inhibition across key segments of acute leukemia, including KMT2A rearrangements, as well as follow-on indications like NPM1 mutant AML.
This effort will expand as we approach a potential launch. We've recruited a talented and highly experienced sales team with an average of 22 years of experience, primarily in hematology oncology, with an average of six product launches per representative. This is obviously a very experienced group with existing relationships and proven past success. The customer-facing field team will play a multidisciplinary role in supporting healthcare professionals and patients. With regard to market access, our team has been educating commercial and Medicare payers on the burden of relapsed or refractory acute leukemia to prepare them to conduct timely and evidence-based reviews and ultimately, access decisions upon potential FDA approval, while formulary approval builds over time. We have little doubt that revumenib will be covered for reimbursement while plans review the product for formulary inclusion.
We've been meeting with pharmacy benefit managers and payers since 2023, sharing relevant market and product information, and expect to reach plans covering more than 90% of all lives prior to revumenib's anticipated approval. Payers are telling us that they recognize a significant unmet need in KMT2Ar acute leukemia patients, and the benefit that revumenib could provide, as supported by the AUGMENT-101 data. This is important due to the acute nature of the disease and the high mortality and morbidity in relapsed or refractory KMT2Ar acute leukemia, making the urgency to treat quickly absolutely critical. I'm excited about our progress to date and look forward to sharing more about our ongoing efforts in the future. Turning now to slide 9. KMT2Ar and NPM1 acute leukemias represent up to 40% of all AML patients, and there are no FDA-approved targeted therapies for this population.
We believe relapsed or refractory KMT2Ar acute leukemia alone represents a total addressable market of approximately $750 million in the U.S. The annual incidence of KMT2Ar acute leukemia is about 2,600 patients, and the majority are refractory to frontline standard of care treatments. We estimate a median duration of therapy across the treated population of approximately nine months, and we believe the clinical data supports pricing competitively to other targeted therapies in AML, such as the FLT3 or IDH inhibitors. Physicians we've spoken with indicate an eagerness to prescribe revumenib early during an eligible patient's treatment journey to bring more patients to transplant, and then extend responses by continuing with revumenib monotherapy following transplant engraftment. We expect that our first mover advantage and the early experience physicians will gain treating patients with revumenib will be vitally important to the long-term success of our brand.
Our significant market share is likely to extend meaningfully beyond KMT2Ar, especially as we will be the first to deliver meaningful pivotal data in other indications, such as NPM1-AML. We estimate that the two distinct market segments in acute leukemias, KMT2Ar and NPM1, avail a total accessible population of 5,000-6,500 patients in the relapse or refractory setting, and an addressable market opportunity that approaches $2 billion in the U.S. Turning now to slide 10. Approximately 14,000 U.S. patients suffer from chronic GVHD, 50% of whom require treatment beyond second line due to disease progression, inadequate response, or disease manifestations that aren't wholly addressed with current treatments. There are no cures for this advanced chronic GVHD patient population. Patients initially treated with corticosteroids are then cycled through a variety of additional therapies based on the physician's experience and manifestations of the disease being addressed.
The successful commercial launches of Jakafi and Rezurock, and importantly, the speed by which both these agents gained adoption, really speak to the unmet need in chronic GVHD. We also know that despite these recent advances, the disease is still inadequately treated, and physicians are looking for an agent that can better address the underlying fibrosis that ultimately leads to organ damage. Further, they are excited to have a drug with such a fast onset of action and impressive durability of response. These key points of differentiation should enable axetilimab to carve out a sizable commercial opportunity within the estimated $1 billion U.S. refractory chronic GVHD market. As you know, Incyte is our partner for axetilimab and really the leader in the GVHD space.
As of last year, we exercised our option with Incyte to co-commercialize axetilimab in the United States and provide 30% of the commercial effort, as we believe there is a considerable benefit to promoting two products simultaneously to a highly overlapping and targeted physician prescriber universe. We're working closely with Incyte to develop our go-to-market strategy for axetilimab, and plan to align more fully with Incyte before sharing additional details. However, we expect to follow a similar set of strategic comparatives as we've just outlined for revumenib. Now I'll turn the call over to Keith to review our financial results.
Keith Goldan (CFO)
Thank you, Steve. Turning to slide 11. As Michael mentioned earlier, the $522 million in cash equivalents and short- and long-term investments on our balance sheet at March 31 is expected to provide runway through 2026. Our financial strength allows us to appropriately invest to maximize the value of our pipeline, and importantly, to transition into a commercial stage organization this year. Turning to the income statement. Operating expenses in the first quarter were $79.5 million, comprised of $56.5 million of research and development expense, and $23.0 million of selling, general, and administrative expense. Keeping in mind that we've always embraced a disciplined approach to resource allocations, I'd like to provide financial guidance for the second quarter and full year of 2024.
For the second quarter, the company expects research and development expenses to be $50 million-$55 million, and total operating expenses to be $80 million-$85 million. For the full year of 2024, there is no change to the existing guidance, and the company continues to expect research and development expenses to be $240 million-$260 million, and total operating expenses to be $355 million-$375 million. Note that the guidance range for operating expenses for the full year 2024 is inclusive of an estimated $43 million of non-cash stock compensation expense. In preparing for launch, I want to take a minute to lay out how we plan to recognize revenue for axetilimab.
Slide 12 includes an illustrative example of accounting for sales of axetilimab, and is not intended to provide any margin or other guidance. Commercially, our partnership with Incyte is a 50/50 split of the economics in the U.S. We will report 50% of revenues earned, net of cost of sales and commercial expenses. During the period where there is a net commercial profit for axetilimab, as in the top example of the slide, our 50% share of the net profit will be recognized on our P&L as collaborative arrangement revenue. During a period where there's a net commercial loss for axetilimab, as in the bottom example on the slide, our 50% share of the net commercial loss would be included in operating expenses, designated as a separate line item called share of collaboration loss.
We also have various future U.S. commercial and regulatory milestones owed to us from Incyte that would be recorded as partnership or milestone revenue on our income statement. Development expenses are shared 55/45 in the U.S., and our 45% share is included in the income statement as part of R&D expense. Outside of the U.S., Incyte is responsible for 100% of the development and regulatory expenses, and we are entitled to receive a milestone, milestones plus royalty on ex-U.S. sales. With that, let me now turn the call back over to Michael.
Michael Metzger (CEO)
Thank you, Keith. As you've heard during the call, 2024 is shaping up to be a historic year for Syndax as we prepare to launch two first-in-class products, and I'm confident that we have the expertise, resources, and determination to bring these products to market. As an organization, we are truly excited to evolve into a commercial organization, and we are laser-focused on bringing these important treatment options to patients in need. On slide 13, we lay out our key upcoming milestones for the balance of the year, and I look forward to updating you on our progress in the coming months. As always, I would like to express my sincere appreciation to the Syndax team, our collaborators, and most importantly, the patients, trial sites, and investigators involved with our clinical programs.
Through your work and dedication, we are getting ever so close to delivering on our mission of improving the lives of patients with cancer. I'd also like to thank our committed long-term investors who continue to share in our vision and support us in building Syndax. With that, I'd like to open the call for questions. Operator?
Operator (participant)
At this time, I'd like to remind everyone, if you'd like to ask a question, please press star and then the number five on your telephone keypad. If you'd like to withdraw your question, press star and the number five once again. We'll pause just a moment to compile the Q&A roster. Our first question is from Peter Lawson at Barclays. Your line is open. Please go ahead.
Peter Lawson (Managing Director and US Biotech Equity Analyst)
A question. Just first question is just around how important NCCN guidelines will be for additional indications after you get the initial approval of revumenib?
Michael Metzger (CEO)
Peter, thanks for the question. Maybe I'll ask Neil to comment on the importance of the guidelines.
Neil Gallagher (President and Head of R&D)
Yeah, thanks, Peter. So, as you know, the first approval we're anticipating for revumenib will come in the third quarter, and that will be for KMT2A rearranged acute leukemias in adults and children. So the approval should be sufficient to actually have that indication included in the guidelines. And in addition to that, we've also guided to the fact that we will. In fact, I referenced, there was some reference to during the prepared remarks that we anticipate reporting pivotal data from the NPM1 cohort by the end of the year. So suffice it to say that we have a plan.
I mean, it prior to approval, you know, presentation at a medical congress, along with publication of the data, could position us to at least start conversations with the NCCN committee regarding inclusion in the guidelines. As you're aware, the committee meets twice a year. The disease-specific committees meet at least once a year, but they also meet ad hoc once important new data become available. So we're considering all of that. And clearly, you know, we want to make sure that the best possible information is made available to the committee as well as to prescribers when we publish our data.
Peter Lawson (Managing Director and US Biotech Equity Analyst)
Thank you. And then as we think about expansion of the menin inhibitor to solid tumors, if you could detail the kind of the expectations around the CRC data, if that's, you know, still too early, when we should expect to see that data at this medical conference and, kind of the number of patients?
Neil Gallagher (President and Head of R&D)
Thanks, Peter. Thanks for the follow-up. So, question was related to solid tumors and our plans there. And, as we've disclosed and mentioned in the prepared remarks, we are continuing to work in the area of colorectal cancer. This is metastatic colorectal cancer, third line plus. So these are, and we are conducting a phase I trial. We had said that we had planned to disclose some information, update everyone on our progress there in the second quarter, and that remains to be the case. Let me remind everyone, this is a dose escalation trial, so this is roughly 10-20 patients, heavily pretreated.
And what we're essentially looking for, looking to see, is activity of revumenib, again, in this, in this patient population, looking for prolonged stable disease in the, you know, 4-6 month range, so call it, with perhaps around 15% of the patients in that stable disease category. So that's sort of the, the signal that would, would be, we think, impactful. Of course, patients don't do very well in this setting, and certainly standard of care doesn't yield, prolonged stable disease of that, of, of that nature. So, we'll, we'll obviously update when, when we're ready to do so in the, in the second quarter.
Peter Lawson (Managing Director and US Biotech Equity Analyst)
Perfect. Thank you so much.
Michael Metzger (CEO)
Thank you, Peter.
Operator (participant)
Our next question is from Anupam Rama at J.P. Morgan. Your line is open. Please go ahead.
Anupam Rama (Managing Director and Senior Equity Analyst)
Hey, guys. Thanks so much for taking the question. Maybe a quick one for Steve. Just wondering, you know, before you joined Syndax and you were doing your assessments of the opportunities for revumenib and axetilimab, what really attracted you to these products? And then, the second one is also actually for Steve. You know, you mentioned very broadly, you know, what some of the levers for success in slide eight are for both of these launches, but anything more specific to revumenib in KMT2A that you'd highlight? Thanks so much.
Steve Kloster (Chief Commercial Officer)
Yeah, thanks for the question. I'll answer both. First is, you know, why did I probably come here? And it's really a combination of things. I've been pretty careful over the course of my career. I think this is my fourth organization in 30 years, so the bar is pretty high, and I look at all opportunities in, you know, three different factors. The first is there needs to be great products, products that address unmet need, products that have a great amount of clinical data, and really provides differentiated attributes. And I think both rev and axa have that. I knew that coming in, and as I've seen the data and as I've you know, reviewed lots of market research and actually engaged with KOLs, that's only been amplified.
I think the second thing that I really think about is really who I work with, right? Wanting to be at companies with great people and great leaders, and that's exactly what we have here. Michael, the entire ELT, the board, are all top tier, very supportive, and even walking in, the commercial leadership team that was in place was strong as well. And the third thing for me is really the willingness to invest and plan for success, and we have that here too. So I'd say my expectations have been exceeded, coming in, and I'm, you know, more excited now than I was even before I started. I think I'm in week eight. The second question is really around levers for success on revumenib.
I, there's, you know, there's a lot we're building as a commercial organization, and all of that will be in place. I think as Neil mentioned, and Michael mentioned, his remarks will be ready in Q3. So infrastructure, processes, all those things will be done. I think from a strategic point of view, the three things that I think about, that we are very focused on, really the first is the population of patients is limited. We know that, right? And that'll, that opportunity will grow over time, but finding them is critical. Patients are fragile. They need treatment immediately, so we've got focus there. I think the second thing is just the landscape of healthcare delivery.
There's multiple stakeholders out there that deliver care to patients, physicians, nervous, sorry, nurses, advanced practice providers, pharmacy, reimbursement, pathology, you name it. We have a customer-facing footprint that will address and directly engage with that dynamic. And the third point is really access, right? Neil mentioned NCCN guidelines, which will be important. Payers are looking for that. They're looking for other published data, but patients need access to treatment. So we've been deployed against the payer space, for some time, making calls directly with payers, and that is in an effort to really expedite formulary review. And in addition, we've built a support program to meet the needs of patients, which we know they need. So thanks for the question. Hopefully, that was a good answer.
Operator (participant)
Our next question is from Brad Canino at Stifel. Your line is open. Please go ahead.
Brad Canino (Equity Research Analyst of Small/Mid Cap Biotechnology)
Hi, good morning. Relating to the plan for the pivotal revumenib combo trial to be initiated by year-end, this will move the emphasis of clinical endpoints from CR towards remission durability and OS. And I want to ask, how does the company plan to evaluate data from the uncontrolled trial updates later this year, both from the combos and also the NPM1 pivotal monotherapy, in order to gain confidence in the randomized time to event endpoints for the frontline pivotal? Thank you.
Michael Metzger (CEO)
Brad, thanks for the question. I'm going to turn it over to Neil to address that.
Neil Gallagher (President and Head of R&D)
Yeah, thank you for the question. I mean, of all of the combination studies that we reported on, the one specific to this scenario, in other words, initiating the phase III venetoclax revumenib study by the end of the year is the BEAT-AML study.
And, as you're aware, we, the, the group reported data, around the ASH, meeting last year and anticipate updating those data during the course of this year. Those data are exciting, not only to, the company, but also to the investigators, and actually not just the BEAT-AML investigators, but the broader, the broader community. So people are, highly enthusiastic about initiating the phase III study. If, just to remind you, the, the response rates, including the CR/CRh rates that were observed in the BEAT-AML study to date, have, exceeded the historical controls observed in the VIALE-A, including in terms of CR. In particular, molecular, MRD-negative CR, was, you know, much, much higher in, in the BEAT-AML study compared to, to, the VIALE-A.
So the emergent data, including, you know, the observation that revumenib is highly combinable. It's not adding... It doesn't appear to be adding toxicity to the, backbone therapy, as well as, being, providing, you know, incremental efficacy in the target patient population. And that's bolstered also by the observations from, for instance, say, the SAVE study, which is a combination, is a combination of revumenib with venetoclax and oral decitabine in a relapsed refractory setting, as well as our own AUGMENT-102 trial, the combination trial with, in a relapsed refractory population in combination with chemotherapy. So the, you know, the body of the evidence is that revumenib is combinable with backbone standards of care, is not adding toxicity in the target population for the phase III trial.
For the phase III trial in the newly diagnosed and fit population, the BEAT-AML data are providing evidence that revumenib is also adding, you know, notable efficacy to the backbone therapy. So obviously, we will be having conversations with health authorities as we design the trial, and we don't typically comment on those, but we look forward to presenting more details around the study prior to initiation later in the year.
Operator (participant)
Our next question is from Phil Nadeau at TD Cowen. Your line is open. Please go ahead.
Phil Nadeau (Managing Director and Senior Research Analyst)
Morning. Congrats on progress. Thanks for taking our questions. A few from us. First, in terms of the phase II doses in the combo trials or validating the phase II doses in the combo trials, this morning's press release notes that some of the trials have been expanded to validate the phase II doses. I was curious whether you'd be willing to disclose whether the full monotherapy dose of revumenib is being used in those combinations at this point?
Michael Metzger (CEO)
Neil, go ahead.
Neil Gallagher (President and Head of R&D)
Yeah, thanks. Thanks for the question. So, just remind everyone, the three studies that I just referenced in the answer to the previous question are the studies under discussion. So I won't repeat what those are. In all three of those studies, in all three of those trials, there were two doses of revumenib that were investigated, 113 mg and 163 mg. 163 mg is the presumptive monotherapy dose in combination with azacitidine that will be included in the label. So revumenib has been given at full dose in all three trials by the time we talked about them at the event around ASH last December.
In all three, the dose-limiting toxicity windows for both doses have been cleared, and both doses are being expanded in all three trials at this point in time. So we haven't... When we talk about RP2D, we're continuing to characterize the two doses. But in general, our anticipation is that revumenib, or our observation to date, is that revumenib is combinable at full monotherapy dose with backbone standards of care.
Phil Nadeau (Managing Director and Senior Research Analyst)
That is very helpful. Thank you. And then second question: Based on the milestone tables that you just presented, it doesn't seem like you're anticipating an advisory committee review for either revumenib or axetilimab. Is that accurate? And can you remind us, did the FDA explicitly say in the acceptance letters that AdComm would not be necessary for both drugs?
Michael Metzger (CEO)
Yeah, Phil, thanks for the question. I think our expectation is that neither axetilimab nor revumenib will require an AdComm, but we haven't explicitly stated, nor do we comment on regulatory correspondence from the agency relative to things like that. So, but that is our expectation, that neither will need an AdComm.
Phil Nadeau (Managing Director and Senior Research Analyst)
Perfect. And then last question from us. You referenced the nine-month expected median duration of use for KMT2A patients. Can you remind us what proportion of patients going to transplant is assumed in that nine-month figure?
Michael Metzger (CEO)
Phil, thanks for the question. It's roughly about a third of that path, right?
Phil Nadeau (Managing Director and Senior Research Analyst)
Um-
Michael Metzger (CEO)
Sorry, of the patients that go transplant.
Phil Nadeau (Managing Director and Senior Research Analyst)
So, a third of patients who get in through a relapse refractory line would go to transplant, is the assumption?
Anjali Ganguli (Chief Business Officer)
Yeah. Sorry, Phil, it's Anjali. I think what we've, what we've been saying is there's basically three groups of patients that seem, based on the trial, seem to all be about an equal-sized population. There were a third of patients that did not respond. Of the 2/3 of patients that responded, half went to transplant. So overall, of the entire population, a third go to transplant.
Phil Nadeau (Managing Director and Senior Research Analyst)
Got it. That is very helpful. Thanks for taking our questions.
Anjali Ganguli (Chief Business Officer)
Yep. Thank you, Phil.
Operator (participant)
Our next question is from Michael Schmidt at Guggenheim. Your line is open. Please go ahead.
Michael Schmidt (Senior Managing Director and Equity Research Analyst)
Hey, guys. Good morning. Thanks for taking my questions. I just had the one on the axetilimab launch, now that we obviously closing in on the PDUFA date later this year, and as we think about the sort of $1.5 billion-$2 billion opportunity in a relapsed refractory setting, just wondering how we should think about perhaps the early launch trajectory, you know, subsequent to approval. Are there any good proxies we should look at, for example? And then, you know, what are your expectations for potential off-label use in the NPM1 subset? Obviously, where you will have data later this year, you know, could that help next year to accelerate the launch early on? Thanks so much.
Michael Metzger (CEO)
Yeah, Michael, thank you for the questions. I'm gonna ask Anjali to comment on the launch.
Anjali Ganguli (Chief Business Officer)
Yeah. Thanks. Thanks, Michael. No, we're really excited about this opportunity. I think it's what revumenib has in front of us is a very unique situation. As you know, we got through the clinical development in record time, first patient dose to NDA filing in four years. We've generated data that support indications across AML and ALL, adults and pediatrics. And as you said, we're anticipating an approval in the third quarter of this year, and we'll have data for another very important patient population treated by the exact same set of healthcare providers in a disease where physicians can choose the best options for their patients.
And then on top of that, we also talked about all the combination data we've generated with revumenib that allow them to think about multiple ways to use this drug and fit it into their treatment plans as they think best. So I think we have a very unique launch curve that we're gonna be, we're going to be generating in real time. I don't think there's a perfect analog that addresses all of these aspects of what's coming in the next 12 months. But we have seen very significant excitement around revumenib, around this new class of agents and how they can utilize it to bring care to patients that have had nothing.
And you know, I think you'll recall the last two ASH meetings have been very focused on the data that we've been generating, and I think that shows how much education is already out there. And you know, as Steve talked about, there's a lot more that we're doing to make sure everybody is aware of the drug, that all the support and patient support is in place to allow utilization. And we're really excited to have a really strong launch of revumenib.
Michael Schmidt (Senior Managing Director and Equity Research Analyst)
Maybe just a follow-up. Can you just remind us what percentage of the AML market is under Medicare, and how do you think about pricing in the Medicare population? Any sort of expectations for free drug programs as we sort of think about the early launch, again, later this year?
Michael Metzger (CEO)
Yeah. Let me, let me ask. Thanks, Michael. I'm gonna ask Steve to comment on, on those questions.
Steve Kloster (Chief Commercial Officer)
Yeah, I mean, it's a good question, and the payer space is different for KMT2Ar versus NPM1. It'll be more of a commercial patient, you know, for the KMT2A launch, just based on the age of the patient. You know, we'll expect coverage honestly at launch. Formulary acceptance will happen over time, but it typically takes 6-9 months for that to happen. But in the meanwhile, you know, healthcare providers, their staff are very fluent on how to get through the medical exception process. That's where the NCCN guidelines are helpful and other published data. Medicare payers will be less important for KMT2Ar, but for NPM1, due to the patient population, which is a little bit older, it's gonna change.
So our approach has been really over the last nine months, even a year, is really to approach all plans. We've been, you know, delivering PIE information exchanges. That's the pre-approval information exchange. So we've had some very good interactions with payers. They recognize the unmet need, the criticality of patient care. And I think as Anjali said, it's a unique launch where you've got a launch followed by, well, the same other launch within a year. So we're preparing for both at the same time. You know, it takes time to build coverage, so we've got the whole payer space. And I think in my prepared remarks, we will talk to payers that cover 90% of covered lives in this country, which is as good as it gets in advance of approval. So we're prepared for success.
Michael Schmidt (Senior Managing Director and Equity Research Analyst)
Okay, great. And then maybe just a housekeeping question as we think about the upcoming filing and potential approval. Are there any milestones due from Incyte for that we should incorporate in our models this year?
Michael Metzger (CEO)
Yeah. Thank you, Michael. Keith, do you know?
Keith Goldan (CFO)
Yeah, Michael, we do, as disclosed in this Q and as we've disclosed in past Qs and Ks, we do have not only development and regulatory milestones, but commercial milestones due us from Incyte. Total milestones for development and regulatory under the agreement, over $220 million. Total commercial milestones are $230 million, so a total of $450 million due us. You can expect those to come at major, certainly major regulatory events such as approval. I think that's a reasonable expectation, but we haven't been more specific as to the amounts.
Michael Schmidt (Senior Managing Director and Equity Research Analyst)
Thanks for the comment. So much, guys.
Michael Metzger (CEO)
Thank you, Michael.
Operator (participant)
Our next question is from Yigal Nochomovitz at Citigroup. Your line is open. Please go ahead.
Yigal Nochomovitz (Biotech Analyst)
Yeah. Hi, thanks very much for taking the question. Just on the NPM1 pathway, you may follow our pathway or perhaps even the breakthrough or given sNDA, is that, are those options not, not really necessary?
Michael Metzger (CEO)
Yigal, thank you for your, for your question. You broke up a little bit, but I think I captured it. So as you know, we have, we've had breakthrough therapy designation for KMT2A. For NPM1, we have, the opportunity to potentially get breakthrough therapy. It's probably most important for your first indication, and I think the engagement around KMT2A and the molecule and the submission package has been very strong. We have priority review as well. I think for NPM1, we'll look to leverage some of the same access points with the agency, but we're, you know, I'd say, pretty well-advantaged by what, what we've, you know, what's come our way already. But we'll see. We don't generally comment on regulatory strategy, but the opportunity to submit for BTD, at a point in the future is open to us.
So I think, I think it's obviously a program that we'll, we'll have data on later this year. We'll have a submission, we hope, in the not-too-distant future beyond that, and then, look to get the drug approved in 2025. So that'll be through an sNDA process. So it's all, I'd say, call it an expedited pathway through some of the designations we have in hand already or some of the things that we may avail ourselves in the future.
Yigal Nochomovitz (Biotech Analyst)
Okay, thanks. And then when you think more broadly about the revumenib in terms of the spectrum of care in AML, both in the frontline and in the relapsed refractory, and given the fact that there's a good chance that you're going to be initiating a pivotal trial in the frontline in combo with venetoclax. When you start to think about the commercial build there, are you making assumptions around the potential retreatment with revumenib for patients that received revumenib in the frontline in a combination setting, whether it be with venetoclax or perhaps even with the 7+3, including those patients in the build for revumenib in a relapsed refractory setting, or once they're treated in the frontline, then that wouldn't be part of your assumption set? Thank you.
Michael Metzger (CEO)
Yeah. Thanks, Yigal. I think our assumption is that once you're treated with a menin inhibitor, at least from a, from our vantage point, the way we see it today, I think once you're treated with a, in, in the frontline setting, it's less likely that you're going to be treated in a relapsed refractory setting again with another menin inhibitor. And Neil, you want to make a comment?
Neil Gallagher (President and Head of R&D)
Yeah, I agree. I agree with Michael's comments there, that I think that, you know, it's a little, it is a little bit nuanced because I think longer term, there... I can foresee, you know, situations where patients could, for instance, if they've been treated and relapsed a long time later around NPM1 positive or KMT2A positive, might be reexposed. But I think in general, I agree with Michael's points. We shouldn't be sort of, expecting a lot of patients to fall into that category.Yeah.
Yigal Nochomovitz (Biotech Analyst)
And then just one on axa. Do you have any timelines for the IPF trial in terms of enrollment and data?
Michael Metzger (CEO)
Thanks, Yigal. No, no, not at this point. I think we are enrolling. As you know, we started recently bringing up sites and enrolling patients, and it's going nicely. And so we'll have more to say in terms of milestones, both for enrollment as well as data, as we get further into the year, maybe into next year.
Yigal Nochomovitz (Biotech Analyst)
Okay. Thank you, Michael.
Michael Metzger (CEO)
Thank you, all.
Operator (participant)
Our next question is from Kalpit Patel at B. Riley Securities. Your line is open. Please go ahead.
Kalpit Patel (Senior Biotech Research Analyst)
Can you comment on what proportion of patients that you estimate might be eligible to receive revumenib as a maintenance treatment after induction and consolidation? I'm trying to understand, you know, if that median duration of treatment in that specific frontline setting would be higher than the nine months that you expect in the relapsed refractory setting. Thank you.
Michael Metzger (CEO)
Kalpit, thanks for the question. I think, if I interpreted your question correctly, I think in terms of patients who would be eligible for maintenance going in the relapsed refractory setting, I think, if you had a successful transplant, there's no reason that all patients wouldn't necessarily be eligible. They need to have, you know, have, you know, be stable and engraft well, and I think that's usually the first step, and physicians remind us of that, that there's an engrafting period. But for all intents and purposes, all patients should be eligible for maintenance. So I think that's our assumption, and that's, I think, been discussed with physicians on an ongoing basis.
I think when you get to the frontline setting, the assumptions for long-term maintenance and how that would play out in the fit population could very well differ. If you were able to get to patients earlier and treat them successfully through transplant and put them back on therapy, I think the expectation is treat patients earlier, they stay on, they do better, and they stay on longer. And so that should change how the assumptions work on the time on maintenance in the frontline compared to relapsed refractory. We don't have a good estimate of that yet. Obviously, we're generating that data, but over time, we'll understand that a little bit better.
Operator (participant)
Our next question is from Jason, Jason Zemansky at Bank of America. Your line is open. Please go ahead.
Jason Zemansky (VP of Equity Research, Biotechnology, and Pharmaceuticals)
Perfect. Thank you. Good morning, and congratulations on the progress. Appreciate you taking our questions. Regarding the commercialization plans for revumenib, and your initial outreach, I have to imagine there's already quite a bit of excitement across at least the more academic, focused community. But what sort of division between rapid adopters and non do you expect? How quickly do you expect maybe the more community-based prescribers to come on board, on board as far as, as awareness and education goes? And maybe bolus isn't quite the right descriptor, given patient dynamics, this latent treatment, but do you expect an initially large bump in patient numbers or more of a straight line uptake?
Michael Metzger (CEO)
Jason, thank you for the question. I'm going to turn it over to Steve to address your questions.
Steve Kloster (Chief Commercial Officer)
Yeah. Hey, Jason, thanks for the question. I mean, there's a lot of excitement. I think, you know, predating me coming to the company, the company's done quite a bit of research, market research, advisory boards, met with KOLs. The field medical team has been out there. So there's a lot of, we'll just say, demand that's there because of lack of treatment options. I've recently actually was out in New York yesterday at Cornell and Sloan and meeting with KOL. So they're ready for the drug. Literally, you know, cannot wait till it hits the market. So I think certainly the academic centers, you know, Jason, there'll be quick uptake. They are ready for this product. Awareness is already fairly high for whether it's revumenib or a menin inhibitor.
I think, you know, downstream in the community, it's going to take a little bit of time. Part of it is just they may not see a lot of patients initially, so it's up to us to be there. So from a commercialization standpoint, we'll have an adequately sized team that's going to cover 95%+ of the opportunity. We'll have a non-personal promotional program that will reach folks in places that we may not be at as frequently. So I think you'll see a quick uptake across the board, and a lot of it is just patients in the office ready to be treated, which I think leads to your second question, and there's not going to be much of a bolus, right? We have an EAP that's in place. You know, it's...
I'm going to give the number, but it's a certain number of patients. No one's withholding treatment for eligible patients, to your point. The criticality is just too high. So there'll be a little, we'll say, extra use initially from EAP, that'll burn out over the, you know, the beginning months of the launch, and then after that, we'll expect a typical uptake just based on, our assumptions and, and available patients.
Jason Zemansky (VP of Equity Research, Biotechnology, and Pharmaceuticals)
Got it. Makes sense. And then maybe just a quick follow-up on your phase I in metastatic colorectal cancer. In terms of go, no-go decision, I know you mentioned disease stabilization as important, but was curious, is there a specific signal, I don't know, maybe a biomarker, that you're looking for in terms of menin's potential or hypothetical role in driving solid tumors that would, you know, just make you feel confident about investing significantly in this potential expansion opportunity?
Michael Metzger (CEO)
Jason, thanks for the follow-up on CRC. I'm going to turn it over to Neil to address.
Neil Gallagher (President and Head of R&D)
Yeah, thanks. So in the part of the study that has been conducted to date, just to reiterate Michael's point, I mean, this is primarily the safety, a safety part of the study. We are looking at, in addition to clinical responses, I mean, primarily it's a safety study. We're also looking at clinical responses, we're also looking at biomarker data. And, you know, our anticipation is that, you know, as we get to a point in the future where we could make a decision on future development in this space, that, you know, the totality there will be taken into that, taken into consideration. We haven't specifically said what, you know, what correlative data we're looking at, but, you know, at some point in the future, we will provide more details around that.
I wouldn't expect necessarily too much data in our update in the second quarter, you know, on for instance, correlative data. But rest assured that we are pursuing correlative studies, and as I said, we'll take the totality of the evidence into consideration.
Jason Zemansky (VP of Equity Research, Biotechnology, and Pharmaceuticals)
Got it. Well, thank you for the color.
Michael Metzger (CEO)
Thank you, Jason.
Operator (participant)
As a reminder, if you would like to ask a question, please press star five on your telephone keypad to raise your hand. Our next question is from Justin Zelin at BTIG. Your line is open. Please go ahead.
Justin Zelin (Director and BTIG Biotechnology Analyst)
Thanks for taking the question, and welcome to Steve. So ahead of two launches this year, I wanted to ask how large of a sales force you're looking to build here, and could you talk to the overlap of providers who treat both leukemia and chronic graft-versus-host disease for promotion of both products?
Michael Metzger (CEO)
Sure. Maybe I'll let Steve take that question. Thanks, Justin.
Steve Kloster (Chief Commercial Officer)
Yeah, and appreciate the question, Justin. In terms of sales force size, we're not, you know, not prepared to provide the exact color and size of the team, but it'll be a team that I think can really address, you know, customer needs. Our goal, whether it's providers, anybody within the healthcare delivery system, that it's a great customer experience. So we're prepared to link up to all different aspects of healthcare organizations to make sure we're meeting the needs and supporting providers in their treatment of patients. So I think I used the term plus, you know, 95% coverage. So that we'll cover the opportunity. There's no doubt about that. In terms of overlap between GVHD and rev, there's high overlap.
I mean, we're likely, along with Incyte, calling on the same treatment centers, right? Whether it's treatment of AML or treatment of transplant. And we'll leverage that call point. You know, there's probably a third overlap right now of our rev audience with the axa audience. We'll obviously provide 30% of the effort. So, we'll leverage our footprint, and we will cover, you know, the market opportunity, in really both opportunities.
Justin Zelin (Director and BTIG Biotechnology Analyst)
Thanks for taking my questions.
Michael Metzger (CEO)
Thank you, Justin.
Operator (participant)
Our next question is from Chris Shibutani at Goldman Sachs. Your line is open. Please go ahead.
Chris Shibutani (Senior Biotechnology Analyst)
Thank you. Good morning. A lot of questions on the focus have already been asked. So perhaps if I can ask a bigger picture, longer-term question, it ties a little bit to your guidance in terms of operating expense spend on R&D. The near-term question is, it looks as if to reach your full year guidance, we'll have a considerable step-up in the second half. Is that primarily attributed to the combination studies? Just to give us a sense there, Keith. And then secondly, Anjali, I think you've done a tremendous amount of work in building this portfolio, and the company is now very focused on trying to launch two products. But as you know, investors are impatient to try and figure out what could come next. What is your thought on capital allocation priorities, further business development? What are you seeing out there?
What's your appetite? Thank you.
Michael Metzger (CEO)
Great. Thank you, Chris. Good questions. Maybe, Keith, you want to take the first one on the longer term?
Keith Goldan (CFO)
Yeah, sure. So, Chris, I wouldn't necessarily agree that it's a big step up, to use your words. You know, we did total operating expenses in 1Q approached $80 million. The guidance range for the second quarter is $80 million-$85 million. So, you know, if we were just to stay on that trajectory, we'd be, you know, $320 million-ish. So there is some increase that I think we would anticipate in the back half of the year.
And I think, yes, you know, certainly as IPF ramps, as the first line, 7+3 combination trial with rev continues to accrue, and as we get ready to launch the pivotal phase III venetoclax trial combo trial with rev, that's certainly gonna add to some of our R&D expenses in the back half of the year. But also, don't forget, we're building out a commercial organization. So, on the SG&A side, we would expect some growth there. For the sales force, all the customer facing individuals that Steve commented on earlier, as well as, you know, the G&A support for those, for that field force.
Michael Metzger (CEO)
And in terms of your second question, Chris, on business development, maybe I'll start and turn it over to Anjali. So look, I think our strategy has been, and we've been, you know, pursuing the same business model for, you know, quite some time, which is to in-license and develop new molecules with differentiated profiles. I think we've been fortunate to have great success with our in-licensing strategy and having these two molecules that are nearing approval. And so the bar is always quite high with regard to new opportunities, and it's incumbent upon us to be thoughtful about how we allocate capital. And so we do think that additional molecules, bringing them into the pipeline, backfilling the earlier part of the pipeline, is quite important, and we are interested in doing that.
And so, I don't know if, Anjali, you want to make a comment on our activities, but I... We remain quite disciplined about what we're doing.
Anjali Ganguli (Chief Business Officer)
Yeah, no, I think you said it well, Michael. We're very actively engaged in the market, looking across a variety of sources for new opportunities and spending a lot of time on diligence, and hopefully, we'll have some exciting news to share. But you know, there's definitely a lot to look at.
Michael Metzger (CEO)
Exciting times. Thank you, Chris.
Operator (participant)
Our next question is from George Farmer at Scotiabank. Your line is open. Please go ahead.
George Farmer (Managing Director of Biotechnology)
Hi, good morning. Thanks for taking my question. A competitor of yours has talked about combining their menin inhibitor with other targeted therapies like FLT3 inhibitors and the like. Is there hasn't been too much conversation on the call about that this morning. Is that something that you're thinking about as well in greater detail?
Michael Metzger (CEO)
George, thanks for the question. So in terms of combinations, maybe I'll let Neil comment on, on what else is going on. And with targeted therapies, obviously, we have the, the trials ongoing, the pillars of our strategy being, the venetoclax in the unfit population, and then Inqovi, if you will, as another interesting option for patients, in relapsed refractory and perhaps in, in earlier patients as well. So just think about it in terms of ven combos. And then on the, fit side of the equation, in, in combination with, with chemotherapy, we've already demonstrated the drug's ability to be combined with chemotherapy in relapsed refractory study. We'll have data updates on that. We'll also have additional data, as we talked about, on the ven combos this year, which, so far looks extremely good.
I think there's options open to us, and Neil, I don't know if you want to comment on some of those.
Neil Gallagher (President and Head of R&D)
Yeah, sure. So we have investigator-initiated trials, either planned or ongoing, which will, in which revumenib in combination with gilteritinib, or midostaurin will be investigated, either are or will be investigated. To Michael's point, you know, conducting, for instance, a pivotal program in the frontline fit population in patients with, with both NPM1 and FLT3 mutations is technically very challenging. It's not really, core to our strategy. Of course, we haven't revealed overall what our strategy is, but it's not core to our strategy. What we've said is that, obviously, in addition to the unfit phase III that we'll initiate, we plan to initiate by year-end, that we're dose ranging in combination with 7+3, which will position us then to initiate a phase III, during 2025.
You can anticipate that that will not be in dual mutation patients, because that's a very large and complicated study. So we prefer to generate evidence in that population as opposed to potentially pursuing a registration strategy.
George Farmer (Managing Director of Biotechnology)
Mm-hmm. Okay, that's very helpful. Thanks.
Michael Metzger (CEO)
Thank you, George.
Operator (participant)
This concludes our question and answer session. I'll now turn the floor over to Mr. Michael Metzger for any additional comments or closing remarks.
Michael Metzger (CEO)
Thank you, operator, and thank you all for your questions. Appreciate you tuning in today. We look forward to seeing you all at our planned investor events, including the Bank of America conference in May and the Goldman Sachs conference in June. With that, we wish you a great day.
Operator (participant)
The meeting has now concluded. Thank you for joining. You may now disconnect.