Incyte Corporation Q3 FY2025 earnings call

• Core business: Confidence in key products' growth potential. Jakafi's sales grew with broad-based demand across indications, leading to raised full-year guidance. Opzelura had exceptional growth, with sales up 35% Y/Y, and reorganized sales force for sustained growth. Niktimvo continues to outperform launch metrics with strong adoption by BMT centers.
• R&D priorities: Focus on high-value programs. Hem/onc pipeline includes mCALR and 617 projects. Solid tumor program focuses on novel biological pathways in high incidence cancers. Pipeline review to streamline and prioritize programs.
• Cost structure: Review of operating expenses to prioritize and make data-driven trade-off decisions, aiming for balance between financial discipline and strategic investments.
• Pipeline updates: Povorcitinib showed positive Phase III results in HS, with plans for regulatory submissions. Solid tumor programs like TGF-beta x PD-1 bispecific and KRAS G12D showed promising early data. mCALR antibody program to share updates on data from ongoing trials.

Total revenues were $1.37 billion, with product sales at $1.15 billion. Jakafi Q3 sales reached $791 million, a 7% increase, representing approximately 57.7% of total revenue. Opzelura had $188 million in sales in Q3, a 35% increase, contributing ~13.7% of total revenue. Niktimvo sales in Q3 totaled $46 million, an increase of 27% versus the second quarter. The broader hematology and oncology portfolio, including Monjuvi, Zynyz, etc., also performed well and contributed to raised guidance.

• Raised full-year net product revenue guidance to $4.23 billion to $4.32 billion.
• Maintained OpEx guidance of $3.25 billion to $3.31 billion.
• Raised Jakafi full-year guidance to a new range of $3.05 billion to $3.075 billion.
• Upcoming product launches like ruxolitinib XR, Opzelura AD in Europe, and povorcitinib in HS are expected to contribute significantly to future growth.

• Uncertainty around clinical trial outcomes for pipeline programs, including whether they will meet efficacy and safety endpoints.
• Regulatory hurdles in obtaining approvals for new products, such as onerous requirements in certain indications.
• Competitive landscape challenges, including potential competition affecting market share of existing products.

Q: Tazeen Ahmad from Bank of America asked about the upcoming mCALR data and its importance for convincing efficacy as a stand-alone.

A: Pablo Cagnoni responded discussing the importance of demonstrating single-agent activity with 989, including clinical and translational endpoints, and using benchmarks like momelotinib.

Q: Andrew Berens from Leerink Partners inquired about terminating the povo program in CSU and data release.

A: William Meury and Pablo Cagnoni explained priorities, differentiation, competitive intensity, and that data will likely be released at a future conference.

Q: Stephen Willey from Stifel asked about 989 abstract publication and Niktimvo's Phase III trial.

A: William Meury and Steven Stein addressed the abstract having more patients and longer follow-up, and Niktimvo's Phase III trial endpoint definition.

Q: Jay Olson from Oppenheimer asked about rationale for terminating BET inhibitor program and mCALR registrational studies.

A: William Meury and Pablo Cagnoni talked about prioritizing higher PTRS programs and mCALR's plan to start pivotal trials in 2026.

Q: James Shin from Deutsche Bank asked about 989's efficacy kinetics and Jakafi's frontline path for 989.

A: Pablo Cagnoni and William Meury discussed demonstrating clinical endpoints in MF and ET, and 989's potential to reshape MPN treatment.

Q: Salveen Richter from Goldman Sachs asked about VAF in mCALR story and OpEx margin expectations.

A: Pablo Cagnoni explained translational endpoints and William Meury discussed OpEx margin improvement through sales growth and cost control.

Q: Peter Lawson from Barclays asked about Niktimvo's growth sustainability and profitability.

A: William Meury and Mohamed Issa talked about Niktimvo's strong launch trajectory, repeat orders, and high contribution margin.

Q: Evan Seigerman from BMO Capital Markets asked about pipeline maturation and business development for post-Jakafi LOE.

A: William Meury discussed 7 growth drivers in pipeline and potential for high-impact oncology portfolio.

Q: Derek Archila from Wells Fargo asked about 989's pivotal trials formulation and XR launch positioning.

A: Pablo Cagnoni and Mohamed Issa talked about enFuse device for 989 trials and XR's launch strategy and conversion from Jakafi.

Q: Ashwani Verma from UBS asked about 989's first-line studies and formulation.

A: Pablo Cagnoni responded on developing 989 for first-line MF and goal of home subcu injection.

Q: Reni Benjamin from Citizens asked about rux XR combinations and TGF-beta PD-1 trial calculus.

A: William Meury and Steven Stein discussed XR's focus on Jakafi indications and TGF-beta PD-1 trial progression.

Q: Jessica Fye from JPMorgan asked about 989's frontline confidence and combo data proof points.

A: Pablo Cagnoni talked about safety profile, efficacy in monotherapy and add-on cohorts, and clinical endpoints.

Q: Srikripa Devarakonda from Truist Securities asked about 989's rux combo rationale and FDA endpoints for 989.

A: Pablo Cagnoni discussed developing 989 for all MF patients and ongoing discussions with FDA on regulatory endpoints.