Incyte (INCY) Beats on Q3 Earnings, Misses Revenue Estimates
Incyte Corporation INCY reported third-quarter 2023 adjusted earnings of $1.10 per share, which beat the Zacks Consensus Estimate of $1.09. The company recorded earnings of 60 cents per share in the year-ago quarter.
Total revenues in the reported quarter were $919 million, which grew 11.6% year over year, driven by sustained performance of lead drug, Jakafi (ruxolitinib) and increased sales of Opzelura (ruxolitinib) on strong demand and expanded coverage. The top line however missed the Zacks Consensus Estimate of $973 million.
Quarter in Detail
Jakafi’s (a first-in-class JAK1/JAK2 inhibitor approved for polycythemiavera, myelofibrosis and refractory acute graft-versus-host disease) revenues came in at almost $636.3 million, up 3% from the year-ago quarter’s number. This was primarily driven by growth in patient demand across all indications. Jakafi's sales missed the Zacks Consensus Estimate of $677 million.
Opzelura (ruxolitinib) cream generated $91.8 million in sales. The figure grew 141% year over year but missed the consensus estimate of $99 million. The year-over-year rise in sales was due to growth in patient demand and expanded coverage.
We note that in July 2022, the FDA approved Opzelura cream 1.5% for the topical treatment of non-segmental vitiligo in adult and pediatric patients aged 12 years and older. Opzelura is also approved by the FDA for the topical short-term and non-continuous chronic treatment of mild-to-moderate atopic dermatitis.
The newly approved medicine, Zynyz (retifanlimab-dlwr), generated sales of 0.09 million. The company obtained accelerated approval for Zynyz for treating metastatic or recurrent locally advanced Merkel cell carcinoma.
Net product revenues of Iclusig were almost $27.7 million, up 7% year over year. The figure marginally beat the Zacks Consensus Estimate of $27.3 million.
Pemazyre generated $18.9 million in sales, reflecting a year-over-year decrease of 19%. The figure missed the Zacks Consensus Estimate of $23.5 million.
Minjuvi's revenues totaled $8.3 million, up 41% from the prior year quarter’s number. Revenues beat the Zacks Consensus Estimate of $7.5 million.
We remind investors that Jakafi is marketed by Incyte in the United States and by Novartis NVS as Jakavi in ex-U.S. markets.
The drug’s royalty revenues from Novartis for commercialization in ex-U.S. markets rose 13% to $96.6 million. Jakavi royalties slightly beat the Zacks Consensus Estimate of $96 million.
Incyte also receives royalties from sales of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small-cell lung cancer. Its partner, Novartis, has exclusive worldwide development and commercialization rights for Tabrecta. The drug’s product royalty revenues amounted to $4.1 million, up 1% year over year.
Olumiant’s (baricitinib) product royalty revenues from Eli Lilly LLY totaled $29.6 million, up 45% year over year. However, the figure missed the Zacks Consensus Estimate of $35.4 million.
Incyte has a collaboration agreement with Eli Lilly for Olumiant. The drug is a once-daily, oral JAK inhibitor discovered by Incyte and licensed to LLY. It is approved for several types of autoimmune diseases.
Shares of Incyte have plunged 35.1% in the year-to-date period compared with the industry’s decline of 25.4%.
Image Source: Zacks Investment Research
Adjusted research and development expenses totaled $348.9 million, down 3% year over year, owing to a decrease in one-time collaboration-related expenses. Adjusted selling, general and administrative expenses amounted to $241.9 million, down 2% from the prior-year quarter’s number. This was due to an asset impairment charge with regard to assets written off under an agreement with Wilmington Friends School Inc.
Incyte’s cash and cash equivalents totaled $3.5 billion as of Sep 30, 2023, compared with $3.4 billion as of Jun 30, 2023.
2023 Guidance Tightened
Based on the third-quarter performance, Incyte tightened its previously issued guidance for 2023. The company now expects Jakafi revenues in the range of $2.59-$2.62 billion compared with the earlier projection of $2.58-$2.63 billion.
Pipeline Updates
In October 2023, INCY announced new positive 52-week data from the IIb dose-ranging study, which is evaluating the efficacy and safety of its investigational oral small-molecule JAK1 inhibitor, povorcitinib, for the treatment of adult patients with extensive nonsegmental vitiligo.
Data from the phase IIb study showed that treatment with oral povorcitinib caused substantial total body and facial repigmentation across all treatment groups at week 52.
Apart from vitiligo, Incyte is currently studying povorcitinib in other indications, including hidradenitis suppurativa (HS) and prurigo nodularis (PN). Phase III studies evaluating povorcitinib in HS are currently ongoing.
Also, the phase II study evaluating povorcitinib for treating PN met its primary endpoint. The company plans to initiate a phase III study on povorcitinib for the given indication in 2024.
Incyte Corporation Price, Consensus and EPS Surprise
Incyte Corporation price-consensus-eps-surprise-chart | Incyte Corporation Quote
Zacks Rank & Stock to Consider
Incyte currently carries a Zacks Rank #3 (Hold).
A top-ranked stock in the biotech sector is Dynavax Technologies Corporation DVAX, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Dynavax Technologies’ 2023 loss per share have narrowed from 24 cents to 22 cents. Meanwhile, during the same period, earnings per share estimates for 2024 have improved from 2 cents to 8 cents. Year to date, shares of DVAX have rallied 35.9%.
Earnings of Dynavax Technologies beat estimates in two of the last four quarters while missing the same on the remaining two occasions. DVAX delivered a four-quarter average earnings surprise of 25.78%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Novartis AG (NVS) : Free Stock Analysis Report
Dynavax Technologies Corporation (DVAX) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
Incyte Corporation (INCY) : Free Stock Analysis Report
