Incyte (INCY) Beats on Q2 Earnings and Sales on Strong Jakafi
Incyte Corporation INCY reported better-than-expected bottom-line numbers for the second quarter of 2020, while sales beat expectations.
Shares of the company have gained 16.6% so far this year compared with the industry’s 6.7% growth.
The company reported an adjusted earnings of $1.24 per share, easily beating the Zacks Consensus Estimate of earnings of 77 cents. The company had reported adjusted earnings of 75 cents in the year-ago quarter.
Including milestones and contracts, revenues came in at $688.04 million, which grew 30% year over year and beat the Zacks Consensus Estimate of $599.45 million.
Quarter in Detail
Total product-related revenues came in at $593 million, up 16% from the year-ago quarter. Jakafi revenues came in at $473.7 million, increasing 16% from the year-ago quarter and beating the Zacks Consensus Estimate of $471 million. Robust demand for Jakafi in all three approved indications drove revenues.
Net product revenues of Iclusig amounted to $22.8 million, down from $24.4 million in the year-ago quarter.
Jakavi (name outside the United States) royalty revenues from Novartis AG NVS for commercialization in ex-U.S. markets grew 16% to $66.2 million. Olumiant’s product royalty revenues from Eli Lilly LLY came in at $25.8 million, up 35%.
R&D expenses were $254.1 million, down from $261.7 million in the year-ago quarter. SG&A expenses amounted to $104.4 million, up from $93.1 million in the prior-year quarter.
Incyte Corporation Price, Consensus and EPS Surprise
Incyte Corporation price-consensus-eps-surprise-chart | Incyte Corporation Quote
2020 Guidance Reaffirmed
The company maintained its previously-provided guidance for 2020. The company expects Jakafi revenues of $1,880-$1,950 million for 2020. Iclusig revenues are projected around $100-$105 million.
Pipeline Update
In July, the FDA granted approval to Monjuvi (tafasitamab-cxix), an Fc-engineered anti-CD19 antibody, in combination with Revlimid for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) and who are not eligible for autologous stem cell transplant (ASCT). Please note that Incyte entered into a global collaboration with MorphoSys MOR for the development and commercialization of tafasitamab. Incyte and MorphoSys will co-commercialize Monjuvi in the United States.
In May 2020, Incyte and partner Novartis obtained FDA approval of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC) whose tumors have a mutation that leads to MET exon 14 skipping (METex14) as detected by an FDA-approved test.
In April, the FDA approved Incyte’s selective FGFR inhibitor, Pemazyre (pemigatinib), for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or other rearrangement as detected by an FDA-approved test.
The REACH3 study, evaluating ruxolitinib in patients with steroid-refractory chronic graft-versus-host disease (GVHD), met its primary endpoint of overall response rate (ORR) at month 6 and both key secondary endpoints (modified Lee symptom scale and failure-free survival). The company also plans to file a new drug application seeking approval for ruxolitinib cream, a new formulation of its key drug Jakafi, as a treatment for mild-to-moderate atopic dermatitis by the end of 2020.
Our Take
Incyte’s performance in the second quarter was impressive as demand for Jakafi in all three approved indications (polycythemiavera, myelofibrosis and the recent label expansion in acute GVHD) continues to boost sales. The company’s efforts to diversify its revenue base are encouraging as well and the label expansion of Jakafi in additional indications will further boost sales. Moreover, the recent approval of Pemazyre, Monjuvi (with MorphoSys) and Tabrecta (with Novartis) will bring additional sales and diversify its revenue base. However, pipeline setbacks remain a concern.
Zacks Rank
Incyte currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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