Incyte Aktie

All right. Welcome, everyone, to this session of the Morgan Stanley Global Healthcare Conference. I'm Judah Frommer, one of the SMID biotech analysts here. We're very excited to have Incyte for this session, represented by Bill and Pablo.

Maybe just a quick disclosure before we get into it.

For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. With any questions, contact your Morgan Stanley sales representative.

All right. With that, welcome back. Bill, you joined the company a couple of months before the conference last year. So maybe you can provide a brief overview of how the company has evolved, both strategically and in the clinic over the last 12 months or so.

Thanks for having us. I think the most significant change over the past 12 months since I've joined, and to be fair, I inherited a lot of substrate is that the pipeline today looks fundamentally different than it did 12 months ago. And to put a fine point on that, when I joined, we had no proof-of-concept data on 989, our CALR antibody for MF and ET. We had no proof-of-concept data on our G12D inhibitor for pancreatic cancer or TGF-beta x PD-1 for colorectal cancer.

We didn't even have Phase III data for povorcitinib, which is now under review at the FDA. And through the acquisition of Vega, we didn't have latarcibart for von Willebrand's disease. And today, we have all of that. And I think the point here is that we have much greater visibility into the recovery phase or the growth phase of the company post '29 after we lose Jakafi. Now it's our job to convert Phase III trials into FDA approvals and ultimately, revenue earnings and cash flow.

And we think about this company right now in 2 simple pieces. And this, I think, is how we should be judged. The first is our core business ex Jakafi, which is annualizing at roughly $2 billion in sales. Our job is to get it to $3 billion to $4 billion by 2030, which sets the floor for Incyte.

And then the second job is to continue to advance the pipeline, which is more derisked now than it was a year ago, as I said, and launch these products. And if we do this right, it's got to work. We don't expect people to take our word for it. The company has the potential to grow at a 15% to 20% CAGR from 2030 to '35. And that would increase the value of the company. It will give us a great deal of sort of breadth and depth in terms of our product line. And we'll have dramatically reduced the LOE exposure of the company. And that's the basic framework for recovery.

Okay. That's a good way to set the stage. And we're going to jump around a bit, but figure -- we'll start with MPN. So for the Jakafi franchise and XR specifically, what will determine whether conversion reaches the low or high end of the 10% to 30% pre-LOE target you've put out?

Yes, it's a good question. So we have this range of 10% to 30%, take the midpoint of 20%. If we're successful there, we preserve almost $0.75 billion in sales as we go through the transition. I think there's 2 steps. The first is to get formulary coverage. We'll provide an update on the third quarter call where we are. We are ahead of schedule. Formulary coverage for XR by the end of the year is going to approach 70% to 80%. We have all the major PBMs and health plans with XR on formulary at parity with IR and at a price that is acceptable to us and acceptable to them, which is parity to Jakafi.

I think the '27 is going to be about conversion, and you can convert new patients and continuing patients. Both sources of conversion are important. And if you're converting at 0.5 point to 1 point a month over a 24-month period, we can preserve a significant portion of this business. It's a bridge. XR is not going to drive the value of Incyte, but it will provide support as we go through the transition.

Okay. That makes sense. And just talking about kind of some of those next-gen assets. So specifically for the CALR antibody 989, right, we'll have frontline Phase I data in MF, I believe, later this year. So maybe just help us with efficacy signals you're looking for? What would support further development of the monotherapy and combination approaches? And then we'll have some more questions.

I'll turn it over to Pablo.

So let me recap real quick just to expand a little bit on your question. So 989 is currently in -- pivotal trials are already for second-line ET or has been initiated, and we disclosed the design earlier this year. We're in the process of implementing a second-line MF trial. We'll give you full details at the next earnings call on the design of that trial. But roughly speaking, the study will be in second-line MF in -- with the best available therapy control arm, and it will enroll all comers with a primary analysis probably around type 1, but just to improve the probability of success of that trial. But that's already in motion.

When it comes to first-line MF, there's a couple of things that we need clarity on. One is, as you brought up, we're going to have a data set in frontline MF patients at ASH. About 2/3 of the patients, single agent 989, about 1/3 with combination with ruxolitinib. So that data set, which is maturing as we speak, but we don't have yet, it's critical for us to make a decision not whether we go into frontline, but what the design of the frontline study is. We're convinced we have a drug here that will be developable in frontline MF, and there's a path to approval with a single agent or combination with Jakafi, the data will determine.

In parallel with that, we have a number of meetings scheduled with the agency or in the process of scheduling to continue a conversation that I think we gave you some visibility on whether it is time to really redefine the endpoint for approval in MF drugs, particularly in frontline. The standard has been now for the past 15 years since the introduction of Jakafi is TSS50 and SVR35. We think that 989 has a different mechanism of action. It does different things for the patient. It normalizes hematopoiesis, which leads to a dramatic improvement in anemia in more than half the patients as well as eradication of the malignant clone. That has been reflected in improvements in SVR35 and TSS50 in second-line patients. Whether the TSS50 data in frontline is sufficient to give us confidence on beating Jakafi is the question that we need to answer.

So in parallel with that, we'll get the data. We'll continue conversation with FDA. We have a constructive dialogue with them so far, and we'll bring those 2 pieces of evidence together, and we'll give you clarity on the design of frontline. Our intention is in the early part of '27 to initiate a frontline MF trial with 989.

The final piece of the story, if I may, is -- and we sort of alluded to this in the last earnings call. At ASH, we'll present preclinical data package with our next-generation mutant-CALR antibody. We think based on what's publicly available that we have now in our hands, not only the first CALR antibody, but the best one with a longer half-life and much, much more increased potency against both type 1 and type 2. We think it's going to reset the bar, and we look forward to sharing that data with you.

Okay. So maybe just a couple more on the ASH readout to help folks with framing those. So for the combination arm, I know you talked about legacy endpoints being utilized. But for efficacy and anemia, I guess, SVR35 range and anemia rates, does comparable to RUX sound like where investors should be anchored?

Yes. I mean, look, if you take the JAK ineligible cohort that we presented at EHA, which is technically frontline. It's just a different group of patients, the SVR35 data that we showed there at 24 weeks was -- I think beats Jakafi in frontline easily. If you look at -- there's not a ton of data sets, but if you look at Jakafi, frontline mutant-CALR-positive patients, there's data from the COMFORT-II study and data from the pelabresib control arm study. And that data falls somewhere between 20% and 22%. We presented data upwards of 45%. I think that's clean.

TSS50, our numbers were very strong in the JAK ineligible patients. We need to make sure that, that stays above -- in order to beat Jakafi head-to-head there, you have to hit 55% to 60%. So that's a little bit harder, which is why we think this dialogue with FDA, number one, or maybe focusing on just type 1 patients or combining with Jakafi for a predefined period of time and tapering off the Jakafi. Any of those approaches, I think, could lead to an approval in frontline.

Okay. And then just for the monotherapy patients, I guess, sort of a similar question, but how important is the efficacy profile versus reducing that anemia?

So that, I think, is the reason why we think and we hope the FDA will get there when we continue to build the evidence that we have or present the evidence to them because the anemia improvement that we've seen in second line is dramatic. There were questions about washout. I think we've answered those, and you'll see more data. It doesn't matter how long you follow patients for, their hemoglobin keeps getting better. If you remove the patients that have prior Jakafi, the anemia improvement is there. So it's very clear.

And then when you look at the bone marrow and you look at markers of erythropoiesis like CD71, there's a clear improvement in those numbers. So this is a true restoration of normal blood -- red blood cell production. When you give Jakafi, you're going to blunt a little bit of that. So that's why even in the case that we need to develop this in combination with Jakafi, one would provide the Jakafi symptom improvement. In parallel with that, you see an improvement -- a growth of the benign clone and then you taper the Jakafi, you'll get anemia benefit. It could take a little bit longer, but you'll get anemia benefit eventually.

Okay. Great. And then maybe just a bit more color on those FDA discussions around endpoints. Where do they stand on incorporating hemoglobin improvement, disease modification measures like you said? And how could the regulatory path affect uptake? And how important could this be kind of for the broader space going forward?

Yes. Great question. So let's take a step back and what we're trying to do here. So we've taken evidence generated independently of Incyte. And I think that's important. There's a publication sponsored by ELN not that long ago. And they show that certain parameters and specifically, we're interested in hemoglobin, platelets, blasts and spleen size are independently correlated with improved leukemia progression and survival in these patients. So we've taken that and we built a model that we think is the basis for this composite endpoint.

I think the FDA is receptive to the idea. The question is what's the evidentiary threshold that we need to clear here to convince them that we're ready to put it in a study. I think that's basically what needs to happen, honestly. And whether it's immediately or not, our goal, as we made clear a number of times is to provide a molecular targeted therapy for every single patient with MPN. So this is a journey that we're in it as long as it takes. We need to get there with FDA. Hopefully, it will happen in the next 3 to 6 months. If it takes long, it takes longer. We still have a path to approve 989. We're playing the long game and really to try to change the standard of care for MPNs.

Okay. Great. And we wanted to touch on the Halozyme Corporation -- collaboration you announced relatively recently for an ENHANZE-enabled subcu formulation of 989. And I believe the Phase I initiated in this past quarter. So how important is that subcu dosing to the commercial profile? Would you call it a differentiator or a nice to have as you kind of progress here?

No, I think it's a need to have. And Pablo can walk through the aspects of the program. But we expect at this point that at least within the first 6 to 9 months of the ET launch, we'll have an on-body subcu twice a month. I think it's especially relevant in ET. And there are several work streams in place, and we'll have more information on the third quarter call about our discussions with FDA. But that program, I think, is in a good place right now.

I completely agree. And we have a clear plan, some of which -- I mean, we've got it with FDA. We continue to advance it. The Halozyme collaboration is an important part of it, but it's not a necessary element. We have in parallel a novel formulation. We have an increased concentration formulation. We have a Halozyme formulation that will all be tested and then we'll select the best one for the next step.

We also, as you know, we have a collaboration for an on-body infusion device. To be clear, this has to be applied only every other week just for 20, 25 minutes. It's not something the patient has to wear continuously. And we think that provides a solution for the higher doses that we need to provide to some of the patients on the subcu. So that's ongoing. And over time, as the data gets generated, we'll provide additional clarity, but we have a very clear plan to get there.

Okay. And just to round out, 989, just remind us of timing for top line for second-line ET, the Phase III data there. And in your mind, what's kind of supportive of expansion to frontline?

We have not provided a time line. The study is just getting initiated. Let us get going a few more months, and then we'll start as we usually do as we -- as enrollment goes well, which we hope it will, certainly we'll provide additional clarity.

The frontline question, there's 2 components that are important. One is we're not 100% convinced, you need a frontline indication in order to build this business. I think that the standard of care in frontline, as you all know, is hydroxyurea. It's a poorly tolerated drug that requires multiple dose adjustments, and it does not lead to disease modification. So we think we have a fundamentally different value proposition for patients. And I think that the shift from frontline to second-line therapy will be faster once a great second-line therapy is available.

Then we have the next-generation antibody, which is coming pretty soon, and we think that might be just a better tool to first -- for frontline ET, and we'll just do that with the new antibody.

Okay. Great. And maybe switching gears for a minute to JAK2V. So you've talked about our next-gen JAK2 V617F inhibitor. What should we be looking for in terms of preclinical translation when it can enter the clinic? What would you tell investors on that front?

So very important target for us. We remain fully convinced that this is a critical target for a big subset of patients with MF and ET and almost 90% plus of the patients with PV. We terminated the earlier program. We had expressed at the time, I think all of you heard that while we were optimistic about it, the therapeutic window for that compound '058 was relatively narrow. It didn't have a selectivity. It was the best effort we had at the time when we thought it was important to test it in the clinic. That program has been terminated. The next-generation program, which you will see preclinical package at ASH is a completely different chemical scaffold. So that's really important.

Number two, we started with an ASD formulation from day 1. So that should not be a problem. And perhaps most importantly, it's much more potent than '058 and it has a much wider selectivity window. This is a much better tool for the job. We're convinced of that. Whether it's the perfect tool time will tell, but it's certainly much better than '058.

Okay. Great. And maybe just a competitive landscape question within kind of the more targeted MPN therapies. For JAK2 V617F, there are clearly some competitors. I think even for mutant-CALR, we're seeing more upstart. So I guess just in terms of differentiation versus those programs, time lines and beyond, how are you thinking about the competitive set there?

I think first on the CALR antibody, it's tough to compare a clinical asset to a preclinical asset until you have human data. We look at it right now, we're 2 years ahead on one and maybe several or a few months behind on the other. I think the way we have to look at, and Pablo mentioned this, he just talked about 4 targeted therapies, 2 CALR antibodies, 617F. We have a T cell engager. And if we're going to win, it's going to come from breadth, covering the 3 MPNs, MF, ET and PV; multiple driver mutations; multiple lines of therapy. And it's hard when you're in a horse race and it's a single asset versus another single asset. Usually, breadth is what's going to decide who's successful long term. And did you build a real franchise? Or is it a single asset franchise?

You can add to that.

No. I mean I have nothing to add to the general point. We look at everything that is public in that space. As Bill said, I think with CALR, if we execute on our plan, I think we're optimistic that everything is going to be fine, and we're going to dominate that space. We have the first one. We have the best one. I think execution is key now.

On V617F, I mean, there are a number of programs out there. We keep an open mind. The best ideas are not always ours, which is why we put a collaboration in place with Prelude, and we have an option deal to their programs that we'll decide whether to exercise next year and everything else is out there. We try to keep an eye on it. Right now, I am confident in our next-generation program and the collaboration of Prelude are the 2 ways to address this problem.

Okay. Great. So moving to your solid tumor programs, you'll have an ESMO update of your KRAS G12D inhibitor '734 in about 50 first-line PDAC patients, I believe. So maybe talk a bit about efficacy and durability that would support a best-in-class profile and kind of derisk the ongoing Phase III further.

So that's why we'll have a couple of updates. One is the one you mentioned, frontline pancreatic cancer, about 50 patients, half and half in combination with FOLFIRINOX and gem/nab. Some of the data are out there. I would tell you the data that we will present at the meeting is a little bit better than what has been put out there.

When I look at all the data, efficacy and safety, vis-a-vis our nearest competitor, which I think everyone knows who they are, I think the data are comparable. I won't try to convince you we're better. I just don't think we're worse. The efficacy data that we report is very strong. We don't have a mature PFS because we don't have enough progression events. You'll see an event-free survival at 6 months, which I think looks very strong as well. We'll give you a full view of the safety as well. Our exposure based on the data that they presented about a couple of 2 to 3 months ago at ESMO GI, our exposure is about 1.6 to 1.8 months longer. So you need to interpret the data, the safety data with that in mind. But when you put the safety data side by side, I think they look roughly comparable. Some adverse events are a little bit different, but roughly the same rate of events are there.

When you look at dose intensity or discontinuations, I think it looks similar. So we think we have a very competitive program. We think we are as good as the best-in-class out there, and we look forward to continue to expand the program, and I'll tell you how. So the frontline study is ongoing, the Phase III, that's accruing very well. We're happy we're expanding it globally. We're going to move in the adjuvant pancreatic cancer setting as well.

But the other piece of data that you're going to see at ESMO, we combine '734, that's our G12D inhibitor with cetuximab in late-line colorectal cancer. We're going to show you that data. We have a nice-sized cohort. We think we have a very good response rate. And we'll provide an update of what we're going to do, which basically talk to the FDA, and we have a design for a pivotal trial in that indication that we intend to launch in the very near term, assuming we get positive regulatory feedback.

And on top of that, we are generating data of '734 in combination with FOLFIRI and cetuximab in frontline colorectal. That data will not be at ESMO. We'll disclose at some point next year. It's not mature enough. So we're expanding this program in a number of different directions, also combination strategy, which we're happy to talk about.

Okay. Great. Maybe just a couple of philosophical questions on the program. I guess how did safety and combinability with chemo factor into program design? Did you consider pan-RAS approaches and then just kind of the on-off mechanism versus on-state only or other on-off inhibitors? What's the -- I guess, how do you feel differentiated on that front as well?

Yes. Bill said it a minute ago, we need to breadth matters for these programs, particularly in the competitive landscape. And you're going to see over the next few months, what I would say is a comprehensive combination strategy. We're not ready to talk a lot about the details. Some of -- some are combinations that I think everybody in the room expects. Other might be more creative based on preclinical data. But we'll have novel targets, and we'll have a next-gen anti-EGFR inhibitor as well. So we're putting together a 3 to 5 different component combination strategy that we'll roll out over the next few months. So I'm very happy the way that is going, and we'll tell you more as these agreements are completed with different collaborators and so just not to get ahead of the curve a little bit.

Okay.

I think when we reverse engineer what we're trying to accomplish at Incyte, which is when you hit 2029, is there a lineup of franchises or individual products that can drive top quartile growth? And I think what will become clear as we get through the second half of the year is that if you look at -- if you bet on the G12D class, to put pan-RAS aside, there's 2 companies in late-stage development in a Phase III trial. And then there's all these opportunities for lines of therapy, combinations and tumor types.

And right now, the G12D class 2x's the response rate and potentially the PFS of the standard of care chemo, and we're one of 2. And if you look at this market globally, U.S., international, it becomes a real needle mover for Incyte as we hit that 2030 to '35 period. And the same is true for 989, which is only a starting point for a franchise. If you look across everything that Pablo talked about, that is another franchise or vertical. You stack those 2 things on top of our core business, potential. We have the potential of 2x this company.

Okay. Great. And maybe just, you mentioned the cetuximab combo in second line plus CRC. I guess any thoughts on an ORR durability bar that supports development there?

So you'll see ORR. As you know, cetuximab single agent is single digits. So I think you'll see data that very clearly beats that. And you'll see a PFS as well for what it's worth, but it's a mature PFS. I think both give me -- give us conviction that we can beat the control arm. I won't talk about the details on the control arm until we have a discussion with FDA, but we're confident in the design that we are presenting to them.

Okay. All right. Great. And maybe just moving to the bispecific '890, which is going to be in MSS CRC. Why could TGF-beta receptor II blockade succeed where TGF-beta approaches have failed previously? And then how does the PD-1 binding affinity factor in?

Yes. It's a very important point because, obviously, this has been tried before. And the reason why it's been tried before is because arguably TGF-beta is the second most important mechanism of tumor immune evasion after PD-1, PD-L1 axis. And so people have tried 2 different types of interventions, full systemic interventions and small molecule inhibitors. Those turn out to be toxic or they can't even be dosed at the right dose. People have tried traps, which you're trying to grab the ligand, which is a lot harder than block a receptor, both have failed for different reasons.

I think what our team did is a different approach, which is combining a bispecific with the PD-1 arm and TGF-beta receptor 2 arm. The TGF-beta receptor 2 arm only engages if the PD-1 arm is fully engaged. And that gives you a targeting that you don't get with the programs that have been tried in the past. It's not about blocking TGF-beta receptor II everywhere. It's about blocking it only when PD-1 is present and fully engaged. That has turned out that in a very large Phase I program with more than 300 patients that the safety is very manageable, and it's mostly related to PD-1 related side effects, which you would expect, it's a PD-1 better after all.

The doses we're testing in Phase III and we're testing in Phase II, 900 milligrams every other week, the TGF-beta related toxicities don't seem to matter. So with that in hand, we run a program in colorectal -- in a broad set of tumors, but interestingly, the most advanced data in colorectal cancer and about 100 patients with heavily pretreated MSS colorectal cancer, where PD-1s have a response rate of 0. We saw a response rate of 15% with very durable responses.

We combined with FOLFOX-bev chemotherapy. We showed the combination is tolerable. And we're going to present data in about 50 patients at ESMO with FOLFOX-bev plus TGF-beta x PD-1 frontline to show you why we believe the Phase III in that indication has a significant probability of success, and we're very optimistic about it, and it's been a very important program for us and is enrolling ahead of schedule as we speak.

Okay. And maybe just a minute on attractiveness to those targets versus PD-1 VEGF.

I think both are great ideas. And the PD-1 VEGF data continues to evolve. I think that some data was presented at the World Lung Cancer Conference. In colorectal, I think there's consensus that bevacizumab is a very important drug. And we can give our drug with full dose bev, which you cannot do with a PD-1 VEGF. It doesn't mean it's not going to work. It means that our thesis here is that a PD-1 better that you can give with full dose bev is superior to a PD-1 better than you cannot. But without making predictions, I think it's possible both ideas will be successful.

Okay. Great. And I want to make sure we touch on the derm franchises also. Maybe we start with povorcitinib in HS. Just as the competitive landscape evolves, how are you thinking about -- we'll have RINVOQ Phase III data upcoming. How could we see that potentially affecting the broader class? Obviously, there's a black box warning. Could that limit uptake?

I think the best way to think about povorcitinib is it's one of -- HS is one of the most difficult derm conditions you can treat. All you have today are antibiotics and steroid on one side and then IL-17s on the other. Antibiotics and steroids are not -- are imperfect solutions. IL-17s have made a big difference in patients' lives. But if you look at the HiSCR50 or 75 numbers, they're modest. It's not like you see in psoriasis.

Povorcitinib is a multi-cytokine inhibitor. HS is a multi-cytokine disease. There is no oral anti -- broad anti-inflammatory for HS. We studied 2 populations. We studied prebiologic and post-biologic. So patients who are in antibiotic and steroids don't have to leap over to an IL-17, you have an oral option. We also have the post-biologic data. I think the drug will get used in both pre- and post-biologic patients. I don't think you could have a better setup for an oral anti-inflammatory inhibitor right now.

As it relates to AbbVie and RINVOQ, it's one of the most successful products in all biopharma. Their data will be in a post-biologic population. I don't think dermatologists are going to question whether there's utility of RINVOQ in a pre-biologic population, but we will have both efficacy and safety data in both. I think that is important. Looks like we're going to have about a 1-year head start. I think that also is important. And as it relates to JAK safety, the dermatology community now has a much more nuanced understanding of JAK safety. And I don't think any company needs to relitigate the warnings and precaution on JAK.

The most important thing is, first, data from our HS1 and HS2 study, open-label extension, over 1,200 people is very reassuring. And the second point I'd make is that it comes down to patient selection, dose selection and monitoring. And I think the benefit/risk calculation in an HS population is fundamentally different, for example, than in an AD population years ago when Dupixent was out, RINVOQ was out and then you had the Xeljanz data.

Okay. Great. And what can you tell us about launch prep for HS in the U.S. and Europe, respectively?

Yes. So we'll have -- it will be fully wired and fully funded and resourced. We'll have a large sales organization covering north of 10,000 HS specialists. We'll have all the appropriate peer-to-peer programs in place. There will be a consumer advertising campaign. We'll make sure we get the right formulary coverage and price this in a way that makes sense for the PBMs and health plans and at the same time, makes sense for Incyte.

Internationally, we'll launch in Germany, which right now is a target market. And launch execution requires careful management, and we have an experienced group. Povo will be marketed right alongside Opzelura. And so we'll have essentially, and we are getting data on Opzelura in HS in the fourth quarter. And the Phase II study with Opzelura looked very reassuring. The HiSCR50 number was in the 70s. There was a high vehicle response, but the HiSCR50 was very good. We could have a topical to oral solution, which is a logical sequencing in HS, which I think could be a competitive advantage for Incyte.

Okay. Great. And maybe just thinking about the vitiligo and PN opportunities relative to HS, what would you highlight on that front?

Well, I'll tell you, we were just talking about prurigo nodularis with povorcitinib. As you know, it is an itch disease. Some would say that JAKs were made for PN. And we know that with Opzelura, it has a profound and rapid impact on itch. We saw the same thing with -- we expect the same with povorcitinib. That could be an outlier for povo. It's a 3 indication oral anti-inflammatory. We start with HS. We'll have our PN data in the fourth quarter too. And let's see what those data look like. If the benefit/risk profile stands up, we could secure an approval by roughly the end of 2027, early 2028. And I think it will be an important growth driver.

And then, of course, you have vitiligo. And the key in vitiligo is bridging the gap between the prevalence population and the treated population. The one benefit of an oral for vitiligo and the same is true for RINVOQ, which will have an indication too, is that there's 50% of the vitiligo market has a BSA involvement of greater than 5%. The topical is a little bit less practical. And so an oral systemic could make a great deal of sense. And medicalizing vitiligo is the difference between, I think, where the class is today and where it could be. And our job is just to execute against these 3 indications.

Okay. And I want to make sure before we run out of time that we touch on the Vega and latarcibart acquisition. So maybe just remind us of the strategic attractiveness of that. How it fits into the broader business? And maybe also if you could loop in just business development thoughts going forward as well.

Yes, I'll touch on it generally, and I'll let Pablo talk a little bit about scientifically why it was so interesting to us. I think it's a textbook example of the type of deal that makes sense for Incyte in hematology, broadly speaking, not MPNs, which is the sweet spot of the company. We have a great deal of knowledge and capabilities in hematology. A completely novel approach to treating von Willebrand's disease, the standard of care today is simply replace a missing protein or factor that you have to take multiple times each week, derisked Phase III, and we were able to do a stage deal.

And it will be highly accretive if we're successful, getting it through Phase III and that be highly accretive to the post 2030 growth profile of the company. And there's not too many of those out there. I think that my view, if you really step back is look what HEMLIBRA did to hemophilia A. Now hemophilia A is a different condition, more severe. But there's a hemophilia A population in von Willebrand's, which is sizable. This is to von Willebrand's, what HEMLIBRA was to hemophilia A. And I think scientifically, it's a really interesting concept.

Yes, it's a completely different approach to treating a bleeding disorder, right, modulating an anticoagulant protein, protein S in order to basically activate the coagulation cascade in those patients, but without getting into a true procoagulant or hypercoagulable state. And you see this based on the PK/PD data that our colleagues generated now a part of Incyte or Vega showing that there's no real movement in D-dimer of F1+2, which tells you there's no evidence of hypercoagulability at all.

And I think that, as Bill said, we thought this is a completely open opportunity. There was a presentation recently where they took the Komodo database and applied the standard prophylaxis criteria to that database. And they calculated that the population of patients with von Willebrand disease that should be on prophylaxis is about 30,000 patients. Only 2,000 of them are on prophylaxis, and that's the market that we consider when we did the transaction. So this is a really big opportunity for us to enter in a relatively near term because it's -- the trial is accruing very well in what could potentially be a significant opportunity.

And as it relates to BD. The way we think about it right now is we have 5 assets in the company that will drive 80% of the recovery that I would say, relatively speaking, have high PTRS. So if the benchmark is 65% to 70% for Phase III, nothing is 100%, but it's somewhere north of 65% to 70%. And that's povorcitinib, which is under review, and then you just walk through them, 989 for MF and ET, G12D, TGF-beta x PD-1 and then latarcibart and that's very reassuring. But we know attrition can come in lots of different flavors.

I don't think we have any zeros on our hand, but there can be delays. You can have underperforming launches. And so business development is a priority to supplement what we're doing internally. I think there's 2 types of deals, Vega's, the perfect deal, accretive in that -- or there's something even near term that could be important. And the most important thing is just to deploy this capital right and not turn $0.50 -- $1 into $0.50. And we're doing what every other company is trying to do in that regard.

Great. We can keep going, but we're out of time. So thank you again.

Thank you.

Welcome to the Cantor Conference. My name is Eric Schmidt, and it's my pleasure to moderate the next session with my colleague, Imogen Mansfield. And delighted to have with us the Incyte team, fresh off a big year and looking forward to a very eventful fall as well.

We've got the company's Chief Executive Officer, Bill Meury, as well as the company's President and Head of R&D, Pablo Cagnoni. Pablo, Bill, thank you for being here. Bill, it's been just about a year since you took the helm.

So give us a lay of the land and what's worked well over that intervening period since we last saw you.

Yes. Look, I joined the company just about 14, 15 months ago. One of the things I observed from the outside looking in is that the pipeline, when I joined, was still really in a proof-of-concept stage. We did not have Phase I -- significant Phase I data on 989 G12D, TGF-beta x PD-1. Obviously, we didn't have our protein S modulator for von Willebrand's disease. And here we are about 18 months into the phase, and we're in Phase III on all those assets. So I think the pipeline has advanced in a way that is very reassuring, number one.

Number two, I think it gives us much greater visibility into the recovery phase, the growth rate of Incyte post '29 after we lose Jakafi. I think we, as a management team should be judged on 2 things right now, and we laid this plan out at the beginning of 2026. The first one is getting the core business to $3 billion to $4 billion. That is essentially the floor for Incyte. And that is supported by multiple product launches over the next 12 to 18 months. Two of them are already on the market, XR, and we launched Opzelura in Germany, actually a couple of weeks ago.

And then we're waiting for povorcitinib and potentially frontline DLBCL for Monjuvi. So that's the core business. And we have to keep that product line moving, and you'll get reports every quarter as we report on the performance of those launches. And then part 2 is the pipeline. And there are 5 assets in the company right now that will represent roughly 80% of our recovery. And that is 989, our CALR antibody for MF and ET, our G12D inhibitor for pancreatic cancer, our TGF-beta x PD-1 bispecific for colorectal cancer, the protein S modulator for von Willebrand's von Willebrands and then povorcitinib, which will be part of the core business as soon as it gets approved, we expect at the beginning of 2027. That is an execution test.

And I think a lot of the biology risk has been removed. The Phase I programs that supported our decisions to go into Phase III were sizable Phase I programs. And now it's about making sure that we maintain study time lines, secure regulatory approvals and then convert those approvals ultimately to revenue, earnings and cash flow. And the last point I would make is business development, like in any company, is going to be used to supplement what we have internally. We're not going to buy our way through 2029, and we look for -- primarily for opportunities that can be highly accretive to the growth rate of the company when we get past the transition.

Very helpful. So as you execute on part 1, the execution on the core business and then part 2, the derisking and maturation of the pipeline, when is the right time to provide us with some guidance on that trough earnings and the growth coming out of the trough?

Yes, it's a really good question. I think sometime next year as we get more clarity on the recovery. And while it is derisked, in my opinion, there will be proof points between now and as we get closer and closer to the transition, and we'll start to provide a framework for how to think about the company in terms of revenue, earnings and cash flow during that period of time. I think we're set up very well right now, but there's one thing you can never underestimate in biopharma, and that's attrition, whether it's a delay or an underperforming launch or I don't believe in our case, is 0. But as we get more information, I think it's important we give visibility into how we'll manage the P&L of the company and what we think the long-term growth rate of Incyte can be.

What we're targeting is top quartile growth. And if we can get this business to grow at a 15% to 20% CAGR from 2030 to 2035, for example, just to pick a period in time, that will be really successful. And certainly, the assets that we have and if you look at the potential without using heroic assumptions, have the potential of 2x the business. But we don't expect people to take our word for it. We have to execute these programs, and we have all the pieces in place right now.

And then throughout this period of transition, if you want to call it, you've got a lot of cash on the balance sheet. You're generating a lot of cash each year. You referenced business development. Is that the right use of that cash, the reallocation of the cash? And what else are you looking for there?

Yes. I think the first call on capital is making sure that this R&D program that we have in place, which is heavily Phase III weighted is maximized. And I think Pablo will talk a little bit about what we're going to do with 989 and G12D because those are single assets. Our job is to systematically expand 989 into an MPN portfolio of multiple targeted therapies and then to do the same with G12D in terms of tumor types, lines of therapy and combinations.

Second call on capital will be business development. And when we think about business development, I think the STAR Therapeutics transaction was a textbook example of the type of deal that makes sense for Incyte strategically and financially. It was a late stage or a Phase III asset in an area where we have differentiated knowledge and capabilities. We believe it has plus billion dollar potential, a relatively derisked asset, and it was a staged deal in terms of how we deployed capital and very accretive if we're successful to the post '29 picture.

And then, of course, things you can do that are more near term, and that could be supportive of the company over the next several years. Those use larger, more upfront capital. We'll be very selective if we do that.

Okay. And then speaking of the near term, as you advance toward the Jakafi patent expiration, we're about to talk, I'm sure, about this top 5 or so pipeline candidates where you're going to spend considerably and really expand the franchises and create some hopeful long-term shareholder value. How much do you care about your P&L in 2027 and 2028?

Yes. Listen, we have to manage it. We're not pursuing a growth at all cost strategy. I don't think anyone has the luxury of doing that. But to be clear, what we're solving for is not margin right now, we're solving for a growth rate. And if we can invest now and take care of the next decade, we're going to do it. We want R&D over the long term as a percentage of sales to come down. And that happens in 1 of 2 ways. You grow your sales. That's the best way. And the other way is you moderate your spending.

What I will say about R&D investment right now is that over 80% of our investment is focused, Eric, on the assets that we're talking about. So we don't have inside the company, I give Pablo a lot of credit for this. We don't have a lot of limbo projects or zombie projects or lottery tickets. We're investing in assets that we think will improve the risk-adjusted net present value of the company, full stop. And we have to continue to call balls and strikes as it relates to what we invest in. And I think we're doing that. And as we get closer and closer to this transition, we'll again provide more framework on that.

Okay. Let's transition to the pipeline. You've highlighted your top 5 candidates. I think 2 of them in particular are very timely in terms of the discussion. Pablo, do you want to start with G12D that we go there given the updates at ESMO that we'll expect.

Happy to. Okay. So we call our G12D program '734. Those are the 3 numbers. We're working on a name. But for now, let's stick with '734. So what you're going to see at ESMO, which is just in a few weeks, it's an update on 2 tumor types, 2 different lines of therapy for the '734 program. The highest priority is frontline pancreatic cancer. And in that area, we're going to present the larger data set that you've seen so far, close to 50 patients, half of them of '734 in combination with FOLFIRINOX and half in combination with Gem/Nab, so frontline chemotherapy based in pancreatic cancer. We'll provide a comprehensive update on efficacy and safety.

And I think the data that's going to be revealed at ESMO, not in the abstract and not some of the data that has circulated, but the data at ESMO, I think, are very competitive in this space in terms of frontline combination with chemotherapy in pancreatic cancer. That gives us a lot of support, I think, for what we're doing in the background, which is we launched the Phase III trial in the indication. That's going very well. We're expanding that globally. We'll be conducted in 200 sites around the world. And we feel very good about the way that trial is enrolling and progressing so far.

So that's the core or the center piece of the G12D strategy for us. Around that, we're building within pancreatic cancer. We're going to move in the adjuvant setting. We're designing and implementing a trial for patients postsurgical resection in pancreatic cancer. And you will also see data in colorectal cancer. We believe that, that's an opportunity for us to move quickly in that space. We have generated data in combination with cetuximab. We will present that data at ESMO, and we will tell you what we're going to do next. We have a meeting scheduled with FDA to get regulatory clarity, but we intend to pursue that indication.

We have also done work in combination with chemotherapy in frontline colorectal cancer. We will not present that data at ESMO. It's not mature enough, but you should keep that in mind. So that's how we're expanding pancreatic, frontline first, adjuvant next, colorectal, late line first, frontline next. And we're also putting in place a combination therapy strategy for '734. We obviously -- those are external collaborations we're working on. You'll hear more about the next few months, hopefully, at ESMO, but sometime around that time frame how we're thinking about that. So that's the whole '734 program that you're going to hear more about at ESMO, which we think substantially derisks the program, at least I hope you agree with that.

In the most recent update, we saw a 62% ORR in the Gem/Nab combo and 75% FOLFIRINOX, and what more could we learn at ESMO? And where do you think...

Yes. So this came from unredacted protocol filed in Europe. The numbers have gotten a little bit better. So you'll see better numbers than that. We'll have to wait for ESMO to reveal that. Those are the same numbers you'll see in the abstract. The numbers in the presentation are a little bit better, that's what I alluded to. Look, when I look at the data that we'll present at ESMO, I think it's fair to say that it's comparable to the best data set that has been put out there, which I think everybody is aware of. I'm not going to claim that we're better, but I don't think we're worse. Again, safety numbers up and down a little bit, efficacy number, a couple of percentage points here and there. I think the data sets are comparable. We feel very good about where we are from the competitive perspective in terms of quality of the data and in terms of time line to first-line approval.

And it's a very competitive field. So how are you thinking about differentiation here within the G12D class, but then also with pan-RAS inhibitors [indiscernible] as well or combination?

Yes. I think the differentiation with pan-RAS inhibitors is pretty clear. It's been -- it's not a question of who's better or not. I think time will tell in frontline therapy, which approach is better or whether both approaches are comparable. They're different. Safety profiles are very different from a pan-RAS inhibitor from G12D specific inhibitors. One thing we noticed with '734, and you'll see this at ESMO, is the GI adverse events get much better after the first cycle, and we'll show this data that way. So the headline number for adverse events is X, and it's higher than I would like. But it gets much better in subsequent cycles after cycle 1. And I think that's going to be pretty clear, I think, to everybody during the ESMO presentation or during the investor event.

I think the question of whether it's better to give frontline first-line at pan-RAS versus a mutation-specific inhibitor, that can only be answered with data. But when you ask experts, and we've done that extensively, Bill and I over the last few weeks, that will tell you that in general, the more mutation-specific approaches will get used first. Obviously, if there's a dramatic efficacy difference, that supports that thesis. But in general, you give the more specific drug first when patients progress, you give a broader inhibitor next. Tolerability will also come into question considering some of the side effects of pan-RAS inhibitors. But I do think that data will probably guide those decisions at the end.

I would just add one comment about competitive intensity. I agree with everything that Pablo said. There are very few markets in oncology where it's winner take all. You can look at BCR-ABL or CDK4/6 or EGFR. And if we're 1 of 2, and right now, there are only really 2 companies in late-stage development with a G12D inhibitor in frontline PDAC, and that's RevMed and Incyte. It's a first-world problem. I think this will be -- we're in a good spot if we're 1 of 2. I think the most important point, and Pablo just made it is, how do you maximize this asset by studying it in all lines and tumor types. And if we do that, that becomes a form of differentiation.

I think more important than for us to try to convince you that we're better than X or Y. The most important thing for us is to execute on the plan and expand the indications. And that's what we're doing.

Not to focus too much on the competition, but one advantage they have is combinations. They've got PRMT5, they're working in collaboration with. They've got a pan-RAS. When will we see some collaboration partners in Incyte?

Soon. Those conversations have started and they're coming, I think, to fruition pretty soon. So you'll hear more about that, hopefully by ESMO.

I guess just one more on the GI adverse events. We've seen from some of the competitors very meaningful impacts of prophylaxis on reported GI AEs. How are you thinking about? How has that been incorporated in the study?

That's been incorporated, obviously, the lesson from the Phase I have been incorporated in the Phase III, and I think that's going to make even a bigger difference. You'll see some of the data that I mentioned from cycle 1 to subsequent cycles. And I think part of that is implementing prophylaxis.

Okay. Maybe we should move to your mCALR inhibitor, 989. And tell us what the latest is there. Again, we're looking forward to some data toward the end of the year.

So the 989, which is the number for CALR antibody, I think the one thing I would start with is the first step towards trying to address the entire group of myeloproliferative neoplasm, specifically Philadelphia chromosome-negative MPNs, which includes MF, ET and PV. Our goal as a company is to cover that entire spectrum. 989 is the first step in that journey. It addresses CALR-mutated patients, which are about 25% to 35% of patients with ET and MF. Where we are today is a second-line study in patients with essential thrombocythemia. The pivotal study has been initiated. So that's ongoing. Control arm is best available therapy, which in that context includes either retrying hydroxyurea or an anagrelide or a little bit of interferon probably. That's -- the study is running. And we think that study is going to make it possible for us to be first to market with the CALR antibody.

The next step is the second-line study in myelofibrosis. That study is being planned and it will be initiated this year, before the end of the year. The specific design we'll give more details at the next earnings call. But roughly, it will be a second-line study. The default today is using conventional endpoints, SVR35 and TSS50. We think the data we presented in that setting convinces us that we can run a positive study. We'll enroll all comers. The primary analysis is likely to be in type 1 patients, but it will be an all-comer study.

So the next step is first-line MF. For that, we need a couple of pieces that are coming into place. One is the data in patients with frontline MF, which we will present is maturing, and it will present it at ASH. There will be about 40 patients with single-agent 989 in untreated MF and about 20 patients in combination with ruxolitinib. That data, together with conversations that are ongoing and planned with FDA over the next few months will determine the design of the frontline MF study. So we don't have full clarity yet. We obviously have an idea in our head that needs to be finalized based on data and conversations with FDA.

And the final step in the CALR journey that I want to mention is, as we disclosed earlier this year, we have a next-generation antibody, which we think dramatically improved in key properties of 989 that will be introduced publicly later this year, and we're looking forward to entering the clinic as soon as possible. We think it will be an accelerated development plan for that program.

How do you make the case that ET patients should be treated with a therapy like 989? And is the case stronger for type 1 patients?

I think today, the efficacy is better in type 1 than non-type 1 patients. Whether that makes for a stronger case, it depends on the outcome of the study relative to what's available to these patients, which is the control arm. I think, yes, and let me tell you why. There's no other intervention today available that has the clear evidence of eliminating the malignant clone that we presented in patients with ET. It's not just normalizing platelets, which does so without need for dose adjustments. It just normalizes platelets. When you look at every measure of translational biology, there's clear evidence of elimination of malignant megakaryocytes, elimination of malignant early progenitors, which are where the disease is coming from. And over time, we see and we'll continue to see elimination of the variant allele frequency, basically the size of the clone in peripheral blood.

So 989 is truly eradicating the disease. And there's no other drug in CALR-mutated patients that does so as clearly and as profoundly as 989 does. The question is, it is a relatively indolent disease, why use this? Well, for the same reason that a lot of patients are treated with hydroxyurea today because even though it's an indolent disease, people with ET do have complications. Some have clots, some have bleeding episodes and some of them progress to myelofibrosis. And when that happens, it's not as indolent as primary ET. So there is a very strong argument that if you have a targeted therapy that is well tolerated and you can eradicate the malignant clone, you should intervene early.

One point I would make, and you'll see an update is the study started about 2 years ago. There's patients -- the number of patients with ET that have discontinued due to adverse events is minuscule. I think there's a couple of patients. This drug is well tolerated by these patients over a long period of time, which supports early intervention.

To put a fine point on what Pablo said, there's 20,000 people in the United States with a CALR mutation in ET. Half of those patients are 40 to 50 years of age, which means they're going to live with their ET for the rest of their life. And hydroxyurea has made a big difference for some people. It's an effective drug, but half the people don't get their platelet counts under control on hydroxyurea because you can't dose it high enough. And I have a feeling that in that population of patients, which is 50%, everything Pablo said is going to be very -- I believe ET is an underappreciated indication for 989.

And then maybe pivoting to myelofibrosis and the development plan there. You've talked about how the default mode is the traditional endpoints, but we also know you're keen to try and validate the composite endpoint that you're looking at. How might that work out? And what's the plan for the first-line setting?

So we've had dialogue with FDA. And I think they are -- I would define it as receptive, but not there yet in terms of changing the regulatory framework for approval of new medicines in MF. That's basically what we're asking them to do. There's been a framework for the past 15 years since the approval of Jakafi on SVR35 and TSS50. We're asking them to change that, and that takes time and that takes more than one conversation. We have already scheduled meetings with them. We'll continue that dialogue. What we're trying to do, just to be clear, is to switch to an endpoint that we believe, based on data that has been generated dependent of insight is more relevant to patients with MF. And that will include components that have to do with normal hematopoiesis, hemoglobin platelets, malignant hematopoiesis blasts and of course, spleen has to be part of that story.

And I think when you put all that together, they correlate better with long-term outcomes, i.e., survival, than simply TSS50 and SVR35. From that conviction that these are better predictors of long-term outcomes that matter to patients comes the fact that we believe it's time to consider this for regulatory approval in MF. How quickly can we convince FDA? I don't know. We're working on it. We think we have a strong argument is supported by external data, which is always important. I think we'll get there. We would like to get the drug approved for patients with second-line MF as fast as possible. So we are not going to wait for that dialogue to conclude. We're going to start the study with traditional endpoints. The composite will be a key secondary endpoint in the study. So we'll have data regardless whether we can change plans later on for statistical analysis, that's debatable at this point, but we will be part of the study for second-line MF.

And we'll give a full update at the third quarter earnings call once we finalize the protocol.

And then maybe one last question on mCALR. You've been much more vocal about your next-generation antibody. What's the timing? And how does that profile stack up versus the competition?

So -- I think that our plan remains to be the first CALR antibody approved, which is going to be 989 if things go well and we execute on the plan that I outlined and then come as soon as possible after that with what we believe today, based on preclinical data and public disclosures is a best-in-class CALR antibody. We have dramatically improved the potency against both type 1 and non-type 1, and we have significantly improved the half-life as well to make it more convenient for patients. And when you put those 2 things together, it's just simply a better antibody.

We're planning to enter the clinic in the near term. You'll see some preclinical data, hopefully, at ASH this year. And I think it's important to remember that the 989 development plan took a little bit longer than I would have liked because we were asked by FDA to start a very low dose escalation. It was a new mechanism. Understandably, we started low. It took some time to escalate. I think we can shorten that time line significantly with the next-generation antibody.

Let's touch quickly on your PD-1 x TGF-beta bispecific. So we've also got data coming at ESMO. Can you help frame for us what good data looks like in first-line MSS CRC?

So we presented earlier data, single agent in MSS colorectal late line. We show single-agent activity. I would argue unprecedented for PD-1 better. What we're going to have at ESMO is a large data set, about 45, 50 patients, frontline MSS colorectal with, I would argue, an overrepresentation of liver mets patients. I think we have more than 2/3 in the study, showing response rate in that population. The PFS is not mature enough because we don't have enough progressors, but you'll get an event-free survival at 6 months data number and obviously, a comprehensive safety profile.

We believe that significantly derisks what we're running, which is a frontline Phase III global study of FOLFOX bev plus/minus TGF-beta by PD-1. When you look at the literature, there's a little bit of variability. I think most of the data that has come in and depends significantly on the percentage of patients with liver mets is somewhere between 40% to 50% response rate. We think we'll beat that number clearly in this cohort, and that's what we expect to be able to show you at ESMO.

I guess one more to finish up, latarcibart. So could you talk to us about how you view the potential here in von Willebrand's disease?

I think a great analog for latarcibart is obviously HEMLIBRA. And if you look at what HEMLIBRA did to hemophilia A, it basically replaced factor replacement therapy. And so it bridges Factor IXa and X and instead of giving Factor VIII replacement therapy, use HEMLIBRA and it really transformed, became the standard of care in hemophilia A. The concept is exactly the same, which is why we acquired STAR Therapeutics in von Willebrand's disease. Today, factor replacement therapy is the standard of care. It degrades quickly. It has to be administered multiple times a week as a prophylaxis regimen. And there's roughly 30,000 people, I think the number is, Pablo, that are eligible for prophylaxis regimen, only 2,000 are receiving it today with VONVENDI or Wilate.

And what latarcibart does is essentially, it's a system-level correction, just like HEMLIBRA is for hemophilia A, modify or attenuate protein S activity, which is a natural anticoagulant, restore thrombin generation capacity. And so if latarcibart can be to von Willebrand's disease, what HEMLIBRA was to hemophilia A, we have a product that's going to be a sizable plus billion dollar opportunity for the company. And right now, in severe frequent bleeders, we will be 1 of 1, and that's a good place to be.

I think we're out of time, guys. Thank you so much, Bill, Pablo, for spending some time with us today.

Good to see you.

All right. Good morning, everyone. Thanks for joining us for the next fireside discussion. My name is Derek Archila, I'm one of the senior biotech analysts here at Wells. I'm very excited to have the next company here, Incyte. From the company, we have Bill Meury, CEO; as well as Pablo Cagnoni, Global Head of R&D, if that's right? All right.

Gentlemen, so a lot of changes at Incyte from last year when you started as CEO, Bill. So maybe just talk a little bit about a year in the seat, priorities, and then we can kind of go through some of the key growth drivers here.

Yes. Thanks, Derek. At the beginning of the year, we laid out a framework for how to think about the company. And I think there's really two simple parts to the -- to our plan, to our strategy.

The first one is we have a core business ex Jakafi, and how we should be judged on that core business is maintaining a double-digit growth rate for the next 5 years. And by 2030, we think that core business, what sets the floor for Incyte in many respects is going to be up $3 billion to $4 billion. Product launches is what will continue to drive our core business, and I think we are on track to do that. And you see that each quarter as we report on the performance of Opzelura and Niktimvo and Monjuvi and Zynyz.

And then part 2 is really executing against the pipeline, and that will drive the recovery. Our aim is to have a business post '29 that can grow at a 15% to 20% 5-year CAGR. And if you look at the unadjusted peak sales potential of the pipeline, you could see a business. We have to -- we don't have to be perfect, but we have to be successful. That has about $8 billion to $10 billion in top line potential.

When you look at the pipeline, there are -- we have three therapeutic areas, as you know, hematology, oncology and immunology. There are five assets that I think have a high PTRS and will drive 80% to 90% of that recovery. In hematology, we have 989, our monoclonal antibody for MF and ET, which is in Phase III. And we have latarcibart, which is a bleeding disorder, which we acquired at the beginning of the year.

In oncology, we have a G12D inhibitor frontline in PDAC, which is in Phase III, and TGF-beta x PD-1 bispecific in frontline MSS CRC, which is also in Phase III. And then, of course, we have povorcitinib in immunology. And that's where our focus is right now.

And this is an execution test. We have to convert Phase III studies into FDA approvals and those approvals into revenue, earnings and cash flow. And it's a two-part story. Business development will be used to supplement what we have internally.

The Star Therapeutics deal for latarcibart is, I think, a textbook example of the type of deal that makes sense for Incyte. We have a clear framework for doing deals. We have criteria. If a deal meets those criteria, we act quickly. If it doesn't, we're comfortable being patient. And I think that framework makes a lot of sense for our recovery.

Perfect. Good segue. So let's kind of talk about these kind of five growth assets that you're pointing to. And maybe starting with 734 and G12D, just because ESMO is coming up. And maybe, Bill or Pablo, if you can kind of set expectations on what we should kind of be seeing in that data set? And what gets you confident to build around and really invest around this given a lot of the competition that's out there?

Pablo, go ahead.

So it's a really important program for us, as Bill highlighted. And I think ESMO will be a very important meeting for all of you to understand why we're so excited about 734.

What you're going to see are a couple of really important data sets. First, it's going to be a combination with two types of chemotherapy, GemNab and FOLFIRINOX in patients with previously untreated pancreatic cancer. That's our lead indication.

We haven't shown mature data in combination with chemotherapy. So this is going to be very important. Will be efficacy, will be a comprehensive update on the safety, including discontinuations, interruptions, dose intensity, et cetera, which I think everybody would like to see.

The efficacy data is maturing very well. Importantly, we will not have yet a mature PFS, quite honestly, because we don't have enough events. Not enough patients have progressed, but we'll have a landmark analysis that will give you an idea of the durability of these responses.

So a very, very important data set to derisk the frontline Phase III study that is ongoing in patients with pancreatic cancer in combination with chemo. That study is ramping up very quickly globally. We'll have more than 150 sites open at its peak, and we're very optimistic on the enrollment rate and how that study is going. So that's sort of the cornerstone, the foundational part of the G12D program.

In addition to that, we will show data in combination with Erbitux in patients with late-line colorectal cancer. If you remember, Erbitux in those patients have a single-digit response rate. We're very, very enthusiastic about the data that we've seen in combination with a G12D agent. We'll show that data. We're having regulatory conversations with the agency to design a Phase III study in late-line colorectal cancer of our G12D in combination with Erbitux. So a very important part as we continue to expand the franchise into a different tumor type.

Two more important things or three that we're not going to show data yet but are important to keep in mind how the program is evolving. We are very interested in moving into adjuvant pancreatic cancer, a very important area for patients because it can drive a lot of benefit and obviously, an important part of the market. We have combined also with FOLFIRI and Erbitux in frontline colorectal cancer. That will not be at ESMO, but it's evolving very, very well.

And the final point is we're going to give you an idea of the combination strategy. We realize that G12Ds combine well with other targeted agents, and that's also something we're building. So you'll see pancreatic and colorectal data, and you'll get an idea of how we're expanding the program going forward.

I think a key takeaway from what Pablo just talked about is we should be judged when it comes to G12D. I think the data are very competitive, and you'll see that at ESMO is on systematic expansion so that this moves from -- or transitions from a single-asset story to a franchise. And that type of breadth is how we extract as much value out of G12D as anything else.

Got it. And I mean, I guess, when you think about the need to be differentiated, as you said, you believe the data is very strong, and we kind of know where that competitive benchmark is. But maybe talk to the development strategy as you kind of outlined, Pablo, how you can differentiate around that and ultimately, maybe be first in areas? And then just a follow-up to that is, how do you think the market evolves commercially, like, again, with the options that will be out there?

So I think when I look at the KRAS G12D space, right, I think it's fair to say that there's two companies, us and our main competitor, that are ahead of the pack, let's call it that, when it comes to executing frontline pancreatic cancer. I think one area different -- and I think when you see the data at ESMO, hopefully, you will agree with us that I think getting into who is 2 percentage points higher or lower on response rates or nausea or -- I don't think it's a very productive use of time. I think you'll see that the 2 programs or the 2 drugs are basically comparable. And I think that's okay.

In terms of who's going to finish first in pancreatic cancer, I think, again, we're neck and neck, and the 2 studies are likely to finish pretty close to each other. So for us, the differentiation here is going to come by combination strategy.

And that's why we think colorectal cancer is very important because I think we're going to -- we have generated data that you'll see at ESMO that is fairly mature, showing that we can combine with Erbitux and we can really significantly improve the response rate of single-agent Erbitux in late-line colorectal cancer. And then taking that, which is in itself an important market and moving that to frontline colorectal with Erbitux and chemo is a really important area of growth for the program.

So that's the approach we're taking. Obviously, the combinations are going to come as well. But the key for us is in this point is to accelerate as much as possible, colorectal cancer. We think it's a critical area of differentiation from our competitors.

Got it. And as you think about kind of the opportunity from a TAM perspective or commercial opportunity, like I know, Bill, you were saying last night, kind of like framing out this kind of GI oncology, like where do you think that -- what could that be? What could that look like?

Well, we know the size of the PDAC and CRC markets. In PDAC, G12D is about 40%. If you look at CRC, it's roughly 15%. You could estimate a TAM of $7.5 billion to $10 billion just in the United States.

I firmly believe -- and precedent proves this -- that this will be a multi-asset, multibillion-dollar category. You look at other areas of oncology like HER2 and BCR-ABL and PD-1 and CDK4/6 and eGFR, there are first generation, second generation, third generation, multiple lines of therapy, multiple tumor types and multiple combinations. Right now, as you and I have talked about, there's only two companies in late-stage development with a G12D inhibitor in Phase III. And that's Incyte, and of course, RevMed.

And so I believe that we're set up to build a vertical inside of Incyte that has the potential to be as relevant and as big as our hematology business, which in many respects is the central identity of the company. And executing against the plan that Pablo just talked about is the priority. And if we focus on that, this will help drive the recovery of Incyte post 2029.

Got it. Continuing to move on down the list of assets here. So we talked a little bit about TGF-beta as well. So I guess, how does this fit in and ultimately, part of that CRC story as well and maybe even the combinability of G12D and TGF-beta? But maybe a little bit more higher risk, but maybe you can kind of give us your sense of like how we should be thinking about that program in the portfolio?

I think Pablo does an excellent job of describing the scientific hypothesis behind TGF-beta x PD-1, which -- we're in a one-of-one situation, one of the largest wide open white spaces in oncology. It's a higher-risk program, but if we're right, it could have a profound impact on the future value of the company. And I'll let Pablo talk about the hypothesis because I think he's spot on.

So TGF-beta is arguably the second most important mechanism of tumor evasion in solid tumors. Obviously, PD-1/PD-L1 axis is the key, and we figure out how to drug that now for the past 15 years. The challenge is if you give a systemic TGF-beta inhibitor is systemic toxicity. And those have been tested multiple times, antibodies and small molecules. Traps don't work as well because catching enough ligand to make a difference is problematic, so those have been ineffective instead of toxic.

So what our team did is come up with a completely different idea, which was take an antibody against a TGF-beta receptor 2 -- only one, which we think is the most important one -- and attach to it, an anti-PD-1 arm. Now the TGF-beta receptor 2 antibody only engages when PD-1 is fully engaged. So what that does is basically drives the bispecific to the key site of action, which is the tumor microenvironment.

And in the Phase I study, what we've seen mostly up to doses of 900 milligrams were PD-1 related side effects, which you would expect. I mean, at the end of the day, I would call it a better PD-1. Very little, if any, TGF-beta side effects. Now if you exceed the doses, there's a point where you start to get a little bit of that, but that's not the dose we're taking for further development. So that's the scientific concept.

The data that we've generated, which is in hundreds of patients we have now well characterized the safety of this molecule is in patients with late-line colorectal cancer, MSS colorectal cancer, including more than half the patients with liver mets, a very clear evidence of single-agent activity which you don't see with anti-PD-1s. Anti-PD-1s have been tested in MSS colorectal, the response rate is 0. And we showed a 15% response rate, including more than half the responders were patients with liver mets, and the responses were quite durable.

That was the data that really set up the chain of events of where we are today, which is we decided then to combine it with chemotherapy, which we've done in combination with FOLFOX-bev. And then we started generating a larger data set which you will see at ESMO in frontline MSS colorectal in combination with FOLFOX-bev.

In parallel with that, we took what is, I would say, a risky approach. We launched a Phase III study in frontline colorectal. High risk, high reward. That study is going very well. It's expanding globally rapidly. And you will see at ESMO, the data that we have now in hand, that hopefully helps significantly derisk the program. A 40-plus patient data set, frontline colorectal MSS, including about 2/3 of the patients with liver mets and the response rate and some idea on the durability. Again, not a lot of progressors yet in combination with FOLFOX-bev. So that's the data that we've generated.

In parallel with that, we're doing a couple of other things. We're combining with a G12D inhibitor. That's a very intriguing combination. When you have 2 novel drugs that work well, you try to see if you can give them together. That work is ongoing. And we're moving the TGF-beta program also into the adjuvant setting in colorectal cancer, which we think is also a very important indication for patients and a big market.

If you take patients with surgically resected MSS colorectal, you give them chemo. After chemo, patients that have circulating tumor RNA have a very high risk of recurrence. We think we can fix that by giving them a TGF-beta x PD-1 in combination with chemo. So that's the plan for TGF-beta. We also have data in other tumor types. We won't talk about that at ESMO. We want to focus on mostly on GI cancers at ESMO.

Got you. When would we learn more about potential other areas or other tumor types that you'd want to...

I would call it first half of next year. We'll generate some more proof-of-concept data. We have presented some of that. We showed data in ovarian cancer, head and neck and lung, 20% to 30% response rate, including post PD-1. So clearly, the drug is active in other settings, and the question now is the development plan. And we are laying the foundation for that, and you'll see more next year.

Got you. Maybe shift gears to 989. So this is one basically helping replace the current business with Jakafi in myelofibrosis, MPN. So we should get a couple of updates, but the main one around kind of the Phase III for MF. So maybe just talk about some of the options that are on the table there?

And I know with a more targeted therapy like this that could be disease-modifying, your push to the FDA is maybe more novel endpoints. But where do you think we'll net out in terms of that relative to more traditional endpoints?

I'll set it up and let Pablo expand. First -- and we've talked about this -- there's a base case scenario here. Second-line MF conventional endpoints, that's SVR35, TSS50. We'll collect information on anemia with a focus on type 1, although we'll study non-type 1.

And then there is an ideal scenario, you could argue, which is we convince the FDA that a composite endpoint makes sense given the attributes of 989. It's a more complete way to look at the benefit of the product in MF. Base case, we get conventional endpoint with a focus on type 1. And we turn the composite endpoint into a key secondary, and then continue our conversations with the FDA as it relates to a composite endpoint, which could be relevant to a first-line program or to our next-gen antibody. We'll provide an update on the third quarter call. We have not finalized the protocol, but those are the two paths, the same two paths we talked about several months ago.

We know that with the conventional endpoint in a base case scenario, that 989 is going to be best available therapy, if you look at the data from our Phase I. So we're very confident about that. When you go into the frontline setting, what's going to be relevant is the data we share at the end of the year, which is we'll have data in monotherapy and combination therapy with ruxolitinib, roughly 50 or 60 patients split 2/3, 1/3, monotherapy and combination.

And those data are going to help instruct what our approach is in the frontline setting. If the data in our ASH update looks like the data from the JAK-ineligible cohort that we shared in the middle of the year at EHA, we have a real line of sight even on conventional endpoints to going into a frontline study. And we'll provide as complete an update as we can at the third quarter call.

Got you. I mean, what do you think those types of -- that composite endpoint in the disease-modifying, like what does that afford you kind of down the line? And how do physicians really start to understand that and where we're going versus kind of like the more blanket JAK approach getting to more targeted therapies? Because there's going to be a learning there.

Yes.

Yes. It's -- look, when you introduce a new mechanism, you need to understand what that new mechanism does for patients. We don't think SVR35 and TSS50 are the best way to understand what 989 does for patients with MF, quite simply. And those endpoints were tailored for Jakafi, and that was the right thing to do at the time. But when you look at the data that we presented at EHA, and we'll present more of that later this year, the normalization of hematopoiesis, which is what 989 does in these patients, is not reflected in SVR35 or TSS50. And we think it should be.

Now the conversation with FDA will be important, as Bill outlined. And whether we get there soon or we get there a little bit later, honestly, it doesn't really matter. The first step is to get this drug available for patients on the market. We have a way to do that both in ET and MF using conventional endpoints.

The second step of the journey is to really convince the FDA to redefine the regulatory landscape for patients with MF, and I think we have a way to do that. I do think they're going to be receptive. They may need more data. We'll generate the data, and I think we're going to get there.

Got's it. I guess, when you think about the opportunities across MF and ET for 989, so maybe can you help quantify those? In light of the fact that it is being delivered IV, but you guys do have a very kind of robust program to get to subcu. So kind of marry all that together.

Yes. We expect when we launch for ET that within 6 months, plus or minus, we'll have an on-body device available. So you go from taking, for example, hydroxyurea once a day for the rest of your life to a twice-a-month injection, which I think is much more convenient. And I think in order to penetrate the ET market, we're going to need the on-body device. And then, of course, that would be available for MF.

When you look at the size of these categories, just to combine it, there's roughly, let's call it, 20,000 people with a CALR mutation that either have ET or MF. So you're looking at a market that's north of $5 billion. And the question is, how much does a monoclonal antibody targeting CALR get? I don't think it takes heroic assumptions to pencil out a peak sales estimate where 989 across MF and ET in CALR-mutated patients could be as big as Jakafi. That is this working.

If you think about the ET market, they've been used in hydroxyurea for 4 decades. It's not an easy drug to dose. It has warnings and precautions, Grade 3 AEs. If there's one thing you can say about 989 in addition to being at least as effective as hydroxyurea, it is a very safe antibody. And for patients with ET that are diagnosed at 40 or 50 years of age -- and half the patients in our study were that young -- they're going to live with this condition for the rest of their life.

And all you're doing with hydroxyurea is treating it like you treat a fever with Tylenol. You're not doing anything to the underlying disease. And so I think there'll be a shift in ET from platelet counts to disease modification. And half the people on hydroxyurea get a partial response, which means residual symptoms, residual thrombotic resist and residual risk of transformation, although that is low.

And then on the MF side of it, we know that there is a therapeutic squeeze with Jakafi and JAK inhibitors. If you increase the dose, you control the symptoms, but you cause anemia. If you don't increase the dose, you avoid the anemia, but you have symptoms. And 989 goes to the one flaw of JAK inhibitors.

And so I think the potential here is real. And the most important thing is for us to get it out even in the second line in both conditions. And the hematology community is going to reshape how they use the two current standard of cares, hydroxyurea and obviously, the JAK inhibitors, namely Jakafi.

Got it. And again, these are must-win for you guys and kind of MPNs and just because Jakafi and what you have there. But can you just talk about -- you've talked about another mutant CALR antibody. You talked about a TCE. So like maybe just reinforce your commitment to this space and the options that you're looking at in the pipeline?

Yes, go ahead.

We are the company that basically built the Philadelphia-negative MPN space. Over the past 15 years, first in MF, then in PV, Jakafi has created this -- through the ability to help patients, created this significant business. Our goal now is to go after the entire group of patients with MPNs, all MF, all ET, all PV.

The first step in that direction is 989, as Bill outlined. We're confident that we're going to be first to market for a CALR antibody. Now the next step is we have to be best with CALR antibody. That's the next-generation program. We'll introduce it at the right time. But it basically optimizes every property of 989. More potent, almost equally potent for type 1 and type 2, but much more potent overall and longer half-life. And you'll see some of the data in the relatively near future.

In parallel with that, we have a TCE, we have T-cell engager, CD3 x CALR. That study is in dose escalation. We'll have data in 2027. We think it could be an important part of the story for certain patients with MF that don't respond or respond poorly to a regular CALR antibody.

The next step of the story is V617F. We had a program, we discontinued it because we didn't think it will clear the bar in terms of optimal efficacy. The next-generation V617F inhibitor is a much, much better molecule. And you will see data at the right time as well, but that will be introduced in the clinic in the very, very near term.

So by doing this, we are committed to the space, and we're committed to going after it to find a solution, a targeted therapy, disease-modifying therapy for every single patient with an MPN by the end of the decade. And we think that plan is on track.

And you also have a couple of shots on goal with 617F, right, with Prelude as well?

We do. Thank you for bringing it up. So we have an internal program that I just mentioned. It will be -- that IND will go in relatively soon.

And then we have a collaboration with Prelude. It's an option deal. The option vests in 2027. It's not just one program. The lead molecule is in the clinic already, but they have other backups that are moving through the system. We're going to get to see all the data that they have, and then we'll make a decision.

We don't play favorites. The best drug will win. Our goal is to win in V617F inhibitors. We think we can do that because we understand the biology very well, and we have the right models in-house to understand that biology very well. So that's why the best of those molecules will be advanced in development.

The biggest shift, I would say, over the last 6 months at Incyte as it relates to, I would say, our two most important therapeutic areas, hematology and GI oncology, is they're moving from single-asset stories to franchise plans. In other words, we had to walk before we ran 989, we had to get it into the Phase III. And the same thing with G12D, but they have been single-asset, single-study, single-indication plans. But you're seeing over the next 6 to 12 months, it will become clearer that we're going after breadth as it relates to both those programs and systematic expansion. I think that's how you extract as much value out of these two very novel compounds as we can.

Yes. Well, let's segue into VGA039 because, again, this is another potential franchise play, as you just talked about. So I guess, what really like was attractive about this deal? And certainly, the asset in your wheelhouse because of the hematology, but what gets you excited about Von Willebrand's?

Yes. I'll make a couple of comments and let Pablo expand on it. If you look at a neighborhood right next to Von Willebrand's, it would be hemophilia A. And HEMLIBRA is now a standard of care for hemophilia A patients and went from replacement therapy to once-a-month injection to provide protection against bleeding.

Von Willebrand's, all they have is replacement therapy. Replacement factor degrades over time, requires frequent infusions. And only a very small percentage of patients with Von Willebrand's disease are receiving prophylaxis therapy because it's not convenient, and there's peaks and troughs when you're given replacement factor.

There is a segment of Von Willebrand's disease that looks like hemophilia A, severe frequent bleeders. That's 7,000 to 10,000 patients. And when we look at a protein S modulator, it's a system-level correction. It's restoring thrombin under a bleeding challenge but not increasing thrombotic risk materially. And we thought this, VGA039, could be, to Von Willebrand's disease, exactly what HEMLIBRA was for hemophilia A.

Phase I data is a limited data set, but we saw significant reductions in bleeding. The entire biomarker package was very, very supportive. And there was a clear regulatory path to be the first prophylaxis once-a-month treatment for Von Willebrand's, which doesn't exist today.

And it was a perfect adjacency to our current MPN business. And so the deal made sense strategically and operationally and obviously, financially, too. And I think Pablo can talk a little bit more about the scientific hypothesis.

We love the program for -- I think Bill made all the points, but just to maybe emphasize a couple of things. Great science, and then a completely novel way to treat a bleeding disorder, right? It's a modulator protein S which is a natural anticoagulant.

And so by modulating -- not reducing or depleting it, by modulating protein S, you don't create a pro-coagulant state, but you rebalance the coagulation cascade. And we know that because you normalize thrombin generation, you don't overshoot it. You don't increase D-dimer, you don't increase the fragment. So it's very clearly rebalancing in a way, but more modulating protein S activity, okay?

Second, the medical need is clear. Von Willebrand's disease patients need something better than infusions 2 to 3 days a week in order to prevent their bleeding. The data package was very, very solid. And we think because of the mechanism of action of modulating protein S, that can potentially work on all types of Von Willebrand's disease.

And in fact, the data set that we presented at ISTH in July shows exactly that. The reduction in ABR, annual bleeding rates, was independent of type of Von Willebrand's disease, independent of type of bleeding, independent of frequency of bleeding. So very clear evidence across the board, even though the sample size is relatively small.

So when we put all that together, we really thought this was a perfect program to bring into the company. The Phase III study is enrolling very well. The pivotal trial is ongoing. We have a very, very strong agreement with the FDA on the design of that study, so we're very comfortable it will be a global study. We think it could enroll ahead of schedule perhaps, and we'll have data in the first part of 2029.

And beyond Von Willebrand's, where could you see this type of kind of more universal agent to expand into?

So there's -- I think it's an important point because this is not a Von Willebrand disease drug, right? It's not factor replacement. It's really independent of that.

So there are a number of areas that we're looking at. The first and most important one, I should say, is to do a study in prophylaxis -- patients that are on prophylaxis today. The pivotal trial excludes those patients. Patients have to be free of prophylaxis for 6 months. It's an observation period, and then they enter the study when they start to be dosed for a year.

So we need to do a [ prophy suit ] study, patients that are on current prophylaxis, Von Willebrand's, switch them to latarcibart VGA039 to make sure we can keep the control and bleeding that they had on the prophylaxis. That's -- I would argue that's the most important study for the program after the pivotal trial to supplement the label as well to supplement or support reimbursement, particularly ex U.S.

After that, the story gets a little bit more complicated because we don't have any preliminary data in the clinic yet. However, potentially, there are diseases like HHD where this could have a role. That's a disease where patients have severe bleeding. Particularly, a lot of epistaxis is very common in those patients. And arteriovenous malformations, which also create a risk for those patients. There's an argument to be made that by modulating protein S, you can again improve the coagulation, the formation of that initial clot in these patients, and that could really be very, very helpful.

There's a group of disorders called bleeding disorders of unknown cause that happen to be fairly frequent in bleeding disorders clinics, and there's a strong interest and also generated in that group of patients. So that's some of the ideas. I don't think we are planning to go into hemophilia right now. That seems a problem that is well addressed by current interventions. But those are some of the other ideas that we have.

Got it. So more to come. And then maybe over the last couple of minutes, last but not least, povo. You've got launches coming up in HS potentially, and you have other indications. So talk to us about how you think about that in the context of your I&I franchise.

Yes. Povo is going to be an important launch for the company in 2027. It's under review at the FDA right now. We expect an approval in the first quarter of 2027.

The current options for hidradenitis suppurativa, which is one of the worst dermatological conditions you have, are completely imperfect. On one hand, you have antibiotics and steroids. And on the other hand, you have the IL-17s, which have had a big benefit for a certain portion of patients.

What povo is going to be in HS is the first FDA-approved multi-cytokine inhibitor for a multi-cytokine disease. It's not like single-cytokine, IL-13-mediated AD or IL-23-mediated psoriasis. You have very impressive skin clearance data, very impressive pain data, pain relief data, which is the cardinal symptom of the condition. And there's one thing a JAK inhibitor does, and that's it works fast. It has a well-characterized safety profile, and it's an oral.

Our view is that this drug is going to be used in both the pre- and the post-biologic setting, subject to a label for both populations, which is what we expect. I think there's going to be immediate trial and adoption of povorcitinib. If it performs in the real-world setting like it did in the clinical trial setting, this will be a very important first indication for povo. We'll follow it up with vitiligo and PN roughly a year later.

I believe that this business has peak sales potential of at least $1 billion in sales. These are product launches, as you know, Derek. And so our job is to execute this launch. And it will be fully funded and resourced.

It will be marketed right alongside Opzelura. Opzelura will have data in HS at the end of the year in the fourth quarter. It could create a really nice sequencing strategy of a topical to an oral. And right now, we're heads down in terms of managing the program.

Well, we'll look forward to that. Thank you guys so much.

Greetings and welcome to the Incyte Second Quarter 2026 Earnings Conference Call and 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.

Thank you, and good morning. Welcome to Incyte's Second 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 Suky, who will deliver our prepared remarks. Steven, Dave and Mohammed will also be available for Q&A. 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'll now hand the call over to Bill.

Thank you, Alexis, and good morning, everyone. At the start of the year, we laid out a plan to move insight from reliance on a cornerstone product to a company with multiple growth drivers. 6 months in, this transition is well underway, and we've made tangible progress. We've strengthened the core business, delivered key regulatory milestones, derisked and advanced our pipeline to late-stage development and added a novel Phase III hematology asset through business development.

Let me expand on each. First, our business continues to perform above expectations. Total net sales growth was driven by increased demand and higher net sales across every product. Jakafi remains foundational to the company and delivered another strong quarter, keeping this product healthy as a strategic priority because it serves as a funding vehicle for the pipeline and new product launches. At the same time, our core business, excluding Jakafi continues to grow and is solidly on track to reach $3 billion to $4 billion in net sales by 2030.

Importantly, this growth is not dependent on a single asset, but is supported by multiple products and near-term launches. We have the commercial capabilities, resources, infrastructure and management team required to execute successfully. The opportunity here is not simply the value of each individual product, but our ability to launch and scale multiple products in parallel. This capability will be a key driver of Insight's next phase of growth. Second, we achieved several of the key regulatory milestones we identified at the beginning of the year, including the approval and launch of Jakafi XR as well as the positive CHMP opinion of Opzelura in moderate AD with the final European Commission decision and Signature expected in the third quarter.

In addition, regulatory reviews for povorcitinib in HS and Monjuvi in first-line DLBCL are underway with anticipated approvals and launches through early 2027. Third, we moved multiple assets into late-stage development. We launched Phase III studies for 989 in second-line ET, 734 in PDAC and 890 in CRC. We also have a catalyst-rich second half of the year with 10 data readouts across nearly all assets in our clinical pipeline, including data from our registration trial for Opzelura in HS and povorcitinib in PN. As these programs advance, we are gaining greater visibility into the potential shape of our growth profile beyond 2029.

We also strengthened our hematology portfolio through business development. The Vega transaction added latarcibart, a potentially transformative treatment for Von Willebrand disease in Phase III development and a potential new growth driver for the company. Latarcibart expands our most important therapeutic franchise offers an attractive risk-reward profile and the transaction was structured to preserve balance sheet flexibility. It checked all the boxes we look for in business development. And as a textbook example of the type of deal that makes sense for Incyte.

Taken together, Incyte is no longer dependent on one asset catalyst or blockbuster. We now have a solid core business, a series of near-term launches and a more mature late-stage pipeline supporting multiple avenues for future growth. Operationally, we're a stronger organization than we were a year ago. Our focus right now is execution, turning Phase III studies into approvals and approvals into successful launches.

Turning to the quarter. Total revenue in the second quarter of '26 was $1.67 billion, up 38% year-over-year. Total net sales in the second quarter were $1.49 billion, representing 40% growth year-over-year. The increase was driven by continued demand across the portfolio and by a onetime noncash benefit from the CMS settlement. Excluding this benefit, total net sales increased 17%. This growth was broad-based with every marketed product growing year-over-year in both the U.S. and international markets. Jakafi sales in the second quarter were $817 million, up 7% year-over-year. Prescription demand for Jakafi increased 9% across all indications, MF, PV and GVHD, with PV being the largest growth driver.

New patient starts remain strong. The prescriber base is stable and formulary coverage is broad, providing an important foundation for the Jakafi XR launch. A few comments on XR. The launch has 2 parts: coverage and adoption. On coverage, we're on track to achieve our year-end formulary goal of 50% to 70%, supported by recent wins at ESI, CVS, Optum and more than 10 regional plans. On adoption, we expect physician adoption to build gradually through the remainder of 2026 as coverage expands and physicians gain experience with XR with acceleration expected throughout 2027. Commercially, XR generated $10 million in sales in the second quarter, which primarily consists of initial inventory build. We expect XR sales to approach $40 million to $50 million for the full year, which is captured in our full year Jakafi guidance.

Sales for our core business, excluding Jakafi were $671 million, up 127% year-over-year, excluding the onetime Opzelura benefit, sales grew 44%. This business is becoming an increasingly important part of how we transition Incyte through the LOE period and for long-term growth. Opzelura remains the largest contributor of our business outside of Jakafi, generating $450 million in second quarter sales. This includes $204 million of net product sales and a onetime noncash benefit of $246 million related to our agreement with CMS and the reversal of previously accrued balances associated with the resolution of Medicaid rebate litigation.

In the U.S., sales, excluding the onetime benefit, were $161 million, an increase of 22% versus the second quarter of 2025. Demand here remains strong with prescriptions increasing 26% year-over-year, which outpaced the overall market, which grew 21%. New patient starts also remained strong with Opzelura capturing 46% of branded topical NBRx volume, a leading indicator of future growth and business health. The resolution of the CMS matter improves the economics of the business, resulting in a favorable change to our average selling price and gross to net profile. It effectively offset some of the investment we made to expand and maintain formulary access at the beginning of the year. As a result, prescription growth should translate more efficiently into net sales growth going forward.

That said, we continue to view the pricing and reimbursement environment is dynamic, and so maintaining broad access and a disciplined gross-to-net profile remains a priority. Opzelura is in a stronger position today than it was a year ago. Demand is robust and access is broad. And while we're encouraged by this momentum, this is not a business we can put on autopilot. Sustaining growth will require effective commercial execution and continued focus on the access and pricing dynamics that support growth. Internationally, Opzelura sales were $43 million in the second quarter, up 34% year-over-year. Growth remains robust in vitiligo, where we see strong demand across markets.

We remain on track for potential approval and launch of Opzelura for moderate atopic dermatitis in Europe during the third quarter. We expect modest revenue contribution in 2026 with momentum building through '27 as additional countries launch and reimbursement expands. We continue to view the international expansion of Opzelura as an important long-term growth driver for the franchise with the potential to deliver 2 to 3x the international sales today. Finally, in hematology and oncology, net sales grew 69% to $222 million. Niktimvo, Monjuvi and Zynyz were the biggest contributors to growth in the quarter.

Niktimvo net sales were $60 million in the second quarter of '26, representing a 67% increase versus the prior year. The performance was entirely volume growth based, more than 300 new patients initiating therapy during the quarter and more than 1,200 patients treated. We currently hold approximately 1/3 of the third line plus market. Monjuvi net sales were $54 million in the second quarter, up 72% year-over-year. Growth was primarily driven by uptake in follicular lymphoma and international markets, including the recent approval and launch in Japan in the second quarter.

Monjuvi is expected to have 3 sources of growth, relapsed/refractory DLBCL, follicular lymphoma and potentially first-line DLBCL. We expect the existing indications to remain incremental contributors while first-line DLBCL has the potential to become the largest growth driver for the franchise over time. Finally, Zynyz net sales were $50 million in the second quarter, a 4x increase year-over-year with rapid and robust adoption in SEAC across markets. In the U.S., Zynyz is becoming the leading prescribed regimen with over 40% share in first-line SEAC in just 12 months post launch.

Now I'll turn the call over to Pablo.

Thank you, Bill, and good morning, everyone. At the beginning of 2026, we outlined ambitious development plans for the R&D organization, including 4 anticipated approvals, 2 new product launches, 7 key data readouts and the execution of 14 pivotal studies across our portfolio. As we have reached the midpoint of the year, I am happy to report that we have made significant progress and remain well positioned to deliver on the milestones we outlined.

In the past 12 months, we have fundamentally changed the maturity of our portfolio, advancing multiple programs from early development into late-stage clinical trials while delivering regulatory submissions and approvals. Today, we have late-stage opportunities across all 3 of our core franchises, creating multiple opportunities for sustained long-term growth. All regulatory submissions, supporting our 4 anticipated approvals for 2026 are now complete. Jakafi XR was approved in the second quarter, representing the first of our 2 new product launches planned this year. In June, Opzelura received a positive CHMP opinion for the treatment of patients with moderate atopic dermatitis in Europe with an approval anticipated in the third quarter. If approved, Opzelura would become the first topical JAK inhibitor treatment available in Europe for moderate AD. Our submissions for povorcitinib in hidradenitis suppurativa and tafasitamab in newly diagnosed diffuse large B-cell lymphoma are under regulatory review with anticipated approvals and launches beginning later this year and into 2027.

Beyond our regulatory progress, we deliver multiple important data readouts across hematology, oncology and dermatology, including registrational data for tafasitamab in first-line DLBCL and povorcitinib in vitiligo as well as additional data for 989 in essential thrombocythemia and myelofibrosis. At the same time, we expanded our late-stage pipeline with additional latarcibart and have advanced 13 of our now 15 planned pivotal studies with the remaining 2 stat initiations expected by year-end. Our teams continue to execute well against our development priorities, positioning the portfolio for both near-term value creation and long-term growth. Importantly, many of our highest value catalysts, including data readout and regulatory decisions remain ahead, positioning us for a catalyst-rich second half of the year.

With that, I'll now turn to the pipeline. Our hematology strategy combines leadership in established disease areas with first-in-class mutation directed therapies designed to redefine treatment across graft-versus-host disease, myeloproliferative neoplasms and now bleeding disorders with additional latarcibart Von Willebrand's disease. In chronic graft-versus-host disease, we continue to advance axatilimab in 2 studies evaluating its potential use earlier in the treatment paradigm, including in combination with ruxolitinib and in combination with steroids. We remain on track to share top line data from the Phase II study in combination with ruxolitinib in the second half of 2026.

Top line data from the Phase III study with steroids is expected in early 2028. We're also advancing a portfolio of molecularly targeted therapies for myeloproliferative neoplasms, or MPNs, focused on the underlying driver mutations of disease. Our PM strategy is built around targeting the underlying biology of disease through highly selective therapies directed against key disease-driving mutations, CALR in JAK2 V617F. Our portfolio includes 989, a mutant CALR monoclonal antibody in late-stage development, 784 are CALR by CD3 bispecific in an ongoing Phase I trial and next-generation programs in preclinical development.

We continue to evaluate emerging data as these programs progress and prioritize those, we believe, have the strongest profiles and greatest potential for patients. As part of this assessment, we decided to discontinue development 058, our lead asset in our JAK2 V617F targeted pipeline and are no longer expecting to report data later this year. Based on the totality of the data to date, we do not believe the molecule demonstrate the profile necessary to become a differentiated therapy. Importantly, this decision is specific to 058 and does not change our conviction in JAK2 V617F as an important therapeutic target in PNs. We are prioritizing our next-generation JAK2 V617F targeted assets. We believe this next-generation programs provide a clear opportunity to realize the promise of electively targeting JAK2 V617F. These programs are progressing through IND-enabling studies, and we'll plan to share more information, including preclinical data by the end of the year.

Turning to our most advanced MPM program, 989. The first and only mutation specific therapy to enter late-stage development in CALR mutated MPNs. Early in the quarter, at the European Hematology Association Annual Meeting, we presented additional Phase I data in mutant color policy patients with ET and MF. As this data has matured, we continue to see evidence supporting the differentiated clinical profile of 989, strengthening our confidence in both the ongoing Phase III program and the broader development strategy in MF.

As mentioned earlier, our Phase III study is now underway in mutant color policy patients with ET who have received prior cytoreductive therapy. In MF, we remain on track to initiate a Phase III study in JAK-experienced patients in the second half of this year. We'll provide an update following the completion of regulatory discussions. Additionally, we continue to advance our Phase I cohort evaluating 989 as a first-line treatment for patients with MF, both as monotherapy and in combination with ruxolitinib. We expect to share data from this cohort along with additional data from the JAK ineligible cohort previously presented at EHA later this year.

We also continue to advance a subcutaneous formulation of 989 and initiate a Phase I study in mutant CALR positive patients in the second quarter. In addition to our ongoing efforts, we recently entered a global collaboration and license agreement with Halozyme to evaluate the subcutaneous formulation of 989 using ENHANZE technology. This collaboration complements our internal subcutaneous development efforts and provides additional flexibility as we optimize the administration profile of 989 for future commercial use.

Earlier this month, we strengthened our hematology portfolio through the acquisition of Vega Therapeutics, adding latarcibart, a novel prognose modulator in Phase III development for patients with Von Willebrand's disease to our late-stage pipeline. At the International Society of Thrombosis and Hemostasis Congress earlier this month, data from the multi-dose VIVID 3 study evaluated latarcibart in patients with VWD were presented during a featured oral session. And VIVID-3, latarcibart demonstrated an 81% median reduction in annualized bleeding rate across patients with different Von Willebrand's disease subtypes and bleeding types along with a favorable tolerability profile. With once monthly subcutaneous dosing, latarcibart also has the potential to significantly reduce treatment burden compared with current prophylactic therapies, which are typically administered 2 to 3x per week. Taken together, the efficacy tolerability and dosing profile, combined with its novel mechanism of action, give us confidence in the potential of latarcibart to establish a new standard of care. Our focus now is in advancing the Phase III VIVID-6 trial, and we remain on track to deliver top line data by early 2029.

Turning to our oncology portfolio. All 3 of our lead solid tumor programs, 890, or TGFBR2xPD-1 bispecific antibody; 734, our KRASG12D inhibitor; and 667, our CDK2 inhibitor are progressing through pivotal development, reflecting the continued maturation of our oncology pipeline. In parallel, we continue to generate data in robust Phase I programs, exploring the potential of this asset across different indications, lines of therapy and combination settings, which will help inform broader development efforts. At the European Society for Medical Oncology Congress in October, we plan to present 4 rapid oral presentations, highlighting Phase I data across all 3 assets. This includes data 734 in first-line pancreatic and late-line colorectal, 890 in first line and late-line colorectal and 667 in recurrent ovarian cancers. These presentations will represent the most comprehensive clinical update we have provided across our leading oncology programs and includes substantially larger and more mature data ads than we have previously shared, providing greater insight into the depth of the clinical efficacy and overall safety and helping further define the emerging competitive profile of each program. For 890, 734, the presentation will include data in combination with chemotherapy and in patient populations directly aligned with our ongoing Phase III studies. At the same time, the breadth of data across all 3 programs will help inform potential expansion into additional indications and treatment settings.

Now I'd like to turn to our IEI portfolio, where we continue to build a dermatology franchise across both topical and systemic therapies with multiple opportunities for continued expansion. Regulatory and clinical efforts for ruxolitinib cream and povorcitinib continue to progress. We remain on track to report top line results from our registrational Phase III program evaluating ruxolitinib cream in mild to moderate HS by year-end. If positive, this data could support the first topical therapy specifically developed for patients with HS and would further expand Opzelura's role across inflammatory skin diseases.

For povorcitinib, we continue to execute a broad development and regulatory strategy designed to support a multi-indication franchise. Povorcitinib is under review for the treatment of moderate to severe HS, and we expect potential approvals in Europe in late 2026 and in the U.S. in the first quarter of 2027. In the first half of the year, we shared positive results from our Phase III program in vitiligo. Additionally, we remain on track to report top line results from our Phase III program in prurigo nodularis in the fourth quarter. By year-end, we expect to have delivered 6 registrational study readouts for ruxolitinib cream and povorcitinib across HS, vitiligo and PN, further strengthening our dermatology franchise spanning multiple diseases and treatment modalities.

To close, we continue to make meaningful progress across our pipeline in 2026, delivering important clinical and regulatory milestones. Our portfolio is broader, more mature and increasingly diversified, and we expect an active second half of the year with multiple registrational data readouts regulatory decisions and development milestones across our 3 core franchises that we believe will further strengthen our long-term growth trajectory.

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

Thanks, Pablo, and good morning, everyone. I'll begin with comments on our second quarter results and then turn to our updated full year outlook. As Bill mentioned earlier, total revenue in the second quarter was $1.67 billion, an increase of 38%, driven by strong product sales. Total net product sales were $1.49 billion, reflecting 40% growth versus the prior year. The increase was driven by strong product demand and a onetime noncash benefit of $246 million. Excluding the onetime benefit, total net sales increased 17% versus the prior year. .

Total GAAP expenses for the quarter were $976 million, an increase of 42% compared to the prior year. The year-over-year increase result reflects a lower expense base in the second quarter of 2025, resulting from the Novartis settlement of $242 million. When we exclude the favorable adjustment in the second quarter of 2025, total operating expenses grew 5%. GAAP cost of goods was $105 million, representing 7% of total net sales. This is in line with our expectations, and we expect COGS to be between 8% to 9% for the full year. Our GAAP R&D expenses were $517 million, an increase of 4%, driven by continued investment in our late-stage development assets across hematology and oncology.

Moving to GAAP SG&A. Expenses were $352 million, increasing 6% driven by prelaunch activities for [indiscernible]. We ended the quarter with $4.5 billion in cash and cash equivalents. This excludes the close of the Vega Therapeutics acquisition in July, which I'll provide more color on momentarily.

Now turning to our outlook for the remainder of the year. We are updating several components of our existing guidance for the full year, including total net sales, which is driven by guidance updates to Opzelura as well as hematology and oncology in R&D and SG&A operating expenses driven by the close of the Vega acquisition and related incremental cost in the second half of the year.

Starting with net sales, we are raising our full year 2026 total net sales guidance to [ $5.13 billion ] to [ $5.26 billion ]. For Opzelura, we are updating full year 2026 net sales guidance to [ $1.05 billion ] to [ $1.10 billion ]. Our new guidance reflects the previous guidance of $750 million to $709 million and the incremental estimated impact of $300 million to $310 million of net sales related to the CMS settlement. This impact includes 2 key components: versus a onetime noncash benefit of $246 million related to Opzelura net sales that was recorded in the second quarter. As a reminder, this amount is associated with the reversal of previously established accrual balances through the first quarter of 2026. Second, higher net sales from an improved gross-to-net profile in the second quarter through the fourth quarter. In the second quarter, the impact of U.S. Opzelura net sales was $15 million. This is a net impact after consideration of certain onetime prior year state-related liabilities that became effective at the conclusion of the CMS settlement. On a go-forward basis, we expect the impact to be approximately $40 million to $50 million for the second half of the year. Regarding our hematology and oncology portfolio. We are narrowing and raising full year guidance range to $860 million to $890 million based on strong performance in the first half of the year.

Turning to operating expenses. We are updating our full year 2026 operating expense guidance. We are narrowing and raising our 2026 GAAP R&D and SG&A operating expense guidance to [ $4.915 billion ] to [ $4.995 billion ]. We're also raising total non-GAAP R&D and SG&A operating expenses to [ $4.625 billion ] to [ $4.695 billion ]. The new guidance reflects an increase of approximately [ $1.27 billion ] related to the upfront payment for in-process research and development and associated transaction costs. in tandem with approximately $50 million in ongoing Phase III development of latarcibart in Von Willebran'ds disease. To close, we are pleased with our performance for the quarter and for the first half of the year and remain confident in our outlook.

With that, I'll turn the call back over to the operator for Q&A.

[Operator Instructions] Our first question today is coming from Marc Frahm from TD Cowen.

Congrats on the strong quarter commercially. Maybe this is mostly for Pablo. Just on the kind of CALR program and your regulatory discussions, can you maybe just review kind of what the major questions are still kind of awaiting resolution on that trial design in MS? How much of that is the endpoint, whether you can include something like anemia and some sort of composite versus how much of that is still outstanding dose selection work for particularly the type 2s and might, on that latter part, that take a little bit longer for type 1s versus type 2s and lead to kind of different trial initiation time lines?

Marc, thank you for the question. So when we think about the regulatory path in MF, there's basically 2 paths, right? One would be the standard, which I think we'll know about, which would include, SVR35 and TSS50 as end points or an alternative one, which will include other endpoints. Let me spend a minute on why we think the second is important to discuss with a field we thought and still think it's important to discuss with FDA. 99% is a complete novel mechanism of action, as we all know. And on top of delivering benefit as we saw the EHA data update that we provided on top of delivering benefit on SVR35 and TSS50, it delivers an extraordinary benefit on improving hemoglobin levels in these patients. Most of the patients treated, whether it's first or second line show increases in hemoglobin that are clinically significant.

In addition to that, there's clear evidence of what we discussed as disease-modifying evidence, including reduction of malignant [indiscernible] bone marrow, reduction of malignant progenitor and peripheral blood, et cetera. So when you put all that together, we thought and still believe it's important to have a constructive dialogue with the FDA to see how we can incorporate some of these endpoints that reflect the benefit patients received from 989 and that reflect the mechanism of action 989 that they need to be reflected in the clinical trial design. We have initiated these conversations with FDA. They're going well. They'd be constructive. And as soon as we complete those, we will give you clarity on what the regulatory path will be first in second line MF, which we intend to start this year, and then as a result of that, we'll continue the conversation with the agency on first-line MF, which we will initiate next year.

At this point, our intention is to conduct a study in MF in all comers, type 1 and non-type 1 patients. potentially with the differential dosing strategy, not quite like ET because in ET, we have a dose escalation, the rapid normalization of platelets allows it for a rapid dose escalation. In MF, we would start type 1 and non-type 1 patients at 2 different dose levels instead of doing the dose escalation. But that's where we are today with the planning of the study.

Our next question today is coming from Eric Schmidt from Cantor Fitzgerald.

Maybe a higher-level strategic question for Bill and team. Given you just on the Vega acquisition, how are you feeling about the breadth and depth of your pipeline? Do you have more capacity? And is there some sort of a target R&D as a percent of sales level that you might want to be spending at as we go into the Jakafi exploration?

Yes, it's a good question. Eric. A couple of things. As it relates to business development, and frankly, R&D, our job is to keep this product line and pipeline moving. And so I think you can never understate attrition in any business. And so we are actively looking at potential opportunities that meet or check the same criteria that Vega did. And I think that we have a very clear framework for doing business development. when we see opportunities that meet certain strategic and financial criteria, we can act quickly.

Alternatively, if we don't, we're comfortable being patient. As it relates to R&D as a percentage of sales, I'd make a couple of comments there. We're not pursuing growth at all costs. Alternatively, where on the other hand, we're not solving right now for a fixed margin percentage. What I will tell you is if there's any margin compression in this business, let's say, as we get to 2029, there'll have to be a clear and positive correlation with materially increasing the risk-adjusted value of our pipeline. And right now, every line item in our P&L is either absorbing, offsetting or directly funding the growth strategy.

As you know, in SG&A, we're funding product launches. And as it relates to R&D, 80% of our investment is concentrated on what we think are really smart investments. And if any of the investments that we're making, if the facts and circumstances around those investments change or performance is not what we are expected we stop making those investments. And as we get closer and we have more clarity on our pipeline, I think we're set up very well right now. I think when you look at the pipeline, there's 4 assets that have a high PTRS, and the potential to deliver outsized returns. That's povorcitinib, 989, G12D and VGA 039. Now that's not to say that there's not value in TGFb x PD-1 or CDK2. But the 4 assets I just mentioned have the potential to move insight way beyond Jakafi, which is ultimately what we're solving for. And so to wrap it up, 12 months of margin compression to set up 10 years of revenue and earnings growth, I think, is a smart calculation, and that's what we look at every day.

Our next question is from Tazeen Ahmad from Bank of America.

I wanted to maybe ask one quick one about the announcement in the last week about your global collaboration with Halozyme to use their ENHANZE drug delivery technology to help with 989. Can you maybe give us a little bit more color on what exactly you'd like to improve? And when you think this could move into a clinic and we could start to see data using this technology?

Thanks, Tazeen. Pablo, why don't you set up where we are the program overall and then get into Halozyme?

Certainly, I think let me remind you a couple of points that we made, which are really important about this program and the subcu development. We have completed a healthy volunteer work, and we are right now with the subcu existing subcu formulation in patients with ENHANZE. That's the status of the program. We have a clear path here to continue that program forward and by optimizing the existing formulation and the existing subcutaneous device for infusion, which is not wearable. As we discussed before, this is something that patients will have to apply for 15 to 20 minutes every other week to deliver the desired dose. That path is clear. We have discussions with FDA on a bridging strategy for that path that I just described. We thought it was important to continue to add optionality to this program.

As you can imagine, the conversations with Halozyme have been going on for quite some time before signature of the agreement. And they're not related in any way to any data that has emerged from the ongoing subcutaneous development. We thought it was important to have an additional option to improve flexibility and potentially to improve the patient experience when it comes to subcutaneous formulation and administration of 989. So that's basically the plan we have in place. We're executing on the existing subcu plan with existing formulation, and we're adding another option now with the ENHANZE technology.

Our next question today is coming from Faisal [indiscernible] from Jefferies.

Can you set expectations for the G12D update that you're going to have at ESMO? And can you possibly give us some more perspective on how you think about competitive positioning and how you see your opportunity to differentiate within the class?

Great. Pablo, do you want to take the first part of the question?

Certainly, thank you for the question. So when we think about 734, our G12D inhibitor, I think we are convinced we have in our hands a highly selective, highly potent novel medicine that combines well with existing standard of care, which is in first line pancreatic cancer is chemotherapy, either FOLFIRINOX or Genmab. In that context, when we think about the development plan, our goal was to accelerate as much as possible development in first-line pancreatic cancer in combination with those 2 chemotherapy regimens. What we will do at ESMO is provide approximately 50 patients' worth of data half and half with Genmab and FOLFIRINOX with a fair amount of maturity, showing you where we are on efficacy and safety in that context. We think that's a really important derisking for the first line pancreatic cancer strategy that we're pursuing.

Now the first -- the Phase III study in first-line pancreatic cancer is ongoing. As far as we know, based on public disclosures, we are neck connect with our competitors. We don't think we're behind. And our team is executing on that as fast as possible. Now let me add a little bit more context on the program because I think it's important, the breadth of how we're looking at this program in other indications. We're going to present data as well at ESMO of combination in colorectal cancer. We think that is a really important indication for G12D inhibitor. There's 2 basic ways to do it is late line in combination with EGFR inhibitors and in early lines in combination with chemotherapy and EGFR inhibitors. We'll show some of that data as well at the ESMO meeting. So when you start thinking about our G12D program, if things go well and the data that we present continues to derisk the program, you should think about it in a number of different -- a couple of different tumor types and in a couple of different lines of therapy, specifically in pancreatic cancer in first-line in combination with chemotherapy and potentially in the adjuvant setting as well and in colorectal cancer in late line in combination with EGFR inhibitors and potentially in earlier lines in combination with chemotherapy and EGFR inhibitors. So we'll talk about it at ESMO. We think the data will go in to present is a significant derisking event for this program in first-line pancreatic and potentially in colorectal cancer as well. Thank you for the question.

I would just add to what Pablo said as it relates to competitive positioning, I think it's unlikely that pancreatic cancer becomes a winner-take-all market. You rarely see that in oncology. I think, generally speaking, oncologists resist dependence on a single treatment. And so this is not, I believe, in either or calculation populations are different. There's various combination strategies that can be put in place. And I think at the end of the day, this will become about sequencing and matching the right drug with the biology. We believe a selective G12D inhibitor be used first in G12D patients and then a nonselective later. But there again, it's not either or. And what we do know is there's only 2 companies right now in Phase III studies with the first targeted G12D treatment in pancreatic cancer. And so whether you're first or early this for insight can be a real needle mover. And I think when you look at the data that we'll share at ESMO, you'll be reassured about the activity of this compound in terms of response rates as well as durability of response.

Our next question today is coming from Jay Olson from Oppenheimer.

Congrats on all the progress, including closing the Vega deal. Based on everything you've learned, including feedback from KOLs at ISTH, can you comment on the potential for lutarcibart to expand beyond VWD? And eventually, do you think litarsibart can be the next Hemlibra? .

Jay, thank you for the question. I'm going to turn it over to Dave Gardner and let him make a few comments.

Yes. Thanks, Jay. Yes, we did get very favorable feedback both from KOLs and importantly, from the patient advocacy channel as well A lot of the discussion was around the impressive clinical profile thus far from latarcibart. But a secondary discussion did emerge around the treatment of bleeds and the urgency to use better prophylaxis to prevent bleeds in a broader set of patients. So coming out of ISTH, absolutely, we are emboldened by the feedback that if we deliver on the target product profile, there is potential to deliver a transformative Hemlibra like opportunity to these patients.

And Jay, if you think about it, there is a hemophilia A like population in Von Willebrand's brands. And that is a sizable pool of patients who are severe frequent bleeders. And if 039 comes out of Phase III, like David said, with a substantial reduction in the annual bleed rate and a good benefit risk profile, adoption in that group, which could be almost 10,000 people would turn this into one of the largest products insight would have. The most important thing for us to do right now is execute this Phase III program, maintain the quality of the data and then, of course, get it approved. But all of the substrate is there for this to be a large product. Thanks for the question.

Our next question today is coming from Derek Archila from Wells Fargo.

So given Niktimvo's IPS data, Phase II day is going to come from Syndax later this year, you guys have an opt-in. So just wondering if you could walk us through kind of the decision framework what sort of data thresholds may trigger an opt in how you kind of communicate that decision and just remind us of the split on the development costs that you decide to proceed.

Great. Thanks for the question. Pablo?

Yes, Derek, thank you for the question. The disclosure of the data since they're conducting the study would be done by Syndax. It would not be done by us. Obviously, they'll show the data with us. will discuss the results and depending how clear they are, it will take a little bit longer or not to make the decision to pursue the indication together with Syndax. When it comes to the existing agreement, it's the same type of agreement we have for other indications, both sharing the development costs and sharing economics. So there's no difference. And when it comes to the opt-in, I just want to make clear that if we decide to opt in, there's nothing to prevent us from doing so. So we really look forward to hearing the data from our colleagues at Syndax, but they will be the ones releasing those results.

Thanks for the question, Derek.

Next question today is come from Andy Chen from Wolfe Research.

This is Jason taking up for Andy. And I just wanted to ask how well is the Jakafi XR conversion tracking along your internal metrics so far? And do you know when payer reimbursement might kick in? And which specific earnings will this specifically impact the most?

What was the second part of the question?

And when payer reimbursement might kick in and which of the earnings coming up, will this impact the most.

Great. Go ahead, Pablo. I mean, Mohamed, why don't you go ahead and comment on that.

Yes. Thanks, Bill. And Jason, thanks for the question. Look, like we mentioned earlier this year, we're focused on accelerating XR formulary access because that will serve as the basis for demand growth. And we're well on track to achieve that goal of 50% to 70% formulary coverage by the end of the year. So to answer your question specifically, when will pay reimbursement kick in, it has kicked in. And like Bill mentioned in the prepared remarks, several major payers have already moved and put XR on formulary. We've already seen demand start to pick up. And if by the end of the year, let's just say, December we exit the year with XR maybe representing somewhere between 3% to 5% of our demand. That will put us somewhere in that $40 million to $50 million range that Bill mentioned in the prepared remarks, and that puts us well on our way to that 10% to 30% conversion before Jakafi LOE. So we're very pleased with the access so far. The market access team has done a really nice job of getting us and putting us in a position for demand generation to accelerate later in 2027.

Our next question today is coming from Matt Phipps from William Blair.

Nice execution in the quarter. Pablo, you mentioned the totality of the data did not support continue to develop 058 for the V617F indication. Over the past year, it seems like the issue has really been around the bioavailability of this drug and being able to achieve target coverage. So were there other factors as you change the formulation of things that move -- that contributed to this totality of the data. And can you just write us on the time line for moving that backup program into the clinics and how you're thinking maybe about the internal program versus the Prelude option?

Certainly, thank you for the question. I think you've captured the keep point there. It was not just about availability. It was not just about exposure. We think the new formulation showed promise, and we were continuing to escalate. When we started to look at the emerging data and what we look at, as you can imagine, is obviously the PK that you just pointed out to as well as the safety and efficacy that is emerging for a particular program. And we look at that in the context of other programs that we have in-house and that we have been advancing preclinically over the last couple of years. And when we put all that together, it just made no sense to continue to develop 058.

The next-generation programs have moved along very, very well. We're really excited about what the data looks like preclinically. We will provide an update for clinical data later this year, just so you have clarity on what the differences are between this program, this new program and 058. And we're looking to basically file the IND in the relatively near future. I won't give you a precise point in time right now. and we'll provide an update later this year when we present the data, but it's reasonably close to an IND filing. On the Prelude agreement, we -- obviously, those programs are managed by Prelude terms of updates, they can provide them. The lead is in the clinic, and there are other programs that we discussed with them at the advancing to different stages of preclinical development. We will sit down with them and discuss the current data that they have. But in terms of providing further updates than that, that should be done by Prelude their programs at this point until we opt in.

Thanks for the question, Matt. .

Our next question today is coming from Evan Seigerman from BMO Capital Markets.

I want to touch back on some of the data at ESMO specifically on 734. As you prepare to present the PDAC and CRC data later this year, what benchmark should we use to judge success? And how much -- how would you frame your conviction in this asset versus kind of the competitive profile that we had talked about earlier on this call?

Thanks for the question, Evan. Pablo?

Certainly. So thank you for the question, Ian. So when we -- the way I think about it is as follows. So the first thing, we initiated a Phase III trial in pancreatic cancer in combination with chemotherapy, as you know, with 734, and we've shown very little data other than ASCO GI last January. So we thought it was very important to have an expanded cohort of patients, as I mentioned, about 50 patients, about half and half with each type of chemotherapy with some maturity in order to derisk this program and generate more conviction around the first-line indication.

When you look at benchmarks, there's 2 sets of benchmarks here. One is existing chemotherapy, and that's pretty clear. There's a number of publications with response rate to 30%, 40%, 45%. And then there are competitors which have presented some data as well in combination with chemotherapy. As we put the data at ESMO, we'll discuss it in more detail, but we think potentially we have a best-in-class agent here in combination with chemotherapy for [indiscernible] pancreatic cancer. We'll discuss those results and then hopefully will be the level -- you'll share our level of conviction around that program.

When it comes to colorectal cancer, obviously, that's a smaller data set, but we'll have data in combination with Erbitux. We also think potentially starts to show signs of being a best-in-class agent to combine with an EGFR inhibitor in patients with colorectal cancer, which we think it might be an underappreciated opportunity for G12D inhibitor that we intend to pursue.

Our next question today is coming from Michael Schmidt from Guggenheim.

I had one on the PD-1 and TGF beta asset, 890. Pablo, I guess, what is your level of conviction that this could succeed in frontline colorectal cancer? How is that positioned longer term in the CRC space relative to other emerging therapies, including amuvantimab or [indiscernible] Phase III? And then how do you think about other opportunities for those agents longer term?

Thank you for the question, Michael. Okay. Let's start with frontline colorectal cancer. What we know today is that TGFBR2xPD-1 antibody generated what I would describe as the best single-agent activity have been reported for a PD-1 therapy in patients with MSS colorectal, particularly in patients with liver metastasis. That led to an acceleration of that program. We generated in combination with [indiscernible] that first showed it was tolerable and they show increasing increasingly a level of responses and durability that convinces that was the right path forward. So what we're going to show at ESMO in a pretty large data set with a fair amount of follow-up that we believe supports the frontline strategy with all [indiscernible] path.

We're fully aware of the competitive landscape. I think the difference here and both approaches my work, Michael. But I think the difference is pembrolizumab is a very important drug in patients with colorectal cancer. And when you give a PD-1 by VEGF, you cannot give full dose path. By giving the TGFBR2xPD-1, we can give with full dose bevacizumab, which we believe could potentially be a differentiating feature. Data over time will decide which one of those approaches is better, and both might be successful. So that's point number one.

The second is we've generated data also in combination with bevacizumab alone. Some of the data might be presented at the meeting as well, and we believe also continues to show the potential of our TGFBR2xPD-1 in colorectal cancer more broadly. When it comes to the tumor types, as you know, we've done some work in other tumor types. I'm not sure we're going to have time for an update on that at ESMO. We want to focus at ESMO on the 3 things that I discussed in my prepared remarks. G12D in pancreatic and colorectal TGFBR2xPD-1 colorectal and 667 in patients with ovarian cancer now in combination with bevacizumab, which we also think it's an important update derisking the maintenance study that we're conducting in that program.

Our next question today is coming from Jessica Fye from JPMorgan.

Just wanted to confirm what the right way to think about Opzelura gross to nets is going forward. And also, can you just remind me of your regulatory plans for Povo in vitiligo?

Great. Jess, I'll take the first part of the question, Mohamed or Suky can add. In simple terms, we were working with the gross to net in the low 60s. And with the settlement, now we're in the high 50s. And as I had mentioned at the start of the call, it just simply proves the gross-to-net profile and average selling price for Opzelura. We made a strategic decision at the beginning of the year to expand access, and there was an investment associated with that. And I can tell you, here we are 7 months later, and I think it was the right decision because when you look at the fundamentals of this business, which is basically volume growth, coupled with coverage, we're in a really good spot. Our job right now is to just manage this selling price as we get into '27 and '28. I think that pretty much covers it. And I think I can turn it over to Pablo or Stephen to talk about the vitiligo regulatory plan.

Thank you for the question, Jess. The plan in vitiligo, after discussions we have with FDA over the past year or so is to submit right after the approval in with 2 years of safety data, safety follow-up in the vitiligo patients. So basically, as soon as the team is printing the filing as soon as we get the HS, and we sort of clicked a 2-year follow-up, we will submit that. So it's going to go in early next year.

Our next question today is coming from Salveen Richter from Goldman Sachs.

Could you speak to your target profile for the MLR program 989 as we look to first line data by year-end in both the mono and combo cohorts versus what you've established with Jakafi and the traditional endpoints of spleen and symptoms. And maybe put this in the context of the composite endpoint that you're trying to create as well.

Great. Thanks for the question. Pablo?

Thank you, Salveen. So as I mentioned, and I won't repeat myself earlier in the call, there's 2 regulatory paths here. One traditional endpoints, as you allude with SVR35 and TSS50 and the conversations we're having with the FDA second line MF. depending on the success of those conversations, some of those lessons may be applied to first line MF or not. Our conviction here remains because of the data we presented in a small subset of tuck-in eligible patients, which is basically a JAK naive population, which we presented at EHA, and we will update later this year. we show pretty solid numbers in terms of SVR35 and TSS50, stronger in type 1 patients than non-type 1. But certainly, when you think about -- if you remember the HA data, there were very few non-type 1 patients and have received a higher dose. And we do know those patients do need a higher dose. So when you put all that together, our conversation with the FDA will complete the second-line MF conversations. Depending on that and whether we are able to advance a different endpoint or not, we will decide the regular path for first-line MF. As of today, our plan continues to be in first line MF to develop 989 both as a single agent and in combination with Jakafi in both in type 1 and non-type 1 patients. That's still the plan.

Our final question today is coming from Mitchell Kapor from H.C. Wainwright.

This is Matt on for Mitchell. And I guess in the same vein, could you help the stage set the stage for the 2H26 treatment-naive MF readout, what would support advancing monotherapy versus plus ruxolitinib or both? And how are you viewing the analysis of the incremental contribution of 989 in the combination are?

Mitchell, could you just repeat the question, your audio broke up?

Yes, no problem. I was just asking if you could help set the stage for the treatment-naive MF readout. What would help support the decision to advance 989 monotherapy versus in combination.

Terrific. Thank you. Look, we have the Jack in eligible cohort from EHA. So that's the first data set that we have, which is about 20 patients that showed what I would describe as strong SVR35 and TSS50 data. And as I mentioned to Salveen, maybe we needed more data at the higher doses in non-type 1 patients to sort of complete the picture. At later this year, we'll have between 50 and 60 patients worth of data with long follow-up, both in combination with Jakafi and as a single agent, that's a randomized, small randomized cohort. And I think all that data put together is what's going to determine which path we go forward. Based on the emerging data that we have, our plan today is develop 989 in frontline, both single agent and in combination and both in type 1 and non-type 1 patients. But obviously, the data that we're generating as we speak and that we will provide an update on later this year, we'll make the final determination there.

Thank you. That does conclude 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.

Good morning, everyone. Thank you for joining us. It's my pleasure to introduce the Incyte management team. With me, I have Bill Meury, CEO; and Pablo Cagnoni, President and Global Head of R&D.

To start here, Bill, could you give us an overview of where the company stands today, including your core franchises, Jakafi and Opzelura? The pipeline priorities and just how you're thinking about, big question. But outlook and strategy for the company as we look to the next 3 years?

Sure. I mean, big picture, we're transitioning Incyte from a single cornerstone product to what we believe will be a portfolio of growth drivers. We think about the business across 3 dimensions, as you know, hematology, oncology and immunology. We also break the business down into 3 parts: a core business, a pipeline and then, of course, business development.

When we look at our core business today, all the products ex Jakafi, that business will finish this year in the range of about $1.7 billion, up 30-plus percent versus prior year. It's relevant because by the time we hit 2030, the transition, we estimate that core business will be doing about $3 billion to $4 billion. So right now, it's funding the pipeline, and it will set a floor.

Then we look at the pipeline. Today, we have 8 assets, including VGA039, the Star deal. That have the potential on an unadjusted basis to 2x the company. The -- and they're supported by 14 clinical studies, 15 clinical studies that will be underway in Phase III. We don't have to be perfect here.

The 4 assets that I think have a high PTRS, will get approved and contribute meaningfully to the company are 989, our monoclonal antibody targeting mCALR, G12D, povorcitinib and now VGA039 for Von Willebrand's disease. You don't need heroic assumptions, assuming we successfully complete the Phase III programs to get to a multibillion-dollar sales level with that group. You layer that right on top of the core business.

Business development will be used just to simply strengthen, extend the core. And what happens is the pipeline becomes the core business, and we expect has the potential to drive top quartile growth from '29, '30 out to '30, '35.

Could you touch on the business development side? So you announced the transaction for Star Therapeutics yesterday. How are you thinking about BD from here? And why Star? What are you solving for when you look at the overall pipeline? And then what are you adding as you go forward?

I'll start with your last question. What we're solving for is growth post 2029. And when we looked at the Star deal, and I've said this a few times now, it was as close to a textbook example of the type of deal that makes sense for Incyte. Its sort of checked all the boxes. First, it's novel. In other words, we're not dealing with incremental innovation. We're not in a situation where we're going to be maximizing marginal differences or we're a late entrant. It has standard of care potential in von Willebrand's disease. That's number one.

Number two, it's in hematology. That's the central identity of the company. We have differentiated knowledge and capabilities there, and we have all the R&D and commercial infrastructure we need. Number three, it has the potential to really move the needle in terms of our top line, and it could be highly growth and revenue accretive. It's in Phase III. So the timing is right. And we did a deal that was structured. The economics made sense for the seller and they made sense for us.

And so I think it's a good phenotype for the type of thing that we should be doing right now, very complementary to the business, the right risk/reward profile. We use only basically just over 20% of our go-forward balance sheet. So we still have flexibility going forward. And our view here is that we have a tight framework and criteria. If something is in the framework, we can act fast. If something is not, we are very comfortable being patient here, and that's how we're going to view it.

Great. Let's start with the myelofibrosis or the MPN business here. So for Jakafi XR, you launched the drug last month, priced at parity with Jakafi, acknowledging your expectations that 2026 will primarily be focused here on formulary coverage. What are you seeing in these early days of launch? And what do you want to see over the coming quarters to give you confidence in reaching that upper end of your 10% to 30% guidance range?

Yes, it's a good question. As it relates to formulary coverage, I can provide an update. We're about 30 days in. Optum has added XR to formulary. CVS has added XR to formulary. 14 regional plans have added XR to formulary and 4 Medicaid states. And so as it relates to formulary coverage, we are off to a good start.

Conversion or uptake for XR will be measured early and tied to formulary coverage, and we expect really a step change when you get to January 2027, and you're going to want to be converting at 1 point, 1.5 points a month. That would be this working. As it relates to what would get us to the upper end of the range, in which case we preserve north of $1 billion in Jakafi sales. It starts with coverage and really just moving prescribers and patients to think about XR before IR.

We have obviously a very large professional promotion effort in place. We cover all the major hematologist prescribers in the country. We also have a patient database, and we're able to communicate with Jakafi patients. And so as you know, with these launches, it's about execution. So far, it's set up. If we're in the middle of our range, that's good. And if we're at the upper end of the range, there's only upside in that.

Why couldn't it be higher than the range you've given?

When you're dealing with an XR conversion, remember, there's new patients and there's current patients. IR makes a great deal of sense for new patients. When you're moving someone off of a drug IR to XR when they're are current, that takes a little bit more time. And I think there's a certain amount of inertia in the market that you have to recognize. Now you can solve for that with a lot of activity, and I think that's what we're going to try to do.

Great. And should we expect you to disclose sales or other metrics over the near-term?

Yes. We'll provide an update on formulary coverage, prescriptions, and you will see the sales. Right now, we have about $10 million to $12 million in sales today. I think by the end of the year, that number could be in the range of about $50 million to $75 million.

Alright. Pablo, turning over to you on the mCALR program here. So that program remains the primary focus from a pipeline perspective and revenue replacement strategy ahead of the upcoming presentations at EHA, walk us through where the program stands today and your level of confidence in successfully bringing this to the market in both the second-line and first-line settings in MF?

Certainly. So we will have an update at EHA as you pointed out. We'll have an update on the ET population, an update on the MF population and a translational update as well. And when you look at overall what this program is, let's start with ET. We'll present an update to probably around 100 patients at EHA.

And I think what consistently we're seeing is very high rates of complete hematologic response regarding 70% or so in type 1 patients, that number is even higher. It's probably around 90%, and it's lower in patients with non-type 1 mutation. We've known that now for quite some time. Very importantly, the safety profile of 989 continues to be very clean. A lot of patients, almost all the patients are still on drug, a very, very low percentage of patients that had to discontinue.

In addition, in second-line ET, we have alignment now with FDA, and we're in the process of launching the first pivotal trial for 989. I'm highly confident that in second-line ET, when you look at the historical numbers for post-hydroxyurea interventions in the 30% to 40% complete hematologic response and not a lot of them with durability, the data that we've shown for 989 gives me a lot of confidence that this medicine will have a positive second-line ET trial and eventually, we'll get it to market.

So now the role -- the goal here is execution in second-line ET, getting that off the ground and enroll as fast as possible.

On the MF side, you have data in the abstract and we'll update it during the meeting, and there's 2 separate important messages there. In this update, it's not a true frontline population that will be updated at ASH at the end of the year. But what you'll see is post-Jakafi or post-rux, patients and a group of patients that were what we call ineligible for Jakafi.

So let's start with the first one. We have SVR35 rates that we reported before, has trended approximately the same, percentage points here and there lower. But overall, the data looks consistent with what we've shown in the past. Importantly, the anemia data continues to get better.

And when you think about what 989 does, which is basically normalizing hematopoiesis in these patients, basically suppressing, eliminating the malignant clone, allowing the benign wild-type cells to grow back, that's why the anemia continues to get better. It's getting in the 60% range or so, which we think is pretty impressive in this pretreated patient population.

The other thing you're going to see is that in the JAK [ SVR35 ] is very high. And that gives us a lot of data that we'll have later this year and about the possibility to accelerate the development of 989, both in second-line MF and first-line MF as well. In second-line MF, we're already in the process of starting conversations with FDA in order to build a new framework, a new regulatory framework for these patients, which would be a composite endpoint, which will incorporate some of the things we're talking about, including some aspect of this normalization of hematopoiesis represented by anemia.

We'll see how those conversations go. If we need to go with SVR35, I'm confident we can get the trial design with a high probability of success anyway based on the data that we already have.

And then the next step is as quickly as possible once we have all the data in-house for the first-line MF population is to launch the first-line MF trial, which we probably will initiate early in 2027. So that's the goal. By this time in 2027, probably earlier, we'll have 3 pivotal trials ongoing with 989, second-line ET, second-line MF and first-line MF. That's the goal.

Got it. If XR could get you to $1 billion at the high end of the range, what does mCALR give you in terms of revenue replacement of Jakafi?

Yes, it's a good question. We'll take ET and MF, which both can contribute equally to, let's call it, the peak sales potential of this product. In ET, the best way to think about it is 20,000 people with the mutation and ET. Half of them, roughly 50% are not fully responding to hydroxyurea, not because it's not a really good cytoreductive agent, but because people can't get to the therapeutic dose due to toxicity. That's 10,000 people.

At biologic pricing, call it, $250,000 a year, that's a $2.5 billion TAM. So what percentage of that segment does 989 get? If it gets all of it, it would be a $2.5 billion opportunity. If it gets half of it, we still have $1 billion plus coming from ET. Another way to think about it is 5,000 people in the United States have the mutation and are resistant to hydroxyurea, which is a negative prognostic indicator. You probably get most of those. Again, you kind of get to $1 billion, multiple roads there. That's half the product.

The other half is MF. I think the most important point of what Pablo said is that, we're very encouraged. We can't call it yet. We'll know more at the end of the year at ASH with the frontline performance of 989. When it's used earlier, it does better, especially in the type 1 population. Type 1 patients are 75% of MF.

There's 10,000 people with the mutation and MF. That's a $2.5 billion segment. If you're in the front line, you get more of it. If you're in the second line, you get a little bit less. Either way, I think both indications can get 989 into that $2 billion to $3 billion range. And that would be a real success for us.

Yes. That's great. Pablo, going back to you here. You have an end of Phase II meeting with the FDA later this summer to discuss the potential for a new composite endpoint for the -- for a pivotal Phase III here in second-line MF. Maybe walk us through the strategy here and how critical this is to Phase III success in both the second line and frontline and what the implications for the field and competitors are if the FDA does move forward with this? And does it really set a new bar here?

So the argument here, which I think it's important to understand is the reason why SVR35 and TSS50 are there is simply because 15 years ago or 16 years ago, it was clear that Jakafi was very good at shrinking spleen and improving symptoms. And so they were put there and everybody has had to use those endpoints in MF since then.

While 989 does shrink spleens and improved symptoms, and we've shown that data very clearly at EHA and ASH last year, it has a completely different mechanism and a different impact on this disease, which we -- the term to summarize that I use is, it normalizes hematopoiesis. But that's basically reflected in a dramatic improvement in anemia that we've seen that, again, we reported at ASH last year.

When you take that into account and about the fact that anemia, its a better correlate to long-term survival in these patients that SVR35, really reach a point that you say, well, it's time to figure it out, how to incorporate this knowledge into a novel endpoint. And this is, by the way, data has been generated independently of us. It's been published by a group of experts showing that other factors than SVR35 and TSS50 have better correlates with long-term survival in MF patients. So that's the argument that we put together.

Obviously, the data has been published. There's support from the scientific community, both in the U.S. and in Europe about really redefining how these medicines are approved. If we can't get there with FDA, I'm confident an SVR35, TSS50 focused trial is still a trial we can win.

When you look at the comparable data in second-line MF in patients with no washout from Jakafi, the SVR35 to momelotinib in that group of patients is 7%. We've been reporting rates around 30% now since ASH last year, and you'll see another update on Saturday. So that's still a trial we can win. We just think it's important to change the regulatory paradigm. But if we have to stick with SVR35 and TSS50, we'll do that and still think we're going to have a way to run a positive trial.

And just on a related point, we've been monitoring the impact of mCALR on VAF, which has been fairly modest thus far in MF. At which time point should we expect this -- or expect to see this meaningfully improve? And how critical is it to the drug's long-term success?

So let's remember what VAF tells us and what it doesn't tell us because I think it's really important. VAF is basically, VAF in peripheral blood is basically taking a pool of cells, a highly heterogeneous cell population and measuring the frequency of the variable -- the different -- the wild-type and the mutated allele in that population. It's a ratio. And the important point there is in MF, the wild-type population is smaller. So changing that ratio with a small population takes longer to grow, it's harder.

And second, it's going to be a lagging indicator to what's going on in the bone marrow. In addition, VAF measures cells that are CALR mutated positive, but thrombopoietin receptor negative, and those cells are not affected by the antibody. They have to die on their own. They're nonmalignant. They don't lead to the disease, and they have to die on their own.

When you put all that together, we think over time, VAF will continue to improve, but it's a much lower indicator of what's going on. What we pay a lot of attention, and we'll update this at EHA is the megakaryocytes in the bone marrow, which are the source of the disease. So we measure CALR mutated megakaryocytes and wild-type megakaryocytes, and thats how we're seeing a shift. The mutated ones are going down, the wild-type are going up.

Then we look at immature cells in peripheral blood, CD34-positive, CALR-mutated cells in peripheral blood, and we again see those going down. And the third, we see normal red cell progenitors in the bone marrow going up. All that is telling us the right things are happening.

When you look at VAF, the magnitude may be modest, as you pointed out, but almost all the patients are pointing down in that waterfall. So we're seeing that the malignant clone is going away as represented by that. I think over time, VAF should continue to get better. We're not too focused on VAF. I know there's a lot of interest in seeing that. I would focus more on what's going on in the bone marrow and what's going on in the peripheral blood progenitors.

Great. There's an expanding competitive landscape that's playing out within MPNs, including J&J into more of mCALR and Lilly and AJAKs on the JAK inhibition side, where we've seen more data, I guess, for the EHA abstract and expect to see initial data from the mCALR programs over the next 12 months or so. What are you monitoring most closely from a competitive perspective? And how are you thinking about differentiation and positioning relative to these assets?

I'll just make a few comments and let Pablo expand. What we're focused on right now is our programs, obviously. As Pablo said, we have an opportunity by the middle of '27 to have 3 Phase III trials. I think as it relates to the other monoclonal antibody, thoughtful antibody design, no human data. So not a lot to say there. As it relates to the opportunity that type-2 JAK2, I think that it's an apples-and-oranges comparison.

One is a symptomatic therapy, optimizing or maximizing spleen volume reduction and symptoms versus a potentially disease-modifying therapy. I don't think it's an either/or. I think in a CALR population, if we can replicate in Phase III what we're seeing in Phase I, we have a solid path to build a very important product for us. And as it relates to the T-cell engagers, more advanced disease, and it could have a role, and we have to focus on ours, not J&J's. That's my view.

Just to complete a couple of points there. Look, our goal, as we stated last year is by the end of this decade is to have a targeted therapy for every single patient on MPN. In order to do that, we need to execute on the current plan. We have the understanding of the space. We know this biology. We have the right team in place. We have these medicines that we've been talking about in the clinic and launching pivotal trials as we speak.

And we also have a number of next-generation programs that we're working on. So we're going to continue to innovate in the space. We have the critical mass in place to continue to expand our presence in MPNs, and we will. So obviously, you always follow your competitors. You don't underestimate anyone, but our goal and our focus is to execute on the current programs.

And just the last one to round out the questions on MPNs here. Where does your mutant-selective 617F program stand? And are you seeing encouraging signals with new solid dispersion formulation? And when should we expect a go/no-go decision for this lead asset?

So 058 has been a challenging program. The first thing I would say is we remain absolutely convinced that this mechanism will work. If we hit V617F hard enough, we will get positive clinical readouts in patients with V617F mutated MPNs. The program has been challenging. We've been generating data. The data right now are not trending in the direction that we would love to see. So we will reassess the program later this year, and then we'll make decisions.

We have next-generation programs that look much better, molecules that look much better than the lead. We also have the option agreement with Prelude. We're following -- we're tracking the progress, and we can execute the option whenever we think it's the right time. So we're unlikely to present meaningful data later this year, but we will continue to update you as the program progresses.

Bill, moving over to povo here. You have framed this opportunity as a $500 million to $1 billion peak sales outlook in HS across both pre- and post-biologic patients. Walk us through the launch strategy and how you plan to target both of these sub-populations and what needs to play out to reach that upper end of the guidance range?

Yes. We do believe, given the data set, which 70% is in a pre-biologic population and 30% is in the post-biologic patient population that we can capture or garner utilization at sort of both those inflection points. When you look at the data on povo and compare it to that of a biologic, you see high score 50, 75, 90, 100; pain relief, draining tunnel clearance, flare control that rivals the 17s. I think it's indisputable.

The one thing that a JAK inhibitor does is it relieves pain, I think, perhaps as good or better, and it's definitely faster. There's no FDA-approved oral option. Someone gets put on or gets diagnosed with HS, they get an antibiotic or steroid on one end, and then they have to leap over to an IL-17. And so I think this will be an important treatment option for dermatologists and NPs and PAs. The benefit-risk profile in HS, I think, is very attractive.

The most important part of what we're going to do at launch is to educate them on the data, of course, and then garner utilization in both those places. And you're talking about 150,000 patients who are diagnosed and treated. I think some estimates are higher with HS that are not taking any advanced systemic therapy. There's only about 50,000 to 60,000, which is growing on the IL-17s.

HS is unlike IL-13-mediated AD or IL-23-mediated psoriasis. It's a multi-cytokine disease. JAK inhibitors are multi-cytokine inhibitors. And so I think there's real potential here. The most important thing for us to do is to get trial at launch. And if the drug performs in the real-world setting like it did in the clinical trial setting, I think it's going to be a needle mover.

And from a payer perspective, is there any hindrance to really kind of dominating that prebiologic set?

Yes. I think, usually what you worry about in this situation is prior authorizations and steps through, for example, a biosimilar Humira. But it's really difficult to mandate that type of medical exception if the label doesn't. And it is important that we have a label that covers both the pre- and post-biologic setting. If it was to happen and there were drug utilization management measures put in place, they wouldn't be widespread. They wouldn't be universal.

And I think more and more cross-subsidization and bundling agreements are less and less effective given the push for transparency. And even on the PBM side, they want to manage their budgets on a line item-by-line item basis. I believe there's a price point in the end that we can charge that makes sense for the PBMs and the plans and makes sense for Incyte, and we'll manage that during the launch.

And speak to your confidence here for expansions into vitiligo and asthma and PN as you look to growing this product further.

Very high confidence in vitiligo. We have the data. I think the key there, whether it's AbbVie, Pfizer or Incyte is you have to medicalize vitiligo. It has to be perceived, understood as a chronic immune disorder, not an aesthetic or a cosmetic problem. And that does take some time. But it's a -- prevalence is very, very high. We know, given our experience with Opzelura, what it's going to take to commercialize povorcitinib for vitiligo. And that could be $0.25 billion that you're adding on.

There is a bull case there what's bigger just based on the prevalence numbers. But I think you have to be clear-eyed about where that category is in terms of diagnosis and treatment. PN is an itch disease. We'll have those data at the end of the year. There's one thing JAK inhibitors do well, and that's relieve itch and they do it fast. And so I think that is of equal significance to povo as vitiligo is. I mean I think those 2 indications could be $0.5 billion, maybe a little bit more. As it relates to asthma, wait for the data at the end of the year, it's not in our model.

Maybe just a final question here. You continue to sound very confident regarding the profile of your G12D KRAS program and PDAC post the data that we've seen, not just from you, but also from competitors in this space. What drives this level of confidence? And how do you see the drug existing within the landscape with other therapies?

So it's an amazing time in pancreatic cancer research, right? I mean the data -- the data from RevMed was pretty extraordinary. Now when it comes to specifically even G12D mutations, we think we have what looks in our hands, whether you want to call it best-in-class as good as anybody else in class -- we can debate that when we show the data.

What we've been doing over the past few months is, number one, we've been executing on putting in place a frontline Phase III trial of our G12D in combination with chemotherapy, both types of chemotherapy, FOLFIRINOX and GemNab and previously treated pancreatic cancer. The trial is getting off the ground. It's already enrolling patients and it's going quite well.

In parallel with that, we generated data, 2 cohorts or cohort of 50 patients, give or take, half with GemNab, half with FOLFIRINOX. We'll present that data at ESMO, assuming it gets accepted. And we'll have a fair amount of follow-up in order to give you an idea, not just the responses, but the durability. We're very happy the way that data are evolving. Hopefully, you will agree when we show it later this year.

What we've also done is combine a G12D with Erbitux, which is something that daraxonrasib can't do because of the rash. So we thought that angle in colorectal cancer was very important. And we've also combined it with chemotherapy plus Erbitux. All that data as part of the potential expansion into colorectal cancer will be presented later this year as well.

So we're really excited how the program is trending. We really like the way the data are evolving, and you should expect not just continued evolution in first-line pancreatic, but also an expansion of the program to other indications.

Great. Maybe just one last question. Anything else I did not ask about that you want to highlight as you look forward here?

I think on Niktimvo, which has become a nice incremental growth driver for the company, we'll have data at the end of the year looking at Niktimvo in combination with Jakafi, which would result in a steroid-free regimen for patients with GVHD. And I think that is an important outcome to watch.

Great. And Opzelura seems to be on track?

The Opzelura looks good. The AD launch in Europe, I think, will be important to keeping that product on a solid growth trajectory. And also, we have Opzelura -- we have a study with Opzelura in HS that will report out in the fourth quarter. And there's no FDA-approved topical treatment. It would be for mild-to-moderate disease. Our Phase II study, the HiSCR50 rate in HS was 79%. Now vehicle was high, too. The Phase III study, we're using an HiSCR75 endpoint to have Opzelura as a topical for mild-to-moderate and to have povo for moderate-to-severe creates a franchise and a sequencing strategy that could be very valuable.

Great. Well, with that, thank you so much. Appreciate the time.

Thank you.

Greetings, and welcome to today's Incyte conference call and webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Alexis Smith, Vice President, Head of Investor Relations. Alexis, please go ahead.

Good morning, everyone, and thank you for joining us today. The press release and presentation for today's call can be found on the Investors page of our website. Today, I'm joined by Bill Meury, Chief Executive Officer; Pablo Cagnoni, President and Global Head of R&D; and Dave Gardner, Chief Strategy Officer, who will offer prepared remarks; Suketu Upadhyay, Chief Financial Officer; and Steven Stein, Chief Medical Officer, will join us for the Q&A portion of today's call.

Before we begin, 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 in our SEC filings for additional details.

With that, I'll hand it over to Bill.

Good morning, and thank you for joining us. Today, we're announcing Incyte's acquisition of Star Therapeutics Vega program centered on VGA039, a first-in-class Phase III asset in von Willebrand disease that we believe can become an important new growth driver for Incyte. I'll briefly cover why this deal makes sense strategically and financially, and then Pablo will walk through the data and development path, and Dave will discuss the market opportunity and commercial framework. We conducted extensive due diligence on this asset across scientific, translational, clinical, safety, regulatory and commercial dimensions and came away with a high level of conviction in both the strength of the data and the attractiveness of the opportunity.

VGA039 checks all the boxes we look for in a business development opportunity. It's squarely within our core, hematology, the science, the disease and the R&D and commercial operating models are all areas where Incyte has real expertise. Second, VGA039 is supported by a high-quality, consistent data package with 3 layers of validation, mechanistic validation through target engagement, translational validation through restoration of thrombin generation and clinical validation with strong early human efficacy and safety data.

Third, the development path is clear and manageable with alignment already in place with regulators who granted VGA039 breakthrough designation for the treatment of von Willebrand disease earlier this year. And importantly, it has the potential to be highly accretive to sales and growth post '29 with approximately $1 billion or more in net sales potential. Taken together, we believe this structured transaction is strategically aligned, financially meaningful and consistent with our framework for capital allocation and value creation. The acquisition fits directly into our broader strategy, transitioning Incyte beyond a single cornerstone product. We're constructing a portfolio of multiple growth drivers rather than making one oversized bet, and VGA fits this strategy well. It strengthens our pipeline and represents a smart use of capital with an attractive upside and manageable risk profile.

On a product level, as you'll hear from Pablo and Dave, VGA039 is designed to restore normal thrombin generation and reduce bleeding by modulating Protein S activity. Current treatments for von Willebrand disease are burdensome, inconvenient and are often failed to adequately control bleeding. If successful, VGA039 has the potential to become the standard of care for a sizable underserved patient population and to be for von Willebrand disease, what HEMLIBRA has been for hemophilia A.

With that, let me turn it over to Pablo.

Thank you, Bill, and good morning, everyone. Our interest in this opportunity begins with a significant medical need and a novel first-in-class therapeutic approach that we believe could address key limitations of existing therapies. Von Willebrand disease is the most common inherited bleeding disorder, affecting 135,000 diagnosed patients in the U.S. and many more worldwide. The disease is highly heterogeneous, encompassing multiple subtypes and a broad spectrum of clinical severity. As a result, patients can experience a wide range of bleeding complications with the most common clinical manifestations, including gastrointestinal bleeding, other mucosal bleeds and heavy menstrual bleeding.

Many of these bleeds can be managed outside the hospital setting. However, recurrent or severe episodes, especially GI bleeding and in rare cases, critical organ bleeding can be clinically significant and are the leading causes of emergency visits and hospitalizations. Patients with more severe disease can also experience hemophilia-like bleeds, including joint or muscle bleeds. The underlying cause of von Willebrand disease is a deficiency or dysfunction of von Willebrand factor or VWF, a key protein involved in normal blood clotting or hemostasis. VWF plays a dual role in hemostasis by helping platelets adhere to sites of vascular injury and by stabilizing clotting Factor VIII.

When VWF is absent, reduced or dysfunctional, both platelet function and coagulation can be impaired, resulting in prolonged recurrent or spontaneous bleeding. Diagnosis includes bleeding history and specialized testing that measures the amount and function of von Willebrand factor with the latter determining disease subtype. In the United States, an estimated 35,000 patients have clinically significant disease burden and receive care at specialized hemophilia treatment centers or HTCs. Current management includes on-demand treatment for acute bleeds and prophylaxis, which is based primarily on von Willebrand factor replacement. While prophylaxis can be effective, it requires frequent infusions and breakthrough bleeding is still common.

Despite guideline support, prophylaxis remains underutilized, primarily due to the onerous nature of the schedule of infusions. These limitations underscore the need for novel prophylactic therapies that can provide effective bleed prevention while reducing treatment burden. That brings us to VGA039, an anti-protein S monoclonal antibody designed to modulate endogenous anticoagulant activity and support more effective hemostasis. Protein S serves as a cofactor for 2 key anticoagulant pathways, TFPI alpha, which regulates the initiation phase of coagulation and activated protein C or APC, which regulates the propagation phase by inactivating Factors Va and VIIIa. By modulating protein S cofactor activity for both pathways, VGA039 is designed to normalize thrombin generation in a controlled manner. The goal is to improve clot formation and stability without replacing von Willebrand factor and without driving excessive systemic coagulation.

This mechanism is particularly compelling in von Willebrand disease where the bleeding phenotype is heterogeneous. By enhancing thrombin generation downstream, independently of the underlying von Willebrand factor defect, VGA039 has the potential to provide broad prophylactic coverage across von Willebrand disease subtypes and bleed types. VGA039 has been evaluated in 4 clinical studies, including VIVID-3, a Phase I/II multi-dose safety and efficacy study in adults and adolescents. In the trial, patients received a monthly subcutaneous dose of VGA039 over a 17-week treatment period with the option to continue into VIVID-5, an open-label extension trial. Enrolled patients had a history of serious and/or frequent bleeding episodes, including mucosal bleeds, GI bleeding and hemophilia-like joint and muscle bleeds.

Pre-study historical annual bleed rates or ABRs range from 0 to 431, reflecting the heterogeneity of the population. Most patients had a baseline ABR of greater than or equal to 12, which is consistent with the high bleed population we are evaluating in Phase III. In this study, VGA039 demonstrated a substantial median annualized bleed rate reduction of 81% across all participants, including those with no prior IV prophylaxis and switch patients. The depth of the response was also significant. 2/3 of patients with a non-0 baseline achieved at least a 75% reduction with 1/4 of them achieving 0 qualifying ABR during the multi-dose treatment period.

Notably, activity was observed across all von Willebrand disease subtypes and bleeding manifestations, consistent with the hypothesis that enhancing thrombin generation downstream of the underlying VWF defect may provide benefit across the heterogeneous VWD population. In precedent clinical trials with other investigational therapies across bleeding disorders, including VWD, ABR reductions from early studies like VIVID-3 were highly concordant with registrational study results. The safety and tolerability profile to date is also encouraging. VGA039 was well tolerated in VIVID-3 with no withdrawals on therapy and no thromboembolic events reported.

Taken together, this data support the potential of VGA039 as a novel once-monthly subcutaneous prophylactic therapy for patients with von Willebrand disease and were the basis for FDA granting breakthrough therapy designation. We have regulatory alignment on the registrational program for VGA039. And the Phase III study is designed as an open-label intra-patient comparison study with a 6-month observational baseline period followed by 12 months of active prophylaxis. Patients will receive monthly subcutaneous VGA039 using a weight banded flat dosing. The primary endpoint improvement in total ABR, including both treated and untreated bleeds comparing each patient's active treatment period against that patient's own observational baseline.

The study is expected to enroll approximately 60 patients and is on track to deliver top line data in early 2029, supporting a potential launch shortly thereafter. As Bill mentioned, our conviction is supported by the convergence of mechanism, pharmacodynamic evidence, early clinical activity and a Phase III design aligned with both the biology of the disease and the needs of the patient population.

I will now turn it over to Dave, who will discuss the commercial opportunity for VGA039 and why this asset is a strategic fit for Incyte. Dave?

Thanks, Pablo. VGA039 checks all the boxes when we think about our business development strategy at Incyte. It is highly adjacent to our core hematology franchise, leveraging existing commercial and R&D capabilities. It has established human proof of concept and is in Phase III with the potential to launch in the peri-LoE time frame for Jakafi. And the commercial opportunity is needle moving in magnitude for Incyte with blockbuster potential. But most importantly, this represents a novel step change for patients who have yet to experience the exciting innovation that has been brought to other bleeding disorders.

Let me start with the last point, which is how impactful VGA039 could be for von Willebrand disease patients from a practical perspective. Today, the prophylaxis options available for von Willebrand are primarily IV factor replacement therapies. These products can reduce bleeding, but they require frequent infusions, often 2 to 3 times per week. This burden is a major reason prophylaxis remains underutilized even among patients with severe and frequent bleeds where benefit risk favors bleed prevention. VGA039 has the potential to change that paradigm.

On the left of the slide, you can see that the current prophylaxis model requires frequent IV infusions with replacement therapy. Patients have to make a choice, deal with frequent infusions or treat acute bleeds as they happen. In many cases, patients will need both. On the right side is the proposed VGA039 regimen, a once-monthly subcutaneous injection. This difference matters. In hemophilia, we've seen that effective subcutaneous prophylaxis can transform treatment patterns and patient expectations. We believe a similar dynamic could be in play in the high unmet need segment of VWD.

Our commercial focus for VGA039 is not on the entire diagnosed population of 135,000 in the U.S., but rather a focused defined population within von Willebrand disease who experienced severe or frequent bleeding. As Pablo mentioned earlier, today, roughly 35,000 patients are treated in HTCs and other specialty settings. At least 7,000 to 10,000 of them have severe frequent bleeding and are eligible for prophylaxis today. This is our initial target market. Due to the limitations of the current options, only around 2,000 of them are on prophylaxis or prophylaxis-like regimens today. Our target population is not the average von Willebrand disease patient. It is a high burden segment characterized by recurrent GI bleeding, clinically significant mucosal bleeding, joint or muscle bleeds and other patterns.

In severe von Willebrand disease, annual bleeding rates can be very high, in some cases, reaching 30 or more events per year. From a market development standpoint, we believe VGA039 will do 2 things. First, it will convert patients currently receiving IV prophylaxis to a less burdensome monthly subcutaneous option. Second, it will expand the prophylaxis eligible treated population by making prophylaxis more practical for patients and physicians who today may avoid regular IV therapy because of administrative burden. We have seen in hemophilia A that when prophylaxis becomes more practical, adoption can become the norm with rates approaching 90% versus only 25% in severe or recurrent von Willebrand disease today.

There is a real opportunity to close the gap between those who need prophylaxis and those who are receiving it. Our pricing assumptions are anchored to existing prophylactic regimens and supported by the severity of disease in this target population. Severe von Willebrand disease is associated with meaningful health care utilization, including iron replacement, transfusions, emergency visits, hospitalizations and ambulatory care, which supports the health economic rationale for more effective and convenient prophylaxis.

Finally, Incyte is well positioned to launch VGA039 successfully given our deep hematology expertise and established commercial infrastructure. In short, VGA039 gives us a late-stage hematology opportunity with a differentiated mechanism, a practical monthly subcutaneous profile and the potential to meaningfully improve care for a clearly defined high-need von Willebrand population. Taken together, we believe these attributes support both the potential to establish a new standard of care and a significant blockbuster peak sales opportunity.

Back to Bill.

Thanks, Dave. Ultimately, this transaction reflects how we think about business development at Incyte. We're focused on opportunities that can create asymmetric outcomes where the upside materially outweighs the downside. We structured the deal with a combination of upfront consideration of $1.25 billion and up to $750 million in sales milestones, which aligns economics with value creation, preserves balance sheet flexibility and supports the potential for a strong return on invested capital. Just as importantly, we do not view this as incremental innovation. Based on the data generated to date, we believe this asset has the potential to establish a new standard of care. Opportunities like that are rare, and they create a fundamentally different value proposition than assets that simply offer modest improvements over existing therapies.

Before we move to Q&A, I want to recognize the work of Star Therapeutics. They've built a differentiated program in an area of real need, and we are excited to carry that work forward with their team. Our focus now is on ensuring smooth integration and executing the Phase III study.

With that, operator, please open the line for questions.

[Operator Instructions] Our first question is coming from Salveen Richter from Goldman Sachs.

This is Lydia on for Salveen. Could you just speak to strategically the timing of the deal? And then also any risk related to the VGA039's mechanism, particularly around thromboembolic events.

Sure. As it relates to the timing of the deal, I don't think we tie BD to a calendar. We have 2 sources of developing our product line, internal R&D and then external BD. And we looked at this opportunity, it was highly differentiated. The timing was right in terms of what we're solving for post '29. We have a Phase III ready asset, and we looked at the risk-adjusted returns on this, and we were ready to act. I think that this is probably as close to a textbook example of the type of deal that makes sense for a company like Incyte. And we also still have balance sheet flexibility if we see other deals. And we're patient right now. If we see something that makes sense, we'll do it. If not, we'll wait. Thank you.

Okay. So let me take the second part of the question. So we believe the risk here is very low. Let me tell you why. We -- number one, we reviewed it with more than 60 patients' worth of data and we reviewed all the data from the open-label expansion study, there were no relevant treatment-emergent adverse events of thrombosis. Furthermore, we saw no evidence of clinically relevant D-dimer elevations in any of these patients. And we think that's for a couple of really important reasons.

Number one, the dosing of VGA039 and the dosing strategy that the Star team put in place was a PD-driven, pharmacodynamic-driven dose selection. By measuring the amount of thrombin generation, we know that if the exposures to 039, the concentrations are between 25 and 100 micrograms per ml, there is normalization of thrombin generation. And that is the key word here is normalization of thrombin generation without overshooting thrombin generation. By doing that, we think the risk of clinically relevant thrombotic events are very, very low, and we were comfortable as we reviewed all the data that I described.

Our next question is coming from Etzer Darout from Barclays.

Congrats on the deal. Just a couple of -- just one question really on the blockbuster potential for VGA039, particularly around pricing. I think about once-monthly prophylactic product like Takhzyro for hereditary angioedema. Is that the right way to look at that from a pricing standpoint? And any color you can provide on how you can get to the $1 billion peak potential, that would be great.

Thanks for the question. I'll turn it over to Dave.

Sure. Thanks for the question. So if you look at not only VWD prophylaxis regimens, but prophylaxis across bleeding diseases, you come up with price points in the $500,000 all the way to upwards of $1 million a year. I would say that we're not banking on the upper end of that, but I would think about a net price point in that kind of $500,000 per year range is how to think about it.

Yes. What I would just add, Etzer, is think about what David talked about during his prepared remarks, if you have a hemophilia A-like segment of von Willebrands, meaning severe frequent bleeders. And we looked at claims data, we looked at the literature. We surveyed a very high percentage of the hemophilia treatment centers in the United States. You have 7,000 to 10,000 people. If you use annual cost of therapy of $500,000, the lower end of the range, you're looking at a market between $3.5 billion and $5 billion. That doesn't assume that you achieve, for example, what has been achieved in the hemophilia A market where prophylaxis has garnered 90% of the population. So there's a credible path here to a product that can move the needle at Incyte and generate north of $1 billion.

Our next question today is coming from Derek Archila from Wells Fargo.

This is Jacob on for Derek. So just from your diligence process, how are you thinking about this approach targeting protein S compared to others aimed at stabilizing VWF.

Pablo, go ahead.

So first of all, this is a completely different mechanism. The mechanism of modulating protein S, which is such a key element in the coagulation cascade, we think it's highly differentiated and uniquely suited for the most severe forms of von Willebrand disease. Now because it normalizes thrombin generation regardless of clotting factor levels, potentially it could work across other indications. But we believe it's uniquely suited for the group of patients that are more in need of better prophylaxis, and that's type 3 and a lot of type 2 von Willebrand disease patients. I think other approaches that have been recently advanced are very different because they're more focused on stabilizing and elevating existing levels of von Willebrand factor, which would not solve the problem of patients with type 3 and many type 2 von Willebrand disease. So as we looked at this, we think the highly differentiated nature, the fact that it's likely to address and it does in the work that we reviewed, the needs of the most severe patients with VWD, we thought that was a very differentiated approach.

Our next question today is coming from Ash Verma from UBS.

Congrats on the deal. Maybe just in terms of like the Phase III focus here, is this on the high bleeders with no prior IV prophylaxis. And I see that like in this data, it shows that you also generated 75% to 100% reduction in patients who switched from prior prophylaxis treatment. So is that a market segment that you want to follow up at a later point of time? Just help us understand like what are the different pieces of the market and how you want to pursue them.

That's most definitely a group of patients we will address as well. We have very early data in some of those patients already from the MAD study that we reviewed. They're not included in the current pivotal trial, but will be absolutely a focus of a future pivotal trial. It's a very important group of the population, and we intend to address their need.

Thanks for the question.

Our next question today is coming from Evan Seigerman from BMO Capital Markets.

So Bill, in the past, a multiplier in how you think about the world in terms of -- to acquire. Aside from indication -- aside from expansion beyond just VWD and kind of other bleeding indications, how else could this be a multiplier? And what else might you be looking for in a next asset beyond this company?

Well, I think as it relates to VGA039 being a multiplier, I think Incyte is at a size right now where if we have a credible path to $1 billion or $2 billion, that is a real needle mover. I mean we're not a giant diversified company where you need $2.5 billion to $5 billion in peak sales potential for a product to be highly material. And we're going to get a lot of leverage out of this business because we have all of the infrastructure we need in R&D and commercially. And as I said, I think this is about as close to a textbook type deal that we could do. It really checks all the boxes.

As it relates to other things that we're going to do, you know our 3 areas, Evan. We have hematology, oncology and immunology. And I don't think it's going to be the case that we replace Jakafi with one big swing. I think often those types of deals, whether it's a large company or a small company, can often destroy value. And we're not trying to meet a deal quota. We're not trying to count the number of deals we're doing. We're looking for things like this, which I think are differentiated. It's got an acceptable risk-reward profile, and it's right in our core. And if we see those things in those areas, we'll act. And if we don't, we're going to be patient. Thanks for the question.

Our next question today is coming from Michael Schmidt from Guggenheim Partners.

This is Rosy on for Michael. Congrats on the deal. So on the patient population, you've called out roughly 5,000 to 8,000 patients who have recurrent bleeds but aren't currently on prophylaxis. I guess what do we know about why those patients are on treatment today? And what kind of market share do you expect VGA039 to capture in that subgroup specifically? I guess if I may add another question, how do you think about the relative size of the U.S. versus ex U.S. opportunity here?

Thanks for the question. I'll turn it over to Dave.

Yes. Thanks for the question. So in terms of penetrating the population who have severe frequent bleeding, but are not currently on a prophylactic or prophylaxis-like regimen, I think that's the gist of the first question. When we surveyed physicians and spoke to dozens of KOLs about this, the indication is that it's multiples of that initial 2,000. So if you ask physicians, they would say it might get up to 4 to 5x. So when we define the population in the way that we did of severe current frequent bleeders, we expect high penetration in that subset. I think that all you need to do really is take that 2,000 and double it to have a really, really meaningful $1 billion to $2 billion opportunity for us.

The physicians are telling us it would be more like 4 to 5x. So I think we're in relatively good shape there. In terms of how to think about the U.S. versus ex U.S., we've modeled the ex U.S. as a relative minority in the total peak sales opportunity. If you look at other examples such as HEMLIBRA and other bleeding diseases, the ex U.S. can be a very, very meaningful portion of the total sales. So I think if anything, we might be being conservative on the ex U.S. front, but we absolutely anticipate this being a global launch.

And Rosy, I would just add, if you think about how you segmented the market, there's 2,000 people taking prophy, which is with replacement therapy, and it's multiple times a week. VGA039 gets approved, there's a high likelihood that the majority of those 2,000 patients could be put on VGA039. Right there starts at roughly $1 billion. And then there's the expansion of the prophy market. And as Dave said in his prepared remarks, it's only 25,000 of that severe frequent bleeding, 25% of that frequent severe bleeding subset. In hemophilia A, different disease, more serious, it's 90%. If we get prophy utilization up to 45% of that overall segment, you're talking about 3,000 to 4,500 patients. And so that is going to be a sizable opportunity for us. Thank you.

Our next question today is coming from Jessica Fye from JPMorgan.

Maybe following up on kind of the theme of a couple of the other ones. So of the 7,000 to, I think, 10,000 U.S. patients eligible for prophylaxis today, would all of those patients who are not currently on infusions meet the enrollment criteria for the VIVID-6 Phase III trial? Or can you tell us kind of what proportion would? And then recognizing the differentiated dosing frequency here, what's the primary comparator or benchmark you're going to hold your Phase III data up against when it reads out.

So let me take the first part of the question, and then I think Dave and Bill may want to comment. So the eligibility, as I mentioned, is ABR of 12 or greater. So patients are going to be followed for 6 months. They have to capture the bleeding episodes. If the ABR is 12 or greater, that's what they need to move to the prophylaxis phase of the study. Each patient is his or her own control here, Jess. There's no comparison with other approaches since there's nothing similar to this. Obviously, von Willebrand disease patients that they are managed with conventional prophylaxis, which is basically factor replacement therapy.

And as Dave reviewed, this is very onerous for patients. The rates of reduction that we've seen were over 80% in terms of ABR reduction in the clinical data that we reviewed even in the open-label expansion. And a lot of the patients, as I mentioned in my prepared remarks, had ABRs of basically 0 once they were switched to VGA039. So that profile that I just described and the statistical design are fully aligned with the FDA. So we're comfortable with the design of the study, and we're very comfortable based on the review of the open-label extension data that we had.

Dave, do you want to add?

So yes, I think it's a good question, Jess. In order to isolate the treatment effect and measure the magnitude of bleed reduction, you're right, not all 7,000 to 10,000 would qualify for the Phase III protocol to state that clearly. In terms of who we would compare to, there's, as you know, a handful of approved agents in VWD. We know that they all have impressive bleeding reductions. We think those are one relevant benchmark. The feedback we get is that because these are relatively small studies and estimates can move around with just individual patients that -- it's key to show that you reduce bleeding by more than 50%. It's key to hit the primary endpoint. By the way, it's designed with the agency. And after that, we think the profile will win.

Thanks, Dave. Thanks, Jess.

Our next question today is coming from Eric Schmidt from Cantor Fitzgerald.

This is Imogen on for Eric. Congratulations on the deal. I guess a question on recruitment. So the time lines here. Given the relatively small size of the study and a fairly small number of sites open, do you see potential to accelerate the early '29 time line now that it's in Incyte's hands?

Yes, Imogen, thank you for the question. A couple of comments on that. The first part is we need to remind you the design of the study. So when a patient is enrolled, they first have to be followed for 6 months in order to capture the ABR, then they get started on therapy. The treatment is a year in order to be able to assess the ABR reduction in those patients. So immediately from -- when the last patient is enrolled, you have an 18-month period that you have to wait. The Star team has done a fantastic job implementing the study.

We reviewed the screening logs and enrollment and the site opening schedule. Obviously, we bring to bear a larger organization with a much larger footprint, and we'll do everything we can to accelerate the enrollment in the trial. And there might be ways to do that. We'll provide further guidance as we transfer all the obligations to Incyte, but we'll obviously try to accelerate the enrollment of the study. But I just want to remind everyone, there's that 18-month period that patients had to be followed for 6 months for the baseline ABR and then 1 year of therapy to capture the reduction in bleeds.

Thanks for the question, Imogen.

Our next question today is coming from Matt Phipps from William Blair.

Congrats on this deal. I think it fits nicely. Just wanted to quickly ask, I know the trial excludes patients with low -- very low levels of Factor VIII. How many does that -- how many patients might have that exclusion criteria? And then just confirming that the same weight banded dosing is going to be used in the Phase III trial that was shown the PK in the ASH presentation.

Matt, thanks for the question. Yes, the answer to the weight banded dosing is yes. The same dosing that we used in earlier trials that was implemented in earlier trials and that were used in the open-label extension will be used in the Phase III trial. There's 3 doses, 225, 300 and 450 depending on the weight of the patient.

On the Factor VIII levels, Matt, just to clarify, we want to make sure patients don't have high Factor VIII levels. So we're limiting to patients needing to be at the lower limit of normal. If you look at the population, we did extensive work on this, the patients who fall into the category of severe frequent bleeders that we have defined as our target patient population, virtually all of them are going to have low Factor VIII levels.

Thanks, Matt.

Our next question today is coming from Jay Olson from Oppenheimer.

Congrats on the deal. Just to follow up on Bill's earlier comment. What's the level of interest you're seeing amongst patients and prescribers to move away from factor-based prophylaxis and switch to a more convenient and potentially more effective, safer option for prophylaxis like 039. And then also, if you could please comment on your appetite for moving into adjacent bleeding disorders like hemophilia.

Great. Go ahead, Dave.

Sure. Thanks, Jay. So the physician interest is incredibly high in this. I'd say it starts with a discussion around how patients on IV prophylaxis would prefer a simple monthly subcutaneous option. But very quickly, it goes to how much this can expand the population. I think a lot of patients really consider going on prophylaxis, but opt against it because of the onerous profile. Most of the physicians we spoke to commented that patients, including those in the VIVID-3 program who had opted out of getting IV prophylaxis didn't actually realize how bad their disease was until they had experienced some relief. So I think we'll just -- if we produce the product profile that we're looking for, the interest in this will be incredibly high, both in the current population on prophylaxis and beyond it.

Pablo, do you want to take the second question?

I'll be happy to. Thanks for the question, Jay. So theoretically, let me take a step back. So VGA039 increases thrombin generation regardless of clotting factor levels. So mechanistically, there's no reason why it could not work in other bleeding disorders as well. The Star team, and we agree with their approach, addressed von Willebrand disease first because there is a bigger need as we've been discussing during the call, particularly in patients with severe von Willebrand disease for better, more effective prophylaxis. So that approach is something we fully agree with, and we're going to drive this forward as fast as possible.

They have presented, the Star team, preclinical data in other bleeding disorders, and we'll have conversations internally and then with key opinion leaders about initiating potential trials in other potential bleeding disorders. But mechanistically, VGA039 should work regardless of the bleeding disorders we're talking about because what it does is it normalizes thrombin generation regardless of clotting factor levels.

Thanks for the question, Jay.

Our next question today is coming from Judah Frommer from Morgan Stanley.

Congrats on the deal. Maybe just first, can you give us a little more detail on overlap in call sites for your hem/onc sales force and kind of hematologists treating these bleeding disorders? And then just assuming this will be a chronically dosed antibody, any evidence of any drug antibodies or neutralizing antibodies that you've seen thus far?

Great. Thanks for the question, Judah. As it relates to the market or the target audience, you're talking about roughly 150 hemophilia treatment centers. In fact, the program here is going to look very similar in size and shape to what we're already doing at bone marrow transplant centers all across the country, where there's roughly the same number. And so we have a pretty good sense of what it will take to commercialize this product.

Let me take the second part of the question. We have not seen any evidence of ADAs in the ongoing open-label extension trial or any of the trials for that matter.

Thanks for the question.

Our next question today is coming from Kripa Devarakonda from Truist.

Congratulations on the deal. So from the data that you've seen so far, do you have a good sense of what the average duration of treatment could be, especially when we think about the real-world use of the drug. And what's your level of confidence that this could be a chronic therapy? And how does that play into your estimate of the peak opportunity.

Dave will start off and then Pablo will add.

Thanks, Kripa. So between VIVID-3 and the open-label extension, we have not seen any evidence that patients won't take this chronically. And so we have yet to give you an estimate on duration of therapy, and that's good news because virtually everyone is ongoing, and we don't see any signs of -- any reasons for discontinuation.

Let me complete that. I don't see why a patient with severe von Willebrand disease that has ABRs over 12, which is enrollment criteria for this study, and some of these patients have 30, 40, 50, an ABR of 30, 40, 50 and that is receiving a once-a-month subcutaneous injection that is well tolerated and has no major side effects that we know at this point, why would that stop at any point in time. So I think what we're looking here is a chronic ongoing therapy, particularly for the patients with more severe von Willebrand disease.

Great. Thanks for the question, Kripa.

Our final question today is coming from Salim Syed from Mizuho Securities.

Congrats on the deal. Just one from us. Given that this is an open-label study, are you guys -- how are you guys handling the data internally? Is this something that you plan to sort of look at as you go and you'll have knowledge to that? Or is there some sort of blinded protocol even for you guys, even though it's open label? And related to that, if you wanted to change the protocol to build an interim, if you saw good data, is that something that you could do?

Thanks for the question. Pablo?

Yes. Thank you for the question. So the way we will handle, as you described, is an open-label study is the same way we handle other open-label studies, whether they're randomized or not. And there is a team within the company that is -- that basically monitors the study, but we are blinded to the ongoing results of the study. So this is treated with a level of regulatory rigor that it has to for a pivotal trial. So the answer is we will not have access to obviously the data as the study is ongoing.

When it comes to modifications to the protocol, I think it's a little bit too early to comment on that. We will obviously transfer all the obligations to Incyte. The process basically starts today to do that. And then we'll make decisions as you usually do in any pivotal trial, whether there's any need for interim analysis. Now very importantly, we have full alignment with FDA here on the design of the study. And so we would take any change. We will be very cautious about making any changes to the ongoing study or the statistical analysis plan because of the agreements we have with the FDA.

Thank you for the question.

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

[Audio Gap] featured company Incyte, presented by their Chief Medical Officer, Steven Stein. So thanks so much for joining us, Steven.

Thanks for having me. It's good to be here.

So a lot to cover. So -- and I don't want to spend the whole time on 989 because I know you have just a few other things in your pipeline. But I do want to start there just because I know it's a topic of high interest, and there's a lot of recent data and developments of late. Maybe just on the 989 for ET you guys recently announced Phase III plans after speaking with the FDA, and that program is going to start midyear. Can you walk us through some of the unique elements in that design and in particular, the ability to shorten the typical registration requirements and the implications of having BAFF as a secondary endpoint here?

Yes. Thanks, Brian. I'll try to get to all your questions. So obviously, just in terms of stepping back for a second, if you look at the sort of company 3 verticals, there's hematology, solid tumor, oncology and then immunology. In the hematology vertical, if I can put it that way, obviously, myeloproliferative neoplasms are front and center. It's something that has been the DNA of the company since the beginning and something, in the correct way, we sort of want to own going forward. And the sort of research frame mindset there is mutation-specific therapies now.

So moving beyond more broad, sort of, JAK-STAT inhibition, even in terms of nuances there but really going to mutation-specific therapies. And the first one in that journey is the mutant CALR antibody 989. And to talk about specifically on ET on this question, I'm sure you'll come to MF next. But ET is where we went first with the antibody. It's about -- if you look at mutant CALR in that setting, it's about 25% of all of ET. It's a very clean environment to study it in because we have such a sensitive pharmacodynamic market in platelets. It just gives you a very quick clean read. And it's something we utilize to the meat of your question going forward with the FDA on the study design, and it really helped us.

I just want to also, in terms of stepping back, in the nearly 30 years I've been dealing with regulators and with the FDA, this is about the most collegial interactions I've ever had, and they're really interested in working with us and helping us. We have breakthrough designation as well. But I think the step back there is 16 years ago, we were the inventors of the endpoints here and certainly in myelofibrosis with SVR35 and symptoms, those were ruxolitinib driven and have remained the endpoints over the last 15-plus years. So there's a recognition from the FDA that this is a space we know well and can work well together.

So with the 989 antibody in ET, we'll have an update at EHA. At ASH, we had approximately, I think, 50 patients of data and 35 of those had 24 weeks follow-up. At this EHA update, it's quite substantive. There are 110 patients and about 60 of those have doses greater than 750. So it's a really substantive data set. And if you look deeper into that data set, and you're not looking at doses per se but for the type 1 mutation, there's about a 92% complete hematologic response rate in the abstract. And then for the non-type 1s, it's in the 30% to 40% range, which is something we knew straight off.

So it comes to your question, what happened with the study design. The principle we wanted to get to was to make a very user-friendly study for physicians and patients. So we wanted an all-comer study, and we wanted to try encompass both type 1s, which are uniquely sensitive but non-type 1s in the same study and then use a dose schema that could be rapidly titrated. So what we did and worked with the FDA to get to is it's an all-comer. So sites don't have to worry about whether they're type 1, type 2, non-type 1, type 1 like, it's quite a complicated arena. We put everybody on. We'll do the mutation-specific testing, obviously, and the stratifications there. Everybody starts at 750 milligrams. It's those control rates I talked about in type 1.

And then at cycle 2, day 1, day 29, if they haven't hit the 400 or below threshold, they immediately dose escalated to 2,500. So we expect all the -- just about all type 1s will be okay at 750. And then for the non-type 1s, a great proportion will need that dose escalation. And then it's -- the other -- so that was a great achievement. It's very user-friendly. It's easy to operationalize.

The second thing was we get control very quickly. So we managed to convince the FDA that we don't have to wait what is standard with other sponsors 52 weeks. We can actually measure the endpoint at 24 weeks. So it's complete hematologic control for at least 12 weeks. So you have to then -- if you think that through, you have to have control by 12 weeks to get to 24 weeks. And then -- so platelets below 400, white cells below 11,000, no thrombosis, no bleeding. So we're confident in that design. We like the setup. It's second-line ET versus BAT arm, which we estimate will be HYDREA, anagrelide and interferons and actually quite a decent proportion, we think will be retreated with Hydrea. In certain parts of the world, interferon use is increasing as well. So we like the setup, it's a good study, and it's literally about to start.

Excellent. And I guess where do you stand with the regulatory alignment in MF? I know there's maybe some principles from ET that can apply but there's obviously not as readily available a rapid biomarker for response. So maybe talk us through how you're thinking about the MF path forward in second line initially and what some of those discussions are entailing?

No, you're right. I mean you teed it up perfectly. It's a little bit of a different milieu, right? The -- we don't have a sensitive pharmacodynamic marker like platelets. Obviously, there's spleen control, there's symptom control, there's VAF reduction. I didn't answer your VAF question on ET. I'll come back to it. There's VAF reduction, but it's not as simple to titrate. So it's a little bit of a different construct. So at EHA, again, we have quite a substantive update. I think there will be about 80 patients of data at the meeting. A good proportion of those will have 24 weeks of follow-up in second-line MF, maybe 60-odd patients there. So -- and we're in the same territories on what are the standard responses in terms of SVR and symptoms. What we have with this drug that's unique is anemia response as well.

So in the abstract, you'll see a 58% anemia response rate, and that talks to disease modification aspects thereof. So our ongoing assumption for your question is that we'll be in the old world of SVR35 and symptoms. And in that respect, we're okay but it's not moving the field forward. What we'd like to do is have a healthy discussion with the FDA around a new endpoint in MF in terms of registration studies but it's actually been driven by the European Leukemia Network for nearly a decade. They published 3 times on what a composite endpoint could look like. And in fact, they make a very strong argument that if you do a composite on hemoglobin, on blast count, on platelets, on spleen, is actually more directly correlated with overall survival and leukemia-free survival than the old endpoints, SVR35 and symptoms. And that's been driven extraneous to insight by opinion leaders in the field. We'll see if we can get the FDA there.

Do you think the FDA is open to it?

I think they are. I think they want to try and move the field forward. They've realized that TSS50, particularly holding to that and trying to beat RUX on symptoms is proven very difficult even for us with some of the combos. So I think they are, and we'll hopefully have agreement sometime a little after the middle of the year and be able to tell you publicly on the third quarter call where we are. So that's the desire and where we want to be.

Control arms, next -- some of the...

The main interest in the field is exactly what you just said. People want to see it against JAKs. So it will probably be a BAT arm that incorporates ruxolitinib, fedratinib, momelotinib, pacritinib, maybe even HYDREA and danazol, lenalidomide, et cetera. But that will be the control arm in second-line MF. It will also be IV. So beyond the endpoint, the next thing to agree on is dose. And this is also tricky here because we don't have that PD marker. One of 2 things maybe, one is we just go with a higher dose across the board if we do an all-comer study, come to an agreement based on our modeling, we'll have extensive modeling on what a higher dose could look like or potentially in this area, do a dose by mutation. So have a dose for type 1 and a dose for non-type 1.

And so we'll have a test that can turn that around pretty quickly and be able to do that. That will be the meat of the discussion, what the best way to do that study is in terms of the dosing paradigm. Again, we'll communicate that when we have it.

Just on the VAF endpoint in ET because you asked earlier, it was the FDA who brought it up. They said, why this is disease-modifying, why don't you put it in and we have. We have pretty good data we'll show at EHA on correlating 25% or greater VAF reductions with heme response. So there's some validation going on already. So the same thing in myelofibrosis, if we get to a composite endpoint that has sort of blasts, platelets, hemoglobin, spleen control, we may have a molecular endpoint there as well to show. So that's where we'd like to be with currently.

You mentioned EHA a couple of times, and you alluded to the additional data we're going to see there, and we saw some additional data in the abstract, which looks very much aligned with what you've presented before. Anything more that we should be looking at -- looking for at EHA across the MF and ET program that you think play out? And maybe also, there's been some competitive updates as well coming out of the EHA abstract. So I'm just curious if you have any views on that.

Sure. So just very quickly, we were 3 presentations at EHA, MF oral, ET poster, translational poster is really important, has single cell sequencing data on megakaryocytes on peripheral blood mononucleosides or marrow fibrosis. So I would look at that because it talks to the disease MOA. There's also about 20 patients worth of JAK ineligible patients in that abstract. And then at the meeting, I think about 15 of those 20 have 6 months of follow-up. So you get some sense of what a first-line population looks like, although the first-line data will present at the end of the year. So that will be interesting as well.

In terms of competitors, we've seen the Ajax' abstract looks really good in terms of SVR and symptoms. What we're interested selfishly on what does it look like in the mutation-specific population, particularly mutant CALR. We know across the board, our own data and the very small public data set that JAKs don't do well in mutant CALR. They're not as active. So we'll see what Ajax does there. And we want to look at the AE profile because we know if we use high-dose RUX, for example, we could achieve very similar SVR and symptom control but you would run into quite significant anemia. So we want to just look at that profile there.

Just to be clear, we're in a different mind frame. We really think about mutation-specific therapies as the way forward, which is why we're not in that space currently. Our own V617F is sort of struggling along with the formulation. We switched to an ASD now. Hopefully, we'll get better exposure and be able to hit IC35. We have next-gen backups, and we have a prelude option deal on their lead and their backup. So this is a space we're also extremely interested in 617F specific therapies. It really opens up p-VERA extensively. So the Ajax data set we'll look at. We're not sure if J&J is going to have an abstract or not on their bispecific. We have a bispecific in the clinic as well. And then there's some earlier efforts on siRNA in the space and vaccines, but I think they're a bit too early to speak about.

Got it. I know you're starting with IV but you've made a lot of progress towards a subcu formulation. And you recently reported that this was -- you had some success in healthy volunteers. So can you just help us envision what sort of -- what are you seeing? What kind of profile will constitute -- would constitute success here? And are you doing any additional formulation work? Is there sort of a concentration goal that you have here with the -- I know you have the device that could enable at-home delivery of the subcu. I guess how are you thinking about putting all the pieces together in terms of concentration, dose level, any reformulation and what you guys are seeing so far that gets you as encouraged as you are?

Yes. No, I think you hit the main points, Brian. The subcu is really important from a patient perspective, right? In ET, particularly people are generally well, don't necessarily want to go to clinics or even infusion centers for years on end. So ultimately, getting to a subcu there is really key to our strategy and plan. We started in healthy volunteers to get bioavailability data. We completed that. We like what we've seen from a BA perspective, and we're currently going into patients now to sort of do the same thing, get more bioavailability data, et cetera. We know from the get-go, just to be clear, that we're not going to be able to encompass these doses in pens.

So we went in with the device very early. We've got this partnership with an FDA-approved device, enFuse, that can hold up to 25 ml. The amount you have in dictates how long that takes to infuse. So low amounts, 10 minutes, high amounts, 20 minutes to get it in, you take it off and dispose of it. You're right, there are 2 aspects. There's bioavailability. If you want to ballpark bioavailability, IV to subcu, people generally want in the 40% to 60% range. And so we're happy where we are without telling you what the exact number is.

But the next aspect is concentration. So you have a certain amount of milligrams per ml. And if you do those 2 calculations, you want to be able to encompass your top dose in a single device. We're comfortable we'll get to where we want in a single device but it will be towards the top end of the 25 ml, right, for you. And so we knew that going in.

If you look competitively now, and we're taking at face value what Damora said, obviously, I think the IND is about to go in. They're talking about more potency for non-type 1 and then in nonhuman primates, a 15-day half-life. So it could be a Q4 week subcu. So our next gen are thinking about that as well. So that's a good desirable profile to get to. potentially, I'm not sure they know their dose or bioavailability. It's too early, but you could start thinking about can you then encompass those in an easier-to-use Penn type formulation.

The second-line ET registration studies is IV to start, should get across the finish line and launch in '29. We have an agreement with the FDA to do bridging work. We should have a subcu available within 6 months of that launch. Second-line MF is likely to be IV as well given the timing because we want to go fast. But our first-line MF study, we want to do with the subcu from the get-go.

Great. That's super helpful. I promised I wouldn't spend the whole time on 989. So maybe we'll shift gears, but maybe stay on myeloproliferative neoplasms initially before we move to I&I. You alluded to your own V617F. You have this new ASD formulation. Can you just give us a sense of like how that's going so far in the clinic and maybe what the key signals you're going to be looking for out of that in the back half of this year to make a go/no-go decision on that asset versus moving with some of your next-gen or with Prelude?

Yes. No, I mean, firstly, again, it's incredibly important to us. So 617F opens up the rest of MF, particularly but all of p-VERA. And again, mutation-specific approaches are key. It's been frustrating. We knew we didn't have the optimal formulation. We've pushed it in the clinic. We can't get sufficient exposures to hit the target hard enough. We've just switched to ASD and we're testing that now. This year, though, if we present data at the end of the year, it will be on the old formulation. So it will be more like a '27 data set. If this doesn't get there because the target is so important to us, as you alluded to, we have next-gen and we have the Prelude option deal, which is still open, I think it was 15 months when it was signed. The IND is in there on the lead. They have backups as well. So this is not a target we want to miss out on. It's key to us. I don't know if our lead is going to be able to give us what we need. We'll see.

That's good. It sounds like you have a lot of different clinical options. And then you recently launched or in the process of launching Jakafi XR. I guess can you give us any flavor of just what the early days are looking like in terms of receptivity, any surprises in the way it's being used? And then just how are you thinking about what would get you to that kind of upper end of the, I think, 15% to 30% patient conversion range that you and have talked about.

Basically principle. So I have PTSD from this. We got a CRL, but now we all celebrately, we got across the finish line. It was not easy. But we're there, and we've launched, as you said. We priced it at parity to IR. So that's important. There's no issue for payers in that respect. The key is formulary coverage, trying to get upwards of 50% to 70% coverage as quickly as possible. This year's contribution will be modest, I don't know, $10 million, $20 million type thing. Next year will be the first full year with adequate formulary coverage, and we hope to see a year of potentially like $100 million in sales.

And then upwards of somewhere in that analog of the 10% to 30% range, you want to use 20% as a number we're using, which in 31 months, that's what we have left until the end of the LOE is going to be a lot of hard work to get there, right? If we achieve that, we then potentially have it through the early 2030s, maybe up to 2034. Bill has been talking about numbers. If you take that 20% of where we are on our top line, we could have somewhere around $500 million to $700 million product from RUX XR, and that would really help us to bridge that trough period. As Bill says, and he's right, if the company is trading on RUX XR at that time period, we've got a lot of things wrong, right? So we have to be beyond that at that point.

Yes. But even a modest piece of [ that ] is still a meaningful bridge.

Yes.

Shifting gears to, I guess, on oncology, hem-onc, you guys recently reported positive Phase III data for tafasitamab in first-line DLBCL back earlier this year. How are you guys thinking about the opportunity for the drug in that setting and the key differentiating features versus standard of care? And what should investors be focusing on for your upcoming ASCO presentation?

Right. So a quick advertisement. It's a plenary oral at ASCO on Saturday. It's a plenary oral at EHA like a week later. So obviously, the academic community is interested. It's a second positive study in first-line diffuse large B-cell lymphoma in 25 years. Hazard ratio reported in January 0.75, p-value 0.019. Different from the POLARx study in that it's a little bit of a worse population. So we're IPI 3 to 5, they were 2 to 5. We're about 30% ECOG 2 or above, they were 16%. So those are the major differentiators, 899 patients. It's a curative -- potentially curative population, really important data set. We'll show you at those presentations, all the other endpoints, event-free survival, et cetera.

Very important focus on, I guess, 2 things. One is cell of origin data. It's about 50% germinal center, 50% activated B cell. The POLARx data is good. It's on a $1 billion run rate, but it's used almost exclusively in ABC subtype because the germinal center hazards were basically one, that's in keeping with its MOA. We have good data in both data sets. So I think that's one differentiator in both cells of origin.

The other thing to look at, people are very focused on the 2-year PFS, EFS data because if you don't relapse within 2 years, you're usually cured of this condition. So we'll show you that 2-year split as well, and then we'll show you overall survival data as well. So really good for patients, really great to have a positive Phase III in this setting. Bill and the company have been conservative because of the entire market here. We know the bispecifics coming, et cetera. But we think this will add to what we already have in somewhere around the $300 million to $400 million sort of range. There are 30,000 patients every year with first-line diffuse large B-cell lymphoma in the U.S., 50% still get R-CHOP, probably the lower IPIs in the germinal centers. So there's clearly opportunity but we've been measured in how -- what we think the uptake will be.

Got it. And can you talk about your latest expectations for povo in HS and maybe just what the uptake curve there could look like, where it fits in and how potential competitor data later this year could shape that?

Yes. So I think we probably did that endpoint too early when we presented last February. I mean you can't change it once you declare a 12-week endpoint. The reason I say that is we saw the 54-week updates looking really good, right? The HiSCR rates are where biologics are. Pain control is probably the best in the class and beyond. Draining tunnel data is good. So the setup is really good. We think there are about 300,000 patients with HS, about 200,000 get treated if you want to add a branded, say, of 35,000 a year, you have a total addressable market that's upwards of between $7 billion, $8 billion.

There are 3 groups of treatment. There's conventional therapy, antibiotic steroids, there's TNF and then there's IL-17. We have data in both prebiologic and post. That's our desire in terms of getting the label in both. And we want to be potentially used in both Bill spoke about numbers on various calls of around $500 million here. We'll launch early next year. So we should have a full year in '27, and we want to be used in both settings, pre and post biologic. So that's the setup. The data looks good to support that. We don't think that's a hyperbolic number to achieve there. If you add vitiligo and then PN, the 3 indications and should we get them all, about $1 billion or north of $1 billion opportunity for povo for us.

And then lastly, where does Opzelura then fit in? And I know you recently expanded that study. Some of the doc feedback we've heard has been some intrigued just given the in elderly, in milder patients...

The anecdotal feedback is great. The study enrolled so, so well that adding 100 patients each study has made no difference on timeline. So we did that. But what we really wanted to do is control the placebo response rate. So there's no competitor in mild HS. We are the only ones going after it. It's abscess and nodules up to 10 and no draining tunnels. So there could be a significant placebo rate. So having a higher number could help there. So the driver was easy to do it to enroll in like gangbusters, control placebo response rate. Opportunity is another few hundred million on top of Opzelura. So important. And then again, will give us that topical to oral solution in HS, topical Opzelura for the mild, povo for the moderate plus.

Lots more we could cover. But unfortunately, we're out of time. So thanks so much.

Thanks for having us.

Really appreciate it. That was great.

Good afternoon, everybody. Welcome back to the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I'm one of the senior biotech analysts at the bank. It's my pleasure to have our next presenting company here, Incyte. Presenting for Incyte up here on stage with me is Bill Meury, who is, of course, President and CEO. Bill, thanks for making the trip out West to see us.

Thanks, Tazeen. It's good to be here.

So it's been quite the year of transformation for Incyte. So I thought maybe we usually start off by asking for an overview of the company, but I thought I would switch it up a little bit with you. And have you tell me what it's been like to be at Incyte since you became the new CEO a while back last year.

Yes. Thank you. It's a good question. It's been about a year. And I can tell you that I did a lot of diligence before coming in. I had an opportunity to speak with the members of the Board for an extensive period of time. And there have been nothing but good surprises so far. One of the reasons I joined is I thought that the core business as well as the pipeline was somewhat underappreciated. I think there's a lot of substrate and potential for meaningful product flow over the next several years. And that's just going to be important in terms of replacing Jakafi and going beyond Jakafi with multiple growth drivers.

Second, I was impressed with the R&D and commercial capabilities of the company. And I think the discovery group, there's a talented bunch of biologists and chemists and translational researchers, the development group. We have about 10 Phase III studies underway, and they know how to execute. Commercial team is wired into the markets that we're in. And then financially, the company is in a good position. Right now, we have strong revenue growth and cash flow and a growing balance sheet. We're squarely focused on Act 2 and just going beyond Jakafi. And since I've inherited a good business, I think the company has achieved most of its major milestones over the last 12 months. And I think the growth profile of Incyte post '29 is much clearer today than it was even a year ago.

Yes. And you've been very passionate about talking about that. So we'll go into some details. So maybe let's talk about the current commercial lineup, especially Jakafi. So I think it still manages to surprise people, the uptake that it gets every quarter, given that it's a very mature asset. We're actually approaching the LOE for it. Can you talk to us about what some of the drivers you've seen over the last year that allow it to keep bringing in new patients or circling patients back?

Yes, it is pretty remarkable. It's year 15 on the market. This quarter, as you know, sales were up about 7%, 6% of that was pure demand. We see broad-based growth across the 3 indications. So MF, PV and GVHD. MF and GVHD are low to mid-single-digit growing indications. PV is plus 10%. And by the end of '26, it will be the largest indication for Jakafi. It's a standard of care treatment. It's got a lot of support from prescribers, and it has excellent formulary coverage and you put those 2 things together and you have a sustainable growth story. And this year looks strong, and we expect the same for the next couple of years when we lead up to 2028.

Okay. So how should we be thinking about the switch rate to Jakafi XR? You recently got that approved. How important is this for life cycle management?

Yes, it's a good question. XR is a bridge for the company. And in terms of conversions, and there's models out there, as you well know -- analogs, you can look at. We estimate that we can convert, let's call it, 20% of Jakafi IR. So on a relative basis, you'd say that's modest. But in absolute terms, that could be $0.75 billion in sales. It's a once-a-day version of a standard of care. We know that with a chronic symptomatic condition, when you miss doses, there can be a loss of control.

When you go to a once-a-day formulation, the adherence rate is going to be 15% to 25% better than BID. The way I think about conversion right now: in 2026, think about measured early uptake with a step-up in conversion tied to access in '27. So '26 will be about formulary coverage. Conversion rates will be in the low to mid-single digits. And then in '27, that's when we expect to really accelerate the rate of conversion. And by the time you get to early '28, we'd like to see that number around 20%.

Okay. And is there a subgroup of patients that you think will be earlier in conversion?

There's definitely a subgroup of physicians, early adopters. We also believe that in the GVHD market where patients are on multiple therapies, a once-a-day version of Jakafi may be more favorable. And there are also certain channels where we believe conversion can be accelerated. And the program is being launched right now. In fact, our sales organization, both on the East Coast and the West Coast has launch meetings this week. Interactions with health plans have already started. And the key metric, and we'll be talking to you about this on each quarterly call, will be: what does the formulary coverage look like, how rapidly can we achieve it? And at that point, you can really start to drive conversion.

Okay. And then just in general, what is the sentiment at Incyte about the time it will take to get on to formulary coverage? Is there anything complicating about this that would make it longer than what you would think?

Yes, it's a good question. It's the right question. So we priced Jakafi XR purposely at parity to Jakafi IR. And that was to enable fast formulary coverage. And I would expect that in a 6- to 9-month period, we're approaching 50% or more formulary coverage. And we'll focus on the top PBMs and the top plans. And I would hope we've made some meaningful progress by the end of the year, which gives us just over 6 months of time.

Okay. So let's talk about Opzelura. It's received phenomenal reviews when we talk to physicians about it. And all the survey work indicates like the drug is really efficacious, so efficacious that the amount of drug that patients need seems to be much smaller than we thought. So is that a good thing?

Is that a good thing? I think it's a good thing that when a dermatologist thinks about a treatment for AD that it's topical, they know that Opzelura is superior to TCI and for long-term use is superior to a topical corticosteroids. Yes.

So for the -- I guess, the patients on the milder end of, let's say, AD, for example, do you think that you could make up for it with more patients over time as opposed to us all counting the number of tubes per patient, which seems to be lower than what initially was thought?

I do. If you -- the business between now and 2030 has the potential to grow at a 10% to 15% 5-year CAGR, which means globally, we expect Opzelura to do almost $780 million this year, and we're just under $800 million. By 2030, we expect that number to be about $1.3 billion. Right now, we know that the underlying growth in the U.S. for AD and vitiligo is very strong. And there's just 2 metrics that we looked at to get to your question. What is our share of new patient starts? That will be the measure of the health of any business in biopharma. We're at 46%. You also look at what are your new patient starts on a year-over-year basis. And so in the first quarter of '26, new to brand or new to patient starts for Opzelura were up 30%.

And so the fundamentals of the business are very strong, and I think it's because of what you said, it performs well. And we have 20,000 writers, and we have very good formulary coverage at this point. And so we just have to keep our foot on the gas and continue to drive the business organically. And then, of course, we would layer in the international launch of Opzelura for AD, which is in the second half of this year, and we may have an indication for HS. And those are the 3 components of growth for Opzelura over the next 5 years.

Okay. Yes. So since you mentioned the ex U.S. launch for Opzelura, how are you thinking about that?

Internationally, Opzelura is available for vitiligo. And in 2025, it did roughly $130 million in sales. We didn't have an indication for AD. We get the indication for AD in the second half of '26, and the AD market is about 5x the size of the vitiligo market. And so I expect it could throw off $200 million to $300 million in incremental sales over the next several years. The first country we're going to launch in, in Germany, where we have reasonable pricing, and we'll also launch in the other EU 4 countries.

Okay. What is the pricing differential between U.S. and Europe just directionally?

Depending on the country, it can be about 50%. But in Germany, it's better.

Okay. So how should we be thinking about the rest of this core business? We talked about Jakafi, we talked about Opzelura. As we approach 2028, you've done a good job of letting people know where you think sales might go to. Obviously, they're going to decrease because you're going to lose exclusivity. But what is the floor? Maybe just remind us what you think it's going to be? How long it will be there, and then we can move into talking about mCALR?

On a revenue basis.

Yes.

Yes. The core business without heroic assumptions about the other products, Monjuvi and Zynyz and we put povo in there, should be at least a $3 billion to $4 billion business, which is this core business growing at roughly, let's call it, a 20% CAGR. This quarter, our core business was up 63% year-over-year. And so it is in very good shape right now. What will be key is that when we launch Monjuvi for frontline DLBCL that we garner a reasonable percentage of that market.

Now you have Polivy and you have Epkinly, but there will be a place for Monjuvi, and we'll share data on our frontline DLBCL study, and there's only been 2 positive studies, Polivy and ours. On top of R-CHOP at the ASCO meeting, and people will be able to see the PFS, which we reported in the press release, but also how the product does across subgroups, different cells of origin, ABC and GCB. This was an IPI 3 to 5 population, so a more severe population, more complex patient group. And from our perspective, a 10% share of the frontline DLBCL market, which is modest in relative terms, doubles the size of Monjuvi. Then the povo launch is going to become very, very important, which we'll introduce in early 2027. We're currently discussing with the FDA the application. But the business right now with those 5 assets I think, reliably sets, as you put it, the floor for the company.

Okay. Maybe let's spend a minute on povo for HS. So where do you think in that treatment regimen this can fall into? It's going to get crowded pretty quickly? And what do you think are the special attributes here that we should be aware of?

HS is one of the most difficult dermatological conditions you can have other than maybe advanced skin cancer. There's no FDA-approved oral anti-inflammatory. It's a multi-cytokine disease. Povo is a multi-cytokine inhibitor. I think we're going to capture patients at 2 inflection points, pre-biologic and post-biologic. If you look at the data from our Phase III, you have biological efficacy, HiSCR 50, 75, 90 and 100, pain relief, drain tunnel clearance. And so I think that the market is structurally set up for an oral anti-inflammatory and for sequencing oral to biologic.

Now that's not to say that it's only going to be used prebiologic. I think it will source patients from both the prebiologic setting as well as the post-biologic setting. We know that IL-17s work. They don't work for everybody. There are patients on those drugs with active disease, not getting pain relief. There can be some wear-off. I think they would cycle right off of 17 onto an oral anti-inflammatory in this case, povorcitinib. And so our job right now is get it approved, broad label and wire the launch for success.

What is the proper range of pricing to assume?

It's a good question. There's a corridor in the market. If you just talk about WAC prices for a minute. At the low end, it's about $7,000 a month. At the high end, it's north of $10,000. We will work within that corridor. And as we get closer to launch, understand what the label looks like, we'll decide what the final price point is. But this will be about volume and establishing povo as a legitimate option in both of those populations.

Okay. And do you get the leverage of the sales force for Opzelura for this?

Yes, it's a good question. We get a lot of leverage out of it. We'll expand the sales force to call on some HS specialists, but most of the infrastructure is in place, and there is a lot of overlap.

Okay. And from the time it gets approved, how quickly can you start marketing it?

So we expect an approval at the end of 2026. I would say we'd have a launch all raring by first quarter of 2027. And one other point is Opzelura, if it gets positive data in HS in mild-to-moderate HS, which will get those results in the fourth quarter of 2026, we have a topical to oral solution and the leverage point that you just made is highly relevant to both products.

Okay. We'll come back to povo later, but I wanted to spend some time on mCALR. So this became -- data -- you started presenting data for this a couple of years ago, and it became a little bit more prominent last year. So I think when we have conversations with investors, MF, I think largely people understand what role it could play. We could talk about that for a minute, but I also want to spend some time on the potentially bigger indication, which is ET. So maybe let's start with ET and then we can go back to MF.

Yes. So we'll start the Phase III trial in the next several weeks. We have agreement with the FDA on a Phase III study design. I think the important thing when you think about ET is to stratify that market. And you have patients, half of 20,000 patients that are doing fine on hydroxyurea. But you have the other half of patients, which is about 10,000 patients, who do not achieve a complete hematological response, not because hydroxyurea is not an effective cytoreductive agent, but because it's very difficult to get to the 1,000-milligram dose where you can get those complete responses. Those patients have residual symptoms, residual thrombotic risk and albeit low residual transformation risk. Those are patients in their 40s or 50s. They'll live with ET for a good portion of their life.

So 989 achieves a complete hematological response, as you know. It varies by type, but roughly 80% and has a disease-modifying benefit in terms of the reduction in VAF. This would fundamentally change the way ET is treated from hydroxyurea, which is a trade-off drug to a disease-modifying mutation-specific targeted therapy in 989. And I think that it will reshape the way hydroxyurea is used today, assuming we take what we produced in Phase I and replicate that in a Phase III study, and we've talked about the design of that study, as you know.

Yes. So for physicians, when we talk to them, they say that, that specific patient population may not feel the need to be on therapy because they're not as advanced as an MF patient. So what's your market data research telling you on that?

Yes. If you look at patients with a CALR mutation in ET, they have very high platelet counts. And they're not achieving a response with hydroxyurea. And so the reason why a physician would say, well, it's a small number of patients is think about all the people with ET. It's like over 100,000. But if you look at the CALR population, it's roughly 20,000. And we're saying half of that 20,000, 10,000 is the target market for 989. And I don't -- I haven't met anybody that has not commented that ET for CALR patients is like a ticking time bomb. The disease does have the potential to cause thrombosis and transform, and they want to get platelet counts into a normal range. In this case, it's less than 400. And so I think if you stratify it the right way, this targeted therapy has utility in that part of the market.

Okay. So you're going to start your Phase III.

Yes.

How long do you think it will take to enroll that study?

From first patient and the last patient, you're probably looking at a 24-month period for enrollment and then you have, of course, 6 months of treatment.

Okay. In the meantime, do you have plans to show any follow-up data from previous data sets at medical meetings?

Yes, it's a good question. So at the EHA meeting in the middle of this year, the last data set we had was 55 patients at week 24. And at the EHA meeting, we will have 110. And so you'll see more patients at week 24.

Okay. And so what metrics should we be looking at there?

Yes, complete hematological response is namely the -- and you look at VAF. And you'll see that unlike in MF, which is a much more complex aggressive condition, the VAF reductions in ET are more pronounced and are stronger than even what we showed at ASH.

Okay. So that's ET. So let's now go to MF. So you've shown impressive data for that subset of the population already. Remind us what part of MF patients have the mCALR mutation?

Yes, it's a good question. About 35% of patients with MF have CALR mutation. Roughly speaking, it's probably almost 10,000 people.

And so how easy are these patients to find? Are they already types, gene types?

Yes. That is pretty routine these days. It's a good question. And we have not had any challenges in enrolling patients in our Phase I trial. I think the NPN community is especially focused on moving away from broad pathway nonspecific treatments to -- just like in other areas of oncology to mutation-specific targeted treatments.

Okay. So for CALR patients that have been on Jakafi, what are additional challenges that they've had relative to the patients who don't have the mutation?

Yes, it's a good question. This isn't widely known. There is data in the literature, and we will share data. Response rates with JAK inhibitors in CALR patients are lower than what you see in the overall population. So for example, if you look at the label for Jakafi, it achieves an SVR35 of between 30% and 40%. I think it's 29% and 40%. But in a CALR patient, it could be like 20%. And so it is a unique population of patients where we think 989, our monoclonal antibody can have a lot of utility.

Okay. So it does look like other companies, larger companies are also looking at this subset of patients. What do you think that is?

I think -- well, it goes to what we believe is a trend in MPNs, which is the JAK-STAT pathway has been -- is fully understood and exploited. But more and more, they're looking to segment the population, match therapies with the biology. And so I think we will see more and more work being done across MPNs, whether it's 989 with CALR or our 617F, so that precision oncology enters the area of MPNs.

Okay. Are there other mechanisms outside of JAK-STAT that you think could have efficacy on CALR patients as well?

Not that's not a broad pathway blocker. I mean this is a mutation-specific targeted approach. And one of the features of 989 is it's exquisitely selective, and you see that in the benefit risk profile. We focus a lot on spleen volume reduction, symptom relief, anemia response, the translational data. Notice every other novel mechanism for MPNs or most novel mechanisms for MPNs are associated with cytopenias and other toxicities, but the benefit risk profile of a monoclonal antibody like 989 is pretty impressive.

So what is the next data update for MF?

So at EHA, we will provide an update. At ASH, we showed data at week 24 in a second-line setting, 36 patients. And when we get to the EHA meeting, it will be roughly 60 patients.

Okay. And trend-wise, numbers do you want them to look the same as they did last year?

Yes, you're looking for consistency in terms of spleen volume reduction, symptom relief and anemia response, and we'll also share where we are with translational data.

Okay. Now what about combination of Jakafi with 989?

Yes, it's a very, very good question. It should be complementary. I think hematologists look at that combination as potentially very interesting. We're going to have data at the end of the year at the ASH meeting in 2026, looking at 989 in the frontline setting as a monotherapy and as a combination therapy. There is a concept, a use case of induction and maintenance where you work with 989 and with Jakafi and then perhaps maintain with 989. That's a concept. We would have to produce data and, of course, secure approval for that.

But Jakafi is dealing with spleen volume reduction in symptoms, but no other part of the disease. 989 is dealing with those 2 things plus anemia, platelets, neutrophils and as well as all the translational data that you've heard Pablo talk about, which is megakaryocytes and CD34 positive progenitor cells. And so it's a much more holistic approach and is focused on restoring bone marrow function, not just a quality of life endpoint.

Right. And what about the survival benefit that Jakafi has? How do you think that could be complementary in combination?

It should be additive, but those are data that we have to produce in long-term studies.

Okay. So let's maybe go back in a few minutes we have, I wanted to touch on povo again. Outside of HS, what other indications do you think are going to be compelling to look at?

Yes, it's a good question because we spend all of our time on HS because we have an NDA submitted to the FDA. But we will get data this year in the middle of the year. Well, we just got the vitiligo data, and we will have data at the end of the year in PN. And so you're talking about 3 indications. I think the primary driver for povo will be HS. But when you look at vitiligo, it's the largest market of the 3, HS and prurigo nodularis. The key with vitiligo is to medicalize the treatment. And the more and more patients and physicians see it as a chronic inflammatory condition, a chronic immune condition, the more likely you can unlock more and more patients.

I think that's key, whether it's AbbVie with their product or Pfizer with their product or Incyte with povorcitinib. One of the benefits that we have in vitiligo is we already have a topical solution with Opzelura. And so we will have a topical to oral option. And what povo does is it unlocks those patients with vitiligo who are not taking Opzelura who have a BSA of greater than 5%, where applying a topical on your body is not always that practical. And in prurigo nodularis, the way I look at it, that's an itch disease. And there's one thing JAK inhibitors are really good at, itch. I think JAKs were made for PN, and they work very fast. And so between the 3 indications, we think we have a product that could do between $1 billion to $2 billion in sales.

Okay. We've talked about this. In terms of vitiligo, so if you pursue povo in this indication, how does Opzelura fit in going forward?

I think they're complementary and they work together. And that's true whether you're in HS or whether you're in vitiligo. Opzelura is very good for people that have less skin involvement. Povo is much more practical for patients who have more extensive skin involvement. I expect very little cannibalization. And whatever cannibalization we get is more than manageable.

Okay. What have you learned from the vitiligo launch so far with Opzelura outside of -- it tends to be more popular and less surface area portions of the body, face, or hands?

Yes. I think that there's a lot of education that is required, educating about the condition, also educating about the time it takes for treatments, whether they be topical or oral to repigment the skin. And I think there are some patients who are willing to live with it. And I think that's a choice. And I think there are other patients that are really looking to manage it, especially when your vitiligo is affecting your hands and your arms and your face and your neck, which are very sensitive areas. There is a major consumer activation component in a condition like this so that patients are aware of the availability of the treatment. And I think with povorcitinib and Opzelura, we can leverage both assets to -- because I do believe you could unlock diagnosis and treatment to a much greater extent with approved orals, ours and others that we haven't been able to do before.

Okay. So how should we be thinking about the catalysts over the next 12 months? So we've talked about upcoming data for a ASCO. What should we be thinking about for ESMO?

So 2 important data updates at ESMO. One is we have -- we'll have an update on our frontline study with G12D in combination with standard of care chemo. So our G12D plus mFOLFIRINOX and GEMNabP. We're very reassured by the data in terms of the objective response rate. The most important component here at this point is durability of response and an estimate on PFS. But we have...

That's in PDAC.

That's in PDAC. In fact, that's exactly right. We have a novel G12D inhibitor, very active combinable with both mFOLFIRINOX and GEMNabP, and we started a Phase III study, as you know. I believe it's an underappreciated asset. I think it's going to start to declare itself and could be an anchor for our solid tumor oncology portfolio in Incyte. We will also provide an update on our TGF-beta x PD-1 bispecific in colorectal cancer. You'll see those data on top of FOLFOX bev, bev and cetuximab. And that is also an interesting opportunity for us. As you know, PD-1s have almost no efficacy in MSS CRC. We showed in our late line or second and third line Phase I study, an objective response rate of about 15%, 23% no liver mets, 12% liver mets. This is a really unique product. No one's cracked the code on TGF-beta x PD-1. The program is still maturing. We are in a Phase III study. It was a calculated risk. It has the potential to be an outlier opportunity for the company. Let's watch the data mature, and we'll see if we have something.

Okay. So that covers ESMO. Then we talked about EHA and we've talked about ASH. So that covers 2026. Did I miss anything?

No, you didn't. Good job.

Okay. And then what data readouts just summarize top level to expect next year?

Good question. In 2027, Well, we'll have updates on the 989 program on JAK2 617, anything coming out of discovery. And we'll probably also have some updates on the solid tumor oncology program. What we'll be in launch mode in is all of our immunology business.

Okay. Perfect. And then last question for me really quickly. Your views on business development, bringing in assets?

Look, it's going to be an important part of our growth strategy like every company. And we're focused on the 3 therapeutic areas that we're in today. I think a deal for Incyte can come in 1 of 2 sizes, a smaller transaction, somewhat derisked, less upfront capital or something that may be a little bit larger that requires more upfront capital. And our balance sheet is a strategic asset right now. What we're solving for in BD is not a revenue gap. It's constructing a portfolio of multiple growth drivers so that Incyte could be a top quartile growth company post '29.

So is it important for you that anything you bring in already generates revenue? Or do you prefer it not yet be closer to it, but not yet.

It doesn't. I think business development for revenue stage assets, there's not a lot of return left for the buyer, as you know. Flip side is we're not looking to buy a lot of unbounded downside risk. I think we're looking for things that can contribute to top quartile growth when we hit 2030, '31, '32, which would be entering Phase III somewhat derisked. I think those make the most sense for Incyte.

Okay. Perfect. All right. Thank you. With that, we're out of time. Thanks, guys, for joining.

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.

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.

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.

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.

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.

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.

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

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?

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?

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.

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

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?

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.

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.

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.

Next question is coming from Stephen Willey from Stifel.

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?

Go ahead, Pablo.

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.

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

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?

I just want to -- I want to make sure your question is related to Niktimvo and the Phase III study with Jakafi?

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

Go ahead, Pablo.

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.

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

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?

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.

Next question is coming from Michael Schmidt from Guggenheim.

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?

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.

Next question is coming from Matt Phipps from William Blair.

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?

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.

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

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?

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.

Next question today is coming from Ren Benjamin from Citizens.

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?

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.

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

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?

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?

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.

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

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?

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.

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

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?

Thanks for the question, Brian. Pablo?

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.

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

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?

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.

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

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.

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.

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.

Good morning, everyone. My name is Etzer Darout, Senior Biotech Analyst at Barclays. My pleasure to have Incyte joining us today, day 2 of our conference. With me, I have Bill Meury, President and Chief Executive Officer at Incyte. And to my far right, we have Pablo Cagnoni, Head of R&D at Incyte. Welcome to our conference.

Thank you.

Bill, I'm sure most of our listeners are fairly familiar with Incyte, but maybe provide some introductory remarks, maybe some of the key points around the business and the pipeline over 2026.

Yes. I mean we think about Incyte across 3 dimensions or therapeutic areas, hematology, which I would describe as the central identity of the company. We have an emerging solid tumor oncology business that really started to declare itself in 2025 at ESMO with our G12D inhibitor for pancreatic cancer and our TGF-beta/PD-1 for colorectal cancer, which are now in frontline Phase III studies. And then we have an immunology business that is anchored today by a topical JAK inhibitor called Opzelura. We expect to get an approval for povorcitinib at least by the end of 2026, early 2027.

And so in that area, we'll have a topical to oral solution, what I think is an advantage across 3 different immune-mediated skin conditions. We think about the business in 2 parts. We have a core business ex-Jakafi, which by 2030, we expect will be as big as Jakafi. That business in '25 did about $1.2 billion, was up 50% year-over-year.

Maintaining the health of that business is critical to navigating this transition in 2029 when we lose exclusivity for Jakafi. And the other part of the business is our pipeline. And we have 7 assets in development where 80% of our R&D investment is centered on. And those programs are continuing to declare themselves.

And so we take our core business, we layer on our pipeline and the company has the potential to go way beyond Jakafi and essentially set a new high watermark for Incyte. That's how we think about the business. The last point I'd make as it relates to business development, just like in any company, it will be used as a multiplier and to extend or strengthen the core business.

Great. Let's maybe start with Jakafi. And when you think about sort of -- it's a major source of revenue today, as you pointed out, but not sort of the growth engine longer term. When you think about sort of how you would internally measure sort of success maybe post Jakafi, is it about revenue replacement pipeline advancement, margin preservation. How do you think about sort of the bar for success for the replacement, if you will, ultimately of Jakafi?

Sure. It's a good question. We're not looking for a one-for-one replacement on Jakafi. If you really think about what we're solving for, it's top-tier growth post '29 and durable revenue earnings and cash flow, which is to say we want to minimize our LOE exposure. And there are 2 parts to the solution. I mentioned this core business ex-Jakafi. That business has the potential to grow at a 15% to 20% 5-year CAGR. So between now and 2030, it should approach $3 billion to $4 billion. And that is about managing the business on a day-to-day basis at a very detailed level.

Now growth is not linear. What's important in that core business is 4 product launches over the next 12 to 18 months. Jakafi XR, frontline DLBCL for Monjuvi, where we just reported top -- well, not top-line results, but released the results of our study, moderate AD indication for Opzelura in Europe, which will be an important incremental growth driver and then povcitinib.

Those 4 launches are important in terms of continuing to drive our core business. And then as we look at our pipeline, we made a lot of progress in 2025. When we started the year, we had no proof-of-concept data on 989. We had no proof-of-concept data on the G12D inhibitor, our TGF-beta by PD-1 -- we had no Phase III data on povorcitinib or combination data with Niktimvo and Jakafi at least from a safety perspective. We have all of those things now. And so what it means is we have much more visibility into the growth profile of the company in order to go beyond Jakafi.

And we'll measure our success this year, next year and the following year in terms of advancing those programs. But right now, we've fundamentally changed the shape and maturity of the pipeline. And I think it's probably more focused and strategically aligned than ever before. And then like I said, the next part of that equation is always BD, which will again will be targeted and selective and it will be used to extend the core, not looking to fill a revenue gap, looking to build the business into the 2030s that is an all-weather business essentially.

Great. And obviously, one of the areas of focus for Ensign is myeloproliferative neoplasms, right, given your position with Jakafi. You presented some NASH data suggesting benefits across spleen benefits, symptoms, anemia benefits for your mCALR program. And when you think about conversations with regulators across these different endpoints, if you will, what do you think ultimately matters most for patients, where if you think about sort of what a pivotal looks like, where you can really sort of highlight the benefits of like an mCALR program in that population of patients with [ MF ]?

Yes, it's a good question. I'll make a couple of comments and then just turn it over to Pablo to expand. First, I think with the data that we shared at ASH at the end of the year, 2025 in both MF and ET, it's a pretty sizable Phase I program. I think we've answered all the threshold questions on 989, our monoclonal antibody targeting mCALR.

On the ET side, we have a very complete -- a very high complete hematological response with pretty pronounced impact on BAF, so both the clinical and molecular end. And I think that the approval of 989 second-line ET is going to quickly reshape the use of hydroxyurea, which is an imperfect treatment. It's the best they have right now.

On the MF side, whether it's spleen volume reduction, SVR35, symptom relief, TSS50, anemia response. What you saw in that Phase I study is frontline efficacy in a second-line setting. And for hematologists out there, Jakafi has been a remarkable drug, made a big difference in patients' lives, but it's a trade-off treatment. You increase the dose, you control symptoms, but cause anemia. If you don't increase the dose, you avoid the anemia, but you don't control the disease.

And symptom relief is common in the treatment of MF, but molecular response is rare, and we have the potential for both with 989. We're going to be starting Phase III studies. We expect to start Phase III studies in the middle to the end of the year in both ET and MF, and we're currently in interactions with the FDA, and I'll let Pablo make a comment on where we're at.

So our goal, as Bill mentioned, is to start at least 2 Phase III studies this year. We started conversations already with FDA. Those conversations have taken place. And we're finalizing the protocol for the second-line ET study. And the important thing is what aspects are we reaching agreement with FDA.

So we need to agree on the population. This study is going to be in all comers, both type 1, type 2 and non-type 1 type 2 patients. We are reaching agreement with the agency on the dosing strategy. We agree with the comments that have been made that when you see the data that were presented at ASH, it seems like patients with type 1 respond at a lower dose. So we want to take that into account in this study, but we still want to keep on study.

The endpoint -- the primary endpoint is pretty straightforward here. It's going to be some version of complete hematologic response. But what we're trying to do with the agency is 2 things. We're discussing maybe accelerating the readout of the endpoint. The traditional approach has been 52 weeks. And then on the other side, incorporate in some manner, not as a primary endpoint, but in some manner, VAF as an endpoint to just get started with the clinical validation of VAF as an endpoint in patients with MPN.

So those things will be -- I'm confident will be finalized by the end of the month. At the latest, we will present the details of the next earnings call in the second half of April, we'll give you full details of the design of that study.

In the second half of the year, as Bill mentioned, our intention is to start a second-line MF study. Those conversations will take place soon with the agency, but we're finalizing a data package. And then we're making a push to start a first-line MF study, whether that's very late this year or early next year. It's a little bit in flux right now, but we're certainly moving as fast as we can.

And I would be remiss, if I don't comment real quick. The other important aspect of the development plan for 989 is a subcutaneous formulation that's going to enter the clinic this month in healthy volunteers. We're going to then move to patients as soon as possible. And by the second half of the year, probably early -- late third, early fourth quarter, we'll have not only the formulation, but we'll have the device, the subcutaneous device that we intend to use at some point. We're going to incorporate as soon as we can into pivotal trials.

And I think I wanted to talk about the anemia response, particularly in MF. When you think about that as it looks like a differentiator to us relative to sort of what you see with JAK1s. Is it really maybe a commercial story? Or could it be viewed as really just game-changing or transformative, I guess, for the patients that can see that anemia response benefit. How do you think that response gets positioned commercially?

Yes. I would say that I mentioned earlier that hematologists will sometimes describe JAK inhibitors as trade-off treatments. And it's because that anemia is a negative prognostic indicator for survival. In fact, if you look at patients with MF and severe anemia, their median survival is quite a bit shorter than those who have MF without severe anemia. The big difference is we're not just avoiding anemia.

And I think Pablo speaks to this quite eloquently, it's proof of mechanism that not only is 989 shrinking the spleen and improving symptoms, but it's restoring normal bone marrow function and red blood cell production. So I think it's a crystal ball into how 989 works.

I think the community is going to have to look at the totality of the data. It's not just about anemia. It's not just about the conventional endpoints, SVR35 and TSS50. But across the continuum, you have what appears to be a superior treatment to the current standard of care. And I think your comments about anemia are, like I said, really effectively describe the benefit that 989 provides relative to anything else to add Pablo.

I think it's an important distinction, as Bill said, because there are drugs that seem to have some impact on anemia, probably because they're less potent than Jakafi and so they're a little bit less toxic for red cell progenitors. What we showed at ASH is something fundamentally different. As you pointed out, in addition to the spleen shrink as a symptom improvement, we showed that more than 50% had really important improvements in anemia. We're talking about 1.5 gram, 2 grams improvement in hemoglobin over time.

And I think one of the questions that has come up is that because of discontinuation with Jakafi? The answer is no. We've talked about this before. We looked at patients with or without a prior washout and the impact on anemia is the same. And we looked over time and the anemia keeps getting better many months after stopping Jakafi. So this is not discontinuation of Jakafi, which is not to say that stopping Jakafi is not a good thing for the anemia, but the effect we're seeing is not Jakafi discontinuation.

And the other important part of the story is when you look at in detail of what's going on in the bone marrow, we showed that we are shifting back to normal production of red cells. And that is basically one of the key elements of disease modification that we're seeing with 989. The bone marrow is starting to normalize again and starting to make normal red cells again, and that's why hemoglobin goes up.

Great. And maybe on the 058 program, the JAK2V617F, I think in our discussions, there doesn't seem to be questions around sort of mechanism or rationale, maybe more around sort of the formulation and whether or not this formulation can overcome limitations of the prior work. Maybe your thoughts around maybe level of confidence for the new formulation for 058 as you think about being able to kind of show, again, clinical benefit with that program.

Let me start. I am confident on the mechanism. V617F is a driver mutation in these diseases. When you hit driver mutations hard enough, you get positive clinical outcomes. I mean we've seen that over and over the past 25 years.

So the question is, how do we hit it hard enough? 058, we knew entering the clinic, there are a couple of challenges, and we made this very clear. The therapeutic window for 058 is relatively narrow. It's not ideal. We thought it was good enough and still do to achieve what we need to achieve. We knew there was a solubility problem. We put a formulation initially in the clinic that we thought addressed it. It turns out we need something different. We introduced a solid dispersion formulation this quarter, and we will have data by the end of the year.

Based on the healthy volunteer data, I'm cautiously optimistic that we'll get to the exposures that we need to see evidence of clinical activity. Now we have 2 backup plans, one internal. We have backup molecules that we think have improved properties over 058. Those are being advanced as fast as possible.

And as you probably know, we signed an agreement with Prelude last year that gives us access to their V617F inhibitor programs. They are managing those programs. We have an option agreement. If at some point in the future, they share the data with us. If the data looks strong, we have the option to acquire -- fully acquire the program. So that's how we are addressing V617F. I think one or more of these approaches is going to get us what we need.

Maybe switch gears to lymphoma and tafasitamab with the update you provided for the frontline treatment in DLBCL. You mentioned R-CHOP is still very much used in that frontline setting. And I guess, how do you see the role of tafasitamab involving in that frontline setting?

Sure. The goal, as most people know, in frontline DLBCL is cure. 40% of people still don't achieve cure. As you know, that space is evolving. You have R-CHOP, which is just 50% of treatment. You have Polivy and then, of course, at some point in the future of Epkinly or this year, we should know whether or not it has utility in the frontline setting.

We have a strong efficacy signal in terms of PFS. We'll release more data in 2026 in terms of activity in subgroups and a manageable safety and tolerability profile. And so when you think about Monjuvi, think about the community setting, high-risk patients, aren't on our trial, and it simply represents an add-on or intensification strategy.

And to put in perspective for Incyte, if we were to get a modest portion of the frontline DLBCL market, call it, 10% or 15%, we could 2x the sales of Monjuvi on an annualized basis. And so I think it's going to play an important role. We don't need to take over the frontline DLBCL market. The data set that we're going to release in 2026 is a fairly competitive or very competitive data set. We'll submit to the agency in the first half of 2026, and we could have an approval at the end of '26, early '27, give or take.

Great. Maybe the I&I franchise with povorcitinib, you have a couple of important pivotal data points this year. Maybe first in PN, how much better does povo need to be relative to a Dupixent, if you will? And just if you think about sort of level setting expectations around that data set and how that can sort of play out or evolve?

I'll make a first comment and then turn it over to Pablo. I don't see whether it's HS, PN or vitiligo sort of a fight to the death or a market share battle or an either/or. I think what's lacking right now in those conditions is an oral anti-inflammatory. And HS, you can take a topical or systemic antibiotic and they got to jump all the way to an IL-17.

In PN, there's no FDA-approved oral. And I think there's an expectation of the dermatology community as it relates to sort of clearance and itch with all these conditions in PN, I think it was made for JAK inhibitors. And so I don't really look at it versus Nemluvio or versus Dupixent, but get the first FDA-approved oral JAK inhibitor for PN, and that's going to have a meaningful role in the treatment of that condition. I think the same is true in HS. And the same is true in vitiligo. Do you want to add anything?

I'll just add one quick comment on PN. I obviously agree with Bill's comments. I think one of the things that povorcitinib does very well, and we've seen that both in HS and in the Phase II and III and in the Phase II in PN is it works very fast.

When you look at itch, 2/3 of the effect that by about 2 weeks. And if you look at the median time to 4 points or greater itch improvement at the higher doses, that's 19 days. That's a lot faster than Dupi. And when you talk to dermatologists, they will tell you that Dupixent works, but it takes a long time to work, particularly when it comes to itch relief. And that's the key symptom in PN patients.

So I think povo is a great drug for PN. Obviously, we're very optimistic about the vitiligo results that we'll have in the middle of the year. And the speed at which it works, both in HS and PN, I think, are going to be, obviously, in addition to the fact that it's oral is going to be a key difference, I think for patients.

And in vitiligo relative to Opzelura, is it going to be a different patient population, complementary treatment? How do you see those 2 sort of evolving in vitiligo?

Yes, it's a good question. We'll have the only topical to oral backbone. And Opzelura has penetrated a fairly high percentage of the diagnosed and treated vitiligo patients, who have a BSA involvement of less than 5%. But for people with a BSA of greater than 5%, clearly, an oral treatment is more practical than a topical one.

And I think we have an advantage going into vitiligo. We're there now. We, of course, have the topical, assuming the data in Phase III are convincing, I think we'll expand that market in terms of diagnosed and treated because you have an oral versus a topical.

Maybe quickly on the TGF-beta PD-1 bispecific program, moving into a pivotal study in colorectal cancer. I think that was a bit of a surprise, if you will, to jump from Phase I to Phase III. Maybe again, talk about sort of what we could see from a differentiation or just data update that can maybe give us more confidence around sort of the pivotal plan around the molecule?

Please go ahead.

So I agree that historically, you sometimes take an intermediate step. The reason why we did this, when you look at the Phase I data, there's a couple of things that are unique. #1, we treated 100 with MSS colorectal cancer. I mean this is not the usual small 12-patient data set that -- so the point estimate for the response rate in that population, I think, is a pretty solid number, which is about 15%, including a lot of patients with liver metastases.

And again, this is third, fourth-line MSS colorectal. When you compare that with every other piece of data published with PD-1, PD-L1 inhibitors, pembro, nivo, atezo, the response rate to those agents is 0, not low, it's 0. There are no responders. And even if you look at the recent combinations with novel CTLA-4 inhibitors in addition to PD-1s, they've seen responses, but none in patients with liver metastases. We have about half of our responders have liver mets.

So that's the strength of the data. We think we have a drug in this population of patients. We combined with chemotherapy with FOLFOXbev, and we showed that the safety is there, they're well tolerated together. So then the question came, is there enough substance here to initiate a pivotal trial? When you look at the history of development of PD-1 inhibitors over the past 15 years, you'll see that a number of times that they have response rate of single agents in the low -- in the single digits to low teens.

When combined with chemotherapy in early lines of therapy, that has delivered about 8 or 9 different approvals. That's the path we're following. We think that the strength of the single-agent responses we've seen in late line, combined with chemotherapy in first line will deliver a positive trial. So at the end of last year, we initiated the study. The study is now accruing patients. And we will provide an update on the data set in combination with chemotherapy towards the middle of this year, just to give you more clarity what we've seen.

And when you think about portfolio construction, the company is going to take some calculated risks. If we're right, it's transformational. If we're wrong, we haven't bet the farm. I think Pablo's point about an intermediate step, given the breadth and depth of the Phase I data set, it made a lot more sense in this case to go into Phase III.

Great. Just maybe lastly on the KRAS program. The early data suggests meaningful activity. How are you thinking about sort of maybe going into maybe earlier line settings, particularly, where you may see lower tumor burden for those patients? How are you thinking about that?

So the data that we showed, as you point out, is a single agent second, third line. We also showed early data in combination with chemotherapy, ASCO GI, showing that we can combine our G12D inhibitor with both main types of chemotherapy in first-line pancreatic cancer, Genmab and FOLFIRINOX. So that's been established.

On the basis of that, we are initiating a Phase III trial in first-line pancreatic. We think that is the most important indication. We obviously are in a race with some competitors are going the same path, and we need to get there as fast as possible. We'll provide an update on that data in the second half of the year, again, just to give you clarity what we're seeing in terms of the combination with chemotherapy. At the same time, we're discussing internally what other indications should we prosecute with the 12D.

And I think you alluded to much earlier lines like adjuvant therapy and perhaps other combinations. We're doing a lot of that background work, and you should expect an update on how we expand this program in the second half of the year.

Great. Bill, Pablo, thank you for joining us, for your participation. And hopefully, you enjoyed the rest of the conference.

Thank you very much.

Thank you very much.

Thank you to our listeners as well. We'll be back shortly with our next session.

Good morning, everyone. I'm Andy Berens, senior biotech analyst at Leerink Partners on day 2 of our Global Healthcare Conference in Miami. We're very happy to have with us Incyte. We have Pablo and Bill. Thank you, gentlemen, for joining us.

Thank you for having us.

It's good to be here.

Yes. It's beautiful weather. Why don't we start? I mean, obviously, I think a lot of people know Incyte, but maybe just a general overview. I mean, you assumed the helm recently, and maybe we could talk a little bit about how the company, what's changed and what's remained the same, I guess, since you joined.

Sure. We're focused on the company against, I think, 3 dimensions. There's a core business ex Jakafi that we estimate over the next 5 years has the potential to reach about $3 billion to $4 billion in sales. So our core business ex Jakafi, which is all FDA-approved marketed products, should be as big as Jakafi by 2030. That's important. And that namely is Opzelura, Niktimvo, Monjuvi. And then we also put in there XR and povorcitinib, which will be approved over the next 12 months. That's sort of priority #1.

Then of course, we have a pipeline of 7 assets where about 80% of our R&D investment is focused. It's in hematology, oncology and immunology. We have 14 clinical studies that will be underway in 2026 against these 7 compounds and that, of course, builds the next growth phase for Incyte, and we'll continue to progress these programs in '26 and beyond. And more and more, I think there's visibility into what the potential of that pipeline will be. It hasn't completely declared itself yet.

But on an unadjusted basis, that pipeline has the potential of 2 to 3x our top line sales unadjusted. And then the third dimension is business development, which like at any company, will play a role in supplementing our growth and extending the core franchise. And that's how we think about the business. That's how strategic operational and financial decisions are made against those 3 areas.

Okay. Why don't we start, I guess, with Jakafi, and then I think we'll probably very quickly shift to the pipeline and things in development that you mentioned. But Jakafi has been a huge success for Incyte. There have been other JAK inhibitors for a while. There were concerns about competition. You have an XR formulation. You have other compounds that are -- we'll talk about in the pipeline in myelofibrosis and myeloid diseases. But how should we think about Jakafi over the next several years importance to the company and the investment thesis?

Yes, it's a good question. In 2025, it was up just around 10% year-over-year. Keeping it healthy is a priority because it's a funding vehicle for the new product launches and for the pipeline. It's got 3 indications, as you know, MF, PV and GVHD. All of 3 are growing. Our focus right now is maintaining a mid-single-digit growth rate on Jakafi between now and the end of 2028. We'll launch Jakafi XR in the middle of this year, and that will preserve a portion of the Jakafi revenue after it loses exclusivity.

In terms of conversions, and Andy, you know these models, you can assume based on analogs that we could convert about 15% to 30% of Jakafi. I'd like to use a sort of point estimate that's just below the midpoint of about 20%, which means we could preserve about $0.75 billion in Jakafi as we go through the LOE. And then, of course, the more important piece of our whole franchise as it relates to MPNs is in 989, the monoclonal antibody.

Okay. Yes, we'll definitely talk about that one. I just want to kind of get there because I know when we start talking about it, there's a lot to talk about. In terms of pricing, how should we think about pricing for Jakafi going forward?

Yes. We -- the company has done an exceptional job of managing gross to net and the average selling price for Jakafi. It's largely a Medicare Part D product as well as there's some 340B there. It's a relatively stable environment with the exception of migration of the 340B program, which can have an impact on every company's average selling price. I think we have it fairly well managed.

As it relates to XR, it should be in the parity ZIP code. In order to get XR put on formulary, we're going to have to set a price that makes sense, most importantly, for PBMs and health plans and at the same time, makes sense for Incyte. And I think there's a price point that is going to be agreeable to the PBMs and the health plans.

The key thing is to make sure that out-of-pocket costs for patients are not changed and that the net cost of the plan is not higher with XR than it is for IR. It will take us about 6 to 12 months to get formulary coverage. And then most of '27 will be about conversion. The second half of '26 when we launch will be about formulary coverage.

Okay. Well, like I said, Jakafi has been very, very successful. It's been the foundation the company has been built on and generated tremendous free cash flow. One of the things that Jakafi was successful at was you basically defined the regulatory goalposts for myelofibrosis with the SVR35, the splenic volume reduction and then also TSS50, which is a measure of quality of life and symptom improvement. So how difficult is it to then come along? A lot of companies have tried with other compounds to beat Jakafi at those 2 endpoints were essentially created for the molecule.

Specifically today, compounds that are looking to enter the MF space you're talking about?

Yes.

I think when you look at other JAK inhibitors that are out there or other mechanisms that are in development that could be introduced, I think they can be important treatments, but they're really tools for subpopulations, I think more niche in nature and refitting around the margins. I don't believe that there's going to be anything that disrupts the standard of care. In this case, Jakafi over the next couple to several years. I think that's how I see the competitive landscape.

Okay. And your program, so you've got several targeting different subgroups. We'll talk about the CALR. Do you think that those interventions can be Jakafi in symptom improvement and splenic reduction?

I think you have to look at the totality of the evidence when you look -- you're talking about 989 our targeted treatment.

Yes, yes.

And there are both clinical and molecular endpoints that matter in this whole equation. If you look at the data that we produced in Phase I in the second-line setting with 989 in both ET and in MF, it looks like first-line efficacy in a second-line study. That's whether you're talking about conventional endpoints like the SVR35, TSS50 or anemia response when you're talking MF, when you look at the results for 989 in the ET population in terms of complete hematological response or VAF reductions, that is a superior profile on paper to anything that's out there today, including Jakafi.

And if we could replicate the results from the Phase I study in Phase III in both ET and MF, there's a potential for a real changing of the guard in the treatment of both those MPNs. We'll start those Phase III studies this year, midyear and then end of the year. And I think the key piece about Jakafi, Jakafi is an important product and made a big difference in patients' lives. It's a quality of life drug, makes people feel better, but it's also a trade-off product. If you increase the dose to control the symptoms, you can cause anemia. If you keep the dose low, you avoid the anemia, but you don't control the symptoms.

On the ET side of the house with hydroxyurea, which is decades old, there hasn't been a change in the standard of care there. It's also sort of a product that requires a trade-off. Most patients with hydroxyurea can't get to 1,000 milligrams a day, which is dose needed, particularly for patients with high platelet counts to control the condition. I think 989 solves the trade-off with both the standard of care in MF, Jakafi and the standard of care in ET, which is hydroxyurea.

Okay. So why don't we pivot and start diving into 989 and the CALR pathway? What is the role of CALR in MF and ET?

I mean I think in the long run or not even long, in the medium term, our goal is to establish molecule-targeted therapies as a standard of care across all NPNs, Andy. We're starting with ET and MF with 989, which is, as you pointed out, a CALR antibody. And the data that we showed last year in 2 meetings and more recently at ASH clearly shows not only there is an improvement in clinical endpoints, which is what's going to matter for regulatory purposes and what matter to patients on a daily basis, as Bill mentioned, spleen reduction, improvement in symptoms and perhaps more distinct compared with other available therapies, the improvement in anemia that we saw, which was pretty dramatic in over 50% of the patients.

As important as that is, I think the other bucket that is really important is the translational data shows very clearly that 989 is eradicating the disease. It's a molecular targeted therapy eradicating cells that have the driver mutation. We saw that in the bone marrow reduction of mutated karyocytes. We saw that in peripheral blood with the elimination of CD34 positive CALR positive cells. And we see that in the progressive VAF reductions more dramatic so far in ET, but also present in MF.

So the way disease -- the word disease modification gets a little bit overused, but I think what we're seeing is truly disease modification in the sense that 989 can selectively eradicate the burden of disease in patients with ET and MF. I think that's the most important way to look at it in the long run because I think in the long run, that will translate in all kinds of benefits for patients even beyond what we've seen so far in terms of spleen reduction, symptom improvement and anemia improvement.

And Pablo, do you want to comment on the frequency of the mutations?

Yes. So the CALR, which was described, as you know, in 2013, is present in about 25% of patients with ET and about 35% of patients with MF. Now we need to spend a minute on this type 1, non-type 1 story. Type 1 is very clear. That happens probably in about 55% of those mutated patients with ET, maybe 55% to 60%. In MF, we think that frequency is higher. It's probably 65% to maybe upwards to 70%. Those are non-type 1.

The best way to characterize, and there's a small group that is type 2, and then there's a group that is non-type 1, non-type 2. And that is a very heterogeneous group of patients that has characteristics, some of those non-type 1, non-type 2 look more than type 1, some are non-type 2. So it's not as straightforward. I'm now for short, I call them type 1 and non-type 1 just because it's simpler. And the important part is, I think the type 1 is about 65% to 70% of MF and about 55% in ET.

Okay. And the difference between type 1 and type 2 and ET versus MF in terms of what we've seen, and we'll talk about the data with 989 and maybe we can talk about it now if you want. But it seems like there is a difference in activity targeting CALR and why would that be?

So 989, which is our first entry into the space, we've known from the beginning has different affinity for type 1 mutations than non-type 1, specifically type 2 in this case. So we knew there will be a difference in dosing. And we think largely that difference in affinity can be addressed with difference in dosing, but just increasing the dose. That's not to say that the efficacy in non-type 1 will be identical to type 1, but we can get pretty close simply by increasing the dose, which is what we intend to do in pivotal trials.

We are discussing -- we're in the middle of conversations with the FDA, and we're discussing a dosing strategy that we think will in part address this difference in affinity. I think it's important to note also that by the time of our quarterly call in April, we will have clarity and we'll be able to provide clarity on the design of the first Phase III trial in ET, which will be in second-line ET when it comes to population, which we intend to enroll all comers, dosing strategy in order to be able to address the differential affinity for type 1 and non-type 1 as well as the endpoints, including the incorporation of some molecular endpoints in the study.

Okay. And the endpoint, the molecular endpoints could be a pathway for accelerated approval or you don't know yet?

We think that in ET, based on the conversations we've had with the agency, hematologic response will be the approval endpoint. We intend to incorporate VAF as a molecular endpoint whether it's the hierarchy, we'll disclose that in April, but we think there's a way to incorporate VAF as one of the endpoints in the pivotal trial. The other conversation we're having with the FDA is the timing for the assessment of the primary endpoint where there's 52 weeks, which is what's been used traditionally in ET or it can be done sooner.

Okay. And what do you see when you target CALR, when we talked -- you mentioned the SVR35, the TSS scores. What about bone marrow changes? And you mentioned anemia, too, is improving. But what about some of the bone marrow changes? -- the hallmark of the disease?

What we saw and reported at ASH is there's 3 things that are important for, I would say, we see a very clear and very fast reduction of malignant megakaryocytes in the bone marrow. That's really part of the source of the disease, and they lead to the fibrosis in the bone marrow, which we also see improvement on. We saw improvement in fibrosis in the bone marrow. The second part is in peripheral blood, there's very mature cells in these patients that you don't see in normal population that are malignant CD34-positive progenitors. We saw dramatic reduction in those as well.

The third part is we saw an increase of normal erythropoiesis. So basically, cells that make normal red cells increase in these patients on treatment of 989. And that supports the improvement in anemia. So improvement in anemia is truly because of normalization of hematopoiesis in these patients, normal production of red cells in these patients. And then the fibrosis improvement is also important to note in a subset of patients. So overall, every measure of the disease, it's getting better on patients undergoing treatment of 989, and that's reflected on the spleen shrinkage, on the symptom improvement and the anemia improvement.

Is the fibrosis improvement is just to stop it from happening and then it starts to remodel on its own? Or is there some direct impact on this fibrosis reverse?

So malignant megakaryocytes produce mediator cytokines that basically trigger fibrosis. And by reducing those, I think fibrosis start to improve through remodeling. There's no direct targeting of the fibrosis by 989. It's just the reduction and hopefully, over time, elimination of malignant cells in the bone marrow that then allows the bone marrow to regrow normal hematopoiesis and remodel over time.

Okay. And I think you mentioned before that there's no way -- I mean, the FDA is difficult to biopsy, obviously, the bone marrow and there's inconsistencies because you're only getting a small segment. And there's no modality to measure with imaging the fibrosis yet.

We've continued to -- we're receptive to ideas. We've interacted with a number of institutions that have claimed to have a method that can be reproducible and widely applicable because if you're going to run a worldwide study, you need for this imaging assessments to be done everywhere. We haven't seen it, and I don't think biopsy is reliable enough. I don't think the FDA is going to agree to that.

Besides, I'm very happy if we can incorporate VAF and then as exploratory endpoints, we can have things as megakaryocytes and more important perhaps the peripheral. But those are really time-consuming cumbersome. I think they're very important to understand what the drug does, but they are not necessarily the right regulatory endpoints. I think in the molecular side, I think reduction in VAF might be the most -- the one that's going to be most widely applicable.

How much of a reduction in VAF do you think you need to have to see clinical benefit?