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Here's Why Incyte (INCY) Stock is Up More Than 7% in a Week

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Shares of Incyte (INCY - Free Report) moved up 7.2% in the past week compared with the industry’s rise of 2.1%.

The upside followed after INCY announced a share repurchase authorization of $2.0 billion.

Investors cheered the news as the move will increase returns for the shareholders who were earlier disappointed with the first-quarter results.

Incyte commenced a modified ‘Dutch Auction’ tender offer to repurchase shares of its common stock for an aggregate purchase price of up to $1.672 billion. Incyte is offering to purchase up to $1.672 billion in value of its common stock at a price not greater than $60.00 per share nor less than $52.00 per share. A modified Dutch Auction tender offer allows stockholders to indicate how much stock they wish to tender and at what price within the range described above.

Concurrently, INCY entered into a stock purchase agreement with the Baker Entities to repurchase up to $328.0 million of the company’s common stock. This would enable the Baker Entities to maintain their current ownership level of approximately 16.4% of Incyte’s outstanding common stock. The Baker Entities purchase will be at the same price per share as is determined and paid in the tender offer.

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Last month, Incyte reported lower-than-expected results for the first quarter, as both sales and earnings missed sales estimates.

Lead drug Jakafi sales too missed expectations due to the impact of the channel inventory reduction in the first quarter. The company reiterated its annual Jakafi revenue guidance of $2.69 billion to $2.75 billion based on the strong patient demand and anticipated growth for the balance of the year.

Incyte Corporation Price, Consensus and EPS Surprise


Incyte Corporation Price, Consensus and EPS Surprise

Incyte Corporation price-consensus-eps-surprise-chart | Incyte Corporation Quote


Incyte is heavily dependent on Jakafi for growth. Investors, of late, are also awaiting management’s efforts to diversify the revenue base as Jakafi is slated to lose patent protection towards the end of the decade.

Incyte recently announced that it will acquire Escient Pharmaceuticals and its pipeline of oral MRGPR antagonists for $750 million, plus Escient’s net cash remaining at the close of the transaction. Escient’s development portfolio included EP262, a first-in-class, potent, highly selective, once-daily small molecule antagonist of Mas-related G protein-coupled receptor (MRGPRX2) and EP547, a first-in-class oral MRGPRX4 antagonist.

In February 2024, Incyte entered into an asset purchase agreement with MorphoSys AG, which gave Incyte exclusive global rights for tafasitamab, a humanized Fc-modified CD19-targeting immunotherapy marketed in the United States as Monjuvi and outside of the country as Minjuvi.

While the move to buyback shares boosts returns for shareholders, management should also look out for strategic acquisitions and collaborations to expand its portfolio.

Zacks Rank & Stocks to Consider

Incyte currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks from the healthcare industry are Ligand Pharmaceuticals (LGND - Free Report) and ANI Pharmaceuticals (ANIP - Free Report) . Both stocks carry a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, the Zacks Consensus Estimate for Ligand’s 2024 and 2025 earnings per share (EPS) has remained constant at $4.56 and $5.27, respectively. Shares of LGND are up 20.1% year to date.

In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPS have improved from $4.43 to $4.44. Shares of ANIP have jumped 17.6% year to date. ANIP’s earnings beat estimates in each of the trailing four quarters, delivering an earnings surprise of 53.90%, on average.


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