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Incyte Corporation (INCY - Free Report) reported better-than-expected results for the second quarter of 2021, driven by growth in lead drug, Jakafi, and an encouraging uptake of Pemazyre (pemigatinib) in Europe.
Shares of the company have lost 9.8% in the year so far compared with the industry’s 1.3% decline.
Image Source: Zacks Investment Research
The company reported adjusted earnings of 80 cents per share, beating the Zacks Consensus Estimate of earnings of 73 cents. The company had reported earnings of $1.24 per share in the year-ago quarter.
Total revenues came in at $705.7 million, increasing 3% year over year and surpassing the Zacks Consensus Estimate of $688 million.
Quarter in Detail
Total product and royalty revenues came in at $695.7 million, up 17% from the year-ago quarter. Jakafi revenues came in at $529 million, increasing 12% from the year-ago quarter and beating the Zacks Consensus Estimate of $525 million.
Net product revenues of Iclusig amounted to $28.2 million, up from $22.8 million in the year-ago quarter.
Pemazyre, which was approved in April 2020, generated $17.9 million in sales during the quarter. The ongoing launch in the United States continues to go well and the recent launches in Europe and Japan are on track.
Jakavi (name outside the United States) royalty revenues from Novartis (NVS - Free Report) for commercialization in ex-U.S. markets grew 24% to $82 million. Olumiant’s product royalty revenues from Eli Lilly (LLY - Free Report) came in at $36 million, up 40%.
Incyte also earned royalties on Tabrecta sales from Novartis, amounting to $2.5 million in the quarter. The drug was approved in May 2020.
R&D expenses were $315.5 million, up 24% from the year-ago quarter due to the progression of the pipeline including parsaclisib.
SG&A expenses amounted to $152.5 million, up 46% 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 ruxolitinib cream for the treatment of atopic dermatitis.
The FDA extended the review period for Incyte’s new drug application (NDA) for ruxolitinib cream for the treatment of atopic dermatitis (AD). The Prescription Drug User Fee Act (PDUFA) action date has been extended by three months to Sep 21, 2021.
The agency also extended the review period for the supplemental new drug application (sNDA) for Jakafi (ruxolitinib), by three months. The sNDA is seeking the label expansion of the drug for the treatment of adult and pediatric patients aged 12 years and older with steroid-refractory chronic GVHD.
The FDA recently issued a Complete Response Letter (CRL) for the biologics license application (BLA) for its intravenous PD-1 inhibitor, retifanlimab, for the treatment of adult patients with locally advanced or metastatic squamous cell carcinoma of the anal canal (SCAC) who have progressed on, or who are intolerant of, platinum-based chemotherapy.
In June, Incyte and partner MorphoSys (MOR - Free Report) announced that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending the conditional marketing authorization of tafasitamab (brand name: Monjuvi) in combination with lenalidomide, followed by tafasitamab monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplantation (ASCT).
2021 Guidance
Incyte is tightening its annual guidance for Jakafi net product revenues to reflect the impacts of higher-than-anticipated government rebates and chargebacks and the new PDUFA date for ruxolitinib for the treatment of steroid-refractory chronic GVHD.
The company expects Jakafi revenues of $2.125-$2.170 billion for 2021 (previous range: $2.125-$2.2 billion). Other Hematology/Oncology net product revenues are projected in the range of $155-$170 million.
Our Take
Incyte’s performance in the second quarter was encouraging as Jakafi sales recorded growth after a soft first quarter. The uptake of Pemazyre is also gaining traction. The company’s efforts to diversify its revenue base are encouraging as well. However, the recent setbacks are concerning.
Image: Bigstock
Incyte (INCY) Q2 Earnings & Sales Beat on Solid Jakafi Growth
Incyte Corporation (INCY - Free Report) reported better-than-expected results for the second quarter of 2021, driven by growth in lead drug, Jakafi, and an encouraging uptake of Pemazyre (pemigatinib) in Europe.
Shares of the company have lost 9.8% in the year so far compared with the industry’s 1.3% decline.
Image Source: Zacks Investment Research
The company reported adjusted earnings of 80 cents per share, beating the Zacks Consensus Estimate of earnings of 73 cents. The company had reported earnings of $1.24 per share in the year-ago quarter.
Total revenues came in at $705.7 million, increasing 3% year over year and surpassing the Zacks Consensus Estimate of $688 million.
Quarter in Detail
Total product and royalty revenues came in at $695.7 million, up 17% from the year-ago quarter. Jakafi revenues came in at $529 million, increasing 12% from the year-ago quarter and beating the Zacks Consensus Estimate of $525 million.
Net product revenues of Iclusig amounted to $28.2 million, up from $22.8 million in the year-ago quarter.
Pemazyre, which was approved in April 2020, generated $17.9 million in sales during the quarter. The ongoing launch in the United States continues to go well and the recent launches in Europe and Japan are on track.
Jakavi (name outside the United States) royalty revenues from Novartis (NVS - Free Report) for commercialization in ex-U.S. markets grew 24% to $82 million. Olumiant’s product royalty revenues from Eli Lilly (LLY - Free Report) came in at $36 million, up 40%.
Incyte also earned royalties on Tabrecta sales from Novartis, amounting to $2.5 million in the quarter. The drug was approved in May 2020.
R&D expenses were $315.5 million, up 24% from the year-ago quarter due to the progression of the pipeline including parsaclisib.
SG&A expenses amounted to $152.5 million, up 46% 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 ruxolitinib cream for the treatment of atopic dermatitis.
Incyte Corporation Price and EPS Surprise
Incyte Corporation price-eps-surprise | Incyte Corporation Quote
Pipeline and Regulatory Update
The FDA extended the review period for Incyte’s new drug application (NDA) for ruxolitinib cream for the treatment of atopic dermatitis (AD). The Prescription Drug User Fee Act (PDUFA) action date has been extended by three months to Sep 21, 2021.
The agency also extended the review period for the supplemental new drug application (sNDA) for Jakafi (ruxolitinib), by three months. The sNDA is seeking the label expansion of the drug for the treatment of adult and pediatric patients aged 12 years and older with steroid-refractory chronic GVHD.
The FDA recently issued a Complete Response Letter (CRL) for the biologics license application (BLA) for its intravenous PD-1 inhibitor, retifanlimab, for the treatment of adult patients with locally advanced or metastatic squamous cell carcinoma of the anal canal (SCAC) who have progressed on, or who are intolerant of, platinum-based chemotherapy.
In June, Incyte and partner MorphoSys (MOR - Free Report) announced that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending the conditional marketing authorization of tafasitamab (brand name: Monjuvi) in combination with lenalidomide, followed by tafasitamab monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplantation (ASCT).
2021 Guidance
Incyte is tightening its annual guidance for Jakafi net product revenues to reflect the impacts of higher-than-anticipated government rebates and chargebacks and the new PDUFA date for ruxolitinib for the treatment of steroid-refractory chronic GVHD.
The company expects Jakafi revenues of $2.125-$2.170 billion for 2021 (previous range: $2.125-$2.2 billion). Other Hematology/Oncology net product revenues are projected in the range of $155-$170 million.
Our Take
Incyte’s performance in the second quarter was encouraging as Jakafi sales recorded growth after a soft first quarter. The uptake of Pemazyre is also gaining traction. The company’s efforts to diversify its revenue base are encouraging as well. However, the recent setbacks are concerning.
Incyte currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.