Incyte (INCY) to Report Q3 Earnings: What's in the Cards?
Incyte Corporation INCY is scheduled to release third-quarter 2023 results on Oct 31, before the opening bell.
The company's earnings beat estimates in two of the trailing four quarters and missed the same in the other two, delivering an average negative surprise of 13.57%. In the last reported quarter, Incyte came up with an earnings surprise of 13.79%.
Let's see how things might have shaped up for the quarter to be reported.
Factors to Consider
Incyte primarily derives product revenues from sales of its lead drug, Jakafi (ruxolitinib), in the United States and its other marketed drugs.
An increase in sales of Jakafi, a first-in-class JAK1/JAK2 inhibitor in all approved indications (polycythemia vera, myelofibrosis and refractory acute graft-versus-host disease [GvHD]), is likely to have boosted revenues in the third quarter. Sales increased 14% year over year in the last reported quarter. The Zacks Consensus Estimate for Jakafi's sales is pegged at $677 million.
Incyte earns product royalty revenues from Novartis AG NVS for the commercialization of Jakafi in ex-U.S. markets. Novartis licensed ruxolitinib for its development and commercialization outside the United States.
While Incyte markets Jakafi in the United States, Novartis promotes the same drug as Jakavi outside the country. INCY is expected to have received higher royalties from NVS in the to-be-reported quarter on higher Jakavi sales.
Novartis reported strong performance of Jakavi during the third quarter, with sale of the drug witnessing a 9% increase.
Incyte also receives royalties from the sales of Tabrecta (capmatinib), which is approved for the treatment of adult patients with metastatic non-small cell lung cancer. Novartis has exclusive worldwide development and commercialization rights to Tabrecta.
While Jakafi’s sales and royalties are the key catalysts for INCY’s revenue growth, Iclusig’s sales and Olumiant’s royalties from Eli Lilly are also likely to have contributed to Incyte’s top line in the to-be-reported quarter.
Incremental sales from newly approved drugs like Opzelura and Zynyz are expected to have boosted sales in the third quarter. The Zacks Consensus Estimate for Opzelura sales stands at $101 million.
Also, the adoption of other newly approved drugs like Monjuvi and Pemazyre is likely to have bolstered the company’s top-line performance. The Zacks Consensus Estimate for Monjuvi and Pemazyre sales stands at $7.54 million and $23.87 million, respectively.
Shares of Incyte have plunged 32.4% in the year-to-date period compared with the industry’s decline of 22.7%.
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Higher research and development expenses, as well as increased selling, and general and administrative costs are likely to have escalated operating expenses in the to-be-reported quarter.
Owing to the strong uptake for Jakafi, INCY raised the sales guidance for the drug during the second quarter. On the upcoming earnings call, investor focus is likely to be on whether Incyte raises its guidance again.
Earnings Whisper
Our proven model does not conclusively predict an earnings beat for Incyte this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: Incyte has an Earnings ESP of -6.92% as the Most Accurate Estimate of $1 per share is lower than the Zacks Consensus Estimate of $1.07. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Incyte currently carries a Zacks Rank #3.
Incyte Corporation Price and EPS Surprise
Incyte Corporation price-eps-surprise | Incyte Corporation Quote
Stocks to Consider
Here are a few stocks worth considering from the healthcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Acadia Pharmaceuticals Inc. ACAD has an Earnings ESP of +6.76% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Acadia’s stock has surged 41.3% in the year-to-date period. ACAD beat earnings estimates in two of the last four quarters while missing the mark on the other two occasions. The company delivered an earnings surprise of 20.33%, on average. Acadia will report its third-quarter results on Nov 2.
Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +1.25% and a Zacks Rank #3.
Vertex’s stock has risen 24.6% in the year-to-date period. VRTX beat earnings estimates in each of the last four quarters. The company delivered an earnings surprise of 4.91%, on average. Vertex will report its third-quarter results on Nov 6.
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Novartis AG (NVS) : Free Stock Analysis Report
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