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Incyte (INCY) Up 5.2% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Incyte Corporation (INCY - Free Report) . Shares have added about 5.2% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is INCY due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Incyte Beats on Q4 Revenues on Strong Jakafi Sales
Incyte reported a net loss of $0.71 compared to a net income of $0.05 in the year-ago quarter. The fourth-quarter saw a significant surge in R&D expenses. Excluding one-time charges and stock-based compensation expenses, earnings per share was $0.02.
The Zacks Consensus Estimate was a loss of $0.52.
Quarterly revenues were $444.1 million, up 36.1% year over year and beat the Zacks Consensus Estimate of $418.4 million. The top line was driven by higher sales of Jakafi in the United States and Iclusig in Europe as well as royalties from sales of Jakavi and Olumiant outside the United States.
Quarter in Detail
Jakafi sales grew 26.9%, year over year to $302 million driven by strong patient demand for both indications. Net product revenues of Iclusig amounted to $19.5 million, up from $12.9 million in the year-ago quarter. Product royalty revenues from Novartis AG for the commercialization of Jakafi in ex-U.S. markets grew 57.4% to $52.3 million.
R&D expenses were up to $447 million from $161.6 million in the year-ago quarter. SG&A expenses amounted to $98 million, up 1.8% year over year.
2018 Outlook
The company expects Jakafi revenues in the range of $1,350-$1,400 million. Iclusig revenues are expected in the range of $80-$85 million.
R&D expenses are expected in the range of $1,077-1,172 million. SG&A expenses are still expected in the range of $465-$480 million.
Pipeline Update
The phase II trial, REACH1 trial evaluating Jakafi in patients with steroid-refractory acute graft-versus-host disease (“GVHD”) has completed enrolment and results are expected in the first half of 2018. Assuming the success of the trial, Incyte expects to submit sNDA seeking approval of Jakafi for this indication.
The phase III trial, ECHO-301, evaluating epacadostat plus Keytruda in patients with unresectable or metastatic melanoma is now fully-recruited and initial data are expected in the first half of 2018.
Incyte has also opened eight new pivotal trials of epacadostat plus PD-1 antagonists in collaboration with Merck & Co. and Bristol-Myers Squibb.
In December 2017, the New Drug Application (NDA) for baricitinib was resubmitted to the FDA. This was classified as a Class II resubmission, which began a new six-month review cycle. A pivotal trial of baricitinib in patients with moderate-to-severe atopic dermatitis has also been initiated.
The European Commission has already approved baricitinib as Olumiant in February 2017 for the treatment of moderate to severe active rheumatoid arthritis in adult patients who have responded inadequately to or are intolerant to one or more disease-modifying anti-rheumatic drugs.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
At this time, INCY has a poor Growth Score of F, however its Momentum is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, INCY has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Incyte (INCY) Up 5.2% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Incyte Corporation (INCY - Free Report) . Shares have added about 5.2% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is INCY due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Incyte Beats on Q4 Revenues on Strong Jakafi Sales
Incyte reported a net loss of $0.71 compared to a net income of $0.05 in the year-ago quarter. The fourth-quarter saw a significant surge in R&D expenses. Excluding one-time charges and stock-based compensation expenses, earnings per share was $0.02.
The Zacks Consensus Estimate was a loss of $0.52.
Quarterly revenues were $444.1 million, up 36.1% year over year and beat the Zacks Consensus Estimate of $418.4 million. The top line was driven by higher sales of Jakafi in the United States and Iclusig in Europe as well as royalties from sales of Jakavi and Olumiant outside the United States.
Quarter in Detail
Jakafi sales grew 26.9%, year over year to $302 million driven by strong patient demand for both indications. Net product revenues of Iclusig amounted to $19.5 million, up from $12.9 million in the year-ago quarter. Product royalty revenues from Novartis AG for the commercialization of Jakafi in ex-U.S. markets grew 57.4% to $52.3 million.
R&D expenses were up to $447 million from $161.6 million in the year-ago quarter. SG&A expenses amounted to $98 million, up 1.8% year over year.
2018 Outlook
The company expects Jakafi revenues in the range of $1,350-$1,400 million. Iclusig revenues are expected in the range of $80-$85 million.
R&D expenses are expected in the range of $1,077-1,172 million. SG&A expenses are still expected in the range of $465-$480 million.
Pipeline Update
The phase II trial, REACH1 trial evaluating Jakafi in patients with steroid-refractory acute graft-versus-host disease (“GVHD”) has completed enrolment and results are expected in the first half of 2018. Assuming the success of the trial, Incyte expects to submit sNDA seeking approval of Jakafi for this indication.
The phase III trial, ECHO-301, evaluating epacadostat plus Keytruda in patients with unresectable or metastatic melanoma is now fully-recruited and initial data are expected in the first half of 2018.
Incyte has also opened eight new pivotal trials of epacadostat plus PD-1 antagonists in collaboration with Merck & Co. and Bristol-Myers Squibb.
In December 2017, the New Drug Application (NDA) for baricitinib was resubmitted to the FDA. This was classified as a Class II resubmission, which began a new six-month review cycle. A pivotal trial of baricitinib in patients with moderate-to-severe atopic dermatitis has also been initiated.
The European Commission has already approved baricitinib as Olumiant in February 2017 for the treatment of moderate to severe active rheumatoid arthritis in adult patients who have responded inadequately to or are intolerant to one or more disease-modifying anti-rheumatic drugs.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
Incyte Corporation Price and Consensus
Incyte Corporation Price and Consensus | Incyte Corporation Quote
VGM Scores
At this time, INCY has a poor Growth Score of F, however its Momentum is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, INCY has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.