I believe this is hugh buy opportunity due to so many people confused with accounting method change. Investors are reading too much into this accounting/forecasting issue. It was unfortunate to announce this change with forecast when many investors were very nervous and unable to think through logically, instead took to quickly panick as bad smell...when company is actually doing fine and moving with good growth rate. I strongly believe it's buying opportunity...should start to recover next week...when sellers exhaust most of shares and buyers return after revisiting potentials of this company...examples: many more drugs in clinicals, RA 2nd phase result, possible insider buys, Start of RA phase III news , etc...
The decline in INCY PPS has nothing to do with fundamentals. It was the result of high frequency trading (HGT). The change in accounting, while fairly innocuous, introduced an new element into the valuation equation. The ownership of INCY is heavily institutional and many of them are fundamentally oriented. Such owners have been hard hit by market volatility in recent years so they back away from the market or reduce positions when it occurs. In such situations the HFT algorithms, which are reputed to increase liquidity, actually create a liquidity vacuum. With time it seems probable that INCY PPS will recover to a level more in consonance with fundamentals.
The lesson I have drawn for incidents like this, and they are fairly common in our markets these days, is that if you are a fundamental investor, as I am, you must take a long term perspective and keep a lot of your powder dry.
If you wish to get some perspective on HFT and the issues it raises for traders/investors I suggest you take a look at the "Themis Trading" and "Nanex" websites.
I do wish your comments were true but they couldn't be farther from it. The expected results in the Q were below expectations with Jakafi sales implying a lower run rate than many investors were expecting. With new guidance being lowered than previously (hopefully conservative)modeled many---both short & ong term institutional investors---dumped shares. I agree that management handled this like a bunch of minor leaguers which did not help the confidence of holders seiing already stretched valuation.
The CEO makes an absurd amount of money for someone whose company has lost money for aeons and just starting making a profit. This suggests that his salary needs a haircut.
Yes, I understand that start-up biotechs lose money before hitting it big. But there is no need to make the very high salary that Incyte's president does -- that should wait till the profits are really rolling in. This mess up just confirms my view.
I agree that many investors got confused with how the accounting change would impact revenue, but our crack management team did not do a very good job of explaining it either. I am with you that I think we slowly begin to move back to the positive this week.
My suggestion to our crack management team is before they do another quarterly call get some professional help on how to conduct one successfully!