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Incyte Corporation Message Board

  • tjnelis tjnelis Oct 21, 2012 9:44 PM Flag

    some thoughts on earnings

    management has stated 120-135 million on the "sell in" model
    1st q 21.3 sell through and 25.1 sell in (leaves 95-110m)
    2nd q 29.7 sell through and 35 sell in (leaves 60-75)

    i believe that they did low ball the numbers so that they can beat the sell in total of 135,though not by much. just looking at the above we see that sales have /are leveling off. i feel that they will go to the sell in model this q to make sales appear better than what they are. thus giving more time to have a 4q over 3q increase in sales, from a flat 2q to 3q (sell through)

    i estimated sales though for 3q to be 39m ( sell in), but booking of an additional 3.8 from 1q and 5.3 in 2q.(9.1) or 48.1 on the sell in model for the 3q.

    There does not appear that incyte hit any milestones in the 3q, but i will give them a misc. income of an additional 10m in revenue for 58m total revenue.

    looking at sg&a for 6months incyte spent 40m, thus 20 million in the 3q
    r&d for 6 months incyte spent 100m, thus 50 million in the 3rd q
    interest expense for 6 months 22m , thus 11 million for the 3rd q

    i am simplifing as much as possible to not loose to many in lots of numbers

    basiscally 80million needed in revenue to balance expenditures, as per 2q, 86.5m to make eanings of .03 per share.

    22million dollars in losses in 3q divided by 128m shares leaves a loss of (.18) per share......better than what i have seen on some estimates of a loss of (.22)

    some might think this is good, but where the issue remains sales are coming in lower than most had hoped.

    if incyte gets 120million in sales and the average cost per script per individual is only $40,000.......that is 3000 clients on jakafi. not an awful lot of sales per sales staff. ( 50 each for 60 person sales staff for nearly 1 year on the market) What if they did 140 million but got $50,000 per incye has only 2800 clients???? any way you look at it, something seems odd, total mf patients stated incyte of 18,000, with 12,000 being moderate to severe mf patients, and 3000 new cases per year. a slow roll, out????, mf numbers skewed??? is jakafi an issue for mf patients in the high risk(severe)???

    looking forward to 4th q , lilly news will be a non event as per a prior 8k from incyte stating phase IIb results already at eular for RA, did nothing for the shares, but i see novartis getting pricing approved in 4th q and incyte getting paid milestone of $60M and not in 1st q of 2013.

    trading range 16-18 until, they are more open with investors on, new drugs in the pipeline and further reults on 424 for pv, and 050, on non RA testing .

    lastly, there is the issue of 20million short shares and growing, until management does better CCs and gives more clarity on future development, they will run the show. and beating by .04 over concenus will not get it done. all IMHO

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    • i can not believe that i was so close on my estimates, as if i had insider information........

      • 1 Reply to tjnelis
      • Great job, TJ... Saw an earlier post from Viselinger....he is on ignore so I can read but not reply to his garbage... Cannot understand some people. Viselinger says he needs to get back to $20 but continually also hopes the share price falls.... I think he is clueless. This is my only post today....going back to damage clean up... please if you can help will feel great and they will appreciate all help.. This stock will go up and down but the feeling you get from helping others trumps all. Viselinger.....go help someone today...

        Sentiment: Strong Buy

    • I haven't looked hard at the bare numbers, but I wouldn't argue with them anyway. I'll point out that the only ones who predicted a slow mostly-linear rollout were Incyte management. Maybe they DO know their business. They have consistently said that scrips will run less than one per sales call with little word-of-mouth or patient-pull for the first year.

      We don't know the terms of the Jakavi introduction milestone, but I'm not lowballing a bit to say that it is likely to be met early in 2nd Q of '13. Listing/pricing happens country-by-country in Europe. Most likely, the milestone amounts to Germany (which is both largest and initially easiest) and two other large countries. Britain is by far the hardest, France moves slowly for cultural reasons and both Spain and Italy have political problems that make regulatory actions move fitfully.

      It WILL take multiple good CCs to repair the damage, but you make it sound as if there had been several bad ones. There was only one bad CC, but it was a doozy.

      INCY's present price represents a discount from the value of the Jakafi franchise by itself. Rachel McMinn increased her estimate of the value of '050 from $2 a share to $5 when it became clear that the phase 2 would succeed. I'd personally add $3-4 for the value of Incyte's share of Jakavi. The only plausible reason for the silence about the deep pipeline is that some sort of a deal is being negotiated--let's assume it fails--that leaves 2 announced anti-cancer candidates and two "black" candidates--ought to be worth another $2. [And we mustn't entirely forget the ruxo vs pancreatic cancer trial, but that's too bi a gamble to estimate right now] That says the stock price is now penalized by more than $10 over concerns of mis-estimation of the MF market and possible management incompetence. I think about half the shorts are hedging the convertible bonds. The rest are taking a very bad gamble.

    • TJ,

      Your most thoughtful post ever. Watching NFL game now but will re-visit your post tomorrow and give you my thoughts.....On first glance I can quibble on a couple of points but overall I give you an "A"....IMHO!

      Sentiment: Strong Buy

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