Cory Kasimov - JPMorgan Matthew Roden - UBS Heather Behanna - JMP Securities Brian Abrahams - Wells Fargo Andrew Jappy - Canaccord Christina Zhang - Barclays Eric Schmidt - Cowen & Company Rachel McMinn - Bank of America/Merrill Lynch David Friedman - Morgan Stanley Skip Klein - Gauss Capital Advisors Josh Schimmer - Lazard Capital Markets Matt Palmer - Oppenheimer

Greetings ladies and gentlemen, and welcome to the Incyte Corporation, first quarter 2013 earnings call. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). It is now my pleasure to introduce your host, Ms. Pamela Murphy, Vice President Investor Relations and Communications. Thank you Ms. Murphy. You may begin.

Good morning and welcome to Incyte’s first quarter, 2013 conference call. On the call today are Paul Friedman, Incyte’s President and Chief Executive Officer; Jim Daly, Executive Vice President and Chief Commercial Officer; Dave Hastings, Executive Vice President and Chief Financial Officer; Rich Levy, Executive Vice President, Chief Drug Development and Medical Officer; and Eric Siegel, Executive Vice President and General Counsel. Paul will begin with a brief overview of the quarter, then Dave will describe our first quarter financial results and Jim will follow with an update on the ongoing commercialization of Jakafi. Paul will close with a description of the rest of the pipeline and then open up the call for Q&A. Before beginning, we like to remind you that some of the statements made during the call today are forward-looking statements, including statements regarding our expectations for the commercialization of Jakafi, our development plans for Jakafi, and other indications, as well as other compounds in our pipeline. These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our Form 10-K for the year ended December 31, 2012, and from time-to-time in our other SEC documents. Paul.

Good morning everyone. The first quarter was quite productive for Incyte. We had solid growth for Jakafi, which is obviously important from a revenue perspective, but the new prescription also represent patients who may experience the benefits of the first FDA approved treatment for intermediate or high-risk myelofibrosis. At the same time we continue to progress the development of Jakafi and other potential indications. Phase III response study of Jakafi in polycythemia vera is fully enrolled and expected to read out in early ‘14, and the results from the Phase II recap study of Jakafi in pancreatic cancer are expected in the second half of this year. These are important potential growth catalysts for Jakafi in new patient populations with high unmet medical need. Later in the call I’ll share some more information with you about the pipeline and Jim will outline activities that we believe will lead to continued solid growth for Jakafi. But first, I’ll turn the call over to David to review our financial performance in the first quarter.

Thanks Paul and good morning everybody. Lets begin with Jakafi, for which we recorded $48.3 million of first quarter net product revenues. Additionally we recorded $5.9 million in product royalties from Novartis, for sales for Jakavi outside the United States. In addition we announced that week that we earned a $25 million milestone from Novartis, based on the formal initiation of a Phase II clinical trial, the c-MET Inhibitor 28060. This amount will be received and recorded as revenue in the second quarter. Our gross net adjustment for product revenue recognized was approximately $5.1 million or 9.5% for the first quarter. As I mentioned in our last call, we expected our growth to net adjustment to be higher in the first quarter than the rest of the year, because of our share of the doughnut hole for Medicare Part B patients. We still expect that our full year gross net adjustment will range from 8% to 9%. Our cost of goods sold for the first quarter was immaterial, as our starting to finished goods inventory was previously expensed as R&D prior to FDA approval. In terms of operating expenses, SG&A was within our expectations, while R&D expense came in slightly below our expectations. From a cash perspective we ended the quarter with $270 million. This is a strong cash position and we have multiple sources of cash flow now. Therefore we are well positioned to fund our growth. Jim will now provide more color around Jakafi performance in the first quarter. Jim.

Thank you Dave and good morning everyone. Our first quarter results reflect continued solid execution of our growth strategy for Jakafi in MF. We added new patients at a steady rate consistent with the previous quarters, while making gradual but meaningful improvement in persistency. In terms of quarter-over-quarter growth, net revenues grew 12% with the following components of growth. Underlying demand is measured by bottles dispensed and accounts for approximately 7%, net price accounted for approximately 2%, and inventory accounted for approximately 3%. Channel inventories remain within a consistent normal range of 3 to 3.5 weeks. In the quarter we continue to add new patients at a steady rate. Roughly half of new patient starts came from new prescribers, with the remaining half coming from repeat prescribers. We continue to make inroads with our target physicians. We believe later adopters are motivated by an increased awareness of the overall survival data presented at ASH, while exiting prescribers are motivated by the impressive improvement in spleen volume and constitutional symptoms they are seeing in their MF patients. Through the first quarter, more than 40% of our target prescribers have prescribed Jakafi at least once and about one-third of those have written for two or more patients. We expect breadth and depth of prescribing to continue to expand, driven by one, educational programs to help physicians identify appropriate new patients, including those who do not carry the JAK2 V617F mutation. We continue to reinforce the fact that Jakafi is targeted to the JAK pathway and not necessarily any particular mutation. Number two, programs including direct to patient and allied health professional activities to assist MF patients in communicating their symptoms to their physicians; and finally three, positive experience as a catalyst to treat more patients. Turing to persistency, we continue to see…

Okay, thanks Jim. I’ll start with Jakafi. While abstracts for ASCO haven’t been posted, the titles are now public and there is an oral presentation involving Jakafi, entitled ‘Exploratory Analysis of the Effect of Ruxolitinib on Bone Marrow Morphology in Patients with Myelofibrosis.’ The lead author, professor Hans-Michael Kvasnicka, a world recognized hematopathologist from [Agartha] (ph) University, Germany, is exploring the effects of treatment on bone marrow fibrosis in this patient population. While it’s not appropriate for me to provide detail about the ASCO presentation, I can tell you that the preliminary findings originally presented by European leukemia net chair, professor Tiziano Barbui, at a closed session of the EON Annual meeting in February, suggests that long term use of Jakafi, slows the rate of advancement of bone marrow fibrosis compared to matched historical controls, and with some patients can result in a reduction in the amount of bone marrow fibrosis. So we’re looking forward to this presentation at ASCO in June. Our most advanced programs in Jakafi are in polycythemia vera and pancreatic cancer. We expect to see results from response to PB trial we’re conducting in partnership with Novartis in early ‘14, which keeps us on track to file a supplemental NDA in the first half of ‘14. Our second trial in PV called RELIEF is evaluating symptomatic benefit, and while this study is not part of the SPA, the Special Protocol Assessment agreement with the FDA, and is therefore not required for FDA approval. When completed we do plan to submit results to support labeling claims on symptomatic benefit in PV. In the second half of this year we expect to have results from recap, the double blind Phase II trial in patients with pancreatic cancer, in which overall survival is the primary endpoint. As we previously…

Thank you. (Operator Instructions). Our first question comes from the line of Matthew Roden with UBS. Please proceed with your question. Mr. Roden, your line is live. Our next question comes from the line of Ian Somaiya with Piper Jaffray. Please proceed with your question.

Hi. This is actually Do Kim in for Ian. A couple of questions; we were wondering if you saw any sense of seasonality in the Jakafi sales number, given the sort of general weakness reported by most of the other pharma and biotech companies and also as we look ahead to the dose titration label update, how should we think about its impact on second half sales in terms of growth persistence and new patient adds? Thank you.

Yes, on the question with respect to seasonality, as you indicated, the first quarter is usually the most difficult for a couple of reasons, particularly from products that are relatively expensive and have a significant percentage of reimbursement through Medicare Part D, because you have patients reentering the donut hole and you have deductibles being reset. As we look at the fourth quarter prescriptions and compare them to the first quarter prescription, we probably had a small level of what we call shoebox prescriptions, where patients may try to get their last prescription in December after they are through the donut hole and after their deductible has been fully met, and so there is a slight drop off in the first quarter, but I wouldn’t say it was significant. As you see, our underlying demand remained strong in the first quarter. So I think we were able to power through that. The other issue is that we simply had a reduced number of shipping days in the first quarter. The first quarter had 52 shipping days versus 64 in the fourth quarter. But despite that, I think we had a very solid first quarter and we carried good momentum in to the second. Regarding the persistence trend and the new patient start trends for the rest of the year, we are not going to quantify those beyond what we said in the prepared remarks, but we are encouraged by the fact that the new patient starts remain strong, consistent with previous quarters, and we are seeing gradual, but important improvement in persistence, and those two drivers give us the confidence that we’ll achieve our guidance for the year.

Great. Thank you very much.

Our next question comes from the line of Cory Kasimov with JPMorgan. Please proceed with your question.

Hey, good morning guys. Thanks for taking my questions; a couple of them for you. First of all, has been any feedback from the field regarding potential concerns over PML and what would you expect the underlined incidents to be in myelofibrosis, and then I have a follow-up.

Hi Cory, this is Jim. Cory, we’ve had zero feedback from the field regarding PML and now I’ll turn it over to...

Yes Rich, I don’t think you can put a percentage on it. It’s a rare enough entity that in Myelofibrosis and Myeloproliferative Neoplasms, its just, I don’t think you can put a percentage on.

It’s hard to do. I mean when we look back at the FDA database from several years ago, there were a number of different drugs that were looked at and there were more cases than you might expect. But when you look at the literature, and when you know that there is going to be under reporting, even for things like PML. So it’s hard to say exactly. But it’s not going to be a big number, spontaneous or with the use of a drug, but it’s also not to say that you would never expect another one to happen, even in the absence of the drug.

Okay. And then next question is just more on the relative breakdown in the Jakafi doses being used. So it’s encouraging that the 5 and 10 mg doses continue to increase. But I’m wonder, is there any pushback at all on using those lower does. I guess I want to get your sense on if we should expect that 44% shortage you have now to keep growing and become in time, kind of represent the vast majority of initial prescriptions. Thanks.

Yes, I wouldn’t necessarily say initial Cory. Whether it’s starting dose and/or titration, we do expect the 5 and 10 to increase as a share of total doses. So we would expect to see that 44% grow over time.

Okay. Thank you.

Our next question comes from the line of Matthew Roden with UBS. Please proceed with your question.

Hi guys. Thanks for taking the question. Congrats on the progress and thanks for getting me back in here. I just wanted to get into the gross net a little bit. I’m trying to better understand what the potential impact or the financial impact was of the donut hole in particular. And also in inventories you talk about, inventory accounted for 3% of the sequential growth, but I’m just trying to understand if that represents a build or if that’s just the growth that’s commensurate with the growth in demand, underlying demand, and then I have a pipeline question if I may.

On the gross to net, as we discussed on the prepared remarks, came in at about 9.5%, but the guidance overall did not change. So our gross net for the year should range somewhere between 8% and 9%. So that should give you a sense for the impact on the increased donut hole exposure for the quarter. The inventory are at normal levels, so it’s really commensurate with the growth in product sales.

Okay, understood. And then on the pipeline, Paul or Rich, can you speak to the differences between your two JAK1 inhibitors? Is there something really different between these two products that you would need to bring sort of complementary assets for those or just the question of being or to cover more indications across cancer and information?

Well, so they are different in terms of, they have a distinct pharmacokinetic difference and I just would like to leave it at that. The first compound has turned out to be much more interesting than I frankly thought it was going to be. It’s a very nice compound, and we are looking forward to presenting our results on that compound and the three indications at which we are looking at the second half of the year. We did with JAK1, JAK2 want and I think it turned out to be the right way to go, to have a distinct compound for inflammatory diseases and one for oncologic indications and that resulted in Ruxolitinib and Baricitinib and we are taking the same approach here. But the second compound, it’s early days and I just don’t think I can say much more than that. Rich, do you have anything else to add to that?

No.

Thanks a lot.

Our next question comes from the line of Liisa Bayko with JMP Securities. Please proceed with our question. Heather Behanna - JMP Securities Hi, good morning. It’s Heather in for Liisa. Just a quick question; if you could give us any more color just sort of about how persistence rates have continued over time and just give us a little more color on new patients versus continuing patients.

I can’t give you much more color than what we give you in the prepared comments. Our best quantification of persistence right now is seen in our ability to drive titration and use of lower doses and we are seeing that happening. Again, our new patient starts a very consistent. As we have communicated previously, we do expect to see a very modest deceleration in new patient starts, more weighted towards the back end of the year than the front-end of the year, and we do expect to see a modest, but important increase in persistence over the course of the year and that’s really exactly what we are seeing. That takes us into our guidance to 210 to 225.

Okay, great. Thank you.

Our next question comes from the line of Brian Abrahams with Wells Fargo. Please proceed with your question.

Hi. Thanks for taking my question and congratulations on a good quarter. Given the recent rejection of zelgen in Europe, I was wondering if you and your partner had any changes to the way you might approach the development of Baricitinib. Any tweaks you might make to the development program? And how confident are you in the differentiation of baricitinib from zelgens, such that you don’t believe you would necessarily fall into the same pitfalls that they did. And I have a quick follow-up.

So, this is Paul and then I’ll ask Rich to add anything that he thinks I didn’t cover or didn’t make clear enough and I really think at the end of the day, the question is best posed to Lilly, but we certainly can pine on it and there is some very important aspects to the question that you asked. In particular, we all listened to the advisory committee that was conducted with Pfizer, and based on what we learned during that, and knowing what Pfizer’s Phase III study was, we used the learning’s from the Pfizer structure study to do a couple of things. One is to increase the sample size, and the second, very importantly, was to enrich for patients more at risk in the RA population for structural deterioration in the absence of effective treatment. And so we, and I believe Lilly remained quite confident in the ability to demonstrate an improvement in structure in the target population. Beyond that, and I think importantly, although the proof will be in the pudding when Phase III is complete or that the Phase II data with baricitinib, it’s a JAK inhibitor that spares JAK 3 in contrast to tofacitinib. The Phase II has not been associated with opportunistic interactions, other than a few cases of uncomplicated zoster, shingles for example or with malignancies. And while the Phase III data will be important to confirm this profile, we may well see a better risk benefit profile than we have seen with tofacitinib. And so we remain confident in the potential approval for Baricitinib for RA in the EU, as well as in the United States and around the world. Rich.

Yes, the only thing I’d add is, I think that because tofacitinib is going to potentially be approved with the 5-milligram dose and not the 10, and they had their positive structure data at 10, I think that also had an effect. And with respect to Baricitinib, the 4-milligram dose, it was at the top dose that Lilly is studying, is looking really good, looked really good in Phase II from a safety perspective, as well as from and efficacy perspective. They have MRI data, even though they haven’t had x-ray data to support that it was going to have effects on bone. They have that data from their MRI studies. So as Paul said, we think it’s going to be safe enough to have the top doses go through, and that should with the enhanced design of the structure study come out positive. So I think in some ways we are looking at this as an opportunity.

That’s very helpful, thanks. And then just one quick follow-up and I’ll hop back into queue. With the trials, the Phase II for 110 and continuing to move along, can you give us any more clarity on which of those trial readouts we might expect in the back half of this year? Thanks.

Yes. So the psoriasis study may very well get presented at EADV, I think which is in October in Istanbul I believe. The rheumatoid arthritis data may very well get presented at ACR, and the myelofibrosis data may very well get presented at ASH. But all of those, none of them have been – either some of them have not even been submitted yet and others have not heard back until they’ll be accepted for presentation. Should any of those not happen, we’ll think about backup plans or potentially just top line fairly than otherwise expected.

Great. Thank you.

Our next question comes from the line of Salveen Richter with Canaccord. Please proceed with your question.

Hi, this is Andrew on the line for Salveen. My question is on the pancreatic cancer, kind of how we should think about the expectations there, and what you need to see in that trial to maybe get a label expansion. If there’s any significant improvement in OS that would be necessary or would you need to go to Phase III. Thanks.

Okay. So the study was designed as clearly a Phase II study, one that where we did not have expectations, but this study by itself would lead to any type of approval, accelerated or otherwise. In pancreatic cancer would be the idea of being that we’d mostly likely need to go Phase III. Is there a possibility that the results could be so robust that we might actually approach FDA, trying to get an accelerated approval on this, based on a commitment to do a second study later? Its possible, but I wouldn’t suggest that that’s our expectation. And in terms of things like what does the hazard ratio need to be, it has to be in a range where we feel comfortable that it’s worth doing another study, that wouldn’t be so large, and I think there’s a good chance that that will be the case. But in terms of a hazard ratio that would be necessary for FDA to consider this as a basis of approval by itself, I really wouldn’t want to try to predict that. Things are changing a little bit. At FDA, there’s more emphasis on breakthrough drugs. The oncology divisions have been calling a lot of things, breakthrough drugs lately, so I don’t know that you can necessarily just go on past experience, given the changes that are going on down there right now.

Okay, great. Thank you very much.

Our next question comes from the line of Ying Huang with Barclays. Please proceed with your question. Christina Zhang – Barclays: Hi, this is Christina on behalf of Ying Huang. I know you mentioned that you are planning to net the RA data for your preparatory JAK 110, potentially at ACR. But I just wanted to see if there was any more data on the 12 design, given that I didn’t see it listed on criticaltrials.gov, but I did see the MSN psoriasis trails on there. Thanks.

I’m pretty sure it has to be on clinicaltrials.gov, I just don’t know what the – right now we’d initially done some one-month data, which was kind of an accelerating dosing paradigm with a few placebo patients included. Once we got toxicology data to be able to allow us to do three months, we are now doing parallel groups of, I believe three or four different doses plus placebo. The study is not big by any means. These are not meant to be studies that would go directly to Phase III, but they gives us a real sense of what the drug does in this indication, in the sense of the doses that may be necessary in a variety of anti-inflammatory indications. And it’s a three 12-week readout not as apposed to the one-week readout we had before. And I expect that if this was to be accepted for presentation at ACR, we would present both, the results of the one-month data, as well as the updated three-month data. Christina Zhang – Barclays: Great. Thank you.

Our next question comes from the line of Eric Schmidt with Cowen & Company. Please proceed with your question. Eric Schmidt - Cowen & Company: Thanks for taking my questions. Intrigue by Rich’s comment, that the Phase II pancreatic trial has a good chance of producing a good enough hazard ratio to go to Phase III and also I guess about your decision to start the gem/abraxane combo study ahead of reporting out the Phase II data. What do you guys know or see about the Phase 2 trial?

Maybe I misheard you or maybe you misheard me. I said I didn’t think there was a good chance that the data would be strong enough to go directly to a registration, just because its a small study, it’s a 135 patients. Eric Schmidt - Cowen & Company: But Rich, I thought you said it would be most likely supportive of a Phase III trial, based on the Phase II showing a good enough hazard ratio.

That’s not based on data. I think the rationale that we’ve had all along has been a good one, and what I was trying to say is that one of the considerations would be how large the study would need to be in order to go to Phase III, depending upon the hazard ratio that we actually see. All we know in terms of data is that it past the futility analysis, which means that the study had at least 30% power after that analysis. And so now that I’ve clarified that, can you remind me what you’re specific question was? Eric Schmidt - Cowen & Company: That’s what I wanted to know. I guess that you don’t see the data and you don’t have any other knowledge than what the DSLV elected to do.

That’s correct. Eric Schmidt - Cowen & Company: Okay. And then as a second question, maybe for Jim, on the potential impact from this new dose titration program, is it possible we would see negative sales impact in Q2 as more patients select the free few weeks of drug?

No. We don’t anticipate any negative revenue impact. If anything Eric, I think you’ll see a positive revenue impact longer-term. We just implemented and in the past several weeks, but we are seeing good activity, but we don’t anticipate any negative revenue impact from it. Eric Schmidt - Cowen & Company: Okay, thanks. And then last question for Dave if I may, it looks like you saw 4% pricing benefit last quarter from the November price hike, another 2% this quarter, adding up to maybe 6%. Is that all we are going to see as the 9% hike? Are you going to basically recognize about two-thirds of that or is there more to come?

Well, I think that’s basically it, right? I mean that will be fully baked in going forward at this point, Eric. Eric Schmidt - Cowen & Company: So in general for your price hikes, we should assume about two-thirds will be realized?

Lets have that one back. If the price increased November 16, absent any increase in gross to net, we would have realized a 5% price increase in the quarter.

Yes, the 2% is that and net of the gross in that impact there. Eric Schmidt - Cowen & Company: Okay, so we probably will see a little more price hike, because you don’t have the same gross to net in Q2.

That’s correct. Eric Schmidt - Cowen & Company: Thank you.

Our next question comes from the line of Rachel McMinn with Bank of America/Merrill Lynch. Please proceed with your question. Rachel McMinn - Bank of America/Merrill Lynch: Yes, I have two questions. As we go into ASCO, I wanted to try to pick your brain Rich or Paul on how to think about the fibrosis remodeling data that we’re going to see for Jakafi. A couple of years ago there was no improvement in fibrosis and that was considered a bad thing and now that we are seeing it, there is some discussion about, oh I’m not sure how it matters, because fibrosis is not correlated to survival outcomes. So it seems like a circular argument to me, but I wanted to pick your brain on that. And then just secondarily, just going back to the JAK1 inhibitor for a minute, you said before that its got to be differentiated from Baricitinib, in order for you to really invest in two inflammatory programs, and I wanted to again get your sense of, is that the proof that you are seeing. Is there something that’s differentiated enough or we should expect the JAK1 inhibitor to be further developed in RA beyond just the Phase II? Thank you.

Okay. So first on this fibrosis. I mean in the past what we have seen was that we were not seeing a lot of reversal of fibrosis. As you can see, if you do a bone marrow transplant and then within six months to a year, you can often see less fiber in the marrow. So it’s really only when you got to compare to a matched historical control of patients who had received HU, that we realize the main finding is that you are seeing less progression. It’s progressing more slowly than that much control, and also that there are some patients and I can’t release the percentage of patients that actually had decreases in the amount of fibrosis in the marrow. So is that a game changer? I don’t really think so. I mean, as you said, I don’t know that that changes the view on – we know we have data out there saying there’s an improvement in survival. It was dependent or independent of fibrosis, not sure it really makes a difference there. But I think that probably some physicians out there that would be swayed by that sort of data that may have not been swayed by survival from studies that were not exactly planned around survival and that symptoms was one thing, maybe there will be some patients, maybe some physicians will start patients who are not as symptomatic, but I don’t think it’s a game changer by any means and we can talk about it more when the data is actually presented. With respect to the second question on differentiation, I mean it’s not just a question of differentiated from Baricitinib. It’s a question of differentiation from the range of new competitors that may exist at the time, and so we are not going to get into what we may or may not know about our results at this time. We are saving that until we have more complete data and give some of those presentations at the meetings I talked about earlier, in both psoriasis and RA on the inflammation side. But I will say that these are large investments and to bring these drugs to markets for these indications and I would not see us going forward just to have a late entry need to. So they would need to be some level of differentiation. Rachel McMinn - Bank of America/Merrill Lynch: And just one quick one for me. Assume that PML is not going to be reported in the FDA label for Jakafi. Have you had your discussions with regulatory agencies, and that’s just not an issue?

We’ve actually proposed, mention of PML in the package insert. I’m not going to get into exactly where and how, and FDA has verbally been very much in agreement with what we had proposed. But they still haven’t made a final decision; maybe it needs to go up to other levels before it finally gets decided. And we’re not going to try to speculate exactly what that is, but since we’ve actually proposed something there, I can give you a clear view that there will be something there, because they are not going to say don’t put anything in. Rachel McMinn - Bank of America/Merrill Lynch: Right. Thank you.

Our next question comes from the line of David Friedman with Morgan Stanley. Please proceed with your question.

Hi, thanks for taking the question. It’s just around the volume growth that you guys had this quarter. It looks like if I calculate, it was about 3 million of sort of organic volume growth, which is about half of what you guys reported last quarter and if this is the new steady-state, it puts you at the bottom end of guidance. So I guess I’m just wondering what you think is going to change this year to reaccelerate the volume growth and the organic growth that puts you above that bottom end.

Hi David, this is Jim. David I would be very careful drawing a trend line from fourth quarter to first quarter. Because as we mentioned earlier, you can’t see some additional sales at end of the fourth quarter, and it’s generally as you’ve seen for the industry, it’s a pretty difficult comparison, fourth quarter versus first quarter. Having said that, we remain very confident in our guidance, and quite frankly I think, let me send you right there, we remain very confident in $210 million and $225 million this year.

Okay. Thank you.

Our next question comes from the line of Skip Klein with Gauss Capital Advisors. Please proceed with your question.

Great, thank you. I was wondering if you could give a little bit of an update on the competitive environment, what’s going on at the Galapagos still where the Jakarta study stands?

So at Galapagos they’ve announced they are I think doing 875 patients in Phase II, which is a very large Phase II program, which indicates that data has not yet been presented, but might be presented at UR for example, on their second one month study, with positive enough for them and have we to decide to continue to invest in this program, but in the absence of data, I can’t comment further. With respect to Sanofi and their JAK2 inhibitor in myelofibrosis, I mean we’ve never been that impressed with their Phase II data, in the sense that they had a fair amount of GI intolerance, not like its grade three or four GI intolerance, but why would you want to have that sort of profile when you don’t need to; Jakafi does not have that. Secondly, with the doses that they studied in the past they’ve had even more anemia than our higher doses. So we recognize clearly that they are going to be coming out there with strategies and strategies of looking at so called Ruxolitinib or Jakafi failures, if such a thing actually exists. But I think once we actually see the data and then they actually have to promote on label, we don’t really see a tremendous threat from them, but again we haven’t seen the Phase III data.

And then still at YM, if you would?

So that one still remains many years behind. We estimated its probably – I think we estimated it would probably be in late ‘15 or early ‘‘6 launch and they said that they would be starting Phase III in the second half of this year, which is coming up in a few months and it’s been pretty much radio silence in terms of anything there. We think that that drug is not going to have some sort of magical effect on anemia that you don’t see by just simply reducing the dose of ruxolitinib to about 10 milligrams twice a day and they do have some side effects that we don’t have. But we’ll get closer to it, when they are actually about three years and see where we stand.

Great. Thanks and then one quick follow-up. I didn’t get an invitation, but is it possible that you have some champagne to celebrate the 4000 unique patients being put on drug, being put on Jakafi and/or the fact that you looked like you might have been positive cash flow in the quarter after adjusting for options and non-cash interest expense? Just questions you know, yes or no. 4000 patients look like they’ve been put on drug, chemo I believe and it looks like your project is cash flow, but I’m an old, tired analyst.

One thing to keep in mind as you are looking at new patients being put on drug, about 10% of our patients are put on drugs through our patient access program. So as you are doing your models, I think that may be a factor that you want to keep in mind as well.

And Skip we do have multiple sources of cash flow, so we appreciate you acknowledging that. We are in good shape from the cash position.

So you have positive cash flow. I mean once you adjust for option expense and I don’t know what you are spending on capital spending, but that’s good, you’re turning the corner. Which is bottom line, 4000 patients, whether they got free drugs or not have been put on this drug.

Yes, we are really not commenting on a specific number of patients on the product Skip.

Okay. So you didn’t open a bottle of champagne in the quarter. Okay, thanks a lot. Bye-bye.

Our next question comes from the line of Josh Schimmer with Lazard Capital Markets. Please proceed with your question.

Good morning. Thanks for taking my question. Two of them quickly, will you announce if and when any additional PML events occur on Jakafi or once that’s in the label, do you not feel like you need to spread or update the Street. And second, Jim maybe you can provide a little bit of color on the progress that you are making or establishing; Incyte’s standing in the MF community, either funding research conferences, other activities that reach beyond kind of the cornerstone and how that’s been evolving over the course of this year. Thanks.

So with respect to PML, I mean it kind of depends. We see an increase, we see something that is beyond what we’ve already seen, such as we say now we have won about 10,000 cases. If that was to go up, then I think we’d probably say something. If there is another 10,000 patients on drugs, exposed to the drug before you see another one, then we probably wouldn’t. So it’s really a change in the view of the risk of the drug that I think would really result in that and that probably would also be the same approach to potential changes in labeling beyond that. And can you repeat the second question about…

The second question was more directed towards me Josh, regarding what progress are we making to develop our relationships with key opinion leaders, and Josh I think that’s one where its more productive to actually keep your head down and do the work rather than commenting on it on too frequent a basis, but obviously we have a long-term commitment to heal malignancy. Jakafi is obviously the cornerstone, but as you hear more about our pipeline. We intend to be working very closely with these physicians, these oncology academic medical centers, with the societies on a long-term basis and clearly we are making the commitment to establish Incyte as really a scientific driver in this field.

Great. Thanks very much.

Our final question comes from the line of Boris Peaker with Oppenheimer. Please go ahead with you question. Matt Palmer – Oppenheimer: Good morning. This is Matt Palmer in for Boris. Thanks for taking the question. Two quick ones actually; how significant will label expansion be for low platelet patients on your target prescriber penetration or do you expect label expansion to have a significant effect on the current prescriber usage?

This is Jim. I think it will have a positive effect on both. We still have a significant number of new patient starts, where those patients have a baseline platelet count below 100,000, and I think the expanded label well help greatly with those. I also think that there will probably be some spillover on the anemia side, which is if you manage Thrombocytopenia with a start low and go slow approach, it’s not a huge leap of faith for doctors to assume that that’s a logical approach for patients with low hemoglobin as well. So, I think there will be a dual benefit both for new prescribers and current prescribers, but I think it will also extend beyond Thrombocytopenia to benefit anemia as well. Matt Palmer – Oppenheimer: Great, thank you. And secondly, you mentioned R&D was a little bit below expectations in the quarter. Should we expect some of these expenses to be shifted into the second quarter or later into the year?

Yes, it was all timing. Matt Palmer – Oppenheimer: Okay, great, Thanks.

Dr. Friedman, we have reached the end of the question-and-answer session. I would now like to turn the floor back over to you for closing comments.

Well, thank you and thank you all for your questions and for dialing in and listening today, and we look forward to providing you with further progress as we move forward. Thanks and with that we will end the call. Good morning.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at time. Thank you for your participation and have a wonderful day.