Incyte Genomics Inc 2026 Q3 Earnings Call

Good morning and welcome to Incyte's third quarter 2026 earnings conference call. Before we begin, I encourage everyone to go to the investor section of our website to find the press release, related financial tables, and slides that follow today's discussion. On today's call, I am joined by Bill, Pablo, and Suky, who will deliver our prepared remarks. Steven, Dave, and Mohamed will also be available for Q&A. I would like to point out that we will be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I will now hand the call over to Bill.

Thanks, Alexis, and good morning, everyone. As we look at the first nine months of the year, we have made meaningful progress against the strategy we laid out for Incyte. That strategy has two fundamental components, scaling the core business beyond Jakafi and advancing our late-stage pipeline to drive the next phase of growth. The core business is the foundation that gives us the scale to navigate the 2029 transition and fund R&D. Layering the pipeline on top of that gives us the opportunity to build a significantly larger company over the next decade. We now have several compounds in phase III development, including mutant CALR antibody for MPNs, a Protein S modulator for von Willebrand disease, a G12D inhibitor for pancreatic cancer, a TGFβR2×PD-1 bispecific antibody in colorectal cancer, a CDK2 inhibitor for ovarian cancer, and a JAK inhibitor currently under regulatory review in HS.

We have increasing confidence in the biology behind these programs and believe we have taken meaningful risks out of them as they have advanced. That does not mean the risk is zero, but increasingly the risk we are managing is execution risk, running high-quality phase III programs, enrolling them on time, and achieving the regulatory milestones in front of us. Those are things we directly control, and that is our focus today. We are fully funding and resourcing these opportunities, leaving nothing to chance, and if we deliver against them, we believe the value creation potential is substantial, and that is how we should ultimately be judged. Now we will frame the quarter around three themes. First, key business performance. Every product grew year-over-year. Jakafi had another strong quarter with growth across all indications, and sales from our core business, excluding Jakafi, increased 37% from prior year.

Second, we achieved important regulatory milestones, including the approval and launch of OPZELURA for moderate AD in the EU in the third quarter. In parallel, the NDA reviews for MONJUVI in frontline DLBCL and povorcitinib in moderate to severe HS are well underway. Third, we continued to advance our late-stage pipeline, including trial initiations and expansion efforts for key programs like G12D, TGFβR2×PD-1, and INCA033989. I will now cover the quarter in more detail and then hand it to Pablo to expand on the progress across our pipeline. Total revenue for the quarter was $1.56 billion, representing growth of 14% year-over-year. Total net sales in the quarter were $1.32 billion, up 14% versus the prior year. Growth was broad-based and led by OPZELURA and our hematology and oncology franchise, while Jakafi remained a significant contributor.

Jakafi franchise net sales in the third quarter were $827 million, up 4% year-over-year. Underlying demand remains strong, increasing 12% with growth across all indications led by PV. Net sales growth reflects expected pricing dynamics during the quarter, including the impact of the CMS GENEROUS Model. Formulary coverage is expected to exceed 80% by year-end. The combination of increasing uptake here and expanding market access keeps us on track to achieve our full year-end target of roughly $50 million in XR net sales and supports our goal of retaining 10%-30% of the Jakafi business by 2029. Now to our core business, ex-Jakafi, which is one of the clearest indicators of transitioning the company.

Net sales from our core business excluding Jakafi were $490 million, representing a 30% increase versus prior year, reflecting contributions from key growth brands, namely OPZELURA, NIKTIMVO, ZYNYZ, and MONJUVI. The growth across brands and geographies strengthens the outlook for the company as we see this business growing to $3 billion-$4 billion by 2030. OPZELURA net sales were $255 million in the quarter, an increase of 36% over prior year. Net sales were driven by increased demand across geographies and favorable U.S. pricing dynamics resulting from the agreement with CMS related to the OPZELURA line extension. On a pro forma basis, which adjusts the third quarter of 2025 for the favorable impact of the Medicaid line extension settlement, total OPZELURA net sales increased 21% over the prior year period. Now we will break down the U.S. and international performance.

U.S. net sales in the third quarter were $208 million, up 45% year-over-year.

The week 36 assessment allows additional time to capture the full magnitude and durability of treatment benefit, consistent with the targeted treatment approach that we believe has the potential to address underlying disease biology. These are established endpoints consistent with those used for current approved therapies in MF. Notably, we are also evaluating a composite endpoint as a key secondary endpoint. The composite endpoint is designed to capture the benefit of INCA033989 on spleen and symptoms, including improvements in hemoglobin, platelet counts, and blasts in peripheral blood. This allows us to further characterize the potential benefit of a disease-modifying therapy on key manifestations of MF. The study's power to evaluate efficacy in patients with Type 1 mutations will represent more than 70% of the CALR-mutated MF population and have experienced the most robust clinical responses to date.

We will also continue to generate data in patients with non-Type 1 mutations to further characterize the potential of 989 across the broader CALR-mutated population. Looking ahead, we expect to share the first clinical data for 989 in first-line MF by year-end, both as monotherapy and in combination with ruxolitinib. This data will help define the role of 989 in an early treatment setting and inform our development plans in 2027. Additionally, we plan to share pre-clinical data on our next-generation mutant CALR antibody, which we will be progressing into the clinic in early 2027. Together, these efforts reflect our strategy to build a broader portfolio of mutation-directed therapies with the potential to meaningfully change the treatment paradigm for patients with MPNs. Beyond MPNs, we continue to advance important programs across our hematology pipeline.

The FDA's review of tafasitamab in first-line diffuse large B-cell lymphoma or DLBCL is ongoing, with approval expected in the first quarter of next year. In chronic graft-versus-host disease, we are evaluating axatilimab in early lines of therapy. This includes a phase II study of axatilimab in combination with ruxolitinib, with results expected at a medical meeting early next year, and a phase III study evaluating axatilimab in combination with steroids, with top-line results anticipated in 2028. We also expanded our hematology pipeline this quarter with the acquisition of Vega Therapeutics and its lead therapy, latarcibart. This novel Protein S modulator has the potential to be a transformative non-factor replacement treatment for von Willebrand disease. The pivotal phase III study is underway, with top-line data expected in early 2029. We also plan to share additional data from the phase I open-label extension later this year.

Turning to oncology, we have advanced our solid tumor programs from early clinical development to a growing late-stage pipeline. A year ago, we established clinical proof of concept across several novel mechanisms and tumor types. Today, we have pivotal programs underway for a KRAS G12D inhibitor, a TGFβR2×PD-1 bispecific antibody, and our CDK2 inhibitor, with expansion efforts planned for next year. As we reviewed at ESMO earlier this week, our strategy is to advance novel mechanisms in high-incidence cancers where outcomes remain poor, with a particular emphasis on building a leading gastrointestinal franchise anchored by 734 and 890. Starting with 734, our G12D inhibitor, our conviction in this program continues to grow, and we are rapidly expanding its development across tumor types, treatment settings, and novel combinations.

At ESMO, we presented phase I data evaluating 734 in combination with standard of care chemotherapy in first-line pancreatic ductal adenocarcinoma or PDAC, and in combination with cetuximab in heavily pretreated patients with colorectal cancer. In PDAC, 734 showed encouraging activity in combination with both standard of care chemotherapies with a safety and tolerability profile consistent with its established regimens. Objective response rates confirmed and pending were 58% for 734 plus gemcitabine and nab-paclitaxel, and 81% for 734 plus modified FOLFIRINOX. We also see promising signals of durability with six-month landmark PFS of 80% and 90%, respectively. The depth of response early signs of durability and consistent tolerability across both chemotherapy backbones reinforce our confidence in the ongoing phase III DAWN-303 study in first-line PDAC and support moving 734 into early stage of disease, with a phase III study in adjuvant PDAC planned to start in 2027.

Turning to colorectal cancer, 734 in combination with cetuximab produced a 36% objective response rate in heavily pretreated patients. This is notable because anti-EGFR therapy alone has historically produced response rates below 5% in late-line colorectal cancer, which suggests a synergistic combination. This data informed the design of our phase III DAWN-302 study in previously treated colorectal cancer. We reached alignment with the FDA on the design this quarter and plan to initiate the study in the first half of next year. Beyond these registrational programs, we recently announced clinical collaborations enabling evaluation of 734 with novel combinations. These include petosemtamab, an EGFR by LGR5 bispecific antibody in first-line colorectal cancer, navlimetostat, a PRMT5 inhibitor in PDAC, and SNV1521, a PARP1 inhibitor in solid tumors. These phase I studies will begin next year. Turning to 890, our TGFβR2×PD-1 bispecific antibody.