But we need to see that I think in the data before we can really provide you more color.
Mark Purcell: Thank you.
Vas Narasimhan: Next question, operator? Thanks, Mark.
Operator: Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please go ahead.
Peter Welford: Hi. Thanks for taking my question. It’s on the planned proposed MorphoSys transaction. I wonder if you can just outline when you did that, how much of the acquisition price that you’re considering was based on getting broad, both geographical and [indiscernible] the market approval for pelabresib? And versus on the other hand, how much of the transaction is described to what you’re thinking with regards to the EZH2 and also the ianalumab royalties that you would potentially owe? And how we should think about, I guess, with that deal the potential of picking that into the [deferred Novartis cost] (ph) structure business as it is today?
Vas Narasimhan: Yeah, thanks, Peter. Probably, I can’t say more than what we’ve already said given that we have an ongoing share tender offer out in the market. So, what we previously outlined is, we believe there’s an opportunity globally for pelabresib in both Europe and in the United States. And that’s an exciting opportunity given our Jakavi business and the opportunity that we have to leverage our long history in myelofibrosis and position in myelofibrosis outside the United States and our strong hematology footprint inside the United States. So, we would see pelabresib as fitting nicely within that global infrastructure that we have. And, yes, we would also benefit from the historical royalties, particularly on ianalumab, where we see the opportunity of a significant medicine, both in immunology and in cancer.
And so, I think that’s a pretty exciting opportunity for us to get those royalties back and then hopefully drive very significant medicine with a — significant medicine in a royalty-free way. And then lastly, the company does have an EZH1, 2 inhibitor in prostate cancer that we think could also be very interesting for us going forward. So, those are the three components of why we saw value in the deal. Next question, operator?
Operator: Thank you. Your next question comes from the line of Andrew Baum from Citi. Please go ahead. Hello, Andrew, is your line on mute?
Andrew Baum: Apologies. Yes, thank you. Just going back to the ASC first trial with Scemblix. Could you just expand your previous comments, Vas, on the dynamics of the CML market, particularly the current market shares in first line generically versus others, the Medicare versus non-Medicare segmentation, just to help us think about the barriers to entry in the different segment in terms of authorization step edits? Thank you.
Vas Narasimhan: Yeah. So, Andrew, a couple of things. I think, one, we see this is a market that on the order of 40% — 35% to 40% imatinib, so Gleevec generics, and 60% TKIs. And then, in terms of commercial and Medicare, we can come back to you with the exact data. But my recollection is it’s largely evenly split between Medicare and private commercial plans. So, the way we look at the overall market opportunity in that 60% or so of patients who are on second-gen TKI, this is an opportunity as this class goes generic certainly and for commercial plans as well, given that we won’t have to compete against a rebate from those players, we would certainly have the opportunity to educate physicians on the great profile that we have here particularly around the safety profile, also the efficacy profile and then hopefully drive switches.
And we see that’s the early opportunity for the medicine in that second-gen TKI, particularly second-gen TKI commercial and then eventually the Medicare. We find that patients who are currently on imatinib tend to be in community oncology and tend to be with physicians who have a long history of using imatinib, and therefore, might be more resistant to change. And that will take us longer to eventually, I think we think move through. Though, we do think we have good strategies to get there. That segment of the market will be a longer lift for us to eventually move through. So that’s in the ex U.S. — in the U.S. setting. I think ex U.S. will really vary by geography. Certainly, in Europe, it will be critical for us to demonstrate differentiation with imatinib from a payer standpoint to justify what we think is a fair price for the medicine.
We would expect in Japan, in China, the opportunity for strong uptake. These are markets where we do think we can get reimbursed. And certainly in Japan, there’s a very well-educated CML physician community. So that’s, I think, a relatively large opportunity as well. So that’s kind of the high-level dynamics. But I think at the ASCO presentation in June, we can provide more insights into the overall market structure and how we’re seeing the opportunity to launch the medicine.
Andrew Baum: Thank you.
Vas Narasimhan: Thank you, Andrew. Next question, operator?
Operator: Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.
Seamus Fernandez: Thanks so much for the question. So really, I just wanted to focus in on IgAN and some of the activity that we’re seeing from a competitive perspective there and acquisitions in the space. Vas, I just wanted to get your thoughts on the acquisitions that you’ve made in IgAN and the opportunity that you see in that space, whether it be for iptacopan or for the acquisitions that you’ve made? I know you specified a lot of opportunity there. But interested to sort of see if you view this as a validation of the IgAN market opportunity and how you’re thinking about the competitive landscape going forward? Thanks.
Vas Narasimhan: Yeah, thanks, Seamus. So, in general, I mean, IgAN is, we believe, a significant market opportunity. These patients don’t have — historically have not had great medicines. They do progress at a relatively high rate in the 10-year period towards needing transplantation or going on to dialysis. And we’re talking about a segment here that’s over 130,000 patients in the U.S. alone. So, we think it is a sizable opportunity. When we think about the treatment paradigm, you — of course, you start out — you want to — historically, this has been a steroid-driven treatment paradigm, but we think this will shift to wanting to somehow manage the hemodynamic component of the medicine — of these patients where we have atrasentan.
You want to manage then the inflammatory component for these patients along two dimensions, complement inhibition and APRIL inhibition as well. Now, we’re in a position where we will have atrasentan for hemodynamic inhibition. We’ll have iptacopan for complement inhibition, and we’ll have zigakibart also acquired in our Chinook acquisition for the anti-APRIL component. We acknowledge there will be competitors, particularly on the anti-APRIL side of things where we’re going to have a few other competitors enter. We believe we’ll be the only company positioned with really the full range of hemodynamic complement anti-APRIL. I should note as well, of course, upstreaming the SGLT2 inhibitors, which are also going generic, will also be part of that early treatment paradigm.
But post SGLT2 inhibitors and perhaps generic hypertensives, you’re going to want to move down this paradigm of really more potent hemodynamic control and then also trying to get to the inflammatory component. And we think having three medicines will allow us to be well positioned with patients, physicians, contracting the various elements of the U.S. supply chain and also globally. So that’s how we’re approaching it. I do think the recent acquisitions do point to that anti-APRIL and this whole area is exciting, right? And we have an asset there others now are also coming, but certainly something we’re looking at very carefully to also see, can you expand APRIL inhibition with or without BAF inhibition for other indications as well. Next question, operator?
Operator: Thank you. Your next question comes from the line of Eric Le Berrigaud from Stifel. Please go ahead.
Eric Le Berrigaud: Yes, thank you. We saw the split in sales by geography on Leqvio being significantly different from the past and now ex U.S. being more significant than U.S. Could you maybe elaborate a little bit on the kind of agreements you reached in ex U.S. territories, maybe the main three markets in Europe and China, how the drug is delivered, how are you billing for the drug in those geographies? Thank you.
Vas Narasimhan: Yeah, thanks, Eric. We’re pleased to see Leqvio now getting to a steady march upward in terms of its overall sales growth. Outside of the United States, there have been a few key dynamics. So, first is China self-pay, where I mentioned over 250 patients a day, steady growth as well in terms of the number of patients that we’re being able to get on treatment in China. And that’s ahead of where we hope to get listed — full listing on the NRDL in the first part of next year. And given the strength of our cardiovascular operations in China with Entresto, we believe we can drive pretty significant uptake of Leqvio over time in China. We also have reimbursement in Japan, and we’re in the very early days of launching in Japan.
So, Japan was not a significant contributor in Q1, but we expect consistently now in the coming quarters, Japan to be a more significant contribution. In Europe, we’ve had very steady uptake in the commercial market in Germany, as well as improving performance in Italy and the UK. And so I mean, the UK has been a disappointment relative to where we hoped it would be, but nonetheless, is steadily moving up as well. And then interestingly, while it’s a smaller contributor, given the number of countries around the globe, we have reimbursement, and we do have public health agreements in places like the Gulf Coast countries as well as other markets in our international business that’s also contributing. So, step by step, all of this comes together to drive the performance that you saw in quarter one.
And we’ll see. We hope we can continue that now in the coming quarters and steadily get Leqvio up to that multibillion-dollar outlook that we’ve given. Next question, operator?
Operator: Thank you. Your next question comes from the line of Steve Scala from TD Cowen. Please go ahead.
Steve Scala: Thank you so much. On Entresto, were there any onetime factors driving Q1 sales such as rebates and/or inventory? If not, then what in your opinion led to it not tracking prescriptions in the quarter? Thank you.
Vas Narasimhan: Yeah, Steve, we’re not aware of any one-timers on Entresto. We saw strong TRx growth. We saw outstanding growth in China. And I think that was a big driver of the performance you saw in the quarter, also steady uptake in Japan. But no one-timers that we’re aware of. Looking at Harry, yeah, so no one-timers that we see. This was just underlying performance, and I think driven both in the U.S. but also China and Japan.
Steve Scala: Thank you.
Vas Narasimhan: Next question, operator?
Operator: Thank you. Your next question comes from the line of Graham Parry, Bank of America. Please go ahead.
Graham Parry: Great. Thanks for the follow-up. Just wondering in terms of the NATALEE charges we were talking about timing earlier, just what’s assumed in your guidance for adjuvant breast cancer for Kisqali for this year? So, is there any significant contribution in there, or is that de minimis at this point? And then, just I’ll slip in a second one. Just at the ASCO event, on Scemblix, so I was wondering if you’re going to be in a position to give some sort of updated peak sales guidance for that asset. There’s obviously a lot of questions on the call about market opportunity. That’s what everyone is fishing for. Thank you.
Vas Narasimhan: Yeah, thanks, Graham. On NATALEE, not a material contribution or really any contribution in this year. So, I don’t think that’s something that needs to be factored in, in terms of our guidance. On Scemblix, we’ll take it under advisement. I can’t commit one way or another, but we’ll certainly take the feedback on trying to guide. It’s always tough, of course, before we’ve even got an approval or launched a medicine to really know the outlook. But I think we’ve got reasonable benchmarks in the CML market with Gleevec and the second-gen TKIs. And as I outlined, we really believe, but we’ll see as we present the data that this can be really the best-in-class medicine to treat CML that’s been launched in this industry. So, we hope we can live up to that profile. Next question, operator?
Operator: Thank you. We will now take our final question. And your final question today comes from the line of Emily Field, Barclays. Please go ahead.
Emily Field: Hi. Thanks for taking my question. I only have a question ianalumab, given that this morning, we did see Phase 3 success in ITP from a competitor BTK inhibitor. So, I was just wondering given that you also have a BTK inhibitor of your own, why you’re pursuing ITP with the BAF inhibition, and you think that, that’s the right mechanism of action? And why you are also prioritizing second line over first line? I believe that’s what it says to the lead indication in the slides. Thank you.
Vas Narasimhan: Yeah. So, first, on BTK inhibition, we really tried to focus our BTK inhibitor outside of the oncology indications. I mean, we look at the indication range we’re pursuing, it’s immunology, the full range, HS, food allergy, CSU. We have also ideas to pursue remibrutinib in other immunology indications and multiple sclerosis. So, we’ve tried to steer clear of the oncology setting overall and really focus ianalumab in both oncology but also in more hard-to-treat immunology indications. Based on our best guidance from FDA and the agreements on the Phase 3 study, we think this was a stepwise approach in ITP, especially for a subcu medicine like ianalumab. And then, yeah, we’ll see if we can move into the front line setting.
So, I think that’s probably the best guidance I can give. I’m trying to recall if we looked at remibrutinib in ITP, but we’d have to get back to you, Emily. I just can’t recall if we looked at it in our Phase 2a program. So, we can come back to you if we have studied our BTK inhibitor in those indications. So, thanks very much. I think that was the last question. So, I really appreciate everybody’s time today. We look forward to keeping you updated, and we will see you all at our event at ASCO. So, thank you, and have a great quarter season and wish you a great spring.
Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.
