INCY
#Hi, <UNK>.
This is <UNK>.
I will take your first two questions, and then I will turn it over to <UNK>.
In terms of the AACR abstract, obviously we will have to wait until those data are presented to discuss them in more detail.
But suffice it to say, that as two costimulatory receptors that can have activity at the level of a T cell, it is an interesting scientific concept to be able to use OX40 and GITR agonism in concert with checkpoint blockade such as PD-1 or PD-L1 inhibition or with IDO1 inhibition.
And so there has been an area of active research that we have had over the past year, and we're excited to be able to share those data.
In terms of the other question, on paired biopsies, this is an active effort of research in our translational sciences and <UNK>'s clinical group.
We now have trials ongoing that we call platform trials where the PD-1 antagonist is dosed either with JAK1 or PI3 kinase delta inhibition, and similarly all oral doublets on the backbone of JAK1 inhibition to study exactly what you alluded to, which were paired biopsies where the on-treatment biopsy is really designed to tell us how we may be affecting the quality and the quantity of the immune cell infiltrate.
So these are clinical studies and translational studies that are ongoing as we speak.
<UNK>.
So, <UNK>, I think you asked the average dose in MF and PV.
So, for the entire brand, the average dose is 10 mg.
The average bottles that we ship is 10 milligrams.
It's about 60% of the bottles shipped.
That is mostly because of PV.
MF patients on average, it is more than 10 milligrams BIP.
But that's ---+ for the brand, it is 10 milligrams BIP.
Okay.
No, I think as we've said, the sequence of available data is different for each of the partners.
So, if you assume that the viability of data is raising their excitement about the potential of the combination, it is also coming with time and depending on when the data is available.
So I would not characterize any their interest as being different.
It's true that with Genentech Roche, we started a little bit later with a narrower program.
So that's the only thing I would say related to that.
But there is certainly a lot of interest, as you know, in the target and in ---+ certainly also in working with us for some of these programs.
Regarding dermatology, I must say, there is no strategic great vision about moving Incyte into dermatology.
As we've said multiple times, we are ---+ the products are leading us in different therapeutic areas.
It is not really us trying to drive them into one place or another.
It just happens that obviously with JAK inhibition, we have a number of indications in dermatology.
The Lilly programs would be done independently by Lilly, and we are not involved more than the cofunding that we discussed and the ability to receive royalties or milestones.
On the topical side, we have decided now it was a little bit more than a year ago to go through the programs.
If there's two programs, we established the right dose and find where it works, where it doesn't work.
There are a number of indications now where we are doing some level of Phase 2 studies, and obviously we will see after that where we go with that.
There is no decision that has been made yet.
It is <UNK> <UNK>.
So you are correct that the study is most likely to be in a post hydroxyurea setting and with the endpoints I discussed.
What we do know at a very high level is that it is smaller than MF and PV in terms of the opportunity.
Beyond that, it's hard to say anything more at this stage to you in terms of its size.
So capmatinib is licensed to ---+ <UNK> here ---+ it is licensed to Novartis.
It is basically ---+ the very traditional kind of deal where there are milestones which I don't think we have disclosed precisely and the royalties.
And the royalties have been disclosed, and they are 12% to 14% depending on the cumulative sales barrier.
Hi, <UNK>.
It's <UNK>.
Just trying to understand your question.
So inventory in Q1, our inventory has been relatively consistent between 2.8 and 3 weeks of inventory on hand.
I don't see any change in Q1 for inventory, but, of course, we do know that the gross to net is impacted by our ability for all-oral oncology drugs because of closing the doughnut hole.
But inventory is not going to affect that.
Hi, it's Dave.
I will try to attempt to answer the question on the milestones.
We announced today that, obviously with the approval of baricitinib in Europe, we will get a $65 million milestone.
That will come through in Q1, and Lilly has stated on US approval once you look to that in terms of the Q2 timeframe.
So it's safe to say that there will be at least a good amount of milestones in Q2.
But Q1, there is just one so far in that, as a result of that, plus with the additional programs we talked about, collaborations between Agenus, Merus and Calithera, there will be a loss in Q1 because the milestones ---+ there won't be enough milestones to offset those one-time R&D costs.
And after that in Q2, there will be substantial ---+ another substantial milestone and some smaller ones that carry in Q3 and Q4.
Hi, <UNK>.
It is <UNK> <UNK>.
I will address your first question and a little bit of your second, but <UNK> will take the backend piece.
In terms of our PD-1 program and the '1210 compound, we are this quarter looking through the data we gathered through dose escalation last year and completed and trying to understand the product's profile in terms of its PK, etc.
We will point you towards the meeting we submit an abstract to and when we present it for any further detail on that.
But we're in the midst of doing that exercise right now.
In terms of the baricitinib negotiations of the Food and Drug Administration and what is going on, I will just have to refer you to Lilly on that.
But Lilly did say in their public remarks that they expect to get to a good point with the FDA sometime soon, and I will leave it at that.
Regarding the economics of baricitinib, obviously for us it's very important because ---+ so there's the milestone which we expect ---+ in fact, in what we described today, we expect that to reach us this year.
And then there are royalties in the 20% to 29% range that will be coming over the next 10 plus years.
So it's going to 2030 for the first patent expiration.
So we look at it as a product that can become very significant for us over the years.
We are very happy to see Lilly moving into a number of new indications where obviously ---+ and that's why we are also opting in for these programs because it will obviously grow the top-line potential and, therefore, the royalty potential for this product over the years.
In terms of calibration in each of these indications, frankly, we need to see the guidance from Lilly, and I would not comment more than what they have said about the fact that it is a very promising and very important product for patients with rheumatoid arthritis.
So the way we look at it is that we look at the US and that is what you are describing, and then we look at the rest of the world and they are fairly different situations there.
In fact, the markets if you think of it that way for these type of products are not very homogenous worldwide.
So you have to take that into account.
If you look at the profile of the product, what we think is that in the JAK1, JAK2 category, baricitinib is fairly unique.
Xeljanz has a different profile, including the JAK3.
We also see in the US that there is an anti-TNF situation that is totally unique in the world, and it has a huge impact on the way these patients are treated.
So all of that can lead to the right position for baricitinib.
There will be fairly significant changes in this market over the next years with availability of different types of products on top of the existing ones.
So I really think there is a huge opportunity.
The clinical profile that came out of the Phase 3 studies is really ---+ was really better than expected from a lot of standpoints, and we are ---+ I am personally very confident that there is a lot of room to make it a big success.
But don't think that the US picture is the same everywhere in the world.
In fact, you see very different types of who is the market leader by country, and the potential to outsell the US on top of the US potential is certainly important also for baricitinib.
Okay.
<UNK> here, so.
I think our priorities are our own internal discovery programs.
So that is something that is the core of what we do at Incyte.
So we are not in a mode of changing that in a way that would be dilutive in any way.
We have protected that team very much in a way where the partnerships we did ---+ were in technologies that were different.
So that was Agenus and Merus antibodies where we didn't have the internal capabilities.
And what we plan is to continue to rely on our internal discovery capabilities and just complement them in the technologies where we are not pregnant.
Concerning Asia, frankly, when I look back at 2016, we can see a number of things that were very successful, including the approval of baricitinib just yesterday, which is the second product from Incyte being approved after ruxolitinib.
So it tells you something about our discovery capabilities.
But when I look back, there's one thing that has been also very successful is the expansion in Europe through the acquisition of the ARIAD team, and it was done in a very economically reasonable way for us.
So we are ---+ we would love to have a similar situation in Asia.
We have not found it yet.
So what we're doing now is starting the planning again in a careful way where we would be establishing a team in Japan to start with to take care of the pipeline ---+ the late-stage pipeline and make sure that we are putting that on a ramp to approval in Japan.
If there were an opportunity to do it through a small transaction, I wouldn't be against it, but we have not found that yet.
Thank you for the time today and for your questions.
And as I said, I look back at 2016 in a way ---+ with a lot of pride because we spoke about the geography.
I think baricitinib moving forward is an important milestone.
We are a company that has discovered two new products that have been approved by health authorities, and obviously the fact that we, for the first time, crossed the revenue line of $1 billion is also symbolically an important milestone.
So we look forward to seeing some of you at the coming investor and medical conferences.
And for now, I will thank you again for your participation in the call today.
Thank you, bye-bye, and happy Valentine's Day.
