Incyte Corporation (NASDAQ:INCY)
30th Annual JP Morgan Healthcare Conference
January 09, 2012, 11:30 a.m. ET
Paul Friedman - MD, President and CEO
Cory Kasimov - JP Morgan
Cory Kasimov - JP Morgan
Incyte Corporation, a very exciting time for Incyte with a recent approval and now launch of the company’s first product Jakafi. Here to tell us much more about the story and the launch is the company’s President and CEO, Paul Friedman. And please note that following Paul’s presentation there will be a break out session down the hall to the left in the Olympic room. So with that I’ll turn it over to Paul.
Thanks Cory. And good morning to everyone. Please not that Safe Harbor rules govern my remarks and forward-looking statements, latest SEC filings, including our most recent 10-Q for a summary of risk factors that could cause actual results to differ materially from any forward-looking statements.
The approval by FDA in November. Our first JAK1 and JAK2 inhibitor Jakafi, for the treatment of intermediate and high risk myelofibrosis was obviously very important and highly gratifying to all of us at Incyte. Immediately following this anticipated approval and after rigorous and systematic preparation, our experienced marketing and sales team launch an intensive commercial effort to reach physicians, other healthcare professionals, payers, patients and patient advocacy groups. And while I’m going to describe the launch in greater detail later in the presentation I can tell you that it's going well.
Beyond the launch, we have studied and are studying Jakafi in a number of other indications that could add to its therapeutic and commercial value. Most advanced is the clinical development of Jakafi and polycythemia vera and other MPN. PV patients can exhibit the signs and symptoms similar to those of myelofibrosis and our Phase 2 results indicate that Jakafi is very effective in reducing [disease burden] in patients with PV.
A global Phase 3 study, pivotal study conducted under an SPA in collaboration with Novartis is underway and on track to complete next year. Key programs with two of our strategic collaborators Novartis and Lilly are progressing well in addition to the Phase 3 PV trial in June of 2011, Novartis filed the MAA for Jakafi for myelofibrosis and expects to begin commercializing Jakafi outside the U.S. later this year.
Lilly is advancing our second JAK1 and JAK2 inhibitor rheumatoid arthritis and now another indication moderate to severe psoriasis. I’m not going to have time to describe some of our earlier stage development of discovery programs and I want to convey that I’m confident in the skill and the proven productivity of Incyte’s research team. Sacrifice an important first medicine but it's only the beginning.
We remain in a strong financial position having ended the third quarter of 2011 with total cash with $317 million that doesn’t include 28.5 million held in escrow for interest payments through 2012 on our convertible senior notes. Our cash used guidance for last year is 185 to $200 million and that doesn’t include milestones from partners nor proceeds from stock option exercises.
As I said we received approval for Jakafi on November the 16, the couple of weeks before our PDUFA date, because our sales and marketing preparations were essentially complete, we were able to launch Jakafi almost immediately. Within an hour of approval Jakafi.com our brand website was operational and shortly after that our digital program was initiated and many of the key educational materials were printed and ready to distribute. As a planned frame session was taking place a day we received approval our field force completed training on the final label went through testing to ensure our high level of knowledge and we are ready to start calling on physicians.
Our comprehensive support program Incyte Cares was handling calls within the first two hours within one week the specialty pharmacies had product and began dispensing scripts. This rapid efficient launch coupled with compelling label we received give meaning high confidence that Jakafi has the potential to be a successful product.
With regard to the package insert, final insert, I think it's worth mentioning that the FDA accepted nearly all of our proposed labeling. We were particularly gratified to see that the label included figures showing both symptom and spleen changes in patients treated with Jakafi as compared to patients treated with placebo or best available care. Jakafi is indicated for the treatment of patients with intermediate to high risk myelofibrosis including primary post-polycythemia vera and post-essential thrombocythemia myelofibrosis.
And of the 16 to 18,500 patients in the U.S. we believe 80 to 90% are intermediate or high risk. As shown here is a waterfall plot in the label comparing from COMFORT-I data Jakafi to placebo, and it clearly illustrates nearly all of the patients treated with Jakafi have a spleen volume reduction while the clear majority of placebo treated patients have notable growth in spleen volume over only six months.
The product label also includes some key data to illustrate the efficacy of Jakafi in reducing the symptomatic burden in patients with MF, and here is a table showing the percentage of patients who achieved a 50% improvement in the total symptom score. This score is based on the sum of six core symptoms including abdominal pain, or discomfort pain under the left ribs, night sweats, itching, bone or muscle pain and early satiety.
At least 50% improvement was reached by 46% of patients treated with Jakafi but only 5% of patients treated with placebo had week 24. This scrip is also in the label and it shows the percentage of patients with at least 50% improvement in each of the symptoms it make up that total score. And you can see that all six core symptoms contribute to the improvement in the total score.
Looking at the change in total symptom score for each individual patient at week 24, as illustrated in this waterfall plot, you see that most patients receiving Jakafi experience reductions in symptom burden, while the majority of patients receiving no treatment continue to see their symptoms worsen.
Inclusion of these expensive data, or symptoms in the Jakafi label was an important achievement. We noted in a recent [BioCentury] article by working closely with the FDA that we were able to capture the patient reported outcomes in a manner that was acceptable to the agency, it's not very common and very important to this product. Based on our market research among several 100 treating physicians, we believe this data will be important drivers in the use of Jakafi, almost all physicians in the survey indicated that reducing the large spleens and its debilitating symptoms, that affect the lives daily of MF patients would be an important and much needed improvement. Although these physicians didn’t consider a survival benefit to be a requirement for use, a new data presented at ASH suggest that Jakafi may also provide improved survival.
An updated analysis from COMFORT-I the randomized placebo controlled trial suggest that Jakafi provided a survival benefit over placebo with a hazard ratio of 0.5. This analysis occurred at the time of a planned safety update with a median follow-up of 51 weeks. Although COMFORT-I was not powered to show a survival benefit, we were encouraged by these findings as well as a results from the independent analysis coming up on the next couple of slides. It's a survival from the on-going Phase 2 study. That overall presentation also just made at ASH reported long-term follow-up on patients treated with Jakafi in the Phase 2 study at MD Anderson. These patients represent about two-thirds of the total populations studied in Phase 2.
The MD Anderson patients treated with Jakafi were compared with the matched historical control using criteria that would have allowed these historical patients to enroll in the study. Consistent with the COMFORT-I results these data suggest that patients treated with Jakafi had a survival advantage compared with an historical control group with a hazard ratio of 0.6.
Now the experience from the other center in the Phase 2 study the Mayo Clinic was recently described in a letter to the New England Journal of Medicine and it did not show survival advantage. When you recognize that to achieve and maintain the benefits of Jakafi, it's necessary to remain on an adequate dose to reasons for the different experience at Mayo compared with both the MD Anderson site and the over 90 Phase 3 sites become obvious. There were many more premature discontinuations of subjects participating in the Mayo Clinic site has a result of decisions of the investigators and/or decisions by patients under their care.
When patients are given the opportunity to stay on Jakafi increase survival rates have been achieved in two independent studies. The MD Anderson group also conducted a second very interesting completely internally controlled additional analysis to further investigate survival with Jakafi treatment. The life expectancy of patients with myelofibrosis varies depending on risk factors. So, the investigators at MD Anderson compared the survival curves at Jakafi treated patients by risk category, importantly this was independent of any comparison with the historical control group. All the data analyzed come from patients within the MD Anderson Phase 2 study. And hence it's completely internally controlled. To me this is the most compelling of the slides my personal opinion.
And as you can see here, Jakafi treated patients who are categorized as having high risk myelofibrosis defined by IPSS criteria, have a survival profile similar to intermediate two risk patients. So, by shifting the survival curve of the high patients, the median survival of which historically has been 26 to 28 months, to that the intermediate two risk group, Jakafi treatment abrogates the prognostic significance of high risk status.
As median survival of intermediate two risk patients is in the 44 to 46 month range, so obvious we need longer follow-up with that group to better understand any affects on survival profile for the intermediate two risk patients.
So, not surprisingly given the compelling efficacy encouraging trends in survival and the fact that this the first FDA approved product from myelofibrosis we are seeing a lot of interest in Jakafi. Patient interest is high and the individual shown here is fairly typical as you noted is spleen size decreased and the symptoms improved including a satiety itching which subsided completely with treatment.
We had good and frequent communication over these past years with the two key patient groups that focused exclusively on patients with myeloproliferative neoplasms and have recently broadened our advocacy outreach to include several other cancer groups who expects an interest in collaborating on patient education initiatives and ensuring that accurate and appropriate information is widely available for MF patients, their families and their care givers.
They have been more than 12,000 hits on Jakafi.com since approval, we believe many of these are patients or care givers seeking more information about the disease, the product and the support programs.
We are encouraged by our first market research survey conducted shortly after approval as well as our exchanges with physicians at ASH. Both suggest awareness of actions are already quite high as these physician interest of using Jakafi, our survey included approximately 50 HemOncs who had seen at least one MF patient in the previous two weeks.
Now few key findings include almost four out of five physicians are aware, that Jakafi is approved for use in intermediate to high risk patients. A vast majority of physician survey over 85% intent to use it with the others wanting more information before knowing if they would.
As field force activities just began at the time of the survey most physicians had learned about Jakafi from peer reviewed sources such as conferences and journals adding to the momentum of launch and our ability to reach the physicians quickly was our strong and highly visible presence at ASH including the airport signage depicted here.
The enthusiasm for Jakafi that we observed that our commercial booth was also reflected in the MPN scientific sessions that were very well attainted and was encouraging to see that an Incyte supported a CME satellite symposium entitled myelofibrosis and old disease with new developments had standing remotely with about 600 participants.
Now we have a strong commitment to help ensure that every patient with MF was likely to benefit from Jakafi can get the product. Incyte Care is a comprehensive program to assist patients in gaining access to Jakafi as well as connecting patients to ongoing support and resources during the treatment. Now the financial support in Incyte Care has three major components; the financial support for eligible on short patients which we expect will represent 10 to 15% will provide free drug. For eligible commercially ensured individuals expect to be about 40 to 45% will provide co-pay assistance. For MF patients who aren’t eligible for financial support from Incyte such as those insured by a Federal Healthcare program, we make contributions to a couple of charitable foundations, we expect that 25 to 50% of all Medicare Part D patients will seek some financial help during their treatment particularly to make it through the [doughnut hole] and we expect Medicare to account for about 40% of our patients.
Incyte Cares will provide educational and counseling support to encourage appropriate use and adherence. The program will also provide services to help patients navigate the increasingly complex insurance environment. I think we believe that providing these services increases the likelihood that any patient with intermediate or high risk MF who is prescribed Jakafi will get the product regardless of the ability to pay.
Incyte has established a distribution network for Jakafi of five specialty pharmacies that work closely with Incyte Cares. We selected the specialty pharmacies based on specific criteria including the number of patients they serve, they payer network and their experience with oral oncolytics. And while not all payers have these specialty pharmacies in their network, it's common practice that exceptions were made for orphan drugs because of their relatively low volume.
Additionally, Medicare has in place any willing provider clause which opens up close networks for Medicare patients, that they are orally in launch, the distribution network is operating effectively with excellent communication between the specialty pharmacies and Incyte Cares supporting increased access to Jakafi.
Because MF is a life threatening illness with a heavy disease burden and no approved therapies, we expect nearly all payers to cover Jakafi. While most payers take 90 to 180 days to determine formulary coverage, tiers and restrictions until that time scrips for new therapy are processed as exceptions. There are hundreds of payers and they handle the exceptions in numerous ways, and the exact time it takes to go from sending an enrollment form the Incyte Cares, so we actually have dispensed by the specialty pharmacy to patient varies depending on the patient’s insurance coverage and financial circumstances.
Once the first scrip has been processed for patient’s subsequent scrip tend to flow through quickly as the patient’s coverage and financial assistance have already been determined. Additionally once payers have made a coverage decisions and are no longer processing scrips as exceptions, the cycle time becomes more predictable.
On November the 23 just one week after approval, the first Medicare patient was shipped commercial product. We subsequently had patients covered under the exceptions process across the wide range of commercial Medicare and other government payers. So, to reiterate, the launch is going well.
We continue to expect a steady and sustained uptake of MF. But MF is just the first of many potential indications for Jakafi. The JAK pathway appears to be involved in the growth and survival of numerous other cancers, and both Novartis and Incyte plans involve moving into other MPN, hematology cancers and solid tumors, either separately or collaboratively and both companies are also supporting investigator sponsored trials as well.
Specifically in addition to the ongoing extensions of our Phase 2 and Phase 3 trials in MF, there is the ongoing Phase 3 trial in advanced P vera which I will describe on the next slide. There are also trials in Leukemias, lymphomas and in pancreatic cancer.
The Phase 3 trial in PV cold response is a global pivotal trial we are conducting with Novartis. The protocol was recently amended and importantly the FDA concluded that the amendment does not affect the SPA agreement already in place. The primary dual end point of phlebotomy independence and spleen size reduction remains unchanged. Our proposal to amend entry criteria and reduce the size of the study was accepted the trial now involves a 200 patients randomized one-to-one to ruxolitinib versus best available therapy and we continue to expect the study to complete in 2013 and to obtain FDA approval of the SNDA in 2014.
We are also conducting a Phase 2b trial with pancreatic cancer. This is an area of high therapeutic need as evidenced by the relative lack of efficacy with the existing agents. In pre-clinical models of pancreatic cancer, Jakafi works well in addition since there is a high incidence of severe cachexia in this patient group, we think are very positive effects on cachexia in MF have the potential to be carried over to pancreatic cancer since cytokine over-signaling and hyper catabolism are thought to play major roles in solid tumor cachexia as well.
RECAP is actively enrolling patients and has the potential to generate top line results in 2013. Our strategic alliances with Lilly, Lilly has worldwide rights to our second JAK1 and JAK2 inhibitor for all chronic inflammatory diseases. And as Lilly will describe in his presentation the Phase 2b trial in rheumatoid arthritis patients will complete in 2012 and is expected to result in public disclosures possibly at ULA and/or at ACR. While the final decisions depend on the not yet seen Phase 2b data, plans for Phase 3 are well underway, and we expect the Phase pre-program will start later this year.
Prior to the initiation of the Phase 2b trial we exercised our core developed option for RA, this means we are now responsible for funding 30% of the associated future development cost for the syndication and it increases our royalties up to the high 20s.
Lilly recently began a 240 patient randomized double blind placebo controlled dose ranging of study 2, 4, 8 or 10 milligrams once a day to explore the efficacy and safety of the JAK1 and JAK2 inhibitor in adults with moderate to severe psoriasis. The primary objective is to demonstrate superiority to placebo at week 12, as measured by the proportion of patients with at least a 75% improvement from baseline in their PASI score. And while it is obviously dependent on enrollment and could change currently we expect to see data for the primary endpoint in the first half of 2013.
So, to conclude 2011 has obviously been a pivotal water shed year for Incyte with the approval of our first product Jakafi for the treatment of MF and it's study advancement and other indications. Our second JAK inhibitor for chronic inflammatory diseases is also progressing well with Lilly. And we look forward to seeing a third indication selected with clinical evaluation beginning in 2012.
Beyond the JAK inhibitors are our early stage oncology programs for CMET and IDO inhibitors are ongoing, these both look very promising and are expected to move into Phase 2 trials this year. We have several new proprietary programs in oncology and inflammation that I look forward to describing, once there is meaningful Phase 2 data to report.
Given the knowledge, skill and productivity of our research and development teams, I’m confident you will see other important medicines coming from Incyte in the future. Thank you for your attention and look forward to seeing some of you in the breakout session.
[No Q&A session for this event]
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