We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Higher Jakafi Sales Boost Incyte's (INCY) Q3 Earnings?
Read MoreHide Full Article
Incyte Corporation (INCY - Free Report) is scheduled to release third-quarter 2021 results on Nov 2, before market open.
The company beat earnings expectations in three of the last four quarters and missed in one, the average surprise being a negative 10.15%. In the last reported quarter, the company beat earnings estimates by 10.96%.
What Our Model Predicts
Our proven model predicts an earnings beat for Incyte this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Incyte is +16.22% as the Zacks Consensus Estimate is pegged at 74 cents and the Most Accurate Estimate is pegged at 86 cents.
Zacks Rank: The company currently carries a Zacks Rank #3.
Incyte Corporation Price, Consensus and EPS Surprise
Incyte primarily derives product revenues from sales of lead drug, Jakafi, in the United States and Iclusig. Patient demand for Jakafi, a first-in-class JAK1/JAK2 inhibitor, in all approved indications (polycythemiavera, myelofibrosis and refractory acute graft-versus-host disease [GVHD]) increased in the second quarter after a soft first quarter. The trend has most likely improved further in the third quarter as patients resume visits to the doctors. Jakafi sales were up 12% in the previous quarter and the third quarter is likely to have witnessed a sequential increase. The Zacks Consensus Estimate for Jakafi sales stands at $558 million.
The company also earns product royalty revenues from Novartis AG (NVS - Free Report) for the commercialization of Jakafi in ex-U.S. markets. Novartis recorded a 26% increase in Jakavi sales in the third quarter. Hence, Incyte is likely to have received higher royalties in the quarter.
We remind investors that while Jakafi sales and royalties are key catalysts for the company’s revenue growth, Iclusig sales and Olumiant royalties from Eli Lilly also contribute to the top line. Hence, these are likely to have aided the company’s revenues in the to-be-reported quarter. Net product revenues of Iclusig amounted to $28.2 million in the previous quarter and similar or higher levels of contribution are likely to have been witnessed by the company in the to-be-reported quarter. The Zacks Consensus Estimate for Iclusig sales stands at $27.3 million.
Olumiant product royalty revenues came in at $36 million in the second quarter, up 40% year over year, and similar levels of growth are likely to have boosted the top line in the to-be-reported quarter.
Incremental sales from newly approved drugs are likely to have boosted sales in the third quarter as well. Sales of Pemazyre (pemigatinib), a kinase inhibitor indicated for the treatment of adults with previously treated, unresectable, locally advanced or metastatic cholangiocarcinoma, came in at $17.9 million in the second quarter. The third quarter is likely to have witnessed a sequential increase.
Incyte also receives royalties from sales of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC). Its partner Novartis has exclusive worldwide development and commercialization rights to Tabrecta. Royalties from the same came in at $2.5 million in the second quarter.
Operating expenses are likely to have increased due to a rise in R&D expenses and selling, general and administrative expenses.
Key Pipeline Updates
Apart from the top and bottom-line numbers, we expect investors to focus on the company’s pipeline updates.
The FDA recently approved a label expansion of Jakafi (ruxolitinib). The drug can now be used for the treatment of chronic graft-versus-host disease (GVHD) after the failure of one or two lines of systemic therapy in adult and pediatric patients 12 years of age and older. The regulatory body also approved the cream formulation of ruxolitinib for the treatment of mild to moderate atopic dermatitis (AD). Ruxolitinib cream has been approved under the brand name Opzelura for the short-term and non-continuous chronic treatment of mild to moderate AD in non-immunocompromised patients 12 years of age and older. Further updates on the same are awaited in the call.
Share Price Performance
Incyte’s stock has lost 25.3% in the year so far compared with the industry’s 8.1% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
Here are a few other stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.
Image: Bigstock
Will Higher Jakafi Sales Boost Incyte's (INCY) Q3 Earnings?
Incyte Corporation (INCY - Free Report) is scheduled to release third-quarter 2021 results on Nov 2, before market open.
The company beat earnings expectations in three of the last four quarters and missed in one, the average surprise being a negative 10.15%. In the last reported quarter, the company beat earnings estimates by 10.96%.
What Our Model Predicts
Our proven model predicts an earnings beat for Incyte this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Incyte is +16.22% as the Zacks Consensus Estimate is pegged at 74 cents and the Most Accurate Estimate is pegged at 86 cents.
Zacks Rank: The company currently carries a Zacks Rank #3.
Incyte Corporation Price, Consensus and EPS Surprise
Incyte Corporation price-consensus-eps-surprise-chart | Incyte Corporation Quote
Factors to Note
Incyte primarily derives product revenues from sales of lead drug, Jakafi, in the United States and Iclusig. Patient demand for Jakafi, a first-in-class JAK1/JAK2 inhibitor, in all approved indications (polycythemiavera, myelofibrosis and refractory acute graft-versus-host disease [GVHD]) increased in the second quarter after a soft first quarter. The trend has most likely improved further in the third quarter as patients resume visits to the doctors. Jakafi sales were up 12% in the previous quarter and the third quarter is likely to have witnessed a sequential increase. The Zacks Consensus Estimate for Jakafi sales stands at $558 million.
The company also earns product royalty revenues from Novartis AG (NVS - Free Report) for the commercialization of Jakafi in ex-U.S. markets. Novartis recorded a 26% increase in Jakavi sales in the third quarter. Hence, Incyte is likely to have received higher royalties in the quarter.
We remind investors that while Jakafi sales and royalties are key catalysts for the company’s revenue growth, Iclusig sales and Olumiant royalties from Eli Lilly also contribute to the top line. Hence, these are likely to have aided the company’s revenues in the to-be-reported quarter. Net product revenues of Iclusig amounted to $28.2 million in the previous quarter and similar or higher levels of contribution are likely to have been witnessed by the company in the to-be-reported quarter. The Zacks Consensus Estimate for Iclusig sales stands at $27.3 million.
Olumiant product royalty revenues came in at $36 million in the second quarter, up 40% year over year, and similar levels of growth are likely to have boosted the top line in the to-be-reported quarter.
Incremental sales from newly approved drugs are likely to have boosted sales in the third quarter as well. Sales of Pemazyre (pemigatinib), a kinase inhibitor indicated for the treatment of adults with previously treated, unresectable, locally advanced or metastatic cholangiocarcinoma, came in at $17.9 million in the second quarter. The third quarter is likely to have witnessed a sequential increase.
Incyte also receives royalties from sales of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC). Its partner Novartis has exclusive worldwide development and commercialization rights to Tabrecta. Royalties from the same came in at $2.5 million in the second quarter.
Operating expenses are likely to have increased due to a rise in R&D expenses and selling, general and administrative expenses.
Key Pipeline Updates
Apart from the top and bottom-line numbers, we expect investors to focus on the company’s pipeline updates.
The FDA recently approved a label expansion of Jakafi (ruxolitinib). The drug can now be used for the treatment of chronic graft-versus-host disease (GVHD) after the failure of one or two lines of systemic therapy in adult and pediatric patients 12 years of age and older. The regulatory body also approved the cream formulation of ruxolitinib for the treatment of mild to moderate atopic dermatitis (AD). Ruxolitinib cream has been approved under the brand name Opzelura for the short-term and non-continuous chronic treatment of mild to moderate AD in non-immunocompromised patients 12 years of age and older. Further updates on the same are awaited in the call.
Share Price Performance
Incyte’s stock has lost 25.3% in the year so far compared with the industry’s 8.1% decline.
Other Stocks to Consider
Here are a few other stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.
Regeneron Pharmaceuticals (REGN - Free Report) has an Earnings ESP of +8.78% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Gilead (GILD - Free Report) has an Earnings ESP of +0.75% and a Zacks Rank #3.