Blueprint Medicines Corp

NASDAQ:BPMC

Earnings Call Transcript 2020-Q4

[Operator]

Ladies and gentlemen, thank you for standing by. And welcome to the Blueprint Medicines Fourth Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I’d now like to hand the conference over to your speaker today, Kristin Hodous of Blueprint Medicines. Thank you. Please go ahead, ma'am.

[Kristin Hodous, Senior Manager, IR]

Thank you, operator. Good morning, everyone. And welcome to Blueprint Medicines' fourth quarter 2020 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.

Today, on our call, Jeff Albers, our Chief Executive Officer, will discuss Blueprint Medicines recent business highlights and 2021 corporate priorities; Christy Rossi, our Chief Commercial Officer, will provide a commercial update; and Fouad Namouni, our President of Research and Development will discuss our R&D efforts; and Mike Landsittel, our Chief Financial Officer, will review our financial results.

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 annual report on Form 10-K and any other filings that we have made or may make with the SEC. In addition, any forward-looking statements made on this call represents 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's our CEO, Jeff Albers.

[Jeff Albers, CEO]

Thanks, Kristin, and good morning, everyone.

We're happy to provide an update on recent progress, and a look forward to our 2021 priorities and catalysts. I know our industry tends to use the word transformation quite a bit, but it really isn't a hyperbole to say that 2020 was a transformational year for Blueprint Medicines. With four AYVAKIT and GAVRETO regulatory approvals in the United States and Europe, and a global collaboration signed with Roche, we're now a fully integrated global biopharmaceutical company, and we’re exceptionally well positioned to drive our next wave of growth.

As we progress into 2021, we're focused on three strategic pillars to build on our recent progress. One, to accelerate the global adoption of AYVAKIT and GAVRETO; two, to advance a new wave of therapeutic candidates to clinical proof-of-concept; and three, to further expand our precision therapy pipeline.

The first, as Christy will discuss, is centered around the anticipated approval of AYVAKIT in advanced systemic mastocytosis and the acceleration of our GAVRETO launch. With the AYVAKIT sNDA now accepted and a PDUFA date in the second quarter, we're on the verge of expanding into what we have long discussed as our most significant growth opportunity. Additionally, the development of AYVAKIT in non-advanced systemic mastocytosis is also progressing via the registration-enabling PIONEER trial. This offers the potential to further expand our commercial efforts in the near future.

And for GAVRETO, the expanded U.S. approval for forms of thyroid cancer in December positions us to continue to advance the launch in the U.S. while also focusing on applications in additional geographies.

The second and third priorities, as Fouad will cover, focus on advancing our new therapeutic candidates to clinical proof-of-concept and continuing to productively tap into our prolific research platform. We expect to make significant progress on these fronts with several upcoming presentations of new preclinical data, including the first data for our latest and newly named development candidate BLU-701 in double-mutant EGFR-driven lung cancer. We also plan to initiate clinical trials for BLU-945 in EGFR-driven lung cancer, and BLU-263 in non-advanced systemic mastocytosis.

Finally, we're excited to announce a new research program focusing on CDK2, a compelling therapeutic target across multiple tumor types, as well as a mechanism of resistance in a subset of patients who progress on CDK4/6 therapies.

I'm particularly excited to share more information about these research programs over the coming months, given the quality of the science and the scope of their respective opportunities. All of this is further supported by our strong financial position, with more than $1.5 billion in cash at the end of 2020, which enables us to continue to invest in these programs and our research engine, while we also consider opportunities to bring an external innovation where there's a strategic fit.

So, with that introduction, I'll hand the call over to Christy to provide a commercial update. Christy?

[Christy Rossi, Chief Commercial Officer]

Thanks, Jeff. Good morning, everyone.

In the fourth quarter, we continued to make progress toward our goal of delivering a portfolio of precision therapies to patients globally. With the FDA approval of GAVRETO for RET-altered thyroid cancer, the first European launch of AYVAKIT for a PDGFR-alpha GIST in Germany, and most importantly, the submission of marketing applications for AYVAKIT for advanced SM in the U.S., and now in Europe as well, we have set the foundation for 2021 to be a year of significant growth. The two most important drivers of that growth will be our anticipated U.S. launch of AYVAKIT in advanced SM in the first half of the year, as well as the ongoing launch of GAVRETO in the U.S.

Before turning to SM, let me start with fourth quarter results and the GAVRETO launch. We had net product revenues of $6.7 million, bringing our total 2020 product revenue to $22.1 million. Revenue for the quarter was primarily driven by $6 million in sales for AYVAKIT. And we also recognized $0.7 million in revenue for GAVRETO. We were pleased to receive approval in thyroid cancer late in the fourth quarter, thereby enabling us to fully launch GAVRETO across the set of indications we expect to have in the near-term.

In addition, two weeks ago, GAVRETO was added to the NCCN treatment guidelines for medullary and papillary thyroid carcinoma, which should create further awareness of this indication.

Overall, we have seen thyroid cancer patients comprise approximately one-third of the selective RET inhibitor market to-date, and we are excited to have GAVRETO available for these patients.

As we continue to advance the launch of GAVRETO, we are focusing with our partners at Genentech in two key areas. The first is increasing our share of patients, starting on a selective RET inhibitor, where we have seen good progress since December; the second is growing the overall number of RET patients who are identified and treated with a selective RET inhibitor, which will be key to enable us to realize the longer term potential of GAVRETO.

Let me start with our share of new patient starts. Following the GAVRETO approval for thyroid cancer in December, our share of new patients, starting on a selective RET inhibitor kicked-up to about 25%. We are seeing a generally balanced mix of academic and community prescribers, and the majority of GAVRETO prescribers in the fourth quarter were prescribing a selective RET inhibitor commercially for the first time. We will be focused on continuing to increase our share of new patient starts, as this metric, when combined with the prolonged duration of therapy we expect based on our clinical studies, is a key leading indicator of revenue growth. We continue to be very encouraged by feedback from healthcare providers and payers on GAVRETO's differentiated profile, which includes deep and durable responses, a predictable and manageable safety profile and convenient once daily dosing.

Our second area of focus is on increasing the percent of RET positive patients who are identified and treated with a selective RET inhibitor, which we estimate right now is around 20%. There are two key drivers here, rebounding from the impact COVID is having on cancer care in the U.S., as well as increasing comprehensive biomarker testing of all patients prior to the initiation of treatment. Data in the public domain have shown that the overall volume of clinic visits as well as rates of biomarker testing for cancer patients have been impacted by COVID. We see this in the RET market as the number of patients starting a selective RET inhibitor was approximately 25% lower in Q4 versus earlier in the year. We expect that as we approach the second half of 2021, we will see these impacts subside and the number of newly diagnosed patients rebound.

In addition, as we have seen with other biomarkers, the availability of a highly effective targeted therapy combined with educational efforts can rapidly increase the percent of patients who are identified and treated. This is an area where our partnership with Genentech plays a key role. Their efforts driving testing and patient identification across their portfolio of targeted lung therapies complement and amplify the patient identification efforts of our team. Overall, we anticipate that the total market opportunity for RET will expand, which will be another significant driver of GAVRETO growth.

Turning now to AYVAKIT, first in PDGFR-alpha GIST. We've seen consistent new patient starts and total patients on therapy in the U.S. over the past few quarters. In Europe, we initiated our first country launch in Germany in the fourth quarter. And consistent with our targeted approach, we anticipate seeing incremental growth over time with additional country launches.

Of course, our primary AYVAKIT focus is on preparing for the anticipated U.S. launch in advanced systemic mastocytosis in the second quarter. This will be a critical milestone for Blueprint as we take the first steps towards realizing the commercial potential of the largest opportunity in our late stage portfolio.

While advanced SM patients represent only about 5% to 10% of the overall SM population, these patients tend to be treated at major centers. This gives us an opportunity to focus the majority of our educational efforts on about 70 hematology centers that treat about half of all advanced SM patients in the U.S.

As I said previously, we’ve built our commercial organization with the portfolio in mind. So, we will largely flex and adapt our existing infrastructure to meet the needs of the advanced SM launch, including leveraging our portfolio footprint to identify patients who may be treated side of these main centers.

We are also beginning to think forward to a potential 2022 launch for AYVAKIT in the larger non-advanced SM population. Our clear near-term priority here is to increase patient identification with accessible and actionable testing. We believe that making blood-based testing for KIT D816V, the SM driver mutation, widely available, will help remove barriers to diagnosis for non-advanced SM patients.

Our precision medicine team has been working closely with testing providers. And in part due to these efforts, highly sensitive blood-based testing is now commercially available in the United States. We expect availability of testing to grow over the course of this year to labs, which cover about 80% of SM patients in the U.S. We are confident that increased testing, combined with disease education and other efforts, will increase the number of SM patients who are diagnosed and have access to treatment.

Over the course of 2021, I see the promise of the Blueprint portfolio translating into accelerating commercial impact worldwide. Anchored by the opportunity in SM, we will significantly expand the value we are bringing to patients with our ongoing and planned near-term launches, while building the foundation for the significant opportunities that our early-stage portfolio is poised to address.

I'll now turn the call over to Fouad, our President of Research & Development, who will provide more detail on our R&D efforts. Fouad?

[Fouad Namouni, President, Research and Development]

Thanks, Christy, and good morning, everyone. It's a pleasure to speak with you today.

I was thrilled to join Blueprint in September to lead our research and development team. Over the last six months, I have had the opportunity to work close with our scientists and clinical team as well as our executive team to chart the course for expanding our R&D vision. It's important to begin by recognizing that our future will be built on the foundation of scientific and clinical excellence.

Our research engine has been profoundly productive with two novel drugs discovered and approved in the first 10 years of Blueprint's existence, a claim we believe no other company can make. We have also nominated four new development candidates since late 2019.

We now aim to build on this progress and become the world's leading precision therapy company. For us, this means strong scientific leadership and therapeutic innovation under a focused R&D strategy in precision oncology and hematology; an expansive development portfolio, combined with the commercial capability to deliver our approved medicines to patients globally; and being the partner of choice for stakeholders across the drug development continuum.

To achieve this vision, we will evolve our R&D strategy in several important ways. First, we will deepen the integration of our research and development teams to accelerate the innovation cycle and expand our leadership in core therapeutic areas, including systemic mastocytosis and lung cancer. Second, we will build on the productivity of our research engine by continuing to identify high unmet need targets and rationally design highly selective kinase inhibitors, while exploring new modalities to expand our ability to address more targets in the field of oncology and hematology. Third, we will operate at the forefront of drug development by expanding our use of translational data, innovative trial designs and regulatory strategies to bring our transformative precision therapy to selected patient populations as quickly as possible. Finally, our culture of scientific excellence and urgency to address patient needs will continue to be the core value as we grow and expand our portfolio.

I could not be more excited to work with our R&D teams as we disclosed today our newest major research program, CDK2. This program explores an approach to target Cyclin E, an oncogenic driver, by inhibiting its catalytic partner, CDK2 or cyclin-dependent kinase 2. In subsets of patients with ovarian, breast and other cancers, amplification of Cyclin E drives malignancy and is associated with the poor clinical prognosis, representing an area of significant patient need.

Cyclin E amplification has also been reported as a resistance mechanism to CDK4/6 agents in hormone-positive breast cancer. We plan to share preclinical data for our CDK2 program at the AACR annual meeting in April and an update on our progress towards selecting a development candidate.

At AACR, we also plan to share a broad range of additional data, including preclinical data for our newly nominated double mutant EGFR inhibitor, BLU-701, highlighting its potency, high selectivity and brain penetrants. We will also report the first clinical data from our Phase 1 healthy volunteer study of BLU-263. We anticipate key themes emerging from these presentations will include the clinical path to develop our EGFR inhibitors, BLU-945 and BLU-701, to address on target resistance to EGFR agents in non-small cell lung cancer and the potential role of BLU-263 in the treatment of non-advanced systemic mastocytosis.

Beyond AACR, in the coming months, we will be working closely with the FDA and EMA on the reviews of our marketing application for AYVAKIT for advanced systemic mastocytosis, with the goal of bringing this important new therapy to systemic mastocytosis patients in the United States and in Europe as quickly as we can.

More broadly, we are building the foundation for multiple clinical data readouts in 2022, including data for AYVAKIT in non-advanced systemic mastocytosis and proof-of-concept data sets across a range of new programs. It's an exciting time to be at Blueprint. And I look forward to updating you on our progress over the course of the year.

I now turn the call over to Mike to discuss financial updates. Mike?

[Mike Landsittel, CFO]

Thanks, Fouad.

Earlier this morning, we reported detailed fourth quarter and full year 2020 financial results in our press release. For today's call, I'll touch on a few highlights from the quarter.

Total revenues for the fourth quarter were $34.1 million. We recognized $27.4 million in collaboration revenue during the quarter, primarily from our agreements with Roche and CStone. For 2021, we anticipate achieving milestone payments from existing collaborations of approximately $80 million, primarily towards the second half of the year.

As Christy mentioned, we recorded $6.7 million of net product revenues during the quarter, driven by AYVAKIT sales. With the launch of GAVRETO in the early stages and an anticipated launch of AYVAKIT in advanced systemic mastocytosis later this year, we expect meaningful product revenue growth over the course of 2021.

Our total operating expenses increased compared to the third quarter of 2020, primarily driven by investments to advance our early discovery pipeline. Looking forward, we expect to see increasing quarter-over-quarter operating expense growth driven by the next wave of research programs from our pipeline as they progress towards clinical development, including BLU-263, our 2 EGFR programs and our newly announced CDK2 program. We also anticipate continued quarter-over-quarter increases in noncash stock-based compensation expense throughout 2021.

Finally, we're entering 2021 in the strongest financial position we've ever been in as a company. We ended 2020 with over $1.5 billion in cash, bolstered by product revenues, milestone payments and proceeds from our ATM facility. This strength provides us the ability to advance our robust pipeline of wholly-owned drug candidates through development as well as the flexibility to prudently consider strategic external innovation opportunities.

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

[Operator]

[Operator Instructions] Our first question comes from Salveen Richter with Goldman Sachs. Your line is open.

[Unidentified Analyst]

This is Andrea on for Salveen. Jeff, maybe a question for you, big picture in terms of your strategy for BD, just would love to hear what you're interested in bringing in as you think on forward what could complement your current pipeline and portfolio? Thanks so much.

[Jeff Albers, CEO]

Sure. So, focusing more on inbound business development has become a large priority for us over the course, I'd say, the last six months. And the way we think about it is that we have built the capability to move precision therapies forward from the earlier stage of discovery all the way through to commercialization. And I think that's certainly an underappreciated capability to have that team in place that is ready to execute on programs.

And, when we think about varying modalities, we've been focused exclusively on kinase molecules, where our platform has and continues to identify really interesting new targets. But, we know there's a lot more out there. I mean, one of the cornerstones of our strategy has always been to think about the potential for combination therapy. So, by creating selective molecules, are there orthogonal mechanisms of action that can be complementary? And rather than partnering those with other companies, are there assets that we could go out and identify and bring in and develop internally? And so, if we think about, the core is precision therapy, but it's certainly beyond kinase inhibitors. And if I think about five years out from now, I think, our ongoing growth will be a blend, a very natural blend of continued investment in our platform, but complemented by external opportunities.

Maybe Fouad, do you want to jump in and add anything to that?

[Fouad Namouni, President, Research and Development]

Yes. Thank you. Jeff, one -- the only thing I will add is, obviously, as Jeff said, we are a blend end-to-end company with all the capabilities that will allow us to really develop and integrate additional modalities in terms of targeting more targets and new targets. One thing that's going to be very important is to continue to look at precision oncology and hematology, always follow the science and follow the high unmet need for patients.

[Operator]

Thank you. Our next question comes from Marc Frahm with Cowen and Company.

[Marc Frahm, Cowen and Company]

Maybe now that you have all or the vast majority of the preclinical data for your double and triple mutant EGFR inhibitors in place, could you maybe speak to kind of the dosing -- the therapeutically relevant doses, the safety window that you have? And maybe put it in the context of GAVRETO's early development? And yes, how quickly you think you can get into therapeutically relevant doses?

[Jeff Albers, CEO]

Fouad, do you want to take that?

[Fouad Namouni, President, Research and Development]

Thank you. Thanks, Marc, for the question. So, first, let me say that our teams have been developing rationally highly selective, highly potent EGFR 4th generation agents with the idea of really tackling the resistance to EGFR treatments in non-small cell lung cancer.

Specifically to talk about your question, Marc, let me start with 701. 701, is our double mutant, has been developed with potency for the original mutation and the CS mutation, selectivity of our wild-type and very importantly, brain penetrants. This gives an opportunity for this agent, 701, to really go and tackle resistance to osimertinib in second line non-small cell lung cancer, but also become a strong candidate for combinations with our own line 4, 5 and other EGFR TKIs.

From a 945 perspective, we call it the triple mutant because it covers all of the original mutation, the CS mutation and the TM or T790M mutations altogether. It is important to highlight for 945 that it has been developed with a very, very selective wild-type EGF window, which is about 900-fold selectivity over EGFR. Not only that this compound has the opportunity to be developed in high unmet need triple mutant tumor patients, but has clear opportunity to be a combination partner, given its clinical profile and given its ability to combine not only with our own EGFR agents and also with other agents.

All-in-all, when we look beyond the single-agent development, I think, combining both agents together has the opportunity to cover the majority of the resistance mutation in EGFR and move to earlier lines while also thinking about expanding the opportunity to additional combination in this space of lung cancer.

We are moving both of them very quickly. So, the first agent, 945, will -- we are targeting an IND this first half of the year and starting right away the Phase 1 trials for 945. We are targeting before the end of this year or second half of this year the IND for 701. We'll be developing monotherapies in combination of both agents and with other agents, with a sense of urgency because we believe there is a high unmet need in EGFR mutant population of patients that we can meet with our EGFR pipeline.

[Operator]

Thank you. Our next question comes from Dane Leone with Raymond James.

[Dane Leone, Raymond James]

Thank you for taking the questions, and congratulations on all the updates. So, maybe two things from me. One, could you maybe provide a little bit more color in terms of how you see the ASM launch going in the back half of the year? You gave us some good color in terms of how you're targeting different centers. But, how long do you think it's going to take to get access for these docs and patients? How much can you leverage the utilization of midostaurin currently to do so?

And then my second question is more of a preclinical question on your CDK2 program. Historically and classically, the issue with targeting CDK2 has been on selectivity for what you see with dinaciclib, fadraciclib and others. Obviously, these are of a high interest area, Pfizer is working on next-generation programs as well. Where do you think your angle is there? Do you think you can just actually dial in selectivity to not hit the other CDKs, or is there another premise that your team is working on? Thank you.

[Jeff Albers, CEO]

Thanks, Dane. So, Christy, why don't you take the first question, and then, Fouad, we'll pass over to you for the second question.

[Christy Rossi, Chief Commercial Officer]

Sure. So, as I said, we're excited about the prospect of an approval and launch in the second quarter, and the teams are engaging now and ready to go for that. I think, what's interesting about this is that, obviously, AYVAKIT is an approved therapy. So I think upon the indication approval in advanced SM, we are -- I think, we'll be ready to go very quickly. Our commercial infrastructure is out engaging with these key centers. In fact, we were just looking at some data yesterday, even looking at overlap with our GIST utilization for AYVAKIT. The centers that are treating most advanced SM patients, there's quite a high degree of overlap with where we already see AYVAKIT uptake for GIST.

So, I think, we have a sense of who the prescribers are? Where these patients are? Certainly, we have a sense of where midostaurin is used. Although, as I said before, I would say mido is underutilized in advanced SM, just given the limitations of the product profile. And so, we will be looking to certainly expand the opportunity for AYVAKIT beyond where mido is used. And the feedback we've gotten from prescribers, healthcare providers, KOLs is that they really see the AYVAKIT profile as being best-in-class for these patients.

So, I think, upon approval, we'll be looking to go out very quickly and focus on education. And I would demand that access should be relatively smooth, given, again, the drug is out there and available.

[Jeff Albers, CEO]

And then, Fouad, maybe you can talk about CDK2, the target product profile, and the focus in on selectivity.

[Fouad Namouni, President, Research and Development]

Thank, Jeff, and Dane, to your question. So, first, let me say, one of the programs that I was really excited about when I was joining Blueprint was the CDK2 program, and that's for a key of reasons.

One, Blueprint has really deployed their expertise in making very rational and designed molecules to be highly selective. This program is focused on high selectivity, high potency for CDK2, and the selectivities over other CDK kinases, including CDK1 and others.

The other thing that excites me about this program at Blueprint is the scope of the opportunity and the ability to help many patients with cancer. You can think of -- and cancer where the development of the CDK2 will be as monotherapy for tumors that are addicted to the pathway, you can think about opportunities for combining with other agents, like CDK4/6, and hormone therapy in cancers like breast cancer, all the way from resistant tumors to earlier lines. So, this -- I believe this will be the best -- has the potential, actually, to be the best-in-class CDK2 in the space. And I trust that the data that we'll show at AACR will be very compelling to you.

[Operator]

Our next question comes from Michael Schmidt with Guggenheim.

[Charles Zhu, Guggenheim]

Hey. Good morning, guys. This is Charles Zhu on for Michael Schmidt. Thanks for taking the questions. I dropped off momentarily there. So, I don't know if this is already asked. But, I'm kind of wondering how GAVRETO sales tracking relative to your initial launch expectations and in light of Lilly's fourth quarter performance with Retevmo? I do understand some of the color that Lilly provided during the prepared remarks, but just kind of wanted to see like [Technical Difficulty] forward and the 25% share of new patients that you're picking up. I was wondering how that breaks down between lung and thyroid, and how you see that building out.

[Christy Rossi, Chief Commercial Officer]

Sure. So, I'll take that one. So, as I said, the share of new starts is really the sort of the primary indicator that we are looking at to understand the health of the launch, along with, as I mentioned, kind of the overall size of the opportunity. Those are really the two key variables that we'd be looking at evolving over the course of the year.

Given that we essentially got the full label of six months behind, Lilly, we were pleased to get to 25% by the end of this year or last year, and we're hoping that that will continue to grow and evolve. Certainly, the feedback we're getting from prescribers has been very positive. And I think, the fact that we're seeing utilization of GAVRETO coming from new-to-market prescribers is I think a really key insight that speaks to sort of the opportunity for growth here overall, right?

So, we know that the majority of RET patients are not being treated with a RET inhibitor right now, and that's not a good thing for patients. And certainly, that's a focus that we will have to kind of grow that pie and grow that opportunity through the course of the year, which will then give us an opportunity to grow GAVRETO utilization as well.

I mentioned -- the question regarding thyroid, certainly, we view thyroid as a very important component of the overall RET opportunity. In total, it looks like it's about a third of prescriptions coming forward. It's been less than that for us, but quickly catching up, right? So, obviously, we just got the thyroid indication at the end of last year. So, we've only had that for several weeks now at this point. But, we've seen utilization of thyroid, and we believe our data there is very strong. And certainly, the duration that those patients may be treated with can be quite long as well. So, thyroid will be an important part of our focus, as we go forward.

[Operator]

Our next question comes from David Lebowitz with Morgan Stanley.

[David Lebowitz, Morgan Stanley]

With respect to the avapritinib submission for advanced systematic mastocytosis, number one, do you expect it will go to panel? And number two, will the FDA be looking also at the data from the indolent population? And I guess, do you expect you might get some commentary on that as well from the agency, an insight on their view, and how they look at that data set?

[Jeff Albers, CEO]

Sure. Fouad, do you want to start with that? The path for review for avapritinib in advanced SM?

[Fouad Namouni, President, Research and Development]

Thank you, Jeff, and thanks, David. We actually have submitted what we believe is a robust package of data for the advanced systemic mastocytosis indication to the FDA and the review started. We believe we are ready to handle the review questions and will also -- we'll be ready to handle any advisory committee if we are made aware of one. But so far, we believe that our data are robust and can lead to an approval.

In terms of the data from non-advanced systemic mastocytosis or indolent systemic mastocytosis, I think, the totality of the data we have submitted on advanced systemic mastocytosis is sufficient in our opinion and make a compelling case for the approval of this indication. Indolent systemic mastocytosis will be a separate indication. We'll be happy to submit this data when they are available later for this indication in 2022 to the FDA. But, we do not see an interaction between the PIONEER data and the approval of advanced systemic mastocytosis.

[Operator]

Thank you. Our next question comes from Peter Lawson with Barclays.

[Peter Lawson, Barclays]

Just more of a modeling question than anything else, just for Mike around how we should be thinking about SG&A and R&D for 2021? And, how we should be thinking about, if there's any changes for GAVRETO in 2021 in the sense of total revenues and payments to Roche, et cetera? How that should be accounted for in the P&L?

[Mike Landsittel, CFO]

Yes. Thanks, Peter. So, I think in terms of operating expenses, what we've guided to is that we expect to start to see increasing quarter-over-quarter operating expense growth through the year. And this will primarily be driven by our R&D investments in our early stage pipeline as we move 945 and 263 further into the clinic. We ask for SG&A, we built out our commercial infrastructure last year. So, I think there will still be some incremental growth as we approach the advanced SM launch. But, R&D will be one of the key drivers for that going forward.

In terms of milestone payments for the year, what we've guided to is that we anticipate approximately up to $80 million in potential collaboration revenue to come in, in 2021. We think that's going to be weighted towards the back half of the year, kind of middle back half of the year. And that will be -- that revenue will be accounted for as collaboration revenue as it comes in.

[Operator]

Our next question comes from Arlinda Lee with Canaccord.

[Arlinda Lee, Canaccord]

I have two. One, you guys alluded to 901 and 945 combination in frontline. I missed whether the preclinical data would be at AACR, or would that be sometime later this year? And then, secondly, as you prepare for ASM launch this year and more indolent disease next, our channel just indicates that midostaurin sales could be up to half of current sales. So, I'm wondering how that might affect your regulatory process and your launch preparations. Thank you.

[Jeff Albers, CEO]

So, thank you, Arlinda. On the first question, I'll take that, in terms of the timing of data. So, AACR is going to be a busy conference for us as Fouad laid out with updates across a range of preclinical programs as well as clinical programs. With respect to EGFR, what we've guided to is we'll have preclinical single agent data for 701. And then, we'll look to share additional data for both of the EGFR programs over the course of the year, but our guidance has been the combination data towards -- in the second half of this year.

On the second question, I'm not sure I completely got it, but I think -- I wasn't sure of the reference to midostaurin sales and how that impacts the regulatory process? Is that what your question was?

[Arlinda Lee, Canaccord]

Sales really are -- half of the current sales of midostaurin is from indolent disease, even though they only have an ASM label. I'm wondering how that might affect your regulatory and launch preparation?

[Jeff Albers, CEO]

Okay. Christy?

[Christy Rossi, Chief Commercial Officer]

So, we know that midostaurin is certainly used in SM broadly, including in non-advanced forms of the disease. I think that speaks to two issues. One is that, as we've talked previously, SM really is one disease with a single driver and differentiating exactly how these patients may be categorized is challenging, even for the most knowledgeable KOLs across the world, but alone for hematologists that may see these patients less frequently. I think, it also speaks to just a very significant unmet need that we see across the spectrum of SM. Our data would suggest that use of mido in non-advanced is probably less than half. I mean, I think -- but you may be looking at a different data. I think overall utilization of midostaurin is limited, as I said, just by the -- both the efficacy and sort of safety tolerability profile of that therapy.

As Fouad said earlier, our -- we are filing for indications in advanced SM. That's our assumption. How AYVAKIT is used in the real world I think will be driven by both of the factors that I just mentioned. But certainly, we would imagine that initial utilization will be in patients who have more significant disease. And over time, we're looking forward to filing in the non-advanced forms of the disease and having the indication there as well. And we'll be engaging with hematologists as well as allergists and others who may see these patients to ensure that they are being identified and appropriately diagnosed, and that's really going to be our focus.

[Operator]

Thank you. Our next question comes from Eun Yang with Jefferies.

[Eun Yang, Jefferies]

Thank you. For the EGFR program, is the frequency of C797S mutation post the first-line of osimertinib in non-small cell lung cancer, similar to that after the second line use?

[Jeff Albers, CEO]

So, maybe I'll start, and then I'll have Fouad jump in as well. And I'll back up and actually think about the development of these two programs. So, our triple mutant program or BLU-945, as Fouad talked about, was really developed early on when there was a more traditional path of a first-generation EGFR inhibitors, then followed by osimertinib once a T790M mutation emerge, and then the recognition that a C797S mutation was the most frequent mutation thereafter. The target product profile, of course, is very challenging when you have to hit that range of mutations, while also create a molecule that's wild-type sparing and brain penetrant. So, it's a very classically Blueprint molecule of a select or discrete patient population.

BLU-701 to me is much more interesting because that was a program that was started based on an understanding of where resistance would go over time. And that was watching the landscape change, and osimertinib moved to first-line and based on preclinical models, determining that the C797S mutation would likely appear earlier. And so, that's an evolving landscape. We're definitely seeing it emerge. The interest from KOLs is significant for that program. In a lot of ways, we see that BLU-701 could beat osimertinib, what osimertinib was to the first generation of EGFR molecules. So, the range to date is perhaps a little bit lower and that sort of 10% range, maybe up to 20% of patients develop that form of resistance. But again, osimertinib, that data continue to evolve.

Importantly, with the profile as Fouad hit on is the fact that we've created a very selective molecule, a wild-type sparing molecule and a brain-penetrant molecule. And so, as you think about the evolving landscape, we see 701 could potentially serving as an anchor to any treatment of EGFR patients and being set up well to combine with other therapies, including 945 or others. So, we're prepared to watch the landscape continue to evolve. But with the two molecules, we think we can cover the vast majority of patients at some time along their treatment journey.

[Operator]

Thank you. Our next question is from Michael Ulz with Baird Capital.

[Michael Ulz, Robert W. Baird]

I just had a follow-up on the CDK2 program. And I realize, you're still in preclinical development there. But, just curious if you have a sense of what indications you might plan to target? Obviously, it will be driven by some data. And then also, how does that relate to sort of going after the resistant mutations for the CDK4/6 inhibitors? Thanks.

[Jeff Albers, CEO]

Thanks, Michael. Fouad, do you want to take that?

[Fouad Namouni, President, Research and Development]

Yes. Thank you, Jeff. So, CDK2 program, as I mentioned earlier, is really developed with really two solid parts of the program, high-selectivity and high-potency against CDK2 as a target. And when we look at cancer and the role of CDK2 and its regulatory partner, CCNE, we can see a broad range of cancer where this agent could be developed as monotherapy or in combination with other agents.

I will give a few examples of cancer where we know CDK2 and CCNE are a major player. If you think about ovarian cancer, that cancer has -- there is an addiction to this pathway in ovarian cancer. If you think about other cancer, like breast cancer, there is really the opportunity, not only to develop this agent in patients resistance to CDK4/6s that we have in the treatment of hormone-positive breast cancer today, but also in combination with CDK4/6s and hormone therapy in breast cancer moving to arrear lines. There are a number of other cancers such as gastric and esophageal cancer we'll be exploring. But I mean, if I step back a little bit, I would say, with such an agent, the scope of the opportunity is really broad. It will include a variety of development strategies, all the way from monotherapy to combination agents, and will include a variety of cancer types and combinations.

So, we are very, very excited. I'm particularly very excited about this CDK2 program we are announcing today.

[Operator]

Thank you. And I'm currently showing no further questions at this time. I'd like to turn the call back over to Jeff Albers for closing remarks.

[Jeff Albers, CEO]

Thank you, operator.

So, I started off the call talking about how 2020 was a transformational year for Blueprint Medicines. And hopefully, you've got a sense of the setup we feel like we have for 2021, really as a year of execution across that fully integrated business. And starting with the potential approval in advanced SM for avapritinib in the second quarter, just a flurry of progress from our discovery efforts and upcoming preclinical data opportunities at various conferences, both in the first half and second half, and then, continued clinical execution across multiple programs, all underscored by strong financial position.

So, as always, we appreciate you taking the time this morning to spend it with us, and look forward to further updates over the coming months. Have a good day. Bye, bye.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.