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Incyte's Jakafi Demand Strong, Label Expansion to Boost Sales

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We issued an updated report on Incyte Corporation (INCY - Free Report) on Oct 11.

Incyte Corporation is a biopharmaceutical company focused on the discovery, development and commercialization of proprietary therapeutics.

Incyte’s lead drug, Jakafi (ruxolitinib), is a first-in-class JAK1/JAK2 inhibitor approved in the United States for the treatment of patients with polycythemia vera (“PV”), who have had an inadequate response to or are intolerant of hydroxyurea.

It is also approved for the treatment of 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.

Its label has been updated several times since approval. Jakafi sales are expected to get a boost from the increased demand and updated labels.

In October 2017, the FDA approved a label update of the drug to add new patient-reported outcome (PRO) data from the COMFORT-I study, as well as update the warning related to progressive multifocal leukoencephalopathy. The pivotal REACH1 trial, evaluating Jakafi in patients with steroid-refractory acute graft-versus-host disease (“GVHD”), has completed enrollment. 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. Incyte expects Jakafi revenues to be $1.35-$1.4 billion in 2018, more than 20% growth in 2017. Meanwhile, REACH2 and REACH3 studies, evaluating steroid-refractory acute and steroid-refractory chronic graft-versus-host disease, respectively, are ongoing.

The company’s second JAK1 and JAK2 inhibitor, Olumiant (baricitinib, JAK1/JAK2 inhibitor) was approved in the EU in February 2017 for rheumatoid arthritis (RA). Incyte is co-developing Olumiant with Eli Lilly (LLY - Free Report) . The recent FDA approval of Olumiant has triggered a $100-million milestone payment from Lilly.

Incyte also has several candidates in early-to mid-stage development in its pipeline, including both targeted therapies and immune therapies that are being developed in oncology and outside oncology.  Promising targeted therapies include INCB50465 (phase II for DLBCL), INCB50465 (phase II for follicular lymphoma, marginal zone lymphoma and mantle cell lymphoma) and INCB54828 (phase II for bladder cancer and cholangiocarcinoma).

However, Incyte suffered a huge setback with the failure of the phase III study, ECHO-301, evaluating epacadostat, one of the most promising candidates of the company, in combination with Merck’s (MRK - Free Report) Keytruda. Year to date, shares of the company have declined 32.6% compared with the industry’s decline of 10.9%.

Moreover, Incyte’s dependence on Jakafi is concerning.

Zacks Rank

Incyte currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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