Incyte (INCY) Stock Plummets 29.6% Year to Date: Here's Why
The going has been tough for Incyte INCY in 2023. Pipeline setbacks and competition for lead drug Jakafi weigh on shares.
Shares of Incyte have lost 29.6% in the year-to-date period compared with the industry’s decline of 20.1%.
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Shares took a hit last month after the FDA approved GSK plc’s GSK momelotinib under the brand name Ojjaara for the treatment of intermediate or high-risk myelofibrosis, including primary myelofibrosis or secondary myelofibrosis (post-polycythemia vera and post-essential thrombocythaemia), in adults with anemia.
Ojjaara is a once-a-day oral JAK1/JAK2 and activin A receptor type 1 inhibitor.
Incyte’s lead drug, Jakafi (ruxolitinib), a first-in-class JAK1/JAK2 inhibitor, is also approved for myelofibrosis. The approval of another JAK1/JAK2 inhibitor for the same indication will pose competition for Jakafi, particularly given Ojjaara’s comprehensive labeling. Ojjaara is approved for newly diagnosed and previously treated myelofibrosis patients with anemia that addresses the critical manifestations of the disease, namely anemia, constitutional symptoms and splenomegaly.
Earlier, Incyte suffered a setback when the FDA issued a complete response letter (CRL) for ruxolitinib extended-release (XR) tablets for once-daily use in the treatment of certain types of myelofibrosis, polycythemia vera (PV) and graft-versus-host disease (GVHD).
The CRL stated that the FDA could not approve the new drug application (NDA) in its present form. The regulatory body acknowledged that the study submitted to the NDA met its objective of bioequivalence based on the area under the curve parameters but identified additional requirements for approval.
Incyte also discontinued the phase III LIMBER-304 trial following the results of a pre-planned interim analysis conducted by an independent data monitoring committee, indicating that the study is unlikely to meet the primary endpoint in the intent-to-treat patient population. The recommendation to stop the study was not due to safety.
LIMBER-304 evaluated the efficacy and safety of parsaclisib plus Jakafi versus placebo plus Jakafi in adult (age ≥18 years) patients with myelofibrosis who have an inadequate response to Jakafi monotherapy.
These setbacks were disappointing as the company is looking to strengthen its portfolio.
Incyte Corporation Price, Consensus and EPS Surprise
Incyte Corporation price-consensus-eps-surprise-chart | Incyte Corporation Quote
Nevertheless, growth in Jakafi and continued momentum from Opzelura (ruxolitinib) cream in atopic dermatitis (AD) and vitiligo in the United States propelled the company to post a 25% revenue growth in the second quarter.
The uptake of Opzelura has been strong, driven by patient demand growth and payer coverage expansion as the launch in AD and vitiligo continues.
Opzelura was also approved in Europe for treating nonsegmental vitiligo with facial involvement. Moreover, three phase II studies in lichen planus, lichen sclerosus and mild to moderate hidradenitis suppurativa have completed enrollment. Two phase III trials evaluating ruxolitinib cream in prurigo nodularis are ongoing.
The FDA also approved Zynyz (retifanlimab-dlwr), a humanized monoclonal antibody targeting programmed death receptor-1 (PD-1), for treating adults with metastatic or recurrent locally advanced merkel cell carcinoma.
Approval of additional drugs will add incremental revenues to the top line and reduce the company’s dependence on Jakafi. Incyte has a collaboration agreement with Swiss pharma giant Novartis NVS for Jakafi.
Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi outside the country.
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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