Good morning. My name is Elliot and I will be your conference operator today. At this time, I would like to welcome everyone to the Blueprint Medicines' Third Quarter 2023 Financial Results Conference Call. All lines have been on placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

[Operator Instructions] I'll now turn it over to Jenna Cohen Vice President of Investor Relations..

Thank you, Elliott and good morning everyone. Welcome to Blueprint Medicines' third 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 are Kate Haviland, Chief Executive Officer; Lena Lee, Chief Commercial Officer; Christy Rossi, Chief Operating Officer; and Mike Landsittel, Chief Financial Officer.

Suad Namouni, President of Research and Development; 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. A little over two years ago, we first launched AYVAKIT in advanced systemic mastocytosis. And five months ago, we launched AYVAKIT's for indolent systemic mastocytosis.

It is clear from both our clinical data and real-world experience now that we're getting with AYVAKIT that AYVAKIT makes a profound difference for patients allowing them to reclaim control of their lives.

Everything we are learning today reinforces our belief that AYVAKIT and Blueprint are positioned to achieve long-term leadership with a blockbuster franchise in SM.

Our third quarter results are impressive, characterized by 90% growth in revenues compared to last year and a strong and steady increase in the number of patients treated with AYVAKIT, now at approximately 800 patients at the end of the quarter.

We are also widening and deepening our prescriber base with strength in both new and repeat prescribers and achieving continued strong support from AYVAKIT from payers.

While we remain early in the growth curve of this launch, the strong positive receptivity we are seeing broadly from the marketplace including from physicians, patients, and payers coupled with our early view on good durability for what we expect to be a chronic treatment for patients with ISM reinforces our confidence that AYVAKIT is a blockbuster opportunity in the US alone.

Lena will provide more color on the launch shortly. AYVAKIT is more than just a transformational medicine in SM. It is the cornerstone of our foundational infrastructure and relationships in the allergy and inflammation therapeutic areas, paving the way for the broader leadership we are building in mast cell diseases.

We have additional assets in development that could meaningfully diversify and solidify our portfolio in this area including elenestinib and BLU-808. On today's call, Christy will discuss our plan for building a durable SM leadership as the foundation for our larger mass cell disease franchise. Turning now to our pipeline.

Over the course of 2023, we have made significant progress resulting in multiple data readouts from our early-stage clinical programs focused in breast cancer and lung cancer.

As our Phase 1 development programs near completion of their dose escalation phases, we will be making data and opportunity-driven decisions on which molecules to prioritize for development going forward. Our bar to take compounds forward through mid- and late-stage development is very high.

A recent positive example of this prioritization is our BLU-222 program where the combined strength of the underlying science on the role of CDK2 in breast cancer, the medical need, and the emerging and compelling best-in-class clinical profile BLU-222 gives us confidence that this program has significant potential to be an important medicine for patients with breast cancer and other solid tumors and therefore, drive substantial value for Blueprint.

Holding a high bar to drive the prioritization of our pipeline programs also enables our expense discipline. Blueprint has been uniquely productive in bringing novel molecules into development more than we can develop on our own.

We will continue to leverage strategic business development to ensure the full promise of our programs are realized while allowing Blueprint to achieve sustainable growth.

As we sit here today, we see a clear path to financial sustainability through the combination of a strong revenue ramp and lower operating expenses resulting in a significant decrease in cash burn in 2024.

This path will enable us to drive sustainable growth while enhancing long-term shareholder value through our focused investment in the most compelling product opportunities. We look forward to talking more about our portfolio priorities in early 2024 and Mike will share more details on our financial results and expectations at the end of the call.

With our ongoing launch success and commitment to financial discipline, Blueprint has never been in a stronger position than we are today. Now, let me turn it over to Philina to discuss AYVAKIT performance in the quarter.

Philina?.

Thanks, Kate. Good morning, everyone. In the first full quarter of AYVAKIT's ISM launch, we achieved net product revenues of $54.2 million including $49.1 million in the US, nearly doubling our revenue from the same time last year.

These robust results reflect the medical need in ISM, the compelling clinical profile of AYVAKIT and the hard work and dedication of our team. We are systematically executing across our three strategic launch pillars to activate patients, engage providers and ensure consistent strong access.

I'll highlight progress across each of these pillars to give context for our third quarter performance and why we are confident in continued growth. First, we ended Q3 with approximately 800 patients on therapy in the US, a significant increase of more than 200 patients since last quarter, driven primarily by ISM.

Increasingly, we're hearing from providers that patients are asking for AYVAKIT, which shows our targeted efforts to strengthen brand awareness are making headway. Second, we have rapidly expanded the breadth of prescribing with significant headroom to continue to grow prescriber breadth and depth.

Breadth of prescribing has grown rapidly across all specialties and settings. An increasing number of Hem/Oncs and allergists are prescribing AYVAKIT for the first time and this adoption is happening in both the academic and community setting.

Importantly, we're gaining great traction with allergists who represent the majority of high-potential SM prescribers. Allergists accounted for one quarter of new SM starts in Q3 a four-fold increase. Most critically, we are driving breadth among the providers who see the most SM patients where we're most likely to see depth from repeat prescribing.

With first positive experiences, we expect providers to put additional patients on therapy and we're encouraged to see early signs of this repeat prescribing. In the words of one provider who started several ISM patients on therapy. People don't realize how unwell they feel until they start AYVAKIT and remember what feeling well is.

With these promising early results, there is significant headroom to grow and we expect continued growth in patients on therapy from both new and repeat prescribers. Third, AYVAKIT access remains strong. Approximately 95% of lives are now covered by payer policies consistent with our broad label with no step edits times to fill our rapid.

Allergists are highly engaged with your Blueprint when they're starting therapy for a new patient and they're finding the access process very easy. Securing such strong access is remarkable this early in the launch. We have exceeded expectations in our first full quarter of launch and we're just getting started.

One year ago at Investor Day, I outlined the path to a blockbuster opportunity for AYVAKIT by penetrating into about half of the 7500 already diagnosed prevalent patients with moderate to severe disease.

Today, we are in the market and we are delivering with several leading indicators that make me even more confident we're on the path to capture every bit if not more of this opportunity. We will drive further breadth and depth of prescribing among providers. We will encourage more and more patients to seek therapy.

We expect to see the cumulative benefit of patients staying on therapy for chronic treatment. Our strategy is working and executing on these steps alone gives us a clear path to a blockbuster opportunity.

And we can further multiply the opportunity by broadening the adoption into a wider range of ISM patients increasing diagnosis rates to grow the market and expanding into additional geographies including our anticipated approval in the EU. In the words of one of our sales leaders with this first full quarter, we have planted the seeds.

Each quarter strengthens our conviction that the SM opportunity exceeds $1.5 billion and that Blueprint Medicines is well on our way to capturing it. With that I'll hand it to Christy to provide an update on our SM franchise vision..

Thanks Philina. A core component of our company strategy is extending our leadership position in SM and expanding it to other mast cell disorders.

We are doing this by leveraging our deep understanding of disease biology to drive scientific innovation bringing that innovation to patients with our clinical and regulatory know-how and driving compelling top line revenue growth through commercial execution. Let's start with our understanding of SM.

We have amassed longitudinal data in hundreds of patients from our clinical trials worldwide as well as from large external real-world data sets. From these data, we know that SM is a complex disease spectrum rather than a group of distinct patient populations.

We understand the clinical characteristics of patients across this spectrum the prognostic factors that impact how their disease could evolve and the long-term benefits and safety of treatment with AYVAKIT. We know that optimizing outcomes for patients requires tailoring their treatment to their individual needs.

There can be no one-size-fits-all approach to SM care. This is one of the reasons the clinical profile of AYVAKIT is so compelling. Today there are four AYVAKIT doses commercially available and accessible for SM enabling physicians to optimize treatment for the individual needs of the patient sitting in front of them.

Physicians like this dose flexibility and we are seeing utilization of all dose strengths in the market today with most ISM patients starting at 25 milligrams and most advanced SM patients starting at 200 milligrams but with physicians prescribing all available doses as needed based on the clinical characteristics of the patients.

Regardless of a patient's disease, severity or individual clinical profile there is a AYVAKIT option available to meet their needs. The feedback from patients and providers across doses has been very positive.

This brings me to the second key driver of our leadership which is our unique ability to bring scientific innovation to patients by leveraging our clinical and regulatory know-how and track record of demonstrated success. We know that there is a clear bar for any therapy to successfully treat ISM.

And that bar gets higher each and every day that AYVAKIT is on the market. Anyone who hopes to bring a new therapy forward will need to demonstrate broad symptom impact and a very well-tolerated safety profile that is meaningfully better than AYVAKITand find a way to overcome our significant head start.

We have invested years of work to successfully develop and validate the ISM-SAF and execute clinical studies culminating in the approval of AYVAKIT. And it is this track record of success that gives us confidence in our ability not just to drive innovation but to bring it to the market.

AYVAKIT is the cornerstone of our SM franchise and our most important priority as we drive a successful ongoing launch. Beyond AYVAKIT we are leveraging the same know-how to develop elenestinib to expand and extend our franchise well into the next decade and beyond.

Over the medium to long term we plan to develop it strategically building a compelling efficacy story across the spectrum of disease. We will present data from Part 1 of the HARBOR trial at ASH later this year.

You can expect those data to characterize the safety profile of elenestinib and give you confidence that we have a clinically active molecule to develop based on our unparalleled knowledge and understanding of the disease. And SM is just the tip of the iceberg.

We are leveraging our scientific clinical and commercial capabilities and infrastructure to impact many more patients suffering from highly prevalent mast cell disorders such as chronic urticaria. BLU-808 has the potential to be both the first and best-in-class oral wild-type KIT inhibitor and we are working diligently to bring it to the clinic.

This brings me to our final pillar of leadership, which is consistent, compelling top line revenue growth through commercial execution, not just over a few quarters, but over the long term. We have established AYVAKIT as the standard of care in SM.

We have established a leadership position that is impossible to catch with a growing body of long-term efficacy and safety data and market leadership in a chronic indication, where preference is sticky. And as Philina noted earlier, we are just getting started. Simply put we are in the best position to address any medical need in SM.

And with AYVAKIT, elenestinib and BLU-808, we have the foundation for broad franchise leadership in allergy immunology for years to come. I'll now turn it to Mike to discuss our financial results..

Thanks, Christy. 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 third quarter, total revenues were $56.6 million, including $54.2 million in net product revenues from sales of AYVAKIT and $2.4 million in collaboration and license revenue.

As Philina noted, we are seeing steady growth in patients on AVICIT which will continue to fuel the ramp in our commercial revenues. Our total operating expenses were $182.8 million for the third quarter, which includes $23.1 million in noncash stock-based compensation expense.

We have always been good stewards of our capital and have managed the business to maintain a strong balance sheet. Cash management continues to be a priority area of focus for us and our approach focuses both on growing revenue and containing expenses. First, revenue.

We're confident in the opportunity that AYVAKIT provides and we are committed to managing the business as we see AYVAKIT revenues ramp.

We plan to provide 2024 revenue guidance inclusive of ISM on our Q4 earnings call and are confident that our early launch trajectory positions us squarely on track to achieve sustainable revenue growth with a line of sight to profitability. Second, operating expenses.

Our year-to-date R&D expenses have declined by approximately $30 million versus 2022. And further, we expect to be able to reduce operating expenses into 2024. This will be achieved by sharpening our focus and allocating capital to programs with the highest potential to drive long-term shareholder value.

And as Kate mentioned at the beginning of this call, we plan to share more details on our capital allocation strategy in early 2024. We are laser-focused on our revenue and operating expense forecasting, as we work towards profitability and have never been more confident in our ability to get there.

We would like to point out that today's external consensus figures do not reflect our demonstrated ability to reduce our spend. For example, the consensus for 2024 costs and operating expenses, excluding stock-based compensation is approximately $700 million.

We anticipate that our 2024 spend will be approximately $100 million lower than this based on our current plans. Pulling this all together, as revenues continue to ramp and our operating expenses decline, our net cash burn will also decline. We expect this decline in cash burn will be even more significant in 2024 compared to where we end in 2023.

Finally, our ability to achieve a sustainable profile by managing expenses as revenues ramp does not require a return to the capital markets. With that, I will now turn the call over to the operator for questions.

Operator?.

Thank you. [Operator Instructions] First question comes from Dane Leone with Raymond James. Your line is open..

Thank you for taking the questions and congratulations on a very strong quarter with momentum behind the AYVAKIT launch. I'm sure my colleagues will ask some subsequent questions a lot around the details of the AYVAKIT launch. But I just want to ask from a higher level strategy question.

And I think, it's going to be a big focus of a lot of investors today. Across the presentation you just gave, you're obviously very excited about penetration into the allergist community building up a commercial team to tackle the sales and adoption of AYVAKIT within ISM.

You talked about BLUE-808, which would be a CKIT inhibitor and you've highlighted maybe some portfolio goals and strategy updates in the early part of next year with the reduction of operating burn.

So putting this together the natural question I think for a lot of us this morning is are we looking at maybe a change in what Blueprint will be focused on and allocate capital to really build out around the current launch of AYVAKIT? And maybe with reductions around the current burn either by reducing internal allocation or partnering out some of the current oncology portfolio, we could really see the focus shift to a positive margin operating profile based upon more of an autoimmune allergist type of strategy going forward for the company overall.

Is that fair? Or could you expand on how you see the totality of the organization strategy really shifting into 2024? I know we're jumping the gun but I think you're going to get this question a lot today..

Thanks, Dave for the question. We appreciate it. So I think from where we sit today, we are exceptionally pleased with the incredibly strong launch. And we are – we have a compelling medicine in AYVAKIT. We are building a market and we're just seeing tremendous results from that.

As you well know, when you think about science and innovation, you plant seeds and they kind of come along over time, right? And so what I think where we've been is we've been leveraging our expertise in KIT biology. We've been leveraging the relationships we're building as we brought ISM forward starting five years ago in the clinic.

And now we have this really exciting portfolio of programs that are focused on that allergy immunology space. And that has been the work over multiple years here at Blueprint Medicines following the science and thinking about where we can add tremendous value to patients, as well as leverage our expertise in infrastructure.

What we know is having a portfolio of programs require that leverage. And for us to be able to operate efficiently and we need to see that. And I think you also see that in our OpEx results.

As Mike said, over the last six quarters, we've been flat to down in OpEx in a moment when we are launching a big new medicine and bringing multiple programs through early clinical development. And so I think that's a tremendous testament to the team and how we think about priorities.

And I think where we sit today is we're starting to harvest that data out of those Phase I studies and we're going to make and hold very high bars on to where do we think we're going to be able to invest to drive the longest or the most compelling long-term value for our patients and our physicians and our shareholders.

And we look forward to talking about that in early 2024. But we're really pleased to see this portfolio come together that Christie really just outlined in mast cell-driven disorders.

And we'll continue to make sure we leverage our scientific knowledge, our clinical expertise and now our commercial infrastructure and relationships as we drive what is going to be really exciting growth for the company forward..

Our next question comes from Marc Frahm with TD Cowen. Your line is open..

Hi. This is Alex on for Mark. Congrats on a really strong Q3. Thanks for taking my question. Just curious if you're already seeing impact of the ISM launch an overall diagnosis rate, are physicians seeing an increase in growth patients identified a number of care.

And also if you could just comment on the ongoing efforts to improve patient identification..

Thank you so much for that question. And I'll just make one comment before handing to Philina. We've really been seeing an impact in ISM diagnosis since we have been in the field in really developing AYVAKIT in ISM. If you remember back in 2019, we put out that about 11,000 patients in the US have been diagnosed with SM.

And now we're well above 17,000 or 18,000 at this point. And so I think that's the result of both the development of AYVAKIT over the last number of years and now also the commercialization where we're going to continue to see patients being diagnosed with this disease. We actually think the opportunity is probably bigger than anyone had expected.

Philina, do you want to take some of that..

Yes. Thanks, Alex for the question. We're so proud of our results in the third quarter and we're just getting started. I think Kate addressed some of our efforts to increase diagnosis rates over the past several years frankly and we've seen that continue to increase.

I think the most important point is that the already diagnosed prevalent patients represent a blockbuster opportunity. And so our efforts are primarily focused on converting those already diagnosed not well-controlled patients.

I think our results this quarter and the breadth of very positive leading indicators make us very confident that there's significant headroom to grow within this patient population alone. Increasing the diagnosis rate further increases the upside above this opportunity. And we are more than confident we'll get there..

Thanks..

Our next question comes from Eun Yang with Jefferies. Your line is open..

Thank you. Great quarter, congrats. So you added more than 200 patients in third quarter compared to second quarter. So is it fair to say, that you are adding about 100 new ISM patients per month now? And are you seeing growth from there. Thank you..

Lena, would you like to add anything?.

Yeah. Thanks for the question, Eun. And we are very pleased to have added over 200 patients on therapy in the prior quarter. To your question, I would say, we are very confident in continued strong and steady growth.

Every time we see an opportunity we see multiple opportunities behind that as we had a chance to get out in the field and I personally have had a chance to engage hundreds of customers alongside our field teams. And so we see significant headroom to be able to grow.

It's important to also remember that this is a rare disease launch, where we are building a market one patient at a time and that's certainly what our teams continue to be focused on..

So you mentioned on the second quarter call, in June you added about 35 ISM patients and the trend was continuing through July. So it seems like uptake in patients in August and September must have been pretty significant..

Yeah Eun, this is Kate. So when we were talking about the Q2 results one of the things -- because it was such a stub quarter we had just gotten approved. We only had a few weeks of launch under our belt.

What we did is provide -- try to help provide a little bit of framework and kind of qualitative discussion around what we were seeing in July because of that we won't really comment on once we -- now we're in a study -- in a place where we've seen four quarters of launch, we're not going to really comment on kind of quarter -- the next quarter's launch.

We do look forward to providing guidance on the Q4 call here which is going to be in short order that will be inclusive of ISM for all of 2024. And so I think as Philina said, we can expect that continued kind of strong and steady growth.

We're really pleased about where we are and all of the signs we're seeing in the marketplace lead to your point to continued strong and steady growth..

Our next question comes from Brad Canino with Stifel. Your line is open..

Thank you. And congrats on the great quarter, maybe first just a quick spin on Eun's question, can you comment on how many patients were added specifically in September.

But then more broadly as you plan to provide AYVAKIT guidance in February, what elements of your thinking or assumptions behind your forecast will be most important as you watch the commercial metrics evolve over the next three months? Thank you..

Yeah. I'll just take the first piece because that's AYVAKIT Brad no, we will not break out kind of patient numbers by month. We'll continue to report them on a quarterly basis.

And then maybe Philina do you want to talk about how you're thinking about the most important drivers for revenue growth in 2024?.

Yeah. Thanks Brad for the question.

I mean some of the key leading indicators that we've emphasized on this call that we see is most important for signaling continued growth, include the number of patients on therapy which we see as a strong predictor of continued revenue, given the potential of these patients to remain on therapy for chronic durations.

In addition, to the new patient starts that we expect to continue to drive by increasing both the breadth and the depth of prescribing across our prescriber base..

Our next question comes from Reni Benjamin with JMP Securities. Your line is open..

Hey good morning everyone. Thanks very much for taking the questions and congratulations on a great quarter. Maybe can you talk a little bit about the penetration in into Alegists versus hemoc kind of how many new physicians have you called.

On the 250 patients that were added, I think you've been asked this multiple times, so I'm going to try it a different way.

How many ISM versus SM and would we expect a similar think about Europe and the ultimate approval in Europe should we be thinking about a civil trajectory early on?.

Thank you so much for the question, Reni. We -- you broke up a little bit there at the end but I think it's really a question around the patients we added and how can we think about the breakdown between different parts of SM advanced versus ISM.

And as we've mentioned before that's very hard to tease out because of the common diagnosis code but I'll certainly let Philina continue to provide details there. I also think you asked a little bit about European approval and then how do you think about the breadth and depth of prescribing. So maybe Philina, if you could take those..

Yes. Thanks for the question. So of the 200 patients, I mean, I think the bottom line is the inflection point that we've seen in this past quarter is primarily driven by ISM. We can see that by the vast majority of patients who have started on the 25-milligram dose.

To your question on the prescriber base we are really pleased with the mix of prescriber base that we're seeing. We saw that big step-up in the number of new prescribers that and importantly, that occurred among, a, the allergists who are important because they tend to see a greater concentration of ISM patients.

And secondly, agnostic of specialty we're seeing that penetration into new prescribers who are just seeing really the deepest -- the biggest concentration of SM patients, who have the biggest potential to deepen over time.

So in sum, we see a really healthy mix in terms of our prescriber base as well as headroom to continue to grow on that breadth and depth..

And then just to comment on the EU approval.

Christie, do you want talk about where we are with that one?.

Sure. So we are looking forward to approval in Europe. That review is on track. And I think Reni your question was kind of higher level regarding the opportunity and how we see it unfolding in the US versus Europe? And what I would say is, I think what the US experience has shown us at this point is that these patients are there.

The unmet need is significant. The receptivity to the profile has been incredibly positive. And AYVAKIT is really transforming patient lives. And there's -- we expect to see very similar trends as we launch globally. As Philina said, the dynamics that we see in the US alone based on the market as it sits today get AYVAKIT to a blockbuster status.

And so we see opportunity to continue to expand that through geographic launches by growing the market in the US, et cetera. But the bottom line is this opportunity is unfolding exactly as we had expected and we are well on our way to making AYVAKIT blockbuster in SM..

Our next question comes from Salveen Richter with Goldman Sachs. Your line is open..

Good morning. Thanks for taking my question. Maybe pivoting here to ASH. As we look to the 263 data, could you help us understand exactly what will be presented and your view here on what would be a competitive profile in the context of AYVAKIT but also competitors? Thank you..

So, thank you Salveen. As Christie really laid out is elenestinib is positioned to help us maximize the long-term performance of our SM franchise. AYVAKIT is really meeting the broad medical needs across the spectrum of SM. And so the solution for those patients are truly in the market today.

But elenestinib is going to have a great space in our portfolio, as we think about building that franchise for 10 years and beyond.

And so Becker, do you want to talk about what we'll be showing at ASH?.

Yes, sure. Thanks. Just a reminder that, we're here to make a difference in the patient's lives for years to come by improving their symptoms in ISM. And AYVAKIT has set a tremendously high bar in this part of the disease. Another reminder is that avapritinib elenestinib and bezeclatinib are all equally potent against TTD816V.

And for any new agent coming in, it's necessary to demonstrate broad symptom impact that doesn't come at the price of a worse safety profile. And as a reminder at 25 milligrams of AYVA this was evident with no Grade 3 adverse events in Part 1 and an amazing safety profile that we saw in Pioneer.

And as Kate said, a point of the elenestinib program is to expand and enhance our leadership in SM and really address all parts of the disease. At ASH, we'll show data showing elenestinib is active and safe and in patients, with indolent systemic mastocytosis and an amazing candidate for development in this space..

Our next question comes from Michael Schmidt with Guggenheim. Your line is open. .

Hey, guys. Thanks for taking the question. Congrats on the great AYVAKIT sales this quarter. Perhaps, a slight follow-up on the prior question for elenestinib.

What are your latest thoughts on next development steps after ASH? How should we think about the opportunity for this drug, beyond what AYVAKIT is already addressing? And then secondly, also on the pipeline wondering, how we should think about the CDK2 program at this point? I know you're very excited about it.

I was just curious where you stand with the study there..

Yes, Michael, thank you for those questions.

Christie, -- will you take the question on elenestinib and then Becker, will you going in on CDK2?.

Sure. So, thanks Michael for the question. The role that elenestinib plays in our portfolio, as I said is really extending and expanding our franchise over the long term. AYVAKIT is very much the cornerstone. And the bar for any new therapy is AYVAKIT and we're very acutely aware that that bar, as I said, gets higher every day that we're in the market.

We are excited about our potential to develop elenestinib, based on the deep understanding that we have of this disease. How we can bring it forward in clinical development, to develop a data set that is bespoke and we'll really speak to the role and the efficacy and safety that this therapy can play in SM again over the long term.

So ASH, we really see as a first step in demonstrating that the molecule is safe, it's active. How we bring it forward will unfold frankly in months and years coming out of ASH, based on the knowledge that we have.

And we think that we are in frankly, a unique and unparalleled position to be able to develop a next-generation therapy in SM, based on the proprietary knowledge that we have..

I think on CDK2.

Sure. So as you remember at ASCO, we presented data showing the unique tolerability profile of BLU-222 compared to others in the field with very little impact on hematology and any other side effect profile really that would be limited its combination with ribociclib.

So the main focus is in breast cancer and that's what really drives the value for any CDK2 program. We have -- we believe that we've closed the gap with Pfizer and the feedback we're getting from investigators is that BLU-222, is really leading the pack right now with great tolerability data. And also, we've shown the efficacy starting to emerge.

We've shown the response in breast cancer and we continue to enroll patients in breast cancer and other indications. We're still in dose escalation. We have begun the combination as we've indicated, and we look forward to sharing more data next year..

Our next question comes from Derek Archila with Wells Fargo. Your line is open. .

Hey, good morning and congrats on the progress. Thanks for taking our question. So it's a very interesting commentary on the 2024 OpEx.

I just want to understand, do you see continued rationalization prioritization beyond 2024 meaning, does out-year spend become lower? And can you get more aggressive on that $100 million as you indicated for 2024? Thanks..

Yes. Thanks, Derek for the question. We will be providing more view, on how we're thinking about operating expenses in a kind of a more official way on our Q4 call. Really I think what Mike was trying to talk about is just the fact that, as we look at consensus out there the numbers are really well off where our plan is.

And I think from where we stand when we see the ramping revenues at AYVAKIT, and we think not just about 2024, but this path to $1 billion market opportunity and north of that as we continue to launch. We see a really compelling profile for the company.

Mike, do you want to provide some more color?.

Yes. I think Kate's, right, like the commentary we provided was specific to 2024 guidance because we think that's just well of consensus – 2024 consensus, because we think that's well off base. We're obviously not providing specific guidance on 2024 OpEx right now, but fundamentally it's going to come down versus 2023.

And I think importantly is our total cash burn is going to come down significantly in 2024. And those are the guidelines that we're pointing to right now. We will in early 2024 spend more time talking about our capital allocation strategy.

And I think that will give more color as to what Kate was saying how do we think about the longer term investments that we'll be making in the portfolio? How do we think about partnerships? And I think it's really exciting, but we feel we're in a very strong place financially in 2024 and beyond..

We now turn to Ami Fadia with Needham. Your line is open..

Hi, good morning. Let me add, my congratulations to the great launch in ISM. Perhaps, if you could add any color around where the patients are and maybe concentration of patients within physician offices. I think you mentioned briefly that you're starting to see prescribers that have the potential for meaningful depth of prescribing.

But maybe you can give us some color around how concentrated these patients are? That would be helpful. And just a follow-up on elenestinib. Can you talk about how much of duration of data in a number of patients we could expect to see at the ASH update? Thank you..

Philina will you give the color on the patient and we'll come back I mean to your question on elenestinib after..

Yes. To your question on where the patients are, one, construct that we've used over the past year or so is this notion of the top 350 providers who see the highest volume of SM patients and beyond that it tails off. And so that is a classic kind of rare disease distribution.

And if anything that distribution and the results that we've shown this past quarter are a very strong and healthy mix for not only this quarter but continued growth. And so our penetration in terms of early adoption includes many of those top 350 providers.

And then importantly, we also see that the overall opportunity tends to be more concentrated among the allergist immunologist. We're really pleased to see the step up there as well..

And your question about elenestinib and what to expect to ASH, I mean we will be selective about the data that we disclosed just given the competitive environment. And as Christie was mentioning we have numerous insights based on our proprietary data that will allow us to drive innovation for the future state of ISM not where ISM stands today.

And so we certainly don't want to provide too much of that information out into the marketplace given the competitive environment. So we will be sure to show the data that shows elenestinib as a very compelling safety and activity profile..

Our next question comes from Mike Ulz with Morgan Stanley. Your line is open..

Good morning and thanks for taking the question, and congrats on the strong quarter as well. Maybe just a follow-up on AYVAKIT. Given the strong trends you're seeing in ISM, I'm just curious what you're seeing in terms of disease severity and if you're starting to capture some of those mild patients already early in the launch year? Thanks..

Thank you Michael for a question.

Philina, do you want to talk about that?.

Yeah. Thanks Mike for the question. So the first patients that were seeing the early adoption in for AYVAKIT, not surprisingly are those patients who tend towards the more moderate to severe part of the ISM spectrum who are not well-controlled.

And we're really encouraged to see in some of our prescribers who have had their first very positive experience in those patients, they are already starting to broaden into additional patient types who might just have one prevalent ISM symptom, which is having impact on their quality of life.

So all of these signs make us very confident that we're going to see continued growth both in terms of the moderate to severe patients, as well as broadening into those milder patients as well..

Let me now turn to Joel Beatty with Baird. Your line is open..

Hi. This is Ben [ph] on for Joel. Thank you so much for taking the question. I guess, maybe building on the previous question.

Are there any particular aspects of the symptom scale that are driving growth?.

Yes. Thanks for the question, Ben. I think what we're really seeing in the real-world experience it's not so literal like that, right? Providers aren't necessarily thinking about the TSS that was an important contract for approval.

But the reality in clinical practice is it's this concept of a patient who is not well-controlled patients who have been on symptom directed medications and that's failed to control the symptoms. And so it's -- it can be any breadth of symptomology across the spectrum of ISM.

But very practically the resounding theme I've heard from just engaging literally hundreds of customers at this point is as patients who are still symptomatic..

I think Ben that's where AYVA's ability to broadly impact symptoms across all different symptom stats. It enables physicians to consider this medicine for any patient who presents in front of them, right? This is a very heterogeneic disease.

You have patients who may be bothered by -- all symptoms to certain degrees or patients who may have one symptom that's really limiting their ability to kind of operate in their life.

And what we see with AYVAKIT both from the PIONEER study results but now in the real world setting is that broad symptomatic impact with such a well-tolerated safety profile is very compelling. And I think it's certainly what is helping drive the usage of AYVAKIT broadly..

Our next question comes from Peter Lawson with Barclays. Your line is open..

Thanks so much for taking my questions. The additional 215 or so patients were those exclusively by ISM patients? And if there's anything you can say about the underlying ASM and just revenues and patient growth in the quarter that would be great.

And then anything you can say around how the pace of growth changed over the quarter for patients and how that looks in October? Thank you..

Thanks Peter for your question. I think that we won't be commenting on kind of forward-looking months or quarters.

But Philina will you certainly be pleased to talk about just that how we think about those two to 15 patients and where you saw how you think about that mix between ASM and ISM?.

Right. And so the inflection that we saw in this quarter was primarily driven by ISM. And we expect that to be the primary value driver going forward for AYVAKIT to achieve that over blockbuster opportunity. Within advanced ISM, we certainly continue to have headroom to grow there as well.

And we've talked about the sort of growth at a more moderate pace but that vast degree of headroom is among ISM. Just we've talked about that remains a steady contributor to our AYVAKIT mix. But again it's ISM that's our primary focus to reach that full potential of AYVAKIT..

We now turn to David Lebowitz with Citi. Your line is open..

Thank you very much for taking my question.

When you look at the new patient scripts across the doses, could you give us a baseline of comparison of what that particular chart would have looked like before the ISM launch?.

Christy, do you want to take that?.

Sure. Thanks, David. So we've been clear that prior to ISM approval, the business in SM was coming predominantly from advanced SM. We were aware of what we thought was a low volume of potential off-label use in ISM that remained quite frankly very consistent all the way up until approval.

So the vast majority of advanced ISM patients as I said started at 200 milligrams. We certainly see dose modification as needed. I think the important point here is that the range of doses that we have for AYVAKIT is an incredible strength. We know that symptom control is the goal for ISM.

25 milligrams is an incredible dose strength that delivers that symptom control with an incredibly positive benefit risk profile. So we're seeing the vast majority of ISM patients at that dose. We see advances in patients starting at 200. But we have patients in that gray area in the middle and we understand that area of SM I think better than anyone.

We know that patients can evolve over the course of their disease. And so the fact that we have this range of doses that really allows physicians to customize treatment for the clinical characteristics of the person sitting in front of them is an incredible strength of the product profile that we're really getting very positive feedback on..

Our next question comes from Chris Raymond with Piper Sandler. Your line is open. .

Hey. Thanks. And congrats from us on the great progress. Just two questions maybe just on the prescriber base. So allergists now at 20% or 25% of prescribers, where do you guys think that mix of allergists and hemoc sort of finds the stasis in terms of that sort of mix between the two? And then also maybe where immunologistsort of fit in there.

And then on the guidance for AYVAKIT for 2023, I think this is the second quarter you guys haven't sort of readdressed that initial guidance or I guess the guidance that you last issued in May. I mean, you seem to be in a pretty decent pace to sort of beat that number. Just kind of curious why not address that here? Thanks..

Yeah. So let me -- David, let me take the guidance piece first and I'll hand over to Philina to talk more about the commercial dynamics. So from a guidance perspective, the guidance we gave at the beginning this year was solely for the existing business at that time. So that was advanced SM and GIST.

I think we were really clear about that at that point that we were not going to include ISM because of the launch year. And at that -- in January, we are anticipating approval on the PDUFA date in May. But again, you just really don't know how those things are going to come together.

And so, again, guidance for this year is focused on the advanced SM and the GIST business. The guidance we will provide next year on the Q4 call will be inclusive of ISM as well. And so therefore, you'll get guidance on the full brand at that point.

Even though it's still early in the AYVAKIT launch, we're committed to providing that AYVAKIT launch excuse me. We're committed to providing that at that point.

Philina, do you want to talk a little bit about the commercial dynamics?.

Yeah. To your question about the prescriber base. And again, I think we're off to a very strong and healthy start in terms of the step-up in new prescribers that we saw in this quarter. We expect that to continue to grow and that there's a lot of headroom to continue to grow that both among the allergies immunologists.

So we do expect the 25% contribution to continue to increase. And we're just getting started, right? The growth that we've seen represents just a really small fraction of the overall providers who are seeing ISM patients and there's a lot of headway to continue to grow the overall patient penetration..

Our next question comes from Matt Biegler with Oppenheimer. Your line is open..

Hi. Congrats from my team as well.

I apologize if this has been asked before but do we have any early insights into the patient retention rate? Are patients generally continuing to refill their scripts, let's say after the first month or two on treatment? Or is it still too early to tell?.

Yeah. Thanks for that question. I mean we -- again we believe that the durability of treatment in ISM is going to be one of those great drivers of growth.

Philina, do you want to talk about what we're seeing today?.

Yeah. So again, reiterating Kate's point we certainly see potential for chronic dosing given the very promising benefit/risk profile of AYVAKIT. We're still very early in the ISM launch, but we're really pleased to see the very high compliance rate of the patients who have come on and that they are refilling their therapy. We expect that to continue..

This concludes our Q&A. I will now hand back to Kate Haviland CEO for closing remarks..

Thank you, operator, and thank you all for taking the time to join us today. We are very excited about the launch of AYVAKIT and ISM and believe it does represent one of the most exciting and attractive launches in rare diseases today. And so, we appreciate your continued support and look forward to additional updates coming forward next year..

Ladies and gentlemen, today's call has now concluded. We'd like to thank you for your participation. You may now disconnect your lines..