Blueprint Medicines (NASDAQ:BPMC) Corporation (NASDAQ: BPMC) has reported a robust first quarter for 2024, with a noteworthy increase in net product revenue for AYVAKIT, their treatment for indolent systemic mastocytosis (ISM). The company has raised its revenue guidance for AYVAKIT, citing strong sales and a promising outlook.
Blueprint Medicines also highlighted its progress in advancing its pipeline, including developments in their KIT and CDK2 inhibitor programs. With a focus on financial discipline and international expansion, particularly in the European market, the company maintains a strong financial position and expresses confidence in its continued growth and profitability.
Key Takeaways
- Blueprint Medicines reported $92.5 million in net product revenue from AYVAKIT for ISM in Q1 2024.
- The company increased its AYVAKIT revenue guidance to $390 million to $410 million for the year.
- A strong financial position is indicated by $735.6 million in cash on hand.
- International expansion, especially in Germany, contributes significantly to top-line growth.
- Positive prescribing patterns and patient experiences with AYVAKIT are reported, with low discontinuation rates.
- Ongoing clinical trials and a direct-to-consumer campaign are expected to further drive growth.
Company Outlook
- Blueprint Medicines forecasts sustained growth for AYVAKIT with a peak opportunity of over $2 billion.
- The company is on track to achieve profitability with disciplined financial management.
- Continued investments in the direct-to-consumer campaign for AYVAKIT are planned for the second half of the year.
Bearish Highlights
- Guidance update suggests a potential slowdown in net patient adds for AYVAKIT.
Bullish Highlights
- Blueprint Medicines has a strong track record in mast cell disorders and is expanding efforts in this area.
- AYVAKIT demonstrates a strong foundation of prescribing across various specialties and settings.
- The company's international performance, particularly in European markets, is robust.
Misses
- There are no specific misses mentioned in the provided context.
Q&A Highlights
- The company discussed partnership discussions for the CDK2 program and potential growth in advanced systemic mastocytosis.
- Plans for exploring additional indications for BLU-808 were mentioned.
- Success of the direct-to-consumer campaign in raising patient awareness was highlighted.
Blueprint Medicines remains optimistic about the future of AYVAKIT and its pipeline of innovative programs. The company's strategic focus on expanding its prescriber base, increasing diagnosed patients, and advancing clinical trials is set to support its growth trajectory. With a strong financial foundation and a commitment to serving patients with allergic, inflammatory, and oncological conditions, Blueprint Medicines is poised to update stakeholders on continued success and developments in its therapeutic offerings.
InvestingPro Insights
Blueprint Medicines Corporation's (NASDAQ: BPMC) positive revenue guidance for AYVAKIT is complemented by an impressive gross profit margin of 94.87% in the last twelve months as of Q4 2023, reflecting the company's strong financial discipline. The InvestingPro data also shows a significant quarterly revenue growth of 85.55% in Q4 2023, signaling robust sales momentum which aligns with the company's raised revenue guidance.
An InvestingPro Tip that stands out is the company's high return over the last year, with a 90.14% price total return, which could be indicative of investor confidence and the successful commercial performance of AYVAKIT. Despite this, analysts suggest caution as they do not anticipate the company will be profitable this year, which is a critical consideration for investors looking at the long-term financial health of Blueprint Medicines.
For readers who are keen to delve deeper into the financial metrics and strategic insights for Blueprint Medicines, there are additional InvestingPro Tips available at https://www.investing.com/pro/BPMC. These tips offer a comprehensive analysis, including the company's current trading near its 52-week high and its high Price / Book multiple of 45.62 as of the last twelve months ending Q4 2023.
To access these insights and more, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 12 more InvestingPro Tips available, investors can gain an in-depth understanding of Blueprint Medicines' financial and market position to make more informed investment decisions.
Full transcript - Blueprint Medicines Corp (BPMC) Q1 2024:
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?
Operator: Thank you. [Operator Instructions] Your first question comes from the lien of Brad Canino for Stifel Brad, your line is open. Please ask your question.
Brad Canino: Thank you. Great quarter. Kate back at the quarter MET in February you referenced a strong sense of via some awareness and the desire to treat patients in the company also had a strong presence of the meeting. So if in your view how much of that awareness momentum is based on the trajectory exiting the quarter? And what does the teams still sees headroom? Thank you.
Kate Haviland: Thanks for that question Brad. And to your point I think one of the things was very notable about Quad AI this year was just in comparison to the year previous where we are introducing blueprint for the first time in showing the Advocate pivotal data for the first time. And then here we were kind of sitting with a large group of now people that clinical the drug and we're treating patients, which was such a kind of notable step change to your point. So basically I'll talk a little bit about how our awareness at the impact of awareness and healthcare providers are growing prescriber base and how that's really fueling our future growth this year and beyond.
Philina Lee: Yeah. Thanks for the question Brad. And to your point QUAD AI certainly we could – our excitement was palpable from treaters across the academic and community setting. That said I would still say we're just we're still just getting started with significant headroom to grow. The team has the ongoing patent interactions of regional meetings the cadence of congresses throughout the year. And I think as we really look at our lead indicators on the provider side and with our breadth and depth of prescribing this is a really strong foundation for continued growth and certainly leaves significant headroom for continued penetration not just into the top 400, but well beyond that into the broader trading immunity. And in addition touching on some of the direct to consumer initiatives are really excited to really be rolling out the next wave of engagements for patient activation and that that also leaves significant headroom to grow in sort of patient awareness and likely had to ask their providers of AYVAKYT. All of this we think bodes exceptionally well hat we are well on that path towards that over $2 billion peak opportunity for AYVAKYT.
Operator: Thank you. Your next question come from the line of Marc Frahm from TD Cowen. Mark, your line is open.
Marc Frahm: Hi. Thanks for taking my questions and congrats on a quarter as well. Maybe following up on Brad's question just how are you seeing maybe trends leading indicators to get into that bigger population that hasn't been well diagnosed historically things like testing rates and stuff like that to really access maybe over the next curve 10,000 patients that you've can talked about being out there that hasn't been cared for historically. And then related to some of that, just with the top-line really taking off here just – may be Kate and Mike talk about because the goal of getting to profitability. How important is that for the company particularly as you start thinking about things like [indiscernible] coming in that could have a very broad development program ultimately.
Kate Haviland: Yes. Thanks for the questions, Marc. Maybe we'll start with talking about how we see – we are building a brand new market here with AYVAKYT in FM and how we think about the different avenues of growth of billing that market that some of the things you mentioned already which is the increasing rate of diagnosis which is a critical part, but also the fact that we know that there's a number of patients who are diagnosed. And you know that we are just kind of starting to penetrate. We have a lot of room there as well. So Philina how do you think about both penetrating the currently diagnosed group versus the opportunities to continue to grow the overall size of the market?
Philina Lee: Yes, I would say -- thanks for the question Marc. First and foremost, if we just look at the patients who are already diagnosed which continues to steadily increase -- penetration into that patient population already represents an over $1 billion opportunity. And that's where sort of like hearing now primary focuses is dedicated and you spoke to sort of was there. There are multiple prongs for continued growth and you spoke specifically to continued growth in diagnosis. There we are really focused on continuing to drive initiatives like the high sensitivity kit testing, the disease awareness and the sponsor testing from Blueprint and we're really encouraged to see significant increases in volumes of high sensitivity ki t testing especially in the allergy segment where that's really important. And even beyond that, we know there are further levers for growth for advocate and that's adoption into abroad. The range of patients initiative, widening that line of who is seen as not well controlled as well as expansion into further geographies. And we're seeing, as I said in a really strong initial performance in our in our international launches all this bodes really well towards that peak opportunity.
Marc Frahm: Yeah. One thing maybe to add there is still very similar to other rare disease launches. We've seen where the epidemiology and these disease states tend to be kind of what we're seeing is even at our sponsored testing patients coming out of other pools of patients with the Amcast or others that I think have been very much underrepresented. And that an epidemiology though it will be providing more views on that and it comes. But our view is this market has a has a long way to go in terms of continued to grow the nine patients on therapy as well as the number patients are diagnosed with this disease. Now turning to your question about the importance of profitability. And how we think about that identified?
Mike Landsittel: Yeah. I'll start. I think Mark I think the key is we're trying to build a sustainable business for the long term. And so part of that is making sure that we stay laser focused on our top priority investment areas such as Blue eight oh eight which is upcoming and that requires financial discipline and focus. But like long term, we're looking to find these key value drivers where we can add long-term value to the Company. And that's a long-term goal yet in that it
Kate Haviland: Yeah. I completely agree. And I think one of the things we've been known for a Blueprint Medicines as our research and development capabilities. And we have had just tremendous opportunity to continue to drive innovation and to make really meaningful impact on patients. I think Blue eight is certainly on everyone's radar, but we have some of our favorite programs. We haven't had a chance to talk to anybody about yet. And so we know we're looking forward to talking about our continued innovation in this space are.
Marc Frahm: Okay. Thank you.
Operator: Thank you. Your next question comes from the line of Michael Schmidt with Guggenheim. Your line is open.
Unidentified Analyst: Hey, good morning. This is Paul on for Michael. Thanks for taking our question and congrats on the quarter. Month on advocates for the ex US opportunity. I know you mentioned Germany sort of drive the European sales this year or do you still see a roughly 10% contribution to this year's full-year sales? And then how are you currently thinking about the longer-term trajectory in Europe perhaps beyond this year? And then maybe just squeeze in one of the CDC to on any update on sort of the call or the tenor of the progress of your partnership discussions for that? And are these exclusively on glue to do to or perhaps more broadly for the city of franchise? Thank you.
Kate Haviland: Thank you. Michael thank you for your question. That I think one thing is the European team has done a tremendous job out of the gates with ISM. approval at the end of December with Germany really coming on strong in terms of getting patients onto therapy. And so they've done a tremendous job there because you how do you think about the overall contribution for Europe in its growth trajectory? And maybe also could you take that the beauty of the questions?
Christy Rossi: Sure. Thanks, Paul. And yeah we're really pleased with the performance of the international team. As Keith said, they're very much of the races. And I think it's been particularly encouraging to see that some of the underlying dynamics in the German launched early on have looked very similar to the United States including risk prescribing et cetera lots of that patient demand. So really encouraging to see. And of course, there's other dynamics and Europe that are different from the United States. And most notably that would be price negotiations. System of those cars will start flipping this year and then into next year as well. So what I think about the overall opportunity in Europe, it's certainly significant. It's going to be a contributor to our overall top line and that for this year that's adding to that 10% to 15% of revenue as a rough estimate is probably not a bad place to be. This frankly is one of the levers that we think about when we're trying to set guidance ranges, right? I mean, this is a variable that informs how we make may perform over there. But I think tenants 18% is probably a good a good estimate. And then at peak in markets like that you know we'll see we'll see how things evolve in the coming years, as we continue to grow the opportunity that you often let's see the US still representing certainly, the majority of the dollar value of the SAM opportunity and as Philina said, and it's very easy math to get to a multi-billion dollar opportunity just in the US based on based on what we are what we are seeing. In terms of CK. two I think that in the prepared remarks very, very excited about the data set that we're going to be sharing at Asco. And we really see this as the first the data that will be showing that you can safely combine CDK2 and have. But over the four six and our partnership discussions are progressing well. We've always been very clear that in a second half of this year is when it makes sense to have a partner on board strategically based on where the program will be heading and as we exit this year and into next. And certainly, you know as we think about the tenor of those conversations, our focus is on CDK2 that's where having a Bluetooth to having a partner on board to advance the program makes the most sense. And of course there's a lot of innovation in our pipeline that ITO partners may be interested and excited by. We always have those conversations and will continue to do that.
Operator: Thank you. Our next question comes from the line of Laura Prendergast from Raymond James. Laura, your line is open.
Laura Prendergast: Hey, guys, congrats on the good print today. Another one on CDK2, you know, thinking about how the cost of CDK2 impacts your off-back flux throughout the year. I'm assuming you guys are looking to outlicens and not cost share. If you could just provide any input here about how you're thinking about, you know, CDK2 moving forward.
Kate Haviland: Thank you, Laura. Do you start with just strategically how you're thinking about BT? And then Mike maybe you can weigh in on just how you feel any kind of impact on what it's like? Yeah, sure. So from a, strategy perspective, we're very intentional using business development to advance programs and really complement what our own capabilities and our own sort of internal priorities may look like. And certainly, at this stage, as we've said, we are very focused on continuing to really develop a broad portfolio in mast cell-driven disorders, certainly executing the ongoing Longeva kit. We have LMS Nib and Blue 808 coming behind that. CDK2 is a very, very significant commercial opportunity and one that, because it's primarily in breast cancer, is obviously in a somewhat different space. And so that's really the driver behind us having these conversations. We'll be open as we go through, you know, in terms of what the exact structure will look like. But, you know, we have a partner on board because we think, you know, we think the capabilities of the partner brains are relevant to how we advance it. I always think about having, you know, co-development, co-commercialization make sense in places where you're trying to build and leverage scale. In the short term, you know, breast is not a place where we're trying to build and leverage scale. So, again, we'll continue to advance those conversations as they make sense. But we have a very clear idea strategically of what we're trying to accomplish.
Mike Landsittel: Finally, I think with respect to the financials there's we obviously don't comment specifically on, partnership structures or financials. At this point, it's too early. But for 2024, we're continuing to execute on our Phase I study. That's baked into all of the financial guidance that we've given. We feel very confident about that. And then longer term, as Christy mentioned, strategically, it makes a lot of sense to bring a big partner on, and part of that is driven by the fact that these studies to move forward in breast cancer are going to be very expensive, and we want a partner to support us there
Laura Prendergast: Thank you.
Operator: Thank you. Our next question comes from the line of Salveen Richter from Goldman Sachs. Salveen, your line is open.
Q –Unidentified Analyst: Hi. Thanks. This is Matt on for Salveen. On Blue 808, could you talk about your strategy for determining which indications to expand into after a proof of concept has been established in chronic uticarian? Thanks so much.
Kate Haviland: Do you want to start and talk about 808?
Mike Landsittel: Thank you. Yeah, I mean, for Blue 808, and I actually would encourage you and others to really go back and listen to the live replay of our powerful mass cell from last week where we treated this topic in depth. The way we are thinking about it is, as we said, chronic uticarian is our leading indication. On the other hand, given the profile of the molecule is really a very good profile, and we are filing the IND and taking it to the clinic this year, is to really look at a number of other indications because the involvement of mass cell in the biology of numerous diseases is clearly well-established now. We'll be doing a lot of preclinical work and other indications, but also we're doing proof of concept clinically for a number of indications, and we see where we really think the full scope is in how to line up the additional indication beyond chronic urticaria. So we believe this molecule, if the clinical profile is consistent with the preclinical data that we are seeing, has the opportunity to really tackle a number of diseases, and therefore, we'll have to look at the POC for many of them.
Kate Haviland: Thanks. I may just add that we also believe that the profile of the compound and the fact we have an oral therapy here is going to enable us to be able to kind of to the therapy to address different patient populations across all these different disease states. We think we're really well-positioned in terms of the target product profile. The compound to evaluate this and bring forward was truly a pipeline in a pill opportunity.
Q – Unidentified Analyst: Got it. Thank you.
Kate Haviland: Next one?
Operator: Thank you. Your next question comes from the line of Reni Benjamin from Citizens JMP. Your line is open.
Reni Benjamin: Hey, good morning, guys. Thanks for taking the questions and congrats on an amazing quarter and really good guidance. So the question for me. Of the top 400 or so – starting physician, how many are prescribing and what's the split between allergists and hematologists? And as we think about reasons that eligible patients might not be being prescribed is acute can you at all or are there any reason that a potential group of patients that is incorporated into that kind of headroom calculation of how the area could grow? And how do you plan on addressing that? Thank you.
Kate Haviland: Yes. Thanks, Reni. And Philina maybe to address both how we see kind of demand coming from the deficit is what the most patients as well as out of positions from the tail and how you see that kind of dynamic in terms of demand and penetration as well as talking a little bit about kind of cadence of new patient starts right? And how that is informing our growth into the future?
Philina Lee: Yes, thanks for the question Reni. I would start with the initial breadth and depth of prescribing that we've established in these first three full quarters of launch in ISM. That's a really strong foundation for us both in terms of the breadth of the penetration. You know what you want to see in rare disease is not that it's concentrated in just a handful of centers like what really fosters – plan to see for sustainable growth and continued growth is that breadth of prescribing. And the fact that we're seeing adoption across both hematology, oncology as well as allergy immunology and split across academic and community settings is extremely important and is a great lead indicator for continued growth. And when we look at the top 400 that's really something that we laser into to illustrate what we see is more the kinetics of prescribing. It doesn't speak to the full penetration because that's really just a snapshot of some of the highest volume providers both. So what's really important I think to see from and from that is that first prescribed first prescribing is really leading to positive experiences that lead to subsequent repeat prescribing for two, three or even more patients. Even within that mix we see it really right mix of allergists and immunologists, hematologists and that you know I think headroom just across all segments and deciles of providers to continue to grow there. In terms of your question around eligible patients and prescribing there you know the most important thing we're focused on identifying when a patient is not well-controlled. And that is really that sort of like a crust across both our provider engagements as well as patient engagement. From a patient perspective patients can also become acclimated to living with a new normal. They may be avoiding triggers. And so it's really important to make them aware of a new treatment option and that reclaiming some of the freedoms of their prior life is actually possible. And so really our direct-to-consumer efforts are really focused on driving that. And again there are a lot of headroom to grow.
Operator: Thank you. Our next question comes from the line of Derek Archila from Wells Fargo. Your line is open.
Derek Archila: Hey. Good morning and congrats on the quarter. Was hoping maybe you could discuss some of the assumptions behind the updated guidance. Its seems to suggest a slowdown in net patient adds relative to the prior quarters. And I guess trying to reconcile that with the very bullish commentary of the prepared remarks? Thanks.
Kate Haviland: Yes. Thanks, Derek. And I think, just to start there. The way we think about –talked about philosophy on guidance. And we are we are in the early days of building a brand new market. And so as we think that the low end, high end of our day range is driven by ranges around a multitude of different inputs across numerous variables. I don’t know Philina, if you want to talk a little bit about how you think about those variables, but have you we certainly expect continued growth and the overall opportunity.
Philina Lee: Yes, Derek I think that the first answer to your question is no we do not expect a slowdown in net patient adds. We see strong and steady growth in the net patient adds and we expect that to continue. You know, in the past quarter, we saw that really driven by us strong cadence of new patient starts very low discontinuation rates which really penned well I think for chronic durations of therapy. And that's also that there are a number of additional on key revenue drivers that contribute to our guidance in addition to that can strong and steady growth of net patient adds that we expect. So, it's things like our compliance on the proportion of free goods which exceeded for this quarter and is something we'll be looking to see how that evolves over the course of the year and as well as things like our ongoing European launch. And so it's the inherent variability in these key revenue drivers moving forward that factor into our guidance range. All of that said you know if we look at sort of the midpoint of that range that represents nearly a doubling of the revenue that we achieved last year and we believe it firmly does put us on that trajectory towards the peak.
Derek Archila: Thank you.
Operator: Your next question comes from the line of Peter Lawson from Barclays. Your line is open.
Peter Lawson: Thanks so much. Thanks for taking the questions on. Just as we think the other item patients you mentioned there was kind of a low discontinuation rate. Anything else you can kind of comment around those patients whether there's any shifting components of the New Century Pembroke to use of a sense of drug holidays for instance? Thank you.
Kate Haviland: Yes. Thanks Peter for the question. I think what are the things I think the team has done a tremendous job in Q1 is and we know that Q1 can often be very challenging kind of across Esplin. Imaginary prepared marks across the pharmaceutical industry and biotech. R&D just did a tremendous job on executing in the recertification process and making sure that compliance and state very high. But since launch, have you thought about -- Philina anything that would save the thematic from patient discontinuation perspective?
Philina Lee: Yes. Thanks Peter. So, what we've seen in terms of discontinuation rates so far has been very much in line with what we've expected when we see [indiscernible] really favorable benefit risk profile from Pioneer. So, discontinuation rates have been low. The very early trends towards duration of therapy have been very, very positive. And we've even seen a lengthening on the advanced SM side. To your question around sort of compliance and holidays, like in fact that has also trended extremely positively in the in terms of patients staying on therapy. When we think about this patient population, they're are very sticky, right? Like they have a regimen that they are adapting to -- and they're really not taking just holidays. And so this is this is a really important point because as we progress in the launch and we increased the total number of patients on therapy, it's not just new patient starts anymore but also the cumulative effect of these patients remaining on therapy that will contribute to overall revenue growth.
Kate Haviland: I think that that's what's really important in the sense that as that pool of patients on therapy get some much larger point changes and compliance and/or free goods make a big difference from a revenue perspective. So, I think that we're certainly seeing that.
Operator: Your next question comes from the line of Matt Biegler from Oppenheimer. Your line is open.
Matt Biegler: Hey there. Congrats from us along the quarter. I'm curious if you're seeing any signs of growth in advanced SM maybe because of the increased prescriber awareness from England launch on? Or I guess should we still think of advanced is pretty flat going forward? Thanks.
Kate Haviland: Yes. Maybe I'll just start quickly does that mean we are so pleased to see that duration of therapy and advance SM being at 20 by modulating either patients with very, very aggressive disease. And I think that bodes well for both the advanced SM opportunity as well as the -- SM opportunity. You want to talk about the growth in number of new patient in SM, Philina?
Philina Lee: Yes Matt. So, I would say we do continue to see growth on the advanced SM portion of our business. That's obviously a relatively moderated compared to ISM, which is our primary growth driver and now represents the majority of patients on therapy with [indiscernible]. But we do see I think a potential kind of halo effect that on with the now the awareness of for the for ISM as our breadth of prescribing increases it's happening. You not just analogy, but also with a number of new hematology oncology prescribers as well who are activated and interested to get involved through ISM.
Matt Biegler: That's great. Thanks.
Operator: Your next question comes from the line of Ami Fadia from Needham. Ami, your line is open.
Ami Fadia: Thanks. Congrats on the quarter. My question is BLU-808, what data you need to generate to understand your go-forward clinical development plan for indication beyond chronic urticaria? And how soon can you start to initiate clinical trials on those indications? And separately if you could provide any additional color on how you're planning to develop an estimate, any update? Thank you.
Kate Haviland: Ami, thank you for those questions. Becker, do you want to talk about the data you want to say on 808 and how we're thinking about the end of broad proof-of-concepts as well as the plant for HARBOR study with elenestinib, which as we've said before elenestinibis really positioned to maximize the long-term performance of our SM franchise. And so we certainly are going to be spending more time talking about that in second half this year.
Becker Hewes: Yeah Ami. So BLU-808 are exquisitely targeted, AYVAKIT inhibitor is one that we're taking in healthy volunteers first, and that's obviously to get the initial PK and tolerability. But it also gives us an opportunity to see the ability of the drug to reduce tryptase even in normal healthy volunteers. And we believe that that will give us a good steer of what the therapeutic range maybe inpatients. And as Kate mentioned earlier this is a very tuneable drug where we expect to be able to use it across a wide range of therapeutic doses. And that may be as a single agent as we illustrated in our mast cell webcast last week where the mast cell is really the driver like chronic urticaria. And then we've shown in our BLU-222 program and our EGFR program that we make highly combinable molecules and that's going to be the essence of that next wave of investigations where we're looking in more complex diseases where the standard-of-care is well established such as asthma where the combination is going to be necessary to really for the field in those indications. And so as we enter into patients next year that will give us a sense of what our dose ranges work for patients who have mast cells that are causing disease. And then we'll be able to look at as Fouad said in a number of different more complex indications and understand where that therapeutic ranges and get quick proof-of-concept in those indications. And then with respect to elenestinib, as we said, we are getting more and more data as we study the patients on Pioneer. And we learn more from commercial patients about the really complex nature of systemic mastocytosis and the broad breadth of patients that can benefit in many different ways. And so we look forward to sharing more about the -- before the end of the year about our design of HARBOR and really our holistic approach to the development of elenestinib and SM.
Operator: Your next question comes from the line of Colleen Kusy from Baird. Colleen, your line is open.
Colleen Kusy: Great. Thanks. Good morning. Thanks for taking our questions and congrats on the quarter. Any commentary on how you're measuring the early success of your DTC campaign, and what your plans are to invest further in the second half of this year?
Kate Haviland: Yeah. So I think our direct to consumer campaign really is evidence of our conviction that we have a tremendous opportunity to help just a vast array of patients with ISM. So want to think about those efforts and how we make sure that we understand their group.
Philina Lee: Yeah Colleen, one of the most direct things that we look at is the patients awareness of AYVAKIT. And we've been really encouraged that the efforts to date have already increased, the unaided awareness of AYVAKIT eightfold, while continuing to have a lot of headroom to grow. So this is really an area that we will continue to lean into in a highly targeted way. We know where these patients are looking for information on the disease and we're really targeting both our media campaigns. And another thing we've talked about is the monthly opportunities we have for patients to come together with other patients to share their experience on AYVAKIT. That element of patient storytelling is so important in a rare disease where in many cases an SM patient hasn't yet met another patient. So the opportunity to connect here about their experiences and what the journey of AYVAKIT has been like for them, we believe will be really compelling. So we do expect to continue growing on these initiatives through the second half of the year in a highly targeted way.
Colleen Kusy: That's helpful. Thank you. And as a follow-up just in your early market research what's resonating most patients to keep them on treatment? And what gives you confidence in maintaining this low discontinuation rate in future?
Philina Lee: Yeah. I mean, I think, that really is a testament to AYVAKIT clinical profile. I mean patients it's a highly tolerable drug, easy to take. I mean we saw in the Pioneer study that the side effect profile of AYVAKIT was for us superior to standard of care and the kind of cocktail of symptomatic treatments that patients are on. And then it's a testament to the activity and the fact that we see clinical impact across a wide range of symptoms in patients, I'd say, it wouldn't such a heterogeneous disease that is absolutely critical. And that a patient regardless of what they're most bothersome symptom is seeing great impact in AYVAKIT. I think that, that is just a profound kind of equation for people that we see is resonating in patients are staying on. I don't know if anyone filling on to it.
Becker Hewes: Yeah. I think, yes, I think this is a couple of questions have since my interest the one about drug holidays and optimism about convincing patients to stay on the drug. As Kate said, when they feel better, they don't need to take holidays, they don't need to be convince to stay on the drug. And so that really speaks to also the way that allergists think about treating this disease and having a very tolerable therapy and treating patients, see how they do. It just speaks to why that there's consistent treatment duration. And I also wanted to comment on the Advanced SM duration. We're into two years in a, Leukemia like disease. And that really bodes well for the ambulance situation as well.
Kate Haviland: Yeah. Philina, do you want to add?
Philina Lee: Yeah. Maybe I will add on, Colleen, these are patients who are really highly motivated to and to regain quality of life. And just to share I think even just some sound bites from engaging customers across the country you have shared some of their patients' experiences is what we hear is patients are getting their energy back, being able to go back to work at the jobs that they had to pullback on previously due to the symptoms of ISM. And the ability of patients to go and participate in activities with their with their kids or friend or loved ones are going to count for the first time. And really I'm reclaiming and starting to remember what normal looks and feels like. And so it's really kind of a profound thing. And I think we really are even just at the beginning of this journey.
Colleen Kusy: Great. Thanks for taking my questions.
Operator: Thank you. Our next question comes from the line of David Lebowitz from Citi. David, your line is open.
Unidentified Analyst: Hi this is [indiscernible] on behalf of David. On the SM patients proportion I wanted to ask that they deliver swing from 25% to 20%. How should we think about patient growth versus actual sales growth? And what proportion of patients will beyond freed up by the end of the year? And I have one more follow-up.
Kate Haviland: So unfortunately at the limit to one question just has are coming on close a time here. But so I believe the question is around, how are we thinking about just the overall dynamic relative to free goods, again, being very early in the launch of a new therapy and building a new market later. How are you guys thinking about that as you kind of gave this year of around 20% since launch? And how do we think about that as a driver of top line versus some of the other variables including compliance new patient starts? Are European launch all the other things that are adding into top line?
Philina Lee: Yes it's your question. I think there's really a couple of things that factor into our free goods mix as we saw that decreased to 20% this quarter. So it's both the payer mix of patients with ISM which trends more and more towards commercial. And the second piece is that more patients were able to access paid therapy. In terms of what to expect through the rest of the year, free goods mix is really something we will need to continue to watch because as you said more patients will continue to add on and be treated with AYVAKIT. So we're in the early days of the IRA and so we need to watch how that plays out. Our expectation continues to be continued strong and steady growth in the number of patients on therapy, favorable, low discontinuation rates, high compliance. We'll watch the free goods mix and continue to watch our international launches.
Operator: Thank you. There are no further questions at this time. I will now turn the call back to Kate.
Kate Haviland: Thank you, Operator. We feel great about the progress we've made in Q1. And we recognize that there's a lot of work, have had a head of us this year. And as we move forward into the middle of the year, we do so from physicians' strength. We are well positioned to build on the momentum we've achieved here coming out of Q1 and we look forward to updating our progress. So thank you all for taking the time to join us today. And for your continued support of Blueprint Medicines.
Operator: This concludes today's conference call. You may now disconnect.
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