Incyte Corporation Q2 2010 Earnings Call Transcript

Incyte Corporation Q2 2010 Earnings Call Transcript
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Incyte Corporation, (INCY)

Q2 2010 Earnings Call

August 5, 2010 8:30 a.m. ET

Executives

Dr. Paul Friedman – President and Chief Executive Officer

Patricia Andrews – Executive Vice President, Chief Commercial Officer

David Hastings – Executive Vice President, Chief Financial Officer

Richard Levy – Executive Vice President, Chief Drug Development and Medical Officer

Pamela Murphy – Vice President, Investor Relations/Corporate Communications

Analysts

Tom Russo – Robert W. Baird

Rachel McMinn – Bank of America/Merrill Lynch

Ryan Tochihara – Oppenheimer & Co.

Liisa Bayko – JMP Securities

Eric Schmidt – Cowen and Company

Joshua Schimmer – Leerink Swann

Presentation

Operator

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» Incyte Corporation Q2 2009 Earnings Call Transcript

Greetings, ladies and gentlemen, and welcome to the Incyte Corporation’s Q2 2010 financial results. (Operator instructions.) As a reminder this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Pamela Murphy, Vice President Investor Relations and Communications. Thank you, Ms. Murphy – you may begin.

Pamela Murphy

Good morning and thank you for joining us. On the call today are Paul Friedman, Incyte’s President and Chief Executive Officer; Dave Hastings, Executive Vice President, Chief Financial Officer; Rich Levy, Executive Vice President, Chief Development Officer and Medical Officer; and Pat Andrews, Executive Vice President, Chief Commercial Officer.

To begin, Paul will review recent developments at Incyte and Dave will follow with a discussion of our Q2 financial results. We’ll then open up the call for Q&A.

Before beginning we’d like to remind you that some of the statements made during the call today, including statements regarding our plans and expectations for our drug development programs including the timing of our clinical trials, regulatory submissions, and the potential safety and efficacy of our compounds, as well as the expected financial results and guidance are forward looking statements. These forward looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our Form 10Q for the quarter ended March 31

st

, 2010, and from time to time in our SEC documents.

Paul?

Paul Friedman

Okay. Thanks, Pam. Good morning to everyone. Our most advanced clinical programs are moving forward as planned. Our news flow for later this year is strong and we’re making good progress with our earlier-stage programs.

We announced today our decision to exercise the option to co-develop Incyte 28050 with Lily for rheumatoid arthritis. Based on the phase II results we’ve seen so far we believe that 28050 represents a major commercial opportunity, and this decision dramatically expands our potential financial upside. And you will remember when we explained our rationale for picking Lily – one of the major drivers was this opportunity. And so with the results that we’ve seen we feel completely comfortable in making this opt-in decision.

As a result of this decision we plan to fund 30% of future development costs up to regulatory approval for 050 in RA and our tiered royalty rate range would increase from up to 20% up to the high 20s.

During our first call in May I described positive 12 week ACR scores for 050 in what was then an ongoing six month phase II dose ranging trial. All the patients have now completed the entire trial. Obviously we’ve seen the data and we look forward to sharing these results with you in November at the American College of Rheumatology meetings.

Just to remind you, this phase II trial included RA patients who were considered to be inadequately controlled by any disease modifying anti-rheumatic drug therapy including patients previously treated with biologics, and we had a significant percentage of such patients. And the positive results we’ve seen with 050 thus far, including again, those patients treated with biologics, suggests that the compound has the potential to be of value for a broad range of RA patients.

The results also suggest that 050 may well provide advantages over existing DMARDs as well as other oral compounds and biologics currently in development, including but not limited to better tolerability and to once a day oral dosing. The protocol for the upcoming phase II-B trial is just about final and the study is on track to begin this fall.

Now switching to Incyte 18424, our most advanced JAK1 JAK2 inhibitor for oncology, both phase III trials in myelofibrosis patients have been fully enrolled for some time and the trials are progressing as planned. Release of the top line results for the US trial COMFORT I is still expected in December with full results for both COMFORT I and the European trial COMFORT II, for which Novartis now has responsibility – results for both those trials are likely to be formally presented at ASCO. Our plans to file the NDA for 424 in the first half of 2011 remain unchanged and key initiatives, such as manufacturing, packaging, labeling and distribution are already underway to support this timeline.

We’re continuing to prepare for the potential commercialization of 424. We’ve completed a significant amount of research into the treatment practices for myelofibrosis and we have a good understanding of the educational needs around the disease and its pathogenesis. We recently created appropriate educational materials including a website,

www.mpnconnect.org

(mpn for myeloproliferative neoplasms) for physicians and print materials appearing in a number of hematology/oncology medical journals such as

Blood

and the

JCO

, the Journal of Clinical Oncology. These efforts are currently directed to physicians, and we intend to reach out more broadly within the MF community with additional educational initiatives and materials over the next year.

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