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Incyte Out-Licenses INCMGA0012 Rights in China to Zai Lab

Zacks Equity Research

Incyte Corporation INCY announced that it is out-licensing the development and commercialization rights to its investigational PD-1 monoclonal antibody, INCMGA0012, in Greater China to Zai Lab. The transaction takes effect immediately.

INCMGA0012 is currently being developed as a monotherapy for treating MSI-high endometrial cancer, merkel cell carcinoma and anal cancer. Incyte in-licensed global rights to INCMGA0012 from MacroGenics MGNX in 2017.

Per the collaboration and license agreement, Incyte will receive an upfront payment of $17.5 million from Zai Lab and be also eligible to earn an additional $60 million as potential milestone fees apart from tiered royalties in low to mid-twenties’ range. However, Incyte will be responsible for all the royalties and pass-through payments to its licensing partner, MacroGenics.

With this deal, Zai Lab will gain exclusive rights to develop/commercialize INCMGA0012 for addressing hematology and oncology indications in mainland China, Hong Kong, Macau and Taiwan. Zai Lab is looking to explore the potential of INCMGA0012 both as a monotherapy and in combination with its existing pipeline candidates.

Moreover, Incyte will retain an option to assist the promotion of INCMGA0012 at Zai Lab’s licensed territories.

Shares of Incyte have rallied 33.7% so far this year, outperforming the industry’s rise of 7%.

We would like to remind investors that Incyte has several encouraging collaboration deals with big pharma companies like Novartis NVS and Lilly LLY wherein the former gets a considerable amount of milestones for the same.

Notably, Incyte has a strategic collaboration pact with China-based Innovent Biologics for the development of three clinical-stage product candidates, namely pemigatinib (FGFR1/2/3 inhibitor), itacitinib (JAK1 inhibitor) and parsaclisib (PI3Kδ inhibitor). The contract triggered an upfront payment of $40 million in cash for Incyte, which is also entitled to clinch an additional $20 million in connection with the first investigational new drug (IND) application, expected to be filed by Innovent in China this year.

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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