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Incyte Corporation Message Board

  • tjnelis tjnelis Feb 21, 2012 5:29 PM Flag

    no pent up demand for Jakafi per management

    interesting comment. Management hoping to prevent a Denderon, lowered the ball. How far is the question? In my model I had even more sales figured than what was recieved in 4th Q.

    So 5 weeks of sales at 2.3 M of Jakafi makes for a lousy year ahead. Even if one increases sales by 300% it still stinks.

    The stock is starting to show it as well. Lost 10% since earnings crossing the 10 and 20 dma's and starting to get very near the 50dma. Another day like today and the stock will go from bearish to strongly bearish with no bottom in sight as the 200dma is just slightly under the 50.

    Now, one possible upside is approval in Europe, Maddison has said, it will be tomorrow. I however do not believe it. Moreover, if it is approved, only positive to Incyte would be a milestone payment of more than 50million. Drug rollout in Europe will be slower that the US, as after approval for the continent, then individual countries need to approve. Thus no bump to the stock.

    Also interesting with the sales of Jakafi is the estimate of disease total counts by Incyte. They roughly guess 18,000 and FDA approval is for moderate and severe MF, so maybe 12,000 total, but with the figures provided and sales in the 5 weeks after approval, the drug will have a hard time getting into the hands of 5000 patients, IMHO.

    No new news from the CC's on any of the drugs in development, leaves investors questioning their positions.

    NEarest news is from Lilly and that at best could be June. PV news with regards to Jakafi is a year or longer away.

    Management is increasing speeding across the board by an amazing 25% in 2012 with zero guidance.....also leaving analysts to lower guidance and down grade the stock.

    So what next? Maybe the BOD will all buy shares again, giving the shares a boost in the short term. Personally, do not see it happening.

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    • You have to be out of your mind to even TRY to read anything into earnings from 5 weeks of sales.

      The assumed adoption curve for a new drug has it reach about 1/6 of the steady-state market in 6 months, half the market in a year and the steady state in about 18 months (a stretched 'S' curve). The first and last bits are sort of linear, so approximating 5 weeks as 20% of 6 months, you expect 1/30 of the final sales volume at 5 weeks, or 1/60 of the eventual 5 week sales. Basically, nothing at all. Sales of 2 MM in the first 5 weeks are consistent with a final annual sales rate between $40 MM and $1 bln+. Even business people demand prediction ranges tighter than that. The first real read on annual sales comes about 9 months after introduction.

      Management has been guiding for a slower-than-usual first few months because the drug is too novel for physicians to be comfortable without a lot of detailing. Some of us think that is going to be counteracted by patient pressure and the occurrence of "throw away the crutches" events.

      But the point is that you can't tell anything from 5 weeks of sales. The band on a woolly bear caterpillar is exactly as informative.

      • 1 Reply to jacosa
      • I'll pull back on my initial statement. Some people have jobs that require them to pick a number before there is enough information to guide them.

        I'm sticking with my range of ongoing annual sales vs MF (broadly construed) of $40 MM to low ten figures. I MAY stick out my neck a bit more after the next quarterly call. Nobody is forcing me to pick numbers with no basis. [And I didn't see any woolly bear caterpillars this year]

    • In contrast to your unreasonable rant, the following is a quote from BofAML's Rachel McMinn who maintains a Buy rating on the Incyte stock.

      Early days for Jakafi, but we are impressed
      INCY’s 4Q net end-user sales for recently launched oncology drug Jakafi were
      $2.0M, well ahead of the nominal $200K sales we had modeled. We estimate
      slightly more than 300 patients started on Jakafi (~85 patients/week) in 4Q,
      predominantly in December since the drug was launched Nov 22. While the
      company was unwilling to comment on current 1Q trends, we estimate that 2012
      Jakafi sales could be ~2x higher than current consensus if demand is relatively
      steady from current levels. Despite there being a significant upwards bias to our
      sales estimates, we are opting to increase our estimates modestly pending more
      information on the launch trajectory. We reiterate our Buy rating.
      Launch metrics overall positive
      We believe that INCY is on track to beat consensus sales estimates for the year,
      although we acknowledge the metrics are very early. Positive commentary
      include: (1) there was no meaningful bolus of patients driving the launch
      (2) management expects steady demand over the year, and initial demand was
      substantially higher than our estimate (3) a small minority of the patients starting
      drug were terminally ill, which implies duration of drug should not be a negative
      impact in 2H12. (4) there is a broad prescriber base, with the launch being driven
      by community based physicians. The gross to net adjustment on sales of 13%
      was higher than our 7% estimate; however this may trend down slightly as some
      fees are fixed cost.
      Milestones relatively low risk, support cash position
      We estimate $40M from partner NVS on Jakafi EU approval in 3Q12 and $50M
      from partner LLY in 4Q12 on a planned Phase 3 start for their rheumatoid arthritis
      program. Comments from the earnings call give us incremental confidence in the
      Phase 3 LLY milestone, and we have extremely high confidence in EU approval

    • well i was right somewhat about the BOD directors though they are SELLING stock inside of buying.

      where does it say anything about ema approval maddison, I have yet to see it, and I see no announcement by novartis

    • you must have missed the news.... we got EMA approval last Wednesday!

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