Blueprint Medicines Corp

NASDAQ:BPMC

Earnings Call Transcript 2024-Q1

[Operator]

Good morning. My name is Faith, and I will be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicines First Quarter 2024 Financial Results Conference Call.

[Operator Instructions] Jenna Cohen, you may begin your conference.

[Jenna Cohen, executive]

Thanks, Faith, and good morning, everyone. Welcome to Blueprint Medicines' First Quarter 2024 Financial and Operating Results Conference Call. This morning, we issued a press release, which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at www.blueprintmedicines.com.

Joining me today are Kate Haviland, Chief Executive Officer; Philina Lee, Chief Commercial Officer; Fouad Namouni, President, Research and Development; and Mike Landsittel, Chief Financial Officer. Christy Rossi, Chief Operating Officer; and Becker Hewes, Chief Medical Officer, are also on the line and available during Q&A.

Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements as outlined on Slide 3 and are subject to a number of risks and uncertainties. These may cause our actual results to differ materially, including those described in our reports filed with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements, and Blueprint disclaims any obligation to update such statements.

I'll now hand the call over to Kate.

[Kathryn Haviland, executive]

Thank you, Jenna, and good morning, everyone. We delivered another very strong quarter in our launch of AYVAKIT in indolent systemic mastocytosis, and we are entering 2024 in a position of strength. We have great momentum across all aspects of our business as we execute on our 3 priorities that we laid out in January.

Our first priority is the launch of AYVAKIT in indolent systemic mastocytosis. We have driven impressive revenue growth. And importantly, we are building the foundation for top line revenue growth well into the next decade. We are also making significant progress in advancing our pipeline of innovative programs that are focused in our most compelling opportunities where we believe we have the greatest prospect of improving patient outcomes. And third, we are maintaining a strong and durable financial position in a self-sustainable financial profile. I'll briefly touch on each of these.

Starting with the exceptionally strong commercial performance we delivered in Q1. We achieved $92.5 million in AYVAKIT net product revenue for the quarter. This result surpassed external consensus as well as our own internal expectations. Philina will discuss in more detail the components of our continued commercial success, but I want to take a moment to say how incredibly proud I am of our hard-working and dedicated commercial and medical team members. Their commitment to delivering for patients with SM globally is resulting in this type of performance.

These results also reflect the profound impact that AYVAKIT is having on patients as well as our strong and growing prescriber base.

Today, we are also increasing our AYVAKIT guidance for the year to $390 million to $410 million. Later on the call, Mike will share more of our thinking around today's AYVAKIT guidance increase, which is [ placing us squarely ] on a revenue trajectory to peak sales of greater than $2 billion globally. This revenue trajectory makes AYVAKIT one of the most exciting rare disease launches happening right now and put us on a similar path to other notable rare disease product launches of first-in-class medicines that built new multibillion dollar markets.

We are also strengthening our presence in allergy and inflammation with BLU-808, our wild-type KIT inhibitor. The BLU-808 program builds on the significant insights we have gained in mast cell biology and targeting KIT, the master control switch on mast cells, which we believe has the greatest prospect of improving outcomes for a large number of patients across allergic and inflammatory diseases.

Our recent webinar titled The Powerful Mast Cell highlighted the scientific rationale for our aspiration to fundamentally shift the way many allergic inflammatory diseases are treated by targeting this primary effector cell, the mast cell, with both mono and combination therapeutic approaches. We are on track to file the IND for BLU-808 this quarter to enable initiation of a Phase I study in healthy volunteers.

We've established a successful track record with AYVAKIT, and you can continue to expect Blueprint to discover and develop potent and highly selective molecules as we expand our mast cell franchise beyond systemic mastocytosis.

Turning now to the oncology side of our portfolio. Next month at ASCO, we will be presenting data, demonstrating that BLU-222 is the first CDK2 inhibitor to be well tolerated in combination with an approved CDK4/6 inhibitor. With this data, we now have the clinical evidence that BLU-222 is a differentiated, best-in-class CDK2 inhibitor. BLU-222's ability to combine with approved CDK4/6 inhibitors also position it to move quickly with the potential to also become the first-in-class CDK2 inhibitor approved for patients with hormone receptor positive HER2- breast cancer.

I remain confident that we will execute a strategic partnership in the second half of this year to rapidly move BLU-222 forward into registration-directed trials.

Importantly, we are executing across the business while maintaining financial discipline. Our total costs and operating expense continued to decline and with $735.6 million in cash on our balance sheet, we are in a strong and durable financial position. I am proud of the tremendous progress Blueprint has made in the first quarter of this year and continue to be impressed by the hands down executional focus I see across all of our teams to make sure we're achieving our goals quarter after quarter.

Now let me turn it over to Philina to discuss this quarter's commercial performance. Philina?

[Philina Lee, executive]

Thanks, Kate, and good morning, everyone. We had an exceptional first quarter, generating AYVAKIT net product revenue of $92.5 million including $83.1 million in the U.S. and $9.4 million ex U.S. AYVAKIT revenue has grown more than 135% year-over-year.

We saw positive trends across all key business fundamentals, continued strong and steady growth in patients on AYVAKIT, reflecting a strong pace of new patient starts and low discontinuation rates. Our mix of commercial versus free goods also skewed more favorable than we anticipated. Compliance remains high. Our international ISM launch is off to a robust start with Germany off to the races.

Let's look at our key fundamentals in more detail. Starting with growth in patients on AYVAKIT. We drove a really strong pace of new patient starts coming out of the holidays throughout the first quarter of the year. We continue to see low discontinuation rates driving positive trends in duration of therapy.

For advanced SM patients, duration of therapy is trending even longer than our last update, now at an average of 25 months. And while it's still early days, duration of therapy in ISM patients is trending significantly longer. This is exactly what we expected based on AYVAKIT's benefit risk profile.

Q1 tends to be a tough quarter in our industry with patients benefits reverifications, lower gross to net and impact on compliance. Our market access team did a great job managing through all of this. Our free goods share once again has been a surprise to the upside and is now averaging about 20% since ISM launch.

The favorability in commercial versus free goods is really driven by 2 things: first, the payer mix of ISM patients skews more commercial, and we estimate that ISM patients now comprise the majority of patients on therapy; second, Medicare patients were able to access paid therapy as we saw last year.

Importantly, unlike last year, we expect these patients will be able to stay on paid therapy for the rest of the year due to changes to the out-of-pocket cap as part of Medicare Part D benefits redesign in the Inflation Reduction Act.

In its third full quarter of launch, we are seeing strong and steady performance against our key revenue drivers just as we expected. The favorability in commercial mix exceeded our expectations and provides a tailwind for the remainder of the year. This, along with confidence in our strong continued execution is a key driver for our guidance update today.

We'll continue to watch the fundamentals that drive revenue over the course of the year, such as the ongoing pace of new patient starts, duration of therapy, compliance and free goods as well as our ongoing European launch performance. Taken together, our ISM first 3 launch quarters are showing a clear inflection point for AYVAKIT revenue growth.

Now let's talk about why we expect to sustain this growth for years to come. Our team is executing well against our commercial strategy, and we continue to make headway across multiple paths to drive sustained growth. We continue to grow breadth and depth in the AYVAKIT prescriber base across all specialties and settings.

Prescriber breadth is one of the most important lead indicators for revenue growth. The number of new AYVAKIT prescribers continued to grow this quarter, including a growing number of allergists who have been activated to treat SM patients. Overall prescribing is still split evenly across the academic and community setting.

The chart on the left shows AYVAKIT adoption into the top 400 providers by SM patient volume. And as you can see, we're starting to see even more depth from repeat prescribing as positive first experiences lead providers to start their second, third or more patients on AYVAKIT.

Because the chronic burden of ISM is often underappreciated, a key part of our ongoing execution is redefining what disease control means for providers and patients. And we continue to expand our direct-to-patient and provider educational initiatives to foster greater awareness of the burden of disease with the goal of activating patients to ask about AYVAKIT.

Living with ISM can be very isolating. Establishing patient-to-patient connections is a critical part of the journey to treatment. In Q1, we launched a monthly educational series where patients can learn from the experiences of other patients who are taking AYVAKIT.

As part of our ongoing community building efforts, we held a first-of-its-kind summit bringing together patient advocates, patients and multidisciplinary thought leaders. Just this month, we launched an unbranded direct-to-patient campaign to drive further awareness of the toll of living with ISM and the availability of a new treatment option. All of these efforts are yielding impressive results.

Unaided awareness among patients has grown nearly eightfold since approval, and we expect our expanding peer-to-peer and patient initiatives will continue to activate more patients and providers to try AYVAKIT.

In closing, the momentum we've shown in our first 3 quarters of launch make us incredibly confident about the path we are on to achieve a more than $2 billion peak opportunity with AYVAKIT. We are building and shaping this market. We are growing the prescriber base. We are activating more patients to seek treatment. We're growing the number of diagnosed patients, and there is plenty of headroom to continue to grow. We knocked it out of the park this quarter, and we remain laser-focused on our mission to help more patients in need.

With that, I'll hand it to Fouad, who will share how we're expanding our efforts in mast cell disorders to help more patients with allergic and inflammatory conditions beyond SM.

[Fouad Namouni, executive]

Thanks, Philina. Last week, Dr. Mariana Castells, a renowned researcher and clinical expert in mast cell diseases, joined us for webinar titled The Powerful Mast Cell, a promising and yet underappreciated target for treating allergic and inflammatory diseases. The webinar was the first in a new series we have planned to keep you updated on how we are thinking about the evolving science behind our portfolio and R&D strategy.

If you haven't yet had a chance to listen to the discussion, I encourage you to check out the replay, which is live on our website.

The mast cell is a key driver cell responsible for the pathogenesis of a wide range of allergic and inflammatory conditions, research into mast cell biology and its involvement in inflammatory diseases, has recently increased with the goal to identify novel therapeutic targets in allergy and inflammation. This webcast focused on the biology of mast cells, including their essential roles as driver of and contributors to inflammatory responses, their core involvement in biological pathways relevant to an array of allergic and inflammatory diseases and Blueprint's approach to modulating mast cells and building a pipeline in allergic and inflammatory diseases.

Blueprint has a long and proven track record of leadership in this space, as evidenced by the success of AYVAKIT and the ongoing development of elenestinib. And we have built what we believe is one of the most advanced mast cell drug discovery capabilities in the industry.

BLU-808 is poised to help us beyond systemic mastocytosis. Tackling the challenge of developing a potent and highly-selective, tunable, oral wild-type KIT inhibitor, is a logical evolution of our capabilities in this space. And the opportunity we have ahead of us is significantly larger than any we've pursued in the past.

Our vision for scientific leadership in mast cell diseases is built on 4 key pillars: first, a level of deep understanding of the mast cell biology and to moderate its activity; second, select the best targets, modalities for monotherapy and combination strategies to achieve first and best-in-class positions; third, establish a strong preclinical and early clinical POC, or proof of concept, to [ derisk ] development; and lastly, pursue pipeline-in-a-pill opportunities in major mast cell-associated disorders where there is a medical need.

We will continue to provide updates on our mast cells franchise throughout the course of the year including BLU-808 IND submission on track for this quarter, which will enable us to initiate the healthy volunteer study. We will also initiate Part 2 of the HARBOR trial for elenestinib in indolent systemic mastocytosis in the second half of this year.

As we expand our mast cell focus, we continue to drive innovation in systemic mastocytosis, as our understanding of the spectrum of patients and the underlying biology of the disease evolves.

Moving from allergy and inflammation to our oncology part of the portfolio. We are happy to report for the first time at the 2024 ASCO meeting, the safety and the signal of early clinical activity of BLU-222 in combination with ribociclib and fulvestrant in hormone-positive HER2- breast cancer patients. We believe these data clearly demonstrate the first and best-in-class potential of BLU-222 to become the combination partner of choice with CDK4/6 inhibitors in hormone-positive HER2- negative breast cancer.

With this, I will turn it over to Mike to discuss our financial results.

[Michael Landsittel, executive]

Thanks, Fouad. Earlier this morning, we reported detailed financial results in our press release. For today's call, I'll touch on a few highlights. In the first quarter, total revenues were $96.1 million, including $92.5 million in net product revenues from sales of AYVAKIT and $3.6 million in collaboration and license revenues.

As Philina discussed, AYVAKIT revenue was driven by continued strong and steady growth in patient starts, positive trends underlying extended duration of therapy and favorability in the mix of commercial patients. Given the strength in Q1, we are raising our AYVAKIT product revenue guidance and now expect to achieve $390 million to $410 million in net product revenue in 2024. We've had a stronger-than-expected start to the year, and we are still learning about the seasonal trends and impacts in ISM as we make our way through the first year of launch.

Our guidance philosophy is to provide our best understanding of where we may end the year given the various puts and takes on revenue, both in the U.S. and the EU each quarter. This update relatively early in the year reflects that commitment.

The increase in today's guidance reinforces that we are on our path to capturing AYVAKIT's peak opportunity of greater than $2 billion. This revenue growth coupled with expense discipline and focused investment is what continues to give us confidence in achieving a financially self-sustaining profile.

Our total costs and operating expenses continued to decline and were $174.9 million for the first quarter. We anticipate that our research and development expenses will remain relatively flat for the remainder of the year with some quarter-to-quarter variability. We also expect our SG&A expenses to remain relatively stable as we continue to gain operating leverage from our commercial infrastructure.

We believe that the current full year sell-side consensus for total costs and expenses of approximately [ $715 million ], which includes noncash stock-based compensation expense reflects an appropriate estimate for 2024.

We remain in an exceptionally strong and durable financial position with $735.6 million in cash on hand. AYVAKIT's revenue performance and today's guidance increase, coupled with our continued focus on managing operating expenses will result in our goal of further reducing our cash burn in 2024.

Our solid financial profile drives our ability to generate long-term value as we invest in the commercial success of AYVAKIT [ and advance an ] innovative portfolio of medicines.

With that, I'll now turn the call back over to the operator for questions. Operator?

[Operator]

[Operator Instructions] Your first question comes from the line of Brad Canino from Stifel.

[Bradley Canino, analyst]

Great quarter. Kate, I remember back at the AAAAI meeting in February, you referenced a strong sense of ISM awareness and the desire to treat patients. And the company also had a strong presence at that meeting. So in your view, how much of that awareness momentum is baked into the trajectory exiting the quarter? And what does the team still see as headroom?

[Kathryn Haviland, executive]

Thanks for that question, Brad. And to your point, I think one of the things that was very notable about AAAAI this year was just in comparison to the year previous, where we are kind of introducing Blueprint for the first time and showing the AYVAKIT pivotal data for the first time. And then here we were kind of sitting with a large group of now people with clinical experience of the drug and were treating patients, which was such a notable step change to your point. So [ maybe Philina do you ] want to talk a little bit about how our awareness the impact of awareness in health care providers, the growing prescriber base and how that's really fueling our future growth this year and beyond.

[Philina Lee, executive]

Yes. Thanks for the question, Brad. And to your point, AAAAI, certainly, the excitement was palpable from treaters across the academic and community setting. That said, I would still say we're still just getting started with significant headroom to grow. The team has the ongoing pace of interactions of regional meetings, the cadence of congresses throughout the year.

And I think as we really look at our lead indicators on the provider side with our breadth and depth of prescribing, this is a really strong foundation for continued growth and certainly leave significant headroom for continued penetration, not just into the top 400, but well beyond that into the broader treating community.

In addition, touching on some of the direct-to-consumer initiatives, we're really excited to really be rolling out the next wave of engagement for patient activation. And that also leaves significant headroom to grow in sort of patients' awareness and likelihood to ask their providers of AYVAKIT. All of this, we think, bodes exceptionally well that we are well on that path towards that over $2 billion peak opportunity for AYVAKIT.

[Operator]

Your next question comes from the line of Marc Frahm from TD Cowen.

[Marc Frahm, analyst]

Congrats on the quarter as well. Maybe following up on Brad's question. Just how are you seeing kind of maybe trends kind of leading indicators to get into that bigger population that hasn't been well diagnosed historically, things like testing rates and stuff like that to really access maybe the next kind of 10,000 patients that you've kind of talked about being out there that haven't been cared for historically.

And then related to some of that, just with the top line really taking off here, just can you -- maybe Kate and Mike, talk about kind of the goal of getting to profitability, how important is that for the company, particularly as you start thinking about things like 808 coming in that could have a very broad development program ultimately?

[Kathryn Haviland, executive]

Yes. Thanks for the questions, Marc. Maybe we'll start with talking about how we see -- I mean, we're building a brand-new market here with AYVAKIT in SM and how we think about the different kind of avenues of growth to build in that market, that some of the things you mentioned already, which is the increasing rate of diagnosis, which is a critical part, but also the fact that we know that there is a number of patients who are diagnosed and that we are just kind of starting to penetrate. We have a lot of room there as well.

So Philina, how do you think about both penetrating the currently diagnosed group versus the opportunities to continue to grow the overall size of the market?

[Philina Lee, executive]

Yes. I would say -- thanks for the question, Marc. First and foremost, if we just look at the patients who are already diagnosed, which continues to steadily increase, penetration into that patient population already represents an over [ $1 billion ] opportunity. And that's where sort of like here and now primary focus is dedicated.

And you spoke to sort of the -- there are multiple prongs for continued growth, and you spoke specifically to continued growth in diagnosis. There, we are really focused on continuing to drive initiatives like the high-sensitivity KIT testing, the disease awareness, the sponsored testing from Blueprint. And we're really encouraged to see significant increases in the volumes of high-sensitivity KIT testing, especially even in the allergy segment where that's really important.

And even beyond that, we know there are further levers for growth for AYVAKIT. And that's adoption into a broader range of patients, sort of widening that line of who is seen as not well controlled as well as expansion into further geographies. And we're seeing, as I said, really strong initial performance in our international launches. All of this bodes really well towards that peak opportunity.

[Kathryn Haviland, executive]

Yes. And one thing maybe to add there is this feels very similar to other rare disease launches we've seen where the epidemiology and these disease states tend to be kind of dated and very small studies that inform that. And what we're seeing is even in our sponsored testing, patients coming out of other pools of patients, be that MCAS or others that I think have been very much underrepresented in the current epidemiology.

So we'll be providing more views on that as it comes. But our view is this market has a long way to go in terms of continuing to grow the number of patients on therapy as well as the number of patients who are diagnosed with this disease.

Maybe now turning to your question about the importance of profitability and how we think about that. Mike, do you want to start?

[Michael Landsittel, executive]

Yes, I'll start. I think, Marc, I think the key is we're trying to build a sustainable business for the long term. And so part of that is making sure that we stay laser-focused on our top priority investment areas such as BLU-808, which is upcoming. And that requires financial discipline and focus. But like long term, we're looking to find these key value drivers where we can add long-term value to the company, and that's the long-term goal.

[Kathryn Haviland, executive]

Yes. And just adding, and I completely agree. I think one of the things we've been known for our Blueprint Medicines is our research and development capabilities. And we have just tremendous opportunity to continue to drive innovation and to make really meaningful impacts on patients. I think BLU-808 is certainly on everyone's radar, but we have -- some of our favorite programs, we haven't had a chance to talk to anybody about yet. And so we're looking forward to talking about our continued innovation in this space, Marc.

[Operator]

Your next question comes from the line of Michael Schmidt.

[Paul Jeng, analyst]

This is Paul on for Michael. Congrats on the quarter. Mine's on AYVAKIT for the ex-U.S. opportunity. I know you mentioned Germany is sort of driving European sales this year. Do you still see a roughly 10% contribution to this year's full year sales? And how are you currently thinking about the longer-term trajectory in Europe perhaps beyond this year?

And then maybe just squeezing one on CDK2. Any updates on sort of the color or the tenor of the progress of your partnership discussions for that? And are these exclusively on BLU-222 or perhaps more broadly for the CDK franchise?

[Kathryn Haviland, executive]

Yes, Michael, thank you for those questions. I think one thing is the European team has done a tremendous job out of the gates with ISM approval at the end of December, with Germany really coming on strong in terms of getting patients under therapy, and so they've done a tremendous job there. Christy, how do you think about the overall contribution for Europe and its growth projectory? And maybe also, could you take the [ BD ] question as well?

[Christina Rossi, executive]

Sure. Thanks, Paul. Yes, we're really pleased with the performance of the international team. As Kate said, they're very much off to the races. And I think it's been particularly encouraging to see that some of the underlying dynamics in the German launch early on have looked very similar to the United States, including where we're seeing prescribing, et cetera, lots of patient demand. So really encouraging to see. Of course, there's other dynamics in Europe that are different from the United States and most notably, that would be price negotiations. So some of those cards will start flipping this year and then into next year as well.

So when I think about the overall opportunity in Europe, it's certainly significant. It's going to be a contributor to our overall top line. But for this year, as I said, that 10% to 15% of revenue as a rough estimate is probably not a bad place to be. Just frankly, is one of the levers that we think about when we're trying to set guidance ranges, right? I mean this is a variable that informs how we may perform over the year. But I think 10% to 15% is probably a good estimate.

And then at [ peak in ] markets like this, we'll see how things evolve in the coming years as we continue to grow the opportunity. But you often would see the U.S. still representing certainly the majority of the dollar value of the SM opportunity. And as Philina said, it's very easy math to get to a multibillion-dollar opportunity just in the U.S. based on what we are seeing.

In terms of CDK2, as we said in the prepared remarks, Very, very excited about the data set that we're going to be sharing at ASCO. We really see this as the first data that we'll be showing that you can safely combine a CDK2 inhibitor with the [ 4/6 ]. Our partnership discussions are progressing well. We've always been very clear that second half of this year is when it makes sense to have a partner on board strategically based on where the program will be heading as we exit this year and into next.

And certainly, as we think about the tenor of those conversations, our focus is on CDK2, that's where having BLU-222, having a partner on board to advance the program makes the most sense. Of course, there's a lot of innovation in our pipeline that partners may be interested and excited by. We always have those conversations, and we'll continue to do that.

[Operator]

Our next question comes from the line of Laura Prendergast from Raymond James.

[Laura Prendergast, analyst]

Congrats on the great print today. Another one on CDK2. Thinking about how the cost of CDK2 impacts your OpEx [indiscernible] throughout the year, I'm assuming you guys are looking to [ out ] license and not cost share. If you could just provide any input here about how you're thinking about CDK2 moving forward.

[Kathryn Haviland, executive]

Maybe Christy would you start with just strategically how we're thinking about BD and Mike, maybe you can weigh in on just how you -- any kind of impact on financially [ for the year ]? [indiscernible].

[Christina Rossi, executive]

Sure. So from a strategy perspective, we've always been very intentional using business development to advance programs and really complement what our own capabilities and our own sort of internal priorities may look like. And certainly, at this stage, as we said, we are very focused on continuing to really develop a broad portfolio in mast cell-driven disorders, certainly executing the ongoing launch of AYVAKIT. We have elenestinib and BLU-808 coming behind that.

CDK2 is a very, very significant commercial opportunity. And one that because it's primarily in breast cancer is obviously in a somewhat different space. And so that's really the driver behind us having these conversations. We'll be open as we go through in terms of what the exact structure will look like, but we have a partner on board because we think we think the capabilities of what a partner brings are relevant to how we advance it. I always think about having co-development, co-commercialization makes sense in places where you're trying to build and leverage scale.

In the short term, that -- breast is not a place where we're trying to build and leverage scale. So again, we'll continue to advance those conversations as they make sense. But we have a very clear idea strategically of what we're trying to accomplish.

[Michael Landsittel, executive]

Yes. Just -- I think with respect to the financials, there's -- we obviously don't comment specifically on partnership structures or financials at this point, it's too early. But for 2024, we're continuing to execute on our Phase I study. That's baked into all of the financial guidance that we've given. We feel very confident about that.

And then longer term, as Christy mentioned, strategically, it makes a lot of sense to bring a big partner on. And part of that is driven by the fact that these studies to move forward in breast cancer are going to be very expensive, and we want a partner to both strategically as well as financially, help support us there.

[Operator]

Our next question comes from the line of Salveen Richter from Goldman Sachs.

[Matthew Dellatorre, analyst]

This is Matt on for Salveen. On BLU-808, could you talk about your strategy for determining which indications to expand into after a proof of concept has been established in chronic urticaria?

[Kathryn Haviland, executive]

Fouad, do you want to start and talk about 808?

[Fouad Namouni, executive]

Yes. I mean for BLU-808, I actually would encourage you and others to really go back and listen to the live replay of our Powerful Mast Cell from last week, [ where we really ] treated this topic in depth.

The way we are thinking about it is, as we said, chronic urticaria is our leading indication. On the other hand, given the profile of the molecule, we believe, is really a very good profile, and we are filing the IND and taking it to the clinic this year. It's -- really look at a number of other indications because the involvement of mast cell in the biology of numerous diseases is clearly and well established now.

[ We've been ] doing a lot of preclinical work and other indications, but also we're doing proof-of-concept clinically for a number of indications, and we see where we really think the full scope is and how to line up the additional indication beyond chronic urticaria. So we believe this molecule, if the clinical profile is consistent with the preclinical data that we are seeing, has the opportunity to really tackle a number of diseases. And therefore, we have to look at the POC for many of them.

[Kathryn Haviland, executive]

Thanks, Fouad. Maybe I could just add that we also believe that the profile of the compound and the fact that we have an oral therapy here is going to enable us to be able to kind of tune the therapy to address different patient populations across all these different disease states. We think we're really well positioned in terms of the target product profile of the compound to evaluate this and bring forward what will truly be a pipeline-in-a-pill opportunity.

[Operator]

Your next question comes from the line of Ren Benjamin from Citizens JMP.

[Reni Benjamin, analyst]

Congrats on an amazing quarter and really good guidance. Just a question for me is of the top 400 or so prescribing physicians, how many are prescribing? And what's the split between allergists and hematologists. And as we think about reasons that eligible patients might not be being prescribed AYVAKIT, can you -- are there any reason? Is that a potential group of patients that is incorporated into that kind of headroom calculation of how the area could grow? And how do you plan on addressing that?

[Kathryn Haviland, executive]

Yes. Thanks, Ren, maybe Philina, to address both how we see kind of demand coming from the physicians who have the most patients as well as out of positions from the tail and how you see that kind of dynamic in terms of demand and penetration as well as talking a little bit about kind of the cadence of new patient starts, right, and how that is informing our growth into the future.

[Philina Lee, executive]

Yes. Thanks for the question, Ren. I would start with the initial breadth and depth of prescribing that we've established in these first 3 full quarters of launch in ISM sets a really strong foundation for us both in terms of the breadth of the penetration.

What you want to see in rare disease is not that it's concentrated in just a handful of centers like what really fosters, plants the seed for sustainable growth and continued growth is that breadth of prescribing and the fact that we're seeing adoption across both hematology, oncology as well as allergy, immunology and split across academic and community settings is extremely important. And is a great lead indicator for continued growth.

When we look at the top 400, that's really something that we laser into to illustrate what we see is more of the kinetics of prescribing, it doesn't speak to the full penetration because that's really just a snapshot of the highest volume providers. So what's really important, I think, to see from that is that first prescribing is really leading to positive experiences that lead to subsequent repeat prescribing for 2, 3 or even more patients.

Even within that mix, we see a really great mix of allergists, immunologists, hematologists, I think headroom just across all segments and deciles of providers to continue to grow there.

In terms of your question around eligible patients and prescribing there, the most important thing we're focused on is identifying when a patient is not well controlled. And that is really -- that's sort of like a crux across both our provider engagements as well as patient engagement.

From a patient perspective, patients can also become acclimated to living with the new normal. They may be avoiding triggers. And so it's really important to make them aware of a new treatment option and that reclaiming the freedoms of their prior life is actually possible. And so really, our direct-to-consumer efforts are really focused on driving that. And again, there are a lot of headroom to grow.

[Operator]

Our next question comes from the line of Derek Archila from Wells Fargo.

[Derek Archila, analyst]

Congrats on the quarter. I was hoping maybe you could discuss some of the assumptions behind the updated guidance. It seems to suggest a slowdown in net patient adds relative to the prior quarters. And I guess, trying to reconcile that with the very bullish commentary in the prepared remarks.

[Kathryn Haviland, executive]

Yes. Thanks, Derek. I think just to start there, when we think about -- Mike kind of talked about our philosophy on guidance, and we are in the early days of building a brand-new market. And so as we think about the low and high end of our FDA range, it's driven by ranges around a multitude of different inputs across numerous variables.

I don't know, Philina, if you want to talk a little bit about how you think about those variables, but we certainly expect continued growth [ in ] the overall opportunity.

[Philina Lee, executive]

Yes, Derek, I think the first answer to your question is no. We do not expect a slowdown in net patient adds. We see strong and steady growth in the net patient adds and we expect that to continue.

This past quarter, we saw that really driven by a strong cadence of new patient starts, very low discontinuation rates which really tends well, I think, for chronic durations of therapy. And that's also -- there are a number of additional key revenue drivers that contribute to our guidance in addition to that continued strong and steady growth of net patient adds that we expect. So it's things like our compliance, the proportion of free goods, which exceeded for this quarter and is something we'll be looking to see how that evolves over the course of the year as well as things like our ongoing European launch. And so it's the inherent variability in these key revenue drivers moving forward that factor into our guidance range.

All of that said, if we look at sort of the midpoint of that range, that represents nearly a doubling of the revenue that we achieved last year. And we believe it firmly does put us on that trajectory towards the peak.

[Operator]

Your next question comes from the line of Peter Lawson from Barclays.

[Peter Lawson, analyst]

Just as we think about the ISM patients, you mentioned there was kind of a low discontinuation rate. Anything I -- can kind of comment around those patients, whether there's any shift in compliance after essentially 10 months of use? And any sense of drug holidays, for instance?

[Kathryn Haviland, executive]

Yes. Thanks, Peter, for the question. I think one of the things I think the team has just done a tremendous job in Q1 is -- and we know that Q1 can often be very challenging kind of across, as Philina mentioned in her prepared remarks, across pharmaceutical industry and biotech, and they just did a tremendous job on executing in the reverification process and making sure that the compliance stayed very high. But I don't know, Philina, since launch, have you thought about -- seen anything that you would say that [ thematic fit ] from a patient discontinuation perspective?

[Philina Lee, executive]

Yes. Thanks, Peter. So what we've seen in terms of discontinuation rates so far has been very much in line with what we've expected when we see AYVAKIT really favorable benefit risk profile from PIONEER. So discontinuation rates have been low. The very early trends towards duration of therapy have been very, very positive. And we've even seen a lengthening on the advanced SM side.

To your question around sort of compliance and holidays, like in fact, that has also trended extremely positively in terms of patients staying on therapy. When we think about this patient population, they're very sticky, right? Like they have a regimen that they are adapting to and they're really not taking dose holidays. And so this is a really important point because as we progress in the launch and we increased the total number of patients on therapy, it's not just new patient starts anymore, but also the cumulative effect of these patients remaining on therapy that will contribute to overall revenue growth.

[Kathryn Haviland, executive]

Yes. I think that last point is really important in the sense that as that pool of patients on therapy gets so much larger, [ point ] changes in compliance and/or free goods make a big difference from a revenue perspective. So I think that we're certainly seeing that.

[Operator]

Your next question comes from the line of Matt Biegler from Oppenheimer.

[Matthew Biegler, analyst]

Congrats from us as well on the quarter. Curious if you're seeing any signs of growth in advanced SM maybe because of the increased prescriber awareness from the indolent launch? Or I guess, should we just still think of advanced as pretty flat going forward?

[Kathryn Haviland, executive]

Yes, I'll just start quickly to say I mean we are so pleased to see that duration of therapy in advanced SM being at 25 months. And I think these are patients with very, very aggressive disease. And I think that bodes well for both the advanced SM opportunity as well as the read-through to the ISM opportunity. But do you want to talk about growth in the number of new patients in advanced SM, Philina?

[Philina Lee, executive]

Yes, Matt. So I would say we do continue to see growth on the advanced SM portion of our business. That's obviously relatively moderated compared to ISM, which is our primary growth driver, and now represents the majority of patients on therapy with AYVAKIT. But we do see, I think, a potential kind of halo effect that with the -- now the awareness of AYVAKIT for ISM, as our breadth of prescribing increases, it's happening not just in allergy, but also with a number of new hematology oncology prescribers as well who are activated and interested to get involved through ISM.

[Operator]

Your next question comes from the line of Ami Fadia from Needham.

[Ami Fadia, analyst]

Congrats on the quarter. My question is on BLU-808. What data do you need to generate to understand your go-forward clinical development plan for indications beyond chronic urticaria? And how soon can you start to initiate clinical trials on those indications? And separately, if you could provide any additional color on how you're planning to develop at an estimate? Any update from previous?

[Kathryn Haviland, executive]

Ami, thank you for the questions. Becker, do you want to talk about the data you want to see at 808 and how we're thinking about the [ end of those broad ] proof of concepts as well as the plan for HARBOR study with elenestinib, which, as we've said before, elenestinib is really positioned to maximize the long-term performance of our SM franchise. And so we certainly are going to be spending more time talking about that in the second half of this year.

[Becker Hewes, executive]

Yes. Ami, so BLU-808 being our exquisitely targeted wild-type KIT inhibitor is one that we're taking in the healthy volunteers first. And that's obviously to get the initial PK and tolerability. But it also gives us an opportunity to see the ability of the drug to reduce [ trip days ] even in normal healthy volunteers. And we believe that, that will give us a good steer of what the therapeutic range may be in patients.

And as Kate mentioned earlier, this is a very tunable drug where we expect to be able to use it across a wide range of therapeutic doses. And that may be in as a single agent as we illustrated in our mast cell webcast last week, where the mast cell is really the driver, like chronic urticaria. And then we've shown in our BLU-222, in our EGFR program that we make highly combinable molecules. And that's going to be the essence of that next wave of investigations where we're looking in more complex diseases, where the standard of care is well established such as asthma, where the combination is going to be necessary to really forward the field in those indications.

And so as we enter in the patients next year, that will give us a sense of what our dose range is for patients who have mast cells that are causing disease and then we'll be able to look at, as Fouad said, in a number of different, more complex indications and understand where that therapeutic range is and get a quick proof of concept in those indications.

And then with respect to elenestinib, as we've said, we are getting more and more data as we study the patients on PIONEER, and we learn more from commercial patients about the really complex nature of systemic mastocytosis and the broad breadth of patients that can benefit in many different ways. And so we look forward to sharing more by -- before the end of the year about our design of HARBOR and really our holistic approach to the development of elenestinib and SM.

[Operator]

Your next question comes from the line of Colleen Kusy from Baird.

[Colleen Hanley, analyst]

Congrats on the quarter. Any commentary on the -- how you're measuring the early success of your DTC campaign and what your plans are to invest further in the second half of this year?

[Kathryn Haviland, executive]

Yes. So I think I'll hand it to Philina. I think our direct-to-consumer campaign really is evidence of our conviction that we have a tremendous opportunity to help just a vast array of patients with ISM. Philina, how do you want to think about those efforts and how we make sure that we understand they're bearing fruit?

[Philina Lee, executive]

Yes, Colleen, one of the most direct things we look at is the patient's awareness of AYVAKIT, and we've been really encouraged that the efforts to date have already increased the unaided awareness of AYVAKIT eightfold while continuing to have a lot of headroom to grow. So this is really an area that we will continue to lean into in a highly-targeted way.

We know where these patients are looking for information on the disease and we're really targeting both our media campaigns. And another thing we've talked about is the monthly sort of opportunities we have for patients to come together with other patients to share their experience on AYVAKIT.

That element of patient storytelling is so important in a rare disease where, in many cases, if an SM patient hasn't yet met another patient. So the opportunity to connect, hear about their experiences. And what the journey to AYVAKIT has been like for them, we believe will be really compelling. So we do expect to continue growing on these initiatives through the second half of the year in a highly-targeted way.

[Colleen Hanley, analyst]

That's helpful. And as a follow-up, just in your early market research, what's [ motivating ] most of the patients to keep them on treatment? And what gives you confidence in maintaining the low discontinuation rate in the future?

[Kathryn Haviland, executive]

Yes. Colleen, I mean I think that really is a testament to AYVAKIT's clinical profile. I mean patients, it's a highly tolerable drug, easy to take. I mean we saw in the PIONEER study that the side effect profile of AYVAKIT was superior to standard of care and the kind of cocktail of symptomatic treatments that patients are on, and then it's testament to the activity and the fact that we see clinical impact across a wide range of symptoms in patients.

I think -- with such a heterogenetic disease, that is absolutely critical. And that a patient, regardless of what their most bothersome symptom is, is seeing great impact in AYVAKIT. I think that is just a profound kind of equation for people that we see as resonating and patients are staying on. Becker, do you have something you want to add?

[Becker Hewes, executive]

Yes. I think this is -- a couple of questions have piqued my interest, the one about drug holidays and then this [indiscernible] about convincing patients to stay on the drug.

As Kate said, when they feel better, they don't need to take holidays, they don't need to be convinced to stay on the drug. And so that really speaks to also the way that allergists think about treating this disease and having a very tolerable therapy and treating patients see how they do. And it just speaks to why there's consistent treatment duration. And I also wanted to comment on the advanced SM duration. We're into 2 years in a leukemia-like disease, and that really bodes well for the indolent situation as well.

[Kathryn Haviland, executive]

Philina, do you want to add?

[Philina Lee, executive]

Yes. Maybe I would add on, Colleen, these are patients who are really highly motivated to regain quality of life and just to share I think even just some [ sound ] bites from engaging customers across the country, we've shared some of their patients' experiences is what we hear is patients getting their energy back, being able to go back to work at the jobs that they had to pull back on previously due to the symptoms of SM.

The ability of patients to go participate in activities with their kids or friends or loved ones, going to camp for the first time and really reclaiming and starting to remember what normal looks and feels like. So it's really kind of a profound thing, and I think we really are even just at the beginning of this journey.

[Operator]

Our next question comes from the line of David Lebowitz from Citi.

[Yigal Nochomovitz, analyst]

This is [ Yigal ] on behalf of David. So on the 3 patient proportion, I wanted to ask that like the levels went from 25% to 20%. How should we think about patient growth versus actual sales growth. And what proportion of patients will be on free goods by the end of the year? And I have one more follow-up.

[Kathryn Haviland, executive]

So unfortunately, we have to limit it to one question just because we're coming on close to time here. But -- so I believe the question is around how are we thinking about just the overall dynamic relative to free goods, again, being very early in the launch of a new therapy and building a new market. Philina, how are you kind of thinking about that as you kind of gave this view of around 20% since launch? And how do we think about that as a driver of top line versus some of the other variables, including compliance, new patient starts, our European launch, all the other things that are adding into top line.

[Philina Lee, executive]

Yes. So to your question, I think there's really a couple of things that factor into our free goods mix as we saw that decrease to 20% this quarter. So it's both the payer mix of patients with ISM, which trends more towards commercial. The second piece is that more patients were able to access paid therapy.

In terms of what to expect through the rest of the year, free goods mix is really something we'll need to continue to watch because, as you said, more patients will continue to add on and be treated with AYVAKIT. So we're in the early days of the IRA and so we need to watch how that plays out. Our expectation continues to be continued strong and steady growth in the number of patients on therapy, favorable low discontinuation rate, high compliance. We'll watch the free goods mix and continue to watch our international launches.

[Operator]

Thank you. There are no further questions at this time. I will now turn the call back to Kate.

[Kathryn Haviland, executive]

Thank you, operator. We feel great about the progress we've made in Q1, and we recognize that there's a lot of work ahead of us this year. And as we move forward into the middle of the year, we do so from a position of strength. We are well positioned to build on the momentum we've achieved here coming out of Q1 and we look forward to updating you on our progress. So thank you all for taking the time to join us today and for your continued support of Blueprint Medicines.

[Operator]

This concludes today's conference call. You may now disconnect.