Blueprint Medicines Corp (BPMC) 2017 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Full Year 2017 Blueprint Medicines Earnings Conference Call. (Operator Instructions) As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Ms. Kristin Hodous. Ma'am, you may begin.

Thank you, operator. Good morning. This is Kristin Hodous of Blueprint Medicines, and welcome to Blueprint Medicines' Fourth Quarter and Full Year 2017 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 by going to the Investors section of our website at www.blueprintmedicines.com.

Today on our call, Jeff Albers, Chief Executive Officer, will discuss Blueprint Medicines' fourth quarter and full year 2017 business highlights and key areas of focus for 2018; Dr. Andy Boral, our Chief Medical Officer, will provide an update on our clinical stage pipeline; and Mike Landsittel, Vice President of Finance, will review our fourth quarter and full year 2017 financial results. We will then open the call for your questions.

Before we get started, I would like to remind everyone that statements we 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 our most recent quarterly report on Form 10-Q filed with the SEC, and any other filings that we may make with the SEC.

In addition, any forward-looking statements made on this call represent 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.

Now here's our CEO, Jeff Albers.

Thanks, Kristin, and good morning, everyone. 2017 was a year of significant accomplishment for Blueprint Medicines, as we advanced our pipeline of clinical and research stage programs and moved closer to realizing our vision of delivering transformational genomically-targeted medicines to patients.

I want to highlight in particular our fourth quarter achievements, which served as an excellent capstone to 2017. With regarding to the close of the year with the presentation of updated data from 2 clinical studies of avapritinib, which demonstrated remarkable clinical activity in 3 distinct patient populations.

We believe these results provide a strong foundation for continued rapid development of avapritinib in patients with gastrointestinal stromal tumors, systemic mastocytosis, and ultimately, a range of other diseases in which subsets of patients have KIT or PDGFRa mutations. We're also pleased to expand our pipeline in the fourth quarter, with the nomination of BLU-782 as a development candidate for the treatment of fibrodysplasia ossificans progressiva or FOP, a severe ultra-rare bone disorder.

In addition, we provided a preliminary update on our rapidly advancing Phase I trial of BLU-667 RET-altered cancers, reporting that BLU-667 was clinically active in non-small cell lung cancer and medullary thyroid cancer patients.

Finally, we significantly strengthened our balance sheet, with a follow-on financing in December. Coupled with the continued advancement of our Phase I trial of BLU-554 in hepatocellular carcinoma, our progress in the fourth quarter positions us for an exciting year ahead. By the end of 2018, we expect to have 4 therapeutic candidates in clinical development for 6-plus tumor types in rare diseases.

Additionally, we'll continue to expand our research-stage portfolio, and we expect to have up to 9 discovery programs by the end of 2018, including up to 5 programs under our cancer immunotherapy collaboration with Roche. We, obviously, recognize that these are ambitious goals for a company of our size. So to achieve them, we'll focus our efforts on 4 key areas. The first is continued advancement of avapritinib toward initial registration in the U.S. and Europe. Based on the consistency of activity we've observed to date, we believe avapritinib has the potential to provide benefit to a broad population of patients with diseases driven by KIT or PDGFRa mutations.

To this end, we'll concentrate our efforts on the following activities: First, rapidly enroll our ongoing trials across multiple populations within GIST and systemic mastocytosis. Second, seek feedback and provide updates from global regulatory agencies on the most appropriate path forward for these trials. Third, initiate additional registration-enabling studies, including a Phase III trial versus regorafenib in third-line GIST; a phase II trial in advanced systemic mastocytosis; and a Phase II trial in indolent smoldering systemic mastocytosis. And fourth, present updated data across multiple GIST and systemic mastocytosis patient population in 2018.

Our second area of focus is to define the clinical path forward for BLU-667 and BLU-554. For both programs, we expect new data along with regulatory feedback to inform our development plans.

For BLU-667, we're on track to present dose escalation data from our ongoing Phase I study in RET-altered cancers in the first half of the year, and then for BLU-554, we expect to share additional data from our ongoing Phase I study, including initial results from the TKI-naïve expansion cohort in the second half of the year.

Our third area of focus is to expand our robust differentiated research pipeline by continuing to optimize our drug discovery platform. In 2018, we plan to advance BLU-782 toward a clinical trial in FOP. In addition, we plan to nominate at least 2 more wholly-owned discovery programs, while also advancing our highly productive collaboration with Roche.

Our fourth area of focus is to continue to evaluate strategic business development opportunities. With a strong balance sheet and growing internal operational capabilities, we'll focus only on transformative partnerships that enable us to accelerate our development programs and/or expand our global reach. All in all, 2018 looks to be another eventful year for Blueprint Medicines as we continue to learn more about the clinical profile of our investigational medicines and work hard to evolve the company into a fully integrated, commercial stage biopharmaceutical company.

Now I'd like to turn the call over to Andy Boral, our Chief Medical Officer, to discuss our clinical activities. Andy?

Thanks, Jeff, and good morning, everyone. As Jeff described, we made great progress across our pipeline of clinical stage assets in 2017. With our preliminary update on the BLU-667 trial in December, we've achieved clinical proof-of-concept for our 3 lead drug candidates. Thrilled by the success, we plan to significantly expand clinical activities across the portfolio in 2018, with the goal of rapidly developing investigational medicines toward global regulatory approvals.

This morning, I'll provide an update on avapritinib development program and preview anticipated 2018 data milestones across the portfolio. First, an update on avapritinib clinical activities in advanced GIST. As we announced in the fourth quarter, we expanded the ongoing Phase I trial, which we now call the Navigator trial, based on strong clinical data in both KIT and PDGFRa-driven GIST. Specifically, we increased the third line plus cohort to 100 patients, and we added a second line cohort based on data showing that avapritinib covers a broad spectrum of KIT mutations indicated in GIST.

Enrollment of the Phase I trial is progressing very well. We've enrolled about 50 patients with PDGFRa-driven GIST in trial to date, and we're on track to complete enrollment by mid-year. As we've previously discussed, we believe there is an opportunity for an early approval based on the remarkable data we've observed in this population to date. In addition, the third line plus cohort of 100 patients is now fully enrolled. Collectively, we believe rapid enrollment across both population highlights the significant need for new therapies in advanced GIST.

Finally, we're on track to initiate the Phase III Voyager trial in the first half of this year, with the goal of supporting registration of avapritinib in a broader patient population. This global randomized trial will compare avapritinib to regorafenib in third-line GIST, with the primary endpoint of progression-free survival.

We're also expanding the avapritinib program in systemic mastocytosis, now called the Explorer trial, based on the very strong clinical data we presented at the ASH Annual Meeting in December. On this slide, we summarized some of the key data. As you can see from the waterfall charts, avapritinib was clinically active at all those levels tested, which gives us confidence to explore lower doses in the indolent form of disease. Overall, 72% invaluable patients had an objective response and all had disease control. Importantly, avapritinib was well tolerated and most adverse events reported by investigators were mild-to-moderate and there were no discontinuations due to adverse events.

These data, combined with our ongoing work to develop additional outcome measures, provides a strong framework to engage global regulatory authorities in the first half of this year with a goal of establishing a pathway to registration.

We plan to initiate a registration-enabling Phase II trial in patients with advanced systemic mastocytosis in the first half of 2018 and to initiate a Phase II dose-finding and proof-of-concept trial in patients with indolent and smoldering systemic mastocytosis in the second half of the year.

In the meantime, we continue to enroll the expansion portion of the ongoing Phase I study, with the goal of generating additional data at the recommended part 2 dose.

As Jeff mentioned, we'll have a continued cadence of important data disclosures throughout 2018. One of our first key milestones will be initial dose escalation data from the Phase I clinical trial of BLU-667 in patients with RET-altered cancers. BLU-667 is our highly selective inhibitor of RET fusions and mutations. Based on preclinical data, we believe BLU-667 has the potential to offer more potent inhibition of RET with fewer off-target toxicities compared to currently used multikinase inhibitors with RET activity. In addition, BLU-667 was specifically designed to inhibit predicted resistant mutations with the goal of enabling more durable response.

In the upcoming presentation, we'll report a detailed picture of the dose escalation portion of the trial, including safety and clinical activity in multiple patient populations across a range of dose levels.

For avapritinib, we plan to report increasingly mature data from the ongoing Phase I trial in patients with advanced GIST, including updated data for the PDGFRa and third line plus cohorts and initial data from the second line cohort.

As I previously mentioned, we also aim to present initial data from the expansion portion of the Phase I advanced systemic mastocytosis trial later this year. In addition, we'll share updates on our anticipated path to registration as we obtain feedback from global regulatory authorities across both avapritinib programs.

For BLU-554, we expect to report new data from the expansion part of the ongoing Phase I trial in advanced hepatocellular carcinoma in the second half of 2018, including initial results from the new TKI-naïve cohort that we're opening right now.

Finally, as we advance in BLU-782 towards a clinical trial in patients with FOP, we'll aim to disclose preclinical data to support our initial development plan later this year.

I also want to take a moment to highlight a key component of our overall development strategy, identifying and treating patients based on the underlining genetic driver of their disease. Our ongoing BLU-667 trial includes a basket cohort that will serve to identify and treat other RET-driven tumors that occur at low frequencies. Similarly, with proof-of-concept established for avapritinib in GIST and systemic mastocytosis, we now plan to initiate a trial targeting additional diseases driven by mutant KIT and PDGFRa beyond these anchor indications. Overall, 2017 has been a great year for Blueprint, with tremendous progress across the portfolio, and we look forward to exciting 2018.

Now I'll turn the call over to Mike to review our financial results for the fourth quarter and full year 2017. Mike?

Thanks, Andy. Blueprint Medicines continues to operate from a position of financial strength. As Jeff mentioned, we ended 2017 with successful close of a follow-on offering, which resulted in net proceeds of approximately $325.7 million. This will enable us to continue funding investments in near- and long-term value drivers across our clinical and research-stage portfolio, including the registration-enabling clinical trials for avapritinib that Andy just mentioned.

Now turning to our fourth quarter and full year 2017 P&L. Collaboration revenues were $1.6 million for the fourth quarter of 2017, compared to $7.7 million for the fourth quarter of 2016. Revenues were $21.4 million for the full year 2017, compared to $27.8 million for the prior year. This decrease in revenues was primarily due to the termination of the Alexion agreement during the fourth quarter of 2017. During the quarter, we incurred $43.6 million in R&D expenses, compared to $24.1 million for the same period last year. R&D expenses for the full year 2017 were $144.7 million, compared to $81.1 million for the full year 2016. This increase in R&D expenses was primarily driven by increased clinical and manufacturing expenses associated with advancing avapritinib, BLU-554 and BLU-667, further into clinical development as well as increased personnel-related expenses.

G&A expenses were $8.1 million for the fourth quarter of 2017, compared to $5 million for the fourth quarter of 2016. For the full year, G&A expenses were $28 million, as compared to $19.2 million in the prior year. This increase in G&A spending was largely due to increased personnel-related expenses as well as increased professional fees, including both market research and public relation costs.

Our net loss for the quarter was $49 million or $1.23 per share, compared to a net loss of $21.3 million or $0.75 per share for the fourth quarter of 2016.

For the full year 2017, net loss was $148.1 million or $3.92 per share, compared to a net loss of $72.5 million or $2.64 per share for the full year 2016.

Now turning to our balance sheet. We ended 2017 with cash, cash equivalents and investments of $673.4 million, compared to $268.2 million as of December 31, 2016. This increase in cash was primarily due to the net proceeds from our follow-on offerings that closed in April and December of 2017, partially offset by cash used to fund operations.

And based on our current plans, we expect that our cash, cash equivalents and investments, excluding any potential option and milestone payments under our collaboration with Roche, will enable us to fund our operating expenses and CapEx requirements into mid-2020.

So as we move forward towards executing on the key priorities and milestones for 2018 that Jeff and Andy outlined earlier, we are now beginning to ramp up our pre-commercial investments. This includes expanding our manufacturing investment to provide both clinical and commercial drug supply as well as building the foundation of our commercial infrastructure for avapritinib. Accordingly, we expect that our operating expenses will continue to accelerate in subsequent quarters, similar to the trend we saw in 2017, as we continue to accelerate our efforts to bring medicines to patients.

With that, I will now turn the call over to the operator for questions. Operator?

(Operator Instructions) Our first question comes from Terence Flynn with Goldman Sachs.

This is Jason Jakoby on for Terence. Can you provide an update on BLU-667? And would it be reasonable to expect initial data at ACR or ASCO? And then just any update on efficacy or safety that you're seeing there since your last disclosure in December?

Jason, it's Andy, I can take that one. So as I said, we plan to update data from the ongoing study at the medical meeting in the first half of the year. It'll be a -- as we've done before, a full detailed update on the safety data, the activity data, enrollment, et cetera. But some -- also as we've done before, we plan to disclose data at a congress. And at this point, we won't say more about what's coming.

Our next question comes from Andrew Berens with Morgan Stanley.

Just one question on the GIST program. Now that Navigator is going to have second-line patients, seems like that could open the door to label a broad label in refractory GIST. Is there any possibility that you could ask for a broad label ahead of getting Phase III data?

Andy, it's Andy. I'll take that one up as well. See -- as I said, we're really excited by the broad activity that we see with BLU-285 across the range of mutations. And that was the -- really the driver for opening the second-line group in the ongoing Navigator trial. We think the next steps really should be based on data-driven decisions. And so, I think, I see 2 potential paths forward in second line. Certainly, the base case would be that in a second-line population, we would need to do some kind of randomized study comparing to a compound, I don't know, like sunitinib similar to the approach in third line. But certainly, a big part of the second-line cohort in the current study is to do detailed genetic analysis. And if we saw high degrees of activity in a highly refractory group or a specific subset, we would certainly contemplate bringing those data to agencies for an expedited approval on a subset as part of the current dataset.

Okay. And what should we look at as the bar for high success in the second-line setting?

Yes. I guess, I can't really speculate on that. That will be the product of ongoing regulatory discussions. Certainly, it would be a high response rate with good durability.

Our next question comes from Eric Schmidt with Cowen and Company.

Maybe another one for Andy on avapritinib and the plans and advanced systemic mastocytosis. Can you just give us a little bit more detail on where your regulatory discussions ended up with in terms of the trial design, the Phase II registration-enabling trial design? Should we just expect something similar to midostaurin in that setting?

So the regulatory discussions are ongoing, and we'll update as we get definitive or more definitive feedback over the course of the year, and I expect that will be in the context of when we update on data from the ongoing study. But the regulatory discussions are not gating our plans. So we are currently expanding the -- working on the expansion part of the ongoing Phase I study, and we are getting -- working full speed ahead to launch the single-arm Phase II advanced SM study. We do think those 2 datasets together will provide a very strong regulatory package that cover a broad range of the SM patient population. And a nice -- I think what we really will get out of the addition of the separate Phase II study are integration of patient-reported outcome data. We've developed a specific patient-reported outcome tool for that study that's validated in advanced SM, and also a very strong central assessment of response for the IWG criteria. So we think those -- we're confident that those 2 datasets together will make a strong regulatory package.

Okay. Then on the expansion of the clinical development of 285 beyond GIST and systemic mastocytosis. Can you comment on what are the tumor types you're looking at there? I assume maybe AML and others?

Yes. So it turns out that, RET -- excuse me, KIT and PDGFRa mutations are seen across -- at low frequencies across a broad range of both solid and heme malignancies. And as we kick-off -- as we finalize plans and kick-off a study in a basket group, it would include both heme and -- heme malignancies and solid tumors. Certainly, there are subsets of AML that have KIT mutations and are thought to be KIT-driven. PDGFRa has shown up in glioblastoma. But there is a broader range KIT mutations show up in melanoma. So it would be a fairly open-ended study and the goal really would be to find the key sites, both in Europe and U.S., that routinely sequence their solid and liquid tumors to get us a broad range.

Our next question comes from Kyung Yang with Jefferies.

I have a few questions on 667. So -- although it's a small number of patients, Ignyta showed about 75% response rate in non-small cell lung cancer. So do you think that's the kind of efficacy bar for selective RET inhibitors?

Yes. It's Andy. So again, I can't really speculate on what is -- would be expected in general. But, it's one example, certainly, they saw good activity. We will present our data as we pull together at a meeting this year. I would expect that it'll look good. And maybe, we just want to clarify a point that, that does not include the KIF5B fusions, which are the most common within lung cancer. So that maybe slightly misleading.

Okay. And then in your current dose escalation study, have most of non-small cell lung cancer patient experienced checkpoint inhibitor, such as anti-PD-1?

It's a mix. But yes, that is becoming a more common therapy. So we accept and we allow patients who have had any mixture of prior therapies.

Okay. And the last question...

But then maybe that said, certainly when we present data, we will describe the prior therapies. And if we can make any conclusions about the relevance, we'll let people know.

Okay, and the last question. So at least with the multikinase inhibitor, when you combine them with other products, such as mTOR inhibitor, response rates have gone up nicely. So I'm just wondering, any kind of potential combination study with the 667 that you're planning in the future?

Yes. So we -- the broad development plan of 667 will include potential combinations, the current study is pure single agent. And we've -- those data -- those decisions will evolve as we accumulate more data.

Our next question comes from Arlinda Lee with Canaccord Genuity.

I have a few of them. One on the PDGFR, you continue to guide to having completed enrollment cohort mid-year. Might we see initial data at year-end in terms of response rates? Or do you think you would hold out for longer durability data? And then secondly on indolent systemic mastocytosis. What kind of information are you guys looking for in the trial that you're planning to start later this year?

Arlinda, it's Andy. So on the PDGFRa, in fact the ongoing GIST study in general, we do plan to update on that study later this year, and that would include an update on data for both PDGFRa and the KIT-driven cohort as well as initial second-line data that we'll have at that time. So that will be a complete study update, and we look forward to sharing that in the coming months. For the indolent systemic mastocytosis study. Yes, so we are planning to kick-off a study in the second half of this year. And they are based on the -- one of the things that excites us a lot about bringing avapritinib into indolent systemic mastocytosis is the fact that we've seen activity in the advanced population at the lowest dose level. The starting dose in that study was 30 milligrams, and that includes activity in bone marrow, tryptase reduction, spleen size, as Dr. DeAngelo described at ASH. So with that in mind, we anticipate developing the drug at lower dose levels in indolent disease and the study we started later this year will be a 2-part study. The first part will be a dose-finding study, where we'll explore several dose levels in parallel. It doesn't need to be a sequential escalation since we've already defined the MTD. So it'll be a parallel dose-finding study. Based on part 1, we'll identify an optimum dose to take forward and that would go into part 2 of the study, which would be more definitive -- a definitive efficacy study, that we actually expect to be a randomized placebo-controlled looking at patient-reported outcome tools as the primary endpoints, since the patients are not evaluable for response by IWG.

Our next question comes from Dane Leone with BTIG.

If I could start with one that's just a bit broader. When you started your clinical programs, like with avapritinib, that you took a more traditional development path of going in later lines and working your way up. And it seems like, at least in this program and then potentially in the RET program, you're pivoting to more of a broader label based on mutation more in the vein of, I guess, larotrectinib. Can you just give us a comment of how you see your clinical strategy evolving and how that's being shaped by some of the changes that the FDA and I guess, maybe comment specifically on the RET program and how you think you're going to approach developing those clinical trials over time?

Yes. Dane, it's Andy. I will start off and see if Jeff can chime in, if he likes. But, see, -- that's a -- we think a lot about that. And I think there are several pieces of that question. For starters, actually, I think that avapritinib is a bit different than BLU-667, just in the kinds of populations you can address. With avapritinib, there's a very clear path forward from the beginning in the GI stromal tumors and advanced systemic mastocytosis. At least in GI stromal tumors, there's a well-defined targeted drug, kind of progression going from imatinib to sunitinib to regorafenib. So I think -- so we really picked the approach that we picked because it, I think, will be the most expedited path to a rapid approval and then it piece things up nicely to move earlier into therapy. And I suppose in some way that's a more traditional approach, but I think it's really the quickest approach to approval and the best way to get the drug -- the medicine available to a broadest number of patients soon.

We knew that in early GIST, the expectation would be large randomized, well, maybe not that large, but would certainly be randomized study, not an accelerated approval on the single arm. BLU-667 is a little bit different. The target anchor indications, they are long, in particular, in medullary thyroid cancer. But in lung cancer, the paradigm is just different. In selected populations, there is a well-established paradigm for starting with a target therapy ahead of chemotherapy. In the setting of the RET population, there are no kinase inhibitors approved. There are no targeted therapies. That's different than GIST. So there is a nice opportunity to move more quickly into earlier lines of therapy we think with a targeted agent. But even there, most of the patients that come up in first study have had prior standard chemotherapy. In both cases, we want to expand to broad genetically-based basket population. So I think we're thinking about that similarly for both. Maybe I'll just add that the opportunity there seemed initially more straightforward for RET, where patient -- people were already born sequencing more tumors.

And maybe I'll just jump in and even take a step further back as you opened it up as a philosophical question for -- and this is Jeff. For every program, when we nominate a program, so this is early in discovery, we develop a target product profile. And one of the mandates internally is that there ought to be a potential for approach to a breakthrough therapy designation and a very rapid development path, and at least one indication. Then the second tenet is that we will always follow the data. That we'll let the data guide us to the next subsequent indication. So in essence, if program earns continued growth as we think about it within the portfolio, that's based on signals we see, areas of interest that -- opportunity that emerge, that any program can expand. And then the third component is that, we, of course, will take macro environment events into account, whether that be changes in regulatory tone and/or competitive landscape that we understand, we don't develop these investigational medications in a vacuum.

And so we constantly, as Andy said, debate and pressure test the optimal path forward, and we don't pretend to know exactly how it will play out when we start a program, but we always want to have a clear starting path.

Great. And maybe I could follow-up with one on the indolent smoldering systemic mastocytosis plans. I think a number of my colleagues were trying to get out this question. So I'll ask it a little bit more directly and also cause a party foul by doing a cross indication comparison. But when we think about the regulatory pathway in the indolent setting, are you thinking generally that the clinical endpoints are going to be something like what we saw with apalutamide in the SPARTAN trial, where it was looking at metastasis-free survival, where it's more of a progression endpoint versus something that would be a -- that you're using a Voyager, Explorer or Navigator, which was a response rate type endpoint?

So Dane, I just want to clarify, you're talking about indolent systemic mastocytosis here?

Right. Yes, because it's going to be a little bit different. Clinically, you're trying to treat people to prevent progression into a more aggressive form of the disease, and that obviously will weigh in terms of what the clinical endpoints will be defined as.

No, for sure. Actually, I think, it will be more different than that, in fact. I mean, indolent systemic mastocytosis isn't a malignancy, at least in any traditional sense there. There is no response -- there is no way to measure response, at least that's been currently evaluated or defined. And what really makes the disease problematic are the broad array of constitutional and other symptoms that patients have. It's GI, nausea and vomiting, and rash, and pruritus and bronchospasm. They don't -- the amount of mast cells in the bone marrow don't actually correlate well to the disease burden, the amount of tryptase in the blood doesn't correlate well to the disease activity. And so this, as I think you're starting to describe when I talked about the study we're planning. In this disease, it will be a patient-reported outcome tool that will be the primary endpoint that measures these symptomatic impact of the disease on the patient. And we are developing a -- actually well along our way of having developed a validated indolent systemic mastocytosis specific PRO tool, which will be incorporated in -- ready for use and incorporation in a validated way in the study we start the second half of this year. So it's probably not even around time for progression or the rate of progression from indolent to advanced disease is quite slow and pretty -- it doesn't actually happen at all that often, so that's not really a practical endpoint. It's really about improving patient disease symptoms.

Great. If I could squeeze in one last one on the ALK2 program. So you took that program back. You're obviously moving forward in FOP. But clearly, there is other opportunities with ALK2 specifically. Is that going to -- the first question I ask, is that how we should think about this program in the broader scheme philosophically of how you nominate different programs? It wasn't -- essentially, I'm asking, this isn't just a recycle program. You put it back through the vetting test of your methodology to actually say, yes, this is something we're going to move forward with clinically because we see a broad opportunity set. Is that the right way to think about it?

Yes. So this is Jeff. Maybe I'll take the second part of that question about how we evaluate it and then Andy can weigh in on the clinical development path. So I think you captured that well. When we retained -- cut back the rights from Alexion, the first order of business was to complete that transition. The second piece was to evaluate the molecules we were testing at the time. When the rights came back, we weren't sure if we would end up with the development candidate that hit the target product profile that we and Alexion had agreed to. Subsequently, we not only did that, but as Marion Dorsch, our CSO, highlighted on our last call, we far exceeded those expectations or that bar, and that's preclinical data that we'll look to share later this year. And so with that data in hand, we put the ALK2 program or BLU-782 into the same process we do with all of our programs, evaluating what's the opportunity, how do we think about the probability of success, what's that the clinical development path, and also with an eye on the evolving landscape in terms of potential treatment opportunities, which has accelerated quite a bit, frankly, since we first initiated this program a couple of years back. And with all that said, we felt like the approach of targeting the underlying driver of disease ALK2 -- mutated ALK2, was a very promising approach. There was a development path that we thought is available. And when we looked at that program vis-à-vis other opportunities, felt like it was one of the most promising and we wanted to fully fund it going forward. And then maybe Andy is on the development path?

Yes. So as Jeff said, we really think that targeting the point mutation, that's the fundamental driver of this rare genetic disease is certainly the most likely way to have a huge impact on the disease. And we think we are the only ones, at least we know, with a highly selective ALK2 inhibitor that can do that. So in that setting, we're working hard now with a variety of external experts in the field to develop the best -- the most effective development path to think about the most effective ways to measure the disease, to understand the most efficient way to develop study. We're all really excited about the opportunity in FOP.

Our next question comes from Mike King, JMP Securities.

I just had a few couple of clean-up questions. I'm just -- and a lot of questions about 667. Obviously, we're all very excited about it. I don't know at this point if you guys can say anything about sort of number of dose levels that you've gotten through to date?

Yes. It's Andy. Mike, we're just not going to say anything until we present the data. It's coming up and we'll have -- it'll be in the second quarter of this year, and what we'd really like to do is just pull everything together as we've done in the past (inaudible) presentation.

Okay. But can you -- it's just based on your answer to the previous questions, Andy, it's safe to say that everybody in this study will have gotten at least one prior round of chemotherapy? In other words, are there any naïve patients in there that were either ineligible for chemo or refused it?

Again we'll leave that out as we get there. You'll have to expect they essentially have normal chemotherapy that have non-small cell lung cancer.

And then there was a recent article in J Thoracic Oncology that talked about landscape, the RET landscape. And what was interesting to me was the various diagnostic techniques that are used to confirm RET positivity. And I would guess that these patients -- the patients in the study now are based on archival tissue. But would you have to work with, say, diagnostic KIT company to try to come up with a standardized RET fusion test, either IHC or RT-PCR or something like that for frontline patients?

Again Mike, our going assumption now -- so first of all, we allow patients based on their local testing. There -- all the sites that we use have robust RET testing. As you said, there are few approaches to it. We are, as we've done in other studies, looking at circulating tumor DNA in all patients and looking at that as an opportunity. We're also planning to look at partners for a CDx development. But it's a rapidly evolving field even just from a regulatory perspective, whether CDxs will be needed down the road, whether that whole regulatory system's going to change or not. Our going assumption at this point is that we'll need CDx, but we're certainly very inflexible in terms of how we approach that as the landscape changes. But we will certainly be ready to have one if needed.

And then if we could just spend a second on 554. Just wondering -- excuse me, again in the TKI-naïve population, can you talk about what data you would be ready to present? Would it be overall response rate? Or would you have more fulsome endpoints like PFS and other data points when you present that data later?

Yes. So we, I mean, again, it would be similar to what we've done before. It'll be an update on the data available at that time. The TKI-naïve cohort is relatively new to the study. So duration of treatment and duration of progression-free survival, things like that would be less mature than for the other cohorts. So it will be a mixture. But I think we'd be focused more until we see the response rate similar to what we saw in the small number of TKI-naïve patients that were reported at ESMO and what is the durability to the degree that we can talk -- we can describe it at that point in time.

Okay. And if I could just maybe a closing question for Jeff. This is the first time you guys have mentioned the Roche agreement publicly as far as having tangible, I guess, tangible results or tangible evidence of that collaboration. Can you maybe give us a little more of a clue what we might see come out of that? Are we going to talk about molecules? Are we going to talk about targets? Anything else you might be able to say about that right now?

Sure. So the feedback there is consistent with what we've talked about before. That, obviously, any disclosure within the context of a collaboration would require both our approval and Roche's approval. So that adds a level of complexity. But we -- the collaboration is now moving along quite well. And so we wanted to highlight that. It now makes up a substantial portion of our early discovery efforts, the programs that were initiated right at the time of signing of the collaboration. Those 2 programs have moved to -- have made very nice progression. And so we'll find that we agree with Roche to unveil those, but we're not going to guide to when that might be.

And our next question comes from Laura Chico with from Raymond James.

So, I guess, I wanted to switch back over to 285 and GIST. And, I guess, I'm just curious, how should we be thinking about potential sequencing of therapies? And I guess, I am speaking more specifically about another agent in development, DCC-2618. I guess, just as you're progressing here up in earlier lines of treatment, I guess, I am wondering if a patient encountered one of these agents, could you envision scenarios in which the other agent would be used sequentially? And I guess, along those lines, could you remind us about any cross-resistance profiles or data that you might have on these agents? And then I have a follow-up.

Laura, thanks for the questions. It's Andy. I will start out with that one. So maybe I want to step back a minute just to remind everyone that avapritinib is -- and the DCC molecules really take very different approaches to inhibiting KIT. So we have focused very much on a selective inhibitor that is KIT, the PDGFRa, and really very few other kinase as well and very -- binds to the -- this type-1 inhibitor binds to the active form of the KIT and PDGFRa molecules, while the DCC compound is much less selective and as far as we can tell, binds to the inactive form. So just from that basic perspective, I actually think that it's unlikely that the 2 would be strongly cross-resistant.

I'd like to think that in the late line GIST population where both compounds are seen reported similar results at a percentage response rate percentage, but I would expect that we're probably not seeing activity in the same patient. So I would actually hope that together the 2 drugs can help more patients than either drug by itself, and I would expect that one would work after the other. In particular, I think that we have data for avapritinib to suggest that would be true. So a real distinguishing characteristic is avapritinib is potently active on these activation loop mutations in KIT D816V, in PDGFRa D842V as well as broadly covering the rest of the KIT gene. It's, I think, quite distinct from the DCC drug, which really is not active on these activation loop mutations. So I think that right away offers an opportunity for distinction that if there is resistance that arises in activation loop mutations, we would cover that, and they wouldn't -- another side line to that is that it really gives avapritinib an opportunity in the PDGFRa subset of GIST that's not available to the DCC compound. And I think probably also that extends to mastocytosis where almost all patients have the D816V mutation. So if you inhibit these activation -- potent activation loop mutations, you -- I'd expect activity in both PDGFRa GIST and systemic mastocytosis like we see and if you don't inhibit them, I would expect we won't have activity there. So I think that will be a different profile of those 2 compounds.

Yes, and maybe I will take it from, this is Jeff, a higher level, that after imatinib, sunitinib or regorafenib certainly leave room for improvement in the treatment paradigm. And I think just piggy backing off of Andy's comment, our hope in initial observation is perhaps both of these molecules are better than the available later line therapies currently. So the treatment paradigm we would hope will change. And then agree with Andy in terms of cross resistance set. I think that's too early for us to speculate or know. As I said earlier, we'll let the data guide us there. But I think there is opportunity for significant change in the treatment paradigm.

Okay. That's helpful perspective. And then, I guess, my follow-up question is kind of also related in the GIST 285 setting. You mentioned concluding enrollment in the registrational study by mid-2018, and we'll probably get an update before year-end, and you have breakthrough therapy designation here. And I guess, I'm wondering if I can ask a little bit more about the commercialization preparation activities you mentioned and kind of what we should be expecting there. I think, just for a brief run-through on the website, the career openings, I'm not seeing many listings for commercial related functions at this point. So I guess, I'm just wondering when might we anticipate seeing more of a build-up and kind of where you're at right now?

Sure, this is Jeff, I'll take that. One is, we'll find an opportunity later this year to provide a more fulsome update on our plans from a commercial perspective. We think it's a bit premature to guide too much in that regard. But I would start with a notion that you haven't seen a lot of positions. We don't think there will be a lot positions early on. That in a -- a first indication is in PDGFRa, these are patients that both in U.S. and Europe are generally funneled to large academic sites. And so it's the type of build that can be -- that can occur in a very targeted manner, much as we think about our molecules as targeted therapies, the commercial build should actually mimic that precision nature. So we certainly have commercial folks on board. Both myself and Kate Haviland, our Chief Business Officer, have extensive commercial experience, and Kate, under her, has a small team currently looking at and laying the groundwork for that initial commercial plan. And then there are -- there will be some subsequent hires over the course of this year. But we're not going to provide greater detail than that at this moment. We're excited about it though.

Our next question comes from Yigal Nochomovitz with Citi.

Just a quick question on the RET market. Can you just give us a sense as to your latest thinking on the scale of that market, both in terms of incident patients and prevalent patients? And to the extent that the RET market extends beyond thyroid and non-small cell lung cancer? I'd be interested in your thoughts.

Yigal, sure, I'll take that. It's Jeff. So non-small cell lung cancer, we estimate that RET fusions occur in roughly 1% to 2% of patients. And so if you take the Epi there in terms of overall occurrence of non-small cell lung cancer, we estimate that there is anywhere from 5,000 to 10,000 patients in the major markets, which we defined as the U.S., EU5 and Japan. The reason of that range is we -- it depends on how you cut it. If you look at by the lines of treatment, it's upwards of 10,000. But if you look at from a frontline perspective, it's close to that 5,000 number. In medullary thyroid cancer, it occurs at a -- mutations occur at a higher rate. It's around 60%, RET mutations, but a much smaller patient population, obviously. So our estimates in those major markets are around 600 patients total. And then if we go -- extend that to the basket, we haven't provided specific guidance, but it is clear in some analysis we've done and others have done that you see RET fusions, primarily though there are some mutations as well, occur at a low frequency across a broader range of solid tumors. And there -- before we provide any type of guides or estimates, we want to see that data evolve a bit more.

Great. And regarding the gene panel, is that currently the case that the fusions in the point mutations for RET are represented on the major panels, meaning thermo (inaudible) foundation or are there still some gaps in what the panels can detect with respect to the RET updation?

It's Andy. Yes, the RET fusions and point mutations are well covered by the available panels. And certainly, they can be done by individual specific testings, while they can be tested.

At this time, I'm showing no further questions. I'd like to turn the call back over to Mr. Jeff Albers for closing remarks.

Thanks, operator. So obviously, a very well-rounded set of questions. So I appreciate you all taking time and your continued interest. Really if you take a step back, we believe we're at a critical moment in the continued evolution of Blueprint Medicines. We have a robust platform with proven capabilities, we have a broad and differentiated clinical and research-stage portfolio, and we have a hard-working team that is deeply committed in improving the lives of patients. So combined with our strong financial position currently, this foundation gives us a clear path of becoming a fully integrated biopharmaceutical company and achieving our ultimate goal, which is delivering transformative genomically-targeted medicines to patients. So with that, we'll conclude the call, and we thank you for your continued support and interest. Bye-bye.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.