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Incyte (INCY) to Report Q4 Earnings: What's in the Cards?

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Incyte Corporation (INCY - Free Report) is scheduled to release its fourth-quarter and full-year 2022 results on Feb 7, before market open.

The company’s earnings surprise history has been dismal so far, with its earnings beating the Zacks Consensus Estimate in only one of the trailing four quarters and missing on the other three occasions, with the average negative surprise being 20.11%. In the last reported quarter, Incyte missed earnings by 16.67%.

Shares of Incyte have risen 12.5% in the past year against the industry’s decline of 10.4%.


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Let’s see how things are shaping up for the quarter to be reported.

Factors at Play

Incyte primarily derives product revenues from sales of its lead drug, Jakafi (ruxolitinib), in the United States, as well as its other marketed drugs.

Patient demand for Jakafi, a first-in-class JAK1/JAK2 inhibitor, in all approved indications (polycythemia vera, myelofibrosis and refractory acute graft-versus-host disease [GvHD]), increased by 13% year over year in the third quarter. The trend is likely to have continued in the to-be-reported quarter as well. The Zacks Consensus Estimate for Jakafi’s sales stands at $636 million.

Incyte also earns product royalty revenues from Novartis AG (NVS - Free Report) for the commercialization of Jakafi in non-U.S. markets. Novartis licensed ruxolitinib from Incyte for development and commercialization outside the United States.

Jakafi is marketed by Incyte in the United States and is marketed as Jakavi by Novartis outside the country. Incyte is likely to have received higher royalties from NVS in the fourth quarter on higher Jakavi sales. The Zacks Consensus Estimate for the same is $92 million.

Incyte also receives royalties from the sales of Tabrecta (capmatinib), which is approved for the treatment of adult patients with metastatic non-small cell lung cancer. Novartis has exclusive worldwide development and commercialization rights to Tabrecta.

While Jakafi’s sales and royalties are key catalysts for the company’s revenue growth, Iclusig’s sales and Olumiant’s royalties from Eli Lilly are likely to have contributed to the top line in the to-be-reported quarter.

Incremental sales from newly approved drugs like Opzelura are also likely to have added to sales in the fourth quarter. The adoption of other newly approved drugs like Monjuvi and Pemazyre is also a positive and is likely to have boosted sales in the fourth quarter.

In August 2022, the FDA approved Pemazyre (pemigatinib), a selective fibroblast growth factor receptor (FGFR) inhibitor, for the treatment of adults with relapsed or refractory myeloid/lymphoid neoplasms (MLNs) with FGFR1 rearrangement. MLNs with FGFR1 rearrangement are extremely rare and aggressive blood cancers that may affect less than 1 in 100,000 people in the United States. So Incyte has most likely generated incremental revenues on label expansions.

Total costs and expenses increased year over year in the third quarter and the same is likely to have increased in the fourth quarter due to a rise in R&D, selling, general and administrative expenses.

Earnings Whispers

Our proven model does not conclusively predict 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. That is not the case here, as you will see below. 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 -6.02% as the Zacks Consensus Estimate stands at 62 cents per share and the Most Accurate Estimate is currently pegged at 58 cents per share.

Zacks Rank: INCY currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.


Stocks to Consider

Here are some drug and biotech stocks you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season.

Novo Nordisk (NVO - Free Report) has an Earnings ESP of +12.81% and a Zacks Rank #2.

NVO topped earnings estimates in three of the last four quarters and has a four-quarter earnings surprise of 3.09%, on average.

Gilead Sciences, Inc. (GILD - Free Report) has an Earnings ESP of +1.71% and a Zacks Rank #3.

GILD beat earnings estimate in three of the last four quarters, with the average earnings surprise being 0.36%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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