Syndax Pharmaceuticals Inc Q1 FY2024 Earnings Call

Good day, everyone, and welcome to the Syndax First Quarter 2024 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Sharon Klahre, Head of Investor Relations at Syndax Pharmaceuticals.

Thank you, operator. Welcome, and thank you all for joining us today for a review of Syndax's first quarter 2024 financial and operating results. I'm Sharon Klahre and with me this afternoon to provide an update on the company's progress and discuss financial results are Michael Metzger, Chief Executive Officer; Dr. Neil Gallagher, President and Head of R&D; Steve Closter, Chief Commercial Officer; and Keith Goldan, Chief Financial Officer. Also joining us on the call today for the question-and-answer session are Dr. Peter Ordentlich, Chief Scientific Officer, and Dr. Anjali Ganguli, Chief Business Officer. This call is accompanied by a slide deck that has been posted on the Investors page of the company's website. You can now turn to our forward-looking statements on Slide 2. Before we begin, I'd like to remind you that any statements made during the call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in the company's most recent quarterly report on Form 10-Q as well as other reports filed with the SEC. Any forward-looking statements made represent our views as of today, May 8, 2024 only. A replay of this call will be available on the company's website, www.syndax.com, following its completion. With that, I am pleased to turn the call over to Michael Metzger, Chief Executive Officer of Syndax.

Thank you, Sharon, and good morning, everyone, and thank you for joining us on the call today. I'd like to begin by welcoming Steve Closter to the call. Steve joined us in March as Chief Commercial Officer. He brings over 30 years of commercial experience to Syndax, which includes establishing winning teams and leading successful product launches. Steve is building on the excellent framework that was in place prior to his arrival, and we are already benefiting from his keen insights as we prepare for commercialization. In the quarter, we made significant progress on executing against our corporate strategy. As you can see on Slide 3, we achieved several significant milestones this quarter, including securing priority review from the FDA for both the revumenib NDA filing and the axatilimab BLA filing. We also completed enrollment in the NPM1 AML cohort of AUGMENT-101 pivotal trial, bringing us one step closer to expanding the market opportunity for revumenib. We look forward to reporting data from the initial trial in the fourth quarter of this year, which could serve as the basis for a supplemental NDA filing in the first half of 2025. These accomplishments set us up for an eventful 2024 that we expect will include 2 full U.S. regulatory approvals, NPM1 pivotal data readout, additional combination data for revumenib in KMT2A and NPM, initiation of a pivotal trial for revumenib in frontline KMT2A and NPM1 acute leukemia in combination with venetoclax, as well as the initiation of 2 combination trials for axatilimab in frontline chronic graft versus host disease. As we approach our expected approvals, we are working to ensure that we are fully prepared to successfully launch at any time during the third quarter with an ability to reach all patients in need as rapidly as possible. Steve will provide additional details on our launch preparations later in the call. Syndax has a differentiated profile as a SMID cap biotech with 2 first- and best-in-class drugs on the cusp of their potential first approvals. Notably, revumenib has a potential second significant indication and near-term expansion opportunity in relapsed or refractory NPM1 that meaningfully extends the target patient population in acute leukemia. This is unique in a launch year as it quickly broadens the market opportunity for revumenib in the relapsed or refractory setting to up to 6,500 patients. Multiple opportunities beyond the initial relapse or refractory indication exist for both assets and trials are ongoing that can drive significant long-term value for these franchises for years to come. We are well-funded with $522 million in cash as of March 31 that we expect will provide significant capital through 2026. Our current balance sheet not only supports our planned commercial launches and clinical trials, but also allows us to expand beyond our core registration indications and pursue select business development opportunities. I'll now ask Neil to provide an overview of the pipeline. Neil?

Thank you, Michael. In the first quarter, the NDA filing for revumenib, our highly selective menin inhibitor, was granted priority review by the FDA for the treatment of adult and pediatric relapsed or refractory KMT2A rearranged or KMT2Ar acute leukemia, and issued a PDUFA target date of September 26, 2024. The filing is being reviewed under the Real-Time Oncology Review, which provides a more efficient review process and has historically led to earlier approval timelines. The submission is based on data from the pivotal AUGMENT-101 trial outlined on Slide 4, where single-agent revumenib induced a high percentage of blast FLT3 responses in heavily pretreated KMT2Ar acute leukemia patients, thereby enabling many of them to undergo potentially curative hematopoietic stem cell transplant and to continue revumenib monotherapy following transplant. We've also completed enrollment in the final pivotal cohort of the AUGMENT-101 trial of 64 adult relapsed or refractory NPM1 AML patients in March and expect to report the pivotal results from this population in the fourth quarter of this year. I'll take a moment to review the Phase I data on Slide 5 that underlines our confidence in the pivotal results for patients with relapsed or refractory NPM1 AML. Multiple presentations generated by us in both the relapsed or refractory and frontline settings have highlighted the consistency of menin inhibition across NPM1 mutations and KMT2A rearrangements and we see the enthusiasm building for revumenib and NPM1. The Phase I NPM1 data that we've reported supports our conviction that revumenib could be an important treatment for this AML population. In the Phase I part of AUGMENT-101, 50% of NPM1 patients achieved an overall response and 36% achieved complete remission or CR with partial hematological recovery. And importantly, all patients with the CR/CRh were MRD negative. Consistent with the KMT2Ar population, revumenib also enabled a high percentage of NPM1 responders to proceed to transplant, 43%, and responses have been durable. This is despite many of the patients having failed prior venetoclax therapy and prior stem cell transplants. It's worth noting that revumenib has been well tolerated in patients with relapsed or refractory NPM1 AML. In the Phase I, there were no Grade 4 or 5 QT prolongation events. No patients experienced greater than Grade 2 differentiation syndrome and no patients discontinued due to treatment-related adverse events. We believe that revumenib will form the backbone of treatment for patients with both KMT2Ar and NPM1 acute leukemias. Our clinical strategy extends beyond the initial relapsed or refractory populations and into the frontline and post-transplant maintenance settings, including combinations with approved therapies. We have several combination trials ongoing with different standards of care across the continuum of patients, including in fit and unfit settings that are listed on Slide 6. Investigators presented data from multiple Phase I combination trials, including BEAT AML, SAVE AML, and AUGMENT-101 during the American Society of Hematology Conference in December, demonstrating revumenib's ability to safely and effectively combine with the standards of care. We expect to provide updated data from these trials later this year. In the first quarter, we initiated another Phase I combination trial with standard of care intensive chemotherapy, also known as 7+3. Beyond acute leukemia, we're investigating the opportunity to expand to solid tumors. Our proof-of-concept signal-seeking Phase I clinical trial in metastatic colorectal cancer is ongoing and we expect to provide an update on the progress of the dose escalation phase of the trial later this quarter. Turning to axatilimab on Slide 7. Also in the first quarter, the BLA filing for axatilimab or CSF-1R antibody was granted priority review by the FDA for the treatment of chronic graft versus host disease or chronic GVHD, after failure of at least 2 prior lines of systemic therapy, with a PDUFA date of August 28, 2024. The submission is based on data from the pivotal AGAVE-201 trial where treatment with single-agent axatilimab led to an overall response rate or ORR of 74%, with 60% of responders still in response at 1 year. Importantly, axatilimab has a differentiated mechanism of action from currently approved therapies for chronic GVHD. It is the first investigational chronic GVHD agent to target inflammation and fibrosis through the inhibition of disease-associated macrophages. We're excited about the opportunity to expand axatilimab into the frontline setting in combination with standards of care and other fibrotic diseases where a monocyte macrophage lineage plays a key role, including idiopathic pulmonary fibrosis or IPF, where we are currently enrolling a Phase II clinical trial. The team has been working hard to increase awareness of the compelling revumenib AUGMENT-101 and the axatilimab AGAVE-201 data ahead of their respective potential approvals. In April, investigators presented pediatric data from AUGMENT-101 in a plenary session of the American Society of Pediatric Hematology/Oncology that further supports the consistency of the data across the groups. Also in April, investigators presented additional analyses from AGAVE-201 at the European Society for Blood and Marrow Transplantation congress, highlighting axatilimab's impressive clinical activity in fibrosis-dominant organs, which, as I mentioned earlier, is a key point of differentiation. We have an ambitious publication plan underway, and we look forward to detailing more of the clinical benefits of axatilimab and revumenib to the prescribing community. I'll now turn the call over to Steve to talk about preparation for our planned commercial launches and the market opportunity. Steve?

Thank you, Neil. This is an exciting time to be at Syndax, and we're looking forward to launching 2 first-in-class and meaningfully differentiated agents this year. As Michael indicated earlier, we'll be ready to launch both revumenib and axatilimab in the third quarter and we've made significant progress so far this year to prepare ourselves and the market to realize the full potential of these medicines for patients, for health care professionals, and the company. Our key focus areas are highlighted on Slide 8. Our pre-commercialization strategy has focused on developing an efficient, effective, and purpose-built infrastructure to support the business and prioritize relationships with important external stakeholders in the health care provider as well as the payer space to accelerate uptake at launch. For revumenib, our prelaunch activities have been centered around disease awareness, mechanism of disease education and market access as well as ensuring patient support services are in place at the time of launch. The customer-facing leadership team has been in the field for some time, focusing on disease state awareness and building relationships with health care providers. The team is actively profiling accounts, understanding workflows, and identifying the patient journey at the largest and most influential academic centers in the country. This has allowed us to have important conversations with health care providers and other health care organization decision-makers and gain valuable insights on the market, which has helped us define our outreach strategy. We launched our non-branded campaign last year, focused on improving the knowledge and understanding around the role of menin inhibition across key segments of acute leukemia, including KMT2A rearrangements as well as follow-on indications like NPM1 mutant AML. This effort will expand as we approach a potential launch. We've recruited a talented and highly experienced sales team with an average of 22 years of experience primarily in hematology/oncology, with an average of 6 product launches per representative. This is obviously a very experienced group with existing relationships and proven past success. The customer-facing field team will play a multidisciplinary role in supporting health care professionals and patients. With regard to market access, our team has been educating commercial and Medicare payers on the burden of relapsed or refractory acute leukemia to prepare them to conduct timely and evidence-based reviews and ultimately, access decisions upon potential FDA approval, while formulary approval builds over time. We have little doubt that revumenib will be covered for reimbursement while plans review the product for formulary inclusion. We've been meeting with pharmacy benefit managers and payers since 2023, sharing relevant market and product information, and expect to reach plans covering more than 90% of all lives prior to revumenib's anticipated approval. Payers are telling us that they recognize a significant unmet need in KMT2Ar acute leukemia patients and the benefit that revumenib could provide, as supported by the AUGMENT-101 data. This is important due to the acute nature of the disease and the high mortality and morbidity in relapsed or refractory KMT2Ar acute leukemia, making the urgency to treat quickly absolutely critical. I'm excited about our progress to date and look forward to sharing more about our ongoing efforts in the future. Turning now to Slide 9. KMT2Ar and NPM1 acute leukemias represent up to 40% of all AML patients, and there are no FDA-approved targeted therapies for this population. We believe relapsed or refractory KMT2Ar acute leukemia alone represents a total addressable market of approximately $750 million in the U.S. The annual incidence of KMT2Ar acute leukemia is about 2,600 patients, and the majority are refractory to frontline standard of care treatments. We estimate a median duration of therapy across the treated population of approximately 9 months, and we believe the clinical data supports pricing competitively to other targeted therapies in AML, such as the FLT3 or IDH inhibitors. Physicians we've spoken with indicate an eagerness to prescribe revumenib early during an eligible patient's treatment journey to bring more patients to transplant and then extend responses by continuing with revumenib in monotherapy following transplant engraftment. We expect that our first mover advantage and the early experience physicians will gain treating patients with revumenib will be vitally important to the long-term success of our brand. Our significant market share is likely to extend meaningfully beyond KMT2Ar, especially as we will be the first to deliver meaningful pivotal data in other indications such as NPM1 AML. We estimate that the 2 distinct market segments in acute leukemias, KMT2Ar and NPM1, avail a total accessible population of 5,000 to 6,500 patients in the relapsed or refractory setting and an addressable market opportunity that approaches $2 billion in the U.S. Turning now to Slide 10. Approximately 14,000 U.S. patients suffer from chronic GVHD, 50% of whom require treatment beyond second line due to disease progression, inadequate response or disease manifestations that aren't wholly addressed with current treatments. There are no cures for this advanced chronic GVHD patient population. Patients initially treated with corticosteroids are then cycled through a variety of additional therapies based on the physician's experience and manifestations of the disease being addressed. The successful commercial launches of Jakafi and REZUROCK and, importantly, the speed by which both these agents gained adoption, really speak to the unmet need in chronic GVHD. We also know that despite these recent advances, the disease is still inadequately treated and physicians are looking for an agent that can better address the underlying fibrosis that ultimately leads to organ damage. Further, they are excited to have a drug with such a fast onset of action and impressive durability of response. These key points of differentiation should enable axatilimab to carve out a sizable commercial opportunity within the estimated $1 billion U.S. refractory chronic GVHD market. As you know, Incyte is our partner for axatilimab and really the leader in the GVHD space. As of last year, we exercised our option with Incyte to co-commercialize axatilimab in the United States and provide 30% of the commercial efforts, as we believe there is a considerable benefit to promoting 2 products simultaneously to a highly overlapping and targeted physician prescriber universe. We're working closely with Incyte to develop our go-to-market strategy for axatilimab and plan to align more fully with Incyte before sharing additional details. However, we expect to follow a similar set of strategic imperatives as we've just outlined for revumenib.

Thank you, Steve. Turning to Slide 11. As Michael mentioned earlier, the $522 million in cash, equivalents, and short and long-term investments on our balance sheet at March 31 is expected to provide runway through 2026. Our financial strength allows us to appropriately invest to maximize the value of our pipeline and importantly, to transition into a commercial stage organization this year. Turning to the income statement. Operating expenses in the first quarter were $79.5 million, comprised of $56.5 million of research and development expense and $23.0 million of selling, general and administrative expense. Keeping in mind that we've always embraced a disciplined approach to resource allocation, I'd like to provide financial guidance for the second quarter and full year of 2024. For the second quarter, the company expects research and development expenses to be $50 million to $55 million and total operating expenses to be $80 million to $85 million. For the full year 2024, there is no change to the existing guidance, and the company continues to expect research and development expenses to be $240 million to $260 million and total operating expenses to be $355 million to $375 million. Note that the guidance range for operating expenses for the full year 2024 is inclusive of an estimated $43 million of noncash stock compensation expense. In preparing for launch, I want to take a minute to lay out how we plan to recognize revenue for axatilimab. Slide 12 includes an illustrative example of accounting for sales of axatilimab and is not intended to provide any margin or other guidance. Commercially, our partnership with Incyte is a 50-50 split of the economics in the U.S. We will report 50% of revenues earned net of cost of sales and commercial expenses. During the period where there is a net commercial profit for axatilimab, as in the top example of the slide, our 50% share of the net profit will be recognized on our P&L as collaborative arrangement revenue. During a period where there's a net commercial loss for axatilimab, as in the bottom example on the slide, our 50% share of the net commercial loss would be included in operating expenses designated as a separate line item called share of collaboration loss. We also have various future U.S. commercial and regulatory milestones owed to us from Incyte that will be recorded as partnership or milestone revenue on our income statement. Development expenses are shared 55-45 in the U.S. and our 45% share is included in the income statement as part of R&D expense. Outside of the U.S., Incyte is responsible for 100% of the development and regulatory expenses, and we are entitled to receive milestones plus royalty on ex-U.S. sales. With that, let me now turn the call back over to Michael.

Thank you, Keith. As you've heard during the call, 2024 is shaping up to be a historic year for Syndax as we prepare to launch 2 first-in-class products, and I'm confident that we have the expertise, resources, and determination to bring these products to market. As an organization, we are truly excited to evolve into a commercial organization, and we are laser-focused on bringing these important treatment options to patients in need. On Slide 13, we lay out our key upcoming milestones for the balance of the year, and I look forward to updating you all on our progress in the coming months. As always, I would like to express my sincere appreciation to the Syndax team, our collaborators, and most importantly, the patients, trial sites, and investigators involved with our clinical programs. Through your work and dedication, we are getting ever so close to delivering on our mission of improving the lives of patients with cancer. I'd also like to thank our committed long-term investors who continue to share in our vision and support us in building Syndax. With that, I'd like to open the call for questions. Operator?

Our first question is from Peter Lawson at Barclays.

Just first question is just around how important NCCN Guidelines will be for additional indications after you get the initial approval of revumenib?

Peter, thanks for the question. Maybe I'll ask Neil to comment on the importance of the Guidelines.

Yes, thank you, Peter. We expect to receive the first approval for revumenib in the third quarter for KMT2A-rearranged acute leukemia in both adults and children. This approval should be sufficient for inclusion in the Guidelines. Additionally, as I mentioned during the prepared remarks, we anticipate reporting pivotal data from the NPM1 cohort by the end of the year. We have a strategy in place. Before the approval, presenting at a medical congress and publishing the data could facilitate initial discussions with the NCCN committee about including it in the Guidelines. The committee meets twice a year, and disease-specific committees convene at least once annually, but they may also meet ad hoc when significant new data emerges. We are taking all of this into account and aim to provide the committee and prescribers with the best available information when we publish our data.

And then as we think about the expansion of the menin inhibitor into solid tumors, kind of just if you could detail the kind of expectations around the CRC data, that's still 2Q, when we should expect to see that data, at which medical conference, and kind of the number of patients.

Thank you, Peter, for the follow-up. The question was about solid tumors and our plans in that area. As previously mentioned, we are actively working on colorectal cancer, specifically metastatic colorectal cancer in the third line and beyond. We are conducting a Phase I trial and plan to share updates on our progress in the second quarter. This is a dose escalation trial involving approximately 10 to 20 heavily pretreated patients. We are primarily assessing the activity of revumenib in this patient population, aiming for prolonged stable disease in the range of 4 to 6 months, potentially with about 15% of the patients achieving stability. This would be a significant signal, especially since patients in this setting typically do not respond well, and standard treatments do not usually lead to prolonged stable disease. We will provide updates when we are ready in the second quarter.

Our next question is from Anupam Rama at JPMorgan.

Maybe a quick one for Steven. Just wondering, before you joined Syndax and you were doing your assessment of the opportunities for revumenib and axatilimab, what really attracted you to these products? And then the second one is also actually for Steven. You mentioned very broadly what some of the levers for success in Slide 8 are for both of these launches, but anything more specific to revumenib in KMT2A that you'd highlight?

Yes. Thanks for the question. I'll answer both. First is, why did I probably come here? It's really a combination of things. I've been pretty careful over the course of my career; I think this is my fourth organization in 30 years, so the bar is pretty high. I look at all opportunities in 3 different factors. The first is there needs to be great products, products that address unmet needs, products that have a great amount of clinical data and really provide differentiated attributes. I think both rev and axa have that. I knew that coming in. And as I've seen the data and as I've reviewed lots of market research and actually engaged with KOLs, that's only been amplified. I think the second thing that I really think about is sort of who I work with. I want to be in companies with great people and great leaders, and that's exactly what we have here. Michael, the entire ELT, and the Board are all top tier, very supportive. And even walking in, the commercial leadership team that was in place was strong as well. The third thing for me is really the willingness to invest and plan for success, and we have that here too. So I'd say my expectations have been exceeded coming in, and I'm more excited now than I was even before I started. I think I'm in week 8. The second question is really around levers for success on revumenib. There's a lot we're building as a commercial organization, and all of that will be in place. I think as Neil mentioned and Michael mentioned in his remarks, we'll be ready in Q3. So infrastructure, processes, all those things will be done. I think from a strategic point of view, the 3 things that I think about that we are very focused on, really, the first is the population of patients is limited. We know that, right? That opportunity will grow over time, but finding them is critical. Patients are fragile. They need treatment immediately. So we've got focus there. I think the second thing is just the landscape of health care delivery. There are multiple stakeholders out there that deliver care to patients: physicians, nurses, advanced practice providers, pharmacy reimbursement, pathology, you name it; we have a customer-facing footprint that will address and directly engage with that dynamic. And the third point is really access. Neil mentioned NCCN Guidelines, which will be important. Payers are looking for that, they're looking for other published data, but patients need access to treatment. We've been deployed against the payer space for some time, making calls directly with payers, and that is in an effort to really expedite formulary review. And in addition, we've built a support program to meet the needs of patients, which we know they'll need. So thanks for the question. Hopefully, that was a good answer.

Our next question is from Brad Canino at Stifel.

Relating to the plan for the pivotal ven/aza combo trial to be initiated by year-end, this will move the emphasis of clinical endpoints from CR towards remission durability and OS. And I want to ask, how does the company plan to evaluate data from the uncontrolled trial updates later this year, both from the combos and also the NPM1 pivotal monotherapy, in order to gain confidence in the randomized time-to-event endpoints for the frontline pivotal?

Brad, thanks for the question. I'm going to turn it over to Neil to address that.

Thank you for the question. Regarding the combination studies we've reported, the one relevant to this situation is the BEAT AML study, which involves starting the Phase III ven/aza revumenib ven/aza study by the end of the year. As you know, we shared data during last year's ASH meeting and plan to provide updates throughout this year. The data is promising, generating excitement not only within our company but also among investigators and the wider community. There is strong enthusiasm for beginning the Phase III study. To remind you, the response rates, including the complete response and complete response with partial healing rates observed in the BEAT AML study, have surpassed historical controls from the VIALE-A study, particularly with respect to molecular MRD-negative complete response rates. Furthermore, the new data indicates that revumenib can be effectively combined without increasing toxicity in the backbone therapy, also showing added efficacy for the target patient population. This is supported by findings from the SAVE study, which combines revumenib with venetoclax and oral decitabine in a relapsed/refractory setting, as well as our own AUGMENT-102 trial with chemotherapy in a relapsed/refractory population. The evidence shows that revumenib can be combined with established standards of care without adding toxicity in the Phase III trial's target population. For the Phase III trial involving newly diagnosed and fit patients, the BEAT AML data suggest that revumenib enhances the efficacy of the backbone therapy. We will engage with health authorities while designing the trial, and while we usually refrain from commenting in detail, we look forward to sharing more about the study before it begins later this year.

Our next question is from Phil Nadeau at TD Cohen.

Congrats on the progress. A few from us. First, in terms of the Phase II doses in the combo trials or validating the Phase II doses in the combo trials. So this morning's press release notes that some of the trials have been expanded to validate the Phase II doses. Just curious whether you'd be going to disclose whether the full monotherapy dose of revumenib is being used in those combinations at this point?

Neil, go ahead.

Thank you for the question. To clarify, the three studies I mentioned earlier are currently under discussion, so I won’t repeat their details. In each of these studies, we investigated two doses of revumenib: 113 milligrams and 163 milligrams. The 163 milligram dose is the expected monotherapy dose when combined with the strong CYP3A4, which will be included in the label. Revumenib has been administered at the full dose in all three trials, as we discussed during the event at ASH last December. In all trials, we have cleared the dose-limiting toxicity windows for both doses, and both are now being expanded in each trial. While we are still characterizing the recommended Phase II dose, we generally expect that revumenib can be combined at its full monotherapy dose with backbone standards of care.

That is very helpful. And then second question, based on the milestone tables that you just presented, it doesn't seem like you're anticipating an advisory committee review for either revumenib or axatilimab. Is that accurate? And can you remind us, did the FDA explicitly say in the acceptance letters that ad-coms would not be necessary for both drugs?

Yes, Phil, thank you for the question. We expect that neither axatilimab nor revumenib will require an advisory committee review, but we haven't explicitly stated this or commented on any regulatory correspondence from the agency regarding this matter. However, that is our expectation, that neither will need an advisory committee review.

Perfect. And then last question from us. You referenced the 9-month expected median duration of use for KMT2A patients. Can you remind us what proportion of patients going to transplant is assumed in that 9-month figure?

Phil, thanks for the question. It's roughly about 1/3 of that path, right? I'm sorry, of the patients that go to transplant.

Yes, sorry, Phil, it's Anjali. I think what we've been saying is there's basically 3 groups of patients that seem, based on the trial, to all be about an equal size population. There were 1/3 of patients that did not respond. Of the 2/3 of patients that responded, half went to transplant. So overall, the entire population, 1/3, go to transplant.

Our next question is from Michael Schmidt at Guggenheim.

I just had one on the axatilimab launch, now that we're obviously closing in on the PDUFA date later this year. And as we think about the sort of $1.5 billion to $2 billion opportunity in the relapsed/refractory setting, just wondering how we should think about perhaps the early launch trajectory, subsequent to approval? Are there any good proxies we should look at, for example? And then what are your expectations for potential off-label use in the NPM1 subset? Obviously, where you will have data later this year, could that help next year to accelerate the launch early on?

Yes, Michael, thank you for the questions. I'm going to ask Anjali to comment on the launch.

Yes, thank you, Michael. We are really excited about this opportunity. Revumenib presents us with a very unique situation. We completed the clinical development in record time, achieving our first patient dose to NDA filing in four years. We have generated data supporting its use across AML and ALL in both adults and pediatric populations. As you mentioned, we expect approval in the third quarter of this year and will have data for another significant patient population treated by the same healthcare providers in a disease where physicians can select the best options for their patients. Additionally, we discussed the combination data we've collected with revumenib, which allows physicians to consider multiple ways to integrate this drug into their treatment plans. I believe we have a unique launch trajectory that we will be establishing in real time. There isn’t a perfect comparison for all the aspects of what’s coming in the next year, but we have observed significant enthusiasm for how this treatment can provide care to patients who previously had limited options. The last two ASH meetings highlighted the data we've generated, indicating how much education on this topic is already present. As Steve mentioned, we are doing a lot to ensure that everyone is aware of the drug. All the necessary support and patient resources are in place to facilitate its use, and we are eager to have a strong launch for revumenib.

Maybe just a follow-up. Can you just remind us what percentage of the AML market is under Medicare? And how do you think about pricing in the Medicare population, any sort of expectations for free drug programs as we sort of think about the early launch, again, later this year?

Yes. Thank you, Michael. I'm going to ask Steve to address those questions.

Yes, I mean it's a good question. And the payer space is different for KMT2Ar versus NPM1. It will be more of a commercial patient for the KMT2A launch, just based on the age of the patient. We'll expect coverage honestly at launch. Formulary acceptance will happen over time, right, typically takes 6 to 9 months for that to happen. But in the meanwhile, health care providers, their staff are very fluent on how to get through the medical exception process. That's where the NCCN Guidelines are helpful and all the other published data. Medicare payers will be less important for KMT2Ar, but for NPM1, due to the patient population, which is a little bit older, it's going to change. So our approach has been really over the last 9 months, even a year, is really to approach all plans. We've been delivering PIE and information exchanges. That's the Pre-approval Information Exchange. So we've had some very good interactions with payers. They recognize the unmet need and the criticality of patient care. And I think as Anjali said, it's a unique launch, where you've got a launch followed by, we'll just say, another launch, within a year. So we're preparing for both at the same time. It takes time to build coverage, so we've got the whole payer space. And I think in my prepared remarks, we will talk to payers that cover 90% of covered lives in this country, which is as good as it gets in advance of approval. So we're prepared for success.

Okay. Great. And then maybe just a housekeeping question. As we think about the axatilimab filing and potential approval, are there any milestones due from Incyte for that, that we should incorporate in our models this year?

Yes. Thank you, Michael. Keith?

Yes, Michael. As we mentioned in this quarter and previous quarters, we have both development and regulatory milestones as well as commercial milestones from Incyte. The total for development and regulatory milestones under the agreement is $220 million, while total commercial milestones amount to $230 million. This brings the total to $450 million owed to us. You can expect these to be triggered by significant regulatory events, like approval. I think that's a reasonable expectation, though we haven't specified the amounts further.

Our next question is from Yigal Nochomovitz at Citigroup.

Regarding the NPM1 regulatory pathway, do you think you might pursue the breakthrough pathway, or even the breakthrough designation? Or given the NDA, are those options not particularly necessary?

Thank you for your question, Yigal. You had some audio issues, but I believe I understood your inquiry. As you know, we have received breakthrough therapy designation for KMT2A. Regarding NPM1, there is a chance we could also achieve breakthrough therapy, which is particularly important for your first indication. The engagement concerning KMT2A, the molecule, and the submission package has been robust, and we have priority review as well. For NPM1, we plan to utilize some of the existing access points with the agency, and we feel well positioned based on what has come our way thus far. While we typically do not comment on regulatory strategies, there is an opportunity for us to submit for breakthrough designation in the future. We expect to have data on this program later this year and aim for a submission in the near future, followed by a drug approval in 2025 via an sNDA process. Overall, this creates an expedited pathway through the designations we currently hold and possibly other options we may consider later.

Okay. And then when you think more broadly about the revumenib in terms of the spectrum of care in AML, both in the frontline and in the relapsed/refractory and given the fact that there's a good chance that you're going to be initiating a pivotal trial in the frontline in combo with venetoclax, when you start to think about the commercial build there, are you making assumptions around the potential retreatment of revumenib for patients that received revumenib in the frontline in a combination setting, whether it be with venetoclax or perhaps even with the 7+3, including those patients in the build for revumenib in a relapsed/refractory setting? Or once they're treated in the frontline, then that wouldn't be part of your assumption set?

Yes, thanks, Yigal. I think our assumption is that once you're treated with revumenib, or at least from our vantage point, the way we see it today, I think once you're treated in the frontline setting, it's less likely that you're going to be treated in the relapsed/refractory setting again with another menin inhibitor. And Neil, do you want to make a comment?

I agree with Michael's comments. It's a bit nuanced because, in the long term, I can imagine situations where patients who have already been treated and relapsed much later could become NPM1 positive or KMT2A positive and might be re-exposed. However, I generally support Michael's point that we shouldn't expect a large number of patients to fit into that category.

And just one on axa. Do you have any timelines for the IPF trial in terms of enrollment and data?

Thanks, Yigal. No, not at this point. I think we are enrolling. As you know, we started recently bringing up sites and enrolling patients, and it's going nicely. And so we'll have more to say in terms of milestones, both for enrollment as well as data as we get further into the year, maybe into next year.

Our next question is from Kalpit Patel at B. Riley Securities.

Can you comment on what proportion of patients that you estimate might be eligible to receive revumenib as a maintenance treatment after induction and consolidation? I'm trying to understand if that median duration of treatment in that specific frontline setting would be higher than the 9 months that you expect in the relapsed/refractory setting.

Yes, Kalpit, thank you for your question. If I understand correctly, regarding patients eligible for maintenance in the relapsed/refractory setting, not all patients who have undergone a successful transplant would necessarily qualify. They must be stable and have successful engraftment, which typically is the first requirement, as physicians often remind us of the engraftment period. However, generally speaking, all patients should be considered for maintenance, and this has been an ongoing discussion with physicians. In the frontline setting, the assumptions for long-term maintenance may differ for a fit population. If patients are treated early and have successful transplants, the expectation is that they would stay on treatment longer and perform better. This would likely alter the assumptions regarding timelines and maintenance between frontline and relapsed/refractory settings. We do not have a precise estimate for this yet, but we are working to generate that data, and we will gain better insight over time.

Our next question is from Jason Zemansky at Bank of America.

Congratulations on the progress. Regarding the commercialization plans for revumenib and your initial outreach, I have to imagine there's already quite a bit of excitement across at least the more academic focused community. But what sort of division between rapid adopters and non do you expect? How quickly do you expect maybe the more community-based prescribers to come on board as far as awareness and education goes? And maybe bolus isn't quite the right descriptor given patient dynamics this late in treatment, but do you expect an initially large bump in patient numbers or more of a straight-line uptake?

Jason, thank you for the question. I'm going to turn it over to Steve to address your questions.

Thanks for the question, Jason. There’s a lot of excitement. Prior to my joining the company, significant research had been conducted, including market research, advisory boards, and meetings with key opinion leaders in the field medical team. There is considerable demand due to the lack of treatment options. I was recently in New York at Cornell and Sloan, meeting with key opinion leaders, and they are very eager for the drug to come to market. I believe academic centers will quickly adopt this product, as they are prepared for it. Awareness around revumenib and menin inhibitors is already quite high. In the broader medical community, adoption may take a bit longer due to potentially fewer patients being seen initially. It will be our responsibility to support that transition. From a commercialization perspective, we will have a sufficiently sized team to cover over 95% of the opportunity and a non-personal promotional program to reach areas we may not cover directly. I anticipate quick uptake overall, driven by patients ready for treatment. Regarding your second question, there won’t be a significant initial spike. We have an expanded access program in place, although I can't disclose specific patient numbers, no one is withholding treatment from eligible patients because the need is too great. There may be some initial extra use from the expanded access program, but that will taper off in the first months after launch. After that, we expect a typical increase based on our forecasts and the number of available patients.

Got it. Makes sense. And then maybe just a quick follow-up on your Phase I in metastatic colorectal cancer. In terms of no, no-go decision, I know you mentioned disease stabilization is important, but I was curious, is there a specific signal, I don't know, maybe a biomarker, that you're looking for in terms of menin's potential or hypothetical role in driving solid tumors that would just make you feel confident about investing significantly in this potential expansion opportunity?

Jason, thanks for the follow-up on CRC. I'm going to turn it over to Neil to address.

Yes, thank you. In the part of the study that has been conducted so far, I want to emphasize that this is primarily the safety aspect of the study. We are focusing on safety, but we are also examining clinical responses and biomarker data. Our expectation is that as we progress towards making a decision regarding future development in this area, we will consider all evidence available. We haven't specified which correlative data we are looking at yet, but we will provide more details in the future. I don't anticipate seeing a lot of data on correlative studies in our second-quarter update, but I want to assure you that we are pursuing these studies. As I mentioned, we will take all evidence into account.

Our next question is from Justin Zelin at BTIG.

Welcome to Steve. So ahead of 2 launches this year, I wanted to ask how large of a sales force you're looking to build here? And could you talk to the overlap of providers who treat both leukemia and chronic graft versus host disease for the promotion of both products?

Sure. Maybe I'll let Steve take that question.

Yes, I appreciate the question, Justin. In terms of sales force size, we're not prepared to provide the exact color and size of the team. But it will be a team that I think can really address customer needs. Our goal, whether it's providers or anybody within the health care delivery system, is to make it a great customer experience. So we're prepared to link up to all different aspects of health care organizations to make sure we're meeting the needs and supporting providers in their treatment of patients. So I think I used the term plus-95% coverage. So we'll cover the opportunity. There's no doubt about that. In terms of overlap between GVHD and rev, there's high overlap. I mean we're likely, along with Incyte, calling on the same treatment centers, right, whether it's treatment of AML or treatment of transplant. And we'll leverage that call point. There's probably a third overlap right now of our rev audience with the axa audience. We'll obviously provide 30% of the effort. So we'll leverage our footprint and we will cover the market opportunity in both opportunities.

Our next question is from Chris Shibutani at Goldman Sachs.

Many questions have already been raised regarding the focus, so let me pose a broader, long-term question. This relates to your guidance on operating expenses and R&D spending. In the near term, it seems that to achieve your full year guidance, there will be a significant increase in the second half. Is this mainly due to the combination studies you have underway? Additionally, Anjali, you've done excellent work in developing this portfolio, and now the company is focused on launching two products. However, as you are aware, investors are eager to understand what may be coming next. What are your thoughts on capital allocation priorities and further business development? What opportunities are you observing, and what is your level of interest?

Great. Thank you, Chris. Good questions. Maybe, Keith, do you want to take the first one on the longer term?

Yes, sure. Chris, I wouldn't necessarily agree that it's a significant step up. Our total operating expenses in the first quarter approached $80 million, and the guidance range for the second quarter is between $80 million and $85 million. If we continue on this path, we would be looking at roughly $320 million. We do anticipate some increase in the second half of the year. As we ramp up IPF, continue the first-line 7+3 combination trial with rev, and prepare to launch the pivotal Phase III ven/aza combo trial with rev, this will contribute to our R&D expenses in the latter half of the year. Additionally, we are expanding our commercial organization, so we expect growth in SG&A related to the sales force and the necessary support for that team.

And in terms of your second question, Chris, on business development, maybe I'll start and turn it over to Anjali. So look, I think our strategy has been, and we've been pursuing the same business model for quite some time, which is to in-license and develop new molecules with differentiated profiles. I think we've been fortunate to have great success with our in-licensing strategy and having these 2 molecules that are nearing approval. And so the bar is always quite high with regard to new opportunities and it gets incumbent upon us to be thoughtful about how we allocate capital. And so we do think that additional molecules, bringing them into the pipeline, backfilling the earlier part of the pipeline, is quite important, and we are interested in doing that. And so I don't know if Anjali, you want to make a comment on our activities, but we remain quite disciplined about what we're doing.

Yes, no, I think you said it well, Michael. We're very actively engaged in the market, looking across a variety of sources for new opportunities and spending a lot of time on diligence, and hopefully, we'll have some exciting news to share, but there's definitely a lot to look at.

Our next question is from George Farmer at Scotiabank.

A competitor of yours has talked about combining their menin inhibitor with other targeted therapies like FLT3 inhibitors and the like. There hasn't been too much conversation on the call about that this morning. Is that something that you're thinking about as well in greater detail?

George, thanks for the question. So in terms of combinations, maybe I'll let Neil comment on what else is going on. With targeted therapies, obviously, we have the trials ongoing. The pillars of our strategy being the ven/aza in the unfit population and ven and Cobi, if you will, is another interesting option for patients in the relapsed/refractory and perhaps in earlier patients as well. So just think about it in terms of ven combos. And then on the fit side of the equation, in combination with chemotherapy, we've already demonstrated the drug's ability to be combined with chemotherapy in the relapsed/refractory setting. We'll have data updates on that. We'll also have additional data, as we talked about, on the ven combos this year, which so far looks extremely good. But I think there's options open to us. And Neil, I don't know if you want to comment on some of those.

Yes, we have investigator-initiated trials planned or ongoing where revumenib is being studied in combination with gilteritinib or midostaurin. Conducting the pivotal program in the frontline fit population with both NPM1 and FLT3 mutations presents significant technical challenges and is not central to our strategy. While we have not disclosed our overall strategy, we plan to initiate an unfit Phase III trial by year-end. We are also dose-ranging in combination with 7+3, which will allow us to start a Phase III trial in 2025. This upcoming trial is expected to exclude dual-mutation patients due to the complexity and scale of such a study, so we prefer to generate evidence in that population rather than pursuing a registration strategy.

This concludes our question-and-answer session. I will now turn the floor over to Mr. Michael Metzger for any additional comments or closing remarks.

Thank you, operator, and thank you all for your questions. Appreciate you tuning in today. We look forward to seeing you all at our planned investor events, including the Bank of America Conference in May and the Goldman Sachs conference in June. And with that, we wish you a great day.

The meeting has now concluded. Thank you for joining. You may now disconnect.