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Incyte Corporation Message Board

  • bherstik bherstik Nov 8, 2012 10:54 AM Flag


    Equity Research


    Brian Abrahams, M.D., Senior Analyst (212) 214-8060

    **As part of its R&D Day slides, NVS - INCY's partner in Europe for ruxolitinib (sold in Europe as Jakavi) - provided several updates on the European launch of the drug and its long-term view of the agent.

    **While European sales of Jakavi are not the primary driver for INCY, INCY does receive a high-teens royalty on sales of the drug by NVS, and demand in Europe could parallel U.S. interest.

    **NVS disclosed that there are over 2,900 patients currently receiving Jakavi in early access programs, with a chart showing rate of patient entry increasing to ~300/month.

    **NVS indicated that at this point, the drug has only been launched in Germany , Austria , and the UK , and we believe it could take time for country-by-country reimbursement to enable NVS and INCY to capture the revenue opportunity represented by these patients as they roll over to commercial therapy. Nonetheless, we believe this does signify high interest and demand for the agent. We currently estimate ~2,350 patients on average on Jakavi in Europe in 2014, translating to ~$117M in sales and ~$20M in royalties to INCY; given these metrics, this would seem very achievable if not beatable.

    **NVS reiterated its belief Jakavi could be a $1B opportunity by 2020 in MF and PV.

    **Throughout its presentations, NVS noted plans to explore combinations of Jakavi with other targeted oncology agents (beyond HDAC inhibitor panobinostat) in its portfolio; we believe based on the scientific rationale that this could include its PI3K and mTOR inhibitors.

    **BOTTOM LINE: We view NVS's continued enthusiasm and commitment around Jakavi and the solid patient demand in Europe as incrementally positive, confirming the long-term potential of the agent. With Jakafi's U.S. launch on track with recently-lowered expectations and the potential for growing enthusiasm around baricitinib, we could see shares regain momentum; while we believe INCY is generally fairly valued we believe the company is becoming more attractively valued given the recent pullback.

    Incyte Corporation (INCY-NASDAQ)--Market Perform (2) / V

    Price as of 11/8/2012: $16.71
    FY 12 EPS: $-0.05
    FY 13 EPS: $-0.06
    Shares Out.: 83.4 MM
    Market Cap.: $1,393.61 MM

    Sector Rating: Biotechnology, Market Weight

    See attached PDF for additional information, current pricing and disclosures

    Wells Fargo Securities, LLC is a U.S. broker-dealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. Wells Fargo Securities International Limited is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority.

    This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC.

    Sentiment: Strong Buy

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