Title

Presentation

Incyte Corporation beats earnings expectations. Reported EPS is $1.81, expectations were $1.34.

Operator: Greetings, and welcome to the Incyte First Quarter 2026 Earnings Conference Call Webcast. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] It’s now my pleasure to turn the call over to Alexis Smith, Vice President, Head of Investor Relations. Please go ahead, Alexis.

Alexis Smith: Thank you. Good morning, and welcome to Incyte’s First Quarter 2026 Earnings Conference Call. Before we begin, I encourage everyone to go to the Investors section of our website to find the press release, related financial tables and slides that follow today’s discussion. On today’s call, I’m joined by Bill, Pablo and Tom, who will deliver our prepared remarks. Steven, Dave and Mohamed will also be available for the Q&A portion of today’s call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I will now hand the call over to Bill.

William Meury: Thank you, Alexis, and good morning, everyone. We’re off to a strong start in 2026 with net sales up 20% year-over-year, driven by strong demand across our entire portfolio. In parallel, we advanced the pipeline with key regulatory and clinical milestones. We view ’26 as a year of strategic progress as we transition Incyte beyond a single cornerstone product toward a high-quality, growth-oriented portfolio across hematology, oncology and immunology. This progress will come from multiple sources, the continued organic growth from our commercial portfolio, the execution of life cycle launches of key brands, the advancement of a broad increasingly late-stage pipeline and a focused approach to business development.

The sequencing and pace of execution here matters as these efforts are intended to lay the foundation for a future beyond Jakafi. During the quarter, the FDA accepted our regulatory application for povorcitinib in patients with moderate to severe HS. The application was submitted ahead of schedule and is supported by a robust high-quality data set across both pre- and post-biologic patient populations. If approved, we believe povo should be a significant growth driver for Incyte as the first FDA-approved oral anti-inflammatory treatment for HS, a disease which affects more than 300,000 people in the United States. We also remain on track for several regulatory decisions this year, including Jakafi XR, which has the potential to generate meaningful sales and serve as an important sales bridge and Opzelura for moderate atopic dermatitis in Europe, a key future growth opportunity for the brand and our international business.

Finally, we expect global submissions from Monjuvi in the first-line DLBCL in the first half of the year with approval and launch anticipated in early 2027. Across the pipeline, we continue to advance novel compounds that support our broader transition to a hem/onc I&I company. The pipeline reflects a deliberate balance of risk and reward, combining programs with the potential for outsized returns alongside opportunities that can deliver incremental but highly reliable growth. This work is backed by an experienced clinical development and clinical operations team and consistent execution across trials. In hematology, we had a positive end of phase meeting with the FDA in the first quarter and are on track to initiate our Phase III study in evaluating our mutant CALR antibody 989 in previously treated CALR positive patients with ET by midyear.

This represents an important step as we continue to build a portfolio of molecularly targeted therapies, which Pablo will discuss in more detail shortly. In oncology, we now have 4 pivotal trials underway across colorectal, ovarian and pancreatic cancers, including the recent initiation of our G12D program in first-line pancreatic cancer earlier this month. These programs target areas of significant unmet need and represent meaningful long-term growth opportunities for the company. In immunology, we are advancing registration programs in mild to moderate HS for Opzelura and moderate to severe HS, vitiligo and PN for povorcitinib. In addition to the regulatory acceptance for povo and HS mentioned earlier, today, we announced positive results from both Phase III registration studies in adults with nonsegmental vitiligo.

These results will support a regulatory application in nonsegmental vitiligo expected in the first half of 2027. Over time, we believe the I&I portfolio at Incyte has the potential to become a significant contributor to the business, representing approximately 1/3 of total revenue by 2030. Finally, I want to take a moment to talk about management. At this stage of the company, our results depend largely on the strength of our management team. Experience, judgment, decision-making and the ability to execute strategic plans. With that context, we have made several executive appointments. This morning, we announced the appointment of Suky Upadhyay as Chief Financial Officer. Suky brings deep experience leading large finance organizations, most recently Zimmer Biomet and Bristol-Myers Squibb.

We also announced the appointment of Pablo Cagnoni as President, Incyte and Global Head of Research and Development; and Steven Stein as Executive Vice President and Chief Medical Officer and Head of Late-stage Development. Additionally, Mohamed Issa was appointed as Executive Vice President and Head of U.S. Commercial, coinciding with the integration of our U.S. commercial operations into a single organization. Mohamed is an experienced executive with a track record of new product launch planning and operations. The new structure is intended to establish consistent standards and enterprise-level capabilities across analytics, market access, sales operations and patient services, creating a launch-ready organization in 2026. These capabilities can be leveraged across the portfolio to maximize the return on our commercial investments.

Taken together, these appointments give us the management experience and operational oversight for the next phase of the company. Now turning to the quarter. Total revenue in the first quarter of ’26 was $1.27 billion, up 21% over prior year. Net sales in the first quarter totaled $1.1 billion, representing 20% growth year-over-year. Sales increased for every marketed product, both in the United States and internationally, and was driven by strong prescription and volume demand across the portfolio. Jakafi sales in the first quarter were $758 million, up 7% year-over-year. Prescription demand increased 6% with broad-based growth across all indications, MF, PV and GVHD. New patient starts remain strong. The prescriber base is stable and a formulary coverage is broad, providing an important foundation for the Jakafi XR launch.

We anticipate the approval and launch of XR in the middle of the year. Our immediate focus will be on securing adequate formulary coverage for XR over the next 12 months post launch. We estimate that XR can achieve 10% to 30% of Jakafi’s business by 2029. We’ll provide more insights on the launch in future quarters. Sales for our core business, excluding Jakafi, were up 63% year-over-year, with contributions across hematology, oncology and immunology. This business will be supported by 4 new product launches over the next 12 months including Jakafi XR, Opzelura for moderate AD dermatitis in Europe, Monjuvi in first-line DLBCL and povorcitinib in HS. As we’ve discussed, our core business ex Jakafi has the potential to approach $3 billion to $4 billion by 2030, reflecting the strength of the portfolio and continued execution.

It is becoming an increasingly important part of how we transition the company for long-term growth. Opzelura continues to be the largest single contributor to the core business ex Jakafi with sales of $143 million, up 20% versus prior year. In the U.S., sales were $106 million, an increase of 12% versus the first quarter of ’25. The underlying prescription demand for this business is strong, up 17% year-over-year, which is supported by the continued adoption of nonsteroidal topical therapies. Internationally, growth remains robust in vitiligo where we see strong uptake across markets. In the first quarter, sales totaled $37 million, up 56% year-over-year. Internationally, growth remains robust in Vitiligo, where we see strong uptake across markets.

As a reminder, Opzelura is under review by European regulators for moderate AD, and we expect approval and launch in the second half of the year. The moderate AD indication has the potential to contribute meaningfully to top line revenue beginning later this year. For full year ’26, we anticipate that roughly 80% of revenue will come from the U.S. and 20% from international markets. In Hematology and Oncology, net sales grew 116% to $204 million. Niktimvo, Monjuvi and Zynyz were the largest contributors to growth in the quarter. Niktimvo has now entered its second year following its launch in the first quarter of ’25. Net sales were $55 million in the first quarter of ’26, reflecting a strong consistent new patient start profile and solid persistency.

We’ve built a broad growing prescriber base with virtually every BMT center in the United States using Niktimvo with all becoming repeat customers. Within 12 months, Niktimvo has captured 32% of the third line plus market. Finally, formulary and payer coverage remains strong for the brand. Monjuvi sales were $49 million in the first quarter, up 67% year-over-year. Growth was primarily driven by uptake in follicular lymphoma following approvals in the U.S. and international markets. Looking ahead, the potential U.S. approval in first-line DLBCL represents an incremental growth opportunity starting in 2027. Finally, Zynyz sales were $41 million in the first quarter with rapid and robust adoption in SCAC. Now I’ll turn the call over to Pablo.

Pablo Cagnoni: Thank you, Bill, and good morning, everyone. We have made strong progress year-to-date across our hematology, oncology and immunology franchises, delivering key regulatory and clinical accomplishments. Turning to hematology. We achieved several important milestones for 989, our mutant CALR monoclonal antibody, where pivotal development efforts continue to advance. Most notably, this includes the positive end-of-phase meeting with the FDA in the first quarter. As a result, we’re on track to initiate the Phase III study evaluating 989 in patients with previously treated essential thrombocythemia midyear, a key inflection point for this program. Our JAK2 V617F inhibitor program, 058, continues to progress. During the first quarter, we initiated our Phase I dose escalation study evaluating the ASD formulation of 058 in MPN patients with a JAK2 mutation.

Preliminary data in a modest number of patients anticipated by year-end, which we expect will provide early evidence of clinical efficacy as well as an increased understanding of the viability of the ASD formulation for future development efforts. In parallel, we’re progressing our next-generation compounds through preclinical studies. We remain confident in the underlying thesis that the inhibition of V617F will lead to positive clinical outcomes in patients with MPNs that harbor this mutation. Lastly, in addition to the previously announced positive top line data for tafasitamab in first-line DLBCL, we plan to present the full data set during a featured oral presentation at the upcoming ASCO Annual Meeting in June. This data supports global regulatory submissions for tafasitamab in first-line DLBCL with approval and launch anticipated early next year.

Turning to oncology. During the quarter, Zynyz was approved by the European Commission for patients who previously untreated squamous cell anal carcinoma, adding a second indication for Zynyz in Europe. In our pipeline, this month, we initiated a Phase III study evaluating our KRAS G12D inhibitor, 734 in combination with chemotherapy in first-line pancreatic ductal adenocarcinoma or PDAC patients. This marks a significant step for the program as it enters late-stage development in a setting with substantial medical need. Finally, in immunology, we have made meaningful regulatory and clinical progress advancing our late-stage portfolio. Notably, this includes the new drug application acceptance by the FDA for povorcitinib in moderate to severe hidradenitis suppurativa as well as the positive results of our Phase III registrational program evaluating povorcitinib in patients with nonsegmental vitiligo.

I will now turn to 989. In the first quarter, we had a positive end of face meeting with the FDA on the development program in ET. The Phase III trial will evaluate 989 compared to best available therapy in both type 1 and nontype 1 mutant CALR positive patients with ET who are resistant or intolerant to at least one prior cytoreductive therapy. The trial will utilize a flexible dosing schedule starting with 750 milligrams IV every 2 weeks, with a single dose escalation option built in to allow for appropriate optimization based on early platelet response. The primary endpoint is durable complete hematologic response or DCHR at week 24. The reduction of mutant CALR VAF from baseline will be evaluated as a key secondary input in the trial, further underscoring the unique mutation-specific and potentially disease modifying profile of 989.

We’re encouraged by a dialogue with the FDA and have a clear and executable path towards forward Incyte second-line ET with a Phase III study on track to initiate midyear. In parallel to ET, we’re progressing our development efforts in myelofibrosis, or MF, where we are evaluating 989 as the first and second line treatment option. Data from our ongoing Phase I program will be shared throughout the year. We remain on track to initiate a Phase III trial evaluating 989 as a second-line treatment in mutant CALR policy patients with MF in the second half of 2026, pending alignment with the FDA in the middle of the year. The Phase I cohort evaluating 989 as a single agent and in combination with ruxolitinib in patients with previously untreated MF is enrolling well.

Finally, we initiated and completed a Phase I study evaluating a subcutaneous formulation of 989 in healthy volunteers, supporting our strategy to expand utility and improve convenience for patients. These results enable the initiation of a Phase I study in mutant CALR positive patients in the second quarter. I will now turn to our oncology portfolio. Starting with 734, a KRAS G12D inhibitor, which is emerging as a very important pipeline opportunity for Incyte. The Phase III trial evaluating 734 in combination with standard of care chemotherapy, gemcitabine plus nab-paclitaxel or modified FOLFIRINOX in first-line PDAC is underway. More than 200,000 patients are diagnosed with PDAC with G12D being the most common driver mutation impacting 40% of patients.

Today, there are no molecular targeted therapies for patients with pancreatic cancer and chemotherapy has been the foundation of care for decades. What we believe is particularly important is the combination profile of 734 with standard of care chemotherapy. To date, 734 has demonstrated a manageable tolerability profile we combined with either gemcitabine plus nab-paclitaxel or modified FOLFIRINOX without compromising chemotherapy dose intensity. Given how PDAC is treated in practice, especially in the first-line setting, that ability to combine effectively with both full dose chemotherapy regimens is critical. This is reflected in our Phase III development program. Our maturing Phase I data reinforces our conviction in this opportunity, which we view as increasingly derisked.

We plan to share efficacy and safety data from the Phase I study in combination with modified FOLFIRINOX and gem/nab in first-line PDAC patients in the second half of the year. The distinguishing feature of our development approach is the scale and depth of our Phase I clinical program where roughly 400 patients have been treated with 734 across PDAC, colorectal, non-small cell lung and other 12D mutated cancers. This has allowed us to build a robust and comprehensive understanding of both clinical activity, safety and tolerability across tumor types and treatment settings, which is informing our development efforts. With a strong early clinical foundation and Phase III development now underway, our focus remains on execution as we advance this program that has the potential to become the first KRAS G12D specific inhibitor approved in first-line PDAC.

In parallel, we continue to evaluate expansion opportunities in additional G12D-driven tumors, and we plan to share more about our efforts later this year. Oncology portfolio has reached an important inflection point with each of our core programs now in registrational development and actively enrolling patients. Pivotal efforts for A90, a TGF-beta receptor 2 by PD-1 bispecific are underway. The Phase III trial evaluating A90 in combination with FOLFIRINOX bevacizumab in first-line MSS colorectal cancer patients is ongoing. In the second half of the year, we anticipate sharing additional data from the Phase I study in combination with FOLFIRINOX, in first-line colorectal patients as well as a combination with bevacizumab in previously treated patients with colorectal cancer.

667, our CDK2 inhibitors in pivotal development in patients with platinum-resistant ovarian cancer Cyclin E1 over expression, a biomarker-defined population with significant medical need. The MAESTRO clinical program consists of 3 studies, 2 ongoing trials, a Phase II single arm study and a Phase III versus investigator’s choice chemotherapy and a planned Phase III study in the first-line maintenance setting, which we expect to initiate in the second half of 2026. Finally, in immunology, we have made significant progress advancing our late-stage development efforts for povorcitinib, our oral JAK1 small molecule inhibitor. This includes the NDA acceptance in HS and as announced today, the positive results from our Phase II/III registrational program in nonsegmental vitiligo.

In HS, last month, at the American Academy of Dermatology Annual Meeting, we presented late-breaking 54-week data from our Phase III STOP-HS program, which reinforced both the durability and the breadth of response associated with long-term povorcitinib treatment. Continuous improvements in clinical outcomes were observed at week 54 and with up to 71% and 57% of patients achieving HiSCR50 and HiSCR75 respectively. Further, up to 29% of patients achieved HiSCR100, the most stringent end point in HS which represents a 100% reduction in abscess and inflammatory nodules count with no increase in draining tunnels. Up to 20% of patients achieved complete clearance of draining tunnels and nodules at week 54. Clinically meaningful improvements in skin pain, fatigue and quality of life measures, outcomes that are highly relevant to patients and clinicians managing this chronic disease were also observed.

Finally, from a safety perspective, both 45 and 75 milligram doses were generally well tolerated throughout the study, supporting the profile for chronic use in HS. This data supports the potential for povorcitinib to deliver symptom control and durable disease improvement in patients with moderate to severe HS, both before and after biologic therapy. With the regulatory application accepted, we look forward to working with the FDA towards a potential approval and launch in early 2027. Today, we also announced positive results from our Phase III program evaluating povorcitinib in adults with nonsegmental vitiligo. Our Phase III program is evaluating the efficacy, safety and tolerability of povorcitinib compared to placebo in patients with nonsegmental vitiligo across 2 identical Phase III studies, STOP-V1 and STOP-V2 for 52 weeks.

The program enrolled over 900 patients including 456 patients who received a 30-milligram dose of povorcitinib. In both trials, povorcitinib achieved the primary endpoint of greater than or equal to 75% reduction in facial vitiligo area scoring index, F-VASI, from baseline to week 52, demonstrating statistically significant and clinically meaningful reductions in facial vitiligo compared to placebo. Statistically significant improvements were also observed in key secondary endpoint measures including total vitiligo scoring index 50 or T-VASI 50 at week 52. The 30-milligram dose of povorcitinib was well tolerated. The overall safety profile for 52 weeks is consistent with prior studies with no new safety signals observed. Across both studies, rates of treatment-emergent adverse events of special interest were low between 2% and 3% and similar between the povorcitinib and placebo treatment groups.

There were no major adverse cardiovascular events. Only one TEAE of VTE was observed in the povorcitinib treatment group in a patient with multiple confounding risk factors, including smoking history, high BMI and intercurrent pneumonia. These results provide a clear and compelling path towards registration planned for the first half of 2027 and underscore the opportunity to add an oral alternative treatment for patients with vitiligo to our portfolio. We plan to share additional data from the trials in the second half of 2026. Povorcitinib continues to produce compelling data in immune-mediated dermatological conditions. We have seen success in translating early Phase II findings into larger registrational programs with now 4 post Phase III trials across HS and vitiligo.

As we look ahead, we expect data from our third indication for prurigo nodularis by end of year. In addition to povorcitinib, we are evaluating Opzelura in a Phase III registrational program for the treatment of mild to moderate HS with top line results expected end of year. If positive, this result would support a supplemental new drug application in 2027. And if approved, Opzelura would provide the first topical treatment option for patients with HS. Our JAK/ANKO franchise is well positioned to provide topical to oral solutions across mild to severe immune-mediated dermatological conditions, and we look forward to providing more updates this year. To close, we have a catalyst-rich year ahead with multiple late-stage data readouts, regulatory milestones and pivotal trial initiations across our 3 core franchises, underscoring the breadth, depth and maturity of our pipeline.

With that, I’ll turn it over to Tom for a financial update on the quarter.

Thomas Tray: Thanks, Pablo. As Bill mentioned earlier, our total revenues and net sales for the first quarter were $1.27 billion and $1.10 billion, respectively, increasing 21% and 20% from the prior year. Our GAAP R&D expenses were $516 million for the quarter, increasing 18% from the prior year, driven by continued investment in our late-stage development assets including our mutant CALR, G12D and CDK 2 programs. Moving to SG&A. GAAP SG&A expenses were $328 million for the quarter, increasing 1% year-over-year. Ongoing operating expenses for the first quarter of 2026 increased 14% year-over-year compared to a 19% increase in ongoing revenues during the same period, leading to a continued increase in operating leverage and margins.

We reaffirm our full year 2026 total net sales, R&D and SG&A operating expense guidance. Total net sales guidance for the full year 2026 is $4.77 billion to $4.94 billion representing a 10% to 13% increase from the prior year. This includes net sales expectations for Jakafi of $3.22 billion to $3.27 billion, Opzelura of $750 million the $790 million and hematology and oncology products of $800 million to $880 million. Total GAAP R&D and SG&A operating expenses are expected to be $3.495 billion to $3.675 billion for the full year. Finally, we anticipate cost of sales to remain relatively stable, representing approximately 9% of net sales. I’ll now turn the call back over to Bill.

William Meury: Thanks, Tom. In closing, we’re off to a strong start to the year. Our core business continues to deliver durable growth. Our pipeline is advancing with multiple catalysts ahead, and we’ve strengthened our leadership team to support the next phase of execution. As we look ahead, we see 2026 as a year of execution with multiple inflection points across the business that we believe will further strengthen both our near-term performance and long-term growth trajectory. And with that, I’ll turn the call over to the operator for Q&A.

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Operator: [Operator Instructions] Our first question today is coming from Tazeen Ahmad from Bank of America.

Tazeen Ahmad: Congrats on the positive data for povo for the nonsegmental vitiligo. I wanted to ask what your thoughts are as you prepared the next step, how do you see this coexisting with Opzelura in the commercial space? What’s been your experience with marketing and this indication so far? And do you think that each of these drugs could be appealing for a different segment of vitiligo?

William Meury: Yes. Thanks for the question, Tazeen. I’ll make a few comments and then ask Mohamed, our U.S. commercial head, to also expand on how we’re thinking about vitiligo. I think there’s a real opportunity here with the FDA approvals of oral treatments to essentially unlock the vitiligo market in the same way that advanced systemic therapies unlocked AD and psoriasis. I think that these approvals will create awareness that vitiligo is a chronic inflammatory disorder. And I think that is important for everybody that’s going to be in the market. This is definitely about medicalizing the condition. Frankly, I think Incyte does have an advantage in that we have a topical to oral solution. There is a natural sequencing that sets up in the vitiligo market and we’re able to cover sort of the waterfront with both Opzelura as well as with povorcitinib.

And that’s ultimately going to be, I think, the key to success here — we have the advantage of incumbency. We have direct ties to the providers. We know how they think about this condition. We understand the education that’s required to increase the treatment rate — and we, of course, have interactions with payers on this front, too. And so I think it’s going to be an important contributor to povo being 1 of the 3 indications that we’re pursuing right now. Mohamed, do you have anything to add?

Mohamed Issa: Really well said, Bill. Look, maybe just some context to the indications. We have obviously reason to believe there’s 1.5 million people living with vitiligo in the U.S. and only 20% to 30% seek treatment, like Bill mentioned, a good portion of those patients, about 35% of them have a BSA less than 5. Those are going to be really good patient segments for Opzelura. You even have a patient segment between 5 and 10 BSA. That’s also a target patient population for Opzelura. And then for patients with BSA greater than 10, where systemic therapy is most likely we estimate that total addressable market to be about $1.5 billion to $2 billion, which gives povo a great opportunity to address that need as well. And like Bill mentioned, having a topical to oral continuum for vitiligo and even HS if both products get approved, puts us in a really unique position as Incyte to satisfy that patient journey from the beginning all the way to advanced treatment.

Operator: Next question today is coming from James Shin from Deutsche Bank.

James Shin: I appreciate all the color on 989. But I just wanted to check in, will 989’s EHA update be mostly a check-the-box kind of update? Or will there be some new wrinkles to glean? And just if I could sneak one in. I don’t know if Suky is on the call, but Bill, I know you guys mentioned previously having expense discipline, but what changes, if any, will Suky brings?

William Meury: Great. James, you snuck in a second question, so there may be a penalty after the call. I’ll let Pablo answer the first question.

Pablo Cagnoni: Thank you for the question. So the update at EHA it’s going to be pretty substantial. We have continued to enroll in these studies. We have longer follow-up and we have continued to deepen our translational understanding of the effects of 989 in patients with both ET and MF. So you should expect continued growth in number of patients. In ET, we’ll have approximately 100 patients enrolled and we’ll report data in those. For MF in terms of the second line, we’ll have about 45 patients, 45 patients, single agent and about 15 to 16 patients in combination with ruxolitinib. And I think, first of all, the data has continued to evolve well. We think the durability is an important point. We think the continued tolerability of 989 in this patient population is very important.

And we do think that continue to see how the translational part of the story continues to evolve with clear evidence of disease eradication disease modification by 989 in patients with MPN is very important. So you should expect to see a lot more of that at EHA.

William Meury: Yes. And as it relates to Suky, look, he has extensive experience at both large and small companies. We have a very strong finance department at the company. He’s going to focus on the things that a CFO needs to focus on. both strategically and operationally. You want to make sure that your budget planning process is efficient and sharp. You want to make sure that capital allocation decisions are made intelligently. There’s, of course, a role in terms of setting up the right systems so that we can scale the company and we’re really glad to have him. So thanks, James.

Operator: Next question is coming from Stephen Willey from Stifel.

Stephen Willey: So I guess, congrats on securing the 24-week CHR endpoint in the pivotal ET trial. But just wondering if you can provide some more detail around the mechanics of dose escalation just in terms of the platelet response criteria that will be used to trigger that and then just how that works from a timing perspective. And then just as a follow-up, just given some of the flexibility here that you were given from the agency around the EP around the ET end point, just curious how you think this now kind of reads into your ability to secure additional flexibility from the agency in the pivotal second-line MF trial?

William Meury: Go ahead, Pablo.

Pablo Cagnoni: Certainly, so let me start with your last point there because I think it’s very important. We had a very constructive set of interactions with FDA. So we’re very, very happy how these conversations are going. And I think they recognize 989 is a fundamentally different way to treat patients with MPN. It’s truly not only molecular targeted therapy but has the potential for disease modification, and that needs to be contemplated as we implement Phase III trials and as we select endpoint for these Phase III trials. So in terms of the conversations on MF, we believe, as you alluded to, that this will allow us to have a conversation with FDA about defining endpoints in MF that truly reflect the effects of 989 in terms of normalizing hematopoiesis, which we think it’s a critical difference compared with existing therapies for patients with MF.

So we’ll provide more updates on this later in the year, but we think that dialogue is going to be very constructive as it was in ET. In terms of your specific question about ET, if you remember the data we presented last year, with 989 does in patients with ET is a very rapid normalization in platelet count that happens very soon after the first dose. And by the end of the first cycle, it’s about a month, most of the patients that will normalize plates have done so. So we believe that an early dose escalation at that point for patients that are not early responders is the right approach here to take into account the heterogeneity that we see sometimes in the response. So we believe that by this, we’ll be able to cover patients with all kinds of mutations and have a treatment effect across the board in patients with ET.

Operator: Our next question today is coming from Etzer Darout from Barclays.

Etzer Darout: Great. Thanks for today’s earnings update. So we noticed the updated guidance for ruxolitinib now in the second half versus early 2027 for first-line GVHD. Just — maybe if you could talk about your expectation for that study? And given sort of the move up in time line, potential to maybe accelerate the pivotal program in combo with ruxolitinib?

William Meury: I just want to — I want to make sure your question is related to Niktimvo and the Phase III study with Jakafi?

Etzer Darout: Yes. The movement in the second half out versus early 2027 that you had previously guided to?

William Meury: Go ahead, Pablo.

Pablo Cagnoni: So let me take that. So the study — the randomized Phase II study combining Niktimvo with rux and comparing that with rux and steroids, accrued very quickly, well ahead of schedule. As a result of that, we’ll have data before the end of this year, and that will help us define the rest of the regulatory strategy to bring Niktimvo to first-line chronic graft versus host disease patients.

Operator: The next question today is coming from Ash Verma from UBS.

Ashwani Verma: So just on 989, trying to understand the implications of this flexible dose escalation in ET pivotal trial design for the MF indication. So I mean how do you think that plays out? Like could this be a challenge if you have to titrate patients and some don’t get the benefit of the efficacy unless you get the 2500 mg dose? And especially like how would that be relevant if you’re pursuing the first line MF indication?

Pablo Cagnoni: When you look at the data that we presented twice last year, a substantial percentage of patients with ET respond by normalizing platelet count at doses well below the dose escalation of 2,500. Based on that, we think that the starting dose of 750 milligrams IV every other week, is the right way to start because a lot of the patients with normalized platelet count with that. And that alone will support achieving the primary endpoint of the study, which is durable complete hematologic response at 24 weeks. Now there’s a percentage of patients like it tends to happen molecular targeted therapies that are less sensitive to 989. And for those patients, we thought one step up to 2,500 should cover the efficacy in that patient population.

So we basically designed the study to try to cover the heterogeneity in this population. We believe that the early dose escalation step is the right way to do it. We believe that the rapid effect of 989 normalizing platelets in patients that will do so, will allow us to very quickly make that determination. And obviously, as I mentioned at the beginning, we had a very constructive discussion with FDA, and we reached an agreement on this.

Operator: Next question is coming from Michael Schmidt from Guggenheim.

Michael Schmidt: I had one on 734, the KRAS G12D program. So nice to see the chemo combo study now up and running in PDAC. Pablo, just curious how you think about either potentially pursuing other registration opportunities in PDA perhaps with investigational therapies such as pan-RAS inhibitors? Or — and then how do you think about addressing other tumor types such as lung and colorectal cancers?

Pablo Cagnoni: Thank you for the question, Michael. So first of all, let me just say, we are very pleased how this — the data are evolving. We’ll have an update for all of you later in the year, but the combination with chemotherapy, which we showed the ability earlier this year at the ASCO GI meeting, but now the response rate data is coming in, and we’ll have that as well as more durability data later in the year, and we’re very pleased with the progress of this program and the implementation of the Phase III pivotal trial in first line. In parallel with that, we’ve done a lot of work in other contexts. First of all, in pancreatic cancer, we have a strong interest in adjuvant and we’re trying to decide the right design there.

You’ll hear more about that in the second half of the year. We’re also then in combination with Erbitux, which I think one of the really important advantage of 734 in this competitive landscape is the absence of rash. And so the combination with EGFR inhibitors is key, and it will be key, we believe, to develop these therapies in colorectal cancer. So you’ll hear more about that later in the year, which could be both in combination with Erbitux alone or Erbitux plus chemotherapy in different lines of therapy in colorectal cancer. And finally, we have enrolled a cohort of patients with non-small cell lung cancer. We’ll have data on that in the second half of the year. All this gives you an idea how we’re going to potentially expand this program later in the year, and we’ll give you a comprehensive update when we present the updated data.

Operator: Next question is coming from Matt Phipps from William Blair.

Matthew Phipps: I’ll follow up on 734. I just wanted to confirm that all studies have resumed enrollment following that temporary pause a month or so ago to review those pneumonitis events? And I guess, is a history of pneumonitis and going to be an exclusion criteria for DAWN-303 Phase II study?

Pablo Cagnoni: So let me recap on what happened here because it’s important to have clarity. We had the event of pneumonitis. We reported — we did a full program review that encounter 4 cases of pneumonitis in more than 350 patients treated. Importantly, 3 of those patients were receiving 734 in combination with chemotherapy. And 2 of the patients had concurrent infections. And an in-depth review of the data concluded there was no signal that about the incidence of 734 producing pneumonitis in these patients. But it’s very important to remember. Now the Phase III study was never put in pause. We — what we did is in order to amend consent forms and investigator brochure, Europe, it’s an administrative reason, they put enrollment on hold in the Phase I study. So that — those have been amended now. It will reopen. Nothing ever stopped in the U.S. We have continued to enroll patients. The implementation of the Phase III study continues apace without any interruptions.

Operator: The next question is coming from Judah Frommer from Morgan Stanley.

Judah Frommer: Just curious on Opzelura. If you could comment on competition, within the nonsteroidal topical market. Is that still a growing pie? Are you fighting for share just within the market kind of ex steroids? And then just curious on — in terms of the long-term guide for Opzelura doubling, how important is it to have povo approved in those indications for those multiple tools within the tool bag for those indications?

William Meury: Yes, Judah, thanks for the question. I’ll start with the second question that you asked and then double back on the first. When you think about this business over the next 5 years, there’s essentially 3 components to growth. And I do believe Opzelura has the potential to grow it, let’s call it, a 10% to 15% CAGR over this period of time. First component is organic growth, which is what you’re talking about, continued penetration of the AD and vitiligo markets. The second component of growth is the launch of the HS indication for Opzelura and mild to moderate HS. And then there’s the launch of Opzelura in Europe for atopic dermatitis, which could throw off $200 million to $300 million in incremental sales. And it doesn’t require any heroic math to forecast at Opzelura can approach $1 billion — let’s call it $1.3 billion roughly by 2030.

Now as it relates to competition in the United States, I’m not so much focused on these modest market share shifts that you can see between products on a monthly basis. A few points here. In the first quarter, our share of new patient starts in the United States was 46%. And new patient starts, as you know, our NBRx is sort of the future, it’s growth. TRx is tell you a lot about the base in the past. But when you’re really monitoring and managing a business, you’re focused on that NBRx number. NBRx volume or new patient start volume in the first quarter was up over 30% year-over-year and was at a higher rate than the market. And we had 2 to 4x more new patient starts in the first quarter than any of the other branded topicals. I think the real key here, and this is true for us as well as anybody else that has a topical is that the use TCIs of is starting to moderate, and there is a shift from TCIs and steroids to these nonsteroidal branded topicals.

And you see that month-to-month and quarter-to-quarter. I think the benefit we have is Opzelura is superior in terms of skin clearance and itch relief relative to a TCI. And it is a better long-term option than steroid. I think the product is set up perfectly over the next 5 years, and we’re in a very, very strong position, and you have the benefit of operating in a market where there’s a real tailwind, and that is the move away from steroids and TCIs. I think that probably covers it. I think as it relates to Povo, I think that’s upside. The fact that we are able in both vitiligo and in potentially HS to offer a complete treatment solution topical to oral, that’s how I think about it. Thanks for the question.

Operator: Next question today is coming from Ren Benjamin from Citizens.

Reni Benjamin: Congrats on the quarter. My question is on 058 in the Phase I with the new ASD formulation. Can you talk to us a little bit more about how we should be evaluating those results? And when we see it in the second half, what you’re looking for and how we view this and will the deal you made with Prelude and that molecule for which you have an option. When do you guys ultimately make a decision between the 2 and how?

Pablo Cagnoni: Thank you for the question. So as I mentioned during my prepared remarks, we are now in the clinic with the new formulation, and we’re going to have an update for you before the end of the year. What we would love to see here is that with the new formulation, if we achieve the right exposures that our preclinical data predicted were necessary to see an effect that then we will be able to confirm our conviction that inhibiting VC617F in this way with pseudokinase inhibitor, will deliver positive clinical outcomes of patients with MPNs. So that’s basically the goal of the program for this year to deliver enough exposures with the new formulation to achieve concentrations that will hit the target hard enough to show clinical outcomes that matter.

Now when it comes to Prelude, we see that as a next-generation program potentially for us. We have internal next-generation programs, and we have an external next generation program, which is a Prelude 1. That’s a time-based option. We’ll have to make a decision at some point in time. And that data will be compared with the data from our internal programs as well as the data from the LEAD 058, and then we’ll make a decision which once we move forward.

Operator: Our next question is coming from Mitchell Kapoor from H.C. Wainwright.

Unknown Analyst: This is [indiscernible] on for Mitchell Kapoor. Congratulations again on the data. I was curious about povorcitinib in HP. So where do you expect to be earliest uptake to take place? Would you say in biologic naive patients post biologic failures or patients with specific disease features such as like draining tunnels pain or a high inflammatory burden?

William Meury: Yes, Mitchell, thanks for the — or excuse me, [indiscernible] thanks for the question. I’ll make a few comments and then Mohamed will add. First of all, I would just step back and say that I think the HS market is tailor-made for an oral. This market is set up for sequencing oral to injectables. And that’s something that’s been missing. Think about all the value that’s been ascribed to orals in the obesity market and povo has the potential to be the first oral anti-inflammatory. We expect to have a broad label, both in the pre- and post-biologic setting, which I think is a real advantage. 70% of our clinical data is in prebiologic patients. As it relates to early uptake, you certainly could envision that patients who are on a biologic right now, 1 of the 17s are TNF who have active disease or aren’t achieving pain relief or have some injection fatigue could be an early source of utilization.

And if you think about the size of the biologic market, there’s a range out there in terms of the estimates, it’s 50,000 to 75,000 patients. If povorcitinib was to get 10% of 50,000 on an annualized basis, you’d have a couple of hundred million dollars in revenue. But I think the most important point here is we expect that we will capture patients at 2 distinct inflection points after an antibiotic before a biologic. And then after a biologic, whether it’s a 17 or TNF alpha. And Mohamed right now is working on preparing that launch. So it is completely wired for success. Mohamed, do you want to add anything?

Mohamed Issa: Yes. Look, I mean, HS, as we know, is a large and growing market and has a significant unmet need. The disease is debilitating. It’s characterized by chronic pain, drainage and flares and obviously, highly heterogeneous, right, with multiple cytokines. So when you think about the market, as Bill just described in terms of its size, 300,000 patients in the U.S., 200,000 actively seeking treatment and yet only 50,000 of them are in advanced therapy. So povo is positioned to address this market as the first and only oral treatment with biologic-like efficacy across all of the treatment parameters that are quite debilitating and by competing, like Bill mentioned, in both the pre- and post-biologic setting, povo has the potential to be somewhere between $500 million to $1 billion in peak sales. And I think at launch, you can expect an opportunity to capture patients on both sides of that inflection point.

Operator: Our next question today is coming from Srikripa Devarakonda from Truist.

Srikripa Devarakonda: And congrats on the most recent clinical data as well with povo. I have a question on the rux mutant CALR combo with the first-line data that is expected year-end. Can you remind us of data that suggests any synergistic benefit? And given how well ka is entrenched in the myelofibrosis market, if CALR mutant patients are doing well on Jakafi, where do you envision mutant CALR fitting, like is it a combo? Is it — could it be a switch add-on?

Pablo Cagnoni: Thank you for the question. So let me offer a couple of points. So let’s start with the first part of your question about synergy. Preclinically, we saw additive to synergistic effects combining 989 with Jakafi and CALR mutated models. And I think what’s important to remember is, first of all, Jakafi as well as it works and as important as a step forward, it has been in patients with MPNs as particularly in CALR mutated patients, very little, if any, disease modification potential. It controls the symptoms, some of the symptoms of the disease. Obviously, it leads to spleen responses. All those effects are much less in patients with CALR mutations. In fact, if you look at the control arms of the COMFORT study or the MANIFEST study, the SVR35 and Jakafi in CALR-mutated patients is approximately 20%.

That’s in previously untreated patients. So obviously, there’s a need for something better for CALR mutated patients even in first-line MF. The second part of the question is Jakafi does have a package, which is obviously produces a fair amount of anemia and thrombocytopenia. So what we’re looking to do with 989 is fundamentally different. We’re looking to restore normal hematopoesis. We’re looking to eliminate malignant megakaryocytes from the bone marrow. We’re looking to eliminate CD34 positive mutant CALR positive cells from peripheral blood. And as a result of that shift back to normal hematopoiesis, which as we’ve seen already, translates into improvements in anemia as well as spleen responses and symptom improvement. So when we put this whole package together, we’ll show you the data by the end of the year in a larger group of first-line patients, we will have for you a regulatory strategy for 989 in first-line MF.

But we think that the effect of 989 and Jakafi are fundamentally different in this patient population.

Operator: The next question is coming from Brian Abrahams from RBC Capital Markets.

Brian Abrahams: Sounds like you’ve made a lot of progress with the 989 subcu form, having completed the healthy volunteer study. So I guess I was wondering if you could maybe tell us about the observations there. And then the scope and dose range that you’re going to be testing in this ongoing Phase I study in patients and whether that in and of itself could potentially be bridging or whether you’ll need integration of the subcu form into the Phase III?

William Meury: Thanks for the question, Brian. Pablo?

Pablo Cagnoni: So the data from the healthy volunteer study, as I mentioned in my remarks, has allowed us now to move very quickly into patients. We’re going to test a very broad range of doses. Let me just assure you that they will cover all the potential doses that we’re using in Phase III in ET and that we could conceivably use in Phase III in patients with MF. So we will have that covered. In terms of implementing this in Phase III studies, this is a question of timing, Brian. Speed is really important here. We need to bring this medicine to market for patients with ET and MF as quickly as possible. We will not slow down the AD study. We’re probably not going to slow down the second-line MF study to incorporate the subcu, and we’ll have a bridging strategy at the back end — our goal is to incorporate a subcu formulation in the first line MF study. And right now, the plan allows us to do that. We’ll provide an update on both before the end of the year.

Operator: Our next question today is coming from Jessica Fye from Morgan Stanley.

Jessica Fye: I had another one on 989. I was hoping you could touch on the potential translatability of the ET design to MF as it relates to starting dose. And I guess really more specifically the potential for an up-titration approach particularly in the context of a potential 6-month primary endpoint where we’re presumably going to be looking at SVR35 and TSS50 versus looking for an early platelet response like in ET?

Pablo Cagnoni: Thank you for the question, Jess. So the journey in MF is just a little bit earlier. We need to spend a little bit more time with FDA discussing the design of the second-line MF study. So I’m going to be a little bit let’s open about answering the question in detail. Now I think that the fact that we have an agreement on the potential for — the potential on the step-up escalation in ET certainly can build — we can build the framework around that in MF. I think the more important thing in MF to be honest, is to have a constructive dialogue with the agency on the primary endpoint of the study, which we intend to do and for which we have a lot of supporting data. As I mentioned in an answer to a previous question, 989 is a fundamentally different type of medicine for patients with MF.

This is about normalizing hematopoiesis not just a nonspecific inhibition of JAK that leads to some symptom improvement and spleen response. It’s about normalizing hematopoiesis. We think that needs to be contemplated into the primary endpoint for the study in MF, and we intend to have that conversation with FDA. Conceivably, we could have the same to address the heterogeneity across the population, we could have a dose escalation step as well. In this case, it could take a little bit longer, but we’ll have that conversation with the FDA as at the right time. Thanks, Jess. Congratulations on the move to Morgan Stanley.

Operator: Our next question today — actually our final question today will be coming from Derek Archila from Wells Fargo.

Derek Archila: Congrats on the progress. This one is for Pablo. If you frame the setup for EHA and the update there earlier, but I guess, is the expectation we should see deepening responses in these MF cohorts at the update I just wanted to reconcile the eradication comment that you made.

Pablo Cagnoni: So it’s always — look, we will have data that continues to show the effect of 989 as a disease-modifying therapy. And that consistently will show that we can continue to eliminate — dramatically reduce in some patients close to eliminate the malignant population of megakaryocytes in the bone marrow and in peripheral blood. And you should see more of the translational data at EHA.

Operator: We 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.

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