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Incyte Corporation Message Board

  • jacosa jacosa Jul 31, 2014 9:44 AM Flag

    Regularly scheduled no-personalities CC topic

    Usual requests: no praise or sniping directed at other posters. There are plenty of topics to do that in.

    Little in the way of meaningful surprises. Basic financials a bit strong on Jakafi sales but otherwise pretty much as expected. Little bits of housekeeping changes in deep pipeline R&D (most important is the ocular toxicity signal in a "non-rodent" seen with the #2 JAK-1 selective candidate. This would be a total non-event except that with JAK inhibitors so new, any time a member of the class shows a signal, there's a flurry of investigation of whether it's somehow an on-target effect)

    This is the 2nd anniversary, more or less, of the "Bad conference call" and I didn't pick up anything that seemed self-destructive.

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    • For once, the Zack's summary is good for something...even though it's wrong.

      We're getting this mixed price response largely because the grown ups are focused on product revenues, but everyone notices earnings. And product revenues beat pretty much every upward-revised forecast, while the net loss was a lot bigger than expected. This despite the fact that every other line item was pretty much as forecast--with one exception. Everyone, and I mean that pretty literally, expected NICE to approve marketing and pricing of Jakavi in The UK by now. If it was Incyte dealing with them, you could say "Ah Ha! Ham-handed business amateurs can't deal with sensitive regulator guys." But Novartis is doing the contacts there, and this ain't their first (or tenth) rodeo. So there's a big (relative to quarterly numbers) hole in contract revenue, and consequently a miss on earnings.

      Where Zack's goes wrong is in saying that the high YoY (but steady QoQ) SG&A number is due to commercialization activities for Jakafi. Well, maybe 'wrong' is too strong. That is absolutely what made the SG&A big in Q1 (a LOT of physician contact about dose titration and related issues). But what we're starting to see now relates to not-yet-approved uses of Ruxo (recall--trademark name should only be used for on-label use). In particular, core staff are being prepared for the push into PV [and management said as much on the call]. That mostly matters in forecasting: SG&A will increase, possibly by as much as $30MM/Q by a year from now. You double your addressable market, you increase SG&A. And if you need a fast sell-in for a drug, you generate an SG&A peak around the introduction.

      Our $60MM milestone may have to come from Italian approval (they DO get around to things, eventually). I have a sick feeling that the delay in UK may turn out to be NICE making a stand against the stupid and evil law they operate under. A by-the-rules delay here kills relatively few people; none immediately.

    • Benign call would you say Jacosa? Guessing still too much upside potential in the pipeline and Jakafi carrying the ball to this point. Dollars being committed to R&D which is typical in many cases for a Pharma company getting a drug to market. Many bullets in the holster no?

      • 1 Reply to mrdtino
      • I think Incyte is at a stage of development when sales are very important to investors. That means there are fewer bullets than you think you see. Basically, Ruxolitinib and '360. On a fundamental basis, I don't see much argument against a new "trading range" period. Jakafi for MF sets a floor. Upward pressure comes from Jakafi for PV, the possibility of Ruxo breakthroughs in non-Incyte trials and progress of Baricitinib toward market. But this is supposed to be about what we learned from the CC, and what I mostly learned was that nothing surprising is likely to happen soon.

 
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