Blueprint Medicines Corp (BPMC) 2020 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Blueprint Medicines Second Quarter 2020 Financial and Operating Results Conference Call. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Kristin Hodous of Blueprint Medicines. Thank you. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Blueprint Medicines' Second Quarter 2020 Financial and Operating Results Conference Call. This morning, we issued a press release, which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at www.blueprintmedicines.com.

Today, on our call, Jeff Albers, our Chief Executive Officer, will discuss Blueprint Medicines' second quarter 2020 business highlights. Christy Rossi, our Chief Commercial Officer, will provide a commercial update. And Mike Landsittel, our Chief Financial Officer, will review our financial results. Dr. Andy Boral, our Chief Medical Officer, is also on the call and will be available for Q&A.

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. I'm happy to provide an update on what has been a productive quarter for Blueprint Medicines. At the beginning of the year, we talked about how 2020 was shaping up to be transformational for Blueprint Medicines as we evolved into a fully integrated precision medicine company, and it certainly has been given the achievements we've made against our goals over the first half of the year.

Let me highlight how this progress sets us up going into the second half of the year across our 3 areas of strategic focus. First, establishing our commercial foundation with AYVAKIT, which we will now harness for pralsetinib; second, prioritizing systemic mastocytosis given the significant medical need; and third, leveraging our discovery platform to advance future pipeline opportunities.

Let's start off with a strong U.S. AYVAKIT launch for the treatment of patients with PDGFR-alpha exon 18 mutant GIST. As Christy will discuss in a moment, we gained critical commercial experience and have built a nimble and highly effective team along with infrastructure to deliver our products to patients. Our early experience with AYVAKIT gives us a strong foundation for our planned launch of pralsetinib in the coming months, which will now be amplified as we integrate the capabilities of our new partners at Genentech and Roche.

We're also capitalizing on our AYVAKIT experience outside of the U.S. Just a few days ago, we received a positive CHMP opinion for avapritinib for the treatment of patients with PDGFR-alpha D842V mutant GIST. This achievement sets up a final decision on our marketing authorization application by the end of this quarter. Assuming avapritinib is approved, we expect to initiate our first commercial launch in Germany with additional European countries to follow. Additionally, as in the U.S., we expect this initial launch will lay the foundation for future systemic mastocytosis commercial efforts as well.

Building from commercial readiness, our second strategic area of focus is the great progress within our systemic mastocytosis program. We believe SM represents the single largest opportunity across our clinical-stage portfolio. The significant medical need, combined with our differentiated approach of potently targeting the SM disease driver, opened an opportunity to advance a new treatment paradigm. Earlier this year, we reported very encouraging data from Part 1 of our PIONEER trial of avapritinib in patients with indolent systemic mastocytosis. Based on these data, we selected 25 milligrams once per day as the recommended dose and finalized the design of the registration-enabling Part 2 with input from regulatory authorities. And today, we're pleased to announce that we've initiated Part 2 of this trial.

Later this quarter, we plan to report top line data from the EXPLORER and PATHFINDER trials of avapritinib in patients with advanced systemic mastocytosis. The combined data set, which will support the submission of a supplemental new drug application to the FDA in the fourth quarter, will include response assessments for approximately 50 patients starting at the recommended 200-milligram once-daily dose. Additional data supporting the submission will include response kinetics, including the time to response and the duration of response; objective measure readouts, such as serum tryptase and mast cell burden; and updated safety results across the broader trial populations.

Finally, our robust discovery platform continues to provide broad opportunities for future growth. Earlier this year, we nominated a first-in-class development candidate, BLU-945, for triple mutant EGFR-positive non-small cell lung cancer. This program combines potent inhibition of treatment-resistant triple mutant EGFR with selectivity over the wild-type kinase, highlighting the ability of our scientific platform to continue to address challenging target product profiles. At the virtual ESMO Congress in September, we plan to present new preclinical data for BLU-945 as well as share an update on our plans to bring this therapy into the clinic early next year. Importantly, the triple mutant EGFR program is just the first of up to 3 new development candidates we hope to nominate by the end of the year.

Our progress across these areas lays the foundation for significant growth for Blueprint Medicines as we continue on our path to become the world's leading precision medicine company. We look forward to updating you on these critical data and regulatory milestones over the coming months and into the second half or throughout the second half of the year.

And with that, I'll now turn the call over to Christy to provide an update on our commercial efforts. Christy?

Great. Thanks, Jeff, and good morning, everyone. I'm happy to share an update on our commercial progress, including our first full quarter of AYVAKIT sales in PDGFR-alpha exon 18 mutant GIST and our ongoing preparation for the planned launch of pralsetinib.

Through the first half of 2020, we have been focused on establishing the foundation that will support multiple, anticipated global launches in the coming years. With potential near-term approvals of pralsetinib in the U.S. and avapritinib in Europe, we are truly excited to be on the precipice of delivering a portfolio of precision therapies that address significant patient needs. Of course, the successful launch of AYVAKIT has been the essential first step on our journey towards realizing this goal.

In the second quarter, we generated $5.7 million in net sales or $9.1 million since launch driven by strong execution against our launch strategies. We quickly established Blueprint with key oncology and hematology centers of excellence and other stakeholders that are critical not just for our initial launch for GIST but for pralsetinib and systemic mastocytosis. We achieved broad access for AYVAKIT rapidly, and we continue to see strong patient access in line with or better than our label.

By focusing on clinical education and individualized patient support, we have ensured that prescribed patients can start on treatment quickly and also remain on treatment as long as it is clinically appropriate. And I've been particularly pleased to see that refill rates have been high, suggesting that our real-world duration may exceed those seen in our clinical studies. Finally, last quarter, I noted that I was encouraged to see strong breadth of prescribing upon launch. This trend has continued in Q2 fueled by the efforts of our seasoned field team, and we continue to add new prescribers with approximately half now coming from the community setting.

I've noted before the significant overlap between GIST and lung prescribers in the community, and this has enabled us to advance our profiling and disease awareness efforts as we prepare for the next chapter in our commercial evolution, our anticipated launch of pralsetinib.

As I've shared before, we plan to deliver a best-in-class RET inhibitor to patients, focusing on our differentiated clinical profile, including deep and durable responses, a predictable and manageable safety profile and once-daily dosing. We will be launching with a patient- and health care provider-centered approach that recognizes the importance of community oncology centers and a highly experienced team for whom this is the top priority.

I was confident in our ability to launch before we entered into our transformative partnership with Genentech. And as we started to engage with our colleagues there to implement this collaboration, I could not be more excited about the power we will bring across our 2 organizations. While Blueprint will be driving launch efforts, we are already working to integrate with Genentech and identify near-term opportunities for them to amplify and extend our efforts, for example, by leveraging their substantial diagnostic and data capabilities, in addition to the experience of their team.

As we prepare for the launch of our second medicine in a single year, we are well positioned to maximize the opportunity for pralsetinib. With a differentiated product profile, a focused and nimble team that is amplified by a strong partner and a foundational infrastructure from our experience with AYVAKIT, we are thrilled with our commercial preparation and execution thus far. We are well on our way to building a best-in-class commercial organization to effectively deliver multiple precision therapies to patients.

I'd now like to turn it over to Mike to discuss financial updates.

Thanks, Christy. Earlier this morning, we reported detailed second quarter 2020 financial results in our press release. For today's call, I'll touch on a few financial highlights from the quarter. As Christy mentioned, we were pleased to record $5.7 million of AYVAKIT net product sales in the second quarter. Cost of sales remain low as we continue to work off inventory of AYVAKIT that we expensed pre-approval. Our total operating expenses increased slightly compared to the prior quarter driven in part by an increase in stock-based compensation expense.

Looking forward, in light of our global collaboration with Roche, we expect to see quarter-over-quarter expense growth stabilize for the second half of 2020 as savings through the cost and profit sharing arrangement with pralsetinib offset planned increases in R&D investments in systemic mastocytosis and our discovery portfolio. We do anticipate continued increases in noncash stock-based compensation expense for the foreseeable future.

With over $1.4 billion in cash after including the upfront payments from our Roche collaboration, we are in the strongest financial position that we have ever been as a company. Excluding the upfront payment from Roche, we anticipate the potential for additional revenues of up to $80 million in the second half of 2020 from a combination of milestones from our multiple collaborations and product sales. We also received an additional $20 million in cash in July from our collaboration with Clementia for BLU-782 that was previously recognized as revenue in Q4 2019.

Between our collaborations and future anticipated product revenues, we now have a clear pathway to financial independence and enhanced flexibility to invest more in multiple, high-value opportunities across our portfolio. We are in a unique position for a company of our size and age and are looking forward to sharing further updates with you as we continue to make progress across our portfolio.

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

(Operator Instructions) Your first question comes from the line of Salveen Richter with Goldman Sachs.

This is Andrea on for Salveen. My first one is maybe for Jeff. Can you just remind us the expectations on timing for patient screening enrollment for Part 2 of the PIONEER study and when we might see data? And then I have a follow-up question.

Sure. So this is Jeff. On PIONEER, we talked about this at the last quarterly call that we've now initiated the study and continue to see a lot of enthusiasm from both sites that were involved in Part 1 as well as some new sites coming on that are going through their screening process. We have not guided to timing of readout. As a reminder, we plan to enroll 200 patients. But we want to see how the site initiation and impact of COVID plays out not just in the next few weeks but also over the coming months. So until we have a better handle on the consistency with which sites are staying open, we're going to hold off on providing that guidance.

Got it. And then maybe just a second question for Christy. How should we think about the cadence of hiring for the AYVAKIT launch both in the U.S. and then expected in the EU? And then can you speak to the progress of how you guys have been incorporating the Roche team in preparation for pralsetinib? Just maybe some actions that have been taking place there.

Sure. So the first question was around AYVAKIT in the U.S. and EU. The U.S. team, as I said before, for AYVAKIT is in place, has been in place since launch and, in fact, that team is really built with a portfolio focus in mind. So that team will be driving the pralsetinib launch. And really, all along, our primary priority with that team has been very much focused on preparing for and launching pralsetinib. And so we're going to see that team's primary focus really shift. Currently, it's disease education and profiling. And then upon launch, we'll be focused on driving promotion for pralsetinib.

For Europe, we have a small, focused, nimble team in place in the countries that we anticipate near-term launches. The focus of that team will be on driving the initial AYVAKIT launch. And because that market is very focused at a number of treatment centers with whom we already have relationships, we believe that we can target that market effectively with a small and nimble team. And then that team will have the foundational infrastructure that will prepare for an eventual SM approval in Europe.

And Christy, the second part was integration with Roche.

Sorry. Yes. So the Roche team, as I said, has been very involved in these initial weeks, and we'll announce the collaboration. Due to the proximity of what we anticipate to be an imminent approval for pralsetinib, certainly, Blueprint will be driving many of the launch efforts, but we've already identified ways for Genentech in the United States to come in and to really amplify our efforts, particularly around patient identification, leveraging data, helping to drive testing as an example and then, clearly, just leveraging the power of their portfolio of targeted therapies into which pralsetinib fits really nicely. So we're still working through specifics on some of the details on roles and responsibilities but have identified a number of ways where they think they can come in and really help us out of the gate.

Our next question comes from the line of Peter Lawson with Barclays.

Just on the RET space. Just point out what you're hearing from physicians regarding the better CR rates and lack of QT prolongation versus [what code] molecule. And I know we're kind of hearing mixed messages. So great to understand what you're hearing.

Sure. This is Jeff. Maybe I'll start, and then Andy and/or Christy can weigh in. We've been very encouraged by the data that we've put out most recently at ASCO and the response to that. As you know, the consistency of activity we're seeing, the deep and durable responses, the notable CR rates, which for many physicians are something that they're very encouraged by and they'll want to see how does that translate into durability of response over the longer term and then the predictable safety profile that Andy noted in his opening comments, that -- particularly, if you push out the community, what we hear is physicians want -- are much more comfortable with -- at side effects that they've managed historically or consistently with other therapies. And the more unusual an adverse event, the more that could have an impact on what they're going to -- how they're going to treat. So there's obviously differences when we look at the academic sites versus the community sites. But overall, we think we have a very promising profile with pralsetinib. Andy?

Sure. Jeff, thanks. Maybe I'll just add that we talk to a lot of both our investigators and other kind of community docs now. And the CR rate, I think, repeatedly comes back as a distinguishing characteristic. Now a bit more on the QT. I think the hardest thing about things like QT prolongations is that it restricts the use of other medications that the patients often need just for general supportive care, antibiotics, antiemetics. And so I think just not having to worry about that is a real advantage.

Great. And then just on the launch dynamics. I mean what should we look at? Is it other RET, ROS1 or ALK? And what are the best proxies here? And what are the kind of the puts and takes versus those other launches?

Christy, do you want to take that?

Sure. So I think all of those analogs are helpful. None of them are perfect, right? So I think certainly a driver, I think, that many are often interested in is just sort of the acceleration of testing and patient identification. And so if you look historically at other targeted therapy launches in lung, you tend to see a ramp of testing practices that is driven by the availability of effective therapy.

And I think those -- that ramp has become more accelerated with recent launches as the space has really shifted towards utilization of testing more broadly. We'd expect a similar dynamic with RET. And certainly having potentially 2 agents in the market is very helpful in that regard, right, to really drive testing practices. But obviously, those -- each patient is slightly different in terms of the frequency of the mutation, the number of players in the space, et cetera. So we are, as Jeff said, really excited and enthusiastic about getting out there with pralsetinib and looking forward to hopefully having that available relatively soon.

Your next question comes from the line of Marc Frahm with Cowen and Company.

Maybe just to follow up on an earlier question about the ISM trial. Jeff, in the past, you kind of talked about the backlog of patients as you were waiting the selected dose and things like that. As you've activated sites, have you seen kind of a bolus of patients coming in from the sites as they come online like you would have expected? Or are you already kind of seeing a little bit of reluctance from patients to come into the clinic given the pandemic?

Yes, so this is Jeff, maybe I'll start, and Andy to weigh in. I think that's too early to say. I mean every site is unique. I find that I often paint broad strokes of the U.S. versus Europe and then I'm reminded that Massachusetts is different than Nebraska. So what we're seeing is there is clearly demand. And that really underlies our continued push that systemic mastocytosis is the biggest opportunity that we're focused on and provides really meaningful upside as you think about patients not only being treated and identified but then staying on for a long period of time with a targeted therapy like avapritinib. So I think that thesis is completely intact.

As we see that then play out site by site, I think there's going to be some variability. We have sites that definitely have backlogs. And how they're going to manage that and how often patients come in, it varies by investigational site we're seeing. So we just need to work through that, and that's why we feel like it's inappropriate to provide any specific guidance. We know, notwithstanding the pandemic, the demand is there. And we'll continue to see these patients enrolled. We're seeing patients already lining up to come in so -- even with the pandemic that the medical need is high enough that we're going to enroll these patients. But how that will exactly play out when you think about 20 to 30 sites, I think there's going to be variability. Andy?

I mean I just -- I think you framed it well, Jeff. The -- as we've talked to our investigators, there is -- they really do have a list of patients that they're looking at. And it's -- as Jeff said, it really is a matter of -- in Florida now versus Massachusetts versus somewhere else in the country, it's just -- it's a bit of a moving target when people in different places feel comfortable coming into the health care centers in the setting of them not having a life threatening -- immediately life-threatening disease. But we think it's going to move quickly.

Okay. Great. And then maybe a quick one on AYVAKIT for Christy. Just in the past, you've mentioned seeing demand both in PDGFR as well as outside of PDGFR. Following the VOYAGER trial results, have you kind of noticed a change in the new patient start trajectory as maybe demand outside of PDGFR shrinks?

Sure. So as we said, we see utilization across -- it's difficult to say precisely what the patient breakdown looks like between PDGFR-alpha and other GIST patients. The indication status is not something that you can kind of pull consistently. And so you're sort of relying on what you just may learn organically about these patients. I can say that we're continuing to see both prescribers added as well as new patient starts. And I -- we're seeing them across, that we're seeing them in PDGFR-alpha as well as in KIT-driven GIST, although, clearly our focus is on PDGFR-alpha, which is where the drug is labeled.

I think going forward, certainly, you've got a number of dynamics at play right now. You've got COVID, you have ripretinib now approved. So I think all of those will factor in, but I would continue to expect to see new patient demand both in PDGFR-alpha as well as outside of it. I mean we know that those patients, there's very significant need there. And current therapies -- even with the approval of ripretinib, that need remains. So I think we can expect to see that on an ongoing basis. Of course, for our team, the focus, as I said, for the second half of the year will really be primarily from a demand generation perspective focused on pralsetinib and then, of course, starting to prepare for what we hope will be a launch in advance of that.

Our next question comes from the line of Diane Leone (sic) [Dane Leone] with Raymond James.

This is Dane filling in for Diane today. He will be back tomorrow. Congrats on the updates. Two for me. Firstly, on the advanced SM. How do you think about having the pivotal data set in hand at the 200 mg QD dose and how that could update the label for avapritinib? The specifics to that question is, right now, you have a label that was all encompassing for AYVAKIT to be approved of the data you have from a safety perspective across both SM and GIST. But you're going to have a more specific update for safety at the 200 mg dose, which I think a lot of us expect to have a lower event rate and have more dynamics around how to manage some of the thrombocytopenia clinical sequelae. So what are your thoughts of how we could see FDA label update that would help inform clinicians and actually better characterize the actual dose that you think should be used for ASM?

It's Andy. Dane, I'll take that. So you see, I think that it will be laid out at the 200 mg dose. Very typically in both U.S. and EU labels, when new indications get added, there's a safety section on the study that supported that indication. And I would fully expect that we would have a description of the safety at the 200 mg dose. And I mean, obviously, we're forward-looking here. It depends a little bit on what the FDA is thinking, but they could -- they might also have some sort of integrated analysis that covers both.

Okay. And would there be additional language you think on platelet count and management of symptoms or any like guidance included in the label from that perspective that would be updated?

Well, no, I think there will -- there should be guidance on platelet counts in the label. I mean that we would actually want because we think it's really important to have patients with severe thrombocytopenia have that dealt with before they get AYVAKIT when they have systemic mastocytosis. So I'd expect there'll be a separate description of guidance for patients with advanced SM.

Great. And the second one for me is, can you give a status update on BLU-263?

Yes. No, so that -- as we've said previously, the study -- the first-in-human healthy volunteer study has started, and it's moving along. It's an ongoing healthy volunteer study, so we don't have any specific information to provide at this time but it's enrolling as expected. Actually, I think that's an area where we're really pleased. I think that's an area where I thought that the COVID-19 could be a problem, but the site really came together and figured it out and has kept things on track.

Great. And have you given a time line of when we would see an update on when that program is going to progress or any initial first-in-human results?

Yes. So we haven't given any specific guidance on that. And as the study evolves, we'll plan and let you guys know.

Your next question comes from the line of Michael Schmidt with Guggenheim Securities.

This is Charles Zhu on for Michael Schmidt. Congrats on the quarter.

First, with respect to ongoing AYVAKIT commercialization and the impending pralsetinib launch, it looks like you guys do have a nice emphasis on the community setting. So I was just wondering if you could provide some additional color on not only perhaps the potential synergy between GIST and RET but also, I guess, some detail around your current presence in the community setting and what this Roche partnership could potentially bring to that, for example, between your exposure between Flatiron versus non-Flatiron utilizing EMR practices.

Christy, do you want to take that?

Sure. So the community has been a focus of ours out of the gate. And we know at lung that upwards of maybe 70% of patients are treated in the community setting. I think way back when we talked about sort of the overlap that we see between prescribers for GIST in lung being 60%-plus. And so these are centers that our team has established a presence with and is actively engaging for AYVAKIT and then, as I said, is really focused on driving disease awareness for pralsetinib in anticipation of that launch. When I think about our colleagues at Genentech, I think, again, they can really help to amplify and extend those efforts. Certainly, the data patient identification is a piece of that, but I think it's also just the breadth of the team that they have and really being able to complement our efforts in getting out and reaching into the community setting.

And when I talk about an approach that prioritizes the community, for me, it really goes beyond just the engagement that our sales team, for example, they have there. We really believe that making the process of prescribing as seamless as possible for community oncology could be really critical. We are launching with a strategy that supports not just prescribers but also community oncology pharmacies and their ability to really maintain the management and care of their patients, which we know is something that's really important to them. And so it's really a 360 approach, I would say, that we're bringing to the community setting.

Got it. And my next question regarding avapritinib and the BLU-263 in indolent SM. I was just also kind of wondering to what extent could a current or longer-term safety signals from AYVAKIT and ISMB used to either inform or potentially even supplement future efforts and data collection for BLU-263. And also as a related follow-up, do you see any, I guess, potential differences in patients remaining on therapy given potentially ISM patients will see that their symptom's resolving but maybe healthy volunteers will not? And will that be kind of a less motivating factor to stay on therapy?

Andy?

So maybe I'll start with the last first. The healthy volunteer study is a very time-limited study really to assess PK safety and establish the best starting dose for the patients. There's not really an issue there. They'll stay on for the short period of time they need to get those data. I think one of the real opportunities that bringing 263 forward offers is that we do think that it shouldn't have really any potential for the cognitive effects that we have seen with avapritinib at higher doses.

We are very happy with the data at 25 milligrams with avapritinib where cognitive effects have not been an issue. But I think certainly, there is -- in theory, there's potential that over many -- someone can take avapritinib for 5 or 10 years, I suppose it's possible that those sorts of things can emerge. And that's the kind of opportunity then that BLU-263 offers to solve or the kind of problem that BLU-263 would offer to solve.

And again, though we still emphasize more with BLU-263 moving into even less advanced forms of systemic mastocytosis where it's maybe more of the -- more of what the -- what it solves is the theoretical concern that may not even exist for ava just because of the data at the higher doses. So I think we're still looking at it as a compound that we'll develop initially in less advanced forms of SM.

Yes. And maybe more at a higher level, I know I've talked about this before, but we've made it very clear that systemic mastocytosis is our priority. It fits perfectly with our strategy of going after very targeted patient populations with an exquisitely selective inhibitor, and we've got a monogenic driver of D816V mutation in this case. It's the intersection of oncology and rare disease. And when we made the decision to move forward with 263, we've looked at this as we're operating from a position of strength and let's double down on that. And as Andy just highlighted, we think it's a way to extend that -- our reach and position. And so we don't know exactly where it will be needed. We continue to be highly encouraged by the emerging data we're seeing with avapritinib both at the 25-milligram and 200-milligram doses. And we are investing heavily there. We're focused there. And I think that really is what underlies the strength of Blueprint right now.

Your next question comes from the line of David Lebowitz with Morgan Stanley.

With respect to advanced systemic mastocytosis upcoming data, can you just run us through the data that you had since last year? I recall you originally intended to submit it then and tried to delay it until after PATHFINDER. Can you, I guess, update us with the data that was in the past and what we're looking for, I guess, incrementally to prepare your first submission?

Sure. So you broke up a little bit in the beginning, but I think I captured the gist of it, which is around the emerging advanced SM data and a reminder of where we were previously. So there's a couple of things at play here. First, I think the most important piece is that the data we have shown to date in advanced SM has been very consistent in terms of high response rates or disease control rate.

The objective measure waterfalls show virtually all patients seeing a benefit. And what -- the way the -- our trials have emerged is that we've now blended 2 different trials because of the unusual nature of the IWG response criteria of needing a baseline, which was not built into our Part 1. We've used -- we move forward with multiple doses where we have pushed up more towards a GIST-like dose of 300 milligrams but then focusing on 200 milligrams given that we were seeing similar response rates or the same response rate as 300, but it just took a bit longer for that to emerge but with a cleaner safety profile.

So there's a compelling intersection at 200 milligrams that you get to the same point eventually and with fewer adverse events. And when you're thinking about chronic treatment, that's important. And then we had changed the exclusion criteria as we identified thrombocytopenia as a risk factor. And so it was really the blend of all of those that, in interactions with regulatory authorities, they said that it's pretty clear-cut that there's strong efficacy here and there's a manageable safety profile. But we're looking for a more homogenous, if you will, focus, thinking about the number of patients who are at 200 milligrams per se across those 2 trials. And so we had agreed to aim for about 50 patients at the 200-milligram starting dose. But obviously, all the data, regardless of starting dose from the 2 trials, will be part of our data submission.

I think to your second part of your question, which was what did we show before, which is -- Andy maybe able -- I think it was 70%, 17% response -- 77%? 77% response rate, but there's a lot more to the data set. I think I'd probably be out over my skis if I try to quote exactly what was shown at ASH previously. But I think the important factor is this was really more of a function of time to have a data set that a regulatory agency could focus in on at a starting dose. And we view that, frankly, that passage of time as more of -- this sounds pity, but administerial that we wanted to get to that point where we had enough patient. But we're very confident in the data that we'll be putting forward. I think it is transformational in nature for these patients.

And then again, going back to PIONEER, we think we're just getting started in SM. This is an area where there -- it's clear that there is need, it's clear that a lot of patients are misdiagnosed and it's clear that it's really a continuum of disease with one driver. So these are the -- subgroups intend to blend together. And we'll be focused on identifying patients there over the long term, both within our clinical trials but then beyond that, commercially.

Your next question comes from the line of Ren Benjamin with JMP Securities.

Congratulations on the quarter. I guess maybe just starting off, can you talk a little bit or provide some more color regarding the patients that are receiving AYVAKIT? Are these majority in the frontline setting after a diagnostic testing? Or are they still receiving kind of standard of care and then primarily obtaining this more in the last-line setting? Just any sort of color as to the patients.

Christy, do you want to take that?

Sure. So again, our insight at a patient-by-patient sort of basis is not perfect. So I would start with that caveat. I think what we saw at launch was certainly that there were PDGFR-alpha patients sort of identified who came onto therapy relatively quickly. Those patients often had been treated with other therapies prior to receiving AYVAKIT. We're continuing to see new patients come on. And I would -- from what we can see, I think that's shifting a bit to patients who are being identified and diagnosed with PDGFR-alpha as the mutation and then immediately going on, right? So that's a mix of patients.

Certainly, in academic centers where testing is more regularly done and is done earlier on when that patient comes into the center, you might see them come on earlier. But often, it takes patients' referrals to get there. And so net-net, I would say that in the U.S., PDGFR-alpha patients are predominantly not being identified sort of by the diagnosis. They're still often being treated with one or more therapies before receiving AYVAKIT. But again, it's a mix.

Got it. And then just regarding pralsetinib. Has there been -- I'm sure before the deal was done, there was an extensive review. But is there a plan now to have an extensive review regarding the pralsetinib development program? And kind of what's the current status of that? I think the combination with osimertinib is still planned. I think you mentioned during the previous call that you're evaluating other combinations. Can you give us a sense as to when we might have a better sense as to how this entire development program moves forward?

Sure. This is Jeff. I'll start with that. So you're correct. In both regards, yes, obviously, there was a comprehensive review of all of the data looking back as well as all of the plans looking forward. The teams, as much as Christy just highlighted how the Genentech and Blueprint Medicines commercial teams are already working together and, frankly, had already started sharing information prior to the signing of the agreement, the clinical teams have been doing the same. We're looking at what is that longer-term clinical development plan that both companies would recommend and then how would that come together.

Encouragingly, the forward-looking plans were very similar. And so now through the collaboration, the teams are coming together, and there'll no doubt be some changes. One of the ones I'm most excited about is that there will be a condensing of time on many of the things that, at Blueprint, we likely would have done sequentially where now, there's the opportunity to do several things simultaneously. But we would need to work through those with our partner and then in terms of when -- how we'll update that, that will also flow through the collaboration in terms of how much is disclosed and when that is disclosed. But it is a robust development plan.

Got it. And then just maybe one final question for me. I think the pipeline -- the upcoming pipeline gets overlooked a lot. And there's a lot happening here. Could you just remind us, I think last set of my notes has like 8 programs that are underway, 4 of which are wholly owned. Can you maybe just help us focus on what are the key ones? Obviously, we have the data coming out for 945, the preclinical data, but the other programs that you think are important that we should be keeping on our radar screen.

Sure. So I would combine the 2 EGFR resistance programs that we disclosed at R&D Day last year, 945 being the triple mutant and then we have a double mutation program that would be one that's focusing on the on-target resistance that would emerge as osimertinib moves into a first-line setting. So those are 2. We've guided to having up to 3 development candidates by the end of the year. So BLU-945 is one of those. So there's 2 other programs that have made very nice progress and then we're shooting for having development candidates. And as that occurs, we would provide updates thereafter. Another bucket is our cancer immunotherapy collaboration with Roche. So we had highlighted MAP4K1 as one of the programs in that collaboration that continues to make nice progress, and there are additional programs that remain undisclosed there. And then there's a grouping of additional undisclosed programs at various stages in preclinical development.

And so if I took all that together, we fundamentally agree that it's an area that's overlooked and we appreciate why. There's a lot of excitement with our lead programs. But when I think about this moment in time and we talked a bit about this when we announced the collaboration, Blueprint Medicines is in the strongest position it's ever been. I think oftentimes, it's overlooked how difficult it can be for new biotechs to build a fully integrated business. We now have that capability.

So we've got Christy leading those commercial efforts that have generated a lot of the questions this morning out on the front end. I can tell you that the team is chomping at the bit to get moving with pralsetinib in earnest, pending regulatory feedback. We've now strengthened that with a partner that we consider to be one of the best when it comes to targeted therapies. It's certainly supplementing our efforts in the U.S. but then globally, bringing pralsetinib to more patients globally in a faster time frame.

That collaboration now allows us to focus more of our energy on systemic mastocytosis, which we think is the biggest driver in long-term value for patients and for us. And then it has also then freed up resources for us really to focus on what we think is an underappreciated and promising pipeline. You don't get many moments like that when all 3 of those factors can come together simultaneously and backed by a strong financial position. So I think it's up to us now to convince you that there is value in that pipeline. But I think we've got a plan to methodically roll that out over the coming years, and there's a lot to be excited about in that pipeline.

Your next question comes from the line of George Farmer with BMO Capital Markets.

Could you guys remind us how much follow-up data you'll have in the advanced SM setting when you ultimately present the data and file with FDA? And also, could you comment on how your patients are doing in Part 1 of the EXPLORER trial? Have they all moved on to the long-term extension? And what sort of data do you need from that in order to secure approvals in both indications?

So maybe I'll start with that and then Andy can chime in. So in terms of the additional follow-up, it will be a blend of a couple of things. So one is we have provided top line data late last year. So just as a function of time for patients who had already been enrolled, you would expect it to be somewhere in the 6 to 9 months of additional follow-up. Of course, there's also new patients that we've not shared data on those. So they'll, by definition, have less follow-up. Many of them will have been enrolled late last year. And I can't remember, I think that the enrollment from a regulatory perspective, all of those patients have been enrolled when we provided that top line. So they would have all been enrolled as of last year. So less follow-up from an IWG criteria. That really matters because a part of the definition of response is a component that -- of time, of how long they've been in response. And then we'll blend it together. In terms of the second part of the question, which is...

I'm not actually -- maybe you were talking about PIONEER, the indolent study there? Is that what you were...

Yes, PIONEER.

Yes, the indolent, yes. So that -- those patients all have gone into what's called Part 3 of the study that we discussed, which is a long-term follow-up. And there -- we haven't given specific data from that part of the study yet but they continue to do well.

Okay. Great. And then a question for Mike. How are you thinking about accounting for the upfront payment from Roche? How should we incorporate that into our models?

Yes, sure. So we're working through finalizing the accounting with our auditors. But we expect that we will recognize a majority of the $675 million upfront payment as revenue in the third quarter. And then we also anticipate -- as you recall, there was a $100 million equity investment. A majority of that will be recorded within stockholders' equity on our balance sheet. And then we'll certainly provide kind of if there's a further update next quarter, but that's what we're anticipating at this point.

Okay. Great. And can you comment as to whether a milestone will be coming upon approval or filing of the pralsetinib -- I'm sorry, on approval of the pralsetinib applications?

Yes. We haven't provided detail on the specifics of the milestone. But I think if you recall what we said at the announcement of the deal is that there's a potential for $90 million in near-term marketing and approval-related milestones. And so certainly, we're excited about what's to come, and I'll probably just leave it at that.

Your next question comes from the line of Eun Yang with Jefferies.

This is [Sara] on for Eun. You touched on this earlier in the presentation. I was just wondering how the commercialization for advanced SM would look. Are they mainly treated in the academic setting? You said there was some overlap, but could you provide more color on this? And would you need to expand your sales force?

Sure. Christy?

Sure. So there certainly is overlap with particularly advanced SM, which tends to be treated primarily at sort of oncology-hematology centers of excellence, academic centers. The specifics around the stakeholders involved in treatment are obviously frequently different than what we see for lung or thyroid or GIST. We have not guided yet to exactly what the commercial structure will look like for SM.

However, we've definitely taken, as I said, a portfolio approach to thinking about our structure, and we certainly have some roles that are already engaging in activities to prepare for an advanced SM launch. In particular, in the U.S., we have a precision medicine team that really plays well across the portfolio and, in fact, has been primarily focused on RET and SM since the beginning of this year. So more to come on that. Advanced SM is certainly a very targeted market. We expect to be able to address it nimbly as we have to date. And then we'll look to how we may evolve as we approach an indolent SM approval down the road.

Your next question comes from the line of Arlinda Lee with Canaccord.

I had a couple of questions. Christy, you talked about being encouraged by retail rates and that the real-world durability may be that of what we've seen in your clinical trial, but you also said that U.S. may not have -- patients tend not to be going on avapritinib at first diagnosis. So I'm kind of curious if you could provide any additional color on the basis of those statements. And then maybe just my second question would be on the additional nominated candidates for the remainder of the year. Would you mind, please, outlining the criteria and prioritization of how you think about your current product and sales force and how that impacts your criteria of prioritization for your nomination of candidates?

Christy, you take the first one, I'll take the second.

Great. So as I said, I have been really encouraged to see that patients who have started on AYVAKIT tend to be staying on therapy and refilling on schedule, and that comment, I think, speaks to a few things. First of all, certainly, we're not seeing a negative impact of COVID on those metrics. We don't, to your point, have perfect visibility into a patient level sort of clinical profile. But based on what we can understand and sort of looking at the mix of patients we see, PDGFR-alpha as well as patients who are sort of more late-line KIT patients, we've been encouraged to see patients refilling beyond what we actually expected. And I think what I attribute that to is the real-world benefit/risk and tolerability profile of AYVAKIT.

Patient management has been really a key focus of our team, and we see that prescribers are individualizing approaches to dosing those patients and certainly modifying patient dose to make sure that it's appropriate for the clinical characteristics of the patient that they're treating. And we see that, that really leads to increased persistence and adherence. And so for me, that's a great sign early on in this launch. And I also think it speaks well as we think about the profile of avapritinib more broadly as we move forward to potential approvals in ASM.

Arlinda, this is Jeff, and I'm looking at the -- we're at bottom of the hour. So it was a broad question that would take more time to address, but it's obviously multifactorial in terms of how we select new targets. But one of them fundamentally that's been a cornerstone is targets where we believe there's a monogenic driver and one where we ought to be a able to get to clinical proof of concept relatively quickly based on the chemical matter that we have in our library. And what that then has transformed into is a portfolio approach that we highlighted in the R&D Day where there are several lung-targeted-type programs with pralsetinib in the EGFR program. There are hematology opportunities that will grow or build from what we do with systemic mastocytosis, and then it continues to be targeted in rare genetic diseases. And so those are all reflected in our early discovery platform just as they are with our more advanced programs.

With that, I think we need to conclude the call. Operator?

At this time, I would like to turn the call back over to Mr. Jeff Albers for closing remarks.

Well, then I turned it over to you to turn it right back to me. So thank you, and thanks for everyone for taking the time and joining us today and for your continued support of Blueprint Medicines. And it's going to be a busy second half of the year. So we look forward to updating you again soon and hope you all stay well. Goodbye.

This concludes today's conference call. You may now disconnect.