Incyte Corp

NASDAQ:INCY

Earnings Call Transcript 2021-Q3

[Operator]

Hello and welcome to the Incyte Third Quarter 2021 earnings call webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. We ask that you please ask one question and one follow-up, then return to the queue. If anyone should require Operator assistance, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Christine Chiou, Head of Investor Relations. Please go ahead.

[Christine Chiou, Head of Investor Relations]

Thank you, Kevin. Good morning and welcome to Incyte's Third Quarter 2021 Earnings Conference Call and Webcast. The slides presented today are available for download on the Investor section of our website. Joining me on the call today are Herve, Barry, Steven, and Christiana, who will deliver our prepared remarks, and Dash, who will join us for the 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 and are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our 10-Q for the period ended June 30, 2021, and from time-to-time, in our other SEC documents. We will now begin the call with Herve.

[Herve Hoppenot, Chairman and Chief Executive Officer]

Thank you, Christine, and good morning, everyone. I'm happy to report today on an important quarter for Incyte. But before we do that, I would like to take a moment to speak about the significant transformation our Company has undergone over the past 2 years. From the sub-quarter of 2019 to today, Incyte has more than doubled its number of approved products from 3 to 7 and has increased the number of approved indication from 5 to 12. A significant achievement for patients around the world.

Within the same time period, quarterly product and royalty revenues have grown nearly 50% from $534 million to $778 million in the most recent quarter. The 778 million in product on Royalty Revenue for Q3 2021 does not yet reflect revenue contribution from our 2 most recent U.S. approval: Opzelura in atopic dermatitis and Jakafi in steroid-refractory chronic GVHD. In addition, we expect further growth from the recent approval of Pemazyre in Europe and Japan, and Minjuvi in Europe.

We have the launches ongoing in Germany and will expand to other countries as reimbursement is secured. As we see on Slide 5, we have provided long-term guidance for some of these products, and there is significant upside to the current sales number. Within hematology-oncology, our MPN / GVHD franchise, which includes Jakafi and other innovation, is expected to surpass 3 billion in peak sales. Additionally, Minjuvi approved for the treatment of relapsed or refractory DLBCL has the potential to reach 500 million in this indication in the U.S.

While we have not provided guidance in Minjuvi, Pemazyre, and Iclusig, these products represent additional growth potential and generate further value to our business. Turning to dermatology, over the past year, we have successfully established our dermatology commercial franchise in the U.S. Given the product profile of Opzelura and the talented commercial team we have in place, we are confident in the potential for Opzelura and we expect peak sales to reach at least 1.5 billion in the U.S., in atopic dermatitis.

While still very early in the launch of Opzelura, the initial uptake has been strong and Barry will be providing details in his prepared remarks. Looking ahead in two other areas of our portfolio, we are anticipating multiple regulatory decisions in 2022, including Ruxolitinib cream in vitiligo in both the U.S. and Europe, Parsaclisip in three non-Hodgkin's lymphoma indications in the U.S., as well as once daily Ruxolitinib late in 2022 or early 2023. This 2022 regulatory decision, which closely follow multiple product approvals in 2021, position us well for further growth and diversification of our product revenues in the coming year.

Our partners are also making headway. With Novartis, ruxolitinib is currently under review in Europe and Japan for acute and chronic GVHD and capmatinib is under review in Europe for non-small cell lung cancer. In addition, Lilly is planning to submit an sNDA to the FDA for baricitinib in alopecia areata by the end of this year. If approved, these opportunities will provide valuable growth to our royalty revenues which have already surpassed $400 million during the first 9 months of this year. As we've seen, 2021 has been an important year of commercial, clinical and regulatory successful Incyte. With that, I will hand over to Barry to cover the individual product performance.

[Barry Flannelly, Executive Vice President]

Thank you Herve, and good morning everyone. Jakafi sales grew 12% year-over-year to reach $547 million for the quarter. And we are reiterating our full-year guidance range of $2.125 billion to $2.17 billion. Jakafi was first approved -- was the first approved treatment in myelofibrosis Polycythemia vera and steroid-refractory acute GVHD. And years later remains a standard of care in each of these indications. Growth across MF, PV and GVHD continues to be strong. And as you can see in the list, new patient stats have returned to pre -pandemic levels.

With patients staying on therapy longer, and new patients coming in, the total number of patients on Jakafi continues to increase year over year. Myelofibrosis patients, the largest proportion of patients on Jakafi comprise 45% of total patients, while polycythemia vera and GVHD patients accounts for 34% and 14% of total patients respectively. At the end of September, Jakafi was approved for its fourth indication, for the treatment of steroid refractory chronic GVHD. To put this in -- this recent approval into perspective, approximately 2000 patients with graft versus host disease are currently using Jakafi.

The majority of whom have acute form of the disease. There are over 14,000 patients in the U.S. living with chronic GVHD of which half require therapy beyond systemic corticosteroids. We expect the recent approval to accelerate new patient starts with Jakafi. Turning to slide 8, Monjuvi sales grew 22% sequentially to $22 million in the third quarter with growth driven primarily by demand. We're seeing increase in the number of total accounts across both academic and community settings and there has been a swift shift towards adoption of Monjuvi earlier in the treatment paradigm.

We now have a greater proportion of Monjuvi patients initiating therapy in the second-line, which should result in patients experiencing longer and more durable responses, leading to a longer duration of therapy. Feedback from healthcare professionals continues to be positive, with efficacy, duration of response, and safety being the key drivers of adoption. HCP awareness of Monjuvi 's differentiated profile continues to increase and the L-MIND 3-year results have been well received by the physician community.

As patients continue to return to the office, and as our reps continue to educate healthcare professionals on the clinical profile of Monjuvi, we're confident in our ability to build on this improving momentum. Turning to Slide 9. We are very excited to receive the approval of Opzelura, the first FDA approved topical JAK inhibitor for the treatment of mild-to-moderate atopic dermatitis. Prior to launch, we had identified 11,000 dermatologist and high priority allergist, the top 20% of which are responsible for nearly 80% of atopic dermatitis prescriptions.

Our patient assistance programs are in place to help reduce the barriers to access for Opzelura, and our negotiations with payers are advancing well. To date, we have made significant progress with our stakeholders in the launch of Opzelura. Since our launch on October 11th, our field-based representatives have actively engaged with 76% of our target prescribers and have conducted 8,500 HCP costs in the first 3 weeks of launch, of which 95% they're being conducted in-person. We're also receiving a significant amount of interest in Opzelura from patients.

And in the first 2 weeks of launch, we have approximately 61,000 unique website users and this number continues to climb. Further highlighting the level of engagement from patients, there were over 1500 patient registrations for our Co-pay card program And lastly, on the Payer front, our discussions with PBM s which include the top three who account for nearly 80% of commercially insured patients in the U.S. have been very positive as they realize the value proposition of Opzelura.

As a result, we expect to secure broad coverage in Q1 of next year. In the meantime, during this contracting period, we have multiple efforts underway to ensure patients are able to access their medication. Although it is still early in launch, our efforts are translating into the first signs of a very successful launch. As you know, there are limitations to the accuracy of script data. It's important to note that IQVIA s capture rate of prescriptions is under-representative of actual demand, especially in the initial weeks of launch.

Over time, the capture rate is expected to continue to improve. There are 2 different metrics that we're using to track performance, consisting of new brand -- new-to-brand Rxs, and 867 data. New Rx data shown on the left captures the patients who are either new to the market or have switched to Opzelura. In the first 2 weeks of launch, there have been close to 1,000 new-to-brand prescriptions, with nearly 2/3 of scripts coming from patients who were previously on topical corticosteroids therapy. On the right-hand side, we're showing 867 data, which is the number of units of Opzelura 60-gram tubes that our wholesalers are shipping to pharmacies.

While 867 data don’t translate directly into scripts, we believe it captures demand appropriately given the low level of inventory retail pharmacies typically hold for specialty dermatology products. Pharmacies order Opzelura when a prescription is received and approved by the patient's insurance, or processed through our patient access programs. In its third week of launch, 1,115 tubes of Opzelura were shipped by wholesalers, bringing the total shipped since launch to over 2,200. Based on early data, we are now tracking towards 300 plus units shipped in the first four weeks of launch. Now I will turn the call over to Steven for the clinical update.

[Steven Stein, Chief Medical Officer]

Thank you, Barry. And good morning, everyone. The third quarter brought numerous achievements on both the clinical and regulatory fronts. Starting with the 3 recent regulatory approvals. Minjuvi was approved in Europe for second-line diffuse large B-cell lymphoma in August. In September, Opzelura was approved in the U.S. for mild-to-moderate atopic dermatitis, and Jakafi was approved in the U.S. for second-line chronic graft-versus-host disease.

In addition to these regulatory milestones and successes, we presented pivotal data from our Phase III TRuE-V studies of ruxolitinib in vitiligo at the European Academy of Dermatology and Venereology. The full dataset highlighted the significant improvements in facial and total body re-pigmentation seen in vitiligo patients after treatment with ruxolitinib cream. Also presented at the DADV was positive pivotal data for bericitinib, our partnered product with Eli Lilly in alopecia areata.

These data showed that treatment with once-daily baricitinib, 4 milligrams was superior to placebo in achieving significant scalp hair re-growth at 24 weeks in adults with severe alopecia areata. We also announced a global collaboration with Syndex Pharmaceuticals, which is pending regulatory clearance to develop and commercialize exetilnimub an anti - CSF1 receptor monoclonal antibody for chronic graft-versus-host disease and other fibrotic diseases.

Lastly, we recently announced the acceptance of the Marketing Authorization Application for the European Medicines Agency for ruxolitinib cream in vitiligo. And yesterday, we announced that the FDA accepted the NDA for parsaclisib in 3 types of non-Hodgkin's lymphomas. We received priority review for parsaclisib in 2 of the indications, including for relapsed or refractory marginal-zone lymphoma, in adult patients who have received at least one prior anti - CD20 -based regimen.

And for mantle cell lymphoma, in adult patients have received at least one prior therapy. The PDUFA date for these 2 indications is April 30th, 2022. There will be a standard review for Parsaclisip in relapsed or refractory follicular lymphoma. In adult patients who have received at least two prior systemic therapies with a PDUFA target action date of August 30th, 2022. Let me remind you of the efficacy across non-Hodgkin's lymphoma. In relapsed or refractory marginal zone lymphoma, response rates seen and independently reviewed were 57% with a duration of response in PFS not yet reached. In mantle cell lymphoma, this was a 71% response rate with duration of response of 9 months and a PFS of 11.1 months.

And in relapsed or refractory follicular lymphoma, it was a 75% overall response rate with a duration of response of 14.7 months, and a PFS of 15.8 months. All this data is with the once-daily regimen of 2.5 milligrams. Remember this drug with designed to avoid hepatic toxicity associated with first-generation [Indiscernible] inhibitors and thus we have seen low rates of liver toxicity with less than 5% rate of grade-3 ALT NAST elevations. In addition, cases of serious diarrhea and colitis were manageable and reversible. Turning to the next slide, the clinical development of Parsaclisib in Hemolytic Anemia continues to progress with the Phase 3 study expected to start by the end of this year.

The study will evaluate the efficacy and safety of Parsaclisib verse placebo with a primary endpoint of durable hemoglobin response at week 24. Patients must have a diagnosis of primary warm antibody autoimmune hemolytic anemia, hemoglobin levels of 7 to 10 grams per deciliter, and a FACIT-F score of less than or equal to 43. This program represents another significant opportunity to address an unmet medical need, where there are currently no approved therapies for patients. Moving to our lumbar development program, we have multiple studies ongoing looking to improve upon the standard of care in myelofibrosis, polycythemia vera and graft-versus-host disease.

We expect data in our regulatory action for few of these programs by the end of 2022, including the NDA submission for the once-daily formulation of ruxolitinib. We also recently entered into collaboration with Syndax for axatilimab, an anti - CSF -1 receptor monoclonal antibody, which is currently being evaluated as a monotherapy in third-line chronic graft versus host disease. In addition, we will have the opportunity to evaluate axatilimab as a combination therapy with our JAK inhibitors, where the ultimate goal will be to arrive at a safe and effective combination that could lead to a steroids-free regimen for chronic graft versus host disease.

Turning to dermatology and ruxolitinib cream in vitiligo. The Phase III TRuE-V data presented at EADV showed meaningful superiority to vehicle, with 30% of patients achieving a facial VASI 75 at week 24, which is in line with our Phase II results. As a reminder, F-VASI75 response in the Phase 2 trial, continue to improve with ruxolitinib cream treatment, with an over 51% response rated week 52. We expect the 52-week data from the TRuE-V [Indiscernible] studies to be available in 2022. We are extremely encouraged by these positive results, and the impact ruxolitinib cream may have for patients living with vitiligo, in the U.S., in Europe.

The MAA was recently validated by the European Medicines Agency, and the U.S. sNDA is in progress. Turning to Slide 18 in an update on our dermatology programs, We continue to focus on developing our dermatology pipeline with ruxolitinib cream and INCB54707, an oral selective Janus kinase-1 inhibitor. Multiple studies are ongoing with ruxolitinib cream in atopic dermatitis, including TRuE - AD3, a pivotal trial in atopic dermatitis in pediatric patients. In addition to our TRuE-V Program in vitiligo, we are also looking at 707 in a Phase II study in patients with nonsegmental vitiligo with a body surface area of greater than or equal to 8%.

Additional studies for 707 are currently underway in other indications, including 2 Phase II trials in hidradenitis suppurativa and prurigo nodularis. We look forward to updating you on these programs next year. In closing, we had a very successful quarter with a number of clinical and regulatory accomplishments, including three approvals. The FDA acceptance of an NDA for Parsaclisib as a treatment for three types of non-Hodgkin's lymphomas and the EMA acceptance of the MAA for ruxolitinib cream as a treatment for vitiligo.

Later this week, we invite you to join an analyst and investor call to discuss our RO PD - L1 program, including data for 86550, which was accepted for presentation at the Citi Annual Congress on November 13. With that, I would like to turn the call over to Christiana for the financial update.

[Christiana Stamoulis, Chief Financial Officer]

Thank you, Steven. And good morning, everyone. Our total product and Royalty Revenue for the third quarter were $778 million, representing a 25% increase over the third quarter of 2020. Total product and royalty revenues for the quarter are comprised of net product revenues of $547 million for Jakafi, and $48 million for other hematology oncology products. Royalties from Novartis of $95 million for Jakavi and $3 million for Tabrecta and royalties from Lilly of $87 million from olumiant.

The 12% year-over-year growth in Jakafi net product sales, reflects higher patient demand across all indications and a continued recovery of new patient starts as we continue to emerge from the COVID-19 pandemic. The tripling of the Olumiant royalties is due primarily to the use of Olumiant for the treatment of COVID-19. Per our agreement with Lilly, for global net or sales of Olumiant for the treatment of COVID-19, we're entitled to receive royalties equal to the base double-digit rates applicable to all global net product sales, plus an additional 13% royalty.

Moving on to our operating expenses on a GAAP basis, ongoing R&D expenses of $331 million for the third quarter increased 11% from the prior year period, primarily due to the progression of our pipeline. Our SG&A expense for the quarter of $191 million increased 58% from the prior year quarter, primarily due to our investments related to the establishment of the new Dermatology Commercial Organization in the new U.S. and the related activities to support the launch of Opzelura for atopic dermatitis.

Our collaboration loss for the quarter was $9 million, which represents our 50% share of the U.S. net commercialization loss for [Indiscernible]. This is comprised of total net product revenues of $22 million and total operating expenses including COGS and SG&A expenses of $40 million. Finally, our financial position continues to be strong as we ended the quarter with approximately $2.3 billion in cash and marketable securities.

Moving on to our guidance for 2021, we are reiterating our revenue COGS, R&D, and SG&A guidance for the year. We remain confident in our full-year guidance for Jakafi based on our continued recovery of new patient stats and the approval in steroid-refractory chronic GVHD. Operator that concludes our prepared remarks, please give your instructions and open the call for Q&A.

[Operator]

Thank you. We'll now be conducting a question-and-answer session. We ask that you please ask 1 question and 1 follow-up, then return to the queue. [Operator instructions]. And once again, we ask you please ask 1 question, 1 follow-up then return to the queue. Our first question is coming from Tazeen Ahmad from Bank of America. Your line is now live.

[Tazeen Ahmad, Bank of America]

Hi guys. Good morning. Thank you for taking my questions. I'm going to focus on atopic derm. So, it looks like out of the gate, as you mentioned, the metrics are looking pretty strong. Can you give us an idea of what are the physicians that are picking up use initially? Is there a particular patient population that you're hearing that doctors want to try this out on first, at least feedback from your sales force? And if you were to say right now, what is your biggest roadblocks to pick up? Is it getting on insurance formulary or is it just trying to educate doctors on the product? Thank you.

[Barry Flannelly, Executive Vice President]

Hi, it's Barry. Thanks, Tazeen. First thing I'd like to say is that I realize I said that we were going to ship, in my prepared remarks, 300 tubes of Opzelura in the first four weeks. And of course, I meant 3,000 tubes, which would actually make it on par or better than the last two launches in atopic dermatitis. So, we expect those 3,000 shipments to pharmacies to actually translate into more than 3,000 prescriptions in the first full four weeks of our launch.

So what patient population are they really looking at? It's just the indication, essentially patients who are 12 years or older. There's no difference. I've spoken to many dermatologists -- spoken to many dermatologists, and they're confident that they can use this drug in teens all the way up to the older adults. So, the biggest roadblock, patient access is always an interesting problem at the beginning of a launch, but in fact, I think we're making great headway there.

And as I said in my prepared remarks, I think we will in fact have broad coverage in the first quarter of next year. As you know, when new products are launched, particularly products like this in dermatology, sometimes the big PBM s will just block you for 6 months or more, and we think we can overcome that as quickly as possible. We've presented many times to payers across the country, big and small payers with our clinical data, and they're really impressed by the value that Opzelura will provide to these patients.

So even though it is always [Indiscernible] to worry about patient access, I think we're going to be fine in the relatively near future. As you know, in fact, when they start a new year is really when you want to ensure that your formulary is fully blown out, and all of your customers know exactly what's going to be covered and what's on the formulary. So, we think in the beginning of the year, we'll have a good progress there.

[Tazeen Ahmad, Bank of America]

Thanks’ Barry. And just to clarify, do you know how long it's taking from the time the doctor writes prescript to the time to patient is receiving products in the early days of the launch?

[Barry Flannelly, Executive Vice President]

I don't. It's very early. I can't give you medium or an average. Some patients are obviously having to have prior approval. Other patients go through our IncyteCARES Patient Assistance Program. I'm sure some patients are getting it very quickly and other patients it might take a few days, but I don't have an average for you yet.

[Operator]

Thank you. Our next question today is coming from Brian Abrahams from RBC, Your line is now live.

[Brian Abrahams, RBC]

Hey, guys, thanks so much for taking my question. I have a question on the MF dynamics overall, it looks like -- and lifecycle, it looks like patient volumes has been very stable year-over-year in MF for Jakafi, and you're seeing a lot of the growth being driven by the other indications. Just wondering if you could talk about what goes into your out-year guidance in terms of overall market dynamics across the indications?

And then as we think about longer term, you didn't talk too much about the ongoing Phase 2, Phase 1-2 work for the [Indiscernible] and [Indiscernible] too and just wondering where those stands and your level of confidence that that can drive potential growth and durability in the MF indication? Thanks.

[Barry Flannelly, Executive Vice President]

Sure, this is Barry. I'll start and then hand it over to Steven for a bet and up to on where they stand. As you can see from the slide that we showed, the remarkable thing about Jakafi is that month after month, year-after-year, the total number of patients on Jakafi continues to increase. Whether it's MF, PV or GVHD. The number of patients who are on MF and are on MF for a very long period of time are -- it's amazing.

In fact, we know that we've really only penetrated about 50% of the market. Our biggest competition is really watch and wait. So, getting physicians to fully understand the survival benefit that Jakafi offers to myelofibrosis patients is really what our challenge is, and we know we're making headway all the time. As I said in the beginning of my prepared remarks that Myelofibrosis PV GVHD, the standard of care is Jakafi and it will continue to be that way.

PV patients, same thing. They continue to grow year-after-year, month after month. And GVHD, especially for chronic GVHD, we know is going to grow very well. Those patients are at prevalence of those patients are greater than a prevalence of acute GVHD patients. And the chronic GVHD patients stay on for a much longer period of time. So, I will hand it over to Steven now for [Indiscernible]

[Steven Stein, Chief Medical Officer]

Thanks, Barry, Brian. Thanks for your question. So let me deal with each separately. Firstly, I'll start with L2, which is a mechanism. Now, we have data in hand that we understand in more and more. So, if you look at iron metabolism in humans, hepcidin, the way it works is high levels of hepcidin inhibit iron absorption from the gastrointestinal tract and stop it's released from macrophages. So, there's less iron available to make red blood cells. If you are able to inhibit that hepcidin pathway to an L2 inhibitor, iron's released and made available both from absorption in both for macrophages to make new red blood cells. And we've shown that this compound

[Herve Hoppenot, Chairman and Chief Executive Officer]

does that from a mechanism action point-of-view. So, where we are, we're very excited about its potential. We're completing the monotherapy safety and then the combo safety, and then we'll be ready to make more decisions on the path forward in terms of more pivotal studies, which let me remind you which I've said repeatedly will hopefully address both the anemia of the underlying disorder, which we think is upside and mediated, plus the anemia induced by ruxolitinib, which we also think is upside and mediated. And if we achieve both of those, you'll get the safety aspect and less discontinuations when it works. And then maintain ruxolitinib dose and enhance efficacy. So

[Steven Stein, Chief Medical Officer]

the program really has a lot of potential. We hope to have a recommended phase 2 combo dose ready to go early next year and then make those decisions. For the BET program. again, a compound with heading our hands for a long time, years ago, we dosed it too much higher multiples in patients with solid tumors. And the dose limiting toxicity there, as we know with BET inhibitors was on target in the thrombocytopenia. We now doing it at 20% to 25% of where we were before. Gathering monotherapy safety in marlow prolactin neoplasm patients. And then

[Barry Flannelly, Executive Vice President]

Combo safety and they will again, just like with the old program, have to make decisions on where to go, looking at the competitive space as well. Would we be looking given its profile at sub-optimal patients, and in addition, would we consider first-line? So those datasets for the mono safety and the converse safety will be available in 2022. And as soon as we are ready and put up on tentrials.gov, we'll be able to show you our clinical programs there, but we're comfortable where they are at the moment. Thanks.

[Brian Abrahams, RBC]

Steven Barry Thanks so much.

[Operator]

Our next question is coming from Cory Kasimov from JP Morgan. Your line is now live.

[Cory Kasimov, JP Morgan]

Hey, good morning, guys. Thank you for taking my questions. I wanted to go back to AbCelera. Now that you're early on in the launch and deep in discussions with payers, curious if you're thinking around expectations for gross to net have changed at all, how we should be thinking about this short-term, and then longer-term trends on this front. And then the follow-up is, as we think ahead to the anticipated approval of Opzelura for vitiligo, how did the tubes per patient likely differ for a typical patient in that setting versus atopic derm. Thank you.

[Barry Flannelly, Executive Vice President]

Hey, Craig, it's Barry. When we're thinking about the gross to net is that what we said in the past is that in long term we anticipate the gross to net to be 25% to 50%. In this quarter in particular, and then as we move into next year, the gross to net will be much higher just because of the NDC blocks and the patient assistance programs that we provide, the co-pay assistance. And as you know, in this therapeutic category, over time, the use of those programs declines as there's more broader coverage, so our gross-to-net will continue to improve.

For vitiligo or maybe I'll start it out and hand over to Steven, We know it's going to be greater. I think we've forecasted, perhaps we said, that we think in atopic dermatitis, 3 or more tubes will be used per year, 10 tubes per year perhaps for vitiligo. I forget exactly what the clinical trial was, how many tubes we got, but obviously, we want to -- patients are going to use this for 24 weeks or 52 weeks, and we will see how much further after that. But I'll let Steven comment as well.

[Steven Stein, Chief Medical Officer]

Thanks, Barry. Thanks, Cory. The data in my prepared remarks for the TRuE-V Phase III studies thus far, has completely replicated the Phase II data in terms of the facial VASI75 at 24 weeks hit in that 30% plus range. We know from the 52-week and a 104-week long-term follow-up on our Phase 2 studies, that one of the phenomena with treating vitiligo is continued improvement over time.

And in fact, most of the patients the vast majority, elected to go on to long-term treatment in the long-term safety extension because of continued improvement. So what Barry is alluding to is, continued use of time and over a 1-year period, the current estimate is at least 10 to 11 60-gram tubes would be needed to achieve what I just spoke about. And then we will get more data in the second year as we continue to follow these patients, thanks.

[Cory Kasimov, JP Morgan]

That's helpful. Thanks, guys.

[Operator]

Thank you. Next question today is coming from Kripa Devarakonda from Truist Securities. Your line is now live.

[Kripa Devarakonda, Truist Securities]

Hey, guys. Thank you so much for taking my question. So, with the approval of Opzelura in atopic derm and the regulatory progress in vitiligo, it looks like the Dermatology Franchise is off to a great start now. You also have additional trials going on. Can you talk about how you're thinking about the future of the Derm Franchise? Given what you've already targeted [Indiscernible] would you be looking for something to complement that? Or should we look -- expect something more broad? Thank you.

[Herve Hoppenot, Chairman and Chief Executive Officer]

Herve here, and then Steven will speak about the specifics of what's going on in Derma and beyond dermatology with our current portfolio. I mean, the whole idea from the beginning was that we do research and discovery of new products somewhere in between immunology, inflammation, and cancer. So, some products are typically cancer products. But many of the products targeted-therapies type of product, antibodies, etc.

But many of the mechanism we are studying in fact have application outside of cancer. And that's where it [Indiscernible], that's where it started. And what we see today when you look at the 10+ mechanism that we are studying in early studies, is that they can have applications outside of cancer. That's what we found with PI 3 - kinases that are in hemolytic anemia.

That's what we see in many dermatology indication. So, the goal is really to continue on that sort of photos of science type of approach. And obviously because dermatology of skin is the largest immune organ, we see a lot of applications in dermatology in the short-term. But it could also go in other type of inflammatory immune type of disease. So maybe, Steven, if you want to give everybody.

[Steven Stein, Chief Medical Officer]

Thank you Herve, and Kripa thanks for the question. Herve is right. The way we are viewing dermatology and I'm glad you called it a franchise even from an R&D point of view, is absolutely not a one and done. There's life cycle management of the cream itself ongoing, within a topic dermatitis and some of the manifestations thereof, like chronic hand eczema, et c.

There's still questions to be asked and addressed in vitiligo, including what happens with -- in patients on for the long term with really good improvements in facial Vesey 90 and beyond. And what happens with withdrawal in those situations? And then beyond those indications as Herve was alluding to, given the mechanism action of the cream in terms of JAK start pathway, there are a number of other indications that we're extremely interested in addressing, which are actually relatively, from an R&D point of view, certainly with an oncology context, really easy to study in terms of time.

So, stay tuned. We view this now as a launch cycle management opportunity with a scale that we can address in a very, very efficient manner. And then because dermas, as you also -- as others have said, they are alluding to have become really important to Incyte, both from an R&D and then a commercial point of view, it's beyond in terms of our other compounds. So, I alluded to in my prepared remarks with 54707, our relatively JAK -1 specific

[Herve Hoppenot, Chairman and Chief Executive Officer]

oral inhibitor. That there are other indications for which we already have really good Phase II data in Hidradenitis Suppurativa. We have an ongoing Phase 2B there and approximately 200 patients that will deliver data next year and then we can make a decision on what to do from a pivotal aspect. We studied net compound in Prurigo Nodularis. Again, the mix of action is very relevant there.

And then in my prepared remarks for non - segmental vitiligo with body surface areas of -- total body surface area involvement of 8% or greater. We think the risk-benefit may well be favorable for an oral JAK there. So, you can see that derm thinking from an R&D point-of-view is expanded in an appropriate proportional way and it's relatively efficient to do so. Thanks for the question.

[Operator]

The next question today is coming from Salveen Rachael from Goldman Sachs. Your line is now live.

[Salveen Rachael, Goldman Sachs]

Good morning. Thanks for taking my questions. So back to Opzelura, could you just give us any qualitative feedback you're getting on the launch and with regard to the safety profile and use in the context of which population would they be looking to [Indiscernible] for instance. And then in vitiligo, is there any change to the outlook for market opportunity here?

[Barry Flannelly, Executive Vice President]

Hi Salveen, it's Barry. So, regarding the safety in a black box, I guess you are alluding to is that dermatologist s is very used to explain to patients the difference between a systemic product and a topical product. For most skin diseases, in fact, dermatologists would rather use a topical product. So, they know that for example, that the safety profile between an oral JAK inhibitor and a topical JAK inhibitor is going to be very different and so they are very comfortable with that.

As I said before, I've spoken to many dermatologists we've gotten a lot of feedback from the field, there really hasn't been a push back on the types of patients they're going to use this Opzelura in. It's approved for the indication from 12 and over and that's what they're telling us they're going to use it for. In terms of combo use I don't know. Sometimes they do cycle through -- dermatological cycle through different therapies as they're trying to control patients with atopic dermatitis, but we can't say in the future what they're going to do.

In terms of vitiligo, it's a game changer. It's a -- it can change patients’ lives and how they feel about themselves. It's the only drug that will be approved for repigmentation of the skin. And we really think that's going to be something that patients and dermatologist healthcare providers who want to utilize because it is such a unique treatment and it's going to help maybe hundreds of thousands of patients, if not more live a better life, I think.

[Salveen Rachael, Goldman Sachs]

Thank you.

[Operator]

Our next question is coming from Jay Olson from Oppenheimer. Your line is now live.

[Jay Olson, Oppenheimer]

Thanks for taking the questions and congrats on the 3 parse explicit filings in acceptances. Can you comment on FDA 's rationale for granting MCL and MZO priority reviews while FL received a standard review. And then on the last call, I think you mentioned the tumor -agnostic programs for cyclicity would transition to a molecularly defined approach.

And I was wondering if you have any more details on those plans. And then lastly, on Monjuvi. Can you talk about any impact that you're seeing from Polivy, especially as it moves to the front line setting and any feedback from physicians in terms of how they compare those 2 drugs. Thank you.

[Steven Stein, Chief Medical Officer]

Jay, it's Steven. Thanks for your questions. On the Parsaclisib acceptance of filing. So, it's one of the biggest submissions I've ever been involved in, in a positive way because we submitted all 3 indications at the same time with the entire package, realizing that the diseases, although under the umbrella of non-Hodgkin's lymphoma in general, are different in terms of some of their pathophysiology and the way they behave.

And that's exactly what happened in terms of the review cycles you allude to. So, for both marginal zone and mantle zone lymphoma, given the unmet medical need there, the FDA felt that they weren't a priority review, and also given the data we've seen. For follicular, I think their feeling is maybe it's a little more of a crowded space, less unmet medical need. But also, and I think very importantly, it's a condition that they want long long-term follow-up in terms of the responders. And I think that's what's driving the review cycle there being lengthened.

Obviously, our intent is to try and march these through all at the same time and get them approved at the same time but if they end up separating out follicular to get longer follow-up on the responders, I think that's what's driving the standard review cycle there. In terms of your second question, I think you were alluding to Pemigatinib, tumor agnostic program, our FGFR inhibitor.

And we had a tumor agnostic study underway for patients either with FGFR 2 driven arrangements, or FGFR3 or any others. And what we saw within that program although early and small numbers is some encouraging signals in certain areas like glioblastoma that felt to be more FGFR 3 driven in like some areas of non-small cell lung cancer that were more FGFR 2 driven.

And we felt that the likelihood of getting a wide Toomey agnostic indication was perhaps more limited and it was more efficient to stop the agnostic program enrolling across the board and go at those -- exactly at those two histologist directly. So, there will be a Phase 2 studies underway in both glioblastoma multiforme, that's FGFR 3 driven and then in non-small cell lung cancer that's FGFR 2 driven. And then for your Monjuvi policy question, I'll turn it to Barry. Thanks.

[Barry Flannelly, Executive Vice President]

Sure, Jay. In terms of Monjuvi and how it relates to Polivy, we think -- well, first of all, we're approved in the second-line setting for diffuse DLBCL patients. And we really think that our profile is always going to be attractive to patients and to physicians. In fact, perhaps, as you know, Polivy has reported over the last two quarters that their sales have declined. And we actually believe that because we are continuing to make inroads there, but Polivy is approved in the third line setting, we're approved in the second-line setting.

As far as moving to the first-line for Polivy if they do move to the first-line, we haven't seen the data yet, but that wouldn't bother us. It actually gives us more faith that our front-line trial will be positive for these patients. And that even if they're in their first-line setting before we get there, we'd be the choice for the -- in the second-line setting going forward. But we really believe that if their study is positive in combination with R-CHOP, our study could be positive in combination with R-CHOP.

[Jay Olson, Oppenheimer]

Great. Thanks for taking the questions.

[Operator]

Thank you. Your next question today is coming from Mark Frahm from Cowen and Company. Your line is now live.

[Mark Frahm, Cowen and Company]

Hi, thanks for taking my questions. To start with, I wanted to just follow-up for -- Steven, on your comments of how to -- when you were discussing that you've [Indiscernible] pathway engagements, and [Indiscernible] and pathway, were you thinking just about iron release or have you seen rises in red blood cell counts in that mono-therapy trial. And then for Barry, maybe if you can give a little more granularity on what you mean by bright access. I guess, one, have any meaningful contracts been signed yet, or at least getting very close to the finalization where maybe you can speak to what type of [Indiscernible] you're expecting to be in these final agreements.

[Barry Flannelly, Executive Vice President]

Mark, it's Steven. Thanks for the question. We have not presented publicly data yet on hemoglobin improvement. Is that what you are asking directly? But we have demonstrated pre -clinically and then in-clinical samples that it's doing exactly what we wanted to do from an MOA point-of-view in terms of iron dynamics in ferritin. We don't have the clinical endpoint yet on actual rise in hemoglobin and hope the -- that will follow and we'll be able to present that next year to you. And then Barry can answer the second part.

Sure. As far as negotiations with payers, like I said, they are ongoing. We think they are very positive. We think in the first quarter, we'll actually have broader access, and so we're negotiating not just with the large PBMs, but all of the regional payers that are important throughout the country. And so, I'm very confident that we will, in fact, in the near-term sign contracts.

But don't forget, patients do have access to drug now, not just through our patient support program, but they are being paid for. You asked about [Indiscernible]. We think that this drug is going to be used after steroids, and I think that's perfectly appropriate. We think in fact, we have a very good situation where from steroids all the way up to systemics, all of those patients, for mild-to-moderate disease, this will be the drug to use for them.

And we know that 1,000s and 1,000s of patients have already failed steroids so that patient population is just there for us to -- for them to begin to utilize a drug with the profile of that Opzelura has. We're confident about our future market access, and we're confident that patients are getting [Indiscernible]. And we don't think that [Indiscernible] will be a problem or if there is one [Indiscernible], just like in our label that should be used after prior topical therapies, that's exactly where it's going to be used and we're fine with that.

[Operator]

Thank you. Our next question is coming from Andrew Berens from SVB Leerink. Your line is now life.

[Andrew Berens, SVB Leerink]

Hi, thanks for taking the question. Maybe just a little color on the sample program. What size of the two that are being given? And are there any mechanics that the physician has to go through before giving a sample? Just trying to get a sense for how confident you are at the samples that are going to be converted to paying patients.

[Barry Flannelly, Executive Vice President]

Well, I'm not sure if I exactly understand your question, but sample-size are in fact 5 grams, so it's a very small tube. Healthcare professionals don't really have to go through anything in order to utilize samples. And --

[Andrew Berens, SVB Leerink]

Okay.

[Barry Flannelly, Executive Vice President]

Okay?

[Andrew Berens, SVB Leerink]

Right. I am just trying to -- so they don't have to have a longer-term prescription to get the free sample initially?

[Barry Flannelly, Executive Vice President]

No, they don't have to. No, they can just write prescriptions and many just write the prescriptions upfront, right away. So, what we did decide to do, in fact, was to temporarily suspend our sample program, that we had a report for the samples of a texture problem, so we just temporarily decided to stop the samples right now and that we will in fact investigate the root cause of any texture problem. Of course, we have to get the tube to be sent back to us. We have to verify lot numbers, that sort of thing. But we just thought it was the best thing to do at this point to temporarily suspend. Once we figure out what that report really means, then we'll see if we can restart the sample program again.

[Operator]

Thank you. Your next question today is coming from Michael Schmidt from Guggenheim. Your line is now live.

[Michael Schmidt, Guggenheim]

Hey guys, thanks for taking my questions. I just had a clarification OPZELURA and then one on PEMAZYRE. On OPZELURA of the 3,000 tubes shipped that you mentioned, is there any expected inventory in stocking or built up or is that expected to directly translate into prescriptions? And then on Pemazyre, I guess just thinking about market dynamics here in cholangiocarcinoma, given the sort of flattish sequential sales and how much additional growth opportunity you see in CCA? And again, help us understand the opportunity in non-small cell lung cancer and upcoming data disclosures for the Pemazyre program. Thanks so much.

[Barry Flannelly, Executive Vice President]

Sure. Michael so for the first one, 3,000 TEU ships, no, I don't think there's really much inventory. I think all of those TEU ship to pharmacies will be turn into prescriptions. The reason is simply that a drug like this, they don't keep on their shelf for a long period of time. They're going to make sure that, in fact, patients have insurance coverage or they have access to the drug before they're going to order this from the wholesalers.

So, I don't think there's very much inventory there at all. Obviously, there's inventory at each of the wholesalers’ sites that will eventually go out to pharmacies. In fact, most of these pharmacies are independent pharmacies. So, pharmacies that are very used to working with dermatologists, as there is -- that's their most of their practice. So that's actually very encouraging, because the dermatologists like to work with their local pharmacies that's experienced in working with dermatologists.

As far as the hemagglutinin goes and the cell carcinoma market in the U.S., sure there's growth opportunities there. Obviously, we have a first-line study. Moving into the first-line study would actually mean a whole lot to us that we know that there are patients are being tested for FGFR2 alterations and rearrangements, but there could be more patient tests.

The more patients that are tested to identify that they might have this FGFR2 alterations then they would be candidates for Pemazyre so I think there is growth there but it is as you know, a very small patient population. And as far as the lung cancer patient population go, we'll have to see how many patients actually do have an FGFR alterations in lung cancer. And we'll see what the future opportunities there as we continue to roll out our studies.

[Operator]

Thank you. We have time for one more question that comes from the line of Matt Phipps from William Blair. Your line is now live.

[Robert Andrew, William Blair]

Good morning, everyone. This is Rob Andrew on for Matt Phipps here. Just wanted to follow up on the earlier question that on the sample products and the potential issues there. How is that sample product actually different from the prescription product if at all? Are they produced separately and are there likely to be any issues with the commercial product at all? Thanks.

[Barry Flannelly, Executive Vice President]

So yes, they are produced differently. Obviously, it's a 5-gram tube. It takes different pressure to get into the 5-gram tube. So, there are separate batches and we're produced about a 140,000 of the samples. As far as the 60 gram, we're investigating all of the batches just to make sure that the texture and problem if there is any, we can fix and address.

We actually do have -- we're following up on information that was reported to us that we may actually have a texture problem with the 60-gram tube, but we're working through that right now, but we have to do root cause analysis, and we have thousands of tubes out there and we have to know, get them back from the patients or from the healthcare providers. Have that analyzed, and see how what the storing conditions were. And once that analysis is done, then we'll go forward from there.

[Operator]

Thank you. We've reached the end of our question-and-answer session. Ladies and gentlemen, that does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.