Blueprint Medicines Corp (BPMC) 2023 Q2 法說會逐字稿

Good morning, ladies and gentlemen. My name is Glenn. I'll be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicines' Second Quarter 2023 Financial Results Conference Call. (Operator Instructions)

I will now turn it to Jenna Cohen, Vice President of Investor Relations to begin.

Thank you, Glenn. Good morning, everyone, and welcome to Blueprint Medicines' second quarter 2023 financial and operating results conference call. This morning we issued a press release which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at www.blueprintmedicines.com.

Joining me today are Kate Haviland, Chief Executive Officer; Philina Lee, Chief Commercial Officer; Fouad Namouni, President, Research & Development; and Mike Landsittel, Chief Financial Officer. Christie Rossi, Chief Operating Officer; and Becker Hewes, Chief Medical Officer, will also be available for 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 3, and are subject to a number of risks and uncertainties. These 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 Blueprint disclaims any obligation to update such statements.

I'll now hand the call over to Kate.

Thank you, Jenna, and Good morning, everyone. In the second quarter, we entered a new era of Blueprint Medicines, which we call Precision at Scale. This inflection is driven by the significant near term growth opportunity for AYVAKIT with the recent FDA approval in ISM. With AYVAKIT, ISM patients now have the first and only medicine approved to treat the disease, and importantly, a medicine that was specifically designed to stop ISM at its source.

The launch is off to a great start, and Philina will provide more color on our commercial results and key launch metrics shortly. Importantly, everything we are seeing in these early days of launch demonstrates that the market for AYVAKIT is a blockbuster opportunity that we estimate to be more than $1.5 billion at peak.

Our Q2 launch momentum has continued into the second half of this year, and AYVAKIT is on track to become the durable market leader across the spectrum of both advanced and indolent SM for years to come.

At Blueprint Medicines, we have developed a deep knowledge of SM that will allow us to extend and enhance our leadership in this area as we define the direction of innovation going forward. In ISM alone, we have studied approximately 400 patients globally at nearly 80 sites spanning 16 countries. Through our development work, we have built a substantive and rigorous base of knowledge of SM disease biology that will allow us to continue to meet the range of clinical needs across the spectrum of patients who have SM. We are developing longitudinal long-term evidence on the treatment impact of AYVAKIT and ISM, and we look forward to sharing data from part 1 of our HARBOR study of elenestinib later this year.

Beyond SM, we are expanding our leadership in KIT biology as we build a franchise in broader mast cell driven diseases. Today, we are very pleased to announce, we have nominated a development candidate targeting wild-type KIT, BLU-808, which has the opportunity to be the first and best-in-class oral wild-type KIT inhibitor with broad applicability across multiple diseases. Fouad will provide more details on this program as well as our other pipeline programs later on the call.

But I want to highlight this program as an example of how we are executing our strategy of Precision at Scale. Our wild-type KIT program directly leverages our KIT technical expertise and our SM commercial and medical infrastructure, which will allow us to work efficiently as we address the medical needs of patients with a wide range of mast cell driven disorders.

Precision at Scale is our strategy for driving growth through leverage. By efficiently using our resources, we are capitalizing on our first-mover advantage in SM and moving quickly into adjacent new diseases, enabling us to operate with financial discipline by leveraging true synergies across programs.

Blueprint has a strong financial foundation, and Mike will cover how we have managed operating expenses while growing revenue and advancing our pipeline. This uniquely positions us to have true options over the coming years to drive value as we prioritize the most promising pipeline programs, utilize partnerships to expand our cash position and stay disciplined and data-driven, deprioritizing programs that don't have compelling data or market opportunities. This is our framework to build Precision at Scale.

Our execution across a diverse set of value drivers in the first half of this year has set us on a strong trajectory for continued success moving into the second half of 2023. Our number one priority will continue to be driving revenue acceleration with the launch of AYVAKIT and SM. While we also progress our pipeline of programs addressing some of the most important and exciting biological targets in oncology and allergy, immunology that have the potential to impact large number of patients globally.

Now let me turn it over to Philina to discuss AYVAKIT performance in the quarter and our perspectives on the first few weeks of ISM launch.

Thanks, Kate. Good morning, everyone. Our results in the second quarter and for the first few weeks of our ISM launch put us exactly where we want to be. We achieved net product revenue of $39.9 million, including $34.3 million in the U.S.

We significantly grew the number of patients on therapy, exiting the quarter with approximately 585 patients on AYVAKIT in the U.S. The growth we saw was fueled by SM, where we saw a significant uptick in June post approval. While our advanced SM business continues to grow, ISM launch is the key catalyst that unlocks AYVAKIT's blockbuster potential.

Our Q2 results are due to AYVAKIT's strong clinical profile in ISM and exceptional execution out of the gate. I could not be more proud of our team. We are delivering across the 3 pillars of our launch strategy, engaging with providers, activating patients and ensuring strong access. Let's look at each of these key strategic pillars driving the launch.

First, we're seeing strong provider engagement. Our field teams have been educating hem/oncs and allergist immunologists on AYVAKIT and ISM and the enthusiastic response we're seeing confirms the unmet need is there. Nearly 70% of SM scripts since approval came from new prescribers, including hem/oncs as well as allergist immunologists. Prescribing was evenly split between academic and community, which is great validation that providers recognize the strong benefit risk profile of AYVAKIT.

What we're seeing in the daily interactions of our field teams with providers across treatment settings aligns well with the overall sentiments you've seen in recent surveys by others. Hem/oncs and allergists are compelled by AYVAKIT's efficacy and safety profile. They're motivated to prescribe AYVAKIT based on the broad symptom improvement. They're identifying the first ISM patients they want to treat and linking to their upcoming appointments through the year. We expect to see a strong and consistent cadence of new patient starts going forward as patients come in for their appointments and have the opportunity to discuss AYVAKIT with their providers.

Second, we're beginning to see the impact of patient activation on AYVAKIT prescribing. Patient activation is a critical part of driving urgency to treat. Before launch, we drove disease awareness, partnering with the advocacy community. At launch, we unveiled a branded patient campaign, engaging thousands of people in our CRM database. And we're just now launching our broadest multichannel direct-to-patient efforts to grow awareness of AYVAKIT.

An educated patient is a catalyst for treatment. Patients are closest to the hard decisions they've had to make to live with ISM, leading to what some have described as a sense of loss of life while still living. When patients see AYVAKIT's profile, we know they're more likely to ask their provider about it, and we're highly encouraged to hear initial examples of patients calling their providers to ask about AYVAKIT. We expect this to grow as we expand our patient activation efforts.

And last, access to AYVAKIT continues to be strong. Prescriptions are being written, approved and paid for, as we expected. The majority of payer coverage policies have been updated to include AYVAKIT in ISM, which is highly encouraging to see this early in the launch. These updated policies provide coverage consistent with AYVAKIT's broad indication. There are no restrictions beyond the label and there are no step edits. We have yet to face any denials, and we have seen paid claims at 9 of the 10 biggest payers.

Strong access is important to all providers, particularly allergists who may have had prior negative experiences with other products. So we're not only educating on the clinical profile of AYVAKIT, but we're also educating new prescribers on the access process. And most importantly, we're hearing that when a provider has prescribed AYVAKIT, they and their staff are finding the access process to be very easy.

Overall, our experience validates exactly what we expected. Q2 reflects just the first few weeks of launch performance. And while we don't typically comment past quarter close, I'm pleased to share the strong initial trends we've seen have carried into July.

We have the right medicine, the right team and the right capabilities to scale our impact, and we are well on track to establish AYVAKIT as the standard of care in ISM. We are executing our plan with precision, and it's a thrill to see our vision becoming reality.

With that, I'll hand it to Fouad to talk about recent accomplishments in our Research & Development portfolio, including how we continue to build on our KIT franchise leadership.

Thank you, Philina. And as Kate mentioned in her introductory remarks, our Blueprint Medicines' pipeline shows how we develop precision medicine at scale with the potential to benefit a large number of patients.

We have leveraged our leadership position in mast cell diseases and knowledge of KIT biology to further pursue large on strategy opportunities that significantly scale our precision discovery efforts. I am pleased to announce that we have nominated BLU-808 as an oral, highly potent and selective non-brain penetrant wild-type KIT inhibitor for development in mast cell disorders, including chronic urticaria.

Chronic urticaria is a serious skin disorder characterized by hives, itching and swelling and defined by high levels of mast cell activation. There are few options for patients who are not well-controlled by first-line treatments, and BLU-808 represents a significant opportunity to bring relief to many people.

Blueprint is uniquely advantaged to bring forward BLU-808 with its very competitive preclinical profile as a potentially first and best-in-class wild-type KIT inhibitor. We expect BLU-808 to be in the clinic in 2024 and look forward to updating you more on clinical development plans as they progress.

Turning now to our oncology clinical pipeline for which we've presented promising clinical data this past quarter at ASCO. This included dose escalation data from our EGFR programs with late-line monotherapy and combination data of BLU-945 with osimertinib as well as first clinical data for BLU-451, which we are studying in exon 20 insertions and atypical EGFR mutations. Across both programs, we saw opportunity for differentiation, and we continue dose escalation to determine RP2D.

One of the biggest takeaways from this year's ASCO was the excitement around emerging data on CDK2, which suggests that this new target will be the focus of medicines that can treat a wide range of intractable solid tumor such as breast cancer. At ASCO, we presented dose escalation data from our CDK2 inhibitor, BLU-222, that show this molecule has both good safety profile and early clinical activity to become the best and most combinable molecule in the past. The validation of CDK2 as an important cancer target and the emerging BlU-222 clinical profile increase our optimism above the value that can be created with this investigational agent.

We are moving towards monotherapy RP2D and are rapidly enrolling patients in the CDK4/6 combination cohort. The next major inflection point for this program will come in 2024, when we expect to share the first combination data.

BLU-222 embodies our approach to Precision at Scale, target validation, potent and selective inhibition with best-in-class agent developed in-house and the development plan that aims to rapidly bring the benefits of precision medicine to a large patient population with medical needs. Having worked on major medicines that transform the treatment of cancer for a large number of patients, I can see BLU-222 becoming one of these.

With this, I now turn the call over to Mike to review our financial updates.

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 second quarter, total revenues were $57.6 million, including $39.9 million in net product revenues from sales of AYVAKIT and $17.7 million in collaboration and license revenues.

As Philina noted, we saw a continued growth in AYVAKIT demand across the SM business. Our total costs and operating expenses were $185.6 million for the second quarter, which includes $23.8 million in noncash stock-based compensation expense. This marks our fourth consecutive quarter of flat or declining operating expenses and a year-over-year decline of approximately 5% compared to the second quarter of last year.

For the second half of this year, we expect operating expenses to remain relatively consistent with what we saw in the first half of the year.

Blueprint is at an inflection point for value creation as we expect AYVAKIT revenues to meaningfully ramp with the ISM launch. As product revenue continues to ramp and we remain disciplined on our operating expenses, we expect our operating cash burn to be lower in 2023 as compared to 2022, and to continue to decline into 2024. We remain in a strong financial position with $836.6 million in cash on hand.

Blueprint's continued diversity of fundamental revenue drivers gives us the flexibility to be strategic and thoughtful in how we manage all aspects of our business to provide the greatest value to our shareholders.

Looking forward, our highest priorities for capital allocation are investing in the continued launch of ISM and in accelerating and expanding the development of BLU-222, given the potential opportunity to drive value with a best-in-class CDK2 inhibitor, as Fouad highlighted earlier, and we will continue to do this while maintaining a strong financial position.

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

(Operator Instructions). We have our first question comes from Brad Canino from Stifel.

Congrats on the initial launch results here. I'd actually like to ask for commentary around the dynamic where 70% of the new scripts were from new prescribers, because you mentioned before you had 400 hem/onc accounts that we're prescribing for ASM, and I think they had over 400 ISM patients. And I think we would have expected first adoption there. So can you speak to what might be preventing the more rapid uptick there in that prescriber segment? Any insight into July for those? And was there -- any commentary you can have over higher off-label use in that segment before the approval?

Philina, do you want to talk about how we're seeing this nice breadth of prescribing coming from both new and existing prescribers?

Yes. First off, Brad, I think that we're really pleased to see the diversity of revenue even this early in the launch, where prescriptions are coming not only from hematology, oncology, where we did see the majority of scripts, as expected, but also starting to see some of the first initial (technical difficulty) immunology.

And so, I think to your question about would we have expected more use from existing prescribers. Certainly, we are seeing use from some of the existing prescribers. I think that skew towards hematology-oncology also reflects their familiarity with AYVAKIT from advanced SM and other settings.

But in fact, seeing this breadth and diversity of prescribing across specialties and across both the academic and the community setting, we think bodes very well for a continued cadence of prescribing for the foreseeable future.

And to the second part of your question about off-label use, I can confirm we were not seeing appreciable off-label use, just a small degree, but not significant prior to the approval.

We have our next question comes from Dane Leone from Raymond James.

Congratulations on a strong launch into ISM. So in lieu of having formal guidance this year, obviously, the -- this fees is going to be analyzing the various metrics that you provided. And the focus that -- of the metrics that you've updated today around having 585 patients on AYVAKIT at the end of the second quarter, gives us a delta of around 65 patients versus what you had stated around 520 at the end of the first quarter. Is it fair to think of that incremental 65 patients as predominantly or entirely coming from ISM and the ISM launch? And does that also -- is that also a consistent metric for your commentary around seeing strong trends into July as maybe carrying forward, somewhere around that patient add number into the first month of the third quarter? And just generally, I guess, maybe expand on how you think of the cadence of the adds into the back half of the year as we think about updating our models today?

I mean, I think as we have talked about before, we have not seen a bolus and we did not see that in this first -- these early innings of launch. And what we've seen is this kind of strong and steady growth. And let me hand it over to Philina to talk a little bit more as you think about those numbers in terms of how we expect that kind of strong and steady growth just to continue throughout the rest of the year.

Yes, Dane, I think the clearest indicator is in the timing and the fact that we saw most of that uptick occur in June post the approval. In terms of the sort of precise, what percentage is ISM, that's something that we won't ever have, I think, perfect visibility into, due to the fact that there's one code, the channels that we distribute through.

I think we can say that early out of the gate, most of the new patient starts had already converted to 25 milligrams. We were really encouraged to see that bump in prescribing that happened in June. And based off of that, we would expect strong, steady and consistent growth for the foreseeable future.

Can I ask one follow-up question on that?

Yes, Please go ahead, Dane.

Going into this launch, there have been discussion around metrics of the patients in ISM having a potentially different skew in terms of payer coverage, whether it be commercial and/or Medicare or Medicaid. Are there initial trends with the launch in the 25 milligram scripts consistent with that your expectations going into the launch? And also for what we've seen so far, the number of patients that would be going on "free drug", is that also consistent with what you are expecting for the launch?

It's very early days to really kind of see an impact in payer mix at this point, but we do expect that the ISM patients will skew more to the commercial side of the business.

Yes, I think, based on the ISM patient demographics, there -- they trend towards some of the younger patients. So over time, we may expect to see sort of a greater shift towards commercial, less Medicare. I think your question around the 25 mg, just to clarify that, that is actually a dosage strength that is used across both advanced SM with dose reduction as well as with ISM.

But to your question about payer mix, I think, no significant changes. Regarding free drug, we have -- while we did see a higher proportion of patients on free drug in first quarter, that has largely unwound to what we had seen as the baseline by second quarter.

So we'd expect the free drug percentage to stay pretty consistent at this point, Dane, through this year.

We have next question comes from Reni Benjamin from JMP Securities.

Congratulations on the quarter. I guess just a couple here. How many physicians have you been able to get in front of during this first month of launch? And Philina, you had mentioned direct-to-consumer efforts are being employed. I think you mentioned in the prepared remarks multichannel. Can you talk a little bit about what that looks like? And how long do you think it will take to -- for you to know how effective those efforts will be?

I think we've been exceptionally pleased with the access and physician engagement we've had to date.

Philina, do you want to kind of qualify that?

Yes, we're really excited to just see the enthusiastic reception from both hematologist-oncologist as well as an allergist. In fact, even just in the first several weeks of launch, we've been able to engage similar number of providers as the first sort of 8 or 9 months in the advanced SM launch by comparison.

So our field team are clearly out there working tirelessly. As you've seen, I think, in some of the survey results as well as reflected in our initial prescribing, the AYVAKIT profile has been extremely well received by these providers.

To your question about direct-to-patient, and so these are multichannel efforts that we'll be rolling out our branded patient campaign across all of the channels where ISM patients are looking for information, including a lot of the online channels. And we know that when patients are aware of AYVAKIT, they're much more likely to ask their providers about AYVAKIT, and so we'll be looking primarily to that continued and increased cadence of adding new patient starts as a result.

We have our next question comes from Eun Yang from Jefferies.

I have just a quick question for Mike. Mike, if I heard you correctly, you said OpEx would be lower in 2023 compared to 2022. Does that mean your R&D would continue to decline for the remainder of the year?

And another quick question is on the collaborative revenue, including royalties. It was about $18 million in second quarter. And should we use that as a run rate for the remainder of the year?

Just to clarify, so the comment I made with respect -- comparing to 2023 and 2022, that was with respect to our cash burn. So just breaking that out, as we see revenues continue to rise with the strong ISM launch, we are also seeing our OpEx maintain -- be flat basically. Over the last several quarters we expect OpEx to remain flat going forward. Putting those together, that leads to a declining cash burn. So just to clarify that first question.

With respect to collaboration revenues, yes, we saw about $18 million in this quarter. A big chunk of that was due to milestone and royalty payments received from CStone this quarter. As we said earlier in the year, we expect our guidance for collaboration revenues for the full year to be between $40 million and $50 million. Right now, we're just over $40 million year-to-date. We actually are going to hold to that guidance on collaboration revenues. And so, we expect some incremental revenue largely just driven by royalty payments the remainder of the year, but I think I'd refer to our guidance to help think about the remainder of this year.

We have our next question comes from Marc Frahm from TD Cowen.

Congrats on the progress on the launch so far. (inaudible) just -- any patterns that you're seeing emerge of the patients coming on therapy in terms of the level of disease severity, the specific symptoms that they're experiencing that may kind of point to who are the early adopters?

Yes. Philina, do you want to comment on the range of patients we're seeing?

Yes, so I think as we're -- as we expected, the first patients that we're seeing coming on to therapy tend to be on the more moderate to severe end of the spectrum. I think one way that we hear providers talking about it is just that these are patients who are not well-controlled or not adequately controlled, despite the symptom directed treatment. So exactly as we expected.

But I think encouragingly, what we also see is the recognition of medical need beyond those patients into the so-called milder patients. And so we expect with first experience that adoption will expand as providers broaden the lens of who's an appropriate patient.

And then (inaudible) very early days and clearly patients haven't gotten to these standards quite yet, but what are you expecting in terms of potential reauthorizations and things like that currently -- and you're not seeing a lot of step edits and things like that for the initial prescription, but in terms of reauthorizations maybe 6 months out?

Yes. I mean, we don't have any signs of that to date. I mean, I think overall, the access story is resoundingly strong, and we're really encouraged to really see all of the strong initial metrics, right? Coverage to label, the majority of payer policies already updated, no denials, no step edits. And certainly, we don't see any signals of any types of attestation or additional information that are needed beyond the label.

We have our next question comes from Salveen Richter from Goldman Sachs.

So I think you're very much implying that the uptick in June is related to ISM. But as we kind of think of this trajectory and look forward, is there anything quantitative you can give us, like in terms of the proportion of 70% new prescribers that are ISM versus advanced SM or understanding who's coming from -- where these prescriptions are coming from, whether from an hem/onc or non hem/onc setting?

And then just remind us, you'd always suggested no bolus, but also talked about the lag that would occur from when a patient has to request treatment and has to kind of [plant] themselves into the physician office. Can you just walk us through this as we think about at least next quarter?

So as we've talked about before, with the single diagnosis code, you were never going to have perfect visibility on who's an ISM patient, who's an advanced SM patient. Our dosage strengths are used across both. And so we can certainly look at the 25 milligrams. And as Philina was mentioning, we saw a really nice step-up in June, particularly driven by patients being prescribed 25 milligrams. So that is likely these are the ISM patients who are coming under therapy upon approval.

And I think you can take -- we've been giving numbers on patients at end of quarter now for -- this is our third quarter. So you can see some base business growth coming from the end of last year into the end of Q1. And then you can see the growth now in Q2. And I think you can do some straight-lining math there. That's probably pretty straightforward and simple as you think about the rest of the year. And then ISM patients are seen by both hematologist-oncologists and allergy immunologists. So there's not a way to easily split by prescriber. But, Philina, I don't know if you have anything else to add.

Yes, I mean, I think your question about sort of the cadence and what to expect. I mean, just sort of stepping back, we're really excited, I think, to just sort of confirm our expectations of the ability to find patients that the need is there. The providers are really recognizing the benefit of AYVAKIT's clinical profile, that they are readily identifying the first ISM patients they want to treat. And so from that point forward, it's simply that cadence of being able to speak to those patients at their subsequent SM appointments. And so based on that, we would expect strong, steady and continued growth for the foreseeable future.

With that, our next question comes from Michael Schmidt from Guggenheim Partners.

I think the AYVAKIT dynamics sound pretty clear now that you're expecting a steady flow of new patient adds there with a similar cadence as outside from what we've seen in -- at the end of the second quarter. But then maybe just a quick pipeline question on the upcoming HARBOR trial for BLU-263 in ISM. I think you mentioned in the past a pretty high bar for this asset to advance, but maybe help us understand sort of what degree of differentiation from AYVAKIT you need to see in the study in order to advance this asset into advanced trials?

Yes, we're very happy to see the strong and steady growth in ISM and great to get a question on the pipeline. So, Fouad, would you like to take that?

I mean, as Philina mentioned, this is the best proof bar -- the high bar that avapritinib has given, is the reception by the physician community, whether in hem/onc and allergy treating ISM patients. The efficacy is very strong. The safety profile is really very good one for chronic therapy.

So the bar is very high in the -- for treating ISM, given what we are achieving with avapritinib now. And as we guided and committed, we will report the data from HARBOR Part 1 this second half of the year. But again, we are very, very pleased with the profile of AYVAKIT and how patients are benefiting from it.

With that, our next question comes from Ami Fadia from Needham.

Perhaps another one on the pipeline. Can you give us an update on BLU-222, where you are in the dose escalation? And perhaps give us a sense of when we might be able to expect data and what you're looking to achieve in terms of the target dose?

I think BLU-222 is probably one of the most important targets that we see -- that actually personally -- I had been in drug development for some time, and I see this becoming a key, potentially medicine for patients with cancer, starting with the breast cancer - [hormone] positive breast cancer. At Blueprint, with our strategy of Precision Medicine at Scale, we were able to make highly potent and selective molecule.

Today, when you look at the profile of BLU-222 within its class, it is the best-in-class. It has efficacy data that started since signal of clinical activity. It has a very good safety profile that makes it very combinable with other agents, within CDK4/6. So we see this really a very good start of development of this major -- potentially major medicine for patients.

Where we are in terms of development. I think we are working towards determining the recommended Phase 2 dose for the monotherapy, on one hand. On the other hand, we are really accelerating and the recruitment in the combination cohort of BLU-222 and ribociclib CDK4/6 with breast cancer target in mind.

The plan is to generate safety data. We'll be able to really talk about these data next year. We'll give much more precise guidance when we are closer to that. But I think the idea is really to go very quickly with good data to a development plan that -- in breast cancer that includes second line, building on background hormone therapy, CDK2 and CDK4/6 combination and the same for first-line breast cancer.

We do also have the brands that is in the program that is focused on a enrichment strategy with CCNE1 amplification, and we are looking at ovarian cancer, in particular and some endometrial cancer, too, where we do monotherapy in combination with carboplatin in that part of the development. More to come next year, but I think this is probably in the oncology pipeline one of the targets that we are most mostly (technical difficulty).

With that, our next question comes from Mike Ulz from Morgan Stanley.

Maybe just a quick follow-up just on ISM launch impact and maybe specifically related to the diagnosis rate you're seeing out there? And if the launch has had any impact yet? And if not, when do you think that might start to happen?

Yes. Philina, do you want to touch on the growing diagnosis?

Yes. I think we're really encouraged -- in fact, just -- as we've been focused on disease awareness over the past many years, I think, working with the advocacy community that -- we have seen diagnosis rates increase continually through that, and we do continue to see those diagnosis rates increase through the launch. That represents, I think, an important driver of medium to longer-term growth for the opportunity.

With that, our next question comes from Matt Biegler from Oppenheimer.

Maybe a controversial one, but are you hearing any evidence of clinicians earmarking, there are more advanced patients for a clinical trial over prescribing commercial AYVAKIT. Obviously, there's at least one other large ISM trial out there recruiting. (inaudible). Hearing of any headwinds from that?

No, I can't say that we're hearing of those types of headwinds. I mean, I think with commercially available therapy and the urgency to treat these patients who are really not well-controlled, We have conversations with providers as well as these centers of excellence and potential investigators. But I think in total, we're seeing very strong recognition of AYVAKIT's efficacy and safety profile as well as the need to be treating these patients.

It's also much easier for patients. I mean, we have very robust patient assistance programs. Our patients do not experience significant out-of-pocket or kind of burdens. And so from a patient's perspective, you'd be able to access the commercial therapy rather than participate in a protocol or trial as a much more patient-friendly opportunity.

With that, our next question comes from Peter Lawson from Barclays.

I wonder if you'd just talk about the dynamics of free drug this quarter if it's changed since 1Q and if that fix both ASM and ISM patients? And then kind of your expectations of what you think the number of ISM patients could get on treatment by year-end?

Yes.. As we said, the percentage of free drugs has historically been around 30%. We expect that continue through the course of this year. It will change over time as more and more ISM patients do come on. But through the course of this year, we expect that to be about the same. We did have that free drug benefit in Q1. That has completely (inaudible). So that is -- we knew that was a temporary benefit. That's why we split that out in Q1 for you all.

And then I think your second question in terms of kind of guiding to the number of patients. I think Philina made some commentary that we've seen -- continue to see really strong momentum in July. We would not normally give any type of indication on a quarterly basis, but give it -- or on a monthly basis. We do stick to quarterly results.

But given the fact that the ISM launch was really kind of 1 month of the last quarter, we wanted to make sure to provide some commentary to say that we've seen that really nice strong momentum continued through July, which we're very excited to see. And we'll be happy to update you on patients on therapy at the end of Q3.

Do you think you'd be able to break it out for prescribers heme versus non-heme, or hem/onc versus non- hem/onc?

Yes. So I would say, as we've said, we're really encouraged to see the diversity of prescribing out of the gate that -- as expected, the initial prescribing is weighted more towards hematology, but also highly encouraged to see the first allergist-immunologists come on to the board, and we expect that to grow over the course of the year.

With that, our next question comes from Derek Archila from Wells Fargo.

Congrats on the progress. Just 2 brief ones from us. Can you just help quantify the change in channel inventory for the 25 mg dose from 1Q to 2Q? And then just a follow-up to Brad's earlier question. I guess, what's the biggest thing you can do to activate the current prescribers of AYVAKIT using it in ASM that have not yet prescribed it for ISM in the future quarters?

So in terms of -- the change in channel is very easy, that -- we've not seen a meaningful change there at this point, Derek. So that's an easy question. And then, Philina, do you want to talk about kind of the current AYVAKIT prescribers? I mean, I think this is not a dynamic about activating them. This is really about that cadence of when they see ISM patients, honestly, Derek, but I don't know. Philina...?

Yes, I mean, I think -- just to be really clear, our team is targeting not only the prior prescribers who are a portion of that market based on advanced SM experience, but also targeting much broader providers, including moving into allergy and immunology and using a suite of tools, local market intel, claims data, patient journey data to be really thoughtful to be engaging where patients are engaging with their providers.

And so as a result of that, we would expect diversity of prescribing as a strong signal and lead indicator for continued growth in the market. We would feel very differently out of the gate if this prescribing were concentrated in experienced prescribers or smaller number of centers. We're highly encouraged to see this breadth of prescribing and expect that growth to continue.

And one of the things we've seen today, Derek, is that when a physician and a patient have a first clinical experience that really widens their aperture to accelerate the next set of patients they get on therapy. So to Philina's point, having that increased breadth with new prescribers coming on rapidly, it bodes very well for a foundation for continued strong and steady growth.

With that, our next question comes from David Lebowitz from Citi.

Understanding that ASM patients use all doses, could you give us a little perspective on how the 25 mg dose usage might have changed? Has there been an uptick in prescriptions for that particular dose and in any way you can quantify that?

And one additional question. On the physicians you are currently reaching out to, what proportion of those physicians have in the past prescribed AYVAKIT for ASM patients? And has that number of patients -- that proportion expanded since the ISM launch?

Yes. Philina, do you want to talk about the dynamics of the 25 milligram dose? And then also, I think your second question, David, is around how many experienced -- already AYVAKIT experienced physicians are -- have been prescribing.

Yes. So I think as we said, the 25 mg now, in fact, comprises most of the new patient start doses that we're able to see through our channels. I think to the second part of your question, again, as we said, 70% are new prescribers, meaning the remaining 30% are prescribers who haven't had prior AYVAKIT experience. I think just sort of stepping back from all that, we could not be, I think, more encouraged by where we are by the breadth of prescribing and what that bodes for the continued success of the launch.

With that, our next question comes from Joel Beatty from Baird.

In the prepared remarks, I think you mentioned that you had to have any denials. Can you just discuss how long it typically takes for payers to make that decision? And if that's changed at all since the ISM launch?

Yes. So I think access has been incredibly strong and smooth, continued point of strength for AYVAKIT, and that continues to be the case throughout the launch. We're thrilled with the level of open access that we're seeing, not only I think the ease of the process, but also the speed of the process continues through ISM.

We have no further questions on the line. I will now pass it back to Kate for closing remarks.

Thank you, operator, and thanks, everyone for taking the time to join us today. Our year-to-date results provide a strong foundation for growth and significant upside for us as we move through the course of this year. We look forward to continuing to update you on our launch progress. And we hope everyone has a great rest of your summer.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.