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Can Jafaki Help Incyte (INCY) Beat Earnings Estimates in Q1?
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Incyte Corporation (INCY - Free Report) is scheduled to report first-quarter 2018 results on May 1, before the market opens.
In the last reported quarter, the company beat estimates by 103.85%.
Incyte’s earnings track record has been decent so far. Over last four quarters, the company’s earnings surpassed expectations thrice, while missing in one. Incyte delivered an average positive earnings surprise of 67.05% in the said time frame.
Incyte’s stock has lost 46.2% in the last six months, worse than the industry’s decline of 8.5%.
Let’s see, how things are shaping up for this quarter.
Why a Likely Positive Surprise?
Our proven model shows that Incyte is likely to beat on earnings this quarter because it has the right combination of the two key ingredients. A stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Zacks ESP: Incyte has an Earnings ESP of +92.00%, as the Most Accurate estimate is pegged at earnings of 16 cents per share while the Zacks Consensus Estimate stands at an earnings of 8 cents. A positive ESP hints at an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Incyte has a Zacks Rank #3, which increases the predictive power of ESP. Further, combined with a positive ESP, chances of an earnings beat are usually pegged higher.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Driving the Growth
Incyte’s lead drug, Jakafi (ruxolitinib), is a first-in-class JAK1/JAK2 inhibitor, approved for the treatment of patients with polycythemia vera (“PV”), patients with intermediate or high-risk myelofibrosis (“MF”), including primary MF, post-PV MF, and post-essential thrombocythemia MF. While Incyte markets the drug in the United States, it is marketed by Novartis (NVS - Free Report) as Jakavi outside the country.
Incyte continues to gain traction by Jakafi’s performance. Incyte's Jakafi performance was strong in 2017 driven by patient demand. The sales guidance for 2018 was also impressive. In October 2017, the FDA approved a label update of the drug to include the addition of new patient-reported outcome data from the COMFORT-I study, as well as updating the warning related to progressive multifocal leukoencephalopathy. The pivotal REACH1 trial evaluating Jakafi in patients with steroid-refractory acute graft-versus-host disease (“GVHD”) has completed enrollment and results are expected in the first half of 2018.
Assuming successful results, Incyte expects to submit an sNDA seeking approval of Jakafi for this indication. Jakafi sales are expected to get a boost from the updated labels. Incyte expects Jakafi revenues in the range of $1.35-$1.4 billion in 2018, more than 20% growth over 2017.We remind investors that while Jakafi sales and royalties are a key component of Incyte’s revenue growth, Iclusig sales and Olumiant royalties are also contributing to the top line.
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 expected in the range of $465-$480 million.
We also expect investors to focus on pipeline updates since Incyte suffered a few setbacks this month. Incyte and partner Merck (MRK - Free Report) announced the failure of a combination therapy — Incyte’s epacadostat and Merck’s Keytruda — in achieving improved progression free survival over Keytruda alone in phase III study ECHO-301/KEYNOTE-252. The study was evaluating the combination drugs for the treatment of unresectable or metastatic melanoma. An external data monitoring committee recommended the termination of the study following the review of the data from the pivotal study.
Moreover, the FDA’s Arthritis Advisory Committee has recommended an approval of the 2-mg dose of baricitinib, a once-daily oral medication for the treatment of moderately-to-severely active rheumatoid arthritis for adult patients who have had an inadequate response or intolerance to methotrexate. However, the advisory committee did not recommend approval of the 4-mg dose of baricitinib for the proposed indication based on the adequacy of the safety and benefit-risk profiles. While the FDA is generally not required to follow the Advisory Committee's recommendation, but it will consider the same during its review of the NDA for baricitinib. The FDA had earlier issued a Complete Response Letter for the same.
A Stock to Consider
Here is one other health care stock worth considering with the right combination of elements to beat on earnings:
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Can Jafaki Help Incyte (INCY) Beat Earnings Estimates in Q1?
Incyte Corporation (INCY - Free Report) is scheduled to report first-quarter 2018 results on May 1, before the market opens.
In the last reported quarter, the company beat estimates by 103.85%.
Incyte’s earnings track record has been decent so far. Over last four quarters, the company’s earnings surpassed expectations thrice, while missing in one. Incyte delivered an average positive earnings surprise of 67.05% in the said time frame.
Incyte’s stock has lost 46.2% in the last six months, worse than the industry’s decline of 8.5%.
Let’s see, how things are shaping up for this quarter.
Why a Likely Positive Surprise?
Our proven model shows that Incyte is likely to beat on earnings this quarter because it has the right combination of the two key ingredients. A stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Zacks ESP: Incyte has an Earnings ESP of +92.00%, as the Most Accurate estimate is pegged at earnings of 16 cents per share while the Zacks Consensus Estimate stands at an earnings of 8 cents. A positive ESP hints at an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Incyte has a Zacks Rank #3, which increases the predictive power of ESP. Further, combined with a positive ESP, chances of an earnings beat are usually pegged higher.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Driving the Growth
Incyte’s lead drug, Jakafi (ruxolitinib), is a first-in-class JAK1/JAK2 inhibitor, approved for the treatment of patients with polycythemia vera (“PV”), patients with intermediate or high-risk myelofibrosis (“MF”), including primary MF, post-PV MF, and post-essential thrombocythemia MF. While Incyte markets the drug in the United States, it is marketed by Novartis (NVS - Free Report) as Jakavi outside the country.
Incyte continues to gain traction by Jakafi’s performance. Incyte's Jakafi performance was strong in 2017 driven by patient demand. The sales guidance for 2018 was also impressive. In October 2017, the FDA approved a label update of the drug to include the addition of new patient-reported outcome data from the COMFORT-I study, as well as updating the warning related to progressive multifocal leukoencephalopathy. The pivotal REACH1 trial evaluating Jakafi in patients with steroid-refractory acute graft-versus-host disease (“GVHD”) has completed enrollment and results are expected in the first half of 2018.
Assuming successful results, Incyte expects to submit an sNDA seeking approval of Jakafi for this indication. Jakafi sales are expected to get a boost from the updated labels. Incyte expects Jakafi revenues in the range of $1.35-$1.4 billion in 2018, more than 20% growth over 2017.We remind investors that while Jakafi sales and royalties are a key component of Incyte’s revenue growth, Iclusig sales and Olumiant royalties are also contributing to the top line.
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 expected in the range of $465-$480 million.
We also expect investors to focus on pipeline updates since Incyte suffered a few setbacks this month. Incyte and partner Merck (MRK - Free Report) announced the failure of a combination therapy — Incyte’s epacadostat and Merck’s Keytruda — in achieving improved progression free survival over Keytruda alone in phase III study ECHO-301/KEYNOTE-252. The study was evaluating the combination drugs for the treatment of unresectable or metastatic melanoma. An external data monitoring committee recommended the termination of the study following the review of the data from the pivotal study.
Moreover, the FDA’s Arthritis Advisory Committee has recommended an approval of the 2-mg dose of baricitinib, a once-daily oral medication for the treatment of moderately-to-severely active rheumatoid arthritis for adult patients who have had an inadequate response or intolerance to methotrexate. However, the advisory committee did not recommend approval of the 4-mg dose of baricitinib for the proposed indication based on the adequacy of the safety and benefit-risk profiles. While the FDA is generally not required to follow the Advisory Committee's recommendation, but it will consider the same during its review of the NDA for baricitinib. The FDA had earlier issued a Complete Response Letter for the same.
A Stock to Consider
Here is one other health care stock worth considering with the right combination of elements to beat on earnings:
GW Pharmaceuticals plc is expected to report earnings on May 8. The company has an Earnings ESP of +8.11% and a Zacks Rank #2. You can see see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>