Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Incyte Corp (INCY, Financial) reported a 9% year-over-year increase in total revenue, surpassing $1 billion.
- Jakafi and Opzelura showed strong performance, with Jakafi net product revenues reaching $706 million and Opzelura net product revenues increasing by 52% year-over-year.
- The acquisition of Escient Pharmaceuticals added two first-in-class medicines to Incyte Corp (INCY)'s IAI portfolio.
- Incyte Corp (INCY) completed a $2 billion share repurchase, demonstrating confidence in its clinical pipeline and commercial business.
- The company anticipates delivering more than 10 high-impact launches by 2030, including several new molecular entities.
Negative Points
- Incyte Corp (INCY) reported a significant increase in R&D expenses, reaching $1.14 billion for the second quarter, primarily due to the acquisition of Escient Pharmaceuticals.
- The company decided to discontinue several programs, including oral PD-L1, TIM-3, LAG-3 antibodies, and the LAG-3 PD-1 bispecific program.
- Despite strong performance, the year-over-year net sales growth for Jakafi was lower than the underlying demand growth due to higher channel inventory levels at the end of Q2 last year.
- The competitive landscape for some of Incyte Corp (INCY)'s programs, such as LAG-3, was a key factor in the decision to discontinue these programs.
- The company faces challenges in the highly competitive market for tafasitamab, particularly in the relapsed/refractory DLBCL market.
Q & A Highlights
Q: Can you drill a little bit more into the key determinants of the pipeline restructuring, particularly regarding the oral PD-L1 program?
A: The restructuring was driven primarily by data review of existing programs and promising data from the earlier stage pipeline. The retifanlimab data did not impact the decision. The focus is on programs with novel biology that hold the highest potential impact for patients. (Pablo Cagnoni, Executive Vice President - Global Research & Development and Technical Operations)
Q: What are your go-forward expectations for Jakafi share in myelofibrosis, specifically in new patients in the frontline setting?
A: We continue to see growth in MF, with total patients up 2% year-over-year. New patients in the quarter for MF were up more than that. We believe competitors like pacritinib and momelotinib are primarily used in the second-line setting. (Barry Flannelly, Executive Vice President, General Manager, North America)
Q: Could you talk more about the CDK2 program and what we should expect at ESMO?
A: We will provide a dataset that captures dose escalation with a range of doses and different schedules. The data will support further development in ovarian cancer, and we will outline a development path for this molecule. (Pablo Cagnoni, Executive Vice President - Global Research & Development and Technical Operations)
Q: For the ALK2 inhibitor data expected in the second half of the year, what are your expectations in terms of the volume of data and follow-up?
A: We will show more patients with more data at higher doses. The goal is to alleviate anemia from the disease and the drug, and we will look at the development path based on the updated dataset. (Steven Stein, Executive Vice President, Chief Medical Officer)
Q: Could you comment on the demand for PV and the impact of IRA on the numbers?
A: PV is growing due to the efficacy of Jakafi. The IRA and the elimination of catastrophic coverage help all patients on oral chemotherapy drugs. The growth is driven by the product's efficacy, and changes to Medicare Part D will make oncology drugs more affordable. (Barry Flannelly, Executive Vice President, General Manager, North America)
Q: How do you view the appropriate level of R&D investment for Incyte?
A: Each project is evaluated for its financial rationale and competitive position. We prioritize resources for high-potential programs and stop those where we are not in a good competitive position. We aim to maintain a reasonable R&D spend with improving ratios. (Herve Hoppenot, Chairman of the Board, President, Chief Executive Officer)
Q: What led to the discontinuation of the LAG-3 asset?
A: The main determinant was the competitive landscape. We are behind in both the monoclonal antibody and bispecific programs. We will decide the right time to disclose data from these programs. (Pablo Cagnoni, Executive Vice President - Global Research & Development and Technical Operations)
Q: Should we consider Mirum's data in PBC as a benchmark for the MRGPRX4 antagonist?
A: The benchmark for Mirum is reasonable. We are excited about the program, particularly in PSC, where there are no good alternatives. We will provide an update early next year. (Pablo Cagnoni, Executive Vice President - Global Research & Development and Technical Operations)
Q: What are your thoughts on combining JAK inhibitors with PD-1 antibodies for oncology?
A: Although recent publications show potential synergy, our past clinical experience was not successful. We will relook at it, but there are no current R&D sponsored plans. (Steven Stein, Executive Vice President, Chief Medical Officer)
Q: How much capacity do you have left for further business development after the large share repurchase?
A: We ended the quarter with $1.5 billion in cash and no debt, giving us additional firepower for BD if we choose to do so. The share repurchase reflects our confidence in the business outlook and pipeline. (Christiana Stamoulis, Chief Financial Officer, Executive Vice President)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
