Hello, and welcome to the Incyte Fourth Quarter Earnings Call and Webcast. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ben Strain, Associate Vice President, Investor Relations. Please go ahead, Ben.

Thank you, Kevin. Good morning, and welcome to Incyte's fourth quarter 2023 earnings conference call. Before we begin, I encourage everyone to go to the Investors section of our website to find the press release, related financial tables, and slides that follow today's discussion. On today's call, I'm joined by Hervé, Barry, Pablo, Steven, and Christiana, who will deliver our prepared remarks and will participate in the 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 Hervé.

Thank you, Ben, and good morning, everyone. So, on Slide 5, we achieved another strong year with 2023 product and royalty revenues growing 14% versus 2022 to reach $3.7 billion, continuing the strong performance we have delivered since 2018. We also achieved a symbolic milestone in the fourth quarter. Total product and royalty revenue reached $1 billion quarterly for the first time, driven by the continued growth of Jakafi and the successful launch of Opzelura. So, moving to Slide 6, 2023 Jakafi net sales were $2.6 billion, growing 8% versus the prior year with growth across all indications year-over-year. Opzelura saw strong momentum in 2023, growing 162% to $338 million, driven by new patient and refills in both AD and vitiligo. We expect Opzelura to continue to be a key contributor to growth in the next year. On Slide 7, our clinical pipeline has the ability to deliver transformative therapies to patients across multiple programs and provides the opportunity for ten high-impact launches by 2030, as presented recently in San Francisco. Importantly, some of the programs highlighted on this slide are de-risked as they are post proof of concept, including axatilimab, which has been submitted to the FDA for approval, RUX cream in pediatric atopic dermatitis to be submitted to the FDA by mid-year, RUX cream in HS where we have randomized Phase 2 data, and povorcitinib, where we are in Phase 3 in HS, vitiligo, and in PN, where we are on track to initiate a Phase 3 study this year. Each of these programs has the potential to address a significant market and provide an opportunity to contribute to the top-line before the end of the decade. I would also like to highlight the recent transaction with MorphoSys on Slide 8. As described in the press release we issued last week, we entered into an asset purchase agreement with MorphoSys, which gave us exclusive global rights for tafasitamab, also known as Monjuvi or Minjuvi. This acquisition provides several benefits to Incyte in the short term. First, going forward, we will now record all revenues from Monjuvi in the US while eliminating MorphoSys' share of the royalties ex-US and all future milestones to MorphoSys. Second, we will realize significant operating efficiencies and cost synergies in US commercialization and in global development by removing redundant positions and redundant external expenses and by simplifying the org chart. Therefore, in 2024, this deal will add to Incyte's revenue and will have a limited impact on operating income. For the future, while the currently approved indication of relapsed/refractory DLBCL represents a smaller opportunity for tafasitamab, we see upside potential in second-line follicular lymphoma and marginal zone lymphoma with Phase 3 data expected later this year and in first-line DLBCL, for which Phase 3 data are expected in 2025. These programs have been co-funded by MorphoSys until now and, if positive, Incyte will fully benefit from the upside from this indication. And this acquisition will be value-accretive for Incyte in all scenarios. I will now turn the call over to Barry, who will discuss our commercial performance in more detail.

Thank you, Hervé, and good morning, everyone. Starting with Jakafi on Slide 10. In the fourth quarter, Jakafi net product revenue increased by 7% year-over-year to $695 million and saw an 8% growth for the full year, reaching $2.6 billion. The total number of patients rose by 6% in 2023, with growth observed across all indications. We observed some changes in Jakafi's dynamics during the fourth quarter, including a rise in patients receiving free drug and fluctuations in inventory. Inventory had a modest decline in Q3, followed by a rebound in Q4. Furthermore, we expect the rise in patients on free drugs at the end of 2023 to normalize throughout 2024, aided by reduced out-of-pocket costs under the Part D redesign. Christiana will share more details about these dynamics in her remarks. We anticipate sustained growth for Jakafi and have updated our net product revenue guidance for 2024 to a range of $2.69 billion to $2.75 billion. As indicated on Slide 11, Jakafi maintains its leadership and market share in myelofibrosis, supported by its unmatched product profile. Market research indicates that competitors have not affected Jakafi's total patient market share or new patient acquisitions, consistent with our expectations. The demand for Jakafi remains robust, and we expect growth to continue, driven by its status as the standard of care in myelofibrosis, as well as opportunities for expansion in polycythemia vera and chronic graft-versus-host disease, including earlier treatment in chronic GvHD. We also foresee that the beneficial changes to out-of-pocket expenses for Medicare Part D patients will foster growth in the coming years, significantly impacting starting in 2025. Moving to Slide 12, we discuss Opzelura's performance in the fourth quarter. Opzelura's net product revenues for the fourth quarter reached $109 million, representing a 78% increase compared to the same quarter last year. Total net sales for 2023 surged by 162% from 2022 to $338 million. Patient demand in the US rose during the quarter, with total prescriptions increasing by 77% year-over-year and refills growing by 22% compared to the previous quarter. The weekly prescription trend shows typical end-of-Q4 dynamics alongside the ongoing growth of Opzelura in both atopic dermatitis and vitiligo. In atopic dermatitis, growth was mainly attributed to Opzelura's effectiveness in addressing inflammation and itch. In vitiligo, where Opzelura is the only approved treatment for repigmentation, growth came largely from refills, improved access, and our educational efforts. We remain highly optimistic about Opzelura's long-term potential as we witness strong adoption. The launch remains robust, gaining positive momentum among both physicians and patients, establishing Opzelura as one of the most successful recent dermatology launches. Evaluating the first 27 months post FDA approval, Opzelura continues to outperform other dermatology products when judged by monthly dermatologist prescriptions and quarterly net revenues. The success of Opzelura's launch is propelled by its strong product profile, its capacity to meet significant unmet needs in both atopic dermatitis and vitiligo, and our enhanced market access relative to competitors, as we continue to improve access and increase net sales. On Slide 14, we highlight several initiatives aimed at boosting demand for Opzelura in 2024 for both atopic dermatitis and vitiligo. Given Opzelura's compelling efficacy and safety, healthcare professionals are eager to incorporate it earlier in the treatment protocol. Beyond securing better access for 2024, we are actively seeking ways to enhance utilization management, supported by our exceptional value proposition. For vitiligo, we continue to build patient awareness through ongoing marketing campaigns designed to educate and inspire patients with positive real-world experiences. We believe this approach will stimulate demand and encourage patients to engage with their dermatologists about treatment options. With that, I'll turn the call over to Pablo.

Thank you, Barry, and good morning, everyone. I want to highlight some of the key R&D milestones that we accomplished in 2023 and to provide a framework for how we are evolving our R&D focus with near-term goals to increase the rigor of our decision-making, accelerate the progression of our pipeline, and optimize our resource allocation. As you can see on Slide 16, we have three areas of focus where we're building a robust and diverse portfolio of medicines for the treatment of MPNs and graft-versus-host disease, oncology, and inflammatory diseases. We're advancing a pipeline to deliver impactful innovation with a focus on best-in-class and first-in-class differentiated medicines in areas with large unmet medical needs. Our discovery process is targeting pathway-centric and leverages cross-program knowledge and deep biology expertise in our established disease areas of interest to identify and prosecute novel targets as well as disease and genotype-specific dependencies with a mortality-agnostic approach. In addition to our established small molecules expertise, we have expanded our drug discovery capabilities to include monoclonal antibody discovery in-house and have access to bispecific antibody discovery capabilities through our partnership with Merus. Turning now to Slide 17, we made significant advancements across all three priority areas of focus in the R&D portfolio in 2023. In MPNs and graft-versus-host disease, we submitted the BLA for axatilimab for the treatment in third-line chronic graft-versus-host disease. We presented updates for our BET and ALK2 inhibitors in MF and highlighted our new potentially transformative therapies for MF, PV, and ET, our mutant CALR monoclonal antibody, which is enrolling well in a Phase 1 study and our JAK2 V617F inhibitor for which we plan to initiate a Phase 1 study in the next month. In oncology, we initiated several monotherapy and combination studies with our small molecule oral PD-L1 inhibitor and highlighted early signs of clinical activity with our small molecule CDK2 inhibitor. Additionally, we unveiled a new program in development, our KRASG12D inhibitor, which entered the clinic earlier this year. Steven will provide more detail on the KRASG12D program in his prepared remarks. In dermatology, we continue to maximize the potential of ruxolitinib cream. In 2023, Opzelura was approved in Europe for vitiligo as the first and only approved treatment for repigmentation. We also presented positive Phase 3 data in pediatric atopic dermatitis and announced that the primary endpoint was met in a randomized Phase 2 study in patients with hidradenitis suppurativa. For povorcitinib, we presented positive randomized Phase 2 data in vitiligo and initiated two Phase 3 studies for patients with extensive vitiligo. We also announced that povorcitinib had met the primary endpoint in a randomized Phase 2 study in patients with prurigo nodularis, and we initiated two randomized Phase 2 studies, one in patients with asthma and another in patients with chronic spontaneous urticaria. We believe that with ruxolitinib cream and povorcitinib, we'll be the only company with the ability to address a broad spectrum of patients from mild to severe, potentially providing both the topical and oral option for a number of indications, including prurigo nodularis, hidradenitis suppurativa, and vitiligo. Apart from an exhaustive list of all the R&D achievements in the past year, this demonstrates that 2023 was a very successful impactful year for Incyte and it serves as a foundation for a number of pivotal trials that will deliver results in the next few years. As you can see from Slide 18, we anticipate that 2024 will be another very exciting year with multiple clinical and regulatory milestones. Steven will provide more details on these, but I would like to highlight certain events. Within our oncology pipeline, we believe that our potentially best-in-class CDK2 inhibitor is an active agent, and we look forward to sharing data as well as our development plan later this year. In addition, the pivotal trial of tafasitamab in patients with follicular and marginal zone lymphoma, also known as inMIND, will read out later this year, and we look forward to sharing those results. We submitted a BLA for axatilimab late last year, and we look forward to working with the FDA to make axatilimab available to patients with chronic graft-versus-host disease later this year and to initiate additional combination studies in patients with less pre-treated chronic graft-versus-host disease. Within our dermatology portfolio, we expect to submit the sNDA for Opzelura for pediatric atopic dermatitis and expect multiple data readouts throughout the year. With that, I would like to pass the call to Steven, who will provide further details on our clinical development pipeline.

Thank you, Pablo. Starting on Slide 20, in December, we presented over 40 abstracts in hematology and oncology, including a plenary presentation at the ASH Annual Meeting. Key highlights included a plenary scientific session featuring full data from AGAVE-201, which evaluated axatilimab, an anti-CSF-1R monoclonal antibody for patients with chronic graft-versus-host disease, as well as additional data from the Phase 1/2 study of zilurgisertib, Phase 1 data from our BET inhibitor, and preclinical data for the JAK2V617F inhibitor. We are currently ongoing with dose escalation for our BET inhibitor, and we are observing reductions in spleen length and volume, along with improvements in symptoms and hemoglobin, indicating that this compound is active. We plan to advance this program to Phase 3 later this calendar year and will provide more details on study design and timing as we approach that milestone. Based on the efficacy and favorable safety profile seen in the Phase 2 AGAVE-201 pivotal study, we submitted the BLA for axatilimab to the FDA for the treatment of patients with chronic graft-versus-host disease. We expect a decision from the FDA in the second half of 2024 and are optimistic about the opportunity to offer a new treatment option to these patients. We continue to expand and advance our IAI and dermatology portfolio, which is evident on Slide 22. For ruxolitinib cream, we have recently presented positive Phase 3 data in pediatric patients, where RUX cream met its efficacy endpoints for both Investigator Global Assessment treatment success and EASI-75. We plan to submit the sNDA by mid-2024 with a potential approval in 2025. We also disclosed that RUX cream achieved the primary endpoint in the Phase 2 study for mild to moderate hidradenitis suppurativa, and we expect to present those results at a medical conference later this year, while a Phase 3 study is currently under evaluation. Ruxolitinib cream is also being studied in two Phase 3 studies in prurigo nodularis and two Phase 2 studies in lichen planus and lichen sclerosus, with data anticipated later this year. Povorcitinib, our oral JAK1 inhibitor, is being evaluated in Phase 3 studies for hidradenitis suppurativa and vitiligo. We recently announced that povorcitinib met the primary endpoint of a greater than or equal to a 4 point improvement in the itch NRS across all three treatment groups in a Phase 2 study of prurigo nodularis. We expect to present the full dataset at a medical conference later this year, with Phase 3 planning already underway. Our earlier-stage dermatology program, an IL-15 receptor beta antibody, has begun evaluation in healthy volunteers. Moving to Slide 23, last week at the European Hidradenitis Suppurativa Foundation Conference, we presented additional data from the open-label extension of the Phase 2 study of povorcitinib in HS. Just a reminder, povorcitinib showed dose-dependent efficacy in patients during the initial placebo control period through week 16. The presented data demonstrate that treatment with povorcitinib through week 52 resulted in a decrease in disease severity based on the International HS Severity Scoring System, or IHS4. At week 52, a significant reduction in disease severity was observed, with about 25% of patients achieving an IHS4 score of zero, indicating the complete resolution of abscess, nodule, and draining tunnels. On Slide 24, further analysis showed maintenance of response, indicating that povorcitinib-treated patients who responded at week 16 were likely to maintain the HiSCR response through week 52. Both datasets reinforce povorcitinib's potential as a leading treatment for patients with HS. As a reminder, two ongoing Phase 3 studies, STOP-HS1 and STOP-HS2, are enrolling well. Our high-potential oncology pipeline focuses on three advanced programs. The first is tafasitamab, currently evaluated in two Phase 3 studies for patients with follicular and marginal zone lymphoma and those with previously untreated diffuse large B-cell lymphoma. We expect Phase 3 results for follicular and marginal zone lymphoma from the inMIND study in the second half of this year, with the first-line diffuse large B-cell lymphoma readout in 2025. The second program is our small molecule oral PD-L1 program, which includes multiple ongoing studies as monotherapy or in combination with other agents like axitinib, adagrasib, and ipilimumab, with combination data expected later this year. The third program is our small molecule CDK2 inhibitor, where we recently announced early signs of clinical activity with several patients showing partial responses. We plan to share data and the development plan later this year. On Slide 26, we announced that INCB161734, a potent and selective orally available KRAS G12D inhibitor, has entered the clinic in a Phase 1 study. This program has shown promising preclinical anti-tumor activity in xenograft models, addressing a significant unmet need as there are no approved G12D targeting agents available. The KRAS G12D mutation is found in approximately 40% of pancreatic ductal adenocarcinoma, 15% of colorectal cancer, and 5% of non-small-cell lung cancer, representing a significant opportunity for Incyte if successful. In summary, we look forward to several pipeline updates in 2024, including sharing top-line results from Phase 2 studies in RUX cream for HS and povorcitinib for PN at a medical conference in the first half of this year. The second half of the year is shaping up to be rich in catalysts, including but not limited to the approval of axatilimab, Phase 3 results from tafasitamab, and the initiation of several Phase 3 studies, including one with our BET inhibitor. With that, I would like to turn the call over to Christiana for the financial update.

Thank you, Steven, and good morning, everyone. 2023 was another year of strong financial performance with total product revenues of $862 million for the fourth quarter of the year and $3.2 billion for the full year, representing a 13% and 15% year-over-year increase, respectively. Total royalty revenues, which are primarily comprised of royalties from Novartis for Jakavi and Tabrecta, and royalties from Lilly for Olumiant were $150 million in the fourth quarter and $523 million for the full year, up 13% and 8%, respectively, compared to 2022. Total revenues grew 9% in the fourth quarter compared to the prior-year period, reaching the $1 billion mark, an important milestone for Incyte. For the full year, total revenues were $3.7 billion. Turning to Jakafi on Slide 30. Jakafi net product revenues were $695 million for the fourth quarter and $2.6 billion for the full year 2023. In 2023, Jakafi net sales grew 8% compared to the prior year. Jakafi sales were negatively impacted by a significant increase in free drug in the fourth quarter of the year, driven by an increase in the number of patients seeking support from Incyte's Patient Assistance Program. The impact of the increase in free drug was more than offset by an increase in channel inventory levels. This increase was in anticipation of patients moving into paid demand starting in Q1 of 2024. The increase in Q4 channel inventory levels represented $46 million in sales. Turning now to Opzelura, net product revenues for the fourth quarter were $109 million, representing a 78% increase year-over-year, driven primarily by increased patient demand. For the full year, total Opzelura net product revenues were $338 million, representing a 162% increase compared to the prior year. Moving on to Slide 32 and our operating expenses on a GAAP basis. Total R&D expenses were $444 million for the quarter, representing an 11% year-over-year decrease, which was primarily as a result of the $70 million upfront payment made as part of the Villaris acquisition in Q4 2022 and partially offset by the $20 million development milestone payment to former Villaris shareholders in the fourth quarter of 2023. For the full year 2023, total R&D expenses were $1.6 billion, representing a 3% year-over-year increase. This increase was primarily due to the progression of our pipeline and was mainly offset by lower upfront and milestone expenses in '23. Total SG&A expenses were $294 million for the fourth quarter and $1.16 billion for the year. The year-over-year increase of 8% for the fourth quarter and 16% for the full year were mainly due to increased sales and marketing activities for Opzelura in both the US and Europe, unfavorable effects and timing of certain G&A related expenses. Moving on to 2024, I will now discuss the key components of our guidance on a GAAP basis, which includes revenues and expenses related to the recent acquisition of the exclusive global rights to tafasitamab, but excludes any potential impact related to the accounting treatment of the $25 million purchase price paid. For Jakafi, we expect net product revenues to be in the range of $2.69 billion to $2.75 billion, on track to achieve our long-term guidance of over $3 billion in net product revenues by 2028. We expect net product revenue growth to be driven exclusively by continued demand growth, and be partially offset by lower net pricing as a result of IRA imposed price increase caps and continued growth in 340B volumes. As in previous years, we expect the gross-to-net adjustment to be higher in the first quarter of the year relative to the previous quarter and subsequent quarters due to the higher deductibles and our share of the donut hole for Medicare Part D patients, which are primarily impacting the first quarter of the year. While for Opzelura we will not be providing full year guidance at this point, in the first quarter, we expect to see again the effect of typical Q1 dynamics on net sales, including higher patient out-of-pocket costs due to the planned deductibles resetting at the beginning of the year and the impact of holidays, medical conferences, and other events on dermatology product sales. As a result, Q1 Opzelura net product revenues are expected to be below the previous quarter and the subsequent quarters and represent a smaller share of the full year net product revenues, consistent with what we saw in 2023. For other hematology/oncology products, which now include Iclusig, Pemazyre, Monjuvi, and Minjuvi, we expect total net product revenues to be in the range of $325 million to $360 million, which at the midpoint represents approximately 47% growth over 23%. Turning to operating expenses on a GAAP basis, we expect COGS to range from 7% to 8% of net product revenues, which is in line with 2023. R&D expense is expected to be in the range of $1.72 billion to $1.76 billion, representing 7% growth at the midpoint versus 2023, primarily driven by the progression of our pipeline. We expect SG&A expense for the year to be in the range of $1.21 billion to $1.24 billion, representing 6% year-over-year growth at the midpoint, primarily driven by the inclusion of sales and marketing expenses associated with Monjuvi in the US under SG&A, whereas prior to the acquisition of full product rights, they were included under the collaboration profit or loss share. Operator, that concludes our prepared remarks. Please give your instructions and open the call for Q&A.

Certainly. We will now be conducting a question-and-answer session. Our first question is coming from Kripa Devarakonda from Truist Securities. Your line is now live.

Hey, guys. Thank you so much for taking my question. On Jakafi myelofibrosis, thank you so much for providing the market share details on patients and share of new patients. I was just wondering if you anticipate stabilization of Jakafi share at these levels. And if collaborative were to be approved in combination with RUX, presuming it happens sometime next year, should we expect to see an inflection point? Thank you.

So, stabilization of market share in myelofibrosis. So Jakafi, as you know, is the leader in myelofibrosis because of its safety, efficacy, overall survival, and really tolerability, which is really a big advantage. We think that myelofibrosis will continue to be the largest portion of our patient share until polycythemia vera patients ultimately take over, because those stay on for long periods of time. Your question around pelabresib, if and when it gets approved in combination with Jakafi, of course, that's a good thing for us. If in fact the profile of the drug is as it appears or the combination is as it appears, then many physicians may choose to use that combination, and Jakafi will only benefit, but we have to wait and see what happens with the approval process.

Great. Thank you so much.

Thank you. Next question is coming from Andrew Berens from Leerink. Your line is now live.

Hi. Thanks. Wondering if you guys could expand upon the development of Jakafi XR in light of the recently announced bid by Novartis for MorphoSys. Does Novartis' control of Jakafi outside the US impact how you're thinking about developing your BET inhibitor? Do they have any direction or say in any of the directions of the XR version of Jakafi? And then also just wondering if you think that an add-on drug to Jakafi in MS still requires a symptomatic improvement as an endpoint for regulatory endorsement, or do you think that there's been a material change in thinking at the agency?

So, let me take the piece about our agreement with Novartis on Jakafi and Steven can speak about the development of XR. So, the agreement is such that both parties can be co-developing new formulations of ruxolitinib in oncology, including the once-a-day formulation. It has not been the case yet, but there is still an optionality for Novartis to co-develop XR if they wish, and that would mean that they would be able to commercialize the XR formulation outside of the US, but not in the US, where, obviously, it will be commercialized by Incyte.

And then, Andy, I'll take the other part of your question. So, for RUX XR, as Pablo communicated at the ASH Investor event, we have now clear feedback from the FDA that we need to do a new formulation strength, which are already developed, which are slightly higher and then demonstrate the EBA with those primarily around Cmin and AUC. That's the clear guidance from the FDA. We estimate this should be completed in a two-year process, so well before the LOE. It doesn't affect our development of fixed-dose combinations with any of our products. So that continues. For our BET inhibitor, again, we showed data at ASH and alluded in my prepared remarks, we have clearly an active compound showing very good rates of spleen reduction, both volume and length, very good symptom improvement and occasional hemoglobin increases, just like seen with the other BET inhibitor. We have been operating under the assumption that at least in first-line, you need SVR35 and symptoms to date to get approvals. I can't comment on where they are in their regulatory progresses or how the FDA may change in that regard. But that has been the standard to date.

Okay. Thank you very much.

Thank you. Our next question today is coming from Michael Schmidt from Guggenheim. Your line is now live.

Hey, guys. Thanks for taking my questions. I had one on povorcitinib. So, as we think about the opportunity for this drug in multiple indications, I believe the HS Phase 3 trial is most advanced. Could you talk a bit about your expectation on how the drug may be positioned relative to some of the biologics in HS, be it HUMIRA or some of the IL-17 antibodies? And then, also, in PN, where you had the positive top-line data last year. Dupixent is obviously approved here. Again, could you talk a bit about how the drug might be fitting into that treatment paradigm relative to Dupixent? Thanks so much.

Michael, hi, it's Steven. I'll start with your question. Thank you for the question. So, povor in HS, we think we have outstanding efficacy data, which we've now updated with 52-week data that shows prolonged effect that's maintained. Remember, this is a JAK1 specific agent, about 50-fold selective for JAK1, has a long half-life, and a very high volume of distribution, which may translate to more penetration in the skin, which is why we see this degree of efficacy showing to date. Both Phase 3 STOP-HS1 and HS2 are enrolling very, very well. So, that probably speaks to also some of the belief out there in the agent, and that is clearly our lead indication as you alluded to, it's hard to always cross-compare with many caveats to other studies where the drugs aren't directly compared, and you spoke about the IL-17 here and the biologics, and clearly, there's some variable activity there. You have to look at placebo-corrected rates. But I think ours tackles multiple aspects of the disease pathophysiology, not just one interleukin. As I said, the drug profile with a long half-life and high volume of distribution may lend itself to increased efficacy here. Obviously, time will tell with the Phase 3 data. It will be a once-daily oral tablet, which offers that sort of convenience. In PN, what patients suffer from primarily is intense itching. Again, our Phase 2 proof of concept data is very strong in terms of the itch relief here and the ability to eliminate that symptom pretty quickly, as well as over time, disease resolution in the actual skin manifestations. There is, as you allude to, an approved agent there in Dupixent, but that has provided us the regulatory pathway on the way to go in terms of itch resolution and skin change resolution. Again, we'll offer the once-daily oral convenience. We think we'll have a really good agent in terms of high efficacy there. So, we're excited about this program as well.

Thank you. Our next question today is coming from Vikram Purohit from Morgan Stanley. Your line is now live.

Hi, good morning. Thanks for taking our questions. We had two on the pipeline. So first, for the ALK2 program, you've guided to POC data by mid-24. We were just wondering what we can expect to learn with this update and what you will be reviewing specifically to decide what the next step of development could be for this program. And then secondly, for the mutant CALR antibody, when can we expect to see initial Phase 1 data there? And what are you hoping to establish to get conviction that the program is headed in the right direction? Thank you.

Yes. Thank you for the question. This is Pablo. So, for the ALK2 inhibitor program, what we're in the process of doing, and we need to establish this efficacy in a larger number of patients with newly diagnosed MF in combination with ruxolitinib. And that's what the team is focused on right now and as we mentioned at ASH last December. So, we continue to push the dose. We need to get to doses of around 400 to 600 milligrams a day in order to get the maximum effect on hepcidin. Two, we need longer duration of therapy in a larger group of patients in combination with RUX. So, that will happen over the course of the year. We haven't provided a specific timeline for when we're going to disclose the data. But as we mentioned at ASH last year, it would happen this year, and we'll provide clarity on what the next steps for that program are. On the second question for the mutant CALR antibody program, we started dose escalation very recently, as you know. That study is accruing very well. The initial goals, like for any first-in-human study, are to establish that this monoclonal antibody is safe, get a good view of the pharmacokinetics in this first-in-human study, and establish initial evidence of efficacy, which, in this case, will be by traditional endpoints in MPNs, and also potentially a view on the effect of the mutant CALR monoclonal antibody on a real burden in some of these patients. That will happen over the course of the year. We haven't decided yet when we're going to present data, whether it's this year, or whether at some point in 2025.

Got it. Thank you.

Thank you. Our next question is coming from Salveen Richter from Goldman Sachs. Your line is now live.

Good morning. This is Anumeet on for Salveen. Thank you for taking our question. We had one question on Opzelura. Outside of the 1Q dynamics that you spoke to, can you help us understand the forward launch trajectory in AD and vitiligo in the context of reimbursement and access and also gross to net in order to be fully able to capture the opportunity as you have additional indications coming in, in the coming years? Thank you.

Thank you for the question. We are continuing to launch effectively in both atopic dermatitis and vitiligo. We expect growth in vitiligo due to our educational efforts aimed at both patients and healthcare professionals. The profile in atopic dermatitis regarding itch relief and skin clearance is unmatched by any topical therapy. In fact, we believe the profile is so strong that payers are interested because over 80% of patients achieve clear skin and relief from itching, which means they can delay or avoid biologics. We view these dynamics positively for both atopic dermatitis and vitiligo as we look to future growth. Now, I'll turn the call over to Christiana to discuss gross to net.

So, in terms of gross to net, first of all, when you look 2023, the average gross to net was around 55%. Our goal is to maximize the value of Opzelura and maximize net sales. If going forward we make the decision to provide any additional discounts, it would be because we expect that this will improve access and we'll have a disproportionate impact on volume and thus lead to higher net sales. So, as such, our comments are going to be focused on net sales versus gross to net in isolation.

Thank you so much.

Thank you. Our next question is coming from Derek Archila from Wells Fargo. Your line is now live.

Hey, good morning, and thanks for taking the questions. So, one just piggybacking on the last. Just in terms of Opzelura, is there, one, any chance we get an update in terms of potential guidance this year? And then, will you ever look to kind of break out both the vitiligo and AD kind of scripts or sales, if you could figure that out? And then, secondly, just on tafasitamab, I guess, can you quantify maybe the incremental growth opportunities you see for this asset in the follicular and marginal zone lymphoma indications? Thanks.

So, as far as breaking out AD versus vitiligo, I think we've said before, it's about 60% currently for AD, 40% currently for vitiligo. It could be changing a little bit. Ultimately, we expect vitiligo total tubes perhaps surpass AD. AD patients are many new patients who always come on for atopic dermatitis, and in vitiligo, it's about continued use and refills. As far as Monjuvi tafasitamab goes, obviously, we're looking forward to, hopefully, positive data in follicular lymphoma, indolent lymphoma, and in first-line diffuse large B-cell lymphoma. So, we think there are great opportunities ahead for these two indications. We think it's a great drug for lymphoma. Obviously, it's a crowded marketplace, but we think the profile of the drug and the trials we put together for those two new indications are going to serve us well in the future.

But in terms of calibration of follicular lymphoma, we need to see the Phase 3 data. It's a fairly competitive place. There are a lot of new products. So, we need to see the Phase 3 data before we can give you a good calibration of that. I mean, the number of patients we are speaking about in the US is around...

Well, there are 29,000 patients in first-line diffuse large B-cell lymphoma. There are about 13,000 patients in second-line plus in follicular lymphoma in the United States.

Got it. Understood. Thank you.

Thank you. Our next question is coming from David Lebowitz from Citi. Your line is now live.

Thank you very much for taking my question. You said that the fourth quarter revenues were negatively impacted by the number of Medicare Part D patients receiving free product. Could you perhaps elaborate on this? And also, looking ahead to 2024 and '25, you spoken about how IRA dynamics could shift, which will drive PV share. Could you possibly give us some way to quantify the potential impacts of this shift over time? Thank you.

In the fourth quarter, we noticed a notable rise in patients requesting free drug assistance from Incyte. These patients had Medicare Part D and were likely receiving financial help from independent charitable organizations to manage their out-of-pocket costs, but that aid seemed to disappear at the year's end. Consequently, they turned to us and qualified for free medication. With the upcoming changes in Medicare in 2024, the out-of-pocket expenses for Medicare Part D are significantly lowered. As a result, we anticipate that many of these patients will revert to being paid patients, and we already have evidence that many have returned. Regarding 2024 and 2025, we view the changes to Medicare Part D positively. We've consistently stated that the co-pay out-of-pocket expenses for cancer patients on Medicare Part D were excessively high and should be lowered, possibly still too high even with the new changes. Starting in 2025, there will be a $2,000 maximum out-of-pocket limit, which can be distributed throughout the year, meaning patients will pay about $167 each month for a full year. We believe there are many patients who may have previously stopped their medication due to unaffordable costs, and now that Medicare Part D expenses are being reduced, there's a chance for these patients to return to drug therapy.

Thanks for taking my question.

Thank you. Our next question is coming from Jessica Fye from JPMorgan. Your line is now live.

Hey, guys. Good morning. Thanks for taking my questions. A couple of follow-ups on some of the previous questions. What's your expectation for the proportion of Jakafi patients receiving free drug in 2024? And then, on Opzelura, for Europe, how are you expecting the average price to shake out for vitiligo? And can you recap your latest thinking on pursuing AD there? And then, in the US, I think you mentioned that recent script trends reflect kind of normal year-end seasonality. Is that to say you expect a volume reacceleration near term? I wasn't sure how to reconcile that with some of the other Q1 comments you made about Opzelura. Thank you.

Okay. I'll try to answer the first and third question, maybe ask Hervé to talk about Europe. So, the expectation for free drug is easy for Jakafi. It's been 3% to 4% of our volume for years and years and years. We expect it to go back. We think this is a one-time exceptional thing that happened because of the changes coming from Medicare Part D. So again, no more than it has been historically, which is around 3% or 4% of our volume. As far as what we talked about seasonality, we do expect that the first quarter to be down mostly because of out-of-pocket expenses, because of deductibles, because of the resetting of the co-pays, but then we should go back to our acceleration in volume in the second quarter, third quarter, and so on. And Hervé, Europe?

In Europe, Opzelura has launched in Germany and Austria, where it is now commercially available at a price of €750 per 100-gram tube. We have recently received reimbursement approval in France through a process called Accès Direct, which allows for special access to patients via a unique distribution system while the price is still being negotiated. This pricing discussion is expected to take about 10 months, and we anticipate starting to recognize revenue in France once the price is officially approved, likely by the end of this year. We are also working on securing reimbursement in other European countries, with hopes of launching in multiple countries in 2024 and 2025. While we initially decided to focus on vitiligo for reimbursement purposes due to a more favorable pricing scenario in many countries, we are conducting ongoing studies that could support a limited indication for atopic dermatitis, which would be necessary to maintain the price. This process is in progress, but we do not expect a new indication within the next two years; that will come afterward.

Thank you.

Thank you. Next question is coming from Tazeen Ahmad from Bank of America. Your line is now live.

Hi, good morning. Thank you for taking my questions. I was just curious about the payer mix differences, if there are any for Opzelura between the AD indication versus vitiligo? And then secondly, as both of these launches start to mature a bit, do you have a better sense of how you're going to land a number of tubes on average use per patient for a full year? Thank you.

As far as the payer mix goes, there's no real difference between payer mix. For AD, more patients perhaps have step therapies. In vitiligo, more patients don't have any steps or have one step. In terms of the number of tubes we've said in the past that for AD, it's around two tubes or a little bit more. We think that will continue to grow as people use the drug over larger portions of the body. Obviously, they can go up to 20% of their body surface area, which is a very large body surface area. Some people start out in sensitive areas, and now they'll continue to use it over a larger portion of their skin. For vitiligo, it's just too early. We'll figure out. But we're anticipating, as we've said, the refills will be much greater in vitiligo compared to AD.

Thank you. Next question is coming from Marc Frahm from TD Cowen. Your line is now live.

Hi, yes. Thanks for taking my questions. Maybe following up on a couple of the payer dynamic questions. Just on Jakafi, can you quantify the level of kind of script abandonment and things like that, that you are seeing and kind of what this opportunity is for volume gains with this redesign, recognizing, yes, some of it's not going to play out over just in one year? And then similarly, for Opzelura, you had some formulary wins late last year that came into effect at the beginning of the year. Christiana, to your comment of only wanting to give price concessions to see enough volume benefit to end up within that net sales benefit, are you seeing early returns from that that are consistent with that view? Or do you kind of need to recalibrate how you do those negotiations for next year to make sure that trend is kept?

Sure, Marc. Barry first. We've identified a level of script abandonment for Jakafi, but we don't have exact figures. We know it's at least 10% based on data from specialty pharmacies, where we have clearer insights. However, we lack information on patients whose prescriptions never reach a pharmacy. Therefore, we believe a significant number of patients who could benefit from Jakafi aren't doing so due to out-of-pocket costs, and we hope this situation will improve in 2024 and 2025. Regarding Opzelura, we've had some formulary victories, such as CVS Aetna changing to preferred status this year with one-step therapy for atopic dermatitis and no step therapies for vitiligo. However, it’s a bit early to observe any tangible outcomes, as it takes time for decisions made by CVS to filter down to local plans.

Okay. Thank you.

Thank you. Next question is coming from Ren Benjamin from Simpsons JMP. Your line is now live.

Hi, thanks for taking my questions. Given the rumors about your bid for MorphoSys, are you looking into any other acquisitions in the MS space? Or was the rumor incorrect, and were you just focusing on tafasitamab? That's my first question. For my second question, back to Steven on the Jakafi XR, I'd like to understand more about the two-year timeline to resolve this issue. What does it involve, and what's the likelihood of success? I assume it should be quite high since it seems like an engineering problem, but I might be misunderstanding that.

Yeah. Maybe on the first question, as I said, I think the tafasitamab acquisition for us is an excellent deal. It's, in fact, very, very asymmetric, because it's, as I said, with all of the synergies we can realize in the short term, it can compensate for what is left in terms of development costs in these two indications or, in fact, most of the development has already been paid for in the past year. So, it is a case where the actual impact on the bottom line will be very minimal in the short term and very positive in the long term, whatever the scenario of the new indication. Now, if any of these new indications hit and it's positive then it becomes obviously a super deal because we get all the benefit in terms of top line. So that's the aspect. Now, in the field of myelofibrosis, as you can see from our pipeline, we have a number of projects that we are pursuing ourselves. We have our own BET. There is still the ALK2 program where, as Pablo was saying, there is some additional data that we need to get certainty, but it's very promising. And obviously, we have the 617F and CALR program on top of the XR formulation. So, all of that is giving us a very full pipeline in the field of myelofibrosis. That would not be the first priority for acquisitions.

And, Ren, your question on XR, so just to go back to the CRL, remember, when we did the submission, we missed on Cmin to a small degree that per the FDA resulted in a theoretical concern on efficacy. We tried to do some more population PK analysis to reassure them, but their pathway didn't work. As we provided more granular detail at the end of last year, the route forward is new formulation, slightly larger tablet size, and then repeat EBA work. You're right; it doesn't take a great length of time. But to get that data in, analyze it, put it into a package and send it to the FDA and then have the discussions, we estimate approximately a two-year journey from the beginning of this year to get it done. We feel has enough conservatism in it that we should make it. In terms of the probability of success, we can model from the formulations what we will likely achieve in terms of area under the curve, Cmin, and even Cmax as well. We think that is relatively high. Obviously, that's why we're doing it, and we'll share that data as it becomes available and then take it to regulatory agencies.

Thank you.

Thank you. Next question is coming from Brian Abrams from RBC Capital Markets. Your line is now live.

Hi, everyone. This is Navin on for Brian. Thank you for picking us in. We just had a couple of questions on our part. So, on Opzelura, what is the latest that you're kind of seeing on patient retention so far? How many patients persisted through the six to 12 months so far to kind of see the benefit versus how many are kind of dropping off or perhaps seeing early efficacy? And then if you could speak to a little bit of the education around the retention strategies as well. And then a second question on the MF space. So, as you kind of see the entry of additional competitors into the space, do you potentially foresee an expansion of the market as these competitors enter? Thank you.

Sure, Navin. This is Barry. So, as far as patient retention, I guess what you mean is that how many patients. Obviously, the vitiligo patients stay on for a much longer period of time. Atopic dermatitis patients, patients with eczema, they have flares; they use Opzelura, it goes away, and it's very effective. Some patients get immediate relief. Obviously, we talk about the itch relief all the time to get good itch relief, and then the skin begins to clear over time. So, these patients will come back, we think, year after year as long as they have their eczema and use the drug when they see the flares until it goes away and then start using it again. Vitiligo patients, we've seen from our long-term data, patients can use the drug for two years and continue to get benefit. So, that's what we keep on reinforcing around education so that patients understand how to use the drug, what they're going to see at three months, six months, nine months, 12 months, and beyond, and that's how we'll continue to retain them. Yes, it's very important, the strategies around patients' adherence, particularly for vitiligo, and particularly, we know we can make improvements around what healthcare professionals, dermatologists, and their offices are telling the patient how to use the drug and then the patients themselves understanding how to use the trend. As far as competitors in the MF space, I mean, there are three other JAK inhibitors approved for myelofibrosis, where we continue to be the market leader in myelofibrosis. We'll continue to be. As far as the combinations that have been studied recently, we'll see. But it certainly does expand the market because you have the opportunity of going early, earlier patients starting. We know if they start early with Jakafi, their survival advantages could be better. And then, in fact, they'll go to second-line drugs and third-line drugs. Yes, we created the market, and it could expand if there are good drugs approved after Jakafi.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Thank you for participating in today's call and for your questions. The IR team will be available for the rest of the day. Thank you.

Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.