Blueprint Medicines Corporation (NASDAQ:BPMC) Q4 2022 Earnings Call Transcript

Blueprint Medicines Corporation (NASDAQ:BPMC) Q4 2022 Earnings Call Transcript February 16, 2023

Operator: Good morning, and welcome to the Blueprint Medicines Conference Call. At this time, all participants are in listen-only-mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded. At this time, I’d like to turn over to Jenna Cohen, Head of Investor Relations at Blueprint Medicines. Please proceed.

Jenna Cohen: Thank you, operator. Good morning, everyone. Welcome to Blueprint Medicines fourth quarter and full year 2022 financial and operating results conference call. This morning, we issued a press release, which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we’ll be reviewing today by going to the Investors section of our website at www.blueprintmedicines.com. Today on our call, Kate Haviland, our Chief Executive Officer, will provide a perspective on Blueprint’s 2022 accomplishments and how that positions us to continue to grow and drive value in 2023. Philina Lee, our Chief Commercial Officer, will review AYVAKIT’s performance and our upcoming opportunity to expand the label and treat many more patients with SM.

Christy Rossi, Chief Operating Officer, will provide a preview of how we will further our SM leadership at Quad AI as well as touch on portfolio milestones for the year; and Mike Landsittel, our Chief Financial Officer, will review our fourth quarter 2022 financial results and 2023 guidance. Fouad Namouni, President of Research and Development; and Becker Hewes, Chief Medical Officer, are also joining our call and will be available for Q&A. Before we get started, I would like to remind everyone that the statements me make on this conference call will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of SEC filings.

In addition, any forward-looking statement made on this call represents our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. I’ll now hand the call over to Kate.

Kate Haviland: Thank you, Jenna. Good morning, everyone, and thank you for joining the call today. In 2022, we significantly advanced our business, making important progress across our AYVAKIT launch in advanced systemic mastocytosis and research and development execution on our portfolio of precision therapies. As we kick off 2023, Blueprint offers a compelling value proposition and a unique profile. I would like to highlight three of the most important components of that position that suits us or positions us well for substantial growth this year and beyond. The first is our leadership in systemic mastocytosis. In 2022, our first full year of AYVAKIT launch in advanced SM, we doubled our net product revenue year-over-year.

The U.S. accounted for the majority of these product sales. And in 2023, we will see our international launches in advanced SM gaining momentum as we work through the access and reimbursement process in key countries. Importantly, through the launch of AYVAKIT advanced SM, we have built a strong team and a foundation of commercial capabilities and infrastructure. We are ready now to scale the impact of AYVAKIT with our potential label expansion in ISM. Philina will go into more detail on AYVAKIT’s performance in 2022 and preview how we plan to build what will become a blockbuster therapeutic category through our anticipated launch in ISM midyear. The second component is our clinical stage pipeline focused on best-in-class investigational therapies that address serious medical problems in large patient populations.

Our development efforts are focused in mast cell disorders, lung cancer and breast cancer. Within these areas, each of our programs have a strong mechanistic rationale and a development strategy to achieve a first or best-in-class position. In 2022, we worked to build the foundation for these programs through dose escalation and dose optimization. And we are poised this year to rapidly advance these programs into earlier lines of treatment, where we have the greatest opportunity to impact significant medical needs. We also continue to broaden our discovery efforts, expanding the range of high-value targets we can pursue as we aim to increase our already impressive research productivity, most recently demonstrated by the announcement of our new research program targeting wild-type kit for common mast cell diseases adjacent to systemic masocytosis, including chronic urticaria.

The third and last component is that we are operating from a position of financial strength. Our strong cash position and disciplined approach to capital allocation ensures that we are well positioned to execute on the range of opportunities we have in front of us, while driving towards a sustainable financial profile. Today, we have greater than $1 billion in cash on our balance sheet, and we are growing product revenue, which will continue to become a more significant portion of overall revenue this year. Mike will go into our financial performance in more depth later on in the call. At Blueprint, we have an incredible growth story right in front of us in 2023 and beyond. We call this precision at scale. This story starts with our existing commercial portfolio, which provides a certainty of value and a near-term opportunity to drive revenue acceleration.

Beyond SM, our discovery and clinical stage portfolios provide multiple opportunities for us to tackle increasingly large opportunities in oncology and beyond. This diversity of fundamental value drivers creates multiple avenues for growth and upside across all aspects of our business. As a fully integrated company, we have critical mass, including the expertise, the infrastructure and most importantly, the right people to deliver on these opportunities, creating extraordinary value for patients, the medical community and for our shareholders. Now let me turn it over to Philina to review AYVAKIT’s performance and provide a perspective on the upcoming ISM launch.

Photo by National Cancer Institute on Unsplash

Philina Lee: Thanks, Kate. Good morning, everyone. Let’s start with AYVAKIT performance. In 2022, we doubled AYVAKIT net product revenue, achieving $111 million. Fourth quarter revenues were $30.1 million, with $26.3 million in the U.S. We have established AYVAKIT as the standard of care in advanced SM in the U.S., where we continue to grow the number of patients treated with AYVAKIT year-over-year. In 2022, we exited the year with nearly 500 patients on AYVAKIT. The percentage of patients on free drug remains stable. In Q4, AYVAKIT growth was driven by several important measures. We added nearly 50 new accounts, increasing the breadth of prescribing to approximately 400 accounts with AYVAKIT experience. AYVAKIT penetration increased across all subtypes of advanced SM.

Approximately 75% of patients who start AYVAKIT are treatment naive, which is a promising lead indicator as we focus on growing the treated advanced SM market. We are confident in our guidance of $130 million to $140 million in AYVAKIT net product revenue this year across GIST and advanced SM. I want to emphasize this guidance is specific to our current indication. The midpoint of this range represents a more than 20% increase in AYVAKIT revenues year-over-year, and we also expect to achieve additional revenue for AYVAKIT this year, above and beyond our base guidance due to our anticipated launch in ISM. Now let’s turn to ISM. Upon approval, AYVAKIT will be the first FDA-approved therapy for patients with ISM. Patients and providers have been waiting for this for a long time.

With our PDUFA date in hand, our team is laser-focused on building the market to deliver on this incredible opportunity to transform patients’ lives. AYVAKIT represents a blockbuster opportunity in FM, with an estimated $1.5 billion global annual peak, chances to make this kind of patient impact are rare in our industry, and this has enabled us to rapidly recruit talent as we’ve incrementally expanded our highly experienced field team. Our U.S. launch strategy focuses on 7,500 patients with moderate to severe ISM. These patients are actively seeking treatment, which is limited to symptom directed polypharmacy today. We expect early adoption of AYVAKIT in patients with severe symptom burden, followed by patients with moderate symptom burden over time.

To prepare for ISM launch, we’re focused on three key areas. First, we’re engaging a broader provider base who are managing ISM patients. Our field team is on the ground, engaging the heme/onc and allergist immunologists who are seeing the most ISM patients to understand their practices and to educate on SM. Our greatest focus is on the top 350 providers who are managing approximately 1,500 moderate to severe ISM patients today. From our field intelligence and primary market research, providers say about half of their patients are not well controlled on current therapy, which ties well to the 7,500 patients we can see in claims. Our second area of focus is activating patients to consider a new treatment option. Our patient and caregiver campaign, it’s something has now enrolled thousands of highly motivated prospective patients who suspect they may have SM.

And we know that an educated and motivated patient is a catalyst for treatment. Third, we’re focused on maintaining strong and rapid patient access to therapy. Today’s favorable access environment for AYVAKIT provides a strong foundation. All doses are currently on the market today with virtually no access challenges and industry-leading time to fill. Now let’s talk more about expectations for our initial launch ramp in ISM, which we expect to reflect our rare disease launch trajectory. We think the HAE market is a good example for how ISM can develop into a blockbuster market. We see several similarities. First, HAE is a rare disease treated by allergists. Multiple disease-modifying therapies are approved and reimbursed today with price points above AYVAKIT’s current list price.

Over the past 15 years, the introduction of these therapies catalyze development of the HAE market, enabling linear sales growth over this time frame. In 2021, global sales of prophylactic HAE therapies were approximately $1.5 billion and still growing. There are 7,500 diagnosed and treated HAE patients in the U.S. today, which is remarkably similar to the number of diagnosed and treated patients with moderate to severe ISM. So collectively, the HAE experience gives us confidence in the commercial launch trajectory for AYVAKIT in ISM. As you see with HAE, we expect a rare disease ramp. While we don’t expect an initial launch bolus, there are several factors that should accelerate the development of the SM market, including our efforts over the past several years to increase disease awareness and diagnosis rates, as well as our advanced patient identification capabilities, and this will further help to catalyze treatment and market growth.

As we drive towards the PDUFA date for ISM, AYVAKIT has all the harbingers of a strong launch, high medical need, first to market with a strong product profile and a highly motivated group of patients and providers who are waiting for an FDA-approved therapy. With our experience and our leadership in SM, we’re confident in our ability to capture the significant ISM opportunity ahead. With that, I’ll turn it over to Christy, who will speak to Blueprint’s leadership at Quad AI.

Christy Rossi: Thanks, Philina. Good morning, everyone. Next week at Quad AI, we are proud to share data across multiple presentations that further solidify our long-standing scientific leadership and commitment to SM. The PIONEER study definitively demonstrates that AYVAKIT potent and selective inhibition of KIT D816V, reduces mast cell burden, improve symptoms and therefore, transforms the quality of life of SM patients. Since presenting the top line data last August, we’ve met with a variety of health care providers who treat SM patients to understand what data is most meaningful to them. While the specific outcome measures that are most impactful will vary by physician and it tends by specialty as allergists have a different reference frame for clinical trials and are much more used to PROs, for example, than hematologists are.

Some themes have emerged consistently. The first is that safety is key. A clean safety profile lowers the hurdle for prescribers and patients to consider a disease-modifying therapy like AYVAKIT, shifting the conversation from why try a new therapy like AYVAKIT to why not. The second is that the totality of impact across symptoms and quality of life is paramount. Our primary endpoint of mean change in TSS captures the symptom benefit broadly. In addition, SM treaters are interested in the impact on patient’s most bothersome symptoms, which can motivate a patient to want to initiate therapy, as well as the impact of treatment across the specific symptoms captured in the TSS. Finally, prescribers are looking for symptom improvement to translate into impact on a patient’s quality of life, which is the ultimate goal of therapy.

Third, data on measures of mast cell burden helps to explain the biological rationale for the benefit that health care providers are seeing in their patients. Seeing meaningful and consistent impacts in these measures, increases prescriber confidence in a therapy’s potential to alter the course of disease. Finally, in a chronic lifelong disease like SM, prescribers are very interested in understanding the impact of treatment over time. We designed Part 3 of PIONEER specifically to assess and capture the benefit of treatment over the longer term. With that feedback in mind, we are looking forward to sharing more from PIONEER in 3 presentations at Quad AI. An oral presentation on Sunday, February 26, will detail the statistically significant and clinically meaningful results that AYVAKIT achieved across the primary and all key secondary endpoints in PIONEER.

We plan to show additional data on our primary and secondary endpoints, including information on individual symptom benefit, as well as data from the 48-week crossover portion of the study. We will also have two additional presentations that will focus on AYVAKIT’s effect on skin signs and symptoms and on quality of life. We are excited to share these important results in detail for the first time, demonstrating the disease-modifying benefits of AYVAKIT and showing how AYVAKIT empowers physicians to address the most important concerns of their ISM patients. Other presentations at the meeting will characterize the burden of disease and showcase new approaches to accelerate diagnostic rates and continue to grow the ISM market. We look forward to this important conference and to sharing more detail during our corporate call on Monday, February 27.

I’ll now turn briefly to our portfolio updates for this year. In January, we guided to a variety of milestones across our portfolio as we work to expand our impact on patients globally. We discussed tow important AYVAKIT milestones already this morning, the upcoming presentation of the PIONEER data at Quad AI, as well as our anticipated approval and launch in ISM by midyear. Today, we are also pleased to confirm that we have received EMA validation of our type 2 variation for AYVAKIT and ISM, bringing us a step closer to this important indication expansion and launch in Europe. We’re on track for our other corporate milestones for the year, including IND submission for BLU-525 and presentation of initial dose escalation data from both BLU-451 and BLU-222 in the first half of the year.

Last week, we announced that the FDA had issued a partial clinical hold on the VELA trial due to visual adverse events observed in a limited number of patients. Patients who are currently enrolled in the study are continuing to receive study drug, and we are working expeditiously with the FDA to resolve the partial hold and resume study enrollment. More broadly, we look forward to sharing additional data across our portfolio as we reach these milestones and make progress towards our 2027 Blueprint. With that, I’ll turn the call over to Mike to review our financial updates.

Mike Landsittel: Thanks, Christy. Earlier this morning, we reported detailed financial results in our press release. For today’s call, I’ll touch on a few highlights. For the full year, total revenues were $204 million, including $111 million in net product revenues from sales of AYVAKIT and $93 million in collaborations and license revenues, exceeding the high end of our 2022 total revenue guidance of $200 million. Of these full year revenues, $30.1 million of AYVAKIT net product revenues and $8.7 million in collaboration revenues were recorded in the fourth quarter. As Philina noted for AYVAKIT, we saw continued growth in advanced SM patient starts and product revenue. Our total operating expenses were $723.7 million for the full year and $183.7 million for the fourth quarter.

Our Q4 operating expenses showed a quarter-over-quarter decline from Q3 as we continue to leverage operating efficiencies across our businesses. In 2023, we anticipate that we will achieve $130 million to $140 million in AYVAKIT net product revenues for advanced SM and GIST. We also anticipate full year collaboration revenues of $40 million to $50 million from existing collaborations. This guidance highlights our expectations for both the continued diversity of revenue and a continued but more moderate growth of AYVAKIT product revenue in advanced SM and GIST. I want to reemphasize that this guidance is specific to our existing AYVAKIT indications, and it does not include growth from our anticipated label expansion into ISM. We expect our operating expenses to grow moderately in the first quarter of 2023, and this will be driven by our preparations for the launch of ISM, including the impact of our incremental field force expansion, as well as planned manufacturing investments to support the continued progress of our clinical programs.

We then anticipate operating expense growth will flatten in the second half of the year as we recognize economies of scale across our portfolio. As we enter 2023, we are in an exceptionally strong financial position with nearly $1.1 billion in cash that will fuel our 2027 Blueprint to achieve precision at scale and create transformative value for patients and shareholders. With that, I’ll now turn the call over to the operator for questions. Operator?

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Q&A Session

Operator: Thank you. We will now start today’s Q&A session. Our first question today comes from Dane Leone from Raymond James. Your line is now open.

Dane Leone: Hi. Thank you for taking the questions and congratulations on all the progress. I think for the guidance that you’ve outlined this morning, we have a number of questions coming in that are pretty similar from investors that are kind of focused around when you look at the current prescriber base of AYVAKIT and ASM, what the overlap is at those centers with patients you identified as being ISM patients who could be eligible for treatment once you get the approval? And I think the genesis of that is trying to help people of once you get the approval, where the launch could be initially focused and kind of what percentage of the target population would be representative of your current prescriber base? Thank you.

Kate Haviland: Thanks for that question. And Philina do you – can you weigh in on that?

Philina Lee: Yes. Thanks very much for that question. So as you know, our teams are in the market on the ground today, engaging with top volume prescribers of AYVAKIT, as well as the top volume providers who are treating ISM patients. And in fact, we do see some overlap. And so within those top 350 high-volume prescribers, they are treating nearly 400 moderate to severe ISM patients today who are potential candidates to start AYVAKIT rapidly upon approval.

Dane Leone: Thank you.

Operator: Our next question today comes from Marc Frahm from Cowen and Co. Your line is now open.

Ernie Rodriguez: Hi, guys. This is Ernie Rodriguez for Mark. Thanks for taking my call and congrats on the quarter. So you mentioned the most bothersome symptoms that will be presented with a PIONEER data later this month. So this endpoint obviously focuses more on symptom with more severe impact on any given patient. Do you think that gives you a bigger range to show symptom benefit versus the overall composite? And how do you see the threshold of clinical meaningfulness differs from the limited domains on the TSS score? Thanks.

Kate Haviland: So Ernie, sorry, I think you’re breaking up a little bit. We appreciate the question. I believe what you’re asking is how are we thinking about the breadth of impact across various symptoms in the PIONEER data versus kind of the interaction with the most bothersome symptom. I believe that was your question. So maybe what we can – is that correct? Okay. So I think what Christy was – great. So I think what Christy was laying out is really that we have – in PIONEER, we have demonstrated statistically important and clinically meaningful benefits to patients across a range of ways of looking at treatment impact. And that includes the impact of pathological mast cells from our quantitative measures, it includes the impact on both the overall symptom burden of patient experiences as measured by the TSS as well as impacts across all the individual symptoms and domains.

And so we really look forward at Quad AI to be able to put that data out to show those that impact the broad and kind of impact that AYVA has. And I think importantly, it is that the early impacts we see as well as the deepening over time that is going to be important to prescribers as we have talked about.

Ernie Rodriguez: All right. That’s helpful. Thank you.

Operator: Our next question today comes from Brad Canino from Stifel. Your line is now open.

Brad Canino: Thanks and good morning. Maybe on the CDK2, I’d like to ask if over the past week have any more patients completed eye exams, particularly the patient that had the Grade 3 event and have those results been consistent with what you previously saw? And then if you can just quickly walk through the current thinking of why those vision events are unlikely to impede the full development of this asset and the logistical steps to reactivate this trial? Thank you.

Kate Haviland: Thanks for the question. Becker, will you pick up?

Becker Hewes: Yes. So with respect to the question on the eye exams for the patient with the Grade 3, and this really applies to all of the patients that we have full eye exams on. There’s really absolutely nothing abnormal showing up on these ophthalmologic exams and they’re very extensive ophthalmologic exams. And I think this is really consistent also with the symptomatology, which are – which are very brief episodes of either changing of the intensity of light or a bit of blurriness. Patient with a Grade 3 also had an MRI showing that there was nothing in the central nervous system that could explain the symptoms. But it’s really the really brief nature of the symptoms and the fact that they resolve so quickly upon either briefly stopping the drug and then restarting at a lower dose.

So – and then with respect to the time line or the steps needed to get the program back on track, we’ve been working very closely with the FDA, who’ve been extremely cooperative. The main reason, as we said for the partial clinical hold is simply to modify the protocol to put ophthalmologic specific dose adjustment criteria in there and grading criteria and then to change the informed consent so that everyone is aware that these are potential things that could occur. And then in terms of how I’m thinking about this in the overall development. As we’ve said before, we’re nearing the end of dose escalation. I think we have a range of potential doses available. And so we see the end of the single-agent dose escalation insight. These events, again, are very brief.

They are usually Grade 1, and they – having some ophthalmologic or visual changes in many cancer drugs it’s really not uncommon. And this is so mild and so transient that I really don’t see this as potentially dose limiting. And again, with a drug that has such a clean kinome and it’s so targeted to CDK2. I think we have a good range where we can see potential in the future for clinical benefit for patients.

Brad Canino: Great. Thanks for the color.

Operator: Our next question comes from Eun Yang from Jefferies. Your line is now open.

Eun Yang: Thank you. So we are awaiting details on the PIONEER data at Quad AI, but I wanted to ask you for this key secondary endpoint responder rate, what’s the minimum delta between the 2 arms needed to achieve statistical significance? Thank you.

Kate Haviland: Yes. Thanks for the question, Eun. And I’m going to hand over to Christy to talk more about that.

Christy Rossi: Yes. So thanks, Eun. As you know, I mean, we hit – we were highly significant across all of our primary and key secondary endpoints. And so I think part of what the question is just sort of how we interpret the variety of data on these endpoints and how do clinicians interpret them in terms of being meaningful. And as we’ve engaged on this, I would say two things. One, as we’ve said before, the totality of the data across all of these endpoints is really what is most impactful and different health care providers interpret different pieces of data in different ways. What’s interesting about response rate is that it’s actually not an endpoint that is used in allergy frequently. And so as we engage in allergists with allergists, they found ORR to kind of be the least interpretable of all the endpoints, but we’re very eager to share it and certainly some hematologists find it incredibly compelling.

And so we will be looking at both responder analyses, as we’ve indicated across the secondary endpoints. It will be also really interesting to see how those rates evolve over time, again, kind of demonstrating the long-term impact of AYVAKIT. And it’s that totality of the data along with the other secondaries and the primary that we’ve found prescribers have found very compelling, and we’re looking forward to sharing all of that data in a couple of weeks.

Kate Haviland: I think you’re in such unusual position Eun that the study has demonstrated significant impact across multiple ways of looking at it, right? Everything from kind of the most fundamental biological impacts on kind of the pathologic measures of mast cells, as well as the patient impacts on symptomatology all the way through to quality of life. And it’s very rare to have such statistically and clinically meaningful outcomes across such a broad array of measures in the study. And so we’re really looking forward to showing that data.

Eun Yang: Thank you.

Operator: Our next question comes from Derek Archila from Wells Fargo. Please go ahead.

Derek Archila: Hey, good morning. And thanks for taking the questions. Just two quick ones from us. First one, just on the 2023 guidance. I just want to understand, is this more about driving new account activations or is this more about depth at current accounts? And I guess, if it’s the latter, how much depth is really left in terms of new patients at these current practices that you’re already at? And then I just want to make sure I heard you correctly. I think it was Dane’s question. So I think on the 350 providers, I think that you’re initially targeting, so the overlap for ISM patients is about 400 out of the initial 1,500. So is it fair to assume those other 1,000 patients are being seen by allergists? So, thanks.

Kate Haviland: Yes, Derek, thanks so much for the question. I’ll hand it over to Philina to answer the specifics. I think – but to your first part of your question, I mean, I think what we’re so pleased to see in this launch is that we are – we have the dominant share of the current market of patients who are treated with advanced SM and we’re seeing that consistent demand, where we continue to drive new patients, broadening the prescriber base, adding new accounts and new prescribers as we really work to expand the overall size of the SM market as well. And so I think we’re going to continue to see both of those dynamics play out through launch. And then Philina, do you want to talk about the numbers in more depth.

Philina Lee: Yes, sure, Derek. I think at the heart of your question. Your first question is really about has the advanced SM opportunity peaked for what is sort of the headroom on that. So to be really clear, we see headroom significantly to continue to grow the advanced SM opportunity. We know that this is going to happen at a more measured rate than the growth trajectory that we saw early in the launch. And that growth is driven by several factors. We’re still early in penetrating into the overall advanced SM patient population. We are the standard of care in the treated patient population, but the biggest lever of growth is truly activating the fuller breadth of advanced SM patients to be treated for their SM. And so penetration across all subtypes, significant room to continue expanding on the breadth and depth of the prescriber base, as well as the durations of therapy, which are favorable.

And as we shift towards a more treatment-naive patient population, that is also a favorable harbinger of longer durations of therapy over extended periods of time. So to your second question about the 400 patients. So just to be really clear, that is just the moderate to severe ISM patients who are treated by the top 350 of our current prescriber base. And importantly, we know that it’s important to engage a broader prescriber base who are treating that 7,500 moderate to severe ISM patients who are diagnosed and actively seeking treatment today. So when we think about where early adoption of AYVAKIT could happen post ISM approval, we see it not only among those 400 patients treated by the current top volume prescribers, but also among that broader group of patients who really have severe symptomology.

Derek Archila: Got it. Thank you.

Operator: Our next question comes from Ana Macdonald from Goldman Sachs. Please go ahead.

Unidentified Analyst: Good morning. This is Ana Macdonald on for Salveen. Thank you for taking our question. So on the ISM launch, we’re just trying to understand what patients would be the early adopters. So from the 400 patients that you mentioned, what proportion would not be well controlled on current treatments? And then just quickly on the CDK2 program, with your proposed actions, is the FDA aligned on the changes to the protocol? Thank you.

Kate Haviland: So thank you for that question. Maybe we’ll start with the overall numbers of ISM. I think we’re getting a little bit confused on the 400. So I just want to make that really clear for people. So maybe, Christy, can take that. And then Becker, if you could take the CDK2. Yeah, go ahead.

Christy Rossi: Yes, happy to. So both of the last two questions, I think, are getting a little bit to sort of where the patients are in breadth and depth. So just to be clear on the 400, we see 400 moderate-to-severe, not well-controlled ISM patients amongst physicians who currently have AYVAKIT experience. So I think that gets to the earlier question on overlap as well. So I think the overall idea here is that there’s a lot of potential with ISM amongst prescribers who have current AYVAKIT experience. And certainly, early in the launch, that is a place that we will focus to drive growth. The 7,500 patients in total when we throw that number out and talk about that, all of those patients are patients that we view to be moderate to severe, not well controlled and candidates for therapy.

And maybe just to close out on kind of the breadth and depth questions that are coming up, we see opportunity in both places, right? So if I think about advanced SM, we are continuing to deepen usage at existing prescribers, what the dynamics that you see is often that they will get comfortable treating a patient and then they will start to identify additional potential candidates. And so we definitely see room to deepen. But breast continues to be really important in a rare disease market like this. And so we’re really pleased to see the number of new accounts that we added in Q4 and expect to see that continue through the year.

Becker Hewes: Yes. And this is Becker. And so with respect to the process with the FDA, just a little bit of background about how this generally happens. So the initial call that we had with them started the process and the way it will end will be with written notification that the partial hold has been ended or been lifted. And we’ve been working very closely with the FDA. We’re rapidly modifying the informed consent and the protocol and the IB. And so far, it’s been going extremely smoothly. This is a collaborative action or interaction with the FDA, and we’ve had alignment along the way. So this is really about informing people and making sure that the right grading system is in the protocol and any adjustments are very clear. So there’s been really quite a bit of alignment.

Christy Rossi: And just so that collaborative nature of the conversations have been really – have been very constructive. We are working to submit the documents. Of course, we’re not in control of the FDA time line on the other side. But I think that collaboration and kind of joint sense of getting the study back on track gives us a lot of confidence that will result this in a short time frame.

Unidentified Analyst: Thank you.

Operator: Our next question comes from Michael Schmidt from Guggenheim Securities. Your line is now open.

Unidentified Analyst: Hey, good morning. This is Paul on for Michael. Thanks for taking our question. Just one from us on the CDK2. Maybe you could help set some expectations for that initial clinical readout this year, specifically on the pharmacodynamic markers of activity, anything that you should highlight that we should expect such as a reduction in passive Rb or cyclin E protein, that would be really helpful. Thank you.

Kate Haviland: Becker, will you take that?

Becker Hewes: Yes. So just as we said earlier, our guidance has been for dose escalation data midyear and then an early look at the combination, we are able to start the combination before we reach a recommended Phase II dose. And so we look forward to presenting that, including safety and biomarker data midyear this year. With respect to biomarkers, we have a number of them. They are circulating biomarkers, they’re tumor biomarkers. And so what we’ll be presenting is an emerging holistic look at the activity and selectivity of BLU-222 in these multiply relapsed Phase I patients.

Unidentified Analyst: Thank you.

Operator: Our next question comes from Michael Ulz from Morgan Stanley. Please go ahead.

Michael Ulz: Thanks and good morning. Maybe I can just ask another question on the ISM opportunity and how you’re thinking about the early trajectory here. I know in your prepared remarks, you commented you’re not anticipating a bolus here. But I’m just curious what impact could presentation of the data at Quad AI next week have on those views. Could it drive additional interest? And could it potentially change your view on the early trajectory? Thanks.

Kate Haviland: Yes. So thank you for the question. Let me take the first part on the bolus. I think – and the point I can weigh in on the impact of Quad AI. I think from both perspective, the reason why we’re not saying that we don’t expect it because we designed the PIONEER study to evaluate long-term follow-up of the patients. And so in a product launch, when you see a bolus, it’s often because you’re switching patients off of clinical trials into commercial drug. And we believe the long-term experience of AYVAKIT treatment in these patients is critically important to the overall value as we continue to look at that impact over time. So we’re retaining patients within the PIONEER study for up to 5 years. So that is why we don’t expect a bolus coming out of clinical trials into commercial therapy. And Philina, do you want to talk about the – how you see the impact of Quad AI?

Philina Lee: Yes, sure. So I mean, I think, first and foremost, I want to also talk about the efforts that the team is doing to prepare for the launch and sort of feed towards the ultimate ramp upon approval as well. So as I mentioned, we’re hyper focused on three critical areas, the broader provider engagement, both within the existing prescriber base for AYVAKIT as well as that broader prescriber base. Future prescriber base, including allergists immunologists, we’re focused on activating patients and maintaining our strong patient access. And so among that, when we think about the importance of Quad AI, clearly, it will increase the awareness of AYVAKIT, especially among that allergists and immunologist community, awareness of AYVAKIT as well as the data.

As far as our teams focus as well, a couple of factors that we think will help with the ramp is that for many years, we have been engaging to increase disease awareness as well as diagnosis rates. And our team has been really honing and perfecting our skills with the advanced SM launch. So we know how to leverage advanced analytics and our field acumen to find patients. We know how to identify their providers, and we know how to engage these providers leveraging our deep disease state expertise. So we are confident as we think about that overall $1.5 billion peak opportunity, that we will ultimately be able to capture this opportunity.

Michael Ulz: Very helpful. Thank you.

Operator: Our next question comes from Reni Benjamin from JMP Securities. Your line is now open.

Reni Benjamin: Hey, guys. Thanks for taking the questions and congratulations on the quarter and outlook for 2023. Can you talk a little bit about how we should be thinking about the sales force and their switch to focus on allergists? Is this something that likely we’re going to have to increase as we get into the year and after approval, do you have a sense as to how many docs are currently aware of AYVA and ISM versus not as well?

Kate Haviland: Yes. Thank you, Ben, for the question. And I’ll turn it over to Philina to answer the question about the sales force. I think one of the great attributes of this launch for us is that it is really an extension of what we’ve been doing in SM, and it is still – it’s a specialty market. So it’s a market that we can certainly access with incremental growth in our field infrastructure. But Philina talk a little bit about how you’re thinking about that.

Philina Lee: Yeah, so as Kate mentioned, with – advanced SM provides a strong foundation, right? So the primary specialty focus historically for us has been hematology and oncology. But as we prepare for the ISM launch, we know that we’ll need to engage a broader provider and specialty base, including allergists. And so we’ve incrementally expanded our field force and strengthened our capabilities in allergy, immunology, as well as rare disease. And to your question on awareness, at this point, we’re in a very strong position with awareness of AYVAKIT among target prescribers of over 40%.

Kate Haviland: So that’s unaided awareness. So I think that’s unusual at this point and this early in a prelaunch phase to have that level of awareness. And so I think – I also think it’s important, as Philina had mentioned before, our data analytic capability is critical here. This is not a reach and frequency model. This is about getting to health care providers at a time when it’s most relevant to them, meaning they’ve seen a patient recently. And so that is something again, that we have really worked hard on and the team has done an incredible job through the advanced SM launch, getting that model up and running.

Reni Benjamin: Great. Thank you.

Operator: Our next question comes from Joe Beatty from Baird. Your line is now open.

Joe Beatty: Great. Thank you. How is the current payer coverage for ISM? And are you able to help frame what approval rate you’ve been seeing by this for ISM?

Kate Haviland: Thanks for that question. I think I’ll fit to Philina, but I have to say that market access has been an incredible strength of our launches to date and we are very well positioned moving into the ISM launch. Do you want to talk more about that, Philina?

Philina Lee: Yeah and so to be clear, ISM is just a small fraction of our current business today and coverage and access are strong across the full spectrum of SM patients. There’s just one broad SM code and so payers aren’t necessarily able to distinguish the difference between advanced SM and ISM today. And as we’ve talked about previously, we have exceptionally strong payer coverage with virtually no access challenges.

Joe Beatty: Thank you.

Operator: Our next question comes from Peter Lawson from Barclays. Please go ahead.

Peter Lawson: Thanks. Maybe a question for Becker just on getting to a recommended Phase 2 dose with your CDK2 inhibitor or if that’s a moot point because you’ve kind of have the ability to start the combination regimen. Just so any sense whether we should see that recommended Phase 2 dose in the first half or if we should be kind of waiting until you’re off partial clinical hold?

Becker Hewes: Yeah, I mean, so first of all, as Kate mentioned, the FDA time line is the FDA time line. We don’t have control over that, but we are encouraged by how quickly we are working with them. I think that both the recommended Phase 2 dose and the combination dose are important because this is potentially very broad program that involves a number of tumor types. The combination is relevant for breast cancer, but CDK2 is really central to the biology of quite a few different tumor types and different biology. So with respect to – we’ve gone really quickly through dose escalation. And so in terms of – it’s really not just is recommended Phase 2 dose, it’s a range of activity where we have a good safety profile. And I already think we have that in sight.

So I think that the data that we are able to present midyear will provide a clear view of where we’re going both with single agent and then very early data on the combination. They’ll need more time to escalate more deeply into that ribociclib combination. It’s also important to realize that we can start the chemotherapy combination as well in the near future after we come off of the partial clinical hold. So I think it’s important to focus not just on that one dose but also on the holistic program.

Peter Lawson: Is this captured under Project Optimus as well?

Becker Hewes: We have the Project Optimus philosophy in mind as we look at the doses and we intend to have a very close relationship with the FDA with respect to making sure that we’ve covered the basis that they’re looking as to understand the right single agent and combination dose so that as we go into bigger trials, we’re not having to do a lot of dose finding beyond this initial trial. So Project Optimus is really the lens that we look at all of our programs through at this point.

Peter Lawson: Great. Thanks so much.

Operator: Our next question comes from David Lebowitz from Citi. Your line is now open.

David Lebowitz: Thank you very much for taking my question. I got one on ASM and one on ISM. On ASM, I guess, to start, there was – we talked last quarter about specifically the adoption and the associated hematological neoplasm group. And I know you had data at ASH, a lot of it focused on that specific group. I guess my thoughts are what – how are things looking now? And how do you think that data could help?

Kate Haviland: And then, David, you said you had a second question on ISM, just…

David Lebowitz: You want the ISM upfront? On the ISM, I guess, specifically, you were talking about how different doctors are going to prescribe the therapy in different ways. And my question is, when reporting your data at Quad AI later this month, how deeply will you go into the benefit on each specific symptom within the TSS score? And is there any thoughts as to which symptoms most doctors are emphasizing most in your view?

Kate Haviland: All right. Thanks David for both those questions. I think starting with advanced SM and SMA, I mean as we have talked about, we are the standard of care in the patients who are treated for their advanced SM, which tend to be the patients who have MCL and aggressive SM and that it’s the SM, AHN patients where they’re just a very complex clinical presentation. And that’s the group of patients that we have worked through that very compelling data, as you mentioned, that we saw at ASH. We’re looking at monotherapy impact of AYVAKIT both on response rate, symptoms and overall survival. It is certainly fueled conversations with prescribers. And in that group of patients, we’re changing practice, right? And they’re very complex clinical patients.

And so that’s where we’ll continue to see that work as we expand the overall size of the SM market, which is why the growth has moderated a bit there. As you think about the ISM presentation at PIONEER, we’re going to show kind of the totality of data, including the impact on patients across all symptoms within the TFS. In terms of – as Christy was mentioning, different specialties have different context for clinical trial data. PROs are commonly used in the allergy immunology space, not as much in hematology. Other measures are more common to hematology. And so what is great about this data set is that we see compelling and consistent impact across all of these measures. And so that is – it’s something that can appeal to all of our potential prescribers.

And so I think we’re really looking forward to getting that out. In terms of the symptomatology that physicians are most focused on, it’s really what impacts the patient the most. It’s not that they want to see one or the other, they want their patient’s quality of life to improve. And so that is, again, why we design the PRO to look at a array of symptoms because one given patient may have predominantly neuro cog symptoms and very – not much in other domains. Another given patient may have predominant skin symptoms and not on other domains. And so it’s a very heterogeneic disease presentation. And that’s exactly why we designed the PRO’s we did and we’ll be showing all of that data.

Operator: Our next question comes from Zhi Shu from Berenberg. Your line is now open.

Zhi Shu: Good morning. Thanks for taking my question. I want to ask a question related to market access. Do you anticipate a separate code for ISN and when the product is going to launch? And then related to that, what’s your expectation for gross to net? Thanks very much.

Kate Haviland: Thank you for that question. And I’ll hand over the question on the codes to Philina and then Mike can take gross to that.

Philina Lee: Yeah, I mean I think at the heart of your question is what kind of access we anticipate as IFM comes to market. And just to answer that head on, we expect and are highly focused on maintaining strong patient access to ISM. Today, we have virtually unencumbered payer coverage. And we expect based on the payer market research that we’ve done that, that’s not expected to change or limit the target patients that should adopt. And your specific question about the code, no, at this point, we don’t expect a new code for SM.

Kate Haviland: So just to be really clear, there’s just one code for SM and you can’t distinguish between subtypes within it. And so that’s what we’d expect to continue. Mike, do you want to take the gross to net?

Mike Landsittel: Yeah, for gross to net, so currently with AYVAKIT, we see a gross to net range in about the mid-80% range as per gross margin. In the near term, we expect that to continue once we announce pricing for ISM and get further into that launch. We said there will be some flexibility and how we think about contracting going forward. If we need to do that, that could lead to some erosion, but the mid-80s is a good starting point.

Kate Haviland: And I think on the ISM market, it’s also important to remember, there’s going to be puts and takes here, right? So the ISM market, we have a larger percentage of our patients are covered by commercial insurance. So there – that will give us some tailwinds. And then we have that room, as Mike mentioned, that if we need to do any type of contracting to ensure that seamless market access, which we may or may not, but we have some space there as well. So it is – there is a slightly different payer mix in this group than we’ve seen in advanced SM.

Zhi Shu: Thank you very much.

Operator: Our next question today comes from Ami Fadia from Needham. Your line is now open.

Ami Fadia: Hi, good morning. Thanks for taking the question. Just ahead of the Quad AI data presentation, I wanted to just sort of understand how to interpret some of the data that will be presented there. I mean it’s clear that there’s a huge heterogeneity in the patient population base with each patient having a very different symptom domains bothersome. So how do we take the change in TSS score across each of the domains that you will be presenting at the meeting and think about how clinically meaningful it may be for an individual patient? And how will physicians really interpret that data? Thank you.

Kate Haviland: Christy, do you want to take that?

Christy Rossi: Sure. Thanks, Ami. So as we said before, what physicians are looking at is the consistency and totality of the data. When we look at sort of change in individual symptoms, again, the TSS is a new endpoint. It’s not used in clinical practice. The lens that I think physicians are interpreting this data through is to say, one, whatever my symptom – whatever symptom my patient is suffering from, do you have confidence that AYVAKIT will improve their quality of life and improve those symptoms? And so I think what we’ve heard is that what physicians are looking for is consistency of improvement across individual symptoms. I think looking at that longitudinally over time is going to be interesting as well. And then importantly, addressing a patient’s most bothersome symptom because we know that these patients are heterogeneous as you say and what specific symptom may be most impactful to a patient is going to be different from patient-to-patient.

And so I think what is compelling about AYVAKIT is that we do see consistent impacts and we know that regardless of the specific presentation of a patient symptomatology, we’re confident that, that patient will benefit. And I think that’s the ones that the prescribers will be looking at this data set through as well.

Ami Fadia: Thank you.

Operator: Our next question today comes from Matt Biegler from Oppenheimer. Your line is now open.

Matt Biegler: Hey, guys. Thanks for squeezing me in. I wanted to ask about median duration on therapy in ASM. If you can comment on that, is it getting longer or shorter and I guess that would be indicative of the severity of patients you’re treating and whether you’re making inroads into that agents component? Thanks.

Kate Haviland: Yeah. Thanks so much for the question. And Philina, do you want to take that?

Philina Lee: Yeah, so our median duration of therapy is trending towards 18 months. We’re highly encouraged that this is standing up well in clinical practice. And certainly, as we shift towards a mix of more treatment-naive patients, we expect that over time to increase.

Matt Biegler: Thank you.

Operator: Our final question comes from Chris Raymond from Piper Sandler. Your line is now open.

Nicole Gabreski: Good morning. This is Nicole Gabreski on for Chris. Thanks for squeezing us in. So I guess we were just wondering, of those 400 moderate your ISM patients that you had referenced, just given the experience of AYVA with those providers, are any of those patients currently receiving drug off label? And also sorry if I missed it, but would you be in a position to provide updated 2023 AYVAKIT guidance that includes ISM revenues potentially later this year post approval?

Kate Haviland: Yeah, thank you very much for that question. So starting with – I’ll answer knowing that we’re coming up against time here. But the 400 patients are really not being treated today with AYVA. We see small number of patients with ISM who are being treated, but it’s not substantial relative to our overall number of patients being treated. And then as we talk about guidance, I mean, I think our goal today is to align on where our current business stands with our approved indications of advanced SM and GIST. And to really set that foundation for all of us as we move towards this anticipated launch. And in any given launch, there are uncertainties, including what our label will look like as we go through the FDA negotiation process and how the first few months will play out. So we look forward to working with all of you as we move into this really exciting launch. So thank you very much for that.

Nicole Gabreski: Yeah. That’s all. Thanks.

Operator: That concludes the Q&A portion of today’s call. I’ll now hand back over to Kate Haviland for closing remarks.

Kate Haviland: Thank you, operator. And really, as we kind of come out of the Q&A and taking a step back, I mean, today, we have highlighted the significant opportunities that we have as Blueprint right in front of us, to create value for patients and for our shareholders, including our continued commercial execution, our anticipated launch in ISM, as well as the ambitious and achievable goals we have for our pipeline. And we are confident in our ability to deliver on these opportunities this year and beyond. We thank you all for taking the time and joining us today and your continued support of Blueprint Medicines. And we look forward to talking to you again soon this time from San Antonio in the Quad AI conference. So looking forward to it.

Operator: That concludes today’s Blueprint Medicines 4Q and FY 2022 earnings call. You may now disconnect your line.