Blueprint Medicines Corp

NASDAQ:BPMC

Earnings Call Transcript 2017-Q4

[Operator]

Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Full Year 2017 Blueprint Medicines Earnings Conference Call. [Operator Instructions] As a reminder, this conference maybe recorded. I would now like to introduce your host for today's conference, Mr. Kristin Hodous. Ma'am, you may begin.

[Kristin Hodous, Investor Relations]

Thank you, operator. Good morning. This is Kristin Hodous of Blueprint Medicines and welcome to Blueprint Medicines fourth quarter and full year 2017 financial and operating results conference call. This morning we issued a press release which outlines the topics that we plan to discuss today. You can access the press release as well as the slides that we will be reviewing by going to the Investors section of our website at www.blueprintmedicines.com.

Today on our call, Jeff Albers, Chief Executive Officer, will discuss Blueprint Medicines’ fourth quarter and full year 2017 business highlights and key areas of focus for 2018, Dr. Andy Boral, our Chief Medical Officer will provide an update on our clinical stage pipelines and, Mike Landsittel, Vice President of Finance, will review our fourth quarter and full year 2017 financial results. We will then open the call for your questions.

Before we get started, I would like to remind everyone that statements we make on this conference call will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors, including those set forth in the Risk Factors section of our most recent Quarterly Report on Form 10-Q filed with the SEC and any other filings that we may make with the SEC. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements.

Now, here is our CEO, Jeff Albers.

[Jeff Albers, Chief Executive Officer]

Thanks, Kristin, and good morning everyone. 2017 was a year of significant accomplishment for Blueprint Medicines as we advanced our pipeline of clinical and research aided programs and moved closer to realizing our vision of delivering transformational genomically targeted medicines to patients.

I want to highlight in particular our fourth quarter achievements which served as an excellent capstone [ph] in 2017. We concluded the year with the presentation of updated data from two clinical studies at avapritinib which demonstrated remarkable clinical activity in three distinct patient populations.

We believe these results provide a strong foundation for continued, rapid development of avapritinib in patients with gastrointestinal stromal tumors, systemic mastocytosis and ultimately a range of other diseases in which subsets of patients have KIT or PDGFRα mutations.

We were also pleased to expand our pipeline in the fourth quarter with the nomination of BLU-782 as a development candidate for the treatment of fibrodysplasia ossificans progressiva, or FOP a severe ultra rare disorder.

In addition, we provided preliminary update on our rapidly advancing Phase I trial of BLU-667 in RET-altered cancers. Reporting that BLU-667 was clinically active in non-small cell lung cancer and medullary thyroid cancer patients.

Finally, we significantly strengthened our balance sheet with a follow on financing in December.

Coupled with the continued advancement of our Phase I trial of BLU-554 in hepatocellular carcinoma, our progress in the fourth quarter positions us for an exciting year ahead. By the end of 2018, we are expecting our four therapeutic candidates in clinical development for six plus tumor types and rare diseases.

Additionally, we’ll continue to expand our research stage portfolio and we expect to have upto nine discovery programs by the end of 2018 including upto five programs under our cancer immuno therapy collaboration with Roche.

We obviously recognize that these are ambitious goals for a company of our size, so to achieve them we’ll focus our efforts on four key areas. The first is continued advancement of avapritinib toward initial registration in the U.S. and Europe. Based on the consistency of activity we have observed today, we believe avapritinib has the potential to provide benefit to a broad population of patients with diseases driven by KIT or PDGFRα mutations.

To this end, we’ll concentrate our efforts on the following activities. First, rapidly enrol our ongoing trials across multiple populations within GIST and systemic mastocytosis, second seek feedback and provide updates from global regulatory agencies on the most appropriate task forward for these trials, third, initiate additional registration enabling studies including a Phase III trial versus regorafenib in third line GIST, a Phase II trial in advanced systemic mastocytosis and a Phase II trial in indolent and smoldering systemic mastocytosis.

And fourth, present updated data across multiple GIST and systemic mastocytosis patient population in 2018. Our second area of focus is to define the clinical path forward for BLU-667 and BLU-554. For both programs, we expect new data along with regulatory feedback to inform our development plans.

For BLU-667 we are on track to present dose escalation data from our ongoing Phase I study in RET-altered cancers in the first half of the year and then for BLU-554 we expect this year additional data from our ongoing Phase I study including initial results from the TKI-naïve expansion cohort in the second half of the year.

Our third area of focus is to expand our robust differentiated research pipeline by continuing to optimize our drug discovery platform. In 2018, we plan to advance BLU-782 towards a clinical trial in [Indiscernible]. In addition, we plan to nominate atleast two more wholly owned discovery programs while also advancing our highly productive collaboration with Roche.

Our fourth area of focus is to continue to evaluate strategic business development opportunities. With a strong balance sheet and growing internal operational capabilities, we are focussed only on transformative partnership that enable us to accelerate our development programs and/or expand our global reach.

All-in-all 2018 looks to be another event filled year at Blueprint Medicines' as we continue to learn more about the clinical profile of our investigational medicines and work hard to evolve the company into a fully integrated, commercial state biopharmaceutical company.

Now, I’d like to turn the call over to Andy Boral, our Chief Medical Officer to discuss our clinical activities. Andy?

[Andy Boral, Chief Medical Officer]

Thanks, Jeff and good morning everyone. As Jeff described, we made great progress across our pipeline of clinical stage assets in 2017. With our preliminary update on the BLU-667 trial in December, we’ve achieved clinical proof of concept for our three lead drug candidates.

Built on this success, we plan to significantly expand clinical activities across the portfolio in 2018 with a goal of rapidly developing investigational medicines toward global regulatory approvals.

This morning I’ll provide an update on the avapritinib development program and preview an anticipated 2018 data milestones across the portfolio. First, an update on avapritinib clinical activity in advanced GIST.

As we announced in the fourth quarter, we expanded the ongoing Phase I trial which we now call the navigator trial based on strong clinical data in both KIT and PDGFRα-driven GIST.

Specifically, we increased the third line sub cohort to 100 patients and we added a second line cohort patient data showing that avapritinib covers a broad spectrum of KIT mutations implicated in GIST.

Enrolment of the Phase I trial is progressing very well. We’ve enrolled about 50 patients with PDGFRα-driven GIST in trial today and we are on track to complete enrolment by mid-year.

As we previously discussed, we believe there is an opportunity for an early approval based on the remarkable data we’ve observed in this population today. In addition, the third line plus cohort of a 100 patients is now fully enrolled. Collectively, we believe rapid enrolment across both populations highlights the significant need for new therapy in advanced GIST.

Finally, we are on track to initiate the Phase III voyager trial in the first half of this year with the goal of supporting registration of avapritinib in the broader patient population. This global randomized trial will compare avapritinib regorafenib in third-line GIST with the primary endpoint of progression free survival.

We are also expanding the avapritinib program in systemic mastocytosis, now called the Explorer trial based on the very strong clinical data we presented at the ASH Annual Meeting in December.

On this slide, we summarize some of the key data. As you can see from the water fall slide, avapritinib is clinically active at all those servers [ph] tested which gives us confidence to explore lower doses in indolent form of the disease.

Overall, 72% in valuable patients had an objective response and all high disease control. Importantly, avapritinib was well tolerated in most adverse spends recorded by investigators with mild to moderate and there were no discontinuations due to adverse events.

Each data combined with our ongoing work to develop additional outcome measures provide a strong framework to engage global regulatory authority in the first half of this year with the goal of establishing a pathway to registration.

We plan to initiate a registration enabling Phase II trial in patients with advanced systemic mastocytosis in the first half of 2018 and to initiate a Phase II dose finding in proof of concept trial in patients with indolent and small and systemic mastocytosis in the second half of the year.

In the meantime, we continue to enrol the expansion portion of the ongoing Phase I study with the goal of generating additional data at the recommended part 2 dose.

As Jeff mentioned, we’ll have a continued cadence of important data disclosures throughout 2018. One of our first key milestones will be initial dose escalation data from the Phase I clinical trial of BLU-667 in patients with RET-altered cancers.

BLU-667 is our highly selected inhibitor of RET fusions and mutations. Based on pre clinical data, we believe, BLU-667 has the potential to offer more potent inhibition of RET with fewer off-target toxicities compared to currently used multi kinase inhibitors with RET activity.

In addition, BLU-667 was specifically designed to inhibit predictive mutations with the goal of enabling more durable responses. In the upcoming presentation, we reported detailed picture of a dose escalation portion of the trial including safety and clinical activity in multiple patient populations across a range of dose levels.

For avapritinib, we plan to report increasingly mature data from the ongoing Phase I trial in patients with advanced GIST including updated data for the PDGFRα and third line sub [ph] cohorts and initial data from the second line cohort.

As I previously mentioned, we also aim to present initial data from the expansion portion of the Phase I advanced systemic mastocytosis trial later this year. In addition, we’ll share updates on our anticipated path to registration as we obtain feedback from global regulatory authorities across both avapritinib programs.

For BLU-554 we expect to record new data from the expansion part of the ongoing Phase I trial in advanced hepatocellular carcinoma in the second half of 2018 including initial results in the new -- TKI-naïve cohort that were opening [Indiscernible]

Finally, it’s an advanced BLU-782 towards a clinical trial in patients with FOP relating to disclose pre clinical data to support our initial development plan later this year.

I also want to take a moment to highlight a key component of our overall development strategy. Identifying and treating patients based on underlying genetic driver of their disease. Our ongoing BLU-667 trial includes a basket [ph] cohort that will serve to identifying other RET-driven tumors that occur at lower frequencies.

Similarly, with proof-of-concept established for avapritinib in GIST and systemic mastocytosis, we now plan to initiate a trial targeting additional diseases driven by mutant KIT and PDGFRα beyond these anchor indications.

Overall, 2017 has been a great year at Blueprint with tremendous progress across the portfolio and we look forward to an exciting 2018. Now I’ll turn the call over to Mike to review our financial results from the fourth quarter and full year 2017. Mike?

[Mike Landsittel, Vice President, Finance]

Thanks, Andy. Blueprint Medicines continues to operate from a position of financial strength. As Jeff mentioned, we ended 2017 with successful close of a follow-on offering, which resulted in net proceeds of approximately $325.7 million. This will enable us to continue funding investments in near and long-term value drivers across our clinical and research stage portfolio, including the registration enabling clinical trials for avapritinib that Andy just mentioned.

Now, turning to our fourth quarter and full year 2017 P&L. Collaboration revenues were $1.6 million for the fourth quarter of 2017, compared to $7.7 million for the fourth quarter of 2016.

Revenues were $21.4 million for the full year 2017 compared to $27.8 million for the prior year. This decrease in revenues was primarily due to the termination of the Alexion agreement during the fourth quarter of 2017.

During the quarter, we incurred $43.6 million in R&D expenses compared to $24.1 million for the same period last year. R&D expenses for the full year 2017 were $144.7 million compared to $81.1 million for the full year 2016.

This increase in R&D expenses was primarily driven by increased clinical and manufacturing expenses associated with advancing avapritinib, BLU-554 and BLU-667 further into clinical development as well as increased personnel related expenses.

G&A expenses were $8.1 million for the fourth quarter of 2017, compared to $5 million for t he fourth quarter of 2016. For the full year, G&A expenses were $28 million as compared to $19.2 million in the prior year.

This increase in G&A spending was largely due to increased personnel related expenses as well as increased professional fees including both market research and public relation costs.

Our net loss for the quarter was $49 million, or $1.23 per share compared to a net loss of $21.3 million or $0.75 per share for the fourth quarter of 2016.

For the full year of 2017, net loss was $148.1 million or $3.92 per share compared to a net loss of $72.5 million or $2.64 per share for the full year of 2016.

Now turning to our balance sheet. We ended 2017 with cash, cash equivalents and investments of $673.4 million compared to $268.2 million as of December 31, 2016. This increase in cash was primarily due to the net proceeds from our follow-on offerings that closed in April and December of 2017, partially offset by cash used to fund the operations.

And based on our current plans, we expect that our cash, cash equivalents and investments excluding any potential option and milestone payments under our collaboration with Roche will enable us to find our operating expenses requirements CapEx requirements in to mid 2020.

So as we move forward towards executing on the key priorities and milestones for 2018 as Jeff and Andy outlined earlier, we are now beginning to ramp up our pre-commercial investments. This includes expanding our manufacturing investment to provide both clinical and commercial drug supply as well as building the foundation of our commercial infrastructure for avapritinib.

Accordingly, we expect that our operating expenses will continue to accelerate in subsequent quarters, similar to the trend we saw in 2017, as we continue to accelerate our efforts to bring medicines to patients.

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

[Operator]

[Operator Instructions] Our first question comes from Terence Flynn with Goldman Sachs. Your line is now open.

[Jason Jakoby, Goldman Sachs]

Hey thanks for the question. This is Jason Jakoby on for Terence. Can you provide an update on BLU-667 and would it be reasonable to expect initial data at ACR ASCO. And then just any update on efficacy or safety that you are seeing there, since your last disclosure in December? Thanks.

[Andy Boral, Chief Medical Officer]

Yes, hi Jason, its Andy I can take that one. So as I said, we plan to update data from the ongoing study -- medical meeting in the first half of the year. It will be a -- as we’ve done before a full detailed update on the safety data, the activity data, enrolment, etcetera. But, as also as we’ve done before, we plan to disclose data at a Congress event at this point we won’t say more about what’s coming.

[Jason Jakoby, Goldman Sachs]

All right. Thanks.

[Operator]

Our next question comes from Andrew Berens with Morgan Stanley. Your line is now open.

[Andrew Berens, Morgan Stanley]

Thanks guys, appreciate it, and thanks for the very helpful slides. Just one question on the GIST program. Now that Navigator is going to have second line patients, it seems like that could open the door sort of label, a broad label in refractory GIST. Is there any possibility that you could ask for a broad label ahead of getting Phase III data?

[Andy Boral, Chief Medical Officer]

Andrew, its Andy I’ll pick that one as well. So as I said, we are really excited by the broad activity that we see with BLU across the range of mutations. And that was really the driver for opening the second line group in the ongoing navigator trial.

We think and that really should be based on, should be based on data driven decisions and I think I see two potential paths forward in second-line, certainly a based case would be that in a second line population, we would need to do some kind of randomized study comparing to a compound I don’t know what like -- similar to the approach in third line, but certainly a big part of the big part of the second line cohort in the current study has to do detailed genetic analysis and if we saw high degrees of activity in a highly refractory group or a specific subset, we would certainly contemplate bringing those data through agencies for a [Indiscernible] in a subset as part of the current data set.

[Andrew Berens, Morgan Stanley]

Okay. And what should we look at as the bar for high success in the second-line setting?

[Andy Boral, Chief Medical Officer]

Yes, I guess I can’t speculate on that. That will be the product of ongoing regulatory discussions; certainly it will be a high responsibility with good durability.

[Andrew Berens, Morgan Stanley]

Okay. All right, thanks appreciate it.

[Operator]

Our next question comes from Eric Schmidt with Cowen and Company. Your line is now open.

[Eric Schmidt, Cowen and Company]

Morning and thanks for the updates. Maybe another one for Andy on avapritinib and the plans in advanced systemic mastocytosis, is can you just give us a little bit more detail on where your regulatory discussions ended up with in terms of the trial design, the Phase II registration-enabling trial design, should we just expect something similar to you might have stored in that setting.

[Andy Boral, Chief Medical Officer]

So the regulatory discussions are ongoing and we will update as we get definite or more – over the course of the year and expect that will be in the context of when we update on data from the ongoing study. But the regulatory discussions are not gaining our plans, so we are currently expanding the working on the expansion part of the ongoing Phase I study and we are getting -- we’re working full speed ahead to launch the single-arm Phase 2 Advanced SM study. We do think those two datasets together will provide a very strong regulatory package that cover a broad range of the SM patient population and then I think what we really will get out of the addition of the separate Phase 2 study are integration of patient reported outcome data. We’ve developed a specific patient reported outcomes tool for that study that’s validated in Advance SM, and also a very strong essential assessment response for IWG criteria. So we think those – we’re confident that those two datasets together will make a strong regulatory package.

[Eric Schmidt, Cowen and Company]

Okay. Then on the expansion of the clinical development of 285 beyond GIST and systemic mastocytosis. Can you comment on what other tumor types you looking there I assume maybe AML and others?

[Andy Boral, Chief Medical Officer]

Yes. So turns out at red – excuse me, KIT and PDGFRα mutations are seen across – low frequencies across a broad range of both solid and hem malignancies. And as we kick-off – as we finalized plans and kick-off a study in a basket – a basket who would include both hem malignancies and solid tumors, certainly they are subsets of the AML that have KIT mutation and KIT-driven. PDGFRα has shown up in stromal, but there is a broader range, KIT mutation itself in melanoma, so it would be a fairly open-ended study and the goal really would be to find the key sites both in Europe and U.S. that routinely sequence their solid and liquid tumors to get us a broad range.

[Eric Schmidt, Cowen and Company]

Thanks very much.

[Operator]

Our next question comes from Eun Yang with Jefferies. Your line is now open.

[Eun Yang, Jefferies]

Thanks very much. I have a few questions on 667, so although it’s a small number of patients --showed about 75% response rate in non-small cell lung cancer. So do you think that’s the kind of efficacy bar for selective RET inhibitor?

[Andy Boral, Chief Medical Officer]

It’s Andy. Again, I can’t really speculate on what is would be expected in general. But its one example, certainly they saw a good activity. We will present our data as we pull us together to meeting this year, I would expect. And maybe just one clarifying point that does not include the KIF5B fusions which is the common within lung cancer, so that maybe slightly misleading.

[Eun Yang, Jefferies]

Okay. And then in your current dose escalation study, have the most non-small cell lung cancer patient experienced checkpoint inhibitor such as anti-PD1?

[Andy Boral, Chief Medical Officer]

It’s a mix, but yes, it just becoming more common therapy. So we accept and we’ll have patients who had any mix or prior therapies.

[Eun Yang, Jefferies]

Okay. And then last question…

[Andy Boral, Chief Medical Officer]

Maybe I’ll just add that certainly when we present data we will describe the prior therapy, and if we can make any conclusions about the relevance we’ll let you know.

[Eun Yang, Jefferies]

Okay. And the last question. So at least with the multi-kinase inhibitor when you combine there with other products such as -- inhibitor, response rates have gone up nicely. So, I’m just wondering any kind of potential combinations study with the 667 that you’re planning in the future?

[Andy Boral, Chief Medical Officer]

Yes. The board development plan of 667 will include potential combinations, the current study is pure single agent and those decisions will evolve that we accumulate more data.

[Eun Yang, Jefferies]

Thank you.

[Operator]

Our next question comes from Arlinda Lee with Canaccord Genuity. Your line is now open.

[Arlinda Lee, Canaccord Genuity]

Hi. Thanks for taking my questions. I have a few of them. One the PDGRF, you continue to guide to having complete enrolment cohort mid-year. When we see initial data at your end in terms of response rate or given that you hold out for durability data?

And then secondly on indolent, systemic mastocytosis, what kind of information are you guys looking for and the trial that you’re planning to start later this year? Thanks

[Andy Boral, Chief Medical Officer]

Hi. It’s Andy. So on the PDGFRα and in fact ongoing GIST study in general, we do plan to update on that study later this year and that would include update on data for both PDGFRα and the KIT-driven cohort, as well as initial second-line data that we’ll have it that time. So that will a complete study update and we look forward to sharing that in the coming months.

[Arlinda Lee, Canaccord Genuity]

Okay. Thanks.

[Andy Boral, Chief Medical Officer]

For the indolent systemic mastocytosis study, yes, we are planning to kick-off the study in the second half of this year. And they are based on the – one of things which excites us a lot about bringing in avapritinib -- indolent systemic mastocytosis is the fact that we’ve seen activity in the advanced population at the lowest dose level, starting dose in that study was 30 milligrams. And that includes activity in bone barrow, tryptase reductions, spleen [Ph] size as Dr. DeAngelo described at ASH.

So with that in mind, we anticipate developing the drug at lower dose levels in indolent disease and the study we start later this year will be a two-part study. The first part will be a dose finding study where we’ll explore several dose levels in parallel. It doesn’t need to be a sequential escalation since we've already defined MTD. So the parallel dose finding study based on part-one will identify an optimal dose to take forward and that would go into part-two of study which should be the more definitive efficacy study that we actually expect to be a randomized placebo controlled looking at patient outcome tools as the primary endpoint since the patients are not valuable for response by IWG.

[Arlinda Lee, Canaccord Genuity]

Okay, great. Thanks very much.

[Operator]

Our next question comes from Dane Leone with BTIG. Your line is now open.

[Dane Leone, BTIG]

Hi. Thank you for taking my questions. So, if I could start with one that just a bit broader. When you started your clinical programs like with avapritinib, you took a more traditional development path of going in later lines and working your way up. It seems like at least in this program and potentially in the RET programs you’re pivoting to more of a broader label-based on mutation more in the vein of I guess low entrectinib [ph]. Can you just give us a comment of how you see your clinical strategy evolving and how that's being shaped by some of the changes that the FDA and I guess maybe comment specifically on the RET program and how you think you're going to approach developing those clinical trials over time?

[Andy Boral, Chief Medical Officer]

Yes. Dane, it’s Andy. I’ll start-off and Jeff you can chime in if you like. But – so yes, that’s – we think lot about that and I think there are several pieces to that question. For starters actually I think that avapritinib is a bit different then BLU-667 just in the kinds of population you can address with avapritinib there’s a very clear path-forward from the beginning in the GI stromal tumors and advanced systemic mastocytosis. At least in GI stromal tumors there’s a well-defined targeted drug kind of progression going from imatinib to [Indiscernible] to regorafenib.

So I think – so we really pick the approach, so we picked because – I think will be the most expedited path to a rapid approval and then it keep things up nicely to move early into therapy, and nice pose and some ways that more traditional approach, but I think its really the quickest approach to approval and the best way to get the drug, the medicine available to the broadest number of patient soon.

We knew that in early GIST, the expectation would be large randomized – well, maybe not that large, but it would certainly be randomized, not an accelerated approval on the single-arm. BLU-667 is a little bit different. The target anchor indications there are lung in particular and medullary thyroid cancer. But in lung cancer the paradigm is just different, in selected populations there’s a well established paradigm for starting with a target therapy ahead of chemotherapy in the setting of the RET population.

There are no kinase inhibitors approved. They are in a targeted therapy. So it’s different than GIST. So there’s a nice opportunity to move more quickly into earlier lines of therapy we think with the targeted agent. But even there most of the patient like among first study have had prior standard chemotherapy. In both cases we want to expand to broad genetically-based basket population. So I think we’re thinking about that similarly for both. Just to add, the opportunity there seems initially put straightforward for RET where patient -- people who were already broadly sequencing more tumors.

[Jeff Albers, Chief Executive Officer]

And maybe I’ll just jump in and even take a step further back as you opened up as a philosophical question. For every -- and this is Jeff. For every program when we nominate a program, so this is early in discovery, we develop the target product profile and one of the mandates internally is that there ought to be a potential for approach to a breakthrough therapy designation and a very rapid development path in at least one indication.

Then the second tenant is that we will always follow the data. That will let the data guide us to the next subsequent indication. So in essence a program earns continued growth as we think about it within the portfolio that based on signals we see, areas of interest that are opportunity that emerge, any program can expand. And then the third component is that, we've course will take macro environment events into account whether that would be changes in regulatory tone and/or competitive landscape that we understand we don’t develop these investigational medicine in a vacuum.

And so we constantly as Andy said, debate and pressure test the optimal path-forward and we don't pretend to know exactly how it will play out when we start a program, but we always want to have a clear starting path.

[Dane Leone, BTIG]

Great. And maybe I could follow up with one on the indolent smoldering systemic mastocytosis plans. I think a number of my colleagues were trying to get out this question, so ask it little bit more directly and also because the party fell by doing across indication comparison, but when we think about the regulatory pathway in the indolent setting are you thinking generally that the clinical endpoints are going to be something like what we saw with apalutamide in the SPARTAN trial where it was looking at metastases free survival where it's more of a progression end-point versus something that would be a --that you're using a voyager, explorer, navigator which was a response rate type endpoint.

[Andy Boral, Chief Medical Officer]

Dane, I just want to clarify, are you talking about indolent systemic mastocytosis here?

[Dane Leone, BTIG]

Right. Yes, because it’s going to be a little bit different. Clinically you’re trying to treat people to prevent progression into a more aggressive form of the disease and that obviously will weigh in terms of what the clinical endpoints will be defined as?

[Andy Boral, Chief Medical Officer]

Now for sure, actually it will be more different than that in fact. Mean, indolent systemic mastocytosis isn’t a malignancy at least in any traditional sense there. There is no response and there is no way to measure response at least that’s been currently evaluated or defined. And what really makes the disease problematic are the broader array of constitutional and other symptoms the patients have. GI, nausea, and vomiting, and rash and pruritus, and bronchospasm, they don't – the amount of mash holes in the bone marrow don't actually correlate well to the disease burden, the amount of tryptase in the blood doesn’t correlate well to the disease activity. And so this – I think as started to describe when I talked about the study we’re planning, in this disease it will be a patient reported outcome tool that will be the primary endpoint that measures these symptomatic impact of the disease on the patient and we are developing a – we’re actually well on our way of having developed a validated indolent systemic mastocytosis specific PRO [ph] tool which will be incorporated in ready-for-use and in corporation in a validated way in the study we start the second half of this year.

So its probably not even around time to progression or the rate of progression from indolent to advancing is quite slow and pretty – it doesn’t actually happen that all by the offense, so that’s not really practical endpoint, it’s only about improving patient disease symptom.

[Dane Leone, BTIG]

Great. If I could squeeze in one last one on ALK2 program. So you took that program back, you’re obviously moving forward at FOP, but clearly there is other opportunities with ALK2 specifically? Is that going to -- the first question I ask, is that how we should think about this program in the broader scheme philosophically of how you nominate different programs. That wasn't – essentially I’m asking this isn’t just a recycle program. You put it back through the vetting test of your methodology to actually say, yes, this is something we’re going to move forward with clinically because we see a broad opportunity set. Is at the right way to think about it?

[Jeff Albers, Chief Executive Officer]

So, this is Jeff. Maybe I’ll take the second part of that question about how we evaluated and then Andy can weigh in on the clinical development path. So, I think you capture that well. When we retain cut back the rights from Alexion, the first order of business was to complete that transition. The second piece was to evaluate the molecules we’re testing at a time. When that rights came back we weren’t sure if we would end up with the development candidate that hit the target product profile that we and Alexion had agree to. Subsequently we not only did that but as Marion Dorsch, our CSO highlighted on our last call. We treated those expectations for that bar, and that’s preclinical data that we’ll look to share later this year.

And so with that data in hand we put out two programs, BLU-782 into the same process, we do it with you all our programs, evaluate and what’s the opportunity, how do we think about the probability of success. What’s that the clinical development path? And also with an eye on to the evolving landscape in terms of potential treatment opportunities, which has accelerated quite a bit frankly since we first initiated this program a couple years back. And with all that said, we felt like the approach of targeting the underlying driver of disease mutated out to was a very promising approach.

There was a development path that we thought is available and when we looked at that program vis-à-vis other opportunities, felt like it was one of the most promising and we wanted to fully funded going forward. And then maybe Andy you weigh on the development path.

[Andy Boral, Chief Medical Officer]

Yes. So as Jeff said, we really think that targeting the point mutation that’s the fundamental driver of this rare genetic disease is certainly the most likely way to have a huge impact on the disease. And we think we are the only ones at least that we know with a highly selective inhibitor that can do that. So in that setting we are working hard now with the variety of experts in the fields to develop the best – the most effective development path to think about the most effective ways to measure the disease, to understand the most efficient way to develop study. I think we’re all really excited about the opportunity in FOP.

[Dane Leone, BTIG]

Thank you very much.

[Operator]

Our next question comes from Michael King of JMP Securities. Your line is now open.

[Michael King, JMP Securities]

Hey, guys. Thanks for squeezing me in and congrats on the progress throughout 2017. I just had a few couple of cleanup questions. I'm just – and I have lot of questions of about 667 obviously we’re all very excited about it. I don't know at this point if you guys can say anything sort of number of the dose levels that you’ve gotten through to-date?

[Andy Boral, Chief Medical Officer]

Yes. It’s Andy. Mike, we’re just not going to say anything until we present the data. It’s coming up then we’ll have -- It will be the second quarter of this year and what we'd really like to do is just pull everything together as we’ve done in the past, if you [Indiscernible] presentation

[Michael King, JMP Securities]

Okay. But, can you – its just based on your answers to the previous questions, Andy, its safe to say that everybody in this study will have gotten at least one prior round of chemotherapy? In other words, are there any naïve patients in there that were either ineligible for chemo or refused it?

[Andy Boral, Chief Medical Officer]

Again, we’ll get – we’ll lay that out as we get there. You’ll have to expect they essentially have normal type chemotherapy that have non-small cell lung cancer.

[Michael King, JMP Securities]

Okay. And then there was a recent article in J Thoracic Oncology. They talk about the landscape, the RET landscape. And what was interesting to me was the variant – the various diagnostic techniques that are used to confirm RET positivity. And I would understand would guess that these patients, the patients in study now are based on archival tissue. But would you have to work with a diagnostic KIT company to try to come up with a standardized RET fusion test either IHC or QPCR something like that for frontline patients?

[Jeff Albers, Chief Executive Officer]

Yes. Mike, Our going assumption now -- so first of all, we allow patients based on their local testing, there are all the sites that we use have robust RET testing. As you said, there are few approaches to it. We are as we’ve done in other studies looking at sort of a tumor DNA in all patients and we had an opportunity, we’re also planning to look at partners for a CDx development, but its a rapidly evolving field even just from a regulatory perspective what whether CDx will be needed down the road. Whether that whole regulatory systems going to change or not. Our going assumption at this point is that we’ll need the CDx, but we’re certainly very inflexible in terms of how we approach that as the landscape changes.

[Michael King, JMP Securities]

Okay. Fair enough.

[Jeff Albers, Chief Executive Officer]

We’ll be certainly ready to have one if needed.

[Michael King, JMP Securities]

Got it. And then if we could just spend a second on 554, just wondering, again in the TKI naïve population, can you talk about what data you would be ready to present. Would it be overall response rate or would you have more fulsome endpoints like PFS and other data points when you present that data later?

[Jeff Albers, Chief Executive Officer]

Yes. So we – I mean, again it would be similar to what we’ve done before. It will be an update on the data available at that time. The TKI naïve cohort is relatively new to the study, so duration of treatment and duration of progression-free survival things like that will be less mature than for the other cohorts, so it will a mixture. But I think it would be focused more on and do we see the response rate similar than what we saw in the small number of TKI naïve patients that were reported as now and what is the durability to the degree that we can talk -- we can describe it at that point in time.

[Michael King, JMP Securities]

Okay. And if I could just maybe a closing question for, Jeff. This is a first time you guys have mentioned the Roche agreement publicly as far as having tangible, I guess tangible results or tangible evidence of that collaboration. Can you maybe give us little more of a clue what we might see come out that. Are we going to talk about molecules? Are we going to talk about targets? Anything else you might be able to say about that right now?

[Jeff Albers, Chief Executive Officer]

Sure. So, the feedback there is consistent with what we talked about before. That obviously any disclosure within the context of a collaboration we require both our approval and Roche’s approval, so that add a level of complexity. But the collaboration is now moving along quite well and so we wanted to highlight that. It now makes up a substantial portion of our early discovery efforts, the programs that were initiated right at the time of signing of the collaboration. Those two programs have moved – had made very nice progression and so we’ll find time that we agree with Roche to unveil those but we’re not to guide to when that might be.

[Operator]

And your next question comes from Laura Chico with Raymond James. Your line is now open.

[Laura Chico, Raymond James]

Hey, thanks guys for taking my question. Appreciate it. So I guess I wanted to switch back over to 285 in GIST. And I guess I’m curious how should we be thinking about potential sequencing of therapies? And I guess I’m speaking more specifically about another agent in development DCC-2618, I guess just as you’re progressing up in earlier lines of treatment, I guess I’m wondering, if a patient encountered one of these agents could you envision scenarios in which the other agent would be use sequentially and I guess along those lines could you remind us about any cross resistant profiles or data that you might have on these agents? And then I have a follow-up.

[Andy Boral, Chief Medical Officer]

Laura, thanks for the questions. It’s Andy. I’ll start off with that one. So, maybe I want to step back a minute just to remind everyone that avapritinib is and the DCC molecules really take very different approaches to inhibiting KIT, so we have focused very much on a selective inhibitor that hit KIT, PDGFRα and really very few other Kinases while and binds to the this Type 1 inhibitor, binds to the active form of the KIT and PDGFRα molecules, while the DCC compound is much less selective and as far as we can tell binds to the inactive form. So just from that basic perspective, I actually think that it's unlikely that the two strongly cross resistant.

I like to think that if in the late line GIST population where both compounds are seeing, have reported similar results at a percentage response rate percentage, but I would expect they were probably not -- you were probably not seeing activity in the same patients. So I would actually hope that on -- that together the two drugs can help more patients than either drug by itself and I would expect that one would work after the other, in particular I think that we have data for avapritinib, this is just that would be true. So a real distinguishing characteristic is avapritinib is totally active on this activation mutation in KIT at D816V in PDGFRα at D842V as well as probably covering the rest of the KIT team.

So, I think quite distinct from the DCC drug which really is not active on these activation mutations. So I think that right away offers an opportunity for distinction that if there is resistant that arises an activation mutations we would cover that and they wouldn’t. Another sideline to that is that it really gives avapritinib an opportunity in the PDGFRα subset of GIST that’s not available to DCC compound. And I think probably also to that extend to mastocytosis where almost all patients have D816V mutation.

So if you inhibit these activation – potent [ph] activation mutation I would expect activity in both PDGFRα GIST and systemic mastocytosis like we see and if you don’t inhibit them I would expect you won’t have activity there. So I think they will have different profiles and two compounds.

[Jeff Albers, Chief Executive Officer]

And maybe I’ll take it from – this is Jeff. A higher level that after matnib, sunitinib and regorafenib certainly leave room for improvement in the treatment paradigm. And I think piggybacking up of Andy’s comment, our hope and initially observation is perhaps both of these molecules are better than the available later line therapies currently, so the treatment paradigm we would hope will change. And then agree with Andy in term of the cross resistant set, I think that’s too early for us to speculate or no. As I said earlier, we let data guide us there, but I think there’s opportunity for significant change in the treatment of paradigm.

[Laura Chico, Raymond James]

Okay. Thank you. That’s helpful perspective. And then, I guess my follow-up question kind of also related in the GIST 285 setting. You mentioned concluding enrolment in the registration say by mid 2018 we’ll probably get an update before year-end. And you have breakthrough therapy designation here. And I guess, I’m wondering if I can ask a little bit more about the commercialization preparation activities you mentioning and kind of what we should be expecting there. I think just for a brief run through on the website the career openings; I’m not seeing many listings for commercial related functions at this point.

So I guess I'm just wondering when might we anticipate seeing more of a build up and kind of where you at right now?

[Jeff Albers, Chief Executive Officer]

Sure. This is Jeff. I’ll take that. So, one is we’ll find an opportunity later this year to provide by a more fulsome update on our plans from a commercial perspective. I think it’s a bit pre-mature to guide too much in that regard. But I would start with a notion that you haven’t seen a lot of positions. We don’t think there will be a lot of position early on. If a first indication is in PDGFRα, these are patients that both the U.S. and Europe are generally funneled to our academic sites. And so it's the type of build that can be -- that can occur in any in a very targeted manner, much as we think about our molecules as targeted therapies, the commercial build should actually mimic that precision nature.

So, we certainly have commercial folks on board both myself and Kate Haviland our Chief Business officer of extensive commercial experience. And Kate under her has it small team. Currently looking at and laying the groundwork for that initial commercial plan. And there are --- there will be some subsequent hires over the course of this year but we are not going to provide greater details on that at this moment.

[Laura Chico, Raymond James]

Okay, thanks guys.

[Jeff Albers, Chief Executive Officer]

We are excited about it though.

[Operator]

Our next question comes from [Indiscernible] with Citi. Your line is now open.

[Unidentified Analyst]

All right, thanks. Just a quick question on the RET-market. Could you just give us a sense as to your latest thinking on the scale of that market both in terms of incident, patience and prevalence patients and to the extent that the RET-market extends beyond thyroid and non-small cell lung cancer, I’d be interested in your thought, thanks.

[Jeff Albers, Chief Executive Officer]

Hey sure, I’ll take this. So non-small cell lung cancer we estimate that [Indiscernible] occurring roughly 1% to 2% of patients and so if you take the [Indiscernible] there in terms of overall occurrence of non-small cell lung cancer we estimate that there is anywhere from 5000 to 10,000 patients in the major markets which we defined as the U.S. EU5 in Japan, the reason of that range as we depends on how you cut it if you look at wide lines of treatment, it’s upwards to 10,000 but if you look at from a front line perspective, it’s close to that 5000 number.

In medullary thyroid cancer, it occurs at a mutations occur at a higher rate, it’s around 60% mutations but a much smaller patient population obviously , so our estimates in those major markets are around 600 patients total. And then if you go, extend that to the basket, we haven’t provided specific guidance but it is clear in some analysis we’ve done and others have done that you see RET-fusions primarily that there are some mutations as well, occurred a little frequency across a broader range of solid tumors and yet there before we provide any type of guidance or estimates we are going to see that data evolve a bit more.

[Jeff Albers, Chief Executive Officer]

Great. And regarding the gene panels, is it currently the case that the fusions in the mutations for RET are represented on the major panels meaning thermal alumina foundation or are there some, are there still some gaps and what the panels can detect the prospect of the RET [Indiscernible].

[Jeff Albers, Chief Executive Officer]

Yes, that’s the RET fusion and mutations are well covered by the available – by the available panels. And certainly they can be done by individual specific testings while they can be tested.

[Jeff Albers, Chief Executive Officer]

Great. All right, thank you.

[Operator]

At this time, I’m showing no further questions. I’d like to turn the call back over to Mr. Jeff Albers for closing remarks.

[Jeff Albers, Chief Executive Officer]

Thank you operator. So obviously a very well rounded set of questions, so appreciate you all for taking the time and your continued interest. Really if you take a step back, we believe we had a critical moment in the continued evolution of Blueprint medicines. We have a robust platform with proven capabilities. We have a broad and differentiated clinical and research stage portfolio, and we have a hard working team that is deeply committed at improving the lives of patients. And so combined with our strong financial position currently, this foundation gives us a clear path of becoming a fully integrated biopharmaceutical company and achieving our ultimate goal, which is delivering transformative, genomically targeted medicines to patients. So with that, we’ll conclude the call and we thank you for your continued support and interest. Bye, bye

[Operator]

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program you may now disconnect. Everyone have a great day.