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Incyte Corporation Message Board

jacosa 103 posts  |  Last Activity: Jul 11, 2016 12:47 PM Member since: Jan 24, 2000
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  • I just called up a 2-year chart to see if it told a story. I think it did.

    The start of the PV business was well-received. Then about a year ago enthusiasm developed for the prospects of epac, and people also started attaching value to the prospects of ruxo for solid tumors. To my eye, nothing related to bari made much difference at all--while sell-siders mostly ignored it, I presume buy-siders had already included a high likelihood of success into their actions. As it became clear that epac was something less than magical, that premium came down, and when the solid tumor trials failed that premium was lost (and a little extra).

    As I said at the time, the recent low-$60s bottom looked a lot like fair value for Jakafi in MPNs + value for bari as a somewhat-distant-future success. We're up about $15 from that--a decent guess is that hopes for epac have come back into the price (along with fading of competitive prospects in MPNs).

    The value of something like this is that putting a star next to items that have affected the price in the past can give a hint at areas in which changes may affect the price.

    There IS one thing that is highly visible and "different." There's a clock running on bari approval. and I put the time on it at 8 months right now. That's the edge between long-term and near-term for some big investors. But however likely, future drug approvals aren't ever valued as a pot of money at a given future time, so while the approaching approval is a tailwind, it probably won't be prominent.

  • Reply to

    1st q estimates for incyte

    by tjnelis Apr 21, 2016 5:26 PM
    jacosa jacosa Apr 26, 2016 5:19 PM Flag

    I looked. Yeah, GVHD is nasty and clearing it up can be dramatic. But the picture by itself is worth a lot less than 1000 words.

    We should know how the label expansion study is going to turn out by the time it begins, about a year from now, because a lot of open-label testing is likely to happen. If it goes on-label, it should happen in about 2 years. A JAK-1 drug figures to be starting phase 3 around when GVHD might go on the Jakafi label. But the initial proposed label for the JAK-1 drug may not include GVHD.

  • Reply to

    incyte trading

    by tjnelis Apr 26, 2016 10:23 AM
    jacosa jacosa Apr 26, 2016 8:07 PM Flag

    Artile on drug pricing in NY Times may have hurt us.

  • Right now, ongoing price increases are getting looked at (and they should be). Incyte has been doing this, but the asparagus-like volume growth of Jakafi has masked its significance. Another issue, getting less press attention right now, is abuse of the specialty pharmacy system. Incyte did this, but seems to have stopped.

    The story is VERY complicated. The market for old [out-of-patent] drugs in the general price range of $100 for a course of treatment [or a year, in chronic conditions] is where the real drama is happening. Many such drugs went years with no price increases. They now have single manufacturers which have no business incentive to meet increases in demand unless they can take price increases. While profit margins are spectacular on first look, the price for a new entrant to get into the market for one of these drugs is enough so effective monopolies continue. This is where Valeant used to play, and where Turing made its mess.

    Price increases on Jakafi-class drugs gather some headlines, but I don't see much actual concern, on either side. Only the uninsured pay list, true pricing is arcane, and nobody wants to open the box [it OUGHT to be opened, but then you might have to DO SOMETHING about what you find].

    Specialty pharmacy abuse is awaiting its star turn. Philidor was both a parking lot for bad investments and a competitive weapon, but it blew up real good. Non-captive specialty pharmacies are less problematic, but telegraphing a price increase near quarter end can get them to buy your stale inventory. The bigger issue is that draconian prescribing enforcement can prevent competitors getting your product for comparative trials. Incyte did both, but seems to have learned from bad press.

    I don't recall any real complaints about prices of new-to-market drugs. Again, headlines without stories.

  • Reply to

    Disaster in Rennes

    by jacosa Jan 15, 2016 4:52 PM
    jacosa jacosa Apr 27, 2016 1:51 PM Flag

    Fierce Biotech reported tentative final conclusions on 4/21. Basically, the drug was metabolized slower than anticipated in humans and was weaker than anticipated at its intended action. It accumulated in the brains of the subjects until they were harmed by off-target toxicity. FDA [probably] wouldn't let you run a trial involving multiple administrations until the fate of administered drug was understood well enough to avoid this.

  • Reply to

    Congressional interest

    by jacosa Apr 27, 2016 12:06 PM
    jacosa jacosa Apr 28, 2016 9:58 AM Flag

    Don't worry. The Dem-controlled Congress will keep this going next year.

  • Reply to

    Congressional interest

    by jacosa Apr 27, 2016 12:06 PM
    jacosa jacosa Apr 28, 2016 1:55 PM Flag

    In a typically bad, but on-theme, posting, ValueWalk just reported on the Senate hearing. (Important error: unlike Medicare, Medicaid is permitted to negotiate drug prices). The key theme is mechanisms OTHER THAN patent protection that drug companies use to hold monopoly power.

    Drug companies aren't supposed to be able to bill their patient assistance programs back to the government, but apparently Valeant was effectively doing that.

    I can't guess how this will tie into the REAL government money issue in drugs: hepatitis C (HCV). The drugs are under patent and hugely expensive. Numerous false starts made them costly to develop. There's a possible way to keep this messy situation from infecting the whole drug pricing system--since a vary large number of HCV patients were infected in Vietnam era service, a special sub-agency could take over their treatment, with price negotiating power (and then, heh-heh, also manage care for civilians in a parallel position). This would resemble the way Medicare was saved from kidney failure costs.

    The possible ways this could affect Incyte are that the HCV situation could lead to regulation of how companies are compensated for costly and uncertain development efforts (US "N.I.C.E." [shudder]) , or that the drug company / pharmacy relationship could be regulated in the name of promoting free markets. Since one tool drug companies use to retain monopolies is regulation of generic manufacturing, that may be relaxed. That doesn't nominally affect Incyte, but it increases the risk of midnight manufacturing of counterfeit drugs. Jakafi has one of the largest spreads between cost of API manufacture and selling price.

    Obviously, with both houses of Congress controlled by Repubs, little action is likely this year. Next year, a lot may depend on where Sen Warren fits into the administration. I THINK her first interest is non-bank financial instiutions, so the top firebrand will likely go elsewhere.

  • Reply to

    Earnings May 9 [?]

    by jacosa Apr 14, 2016 8:56 AM
    jacosa jacosa Apr 29, 2016 2:01 PM Flag

    Two weeks, no real clues--even in the proxy statement. I'm partial to the internal realignment idea.

    Clearly, there's nothing in common between the Jakafi business and the pre-phase-2 candidates. I contend that the phase 2 candidates, at median, are more studied than typical for the corresponding bunch at a typical drug company, while the pre-phase-2s are less mature than their peers (we could talk a lot about how this happened, but the historical reasons sorta make sense). Bari, of course, is odd man out, but you could put it with Jakafi [or sell it]. Anyway, for a couple years going forward, I can make a case for a marketed / near market / long-term-prospects division, with each category lobbying top management for resources and dividing its allotment among projects internally. It would make a kind of sense in the aftermath of failure of the blue sky hopes for ruxo.

  • Hereditary cancer and prostate cancer aggressiveness will be what they will be. Still [extremely] early days for companion diagnostics.

    Rheumatoid arthritis treatment is like a $40bln market, and aside from the expense, a lot of the major drugs have serious ide effects. It makes sense that 5% or so of that market might eventually be available to tune treatment. About half Medicare / half private (not yet addressable). So some start on adoption would be real nice. Sooner is better, because safer (still expensive) RA drugs are coming in '17.

  • Reply to

    Earnings May 9 [?]

    by jacosa Apr 14, 2016 8:56 AM
    jacosa jacosa May 2, 2016 8:39 PM Flag

    Or instead of by stage of development, by type of target (I'm pretty sure this was considered and rejected in the past): drugs affecting signal transduction (kinase and delta inhibitors), drugs feeding into immunotherapy and epigenetic modifiers. Not so neat, but thinkable.

  • Reply to

    Anybodyb want to share on TSRA?

    by kg2931 Apr 20, 2016 4:18 PM
    jacosa jacosa May 3, 2016 11:02 AM Flag

    Stock "owned" by individuals in margin accounts is registered to the brokerage (which can lend it or use it as collateral). In return, the individual can borrow money against it from the brokerage. This can bite if the brokerage fails suddenly (great historical example: DuPont Glore Forgan--suddenly doesn't need to be fast if your records are scrambled enough). When a company is being subjected to heavy prolonged short selling, holders often choose to move stock to cash accounts (where it is registered in their own names, and is unavailable for lending) (this is obsolete, since anti-stock-watering rules are toothless overseas).

  • Reply to

    Anybodyb want to share on TSRA?

    by kg2931 Apr 20, 2016 4:18 PM
    jacosa jacosa May 3, 2016 12:03 PM Flag

    I am extremely happy with the conference call. Starboard seems to have won the work-out as they won the control dispute. The legal docket is as clear as I can recall, and while there haven't been smashing victories, the possibility of future business doesn't seem to have been shut off. Narrowing research focus (and buying what was available where it was an improvement) has generated great results. I used to say that when the industry needed 400 connection per square millimeter Tessera would be ready. Now that's up to a million connections per square millimeter. Obviously, assembly with the delicacy that sort of number requires isn't for everyone, so the ASE deal is extremely important.

    Management makes no bones about structured legal settlements being recurring revenue. If you expect a license to follow the end of the settlement, that's completely reasonable. Apparently serious talk about possibility of a contract with Qualcomm in the future definitely goes along with that.

    An analyst question gently suggested that Tessera is lowballing its forecast for the rest of the year. The answer, basically, was that they had included some optimism in the original forecast, so some of the recent happy developments were within the original forecast.

  • Reply to

    Congressional interest

    by jacosa Apr 27, 2016 12:06 PM
    jacosa jacosa May 3, 2016 12:27 PM Flag

    Bloomberg, May 3rd. The Blues Singer Who Created America's Hated Drug-Pricing Model

    Basically, capitalism meets socialism at infinity. Example: it might not be worth $100K to a HepC patient to get cured, but he wouldn't be able to afford a liver transplant; society might elect to pay to keep him alive if that was needed; so society gains by picking up part of the tab for the cure.

  • jacosa jacosa May 3, 2016 6:52 PM Flag

    Vectra volume up 18% YoY. It's a start. Some private coverage, too, although that will mostly await further validation. Anyone out there with RA check me, but there was a throw-away in the discussion that baseline medical supervision is 4 visits a year. Medicare presently covers Vectra twice a year, and you might want an extra test or two when making any large alteration in meds, so there's room to expand the indication...again, pending validation. And heads up, here: a very different RA drug (generic name baricitinib; its similarity to the marketed tofacitinib {Xeljanz) is superficial) is hitting the market in early '17, so there may be more than usual adjustments in meds next year.

    Market will, of course, focus on delayed hereditary cancer reimbursements. And of course SOME people would like forecasts to include new reimbursement authorizations.

    Efforts continuing to get Prolaris recommended in a noticeably larger population. I guess the insurers have to push back, but these favorable intermediate risk patients were included in the validation studies, and this is the group where a well-validated test has the greatest impact on choices.

  • Reply to

    Anybodyb want to share on TSRA?

    by kg2931 Apr 20, 2016 4:18 PM
    jacosa jacosa May 3, 2016 7:04 PM Flag

    I don't know a better available number. But my impression is that single stocks held in individual margin accounts are a smallish part of the float for most companies, So the trend is meaningful. Institutional % can get misleading when a lot of ownership is through "sector funds," which are managed pretty mechanically. Another distorting factor in some companies is large convertible securities issues--these can be hedged with short positions, occasionally making institutional ownership larger than the float. I think TSRA is represented in some sector funds, but not as a top holding.

  • Reply to

    Anybodyb want to share on TSRA?

    by kg2931 Apr 20, 2016 4:18 PM
    jacosa jacosa May 3, 2016 7:36 PM Flag

    Tessera makes money by licensing intellectual property (and doing joint development). Sometimes it's unclear whether a party is using IP another party owns. So you get lawsuits. Tessera used to sue a lot, and won a lot because they had a dynamite patent on flexible connections, which has since expired. Some of the disputes got nasty. Starboard instituted a policy of Tessera being much 'softer' in enforcing its rights to IP, in return for seeking to do business with those it is having problems with.

    Especially in the old days, the decision in a lawsuit could result in a bolus of income. That's episodic revenue, and it's hard for investors to think what to make of it. Post Starboard, Tessera states episodic and recurring revenue separately. There was a to-do a few months back when a journalist pointed out that when legal settlements were of the form "$5 MM a year for 5 years" (a structured settlement) rather than "$25MM next Tuesday," Tessera was reporting them as recurring. And it's NOT clear that they are the same sort of thing as licensing fees and payment for services. But if a settlement with payments over 3 years is really a cover for negotiating an ongoing business relationship, it's hard to argue.

    This Q's episodic revenue was mostly the result of an audit, in which a customer concluded that "Oops, we made more use of your IP than we had paid you for."

  • Reply to

    IMAX IS ON THE MOVE

    by cashworkswell1 May 2, 2016 8:41 PM
    jacosa jacosa May 3, 2016 7:48 PM Flag

    Paper airplanes?

    Sorry, Really, I'm long and I like the deal. But we've learned around here to value contracts for future builds "appropriately."

  • Reply to

    Earnings May 9 [?]

    by jacosa Apr 14, 2016 8:56 AM
    jacosa jacosa May 4, 2016 8:27 PM Flag

    There's been some commentary in other items. First: the maternity leave thing was a joke.

    Ok, suppose there was something wrong with epac (I have no information). What might delay the CC but not require a prompt announcement? Can't be adverse events; they have to be announced promptly. Can't be outright termination of an announced joint research deal--same thing. I don't think disappointing results from collaborations would delay the CC. Massive success in one might force Incyte to budget for half of a registration program before they were prepared to, and Incyte wouldn't need to comment (if the partner didn't want to announce anything before the clinicaltrials posting, Incye couldn't comment. I just heard on another company's call that "a top tier customer is evaluating our firmware as part of a flagship product") That stuff can happen. But I doubt it here. Plausibly, epac might be getting back-burnered somewhere without termination of the agreement involved. I don't see that the CC would be delayed. I speculated that the failure of the ruxo/inflammation/cancer thing might have made reorganization appropriate. I don't see that epac is as central to the immune-oncology program as all that.

    Most ownership actions (companies, parts of them, even product lines) create even hotter potatoes than the quarterly numbers You announce them when they're done, and you do NOTHING to hint at something going on.

    "The usual suspects" for delayed earnings are inventories, goodwill and unconsolidated subsidiaries. None of those here.

    I'm pretty suet that I once saw an announcement that earnings reporting would be delayed due to the untimely departure of a key treasurers' office employee. Thing is, they said what and why up front.

    We'll learn soon enough.

  • Reply to

    Earnings May 9 [?]

    by jacosa Apr 14, 2016 8:56 AM
    jacosa jacosa May 5, 2016 10:56 AM Flag

    One more, semi-serious: maybe the accounting staff has been over-burdened preparing materials against a possible need for Senate testimony. We might never know that one.

  • Reply to

    INCB039110 Ibrutinib combination trial

    by downtoearth54321 May 5, 2016 11:04 AM
    jacosa jacosa May 5, 2016 11:44 AM Flag

    I don't know about specifically called out, but we've been prepped for trials of '110 in lymphoid malignancies. WAY back when, ruxo was tried against multiple myeloma (with good theoretical reasons) and failed (presumably because of dose-limiting toxicity). '110 Ought to be less toxic (I don't think we've seen a big study)

    If successful, this would start out as an extreme example of a costly / costly drug combination (before we learn the dirt against '110, it looks like a drug that could find a large market, lowering the price).

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