Yahoo Finance Blueprint Medicines Corporation (NASDAQ:BPMC) Q1 2024 Earnings Call Transcript
Blueprint Medicines Corporation (NASDAQ:BPMC) Q1 2024 Earnings Call Transcript May 2, 2024
Blueprint Medicines Corporation misses on earnings expectations. Reported EPS is $ EPS, expectations were $-1.64. Blueprint Medicines Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning. My name is Faye, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicines First Quarter 2024 Financial Results Conference Call. All lines have been on placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Jenna Cohen, you may begin your conference.
Jenna Cohen: Thanks Faye and good morning everyone. Welcome to Blueprint Medicines first quarter 2024 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 will be reviewing today by going to the Investors section of our website at www.blueprintmedicines.com. Joining me today are Kate Haviland, Chief Executive Officer; Philina Lee, Chief Commercial Officer; Fouad Namouni, President, Research and Development; and Mike Landsittel, Chief Financial Officer. Christy Rossi, Chief Operating Officer; and Becker Hewes, Chief Medical Officer are also on the line and available during Q&A. Before we begin, I'd like to remind you that some of the statements made during the call today are forward looking statements as outlined on slide three and are subject to a number of risks and uncertainties.
These that may cause our actual results to differ materially including those described in our reports filed with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements and we print disclaims any obligation to update such statements. I'll now hand the call over to Kate.
Kate Haviland: Thank you, Jenna and good morning everyone. We delivered another very strong quarter and our launch of AYVAKIT in indolent systemic mastocytosis. And we are entering 2024 in a position of strength. We have great momentum across all aspects of our business, as we execute on our three priorities that we laid out in January. Our first priority is the launch of AYVAKIT and indolent systemic mastocytosis. We have driven impressive revenue growth. And importantly, we are building the foundation for top line revenue growth well into the next decade. We are also making significant progress in advancing our pipeline of innovative programs that are focused in our most compelling opportunities, where we believe we have the greatest prospect of improving patient outcomes.
And third, we are maintaining a strong and durable financial position in a self-sustainable financial profile. I'll briefly touch on each of these. Starting with the exceptionally strong commercial performance we delivered in Q1, we achieved $92.5 million in EBITDA net product revenue for the quarter. This results surpassed external consensus, as well as our own internal expectations. Philina and we'll discuss in more detail the components of our continued commercial success, but I want to take a moment to say how incredibly proud I am of our hard-working and dedicated commercial and medical team members. Their commitment to delivering for patients with SM globally is resulting in this type of performance. These results also reflect the profound impact that AYVAKIT is having on patients, as well as our strong and growing prescriber base.
Today we're also increasing our AYVAKIT guidance for the year to $390 million to $410 million. Later on the call, Mike will share more of our thinking around today's AYVAKIT guidance increase, which is steadiest quarterly on a revenue trajectory to peak sales of greater than $2 billion globally. This revenue trajectory makes AYVAKIT one of the most exciting rare disease launches happening right now and puts us on a similar path to other notable rare disease product launches of first-in-class medicines that built new multibillion-dollar markets. We are also strengthening our presence in allergy and inflammation with BLU-808, our wild-type KIT inhibitor. The BLU-808 program built on the significant insight we have gained in mast cell biology and targeting KIT, the master control switch or mast cells which we believe has the greatest prospect of improving outcomes for a large number of patients across allergic inflammatory diseases.
Our recent webinar entitled powerful mast cells highlighted the scientific rationale for our aspiration to fundamentally shift the way many allergic inflammatory diseases are treated by targeting this primary effect to sell the mast cells with both mono and combination therapeutic approaches. We are on track to file the IND for BLU-808 this quarter to enable initiation of a Phase one study in healthy volunteers. We've established a successful track record with AYVAKIT and you can continue to expect Blueprint to discover and develop potent and highly selective molecule as we expand on mast cell franchise beyond systemic mastocytosis. Turning now to the oncology side of our portfolio, next month at Asco will be presenting data demonstrating that BLU-222 is the first CDK2 inhibitor to be well tolerated in combination with an approved CDK4/6 inhibitor.
With this data, we now have the clinical evidence that BLU-222 is a differentiated best-in-class CDK2 inhibitor. BLU-222 ability to combine with approved CDK4/6 inhibitors also position it to move quickly with the potential to also become the first in class CDK2 inhibitor approved for patients with hormone receptor positive HER2-negative breast cancer. I remain confident that we will execute a strategic partnership in the second half of this year to rapidly move BLU-222 forward into registration directed trials. Importantly, we are executing across the business while maintaining financial discipline. Our total costs and operating expense continued to decline and was $735.6 million in cash on our balance sheet. We are in a strong and durable financial position.
I am proud of the tremendous progress Blueprint have made in the first quarter of this year and continue to be impressed by the head down executional focus I see across all of our teams, to make sure we're achieving our goals quarter-after-quarter. Now, let me turn it over to Philina to discuss this quarter's commercial performance. Philina?
Philina Lee: Thanks, Kate and good morning, everyone. We had an exceptional first quarter generating AYVAKIT net product revenue of $92.5 million, including $83.1 million in the US and $9.4 million ex-US. AYVAKIT revenue has grown more than 135% year-over-year. We saw positive trends across all key business fundamentals, continued strong and steady growth in patients on AYVAKIT reflecting a strong pace of new patient starts and low discontinuation rates. Our mix of commercial versus free goods also skewed more favorable than we anticipated. Compliance remains high. Our International ISM launch is off to robust start, with Germany after the races. Let's look at our key fundamentals in more detail. Starting with growth in patients on a AYVAKIT, we drove a really strong pace of new patient starts coming out of the holidays throughout the first quarter of the year.
We continue to see low discontinuation rates, driving positive trends in duration of therapy. For advanced SM patients, duration of therapy is trending even longer than our last update, now at an average of 25 months. And while it's still early days, duration of therapy in ISM patients is trending significantly longer. This is exactly, what we expected based on AYVAKIT benefit risk profile. Q1 tends to be a tough quarter in our industry, with patients benefits reverifications, lower gross to net and impact on compliance. Our market access team did a great job managing through all of this. Our free goods share once again, has been a surprise to the upside and is now averaging about 20% since ISM launch The favorability in commercial versus free goods is really driven by two things.
First, the payer mix of ISM patients skews more commercial and we estimate that ISM patients now comprise the majority of patients on therapy. Second Medicare patients were able to access paid therapy as we saw last year. Importantly, unlike last year, we expect these patients will be able to stay on paid therapy for the rest of the year due to changes to the out-of-pocket cap as part of Medicare Part D benefits redesign in Inflation Reduction Act. In this third full quarter of launch, we are seeing strong and steady performance against our key revenue drivers, just as we expected. The favorability in commercial mix exceeded our expectations and provides a tailwind for the remainder of the year. This along with confidence in our strong continued execution, is a key driver for our guidance update today.
We'll continue to watch the fundamental of the drive revenue over the course of the year such as the ongoing pace of new patient starts, duration of therapy, compliance and free goods as well as our ongoing European launch performance. Taken together, our first ISM, first three launch quarters are showing a clear inflection point for AYVAKIT revenue growth. Now, let's talk about why we expect to sustain this growth for years to come. Our team is executing well against our commercial strategy and we continue to make headway across multiple paths to drive sustained growth. We continue to grow breadth and depth in the AYVAKIT's prescriber base across all specialties and settings. Prescriber breadth is one of the most important lead indicator for revenue growth.
The number of new AYVAKIT's prescribers continued to grow this quarter including a growing number of allergists who have been activated to treat SM patients. Overall prescribing is still split evenly across the academic and community setting. The chart on the left shows a AYVAKIT adoption into the top 400 providers by SM patient volume, and as you can see we're starting to see even more dense from repeat prescribing as positive first experiences lead providers to start their second, third or more patients on AYVAKIT. Because the chronic burden of ISM is often underappreciated, a key part of ongoing execution is redefining what disease control means for providers and patients. And we continue to expand our direct to patient and provider educational initiatives to foster greater awareness of the burden of disease with the goal of activating patients to ask about AYVAKIT.
Living with ISM can be very isolating. Establishing patient to patient connections is a critical part of the journey to treatment. In Q1, we launched a monthly educational series where patients can learn from the experiences of other patients who are taking AYVAKIT. As part of our ongoing community building efforts, we held a first-of-its-kind Summit bringing together patient, AYVAKIT’s patients and multidisciplinary thought leaders. Just this month, we launched an unbranded direct-to-patient campaign to drive further awareness of the toll of living with ISM and the availability of the new treatment option. All of these efforts are yielding impressive results. Unaided awareness among patients has grown nearly eight-fold since approval and we expect our expanding peer-to-peer and patient initiatives will continue to activate more patients and providers to try AYVAKIT.
In closing, the momentum we've shown in our first three quarters of launch make us incredibly confident about the path we're on to achieve a more than $2 billion peak opportunity with AYVAKIT. We are building and shaping this market. We are growing the prescriber base. We are activating more patients to seek treatment. We’re growing the number of diagnosed patients and there is plenty of headroom to continue to grow. We knocked it out of the park this quarter and we remain laser-focused on our mission to help more patients in need. With that, I'll hand it to Fouad, who will share how we're expanding our efforts in mast cell disorders to help more patients with allergic and inflammatory conditions beyond SM.
Fouad Namouni: Thanks Philina. Last week Dr. Mariana Castells, a renowned researcher and clinical expert in mast cell diseases joined us for webinar titled, The powerful mast cell: a promising and yet under appreciated target for treating allergic and inflammatory diseases. The webinar was the first in a new series we have plan to keep you updated on how we are thinking about the evolving science behind the whole portfolio and R&D strategy. If you haven't yet had a chance to listen to the discussion, I encourage you to check out the replay which is live on our website. The mast cell is a key driver cell responsible for the pathogenesis of a wide range of allergic and inflammatory conditions. Research into mast cell biology and its involvement in inflammatory diseases has recently increases with the goal to identify novel therapeutic targets in allergy and information.
This webcast focused on the biology of mast cells, including their essential roles as of driver of and contributors to inflammatory responses. Their core involvement in biological pathways relevant to an array of allergic and inflammatory diseases and Blueprint’s approved to modulating mast cells and building a pipeline in allergic and inflammatory diseases. Blueprint has a long and proven track record of leadership in this space. As evidenced by the success of AYVAKIT and the ongoing development of elenestinib. And we have built what we believe is one of the most advance in mast cell drug discovery capabilities in the industry. BLU-808 is poised to help us beyond systemic mastocytosis. Tackle with the challenge of developing a potent and highly selective tunable all wild-type kit inhibitor is the logical evolution of our capabilities in this space.
And the opportunity we have ahead of us is significantly larger than any we've pursued in the past. Our vision for scientific leadership in mast cell diseases is built on four key pillars. First, level of deep understanding of the mast cell biology and to modulate activity. Second, to select the best targets modalities for monotherapy and combination strategies to achieve first and best in class positions. Third, establish a strong preclinical and early clinical POC or Proof of Concept to derisk development. Lastly, pursuit pipeline in a pill opportunity in major mass cell associated disorders where there is a medical need. We will continue to provide updates on our mass cell franchise throughout the course of the year, including BLU-808 IND submission on track for this quarter, which will enable us to initiate the Healthy Volunteer study.
We will also initiate Part 2 of the HARBOR trial of elenestinib in Indolent Systemic Mastocytosis in the second half of this year. As we expand our mass cell focus, we continue to drive innovation in Systemic Mastocytosis as our understanding of the spectrum of patients and the underlying biology of the disease evolves. Moving from allergy and inflammation to our oncology part of the portfolio, we are happy to report for the first time at the 2024 ASCO Meeting, the safety and the signal of early clinical activity of BLU-222 in combination with Ribociclib and Fulvestrant in hormone-positive HER2-Negative Breast Cancer patients. We believe these data clearly demonstrate the first and best-in-class potential of BLU-222 to become the combination partner of choice with CDK4/6 inhibitor, in hormone-positive HER2-Negative Breast Cancer.
With this, I will turn it over to Mike, to discuss our financial results.
Mike Landsittel: Thanks Fouad. Earlier this morning we reported detailed financial results in our press release for today's call. I'll touch on a few highlights. In the first quarter, total revenues were $96.1 million, including $92.5 million in net product revenues from sales of AYVAKIT and $3.6 million and collaboration and license revenues. As Philina discussed, AYVAKIT revenue was driven by strong -- continued strong and steady growth in patient starts, positive trends underlying extended duration of therapy and favorability in the mix of commercial patients. Given the strength in Q1, we are raising our AYVAKIT product revenue guidance and now expect to achieve $390 million to $410 million in net product revenue in 2024.
We've had a stronger than expected start to the year and we are still learning about the seasonal trends and impacts in ISM, as we make our way through the 1st year of launc. Our guidance philosophy is to provide our best understanding of where we may end the year, given the various puts and takes on revenue growth both in the US and EU each quarter. This update relatively early in the year, reflects that commitment. The increase in today's guidance reinforces that we are on our path to capturing AYVAKIT's peak opportunity of greater than $2 billion. This revenue growth, coupled with expense discipline and focused investment is what continues to give us confidence in achieving a financially self sustaining profile. Our total costs and operating expenses continued to decline and were $174.9 million for the first quarter.
We anticipate that our research and development expenses will remain relatively flat for the remainder of the year with some quarter-to-quarter variability. We also expect our SG&A expenses to remain relatively stable, as we continue to gain operating leverage from our commercial infrastructure. We believe that the current full year sell-side consensus for total costs and expenses of approximately $715 million which includes non-cash stock-based compensation expense reflects an appropriate estimate for 2024. We remain in an exceptionally strong and durable financial position with $735.6 million in cash on hand. AYVAKIT's revenue performance in today's guidance increase, coupled with our continued focus on managing operating expenses will result in our goal of further reducing our cash burn in 2024.
Our solid financial profile drives our ability to generate long-term value, as we invest in the commercial success of AYVAKIT in advanced and innovative portfolio of Medicines. With that, I'll now turn the call back over to the operator, for questions, Operator?
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