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Incyte (INCY) to Report Q2 Earnings: What's in the Cards?
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Incyte Corporation (INCY - Free Report) is scheduled to report second-quarter 2018 results on Jul 31, before the market opens.
In the last reported quarter, the company missed estimates by 112.50%. Incyte’s earnings track record has been mixed so far. Over the last four quarters, the company’s earnings surpassed expectations twice, while missing in the other two. Nevertheless, Incyte delivered an average positive earnings surprise of 38.7% in the said time frame.
Let’s see, how things are shaping up for this quarter.
Factors Driving the Growth
Incyte’s lead drug, Jakafi (ruxolitinib), is a first-in-class JAK1/JAK2 inhibitor, approved for the treatment of patients with polycythemia vera (“PV”), patients with intermediate or high-risk myelofibrosis (“MF”), including primary MF, post-PV MF, and post-essential thrombocythemia MF. While Incyte markets the drug in the United States, it is marketed by Novartis (NVS - Free Report) as Jakavi outside the country.
Incyte continues to gain traction by Jakafi’s performance. Jakafi sales grew 25%, year over year to $313.7 million, driven by strong patient demand in the first quarter. We expect the trend to continue in the second quarter as well. The sales guidance for 2018 was also impressive. The company continues to expect Jakafi revenues in the range of $1,350-$1,400 million in 2018.
In order to expand the patient population and increase the commercial potential of the drug, the company is working on expanding the Jakafi’s label, further. We expect investors to focus on the pipeline development efforts as well, given the recent setbacks.
Last month, Incyte reported positive results from the phase II trial, REACH1, evaluating Jakafi in combination with corticosteroids for the treatment of patients with steroid-refractory acute graft-versus-host disease (GVHD). The study met its primary endpoint. Propelled by positive data from the REACH 1 study, Incyte now plans to file a Supplemental New Drug Application (sNDA) with the FDA for the label expansion of Jakafi, for the treatment of steroid-refractory acute GVHD, during the third quarter of 2018. Jakafi sales are expected to get a boost from the updated labels, even though not for the second qurater.
In addition, we remind investors that while Jakafi sales and royalties are key components of Incyte’s revenue growth, Iclusig sales and Olumiant royalties are also contributing to the top line. Iclusig revenues are expected in the range of $80-$85 million.
In June 2018, Incyte and partner Eli Lilly and Company (LLY - Free Report) announced that the FDA has approved the 2 mg dose of Olumiant (baricitinib), a once-daily oral medication for the treatment of adults with moderately-to-severely active rheumatoid arthritis (RA) who have had an inadequate response to one or more tumor necrosis factor (TNF) inhibitor therapies. As part of the approval, the companies have agreed to conduct a randomized controlled clinical trial to evaluate the long-term safety of baricitinib in patients with rheumatoid arthritis. Incyte will obtain a $100 million milestone payment from Eli Lilly as a result of the approval, which Incyte expects to recognize in the second quarter of 2018. Hence, the top line will be boosted by the payment. However, the 4 mg dose of the drug was not approved.
The company also updated its guidance with the first-quarter results. R&D expenses are now expected in the range of $1,013-$1,108 million, down from $1,077-1,172 million. SG&A expenses are now expected in the range of $340-$355 million, down from the earlier expectation of $465-$480 million.
Share Price Performance
Incyte’s stock has lost 26.2% in the year so far, worse than the industry’s decline of 1.2%. The recent pipeline setbacks continue to weigh on share price performance
Earnings Whispers
Our proven model does not conclusively show that Incyte will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: For Incyte, Earnings ESP is -21.2%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Incyte currently carries a Zacks Rank #3. Although the rank is favorable, the company's negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
A Stock to Consider
Here is a health care stock worth considering with the right combination of elements to beat on earnings:
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Incyte (INCY) to Report Q2 Earnings: What's in the Cards?
Incyte Corporation (INCY - Free Report) is scheduled to report second-quarter 2018 results on Jul 31, before the market opens.
In the last reported quarter, the company missed estimates by 112.50%. Incyte’s earnings track record has been mixed so far. Over the last four quarters, the company’s earnings surpassed expectations twice, while missing in the other two. Nevertheless, Incyte delivered an average positive earnings surprise of 38.7% in the said time frame.
Incyte Corporation Price and Consensus
Incyte Corporation Price and Consensus | Incyte Corporation Quote
Let’s see, how things are shaping up for this quarter.
Factors Driving the Growth
Incyte’s lead drug, Jakafi (ruxolitinib), is a first-in-class JAK1/JAK2 inhibitor, approved for the treatment of patients with polycythemia vera (“PV”), patients with intermediate or high-risk myelofibrosis (“MF”), including primary MF, post-PV MF, and post-essential thrombocythemia MF. While Incyte markets the drug in the United States, it is marketed by Novartis (NVS - Free Report) as Jakavi outside the country.
Incyte continues to gain traction by Jakafi’s performance. Jakafi sales grew 25%, year over year to $313.7 million, driven by strong patient demand in the first quarter. We expect the trend to continue in the second quarter as well. The sales guidance for 2018 was also impressive. The company continues to expect Jakafi revenues in the range of $1,350-$1,400 million in 2018.
In order to expand the patient population and increase the commercial potential of the drug, the company is working on expanding the Jakafi’s label, further. We expect investors to focus on the pipeline development efforts as well, given the recent setbacks.
Last month, Incyte reported positive results from the phase II trial, REACH1, evaluating Jakafi in combination with corticosteroids for the treatment of patients with steroid-refractory acute graft-versus-host disease (GVHD). The study met its primary endpoint. Propelled by positive data from the REACH 1 study, Incyte now plans to file a Supplemental New Drug Application (sNDA) with the FDA for the label expansion of Jakafi, for the treatment of steroid-refractory acute GVHD, during the third quarter of 2018. Jakafi sales are expected to get a boost from the updated labels, even though not for the second qurater.
In addition, we remind investors that while Jakafi sales and royalties are key components of Incyte’s revenue growth, Iclusig sales and Olumiant royalties are also contributing to the top line. Iclusig revenues are expected in the range of $80-$85 million.
In June 2018, Incyte and partner Eli Lilly and Company (LLY - Free Report) announced that the FDA has approved the 2 mg dose of Olumiant (baricitinib), a once-daily oral medication for the treatment of adults with moderately-to-severely active rheumatoid arthritis (RA) who have had an inadequate response to one or more tumor necrosis factor (TNF) inhibitor therapies. As part of the approval, the companies have agreed to conduct a randomized controlled clinical trial to evaluate the long-term safety of baricitinib in patients with rheumatoid arthritis. Incyte will obtain a $100 million milestone payment from Eli Lilly as a result of the approval, which Incyte expects to recognize in the second quarter of 2018. Hence, the top line will be boosted by the payment. However, the 4 mg dose of the drug was not approved.
The company also updated its guidance with the first-quarter results. R&D expenses are now expected in the range of $1,013-$1,108 million, down from $1,077-1,172 million. SG&A expenses are now expected in the range of $340-$355 million, down from the earlier expectation of $465-$480 million.
Share Price Performance
Incyte’s stock has lost 26.2% in the year so far, worse than the industry’s decline of 1.2%. The recent pipeline setbacks continue to weigh on share price performance
Earnings Whispers
Our proven model does not conclusively show that Incyte will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: For Incyte, Earnings ESP is -21.2%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Incyte currently carries a Zacks Rank #3. Although the rank is favorable, the company's negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
A Stock to Consider
Here is a health care stock worth considering with the right combination of elements to beat on earnings:
ArQule, Inc. is scheduled to report second-quarter results on Aug 1. The company has an Earnings ESP of +80.0% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>