Incyte's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Incyte Corp. (INCY)

Q1 2012 Earnings Call

April 26, 2012 08:30 am ET


Paul Friedman, M.D. – President and Chief Executive Officer

Patricia Andrews – Executive Vice President and 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 and Corporate Communications


Rachel McMinn – Bank of America/Merrill Lynch

Salveen Richter – Canaccord Genuity

Eric Schmidt, PhD – Cowen & Co.

Sapna Srivastava – Goldman Sachs

Thomas Wei – Jefferies & Co

Liisa Bayko – JMP Securities

Cory Kasimov – JP Morgan Chase

David Friedman, MD – Morgan Stanley

Matt Roden, PhD – UBS

Brian Abrahams, MD – Wells Fargo Securities

Ying Wang – Barclays Capital

Elliott Savis [ph] – Savis Research [ph]



Greetings, ladies and gentlemen, and welcome to the Incyte Corporation First Quarter 2012 Financial Results Conference Call. A question and answer session will follow the formal presentation. (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 welcome. With me today are Paul Friedman, Incyte’s President and Chief Executive Officer; Pat Andrews, Executive Vice President and Chief Commercial Officer; Dave Hastings, Executive Vice President, Chief Financial Officer; and Rich Levy, Executive Vice President, Chief Drug Development and Medical Officer.

Paul will begin with a brief overview of the quarter, Pat will update you on the product launch of Jakafi, and Dave will describe our first quarter 2012 financial results. Prior to opening up the call for Q&A, Paul will close with a summary of some of our other programs.

Before beginning, we’d like to remind you that some of the statements made during the call today are forward-looking statements including statements regarding our expectations for the launch and commercialization of Jakafi as well as our development plans in other indications.

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 10-K for the year ended December 31, 2011, and from time to time in our SEC documents. Paul?

Paul Friedman, M.D.

Good morning, everyone. The launch of Jakafi for patients with intermediate- or high-risk myelofibrosis is going well. During the first quarter we recognized $19.3 million in net sales of Jakafi and we shipped 25.1 to our specialty pharmacies. Jakafi is an important advance for patients who suffer from this progressive and life threatening disease.

Given the compelling benefits it provides in terms of spleen reduction and symptom improvement, the encouraging survival data recently published in the New England Journal and the fact that this is the first FDA approved treatment for patients with MF, it’s not surprising to me that interest in Jakafi is high.

Additionally, last week our partner Novartis received recommendation by the Committee for Medicinal Products for Human Use, the CHMP, for approval of ruxolitinib, the treatment of disease related splenomegaly or symptoms in adult patients with primary post-polycythemia vera or post-essential thrombocythemia myelofibrosis. We look forward to seeing patients and physicians outside the US have access to the drug.

The positive CHMP opinion means that Incyte has earned a $40 million payment from Novartis and will earn a second payment of $60 million once Novartis receives reimbursement and pricing approval in specific EU countries. In the EU, the European Commission generally follows the recommendations of the CHMP and the decision will be applicable to all 27 EU member states.

In addition to the ongoing extensions of our Phase II and Phase III trials in MF, Incyte and Novartis are conducting a global pivotal Phase III trial called RESPONSE in patients with advance polycythemia vera and we continue to expect the RESPONSE study to be completed in 2013 with our goal being to obtain FDA approval of the SNDA in 2014.

There are also a number of ongoing investigator-sponsored trials in leukemias and in lymphoma, and then there is the Incyte-sponsored trial in pancreatic cancer with that expected from that trial in 2013.

So for now, I’ll turn the call over to Pat and then to Dave.

Patricia Andrews

As Paul said, the launch is going well. Our launch tracking surveys, as well as feedback from our field force, suggest that physicians who have tried Jakafi are impressed by how quickly the product works and how dramatically it improves the debilitating symptoms and splenomegaly that affects so many patients with MF.

In the near- to mid-term, we remain confident that this positive initial experience will lead to a steady increase in the use of Jakafi in patients with severe or moderate symptoms and/or splenomegaly.

Longer term, as we build awareness of the benefits of Jakafi and the burdensome progressive and life-threatening nature of MF, we expect that use of the product will gradually expand to include intermediate or high-risk MF patients with any degree of symptoms and/or splenomegaly.

While it’s still early on in the product launch, I’d like to describe a couple of factors that we think drove our first quarter sales and why we continue to believe that our launch will build gradually. First, since we’ve launched Jakafi in November, we’ve conducted a series of market research surveys with hematologist-oncologists that are remarkably consistent with positive feedback from the field, as well as our own prelaunch market research.

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