On August 4, 2020 Incyte (Nasdaq: INCY) reported 2020 second quarter financial results, and provides a status update on the Company’s development portfolio (Press release, Incyte, AUG 4, 2020, View Source [SID1234562755]).
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"We continue to execute successfully across all aspects of our business," stated Hervé Hoppenot, Chief Executive Officer, Incyte. "Demand for Jakafi (ruxolitinib) is robust and the recent approval of Pemazyre (pemigatinib), as well as those of Monjuvi (tafasitamab-cxix) with MorphoSys and TabrectaTM (capmatinib) with Novartis, add to our momentum. In addition, clinical updates from the tafasitamab and LIMBER programs at the recent EHA (Free EHA Whitepaper) congress, the successful outcome of REACH3, and our plan to submit an NDA seeking approval for ruxolitinib cream at the end of this year, further illustrate the opportunities within our portfolio to drive additional diversification and growth."
Portfolio Update
LIMBER – key highlights
Positive proof-of-concept data for parsaclisib in combination with ruxolitinib in myelofibrosis (MF) patients with an inadequate response to ruxolitinib monotherapy were presented at the virtual 25th Congress of the European Hematology Association (EHA) (Free EHA Whitepaper). Incyte plans to initiate pivotal trials of the combination of ruxolitinib and parsaclisib as both first-line therapy for MF patients and in MF patients with an inadequate response to ruxolitinib monotherapy.
Monotherapy treatment cohorts in the trials of INCB57643 (BET) and INCB00928 (ALK2) in patients with myelofibrosis are being opened for recruitment, and these are expected to be followed by the initiation of ruxolitinib combination trials with both agents. Further development of the combination of INCB53914 (PIM) plus ruxolitinib has been discontinued.
Indication and status
Once-a-day ruxolitinib
(JAK1/JAK2)
Myelofibrosis and polycythemia vera: clinical pharmacology studies
ruxolitinib + parsaclisib
(JAK1/JAK2 + PI3Kδ)
Refractory myelofibrosis: Phase 3 in preparation
First-line myelofibrosis: Phase 3 in preparation
ruxolitinib + INCB57643
(JAK1/JAK2 + BET)
Refractory myelofibrosis: Phase 2 in preparation
ruxolitinib + INCB00928
(JAK1/JAK2 + ALK2)
Myelofibrosis: Phase 2 in preparation
Oncology beyond MPNs – key highlights
In July, the FDA granted approval for Monjuvi (tafasitamab-cxix), an Fc-engineered anti-CD19 antibody, in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) and who are not eligible for autologous stem cell transplant (ASCT). Monjuvi was reviewed under Priority Review and granted accelerated approval based on overall response rate data from the L-MIND trial of tafasitamab in combination with lenalidomide.
Incyte and MorphoSys will co-commercialize Monjuvi in the U.S. Medical and commercial teams from both companies were ready for the early approval and launch activities are already underway, including engagements with prescribing physicians and payors.
In May, Incyte and MorphoSys announced the validation of the European Marketing Authorization Application (MAA) for tafasitamab. Incyte has exclusive development and commercialization rights to tafasitamab outside of the U.S.
Updated results from the ongoing Phase 2 L-MIND study investigating the combination of tafasitamab and lenalidomide in patients with relapsed or refractory DLBCL (r/r DLBCL) were reported at EHA (Free EHA Whitepaper). The results were consistent with the primary analysis and those included in the U.S. prescribing information, and confirmed the durability of the response and measurements of overall survival of tafasitamab in combination with lenalidomide followed by tafasitamab monotherapy in ASCT-ineligible patients with r/r DLBCL.
In July, Incyte and Novartis announced that the REACH3 study, evaluating ruxolitinib in patients with steroid-refractory chronic graft-versus-host disease (GVHD), met its primary endpoint of overall response rate (ORR) at Month 6 and both key secondary endpoints (modified Lee symptom scale and failure-free survival). No new safety signals were observed, and the ruxolitinib safety profile in REACH3 was consistent with that seen in previously reported studies. REACH3 is the largest randomized trial ever conducted in the steroid-refractory chronic GVHD setting. Data are being prepared for presentation at an upcoming medical meeting and for regulatory submission.
Indication and status
ruxolitinib
(JAK1/JAK2)
Steroid-refractory chronic GVHD: Phase 3 (REACH3)1 Primary endpoint met
itacitinib
(JAK1)
Treatment-naïve chronic GVHD: Phase 3 (GRAVITAS-309)
pemigatinib
(FGFR1/2/3)
Cholangiocarcinoma: Phase 2 (FIGHT-202), Phase 3 (FIGHT-302); MAA under review
Bladder cancer: Phase 2 (FIGHT-201, FIGHT-205)
8p11 MPN: Phase 2 (FIGHT-203)
Tumor agnostic: Phase 2 (FIGHT-207)
tafasitamab
(CD19)2
r/r DLBCL: Phase 2 (L-MIND); Phase 3 (B-MIND); MAA under review
First-line DLBCL: Phase 1b (First-MIND)
parsaclisib
(PI3Kδ)
Follicular lymphoma: Phase 2 (CITADEL-203)
Marginal zone lymphoma: Phase 2 (CITADEL-204)
Mantle cell lymphoma: Phase 2 (CITADEL-205)
retifanlimab
(PD-1)3
MSI-high endometrial cancer: Phase 2 (POD1UM-101)
Merkel cell carcinoma: Phase 2 (POD1UM-201)
SCAC: Phase 2 (POD1UM-202); Phase 3 (POD1UM-303) in preparation
NSCLC: Phase 3 (POD1UM-304) in preparation
1)
Clinical development of ruxolitinib in GVHD conducted in collaboration with Novartis
2)
Development of tafasitamab in collaboration with MorphoSys
3)
Retifanlimab licensed from MacroGenics; SCAC = squamous cell carcinoma of the anal canal
Inflammation and Autoimmunity (IAI) – key highlights
The 44-week long-term safety and efficacy portions of both the TRuE-AD1 and TRuE-AD2 Phase 3 trials of ruxolitinib cream in patients with mild-to-moderate atopic dermatitis are proceeding as planned, and the NDA submission is expected at the end of 2020.
Data from the randomized Phase 2 trial of ruxolitinib cream in patients with vitiligo were recently published in The Lancet. The two randomized Phase 3 trials in the TRuE-V pivotal program evaluating ruxolitinib cream in patients with vitiligo are proceeding as planned, with results expected in 2021.
Indication and status
ruxolitinib cream
(JAK1/JAK2)
Atopic dermatitis: Phase 3 (TRuE-AD1, TRuE-AD2; primary endpoints met)
Vitiligo: Phase 3 (TRuE-V1, TRuE-V2)
INCB54707
(JAK1)
Hidradenitis suppurativa: Phase 2
parsaclisib
(PI3Kδ)
Autoimmune hemolytic anemia: Phase 2
INCB00928
(ALK2)
Fibrodysplasia ossificans progressiva: Phase 2 in preparation
Discovery and early development – key highlights
Based on emerging data from the LSD1 inhibitor program, development of INCB59872 has been discontinued. Incyte’s portfolio of other earlier-stage clinical candidates is summarized below.
Modality
Candidates
Small molecules
INCB01158 (ARG)1, INCB81776 (AXL/MER), epacadostat (IDO1), INCB86550 (PD-L1)
Monoclonal antibodies2
INCAGN1876 (GITR), INCAGN2385 (LAG-3), INCAGN1949 (OX40), INCAGN2390 (TIM-3)
Bispecific antibodies
MCLA-145 (PD-L1xCD137)3
1)
INCB01158 development in collaboration with Calithera
2)
Discovery collaboration with Agenus
3)
MCLA-145 development in collaboration with Merus
Potential therapies for patients with COVID-19
There are several ongoing studies of ruxolitinib, conducted by Incyte alone or in collaboration with Novartis, and of baricitinib, conducted by Lilly, in patients with COVID-19. Initial results from these trials are expected in the second half of 2020.
Incyte and Lilly have amended their agreement to enable Lilly to move rapidly in the development and commercialization of baricitinib as a potential therapy for patients with COVID-19, moving financial obligations post-approval.
Status
ruxolitinib (JAK1/JAK2)
COVID-19 associated cytokine storm: Phase 3 (RUXCOVID1; 369-DEVENT)
baricitinib (JAK1/JAK2)2
Hospitalized patients with COVID-19: Phase 3 (ACTT-23; COV-BARRIER)
Sponsered by Incyte in the United States and by Novartis outside of the United States
Worldwide rights to baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis
ACTT-2 agreement with the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health
Partnered – key highlights
In May, Incyte and Novartis announced the FDA approval of TabrectaTM (capmatinib) for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC) whose tumors have a mutation that leads to MET exon 14 skipping (METex14) as detected by an FDA-approved test. Tabrecta was reviewed under Priority Review and granted accelerated approval based on Phase 2 data in first-line and previously treated patients with METex14 mutated NSCLC.
In June, the Japanese Ministry of Health, Labour and Welfare (MHLW) approved TabrectaTM (capmatinib) for METex14 mutation-positive advanced and/or recurrent unresectable NSCLC.
Indication and status
baricitinib (JAK1/JAK2)1
Atopic dermatitis: Phase 3 (BREEZE-AD)
Systemic lupus erythematosus: Phase 3
Severe alopecia areata: Phase 3 (BRAVE-AA1)
capmatinib (MET)2
NSCLC (with MET exon 14 skipping mutations): Approved as Tabrecta in U.S. and Japan
Worldwide rights to baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis
Worldwide rights to capmatinib licensed to Novartis
2020 Second Quarter Financial Results
The financial measures presented in this press release for the three and six months ended June 30, 2020 and 2019 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers.
Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.
1. Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation.
2. Non-GAAP research and development expenses exclude the cost of stock-based compensation.
3. Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation.
4. Non-GAAP change in fair value of acquisition-related contingent consideration is null.
Research and development expenses GAAP and Non-GAAP research and development expense for the three months ended June 30, 2020 decreased 1% and 3%, respectively, compared to the same period in 2019. For the six months ended June 30, 2020, GAAP and Non-GAAP research and development expense increased 145% and 160%, respectively, compared to the same period in 2019, primarily due to upfront consideration of $805 million related to our collaborative agreement with MorphoSys.
Selling, general and administrative expenses GAAP and Non-GAAP selling, general and administrative expenses for the three months ended June 30, 2020 increased 11% and 12%, respectively, compared to the same period in 2019, primarily due to increased headcount and commercialization efforts of our products. For the six months ended June 30, 2020, GAAP and Non-GAAP selling, general and administrative expenses remained relatively flat compared to the same period in 2019.
Other Financial Information
Operating income (loss) GAAP and Non-GAAP operating income for the three months ended June 30, 2020 increased compared to the same period in 2019, due to growth in both product and royalty revenues and milestone and contract revenues. For the six months ended June 30, 2020 we recorded an operating loss compared to operating income for the same period in 2019, on both a GAAP and Non-GAAP basis, primarily due to upfront consideration related to our collaborative agreement with MorphoSys, partially offset by the growth in product and royalty revenues.
Cash, cash equivalents and marketable securities position As of June 30, 2020 and December 31, 2019, cash, cash equivalents and marketable securities totaled $1.6 billion and $2.1 billion, respectively. The decrease reflects the upfront payment and stock purchase related to our collaborative agreement with MorphoSys and was partially offset by the cash flow generated during this six-month period.
2020 Financial Guidance
The Company has reaffirmed its full year 2020 financial guidance, as detailed below. The R&D expense guidance excludes $805 million of upfront consideration paid under the MorphoSys collaboration. The financial guidance also excludes the impact of any potential future strategic transactions.
1. Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the estimated cost of stock-based compensation.
2. Adjusted to exclude the estimated cost of stock-based compensation.
3. Adjusted to exclude the change in fair value of estimated future royalties relating to sales of Iclusig in the licensed territory relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.
Future Non-GAAP financial measures may also exclude impairment of goodwill or other assets, changes in the fair value of equity investments in our collaboration partners, non-cash interest expense related to the amortization of the initial discount on our 2020 convertible senior notes and the impact on our tax provision of discrete changes in our valuation allowance position on deferred tax assets.
Conference Call and Webcast Information
Incyte will hold a conference call and webcast this morning at 8:00 a.m. EDT. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13706620.
If you are unable to participate, a replay of the conference call will be available for 90 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13706620.
The conference call will also be webcast; the livestream and the replay can be accessed at investor.incyte.com.