Blueprint Medicines Corp

NASDAQ:BPMC

Earnings Call Analysis

Blueprint Medicines Targets Blockbuster Status for AYVAKIT

Blueprint Medicines is on a robust growth path with their drug AYVAKIT after a strong launch, driving Blueprint's thriving business with the potential to be a multibillion-dollar product. The company saw a significant revenue increase in 2023, earning $204.2 million from AYVAKIT, an 84% rise from the previous year. AYVAKIT's peak sales are now expected to exceed $2 billion. In 2024, Blueprint projects AYVAKIT revenue of $350 to $390 million, and their focus extends to advancing their pipeline targeting mast cell-mediated diseases. With solid cost management and strategic investments, Blueprint aims for profitability backed by $767.2 million in cash and a decreasing operating cash burn as they fortify their financial profile and future value.

Blueprint Medicines Achieves Pivotal Growth and Sets Strong Guidance for AYVAKIT

In 2023, Blueprint Medicines celebrated a landmark year by securing the only approval for AYVAKIT as a treatment for indolent systemic mastocytosis (ISM), with the promise of AYVAKIT shaping the future of the company. The focus for 2024 is ramping up patient reach in the U.S. and Europe following the EMA approval, aiming to drive potent revenue growth. AYVAKIT's sales momentum has set the stage for what Blueprint anticipates to be a continual climb towards a peak sales opportunity surpassing $2 billion.

Expansion into Allergic Inflammatory Diseases

Blueprint Medicines is harnessing its expertise in mast cell biology and targeting KIT with therapies like AYVAKIT and elenestinib, and is taking strides into broader therapeutic areas. A significant effort is being put into the development of BLU-808 for conditions such as chronic urticaria, with the goal of leveraging their scientific knowledge for greater clinical impact and success.

Strengthening Financial Backbone and Business Development

The company has highlighted cash management as a critical focus in 2024, expecting a solid path to profitability driven by robust revenue and controlled expenses. Blueprint Medicines foresees a significant reduction in operating cash burn, implying healthier financials moving forward. Efforts in business development have also progressed, particularly with an arrangement for GAVRETO aimed at maintaining its availability in the U.S. while conserving Blueprint's financial resources.

AYVAKIT's Commercial Performance and 2024 Guidance Outlook

AYVAKIT's net product revenues in 2023 saw a remarkable 84% increase to $204.2 million from the previous year, with Q4 revenues experiencing a 30% jump to $71 million, predominantly from U.S. sales. The growth drivers identified are new patient starts, a decrease in free goods, high compliance, and low discontinuation rates, encapsulating the significant potential of AYVAKIT. As the company moves forward, it will shift from sharing quarterly patients on therapy numbers to broader launch updates and has set a guidance range of $360 million to $390 million for 2024, which anticipates a continuous strong and steady growth for AYVAKIT.

Earnings Call Transcript 2023-Q4

[Operator]

Good morning. My name is Drew, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicines Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions]. Thank you. Jenna Cohen, you may begin your conference.

[Jenna Cohen, executive]

Thank you, Drew, and good morning, everyone. Welcome to Blueprint Medicines fourth quarter and full year 2023 financial and operating results conference call.This morning, we issued a press release, which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at www.blueprintmedicines.com.Joining me today are Kate Haviland, Chief Executive Officer; Philina Lee, Chief Commercial Officer; Fouad Namouni, President, Research and Development; and Mike Landsittel, Chief Financial Officer. Christy Rossi, Chief Operating Officer; and Becker Hewes, Chief Medical Officer, are also on the line and available during Q&A.Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements, as outlined on Slide 3 and are subject to a number of risks and uncertainties.These may cause our actual results to differ materially, including those described in our reports filed with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements, and Blueprint disclaims any obligation to update such statements.And with that, I'll now hand the call over to Kate.

[Kathryn Haviland, executive]

Thank you, Jenna, and good morning, everyone. 2023 was a pivotal year for Blueprint Medicines as we successfully brought forward AYVAKIT to become the first and only approved medicine for patients with indolent systemic mastocytosis or ISM.As we enter 2024, AYVAKIT will continue to be the foundation of our thriving business with our early launch momentum putting AYVAKIT firmly on the path to becoming a multibillion-dollar product.Our growing revenue also enabled us to invest in additional compelling opportunities in our pipeline to drive longer-term growth and deliver even more transformational medicines in the future.To achieve our goal this year, we are focusing on three key aspects of the business. Let's start with AYVAKIT's blockbuster potential and its ability to drive durable revenue growth for Blueprint well into the next decade. We know that the first few quarters of launch are critical in dividing the sales trajectory for a product, and we have driven a very strong first six months of results in this ISM launch, establishing the foundation for future growth.We have clearly demonstrated our ability to reach patients and drive revenue, achieving $204 million in global AYVAKIT revenue in 2023, an 84% increase over 2022. This compelling growth was primarily driven by the uptake in patients with SM, who comprised about 95% of all patients with ISM, a sizable rare disease patient population that we estimate at 70,000 prevalent patients in the U.S. and Europe alone.Today, we are pleased to provide 2024 AYVAKIT revenue guidance of $350 million to $390 million, putting us on pace to nearly double our sales this year. This revenue trajectory is very similar to other notable rare disease product launches such as Soliris and Jakafi, with additional similarities being a compelling new first-in-class medicine approved to address a significant medical need and building a new multibillion-dollar market.These similar attributes and importantly, similar sales trajectory is why we believe the launch of AYVAKIT in SM is one of the most exciting rare disease launches happening across the industry today. And we are just now scratching the surface.In 2024, our primary focus is on reaching more patients with SM in the U.S. and also now in Europe with our EMA approval in ISM this past December.AYVAKIT's compelling efficacy and safety profile, coupled with the chronic nature of ISM mean that both new patient starts and the cumulative effect of patients staying on therapy for longer durations are important drivers of revenue this year and beyond.I will hand it over to Philina next on the call, and she'll go into more detail on AYVAKIT's performance in Q4 and why we expect our strong and steady growth to continue as we drive towards peak sales of greater than $2 billion. And yes, we are now pointing you all to a peak opportunity for AYVAKIT that is greater than $2 billion.For the past 12 to 18 months, since before our FDA approval on ISM, we have been citing a piece opportunity for AYVAKIT of greater than $1.5 billion. Now, based on the strong underlying fundamentals that are driving our early sales trajectory and the rapid growth in diagnosis that has led to an expanding SM market, our conviction has grown that AYVAKIT will be able to achieve peak global sales of greater than $2 billion.Now, let's turn to our second area of focus. Advancing our portfolio targeting allergic inflammatory diseases where mast cells play a central role. Last month, I shared how we are focusing our investment in our most exciting research and development programs with opportunities to address high medical needs in large patient populations. And importantly, in therapeutic areas that play to our strength by leveraging our expertise and our infrastructure.A primary area of focus for us this year is to advance our portfolio of approved and investigational programs targeting mast cell mediated diseases. Blueprint is uniquely positioned to drive novel science in this space. Because of our scientific leadership in targeting KIT and our proprietary insights into mast cell biology, an important area of science that has been historically underappreciated.With AYVAKIT and elenestinib, we are fully covering mast cell diseases driven by mutated KIT. And this year, we are expanding into a much larger opportunities driven by wild-type KIT with BLU-808.We are particularly excited about the potential for BLU-808 to impact fundamental biology in a number of large diseases with significant medical need, starting the chronic urticaria. We believe this program will move quickly with a higher than typical probability of success at this stage, given our track record of translating our discovery expertise and targeting KIT into clinical impacts and now commercial success.Next week, we will have a huge presence at the American Academy of Allergy, Asthma and Immunology meeting, also known as Quad AI, which is the largest allergen immunology conference in the U.S. and taking place in Washington, D.C. this year.Later on the call, Fouad will go into more depth on what we will be showcasing at Quad AI, as well as provide an update on our development stage portfolio.The third area of focus for us is maintaining a strong and durable financial position. Cash management will continue to be a priority area for us to focus on in 2024. And as we sit here today, we see a clear path to profitability through the combination of strong revenue ramp and disciplined operating expenses, which will result in a significant decrease in operating cash burn in 2024 and beyond.Mike will talk more about our financial results and our approach to balancing disciplined capital allocation and investing at the same time in our compelling near and long-term growth opportunities.Business development will also continue to be core to how we build and optimize our business in a sustainable way. To that end, I'm very pleased to say that we have made significant progress on our deal that will enable GAVRETO to continue to be commercially available to patients in the U.S. while minimizing the financial impact to Blueprint.We look forward to updating you in the near future once that deal is finalized.Now, I'll hand it over to Philina, who will go into more detail on our commercial performance. Philina?

[Philina Lee, executive]

Thanks, Kate. AYVAKIT achieved $204.2 million in net product revenues in 2023, representing 84% revenue growth over last year.Fourth quarter revenues grew 30% quarter-on-quarter to $71 million with $63.6 million in the U.S. This growth was driven by several key factors, new patient starts, a decline in our share of free goods, low discontinuation rates and high compliance. ISM is the clear growth driver with the majority of new starts at the 25-mg dose.Starting with patients on therapy. We hit a major milestone in January with approximately 1,000 patients on AYVAKIT in the U.S. We were looking to see if this would come in December or January, and we're encouraged by the strong demand we see coming into Q1.We're thrilled to hit this 1,000 patient milestone this early in the launch, and we're focused on driving continued growth. Today, we're setting revenue guidance that reflects the strong and steady continued growth we expect in 2024 as we get closer to realizing AYVAKIT's blockbuster potential.Our guidance range of $360 million to $390 million assumes another year of more than 80% year-over-year revenue growth at the midpoint. We have good insight into the fundamentals driving our revenue, namely, new patient starts, compliance, duration, free goods and our international performance.This range reflects the inherent variability in those fundamentals. With guidance now in place, we're going to move away from providing a quarterly patients on therapy number. We will continue to share commentary on how the launch is progressing.Looking next at persistence. We expected strong persistence in ISM based on AYVAKIT's clinical profile and the chronic nature of the disease. And even though it's early days, all signs point to extended durations of therapy with low discontinuation rates and high compliance launched to date.What's been a surprise upside is how quickly we've moved the needle on our free goods share, dropping to approximately 25% as we grow the number of ISM patients on therapy. We have just reported our second strong quarter of revenue from our ISM launch. Let me tell you why we expect to sustain this growth in 2024 and beyond.Our commercial strategy is grounded in strong continued execution across multiple paths that will drive sustained growth in this market. First, we're ramping up our direct-to-patient marketing to further drive awareness and activate patients to seek treatment.The SM market is growing, and we've only captured a small fraction of it so far. Today, there are more than 20,000 diagnosed patients in the U.S. alone, and about half are not well controlled on symptom directed therapies.We know this is a chronic market where patient preference is sticky. Once patients start AYVAKIT, that positive clinical experience bodes well for chronic duration of therapy.Second, we're expanding AYVAKIT's prescriber base across all specialties and settings, and we're nowhere near saturation. We are seeing strong receptivity to AYVAKIT's profile among both HemOncs and allergists in the academic and community settings.Breadth of prescribing is happening exactly where we want as we're motivating more allergists to prescribe AYVAKIT, and we're adding more prescribers at the top of the concentration curve.You can see this in the chart on the left, which shows early AYVAKIT adoption among the top 400 SM providers who see about 4,300 unique SM patients. We continue to grow the breadth of prescribing here in light green, and we're also beginning to see depth of prescribing with providers who have already started two, three or more patients on therapy in darker green.As we expected, the first positive experience is leading providers to recommend AYVAKIT to the next patients who are coming in for their scheduled appointments.Breadth of prescribing is an important lead indicator for long-term growth. We are highly encouraged to see prescriber breadth and early signs of prescriber depth at this point in the launch.Over time, we expect to see the cumulative impact of growing this motivated prescriber base, together with activating more patients to seek what's possible with AYVAKIT. That's why I'm so confident about our ability to both grow and capture this market.We understand the SM market better than anyone else. What activates patients to move away from the symptom directed polypharmacy they're here habituated to and tri-therapy designed to address the underlying driver of disease, what drives providers urgency to treat, what influences their prescribing behavior and how to ensure that access is seamless for patients and providers.We are making great headway to disrupt entrenched attitudes and behaviors about disease control and treatment and to drive patients and providers to take action.With two quarters of strong performance and our guidance today, we are in the early innings of a pioneering rare disease launch. We are exactly where we thought we would be, and we're delivering what we said we would deliver.As we've seen from the launch trajectory of other rare disease blockbusters, we are right on track to capture AYVAKIT's peak opportunity of over $2 billion.With that, I'll hand it to Fouad, to share what you can expect from Blueprint Medicines at Quad AI.

[Fouad Namouni, executive]

Thank you, Philina. With more than 10 years of experience in systemic mastocytosis, we have built an extensive repository of knowledge to uncover insights into SM disease biology, our patients' journey, our prescriber management of the disease spectrum from ISM to ASM.At Blueprint Medicines, we are redefining how SM is treated across a broad network of academic leaders and prescribers with whom we are not only expanding the frontier of innovation in SM, but also in many other mast cell driven diseases.With two oral presentations and seven posters, Blueprint will lead SM Science and Medicine at the 2024 Quad AI Conference. The long-term efficacy and safety data from PIONEER will continue to establish AYVAKIT as the standard of care and the only available option to treat the root cause of systemic mastocytosis. Additional data will include health outcomes measures and reduction in polypharmacy.Turning now to our pipeline. The extensive data we generated from PIONEER and from real-world evidence in SM, coupled with the regulatory experience we gained with AYVAKIT development are enabling us to build a robust, differentiated development path for elenestinib, our next-generation D816V-mutated KIT inhibitor.We very recently presented data showing elenestinib-driver clinically meaningful symptom improvement across those levels with a well-tolerated safety profile. We see a lot of potential with elenestinib as the core part of expanding our SM franchise.Mast cells are well-established key drivers for many allergic and inflammatory diseases, where there is still a high medical need. However, their role as therapeutic targets for inflammation has often been underappreciated in our industry.At Blueprint Medicines, we are building on our expertise in mast cell biology to identify targets and develop therapies for a variety of mast cell-driven inflammatory diseases.Last month, we presented for the first time more detail on the preclinical profile of BLU-808, a profile that met or exceeded all our key criteria. It is potent on wild-type KIT highly selective, and it has drug properties compatible with once daily oral administration.Next week, we will also show a compelling in vivo activity of BLU-808 in models of mast cell activation and asthma that supports our development strategy into the diseases and beyond. We are on track to submit an IND in the second quarter of this year, and then we will initiate the SAD/MAD study.Finally, on the solid tumor part of our pipeline, we are advancing our CDK2 inhibitor, BLU-222, one of the most exciting programs that we have in clinical development. BLU-222 is an important value driver for Blueprint Medicines and one that we are looking to move forward in the context of a partnership.CDK2 is a clinically validated cell target with the potential to impact a large patient population with hormone-positive, HER2 negative breast cancer. BLU-222 has a very encouraging profile with a broad therapeutic window and best-in-class selectivity.Our goal is to pursue it in combination with approved CDK4/6 medicines to prolong breast cancer patient survival. We have had significant engagement on this program with a range of potential partners, and those conversations continue very productively.With that, I will turn the call over to Mike to review our financial updates.

[Michael Landsittel, executive]

Thanks, Fouad. Earlier this morning, we reported detailed financial results in our press release. For today's call, I'll touch on a few highlights.For the full year, total revenues were $249.4 million, including $204.2 million in net product revenues from sales of AYVAKIT and $45.2 million in collaboration and license revenues. Of these full year revenues, $71 million of AYVAKIT net product revenues were recorded in the fourth quarter.In 2024, we anticipate that we will achieve $360 million to $390 million in AYVAKIT net product revenues. We expect that the U.S., ex U.S. AYVAKIT revenue split in 2024 will be approximately consistent with what we observed in 2023 as we launch first in Germany before expanding to other countries as pricing and reimbursement is negotiated.Today's guidance illustrates we are on the path to capturing AYVAKIT's peak opportunity of $2 billion. This revenue growth, coupled with expense discipline and focused investment is what is accelerating our path to profitability.We do not anticipate any material collaboration revenue from existing collaborations in 2024. We are nearing a path forward for GAVRETO in the U.S. and plan to provide an update next week to coincide with the termination date for our existing agreement with Roche.We continue to expect that the wind down of the Roche collaboration for GAVRETO will result in significantly lower year-over-year operating expenses related to GAVRETO and will have no material impact to our overall expense plans in 2024.Our total costs and operating expenses continued to decline and were $735.7 million for the full year and $177.1 million for the fourth quarter. We anticipate our R&D expenses will continue to decline in 2024 as we wind down our early-stage EGFR clinical programs, partially offset by increased investments in our programs for mast cell-mediated diseases, specifically BLU-808.We expect only a small increase in SG&A expense as we gain operating leverage from our commercial infrastructure and continue to drive significant increases in revenues.Last month, Kate shared our vision for maintaining financial strength at Blueprint. We have a focused spending plan that allows for continued reduction in operating expenses while also investing in opportunities for longer-term growth.We have prioritized capital allocation towards a portfolio built around mast cell mediated diseases, solid tumors implicated by cyclin-dependent kinase biology and ongoing early research efforts as we believe that these areas provide the best opportunity to drive long-term value.Entering 2024, we are in an exceptionally strong and durable financial position with $767.2 million in cash. We are commercializing AYVAKIT globally, a first and best-in-class medicine that is growing revenues on the way to blockbuster status.We expect our operating cash burn to further decline in 2024, even as we advance our portfolio of high potential medicines like BLU-808. Our pathway to profitability is becoming clearer, solidifying our financial profile and our ability to generate long-term value.With that, I'll now turn the call back over to the Operator for any questions. Operator?

[Operator]

Thank you. [Operator Instructions] Our first question today comes from Brad Canino from Stifel.

[Bradley Canino, analyst]

Congrats on the quarter. It would be great to hear a description of how the team viewed its overall approach coming into guidance here. And then what you believe this guide now represents about the opportunity? And then I've got a follow-up.

[Kathryn Haviland, executive]

Thank you Brad, very much. We really appreciate that. Christy, do you want to take the question on guidance?

[Christina Rossi, executive]

Sure, Brad. So, as Kate said, we now have two full quarters of experience under our belts with AYVAKIT. And those two quarters have set an incredibly strong foundation for the trajectory that we see for this product.We also have a sense now based on those two quarters of what some of the key drivers are of revenue performance. And Philina walked through those, things like new patient starts, duration of therapy, which increasingly in a chronic market like this is becoming a very important driver of revenue growth as we have a strong and growing base of patients on therapy and then factors like compliance, et cetera, free drug rates.And so, as we've understood those variables and we understand what reasonable ranges are around those variables, that really informed our guide, which like other external milestones, et cetera, that we communicate, we're really putting out so that we can help everyone understand what we think is a reasonable expectation for revenue this year.One important factor is that we are not even 12 months into this launch. And so, one of the things that we're understanding as we go through are some of the quarter-on-quarter dynamics and how those things will play in, Philina talked about, for example, seasonality in Q4.We know that Q1 is often a quarter in many and pharma generally, where you see impacts around compliance, gross to that, et cetera. So, we're understanding how those factors will also play in as we think about the quarter-on-quarter ramp through the year.I think the important thing is, if we pull back is that this guide represents more than 80% year-on-year growth again, for AYVAKIT. And it is very, very clear if you look at the revenue trajectory that we are on, that we are very much marching down that road towards a $2 billion peak.The trajectory is very much aligned with what we've seen with other compelling rare disease launches. And so, we feel like we're in an incredibly strong place and very much demonstrating with each quarter, the opportunity that we've been saying is there in SM.

[Bradley Canino, analyst]

And then I want to ask on Slide 7, which is a very helpful visualization of the proportion of practices where only one or two patients have started AYVAKIT. But what were the key execution steps that got that disclosed minority of activated accounts to three to 10 patients? And how are you going to replicate that in the remaining majority that are at one to two?

[Kathryn Haviland, executive]

. Thanks, Brad. Philina, do you want to talk more about that dynamic?

[Philina Lee, executive]

Yes. Thanks for the question, Brad. We're really encouraged this early in the launch to see both strong signs of growing prescriber breadth across all specialties and settings, so HemOnc, AI and an even split across academic and community. That therein, represents how well that real-world experience with AYVAKIT's strong profile is playing out and the receptivity.To the point of what's leading providers with their first experience to put on two or more patients, it's really as simple as they start AYVAKIT and can see that positive benefit, it brings it to life in these providers of what's possible with patients. And that is leading to further repeat prescribing and deepening in these accounts.From an executional standpoint, I would highlight the efforts of our team that have the greatest amount of promotional focus on the providers who are seeing the greatest number of SM patients, and it's really the strength of both our data analytics that inform that targeting as well as the strong relationships that our team has forged with these top volume prescribers on the ground.

[Operator]

Our next question today comes from Salveen Richter from Goldman Sachs.

[Salveen Richter, analyst]

Two on the pipeline, for BLU-263 following positive data from the Part 1 portion of the Phase II/III trial in ISM, the next key event is in the Part II trial. How will you demonstrate the differentiation of this asset relative to AYVAKIT in that portion?And then separately, on the CDK2 program, we are going to see data in the first half. Just walk us through your expectations, what you present in the benchmarks here for success and differentiation versus the other CDK2 inhibitors.

[Kathryn Haviland, executive]

Yes. Thank you for the question, Salveen. And I'll hand it over to Fouad. But we look at elenestinib, they have being a really core part of how we're going to maximize the long-term performance of our overall SM franchise. And as we said before, AYVAKIT sets a very, very high bar. So, I'll hand over to Fouad to talk about how we're going to be able to bring elenestinib forward in an innovative way.

[Fouad Namouni, executive]

Thank you, Salveen, for questioning. We presented at ASH a few weeks ago, a very robust data on the activity in terms of improving the symptoms with a validated TSS tool, put elenestinib in patients with indolent systemic mastocytosis. We also showed very good safety and tolerability profile. So, the Phase II POC is very solid there.We are, and we continue to gain scientific information from PIONEER. We'll show some of it at this upcoming Quad AI meeting. We have information from real-world evidence. We also gained a very robust experience from a regulatory perspective, not only in the United States but also in Europe and elsewhere.So, all these items are being put together to really put together a differentiated strategy to develop elenestinib for what we believe ISM patients will be in a few years from now, not what they were back in 2016, 2017, and I think you will see this reflected in our development strategy as we start the registrational trials.For the CDK2 question, I think we're happy that the study is continuing the dose escalation in the Phase I. We're mostly focused on the combination, as I mentioned in my prepared notes, on the combination with CDK 4/6 medicines. We will be presenting the early safety data from the combination of ribociclib and BLU-222 all with the characteristic and the profile of this combination together.The goal there is really to show that as we go to hormone positive, HER2 negative breast cancer, the goal is to show that we can combine safely and that safe combination will drive the efficacy and the short and the long term. So stay tuned for data coming from the VELA study.

[Operator]

Our next question comes from Marc Frahm from TD Cowen.

[Marc Frahm, analyst]

Congrats on all the growth in the quarter. Maybe going to that slide of the patients per prescriber, can you maybe give a sense of kind of what's the opportunity from the breadth side, right of just deepening at those existing kind of 400 treaters versus the depth of that? But then what's the opportunity more at expanding out to many more prescribers?And kind of related to that, the guidance implies yet the midpoint, maybe like 125, 150 patients per quarter kind of being added to the franchise versus the recent trend has been more like 200. So, I guess, maybe can you kind of square these?

[Kathryn Haviland, executive]

Thanks, Marc. I'm going to hand over to Philina. I also just want to reiterate some of the points that Christy made about the guidance. We are six months into the launch. We have not had an opportunity to see a full year of ISM revenue, and we're continuing to get a sense of some of the seasonal dynamics.And we're incredibly excited that this guidance puts us on the trend line for kind of comparable rare disease products that have just created really compelling markets. But Philina, do you want to talk about some of the specifics?

[Philina Lee, executive]

Yes. Hey, Marc. So, to your question about sort of the opportunity that this represents. When we look at the top 400 treaters by SM patient volume, collectively, they're seeing about 4,300 already diagnosed SM patients today.There is substantial headroom to grow both in breadth as well as depth just within these top 400. So, when we look at the penetration only about 20% of these top 400 have yet prescribed AYVAKIT, and we see this growing steadily in that sort of like green curve on the top.You will also see that substantial opportunity for deepening. And we sort of talked about how the first positive experience leads to repeat prescribing. And that's both recognition of the clinical benefit, which is leading providers to think of AYVAKIT for a broader range of their patients. They typically start with a more severe symptomatic type of patient, and they're broadening that lens over time.It's also exciting to see the growth in allergy penetration within and beyond this segment as they become familiar with AYVAKIT, accustomed to the access process. And then, again, are sort of fishing and identifying those next patients as they're coming in for treatment. And so, I think the take on there is, we see significant potential for growth as this continues to accumulate over time, both breadth and depth.To the second part of your question, this is not a sort of 125 to 150 per quarter story alone. I think that the limitations of patients on therapy at the end of every quarter, it doesn't tell you when those new patient starts are happening, what the duration of therapy is for these patients, and we've highlighted how much more important duration will be as a contributor going forward in this launch.It's a rare disease. We're early. There's variability month-over-month, as Kate alluded to, we're learning those quarterly dynamics. And so, I think a better lens to take is probably that moving average, as well as a breadth of factors that are contributing to that revenue guidance that Christy just highlighted.I think taken together, we're really pleased with the first two quarters. And when we look at the other blockbuster opportunity comparators that Kate mentioned, like we're well within the pack of the trajectory that they've been on towards realizing that blockbuster opportunity for AYVAKIT.

[Operator]

Our next question comes from Ren Benjamin from Citizens JMP.

[Reni Benjamin, analyst]

Congratulations on a great quarter and even more impressive guide. Can you talk a little bit about the trajectory in Europe? And maybe what contribution of the guidance is coming from Europe? I know you mentioned in the prepared remarks the launch will start in Germany, but can you maybe just talk us through the cadence of how the countries come online and who's doing the actual selling?And just as a follow-up, you've talked now about the $2 billion peak revenues. How do you think about how long it might take to get to peak revenue?

[Kathryn Haviland, executive]

Yes. Ren, thank you for both those questions. Christy, do you want to talk about European, the peak, actually?

[Christina Rossi, executive]

Sure. Thanks, Ren. So, we were pleased to see the European approval come through before the end of last year, as I think everyone knows, and even more pleased to see that we saw ISM patients being treated in Germany even before the holidays, which was great to see. So, we're out of the gates in Europe and ISM.Germany is really going to be the primary market that's driving ISM this year due to the cadence of pricing and reimbursement. So, other markets will start to come online, but I would expect that more towards kind of end of this year into next year.I think the important thing is, if we're thinking about from a revenue perspective, certainly our guide does encompass international, and that's yet another variable actually as we think about sort of the guidance range as that launch gets underway.My general expectation is that if you look at the percent of revenue that the international business contributed to AYVAKIT, say, in 2023, it's probably going to be roughly in the same range as the U.S. continues to grow very robustly. So, 10-ish percent plus or minus is probably not a bad assumption there to think about Europe.In terms of the peak, I think, again, Kate mentioned we're on a very clear trajectory that I think looks a lot like other rare disease launches. The time to peak in those launches, it varies, right? These are never markets that are sort of up to saturation within 2 or 3 years and then flattening. I expect AYVAKIT revenue to drive growth for Blueprint for several years to come.One thing that I think is often interesting about time to peak is that there is often a positive relationship between time to peak and what the peak is. So, we just talked about our view of the peak kind of coming up to $2 billion.If you look at markets like HAE, if you look at even Jakafi or Soliris, those drugs have continued to grow and the peak opportunity has also continued to grow because the market grows underneath the drug launch. And so, we'll see what happens. It wouldn't surprise me if our view of the peak continues to evolve as we move through this launch.

[Operator]

Our next question comes from Michael Schmidt from Guggenheim.

[Michael Schmidt, analyst]

I had one on BLU-808. As we sort of head towards Quad AI next week, how do you think about the overall development opportunity for this oral wild-type KIT inhibitor? And talk a bit about how you see potential for differentiation from biologics that are in development for a wild-type KIT?

[Kathryn Haviland, executive]

Yes. Thank you, Michael. We're really excited about BLU-808. Fouad, do you want to talk a little bit more about that and if you have any colors?

[Fouad Namouni, executive]

Thank you, Michael. So, first to your question, first, I have to say I'm very happy today to see a proof-of-concept having been achieved by inhibiting wild-type KIT with a strategy using monoclonal antibodies. So, the POC is there. Now, BLU-808 is a small molecule PK inhibitor that is highly potent wild-type KIT, very selective, which will have a promise and safety profile as we have run the SAD/MAD studies, I believe.It is a very flexible way to administer a drug and it will be very simple to give, compared to all the strategies. The most important thing that, in my opinion, will be a key inflection point for us in BLU-808 is the safety and pharmacology data that we gather from the SAD/MAD. After that, I think the POC of wide-type could be in a superior strategy of inhibition and CSU has already been shown in some Phase II data.Beyond CSU or chronic spontaneous urticaria, there is cold induced urticaria as we all know. But overall, mast cell as I mentioned in my earlier remarks, has been really underappreciated target in type 2 inflammation.And now that we started knowing this in our industry, I believe the opportunity to leverage BLU-808 and wild-type KIT inhibition overall in the number of inflammatory disorders such as type 2 asthma and or MCAS and others will be very important. I think patients will, at the end of the day, like an oral agent that we can dial up and down depending on the need for their diseases.

[Becker Hewes, executive]

Yes. Thanks, Fouad. I just want to add one thing. This is Becker. I get the question a lot about how a wild-type KIT inhibitor might compare with what is currently being developed.And I think one thing to remember is we're talking about a very wide spectrum of the disease with different manifestations and different tissues and different levels of severity and using a blunt instrument like an antibody that might eliminate a number of mast cells isn't where you want to go with a lot of these diseases.And so, we think that a tunable solution that we can titrate to what each patient or patient population needs is the right thing in this population or in these diseases.The other thing to remember is that most of these approaches, whether it's BTK or antibodies, don't directly address the true driver of the mast cell, which is KIT. BTK inhibits activation and degranulation, but really doesn't address the biology of the mast cells. And even the antibodies that are active in asthma are really an orthogonal approach to the disease methodology. So, really KIT is the Achilles heel of these diseases.

[Operator]

Our next question today comes from Derek Archila from Wells Fargo.

[Derek Archila, analyst]

Congrats on the results here. Just two questions from us. You talked about kind of an increasing rate of diagnosis for ISM. So, I guess I'm just curious, do you think current estimates might be still slow for the number of patients out there? And, I guess, what inning do you think we are in, in terms of the increasing diagnosis rate?And then just as a follow-up, any additional kind of quantitative color on the current discontinuation rate you're seeing?

[Kathryn Haviland, executive]

Thank you, Derik, for those questions. Maybe just starting with the epidemiology. I mean we updated epidemiology at JPMorgan. We've seen really nice growth in the diagnosis of SM that is predominantly ISM, because advanced SM patients have a smaller or less intense diagnostic odyssey, just given the manifestations of that disease.And we're in very early innings on understanding the size of this market, and we anticipate it will continue to grow very substantially over the next set of years. So, as Christy talked about what we've seen in other rare disease launches.So, Christy, do you want to talk about the durability we're seeing and how that's becoming such a big part of the future value prospect of AYVAKIT?

[Christina Rossi, executive]

Yes, sure, Derek. We've been really pleased to see the clinical profile of AYVAKIT, really playing out positively in terms of real-world experience. Compliance has been really high. And while we're really early in the launch, but very low discontinuation rates, which bode well for chronic duration to therapy with AYVAKIT.And at this point in the launch, as we continue to add more patients that duration and the cumulative impact of adding more patients and more patients staying on therapy is going to be a substantial contributor to the revenue growth going forward.

[Operator]

Our next question comes from Laura Prendergast from Raymond James.

[Laura Prendergast, analyst]

Congrats on the big beat today. Very exciting to see. Just two questions for me. First, what is driving these new patient starts? Do you think it's more so from the patient awareness side or education from providers during routine visits?And then my second question is, as you guys think about the CDK2 partnerships, is this focusing on just partnering the BLU-222 asset? Or are you more so thinking about partnering the whole CDK2 franchise, the next gen and the degrader you guys brought up at JPMorgan.

[Kathryn Haviland, executive]

Yeah, thank you, Laura, for those questions. Fouad, do you want to talk a little bit about how we see the drivers of new patient starts? Then Christy will hand it over to you to talk about this development around CDK2.

[Christina Rossi, executive]

Yes. Thanks for the question, Laura. So, we entered the launch already with strong awareness, some of our targeted HemOncs and AIs. Initially, the drivers, obviously, some of the HemOncs were coming in with experience with AYVAKIT, from advanced SM. That was what we shared in some of our very earliest adoptions.But what's honestly been really exciting to see is an expansion in the breadth of new prescribing. In hematology, oncology as well. They're motivated. They're so much more excited about ISM and the opportunity and the need here, as well as an increasing proportion of allergy immunology who are prescribing.So, significant growth to date, there is significant headroom to grow, as we've said.To date, the majority of that growth has been driven by provider engagement. We've talked about how out of the gate, we have made available a lot of really patient-facing initiatives. And JPMorgan we shared that we almost doubled patient awareness of AYVAKIT, which activates them to speak to their provider about it.But I would say with the patient activation, that's early days, and that's even more headroom to grow on that front. We know patients are a critical stakeholder in this type of chronic disease where they're a key part of that shared decision-making with their providers.And so, this year, we're really embarking on deeper direct-to-patient initiatives to promote increase the awareness of AYVAKIT and really encourage them to seek options that can give them better disease control.And we're excited to share more about that. And we're also doing that, I should say, in a very resource-effective way. Based on our deep knowledge of where these patients are going to look for information, learn about the disease and engage with providers.

[Kathryn Haviland, executive]

And one thing I'd just add to that is nothing is as impactful to patients that's hearing from other patients who've been on the therapy. And now that as we see here today, we're over 1,000 patients, estimated 1,000 patients in the U.S.And we see patients who are on therapy sharing experiences and chat rooms and online, and we also have some more formalized programming around that where we can connect patients who are on AYVAKIT with patients who are considering it as a therapy, which I think is going to be very impactful this year. Christy, do you want to talk about the CDK2?

[Christina Rossi, executive]

Sure. So, as you said, we have a significant amount of strategic interest in the target, right? I think the target is clearly now one, that's going to be incredibly important to any company that wants to be a player in the breast cancer market going forward.The focus of conversations from a BD perspective has been on 222 certainly and we have a next-generation asset that could be a part of those conversations for exploring and open to different possibilities there. But I think there's also a lot of interest in our degrader platform broadly.And we really look at that as essentially a different modality and approach to addressing this target. So, we'll see how these conversations evolve, certainly open to different collaboration structures, but our overall goal is really maximizing the value of the franchise in totality.

[Laura Prendergast, analyst]

And just when can we expect to see more information on this, degrader platform?

[Kathryn Haviland, executive]

Fouad, do you want to talk a little bit more about that?

[Fouad Namouni, executive]

We are very happy with the rapid progress that we made on our degrader platform. As you may remember, we started this a little bit more than 2 years ago. And today, we have a number of degraders in development. We mentioned CDK2 degraders in the cyclin-dependent kinase space, but this is only the tip of the iceberg that we and that Kate shared at the JPMorgan Conference.I think down the road, you will see some good degrader, CDK2 clearly, other targets are our key targets in the treatment of cancer. And we will really give more time line and guidance as we get closer and ready to share that type of information.

[Kathryn Haviland, executive]

And I think one other thing to mention too is, and I know we've said it in our press release, I mean, we're also doing quite a bit of work in the mast cell and looking at other mast cell-driven targets as well. And so stay tuned on that as we move forward.

[Operator]

Our next question today comes from Mike Ulz from Morgan Stanley.

[Rohit, analyst]

This is Rohit on for Mike. Can you just talk about the breakdown of your 2024 guidance? How much do you attribute to ASM versus ISM? And then can you talk about any trends you're seeing thus far for 2024?

[Kathryn Haviland, executive]

Yes, Christy, do you want to take the guide? I mean one thing I'll say about 2024 is that, we're a few weeks in here, where this is our first experience with the Q1 dynamic that Christy mentioned, you see often in pharma with ISM. So we're just -- teams are working through that. We'll see how that plays out. But really, the underlying demand from both new and existing patients appears very strong this year in very early days.Christy, do you want to talk about the guidance?

[Christina Rossi, executive]

Sure. So, as you all have heard us say many times, we don't break out revenue by indication. However, ISM is clearly driving our revenue growth, right? We've seen that clear inflection upon the first two quarters of launch. And I think if you look at the revenue trajectory we're on, it's obviously that growth is coming from ISM.And Philina shared that more than 70% of our new starts are coming at the 25-milligram dose, which isn't imperfect sort of way I'm looking at it, but I think it's a relevant data point that, again, just highlights that we're really seeing the growth coming from ISM and would expect that to continue well into the future as we capitalize on this $2 billion opportunity for AYVAKIT.And as Kate said, we are early in Q1. The one thing I would highlight is we were really pleased to hit the 1,000 patient mark in January. So, I think that speaks to, certainly, the continued demand that we're seeing in terms of new patient starts, et cetera, that we're seeing.There's other dynamics in Q1 that I wouldn't be surprised if we faced our first quarter of launch, certainly, in my previous experience, especially in these types of chronic immunology markets.You do often see hits around compliance, growth to net and copay dynamics, et cetera. So we're only part of the way through the quarter. Obviously, we'll see how that all plays out, but Q1 is often more of a challenging one, just if you look at quarter-on-quarter dynamics for the year.

[Operator]

Our next question comes from Matt Biegler from Oppenheimer.

[Matthew Biegler, analyst]

Congrats from us as well. Can you give us more granularity on the prescriber mix? I think last quarter, we saw around 25% of new scripts from allergists. Like, has that figure continued to increase? And also, what's the contribution of dermatologists and GI docs as well?

[Kathryn Haviland, executive]

Yes. Thanks, Matt. I mean we've been really pleased to see that, that contribution from allergist immunology, which is a key prescriber target for us has continued to grow. Philina, do you want to talk more about that?

[Philina Lee, executive]

Yes. Thanks for the question, Matt. We do continue to see the allergist contribution growth. It's now over 30%, probably in the mid-30s. I think we had talked about 20%, 25% previously.We're really excited to be motivating this prescriber base among allergists that's also adoption among the academic as well as the community setting. They're finding AYVAKIT easy. They're obviously very attuned to the symptom management and the quality of life impact of ISM on these patients and are motivated to try a disease-modifying option.Among derm and GI, in our experience, derm and GI is really much more of a referring specialty, whereas allergists immunologists and hematologist oncologists are the primary prescribing specialties. And that really has been our focus to date from a promotional standpoint.For example, when you look at the top 400 treaters that is completely dominated by HemOnc and AI, and that continues to be our primary focus to drive the adoption, where we're most likely to see repeat prescribing.When it comes to derm and GI, I would say they do play an important role in diagnosis and multidisciplinary care. And so, we do have other sort of arms of educating to help these specialties identify patients.

[Kathryn Haviland, executive]

Just to add to that, our medical team has done a really great job here actually, and they've been focusing on some of these other specialties to Philina's point, but making sure we're finding kind of the right medical dermatologists who actually have an interest in SM, CSM patients and tend to be kind of part of those patients' journeys.And so, it's a full group effort here but as the allergy immunology and hematology, oncology are going to be the drivers of this opportunity for the foreseeable future.

[Operator]

Our next question comes from Ami Fadia from Needham.

[Ami Fadia, analyst]

Let me add my congratulations on the strong quarter and guidance. But I had a follow-up on guidance. And I'm trying to square away what are some of the variables as I think about what the guidance implies. It seems to be that in fourth quarter, you had added more than 200 patients and guidance implies roughly a little over 100 patient adds per quarter.So, what are some of the other variables we should be thinking about? What's your assumption with regards to discontinuation of patients from the 1,000 patients that you had in January? And then how should we think about duration of treatment? And is there any other sort of important variable we should be thinking about?

[Kathryn Haviland, executive]

Yes. Thanks, Ami. Christy, do you want to dive into guidance a bit?

[Christina Rossi, executive]

Sure. So, Ami, I would say the guidance does not imply that. And I know Mike asked a similar question earlier. There's a range of assumptions on each of these variables that you can kind of think about to get into that guidance range.We're obviously thinking about a number of inputs here, right? So, new patients prescribed discontinuation rates, both of those things kind of impacting that patient adds on a quarter, factors like compliance, what our percent of free drug looks like, et cetera. And then we talked about the international launch.So, you could probably get to more than 1,000 scenarios if you play with those is variable depending on the assumptions. And I think there's some people at Blueprint that have probably done that. But what's safe to say is that our first couple of quarters of launch and our experience there, really set the foundation for sort of, what are the key assumptions that we're taking forward?And certainly, one of those is that we're going to continue to have very steady, consistent new patient starts and discontinuation rates that are very much in line with what we've been seeing, which supports extended durations of therapy that we think could be multiple years. And so, that is sort of the format foundation of our assumptions based on the last two quarters of experience.That was where we started and then you kind of think about reasonable ranges and assumptions around each of those things, and that really informed how we got to the guidance range.

[Operator]

Our next question comes from Peter Lawson from Barclays.

[Peter Lawson, analyst]

Was there anything that happened during 4Q or the beginning of 1Q, that kind of changes the view that GSM revenue should essentially be flat in '24?

[Kathryn Haviland, executive]

Thanks, Peter, for that question. I mean, the answer is no. But Philina, I know if you have any more color. I mean we've been very just as consistent. I mean we have said for maybe 18 months now that just it contributes about $8 million a quarter. That is steady Eddy. That is even very, very consistent quarter-over-quarter for a long period of time now. BSSM continues to have growth in it. It's just not the same growth rate as ISM.

[Philina Lee, executive]

Yes. The short answer, Peter, is no. The launch is not flattening. I think that our guidance is the clearest signal of that with over 80% of growth at the midpoint and all leading indicators being very positive.

[Operator]

Our next question comes from Colleen Kusy from Baird.

[Colleen Hanley, analyst]

Congrats on the progress. So, I think you talked about 20% of the past 400 docs based on volume have prescribed AYVAKIT. So, in those 80% of docs that haven't, can you explain what's been the hurdle for them? And what might convince them to start prescribing AYVAKIT?

[Kathryn Haviland, executive]

Yes. So, Philina, you should dive in here. Just to be clear that, that's been since the ISM approval, just to be pleased or we're trying to track here like physician to see as them generally, but we're looking at the -- we can't -- as Christy said in Philina, we can't really distinguish between advanced SM and indolent SM some other time based on diagnosis codes.We do look at the dosage 25 milligram as an imperfect proxy for that. So, this is really looking at the physicians who have been prescribing since Q3 and Q4, right? So, I don't know if Philina, if you want to?

[Philina Lee, executive]

Yes. Thanks for the question. This is a market where the cadence, the timing of patient visits is a really critical factor. And when they're able to engage and have that conversation about indolent SM with their providers.And so, I would say, at this point, this early in the launch, we're actually really excited to have had penetration into 20% of this group with room to grow the adoption both within that group as well as broadening beyond to those who haven't.I would say awareness among this group is very strong. They are all having personally engaged a number of these providers. They are all motivated. They are excited about AYVAKIT's benefit risk profile, and they're waiting for those next patients to come in and have that conversation.

[Operator]

We are coming up on the hour and going to end the call. Ms. Haviland, I turn the call back over to you.

[Kathryn Haviland, executive]

Thank you, Operator, and I want to thank you all for taking the time to join us today, and thank you for your questions. And we look forward to seeing you in the near term here, many of you at Quad AI in Washington, D.C. And so, have a great day, and we'll see you soon.

[Operator]

That concludes today's call. You may now disconnect your lines.