Incyte (INCY) 1 May 182018 Q1 Earnings call transcript

Company Profile

Participants

Michael Charles A. Booth	Incyte Corp.
Hervé Hoppenot	Incyte Corp.
Barry P. Flannelly	Incyte Corp.
Steven H. Stein	Incyte Corp.
David W. Gryska	Incyte Corp.
Reid M. Huber	Incyte Corp.
Alethia Young	Credit Suisse Securities (NYSE:USA) LLC
Cory W. Kasimov	JPMorgan Securities LLC
Ying Huang	Bank of America Merrill Lynch
Jason Zemansky	Barclays Capital, Inc.
Jay Olson	Oppenheimer & Co., Inc.
Yu Katherine Xu	William Blair & Co. LLC
Carter Gould	UBS Securities LLC
Peter Lawson	SunTrust Robinson Humphrey, Inc.
Salveen Richter	Goldman Sachs & Co. LLC
Marc Frahm	Cowen & Co. LLC
Reni Benjamin	Raymond James & Associates, Inc.
Liisa A. Bayko	JMP Securities LLC
Christopher N. Marai	Nomura Instinet

Call transcript

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Operator

Greetings and welcome to the Incyte First Quarter 2018 Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. It is now my pleasure to turn the call over to your host, Mike Booth, Vice President of Investor Relations for Incyte. Please go ahead, sir.

Michael Charles A. Booth

Kevin. you, Thank welcome call and first XXXX quarter Good webcast. to conference and earnings morning Incyte's The are used of slides today incyte.com. Investors on section the available for download Dave, today I Hervé, the joined call am Barry, on Steven, and Reed. my

our and we the XXXX some the statements XX, as remarks. results are that of of guidance, pipeline, today pass forward-looking the statements a to XXXX, for to remind regarding time and compounds statements risks the other in products, call of of statements, the commercialization we'd actual including that including Hervé These the to his the during materially, our introductory as Before for for development and begin, described from collaboration documents. are to those our you time uncertainties subject in like to forward-looking our development I'd like plans now made expectations differ our well the in our our for December plans may SEC to ended cause call XX-K number year partners.

Hervé Hoppenot

everyone. Mike, good morning, you, Thank and

would like not development benefit true Epacadostat share is a weeks call. into program biology is flow products briefly definitely and much from advanced several to and at compounds it's revenue patients few multiple the having with an did what tough longer That could for stage I perspective news the in of term. the new late-stage and been pioneering melanoma. be with in next said, our So begin there fast-growing a excited Incyte line, as a my to a lead of portfolio that was in today's pipeline to the marketed translate about we standpoint future earlier years, opportunities for

to ECHO presentation forward. in detail program. our scientific changes the downsize and a We should working while allow partners changes but allowing spending us recalibrate and later ask us the question, these smaller going Steven efficiently with program, will right to still to the have in our been investigators much these R&D

address to daily discuss the week me X-milligram which FDA in June in of profile date rheumatoid for the The let baricitnib action Last benefit/risk arthritis, convened FDA quickly voted the the Next dose. baricitnib. favor resubmission the XXXX. for of baricitnib NDA of is an AdCom

next Looking forward, Incyte the very for steps are clear.

R&D to continue guidance will we top profitability. We believe our this clear sustained towards we and and the morning, published new line are now the from grow that on I trajectory SG&A

X of and our an deliver the and projects, We slide the obligation development exciting also to illustrates breadth on depth portfolio have of of promise our pipeline. product

five molecules have to of to FGFR in announce inhibitor in program updates the before expected Jakafi initial of GVHD and We news XXXX. expect and half drive second results first data cholangiocarcinoma from trial clinical near-term we pivotal in of from flow. is We our later middle in the these the the that are year trial plan it from stage our

significant Olumiant market from growth. is agent continue the grew within JAKX and future royalties we our to analyst Europe XX, investor in deeper anticipate the and a number Royalties will Incyte strong and on U.S. in a portfolio expect top little during to also this be expect into programs quarter becoming combination where dynamics. other a the commercialization NHL time. Jakafi look Revenue in GVHD, over dig year. in continues to patients XX% this to Jakavi from by line Jakafi contributor and we trends delta in at single recruit now with and highlighting these program become antagonists and from we the to June Iclusig of and and We our candidates PD-X opening cohorts forward our into We into event

also we X, slide revenue of side right-hand in opportunities future. have the to drive growth additional multiple on the shown As

and be the global I'll New molecular update be on also a number Jakafi. for to Barry years. of that entities With call have for over an new that, Jakafi approval submitted turn we over for indication achieved could may the coming

Barry P. Flannelly

good you, estimated We $X.X two eligible for to Jakafi illustrates the its and because the growth therefore, indications, significant we PV and XX% in up Net take everyone. We revenue see, reiterate which both are is Jakafi We same Thank billion revenue work PV the approximately by of potential mix potential the Jakafi total for quarter in range period exited does guidance today patient year. Jakafi year-on-year MF robust a XX,XXX first XXXX more of approved so over penetration morning, with to a patients. to in levels of increase in patients these Jakafi. are duration rises, being believe by patients prescription treated of billion. Hervé, QX XX% with be Slide our to net continue and is that the and last of full demand into Sales patients X XX,XXX therapy. of this and the continue to product of of that grew a in for and approximately product driven XXXX normal to to there proportion we XXXX, opportunity indications. Jakafi the the year bring $X.XX average saw augmented as inventory of therapy,

As the guidelines, Jakafi on our included over call that prescribing those community, the awareness I'll for increase. physicians guidelines is greater also you become last believe recall, in there a pass now the Steven treatment We an and as as year, among update that of a NCCN to for the guidelines. of now portfolio. in July PV was recommended more that Jakafi may with familiar usage PV

Steven H. Stein

everyone. Thanks, Barry, morning, and good

pembro you over monotherapy efficacy XX, epacadostat to are with which the in demonstrated the As clearly results important announced patients can or recently of to slide changes melanoma. not program, that see we making ECHO on advanced did following some ECHO-XXX, pembro adding add metastatic

the very important to and by and well of the assess to from conference possible. cooperation as swiftly month. ECHO-XXX committee as Merck, data into in the it's combination also the think data chemotherapy. achieve in next with investigators, as both changing objectives pembro studies bring ASCO X with another these significant share moved to combination these assessing We it to We organizing Phase PD-X as plus soon from the tumor We two IDO can trials. want with have We randomized lung type, very ongoing

of population, The been ECHO amended also be second lung cancer each Specifically, question the would consider PD-X stopped tests combination a and in look X proposed score their at program we'll we asking looking after melanoma. And pembro all in to studies the patients of performing thereby tumor to initiated. studies lung will alone, an thus combination a lung Enrollment IDO, Dova population. non-small chemotherapy pivotal at Phase plus all-comer the pivotal with chemotherapy chemotherapy be study has and cell IDO combination non-small in plus alternative pembro cancer high enable cancer the randomized versus proportional PD-X, therapeutic the the cell options. these plus in not be other (XX:XX:XX) versus physicians histology in in and will

emerging as significant endpoint lower of FGFR cholangiocarcinoma, of alterations as biology is potential On variety patients. INCBXXXXX which reminding compelling. and top in patients slide each the FGF transplants. these settings, with the small increase more commitment graft-versus-host need. and slide investigate with to finding half translational my of two-month The utility primary to FGF in trials need and In is The evaluating a conducted to for The FGFRX can disease, of XXX we advanced therapy be in an it If XXXX. finish GRAVITAS-XXX orphan updates but the therapy cholangiocarcinoma to enroll FGFRX anticipate the of survival. be patients describes allogeneic are in quarter, is trial would disease, expected in be in for that and data here unmet trial the any patients to trial post XXX and to graft-versus-host these. announce a believe trial of chemotherapy, initial between been short The of acute a XX, being high. very than second-line NDA year. I'll second this our and new mortality and be successful, to and or in number expected graft-versus-host will year. of clinical be this to next of data a open-label of progression-free we overall this the where proof-of-concept run intention FGFR other a lead patients additional supplemental The ruxolitinib in expecting line for with a graft-versus-host to In in graft-versus-host we confirm in a first-line the steroid-refractory rates alterations these more section and XX% may continue in will patients patients a year, plan treatment by we're could that with depending the disease. submission as pivotal inhibitor the mortality rates pivotal Unfortunately, REACHX can trials selective or the enroll GRAVITAS with detail. of more are collaboration XX patients Novartis, IDOX rate approximately on XX unresectable with transplant bring has and available we've data total summarized the overall with or the you response an early We translocations. with continued to only is the disease expected from the effective is inhibition half develop to submit setting, safe to represents a that are XXX can very is of patients in clear. itacitinib support disease. our than JAKX so second-line from due in translocations. with to patients REACHX, REACHX our graft-versus-host is response total ongoing NDA and I cholangiocarcinoma incidents results disease the later first result pivotal XX% seek evaluating these patients treatment-naïve patients approximately XXX enroll GVHD growing XX%, the program XX%, indication trial patients grade we rates without unmet

unresectable cancer. patients with We are also INCBXXXXX evaluating surgically or metastatic bladder in

this I'll will of efficacy Dave XX, slide to of financial pass half inhibition with patients trial lower update. fusions. the With focus the in cancer mutations FGFR or the on in for FGFRX the described bladder call As that,

David W. Gryska

Thanks, update will financial Steven, GAAP include and everyone. non-GAAP numbers. good morning, and The this morning

royalties of GAAP total release. basis. This non-GAAP revenue full In on to GAAP Jakavi from and the Jakafi comprised non-GAAP, to million Iclusig in the and please in quarter, million net $XXX $XXX net $X million is product million first we a Novartis, Lilly. of in refer reconciliation from $XX recorded revenue, $XX revenue, our royalties For in of product press both Olumiant million

sales quarter received quarter begin that the $XXX of tiers in year. last Jakafi, XX% of period reset XX% than tier. same first Jakafi are and despite the of royalties royalty growth the the XXXX the period Novartis and of Remember royalties of growth $XX growth we First fourth in Jakavi because underlying represents net million year each the lower over million slightly over the first each in year XXXX, lowest represents quarter quarter last year significant sales calendar same

year first This by approximately oral patients. the the for share primarily as gross/net adjustment Our oncology quarter the of was and, hole of our of the with for is Part our quarter the drugs, higher the XX%. is Medicare donut Jakafi because the primarily D rest in of year, gross/net driven than similar adjustment

adjustment XXXX the our We full-year XX%. gross/net for be will expect that approximately

on and on goods revenue quarter million product net $XX cost Jakafi, sales. the Jakafi includes the of for payment royalties Our for U.S. to basis. of Iclusig, a of was This cost non-GAAP sold Novartis

on quarter primarily million the non-GAAP clinical a basis, for expense by driven R&D development Our was programs. $XXX

includes are the Our basis. for on the an lower quarter in the expense and to which typically first independent in year non-GAAP foundations, SG&A was progresses. $XXX donations increase a million higher quarter charitable This as our

GAAP from recorded The quarter, our two first recorded of the of press non-GAAP in this $X GAAP and, quarter. we on reconciliation net XX summary mentioned, In $X interest basis. non-GAAP I on a income the more release. in provide summary provides detailed reconciliation guidance. million a first and net loss provided Moving items, metrics to as non-GAAP non-operating a million Slide is next of a updated morning's to slides a we

We or revenue to have of product cost made revenue no guidance. changes

million billion, As which $X.XX GAAP from our we development of our adjust $X.XX change epacadostat new will R&D is our to reduction programs, previous guidance $XX to a range billion a of guidance.

prior the lower out, epacadostat and be expenses XXXX compared will we to XXXX. expect related further plan, to and in significantly Looking our also R&D

$XX to April purchase property. non-GAAP a intellectual exercise BMS In in our related quarter. This PD-X will million to a paid from we our nonexclusive be the to addition, second in excluded option earnings fee license amount

and our are perspective, our recent well-positioned the with news to to delivered of the despite deliver and product SG&A of to ECHO-XXX Please range a we a the GAAP revenue first sheet, cash the give marketable the Thank disappointment, quarter. believe and included we epacadostat our Finishing This we shareholder are updating Operator, to continue open development to million We we $XXX SG&A prepared first in advancements the epacadostat up ended concludes with revenue marketable in now for the end previous we we guidance. in $X.X growth and To of prelaunch which cash and potential cash believe $XXX value. Given year a were to from securities. the quarter our balance level make over strong development have and your programs, expense Q&A. program, excludes similar securities, long-term with that that million. $XXX clinical expenses guidance we strongly expect billion million remarks. instructions you. summarize,

Operator

Certainly.

Credit first question coming Young is Alethia Suisse. from Our from today

Your Credit guys. - line live. Securities Thanks question. taking is for my Alethia now (USA) Suisse Hey, LLC Young

burdened or you combinations, the which I are that about of the thinking for how with this then kind the , seen kind we've One, continue tumor Just program kind use would about the kind or changing you cell just used you And little of that mean, non-small the of of out monotherapy Phase X program assets? with in I AACR trends you two redefining well, high also, bit coming of kind you of talking think a will picture. about the folks group. have PD-X MacroGenics, or do big know

to just thinking kind Thanks. wanted I So you were how strategically well. that as of see about

Steven H. Stein

question. Alethia, your hi, it's Steven. for Thanks

MacroGenics done. in in tumor compound the initially, our niche combinations and you upwards at types. we exploring in at compound of it be We for to that registration pursuing PD-X, in potentially monotherapy, elsewhere of needed of But ways thereafter strategies for level, a So will if then tumor seven IDO. many look was terms independent likely internally be bigger the high

have a strategy work. numerous So, just internal it, be well to as attached reiterate, combinations to it to will for need monotherapy that as done proof-of-concept

way In terms mentioned, of mutational of select and general immunotherapy cetera. scores, tumor AACR following and perspectives you et all we're on PDL-X what proportional is patients the what checkpoints, tumor burden, potential to best in for including

but ECHO-XXX may We which also, what we own of We'll interesting. Thanks. obviously, haven't the are that all in would outlined see potentially from help examining data us. enrich, yet way to our or may be above biomarkers program not

Operator

you. Thank

is Cory JPMorgan coming question Company. from Our next from Chase Kasimov &

is now line live. Your

Cory W. Kasimov

I a can current And are curious a you this follow-up, your to in this prepared need options for to obviously, how questions. for single-arm you the viable regulators. my think the expectations guys, but trial helpful pivotal bit, XX%. then only to taking sizing? follow-up wanted little morning, comments a here and potentially framing cholangiocarcinoma. comments I'm describe would a The to there's, little FGFR that standards patients lack But rates What's you opportunity for clinically were a of satisfy result have if for as good Hey. potential clear market response thank X and meaningful much you by on also bit?

Steven H. Stein

else then the will first part it's your second. on opine Cory, question, the Steven. and somebody of do I'll

short XX% in with very chemotherapy You approximately months of set-in. survival progression-free the two Combination response are are rates around right.

XX% something durable for approval that so progression-free are us, a consideration combined of for durable, would for that's range that us, be, response So is north rates XX% an reasonable that setting reasonable in to that with survival. accelerated a

single-agent the a combination You to chemotherapy. targeted more that than do likelihood additionally, to with tolerable that, a is likely couple therapy lot have be

there. for should submission all viable we a the of reasons, the a for trial we'll think So results option have those we deliver expect,

I'll In market pass to Barry. the terms of it opportunity,

Barry P. Flannelly

Remember, with this subset that looking at. FGFRX patients have that translocations of a Sure. cholangiocarcinoma we're is

the So patients. in about and with worldwide patients X,XXX the X,XXX is opportunity the this United translocation States, disease we about believe in

Cory W. Kasimov

And program, highlighted on you intention then that that bladder trial one FIGHT to in the this slides, quick the follow-up be is pivotal the also a for cancer, your trial? there

Steven H. Stein

patients Steven with bladder Cory, is it's in FGFRX single-arm again. a study It cancer.

durable, deliver certainly for rate the should response be in considered it a that's an would U.S. approval it accelerated again, opportunity So,

for that randomized matter ex-U.S., that. a need of data but be for may terms additionally In we regulators consider, to would

Cory W. Kasimov

Thanks, guys. Okay.

Operator

Thank you.

from Our America next Merrill Ying Bank coming question Lynch. of is Huang of today

line is now Your live.

Ying Huang

rate Hi. if Thanks your R&D market maybe, is X-milligram, and maybe indications? my get allocated Thank for portion about can baricitinib for My R&D non-GAAP to the would And that's percentage now, R&D? you by the taking the considering questions. IDO we rate, not Good the of opt-in talk secondly, is but the program and the XXXX in sense morning. run FDA, for question other (XX:XX:XX) approved the first so reconsider you size you. X-milligram the the that then of a

David W. Gryska

the answer question. it's Ying, part Dave. I'll first So, the of

come remarks In down in a IDO what down, obviously we of insignificant. in break the be far overall million. of that We it out because And, originally we it – come in would thought be down will become but R&D XXXX, will $XX it will and be. about There than still very some, XXXX. smaller R&D, the don't about that terms mentioned obviously, expense XXXX it's by our percent will separately, will is by is but going that prepared to come

Hervé Hoppenot

the look at by it that frankly, always we have option and baricitinib, is we indication. regarding opt-in Yes, open

that RA. amount a in decision we happen sense indication correlation impact new and there royalty royalties it that the could that there is what But the between receiving. would an be no the So on connection in for really direct of and is has

So make go. it's today speculation far, far too us it to early would about which for way

to I have half decisions are the think discussion now, FDA, month make up a have and then the see on that. based to going to how will a all opportunities we June, and with we

Ying Huang

Hervé. you, Thank

Operator

Thank you.

is next question. coming from Barclays. Meacham question with Please today Our your Geoff proceed from

Jason Zemansky

lung you Thanks so to could some stratification, cancer is regards but that on again, ECHO-XXX there, specifically from it's in along or know Good clues Jason I'm any provided questions. I a that And sort there you some This for the morning, taking were lung way? give terms guys. patient with our insights trials, of clues then suggestions Geoff. any potential? for curious why happened early still epacadostat has touched days, much as this, what cancer but and upon then study of to

Steven H. Stein

Steven. it's hi, Jason,

on So, said I for morning, the Sunday prepared there. secure remarks, will been presentation ASCO to at It is early point my ECHO-XXX an have so of as in itself, able the view. from be presented data oral we biomarker

calls, As data we in comes through this only the said half before the and second of biomarker year. on repeatedly

tell junction, So, whether can't have will biomarker not it. that presentation you at or I this within data

Phase In asset and sort we the so the cancer in back, step terms a settings. be lung of two X randomized now, pre-proof-of-concept lung we'll to with Merck read-through either consider and firstly, why lung, tests setting, in doing of we

the a monotherapy that. at of clean There's pembro IDO of IDO learning or pembro to potential score study and setting. through enrichment Phase very effect that in current other XX% any or Merck it's by So randomized tumor the cleanly above, no of the a read versus we've X time very in definition the high isolates proportional plus

setting, then IDO being the second versus an with in with very MoA again pembro/chemo/IDO In combination clean IDO all-comer study, of explored that pembro/chemo. the terms us study – isolate alone lung allows of a and to chemotherapy different a again, versus

there. that this pembro/chemo then cleanly no versus at this in at the potentially And stratification important point isolate us pembro/chemo/IDO to So allows time. effect IDO again, biomarker junction, very

Jason Zemansky

you I indication for color. that is following potential consider the might other guess, epacadostat? there Thanks Great. any with oncology

Steven H. Stein

rule We you clear. In out principles other doublet, of blockade to will, Xs, are false randomize chemotherapy pretty the outlined, checkpoint MoA. and if Phase I test our want negative, the one terms a then histology as to

of your terms ask I'll other in to In answer beyond question. that, Reid biology, terms of

Reid M. Huber

is Reid. Yes, this

place think So we I an and in the to evaluate maybe and IDOX remains, most appropriate the remain, inhibitor. field interested

we the Merck way They'll that strong isolate described, epacadostat translational in lung I And are evolve given where so mechanism perhaps early a stimulatory and evolving thinking around to molecule the either to Steven situations in the clear absolutely to we look or look in vaccines, in details evaluate X clinical mechanisms, But conduct is think stage setting, the treatment like study as studies, be to with places, with data, studies, data. in months. but will we're on cancer, think have those. Phase effects and do scientific perhaps program we we to with in Phase I randomized our smaller a just over pursue ECHO-XXX think other going IDOX X/X likely coming preclinical other the for such immune the the

Jason Zemansky

color. Great. the much for Thanks so

Operator

Thank you.

Our next Company. Jay Olson with & coming from today Oppenheimer is question

Your now live. line is

Jay Olson

hey, for taking questions. Oh, Thanks the guys.

of just into paradigm some as there? Just wanted light opportunity. the how think make treatment will the us recent through should we the Jakafi in of understand IMBRUVICA? about sure we you Can us maybe commercial the take such And and approvals, opportunity itacitinib walk that current size where fit through to GVHD then

Steven H. Stein

talk Jay, it's start I'll Barry Steven. So, then opportunity. the will about off, commercial and

at entire in disease dealing look graft-versus-host entities. and back step you if with you're So, spectrum, multiple its

acute then first with is different the graft-versus-host a is fibrotic also XXX REACHX, ibrutinib To and study, there's with clinical there's disease is approval ex-U.S. started up disease, more data therapy. setting, in randomized that a steroid-refractory which days study delivering single-arm get ruxolitinib it a right, And more endpoint acute entity, post year, monotherapy you're in which be disease. chronic REACHX there of ruxolitinib in than to this in Novartis of graft-versus-host disease transplantation, that a phenotype more that XX-day available with single-arm So manifestations. completely looking will and clinical study of and back in steroid-refractory study which skin a at study approval that's settings, And occurs same the has setting. half steroid-refractory graft-versus-host a best where different terms chronic being a an has we versus

study, versus X rate best is is Phase therapy, REACHX, in ruxolitinib could endpoint randomized available which and primary month that at ibrutinib Our six. response setting include the

So in XX-day our would rate. be owned steroid-naïve which the that's that's the study if ultimately spectrum steroid-naïve If used different that data And way graft-versus-host in graft-versus-host setting, a a the upfront versus its by with so high-dose would was setting. placebo steroid-naïve setting, then of strongest in inhibitor, our GRAVITAS-XXX, is the steroid-refractory wholly to conducting itacitinib there's I response acute is steroids, which that's find then and upfront in I'll that in so patients. And setting, a we're setting rux successful, the before disease, randomized as and setting, epidemiology. in opine Barry steroid-refractory outlined that's with completely And Incyte you is the entity, ours. dexamethasone itacitinib, then remember, proof-of-concept globally more JAKX is is ask on compound where study XXX used. disease and above. It's

Hervé Hoppenot

here. Hervé Yeah.

potential of us. about for give U.S., Before you just the Barry perspective the speaks the to

is new number has a is program commercializing patients obviously ruxolitinib, that steroid-refractory cases U.S., our of and first GVHD So been around chronic around that GVHD and estimated, the of the slide of U.S. XX. in in the It's there and partner X,XXX acute in as cases it in Novartis the is Incyte GVHD, also X,XXX U.S. outside on where new shown is

XX,XXX a Japan, do cases a in important first it's U.S., with GVHD, where we the the north will setting. U.S., estimate Incyte new Novartis, commercialize itacitinib and the steroid-naïve Europe Europe, In GVHD we of the and commercializing where is that's we because of U.S., where that's will developed, across between work thing So Japan. and it's acute itacitinib be project and steroid-refractory

a the us. U.S. don't if specific want speak little I about short-term Barry, to for bit you opportunity know So,

Barry P. Flannelly

Well, the U.S. out so GVHD acute for I think pointed and epidemiology both the Hervé in chronic

about I think GVHD our GVHD, far it's We profile there. you IMBRUVICA, that be in question both will IMBRUVICA great asked We an serve obviously don't drugs there's in that chronic well uptick actually there. so think for setting. the a the chronic and to in see approved opportunity we and think patients

Jay Olson

Thanks taking the Great. for question.

Operator

you. Thank

Kathryn Xu from coming William Blair. question next Our today is from

now line Your is live.

Yu Katherine Xu

a just few morning. I Good questions. have

Barry, of or for you can Jakafi will be the R&D investing in comment at you update I strategy helpful. and moment profitability there then First, in at strategy the going Just and look guess, the some forward in (XX:XX:XX) duration to company? on Hervé MF the and this treatment do how And marketplace? Dave, also the PV very forward updated going advancing

Barry P. Flannelly

Thanks, question. Yeah. for Katherine, the

insurance and forth. this to of a as said switch we've So so difficult about it's sometimes actually follow I patients the times, number think, they persistency and in commercial setting how

to So turn is our evidence best to trials. the

more the at RESPONSE than for years. therapy than trials, look are look trial, patients at on that patients XX% you more at on you If COMFORT two of three example, years. And at the are have therapy if of XX% still you

guidepost. the our will years least of are at of our information have sort Society of There's either therapy. trial from five therapy ASH, an RESPONSE be still of at that's response on and where patients there Hematology, European completed from XX% or ESH, So data actually we've update that shown

MF, is duration So Dave? as of the long than but a for therapy on clearly longer stay well. patients in therapy time MF PV

Hervé Hoppenot

the the R&D on here profit Hervé question. Yeah, and

that is decisions of mean, a basis. I choices it – on and a said have series are product-by-product made We

the as I this this fairly it it's mean, goal year, in the drastically our to of program, are was we profitability So obviously discussed, as at the interesting bad look part very by just to the back ECHO-XXX multiple epacadostat improving of but that (XX:XX:XX) with certainly indications is sort was what we in fact, happened for this example. quickly. And an goal. not develop downsizing

We here well-established. where we has safety a good profile that a have was very that program have clear a biology. It's project

it standpoint, we data from clinical early a a the test in have did. as scale where strategic makes sense the to larger and We and lot it of cost

ECHO-XXX, the past led If two the studies over X around so the million years. – was for discussed look that at you that so the $XX we led Phase the results of Incyte to studies month, cost over of cost that study first total

So that et have supplier had the was a from the we it's cost, we because also a partner partnership, case because the sharing cetera.

you us and investment from that sense competitive it in that the put do us advantage. makes look that ahead a when say clear give from standpoint all world standpoint, at would So curve it the of you the to the

continue will the the more look very It's you and seeing, the dynamically. at top we program look the XX% them the biology cost and from at and look portfolio way, evolves, efficacy to science and the position. receiving. sense we competitive program invest as in it we grow safety outside we where the that Overall, in our are it when and bit research on to make the the So a royalties does as based U.S., the line to at little that then continues are the

looking epacadostat, events. the imagine past fully direction. cross saying we is It's to going quarter. not are it. would to have are that that in the with time, a have we over trends that a And existing trying over if that it's be or over some quarter, So as case crossed mean we at seeing depending that that that project the of clearly there is on requires downsizing to of you we go just the from the past trend can are resources today lines will realized, and said, what do the It situation the doesn't

Yu Katherine Xu

Thank you.

Operator

Thank you.

proceed from with today UBS. your Gould from is Carter coming Please question. question next Our

Carter Gould

line Good guess, the numbers robust, prior that I on these taken IDO on morning, the of team. basis. for color at things out and wanted kind comments Hervé, I kind spend R&D just the I out. R&D that coming with of even of still program-by-program a your follow-up the you still is to look – spend. on Thanks I pretty even that question. appreciate IDO mean, But, R&D you've

focus Thank to you after the of forward feel comfortable feel profitability and or on bit So may change. need terms to more like that maybe extent you expand that work if could little do you you still guidance on going just this you. in end just a here maybe the pretty

Hervé Hoppenot

Yeah. larger carry cost have epacadostat still Concerning that this of program, studies obviously, year will two the we the first of ongoing. the quarter the

don't expect dropping be suddenly to QX very quickly. So

will you think in I QX, and the see effect XXXX certainly most XXXX. of in and QX,

be shutting of you closure. carrying the by end clear, quarter, down some the very cost to of the up middle all the in just or stopping of the studies So,

good, have spending I So company like for us our be because that's same if believe At science as following thing over profitability be I this looks of the always quarters, we that we a we right growth sustainable in emerging line, a would believe what the R&D time, the next science I go. and as the we the have also robust perspective is having top is that like. planned that just we'll think for.

program looking were the in ratio a has into the fixed on smaller a earlier. more plan making happen the of bit at back less emerge put sustainable cost and at little a that profitability been investment cost, much always the specifically we IDO variable The very So or number, proof-of-concept it way stage just is into to point. fact or some and there was

Carter Gould

Thank you.

Operator

Thank you.

Robinson coming is Lawson Peter question next Humphrey. Our from from SunTrust

now is live. line Your

Peter Lawson

just buying there. around on is use of how that building and get maybe M&A kind you of capital could versus aggressive structure thoughts Hervé,

Hervé Hoppenot

have Yeah, to I know you always think – been assets. open we acquiring

been the it can three and back And over some has programs, some in, early-stage PD-X. past more partnership CYROS to that been go scientific and that see on like there were has the interested fairly been always we can the it are can so (XX:XX:XX), questions for or MacroGenics arginase, research to targeted has you you like needs, MIRAS then been years It based scientific you So see has there. portfolio selective. appetite

we that, that today lack are we think portfolio stage the middle look them And but few so at they of at look that will the at to strengthen opportunities. is studies, but products full the over them, at we opportunities would time, at pivotal next any in solid we of I starting see are being four molecules near-term spoke the new don't about and not have if the very them, like we of launch opportunities will We price. years. same

fits and is that be is to would I range that the portfolio with something price think that in it have something a reasonable.

billion, so we in way that at have us We that's gives billion cash, right it. $X.X that look really if and $X.X we some do to flexibility see opportunity, the the

Peter Lawson

the is going financial corporate going to profitability, key forwards? part of the comments be sustained strategy and And a that around

Hervé Hoppenot

profitable, the not is of being always There no It's goal. objective obviously.

fact, with we always is goal. technical been is, because spend the today, It short that So our see it of it What epacadostat in the reduction the R&D always of happening in term. is has goal. the the downsizing

gave, take it. if maybe, just you describe Dave, the can If guidance you we

David W. Gryska

Yeah.

So mentioning, we assumed just guidance, going Hervé the milestones of on what give if gave, the that's mean, $XXX we reduced of don't and if year. but the I between SG&A to take milestones, because reduced this we're you of $XX guidance Jakavi consensus guidance up and is we on is with course, not on the royalties and million guidance R&D consensus, million profits million $XXX million to non-GAAP end $XXX Olumiant, of you

profitability number we has Hervé to on that we're will and way that as over a on mentioned, time well yearly better our basis. hope So, get sustained

Peter Lawson

you much. questions. Perfect. taking for so the Thank Thanks

Operator

Thank you.

question. question today Please Our next Goldman Richter proceed from is your from Salveen Sachs. coming with

Salveen Richter

Thanks for my taking question.

early here. your the pipeline just strategy to and transitioning maybe So, checkpoint

looking could are are so these You've feedback? and you're to clinic, progressing you dose GITR, TIM-X combine like LAG-X to relative with you OXXX it targets, the for completed going escalation looks comment forward? studies just particularly how prioritizing competitive on given studies these what And the and

Steven H. Stein

I'll Hi. Steven. start. it's Salveen,

activity, as to year, with been of nor combination continue in large this proof-of-concept OXXX And was year slightly of over So, expected. ensuing And to-date competitors monotherapy. or for both to GITR the go checkpoints. we've the are GITR, clinic the our demonstrated early with us nor likely longest. We any discern for monotherapy next ability Phase to agonist you agonists the drugs, for recommended before hope They OXXX. should it get these not there's next amount Neither the to combination in have the currently, and doses whether two they X forward. half blockade. is with checkpoint they've pointed got out,

monotherapy and field, have not they're probably a bullish antagonists. they're we've TIM-X a what based to again, is terms INDs year antagonists, In and on their about LAG-X, large more this go Their amount the of likely a on clinic as through track to the competitors. seen and little their activity of get into whole, from

they we But and very I'll and combination into and be do very Thanks. go we not round that into taking just from we'll And out that the speak, clinic first competitors they'll and speak, only AXL/MER clinic early IO are clinic. proof-of-concept, the taking inhibitor, can get another where a immunotherapy we as we compound, that So said, as it's is remind on hopefully, that then our One has products. deal quickly. our and portfolio. too, I you go they carefully thing then the our learn, that's into will are with to and also where jump current they mechanism potentially and be see that about when we're as those great programs

Salveen Richter

following are the just and bromodomain the next first-in-man you programs. the up, What PIM December there? then And both had steps for Great. in data

Steven H. Stein

Yeah.

a compound. the So route thrombocytopenia. better selected publicly see work terms we in in of – the And profile we we're their bromodomain, does showed of that a to again, toxicity work of in a at it than on-target getting PK of But those presentations to there and terms with. with, targets, you're compound dose. terms towards our in carefully the a had that this because proof-of-concept go very for backup to it lead forward is for the right, have busy It program early have part looking if – completed

So work carefully that will have very we'll – to for it.

that a again, left. program many been There cautious PIM, we've not competitors For with. are

data and in of the heme have malignancies paths at way, looking with in and have in dose, combination. rux We them, are by again, Both myelofibrosis. combination really where a we're good there forward

our yet So it's can't in programs and rux we they of haven't and yet. would declare part early proof-of-concept MF. be where are work going still combination But reached

Salveen Richter

Thank you.

Operator

you. Thank

from coming Company. from is question & next Frahm Marc Our Cowen

Your now is line live.

Marc Frahm

PV Hi, we the long-term that questions. Can I that taking know guys. Jakafi GVHD – is? years? this talk to GVHD, to about the durability several that of we Thanks guidance potential transient a the you assume on If go you what back population people opportunity. that's very are sales MF more where for includes there's the since guidance, sales in be kind my kind or Jakafi for the of part thinking and Are going of like big of

Barry P. Flannelly

It's So, Barry. hi, Marc.

the on that is for try study to how to I'll chronic answer see results in GVHD, see have to we your the to stay So much But question with that believe acute get can product acute can even they go long potential for with the of the final the benefit therapy. greater We and could get remember, REACHX they be patients have. on GVHD long-term patients retreated or provided persistency for chronic same GVHD, GVHD.

for good. So could chronic both acute opportunity the and overall, GVHD that we quite think be

Hervé Hoppenot

the PV. you also in what being duration MF much see we observe as of treatment But shorter than and

Marc Frahm

you've kind pipeline, years Hervé, of you these model the some or be territories both more preparation company to few GVHD in going strategically, this maybe a other it's global is Okay. or of company opportunity breadth last ARIAD, a efforts Do as of the Japan preparing the molecules? things for kind fully for size same some necessarily fully the like to traditional the for the and but be global And with to in IDO. over epacadostat, next then, of whether spent just FGFR, still of and kind aren't of same have the Incyte you appetite also

Hervé Hoppenot

way was it and organize now, are happy to the portfolio. good to did the proportional It's question. we make we expansion, The that way a it we existing

and is on in working have that is fast-growing So a we're the organized thing team basically the U.S. Jakafi. top a Same well of commercial all the They very is standpoint. from doing line, in way Europe. there

team growth commercial ponatinib the in look Iclusig, self-sustained in is that, in Europe, see you the can at of Europe fact, – the you is with ponatinib fact, numbers In in if Europe. on

Iclusig or the changing So the we first not strategy fact and approach for Jakafi there. a our delay is, that in the have fact, after launch

pipeline GRAVITAS in Europe, European FGFR also in team our study, the a they development study, have study, of all We delta working centers. are new running the on the

geographies. and on program, becomes epacadostat, that spite not is goal have is the as available is the change a there. been people commercial is started modified, we do all thing, product for and a for scale-up of are is today. no the there a group each and the in which be for did very We will the of in working the hyper commercialization development that epacadostat direction development. to delay of we Obviously, team of with also stable. of for team. the in They would growth the that XX when back have but the in is proof-of-concept, a So we Japan, delay GRAVITAS on Europe the other changing. concerning around is U.S., there And the same but when of line that It's of the because Japan no plans same plan. change these is moving have Obviously, And we there top

Marc Frahm

Okay. Thank you.

Operator

Thank you.

next today Ren from is coming from question James. Raymond Benjamin Our

is Your live. line now

Reni Benjamin

Hi. Good for the and morning thanks questions. taking

led that are two. data and the study? in expectations what in you expectations clinically REACHX Just prior can acute, what One Steven, you with design GVHD. and your are this us trial relevant the to remind

Steven H. Stein

your Ren, question. Steven. for you it's Yeah, Thank

So to group controls from led response patients their with very from external rux. with it data. Germany a rates. by our And we the XX, investigator came was very, run who XX research very investigators encouraging interesting. XX%, approximately back sponsored graft-versus-host get cetera, but endpoints, of to tight measure worked proof-of-concept disease et Not then you study classic study, which program showed rights had how as on It XX% in, in actually Zysa initiated in

mortality up which Breakthrough as is with also unmet large transplants We And they rates, extreme about you. graft-versus-host I if got and patients, they than an to designation teed the I XX,XXX, them the approximately aren't remember, steroid that have occur, high need here. half then here. of Now allogeneic disease. getting responsive, more XX,XXX There's morbidity half outlined

in a we to acute would as in that with submission, in under and have have outlined, by a we REACHX, is the a randomized Europeans that single-arm well the We a but single-arm it's interested durable. States. to XX% conditions the study, I've plus just data, that meet the response agency, way, are we run territory think if study then that's able, the to in supplemental where The be. NDA rate we need in if see that We the steroid-refractory will may mentioned, United go also territory be I to, that like if

questions how on answers that hopefully, steroid-refractory So, acute. we got your on there

Reni Benjamin

does. switching CITADEL study, it probably Italian have ongoing. I are to that PIXK-delta, an well. Yes, And sponsored but was gears investigator several you German remembering then as it studies was the study

how thought How combination, I are of these to were the this into with still thinking in little studies was I appropriate find interesting Because PD-X pivotal some looking Can you schedule. versus data you about a at combination synergistic this effects fold now? talk program right the at AACR. bit do you there inhibitor about a dosing study? and presented trying a monotherapy think kind

Steven H. Stein

yeah, the PIX-kinase-delta for So, on our INCBXXXXX. question thank you inhibitor,

have but to a the B class like long-term compound high presented in two, a already. B see still part we this we the a malignancies, second-generation looked going time seems and the in suppression to So, in cell zone marginal we We We lymphomas. toxicity liver long-term like had most very is But many probably that some with that data from mantle, there and knew idealalisib, have very take times compound. active ways, activity are we particularly first-generation general we three seen time hit, toxicities knew cell There were at with and did for chronic stepped in compounds, in also follicular, colitis. back the said, of toxicity. we that eliminated

we paradigm a get dose the different at respond endpoint time people the is So numbers showed through last ameliorate to many for able at we're you or most to data to then the year, did changing change first again, toxicity part eight/nine by want. ameliorating to and schedule, ASH sort with that schedule see we most to and induction thereafter And toxicity able an dosing profile. ameliorate efficacy the of And the small scans we weeks, that and profile. what were dosing of the caveats,

dosing with we're good think change in compound with the tolerability highly scheduling changes. we to able the we very our place So and are a active profile

mantle a efforts have B-cell follicular, malignancies, and of diffuse have we activity all large. meet diffuse the is as outside now tends whole class So We're conducting into calendar in then more studies year. year, mantles, the next required and and in data marginal. durable, next B lymphoma, more settings. large hopefully that's high marginal active The response are follicular cell, in cell lymphoma, this to It the ongoing there strategies those If accelerated early again year, rate approval potential zones. they those have

we We're we've like what to to So proud did studies and stand of now that's we efficacy these have change been program. able and in to where with profile. tolerability. look trying execute the the the to both show we We

Reni Benjamin

combinations? regarding thoughts just And

Steven H. Stein

compounds. all or the combinations. But combinations. We'll we'll many safety with of is In with other to then various those that require monotherapy, follow of settings antibodies CDXX have strategy and you initial begin work

very currently, at change that is tumor as some conducting a preclinical well. with AACR there's with that study in because also pathway upregulated in inhibitor that and that. may was The looking in delta to alluded combination we're for then looking of there's early with you lower We data to with are myelofibrosis, activity microenvironment early doublet INCBXXXXX we're and and be good the now. PD-X some rux And dataset that a dose try at that there very at INCBXXXXX rationale a myelofibrosis

Reni Benjamin

Great. Thank you, guys.

Operator

Thank you.

coming Bayko Liisa Our question from JMP is Securities. from next

live. is Your line now

Liisa A. Bayko

Hi.

and Just a steroids, chronic? this sense duration follow-up us of which gaining I the do population, How think second-line, obviously the therapy across frontline for be, you. both strategy you on and in there? share obviously, – And of how then similar going also Thank those. of GVHD. against if in for know kind Can some And inexpensive. maybe just about up and to the acute against you steroids? give frontline don't and anticipate will What's of are itacitinib, setting kind positioning it's it

Steven H. Stein

Barry this, because first, answer final So, your yet. Steven. we Liisa, data try question the to alluded don't I'll to have it's and

Our duration that then the duration disease, in expectation and compound eliminate ultimately response will have the data. JAK don't graft-versus-host what physicians acute to be, eliminate between I order inhibitor of the is that knowing dataset around well, somewhere the are eventually will as anything what of probably is get of control show once to three they approximately, of nine months use know patients the it's is, the and steroids, controlled. not the potentially you once to the know but then that

rate response may six-month slightly different paradigm. a it said, They endpoint. These have Barry be lot endpoint. skin a as It's of a it's disease. chronic, and toxicity to phenotypically For different a patients tend have longer

them that and the inhibitor setting Barry will systems, said, we'll there as feel is off organ in the we look a So longer control use once weaning people have the at that JAK therapy. likelihood, there in various the pattern be they of of

steroids. Itacitinib, in steroid-naïve, combination it's with For but it's

an add-on So it's therapy.

You use have well. to as the steroids

steroids. versus So in it's versus not plus It's steroid-naïve. steroids Itacitinib steroids

of that's terms of So, I clear study. the the in hope scheme

Liisa A. Bayko

Great. Thank you. It's very helpful.

Operator

Thank you.

Marai from is Nomura coming Our from Christopher Securities. question next

now line is Your live.

Christopher N. Marai

comment Thank for the that to through T-cell the IDO taking given Obviously, perhaps of there, wondering program was checkpoint on hypothesis thoughts with if in-house the your combination the your metabolic and on potential with question. perhaps data Thanks Calithera. you inhibitor now us Hi. arginase PD-X. you. I sort related could run program,

Reid M. Huber

this Reid. Chris, Thanks, Yeah. is

have, mechanism, very Phase types actually well, actually similarities escalation we which the positive. dose program or which Calithera. those inhibitor expansion does are you express that arginase patients studies. some have now some and that of different completing therefore, compound, the a and and are and as co-developing is the important X We've IDOX immune completed but to enzyme So that than not in-licensed there's the those quite The to epacadostat, IDOX with least may out, the are as are complexities cell bit the of the differences pointed types

pre-proof-of-concept program. agent effects epacadostat are arginase look PD-X arginase the microenvironment, So to don't standpoint. antagonist. the mechanistic de-risking we studies the studies think the with as the read-through mechanism the of molecule studies include inhibitor the safety the both there's I from we now kind experience right will stepwise Clearly, months color translational immune it's any that combination take working team first to the any thinking the the on that at to a of steps as clinical generate But And probably the direct important over translational the to on initial pursue a we next the data well and move coming make. in now that will around be to

Christopher N. Marai

think clinical reference Thank epacadostat fit data out be you. that compound? to Okay. program translational potential the you that half, And of the this that data, biomarker respect then second to informative is guess, just with something could I of coming with

Reid M. Huber

that apply mutational are probably translational to To doublet tumor PDL-X extent more melanoma. to the with IDOX burden, going work ECHO-XXX and from include so the to again, trials, the RNA status, Yeah, setting seek. it's there learnings PD-X those status, and certainly the

dependency think those probably information the arginase being a patients have So potential think likely earlier, are there you normally that of are tumor but melanoma. content as I like on mentioned types the some of a flow biology that we types, as believe to inflamed to not I for arginase, is would to

short, in not So, much. very but some read-through, probably

Christopher N. Marai

Got It. Thank you.

Operator

you. Thank

over session. end comments. the our to closing of reached have any to turn I'd back like floor Hervé for or question-and-answer further We

Hervé Hoppenot

your for Thank your you. today, Okay. Thank for you time questions.

where goodbye. look we investor seeing also of the will some meeting at at thank but participation you medical company the are call full to forward for update. you So do of the today XXst in again your June for a organizing, But we we now, and conferences,

Operator

does conclude That today's and you. webinar. Thank teleconference

your and participation wonderful thank today. time disconnect your may You day. have We for this a at you line

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