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Incyte's (INCY) Q1 Earnings and Revenues Fall Shy of Estimates

Incyte Corporation’s INCY earnings and revenues missed the Zacks Consensus Estimate in the first quarter of 2022. However, the company’s lead drug, Jakafi (ruxolitinib) witnessed growth in patient demand during the same time.

Shares of Incyte have gained 3.6% in the year so far against the industry’s 21.4% decline.

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Zacks Investment Research

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The company reported adjusted earnings of 55 cents per share in the first quarter of 2022, missing the Zacks Consensus Estimate of 57 cents. It had reported earnings of 67 cents per share in the year-ago quarter.

Incyte’s total revenues came in at $733.2 million in the first quarter of 2022, increasing 21% year over year. Sales missed the Zacks Consensus Estimate of $764 million as well.

Quarter in Detail

Total product and royalty revenues came in at $728.2 million, up 20% from the year-ago quarter. Jakafi (a first-in-class JAK1/JAK2 inhibitor approved for polycythemiavera, myelofibrosis and refractory acute graft-versus-host disease [GVHD]) revenues came in at $544.5 million. The figure increased 17% from the year-ago quarter but missed the Zacks Consensus Estimate of $549 million.

Net product revenues of Iclusig amounted to $26.1 million, up 2% in the year-ago quarter.

Pemazyre, which was approved in April 2020, generated $18 million in sales during the first quarter, reflecting an increase of 34% year over year.

Jakavi (name outside the United States) royalty revenues from Novartis NVS for commercialization in ex-U.S. markets grew 8% to $70.9 million.

Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi outside the country.

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 to Tabrecta.

Tabrecta product royalty revenues came in at $3.5 million, up 70% year over year.

Olumiant’s product royalty revenues from Eli Lilly LLY came in at $48.1 million, up 49% year over year, as a result of the use of the drug for the treatment of COVID-19.

R&D expenses were $327 million, up 18% from the year-ago quarter owing to higher investments in late-stage pipeline development. SG&A expenses amounted to $192.7 million, up 56% from the prior-year quarter due to expenses related to the establishment of its dermatology commercial organization and activities to support the potential launch of Opzelura for the treatment of atopic dermatitis (“AD”).

The FDA approved Opzelura, a novel cream formulation of ruxolitinib, for the topical short-term and non-continuous chronic treatment of mild to moderate AD in non-immunocompromised patients aged 12 years or older whose disease is not adequately controlled with topical prescription therapies, or when such therapies are not advisable. The product was launched in October 2021.

Pipeline and Regulatory Updates

In March 2022, the FDA extended the review period for the supplemental New Drug Application (sNDA) for ruxolitinib cream.

The sNDA is seeking approval of the cream for the treatment of vitiligo. The regulatory body has extended the target action date by three months to Jul 18, 2022, which was previously set at Apr 18, 2022. Ruxolitinib cream is marketed under the brand name Opzelura.

Also, in March 2022, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion on and recommended the approval of Jakavi to treat patients aged 12 years or older with acute graft versus host disease or chronic GvHD who have an inadequate response to corticosteroids or other systemic therapies.

Per the company, a potential approval will make Jakavi the first JAK1/2 inhibitor available for patients with GvHD in Europe.

Eli Lilly received a Complete Response Letter (“CRL”) from the FDA for the Olumiant AD indication as the company was not in alignment with the FDA on the indicated population.

Earlier, Incyte and LLY had announced that the FDA might issue a CRL for their sNDA, seeking label expansion of Olumiant for the treatment of adults with moderate-to-severe atopic dermatitis.

2022 Guidance

Incyte raised the bottom end of full-year Jakafi net product revenue guidance. The company now expects Jakafi revenues to be in the range of $2.33-$2.40 billion compared with the previous expectation of $2.3-$2.4 billion for 2022.

Other Hematology/Oncology net product revenues are projected in the range of $210-$240 million, unchanged from the previous expectation.

Incyte Corporation Price, Consensus and EPS Surprise

Incyte Corporation Price, Consensus and EPS Surprise
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 #5 (Strong Sell).

A better-ranked stock in the biotech sector is Vertex Pharmaceuticals Incorporated VRTX, which has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vertex’s earnings estimates have been revised 0.3% upward for 2022 and 0.2% upward for 2023 over the past 60 days. The VRTX stock has rallied 19.3% year to date.

Earnings of Vertex surpassed estimates in each of the trailing four quarters.

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Novartis AG (NVS) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

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Incyte Corporation (INCY) : Free Stock Analysis Report

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