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Why Is Incyte (INCY) Up 2.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for Incyte (INCY - Free Report) . Shares have added about 2.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Incyte due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Incyte Reports Q1 Loss, Beats on Revenues
Incyte reported adjusted loss of $2.86 per share against adjusted earnings of 62 cents in the year-ago quarter. The loss reported in the quarter was primarily due to an upfront payment of $805 million related to its collaborative agreement with MorphoSys. The Zacks Consensus Estimate was pegged at an earnings of 8 cents.
Including milestones and contracts, revenues came in at $568.5 million, which grew 14.2% year over year and beat the Zacks Consensus Estimate of $546.49 million.
Quarter in Detail
Total product-related revenues came in at $486.7 million, up 22.8% from the year-ago quarter. Jakafi revenues came in at $459.5 million, increasing 22% from the year-ago quarter and beating the Zacks Consensus Estimate of $443 million. Robust demand for Jakafi in all three approved indications drove revenues.
Net product revenues of Iclusig amounted to $27.2 million, up from $20.6 million in the year-ago quarter.
Jakavi (name outside the United States) royalty revenues from Novartis AG for commercialization in ex-U.S. markets grew 24% to $56.3 million. Olumiant’s product royalty revenues from Eli Lilly came in at $25.4 million, up 59%.
R&D expenses were $1.06 billion, significantly up from $304 million in the year-ago quarter. The significant increase in R&D expenses was due to consideration of an upfront payment of $805 million, related to a collaborative agreement with Germany-based biopharmaceutical company, MorphoSys. SG&A expenses amounted to $97.6 million, down from $111 million in the prior-year quarter.
2020 Guidance
Incyte stated on its first-quarter earnings call that although it is currently not possible to predict the overall long-term impact of the COVID-19 pandemic, there has been no impact on the commercial side of the business. The company maintained its guidance for 2020 provided on the fourth-quarter earnings call.
The company expects Jakafi revenues in the range of $1,880 -$1,950 million for 2020. Iclusig revenues are projected around $100-$105 million.
Pipeline Update
In April, the FDA approved Incyte’s selective FGFR inhibitor, Pemazyre (pemigatinib) for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or other rearrangement as detected by an FDA-approved test. This is the first of the three pipeline candidates lined up to receive approval in 2020. The drug is under review in Europe. Other two candidates lined up for potential approval in 2020 are — capmatinib for lung cancer and tafasitamab for large B-cell lymphoma.
The company also plans to file a new drug application seeking approval for ruxolitinib cream, a new formulation of its key drug Jakafi, as a treatment for mild-to-moderate atopic dermatitis by the end of 2020. It is also evaluating ruxolitinib cream in two phase III studies in patients with vitiligo, with top-line data expected in 2021.
The company is evaluating Jakafi in combination with standard-of-care in patients with COVID-19 associated cytokine storm and in COVID-19 patients on mechanical ventilation with acute respiratory distress syndrome in two separate phase III studies.
Incyte entered into a global collaboration with MorphoSys for the development and commercialization of tafasitamab, an anti-CD19 monoclonal antibody. The companies received the pending clearance by antitrust authorities in March.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 27.37% due to these changes.
VGM Scores
Currently, Incyte has a poor Growth Score of F, a grade with the same score on the momentum front. 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Incyte has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Incyte (INCY) Up 2.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Incyte (INCY - Free Report) . Shares have added about 2.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Incyte due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Incyte Reports Q1 Loss, Beats on Revenues
Incyte reported adjusted loss of $2.86 per share against adjusted earnings of 62 cents in the year-ago quarter. The loss reported in the quarter was primarily due to an upfront payment of $805 million related to its collaborative agreement with MorphoSys. The Zacks Consensus Estimate was pegged at an earnings of 8 cents.
Including milestones and contracts, revenues came in at $568.5 million, which grew 14.2% year over year and beat the Zacks Consensus Estimate of $546.49 million.
Quarter in Detail
Total product-related revenues came in at $486.7 million, up 22.8% from the year-ago quarter. Jakafi revenues came in at $459.5 million, increasing 22% from the year-ago quarter and beating the Zacks Consensus Estimate of $443 million. Robust demand for Jakafi in all three approved indications drove revenues.
Net product revenues of Iclusig amounted to $27.2 million, up from $20.6 million in the year-ago quarter.
Jakavi (name outside the United States) royalty revenues from Novartis AG for commercialization in ex-U.S. markets grew 24% to $56.3 million. Olumiant’s product royalty revenues from Eli Lilly came in at $25.4 million, up 59%.
R&D expenses were $1.06 billion, significantly up from $304 million in the year-ago quarter. The significant increase in R&D expenses was due to consideration of an upfront payment of $805 million, related to a collaborative agreement with Germany-based biopharmaceutical company, MorphoSys. SG&A expenses amounted to $97.6 million, down from $111 million in the prior-year quarter.
2020 Guidance
Incyte stated on its first-quarter earnings call that although it is currently not possible to predict the overall long-term impact of the COVID-19 pandemic, there has been no impact on the commercial side of the business. The company maintained its guidance for 2020 provided on the fourth-quarter earnings call.
The company expects Jakafi revenues in the range of $1,880 -$1,950 million for 2020. Iclusig revenues are projected around $100-$105 million.
Pipeline Update
In April, the FDA approved Incyte’s selective FGFR inhibitor, Pemazyre (pemigatinib) for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or other rearrangement as detected by an FDA-approved test. This is the first of the three pipeline candidates lined up to receive approval in 2020. The drug is under review in Europe. Other two candidates lined up for potential approval in 2020 are — capmatinib for lung cancer and tafasitamab for large B-cell lymphoma.
The company also plans to file a new drug application seeking approval for ruxolitinib cream, a new formulation of its key drug Jakafi, as a treatment for mild-to-moderate atopic dermatitis by the end of 2020. It is also evaluating ruxolitinib cream in two phase III studies in patients with vitiligo, with top-line data expected in 2021.
The company is evaluating Jakafi in combination with standard-of-care in patients with COVID-19 associated cytokine storm and in COVID-19 patients on mechanical ventilation with acute respiratory distress syndrome in two separate phase III studies.
Incyte entered into a global collaboration with MorphoSys for the development and commercialization of tafasitamab, an anti-CD19 monoclonal antibody. The companies received the pending clearance by antitrust authorities in March.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 27.37% due to these changes.
VGM Scores
Currently, Incyte has a poor Growth Score of F, a grade with the same score on the momentum front. 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Incyte has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.