Incyte's CEO Presents at UBS Global Life Sciences Conference (Transcript)
September 20, 2012 6:00 PM ET
Incyte Corporation (INCY)
UBS Global Life Sciences Conference
September 20, 2012; 01:00 pm ET
Dr. Paul Friedman - President & Chief Executive Officer
Matt Roden - UBS, Biotech Analyst
Good afternoon. We are going to get started with the next presentation, and I’m Matt Roden, Biotech Analyst here at UBS and we are pleased that you can join us at the Global Live Sciences Conference.
Speaking next is Incyte Corporation. Speaking on behalf of Incyte is President and Chief Executive Officer, Dr. Paul Friedman. As a reminder to everyone, the breakout session is to follow in the Broadway Room, one level down immediately to follow. Paul.
Thank you Matt and good afternoon everyone. I think I don’t know how to work this. Here we go.
So before I start, I have to go through the fine print here. Please note that Safe Harbor rules govern our remarks and forward-looking statements and we ask that you review our latest SEC filings, including our most recent 10-Q for the quarter ended June 30, 2012 for a summary of risk factors that may cause actual results to differ materially from any forward-looking statements.
Now, while we are all appropriately focused on the launch of Jakafi, I’m going to spend the next few minutes describing how our JAK inhibitors are providing us with a pipeline in and of themselves. Just to remind you, JAK inhibitors are a class of drugs that block enzymes called Janus Associated Kinase or JAKs for short.
We initiated the JAK program in the mid-2000’s and we identified two oral proprietary JAK 1 and JAK 2 inhibitors to advance into the clinic and they rapidly achieved Proof-of-Concept in myeloproliferative neoplasms, as well as in rheumatoid arthritis.
This allowed us to establish two important strategic collaborations, the first is with Novartis for our lead JAK inhibitors, Jakafi, for all hematology, oncology indications outside the Untied States and we kept the commercial rights to Jakafi in the United States. The second in the global collaboration with Lilly for the JAK inhibitor Incyte 28050. Its now called baricitinib for all chronic inflammatory diseases.
In November of last year the FDA approved Jakafi for use in patients with intermediate or high risk Myelofibrosis. Jakafi is the first and only product approved by the FDA for Myelofibrosis and it’s also the first JAK inhibitor approved for any indication. And last month Novartis received the European Commission Approval of Jakafi; it’s called Jakavi outside the United States. Also with a broad label, treatment of disease related splenomegaly or symptoms in patients with myelofibrosis.
Now we see a great potential for Jakafi in other hematology/oncology settings. Most advanced is the clinical development program in polycythemia vera, another myeloproliferative neoplasm. A global phase restudy conducted under an SPA and collaboration with Novartis is underway and on track to complete in 2013. There are also ongoing trials in Leukemias, Lymphomas and pancreatic cancer.
The six-month results from the phase II (b) trial of baricitinib in patients with rheumatoid arthritis will be presented at ACR in November and we expect Lilly to start the Phase III program in RA this year. Baricitinib is also in Phase II development as a treatment for psoriasis and Lilly has recently initiated a Phase II trial in patients with diabetic nephropathy. I’ll describe that later in the presentation. We also have a broad and growing pipeline, as well as a productive R&D engine and we are in a strong financial position.
We ended the second quarter with $262 million in cash, excluding $9.5 million of restricted cash held in escrow for interest payments through October on our convertible senior notes. Our cash position at the end of the second quarter includes the $40 million milestone we earned from Novartis, based on the CHMPs recommendation for EU approval of Jakavi.
In addition we expect to earn $60 million when Novartis receives pricing and reimbursement approval for a subset of the major European countries. This will most likely occur in the first half of next year.
We are still using the sell-through method for revenue recognition, which means we defer revenue until the specialty pharmacy ships the product to the patient. We anticipate transitioning to the sell-in method later this year, which means we’ll recognize revenue when our product is received by the specialty pharmacy.
For the first half of the year our gross product revenue was $53.1 million. The gross net adjustment for this revenue was approximately $4.1 million, resulting in net product revenue of $49 million.
Our net product deferred revenue at the end of the first half of the year was $9 million. Our net product revenue guidance for this year is $120 million to $135 million. The low end of this guidance represents an amount we are confident we can achieve and the high end is what we are shooting for.
So now as I update you on Jakafi, for those of you who are interested in learning more about the product, we recently updated the website for both physicians and patients. Just visit www.jakafi.com.
There’s another website that may interest you called www.myelofibrosisawareness.org. This site is hosted by cancer care on behalf of the MPN coalition and can see here that today marks the first national Myelofibrosis awareness day, which is being led by the MPN coalition with support from us. The theme for the day is Empower and its designed to encourage MF patients become more knowledgeable about their disease.
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