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Why Is Incyte (INCY) Down 1.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Incyte (INCY - Free Report) . Shares have lost about 1.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Incyte due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Beats on Q3 Earnings, Misses Revenue Estimates
Incyte reported third-quarter 2023 adjusted earnings of $1.10 per share, which beat the Zacks Consensus Estimate of $1.09. The company recorded earnings of 60 cents per share in the year-ago quarter.
Total revenues in the reported quarter were $919 million, which grew 11.6% year over year, driven by the sustained performance of its lead drug, Jakafi (ruxolitinib) and increased sales of Opzelura (ruxolitinib) on solid demand and expanded coverage. The top line, however, missed the Zacks Consensus Estimate of $973 million.
Quarter in Detail
Jakafi’s (a first-in-class JAK1/JAK2 inhibitor approved for polycythemiavera, myelofibrosis and refractory acute graft-versus-host disease) revenues came in at almost $636.3 million, up 3% from the year-ago quarter’s number. This was primarily driven by growth in patient demand across all indications. Jakafi's sales missed the Zacks Consensus Estimate of $677 million.
Opzelura (ruxolitinib) cream generated $91.8 million in sales. The figure grew 141% year over year but missed the consensus estimate of $99 million. The year-over-year rise in sales was due to growth in patient demand and expanded coverage.
We note that in July 2022, the FDA approved Opzelura cream 1.5% for the topical treatment of non-segmental vitiligo in adult and pediatric patients aged 12 years and older. Opzelura is also approved by the FDA for the topical short-term and non-continuous chronic treatment of mild-to-moderate atopic dermatitis.
The newly approved medicine, Zynyz (retifanlimab-dlwr), generated sales of 0.09 million. The company obtained accelerated approval for Zynyz to treat metastatic or recurrent locally advanced Merkel cell carcinoma.
Iclusig's net product revenues were almost $27.7 million, up 7% year over year. The figure marginally beat the Zacks Consensus Estimate of $27.3 million.
Pemazyre generated $18.9 million in sales, reflecting a year-over-year decrease of 19%. The figure missed the Zacks Consensus Estimate of $23.5 million.
Minjuvi's revenues totaled $8.3 million, up 41% from the prior year quarter’s number. Revenues beat the Zacks Consensus Estimate of $7.5 million.
We remind investors that Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi in ex-U.S. markets.
The drug’s royalty revenues from Novartis for commercialization in ex-U.S. markets rose 13% to $96.6 million. Jakavi royalties slightly beat the Zacks Consensus Estimate of $96 million.
Incyte also receives royalties from sales of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small-cell lung cancer. Its partner, Novartis, has exclusive worldwide development and commercialization rights for Tabrecta. The drug’s product royalty revenues amounted to $4.1 million, up 1% year over year.
Olumiant’s (baricitinib) product royalty revenues from Eli Lilly totaled $29.6 million, up 45% year over year. However, the figure missed the Zacks Consensus Estimate of $35.4 million.
Incyte has a collaboration agreement with Eli Lilly for Olumiant. The drug is a once-daily oral JAK inhibitor discovered by Incyte and licensed to LLY. It is approved for several types of autoimmune diseases.
Adjusted research and development expenses totaled $348.9 million, down 3% year over year, owing to a decrease in one-time collaboration-related expenses. Adjusted selling, general and administrative costs amounted to $241.9 million, down 2% from the prior-year quarter’s number. This was due to an asset impairment charge with regard to assets written off under an agreement with Wilmington Friends School Inc.
Incyte’s cash and cash equivalents totaled $3.5 billion as of Sep 30, 2023 compared with $3.4 billion as of Jun 30, 2023.
2023 Guidance Tightened
Based on the third-quarter performance, Incyte tightened its previously issued guidance for 2023. The company now expects Jakafi revenues in the range of $2.59-$2.62 billion compared with the earlier projection of $2.58-$2.63 billion.
Pipeline Updates
In October 2023, INCY announced new positive 52-week data from the IIb dose-ranging study, which is evaluating the efficacy and safety of its investigational oral small-molecule JAK1 inhibitor, povorcitinib, for the treatment of adult patients with extensive nonsegmental vitiligo.
Data from the phase IIb study showed that treatment with oral povorcitinib caused substantial total body and facial repigmentation across all treatment groups at week 52.
Apart from vitiligo, Incyte is currently studying povorcitinib in other indications, including hidradenitis suppurativa (HS) and prurigo nodularis (PN). Phase III studies evaluating povorcitinib in HS are presently ongoing.
Also, the phase II study evaluating povorcitinib for treating PN met its primary endpoint. The company plans to initiate a phase III study on povorcitinib for the given indication in 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Incyte has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 indicates a downward shift. Notably, Incyte has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Incyte is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Qiagen (QGEN - Free Report) , a stock from the same industry, has gained 8.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Qiagen reported revenues of $475.89 million in the last reported quarter, representing a year-over-year change of -4.8%. EPS of $0.50 for the same period compares with $0.53 a year ago.
For the current quarter, Qiagen is expected to post earnings of $0.54 per share, indicating a change of +1.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.3% over the last 30 days.
Qiagen has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Incyte (INCY) Down 1.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Incyte (INCY - Free Report) . Shares have lost about 1.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Incyte due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Beats on Q3 Earnings, Misses Revenue Estimates
Incyte reported third-quarter 2023 adjusted earnings of $1.10 per share, which beat the Zacks Consensus Estimate of $1.09. The company recorded earnings of 60 cents per share in the year-ago quarter.
Total revenues in the reported quarter were $919 million, which grew 11.6% year over year, driven by the sustained performance of its lead drug, Jakafi (ruxolitinib) and increased sales of Opzelura (ruxolitinib) on solid demand and expanded coverage. The top line, however, missed the Zacks Consensus Estimate of $973 million.
Quarter in Detail
Jakafi’s (a first-in-class JAK1/JAK2 inhibitor approved for polycythemiavera, myelofibrosis and refractory acute graft-versus-host disease) revenues came in at almost $636.3 million, up 3% from the year-ago quarter’s number. This was primarily driven by growth in patient demand across all indications. Jakafi's sales missed the Zacks Consensus Estimate of $677 million.
Opzelura (ruxolitinib) cream generated $91.8 million in sales. The figure grew 141% year over year but missed the consensus estimate of $99 million. The year-over-year rise in sales was due to growth in patient demand and expanded coverage.
We note that in July 2022, the FDA approved Opzelura cream 1.5% for the topical treatment of non-segmental vitiligo in adult and pediatric patients aged 12 years and older. Opzelura is also approved by the FDA for the topical short-term and non-continuous chronic treatment of mild-to-moderate atopic dermatitis.
The newly approved medicine, Zynyz (retifanlimab-dlwr), generated sales of 0.09 million. The company obtained accelerated approval for Zynyz to treat metastatic or recurrent locally advanced Merkel cell carcinoma.
Iclusig's net product revenues were almost $27.7 million, up 7% year over year. The figure marginally beat the Zacks Consensus Estimate of $27.3 million.
Pemazyre generated $18.9 million in sales, reflecting a year-over-year decrease of 19%. The figure missed the Zacks Consensus Estimate of $23.5 million.
Minjuvi's revenues totaled $8.3 million, up 41% from the prior year quarter’s number. Revenues beat the Zacks Consensus Estimate of $7.5 million.
We remind investors that Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi in ex-U.S. markets.
The drug’s royalty revenues from Novartis for commercialization in ex-U.S. markets rose 13% to $96.6 million. Jakavi royalties slightly beat the Zacks Consensus Estimate of $96 million.
Incyte also receives royalties from sales of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small-cell lung cancer. Its partner, Novartis, has exclusive worldwide development and commercialization rights for Tabrecta. The drug’s product royalty revenues amounted to $4.1 million, up 1% year over year.
Olumiant’s (baricitinib) product royalty revenues from Eli Lilly totaled $29.6 million, up 45% year over year. However, the figure missed the Zacks Consensus Estimate of $35.4 million.
Incyte has a collaboration agreement with Eli Lilly for Olumiant. The drug is a once-daily oral JAK inhibitor discovered by Incyte and licensed to LLY. It is approved for several types of autoimmune diseases.
Adjusted research and development expenses totaled $348.9 million, down 3% year over year, owing to a decrease in one-time collaboration-related expenses. Adjusted selling, general and administrative costs amounted to $241.9 million, down 2% from the prior-year quarter’s number. This was due to an asset impairment charge with regard to assets written off under an agreement with Wilmington Friends School Inc.
Incyte’s cash and cash equivalents totaled $3.5 billion as of Sep 30, 2023 compared with $3.4 billion as of Jun 30, 2023.
2023 Guidance Tightened
Based on the third-quarter performance, Incyte tightened its previously issued guidance for 2023. The company now expects Jakafi revenues in the range of $2.59-$2.62 billion compared with the earlier projection of $2.58-$2.63 billion.
Pipeline Updates
In October 2023, INCY announced new positive 52-week data from the IIb dose-ranging study, which is evaluating the efficacy and safety of its investigational oral small-molecule JAK1 inhibitor, povorcitinib, for the treatment of adult patients with extensive nonsegmental vitiligo.
Data from the phase IIb study showed that treatment with oral povorcitinib caused substantial total body and facial repigmentation across all treatment groups at week 52.
Apart from vitiligo, Incyte is currently studying povorcitinib in other indications, including hidradenitis suppurativa (HS) and prurigo nodularis (PN). Phase III studies evaluating povorcitinib in HS are presently ongoing.
Also, the phase II study evaluating povorcitinib for treating PN met its primary endpoint. The company plans to initiate a phase III study on povorcitinib for the given indication in 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Incyte has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 indicates a downward shift. Notably, Incyte has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Incyte is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Qiagen (QGEN - Free Report) , a stock from the same industry, has gained 8.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Qiagen reported revenues of $475.89 million in the last reported quarter, representing a year-over-year change of -4.8%. EPS of $0.50 for the same period compares with $0.53 a year ago.
For the current quarter, Qiagen is expected to post earnings of $0.54 per share, indicating a change of +1.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.3% over the last 30 days.
Qiagen has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.