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Incyte Corporation Message Board

  • jacosa jacosa Apr 3, 2013 1:58 PM Flag

    What might be going on

    I'll lead with my best answer: quarterly reallocation, done pretty mechanically.

    The other possibilities are trading on inside information: not likely this week, given the news of aggressive enforcement. Pure seasonality: too sudden, but this IS a quarter in which I've seen a lot of weakness in medical growth names. Reclassification of company from emerging to operating status: I can believe in stupid analysts, but that's stretching it. Fear (without MNPI) of unfavorable FDA report re PML: possible contributor, but 1 case in 5000 of PML is irrelevant re MF, and there's no sign that investors at large ever attached much value to prospects of Jakafi for other MPNs (generally, the price would have to come down, offsetting the larger market). Disappointment about Jakafi vs ET: the results have been out for a while, but appreciation could be slow: great symptomatic benefit, but little platelet reduction. That isn't really so bad in itself, as disease course modification isn't really needed. It casts some doubt, however, on evidence of course modification in other MPNs. I just don't see this causing anything sudden.

    Again: as a smallish company 100% (due to converts and hedging) institutionally owned, most INCY is held as part of market baskets. Health care underperformed last quarter, and I think biotech performed below expectations. INCY was a leader in both baskets. Mechanical reallocation will have institutions reduce the underperforming baskets. Managers doing personal tweaks to the baskets they are adjusting will notice the top (INCY) and bottom performers within them; absent any strong conviction, the extreme performers will be hedged or underweighted.

    So far INCY remains within its recent trading range, so even this sort of guessing is needless. A stock can move to any price in its trading range with no need for an explanation.

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    • Time scale looks about right. Strength yesterday and today thus probably technical (hedges placed in anticipation of tj's 50dma story playing out are being undone). There may just barely possibly be some positioning in anticipation of benign statements re the PML case soon (usually takes around a month for FDA to say that they're concerned, or to tell the company it's ok to comment) (since it was a pretty weak driver in the first place, a reasonable person (ie, one who avoids the stock market) might expect minimal impact from taking it away.

      Barring another adverse event surprise, next chance to break from the trading range will be topline release from a clinical trial. I would expect the '110 topline to have a modest temporary effect, but a positive result in the pancreatic CA trial is a complete wild card. (I don't anticipate earnings grabbing any interest)

    • PCYC,CLDX,SGEN INCY...just took big interday drop...seems like these biotecks moves up /down like someone push trade botton all together....More confirmation that no insider news leak or fundamental problem with INCY

    • Jacosa; I think you are right..reallocation ...PCYC in last several weeks had similar price action like INCY....last few days pullback % and chart pattern is almost same ...indicating purging is done by same institution is very likely....So weakness can be strictly related to market strategy and not on INCY fundamental.

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