Morningstar | INCY Updated Forecasts and Estimates from 27 Mar 2019
Incyte's myelofibrosis drug Jakafi had strong sales growth in the fourth quarter, with U.S. sales of $380 million representing 26% growth, and almost $1.4 billion for the year (22% growth). Incyte slightly beat our expectations for full-year 2018 on stronger other revenue, but 2019 guidance was in line with our assumptions. While we've slightly raised our long-term assumptions for R&D expenses, we've also boosted the probabilities of approval of several mid- to late-stage pipeline programs, and we don't expect any significant changes to our $97 fair value estimate. The firm's narrow moat is supported by Jakafi's dominance, and its positive moat trend by expanding Jakafi approvals and a growing late-stage pipeline. Incyte has $1.4 billion in cash, which we expect the firm could use to add to its late-stage pipeline.The FDA review of Jakafi in steroid-refractory graft-versus-host disease has been delayed by three months, with approval now expected in May. There will be significant additional data in GVHD from Incyte later this year with the potential to expand into steroid-naïve patients, which could add 15,000 eligible patients to Incyte's Jakafi and next-generation JAK itacitinib. Incyte expects GVHD data (steroid-naïve patients) for itacitinib in the second half, as well as additional ruxolitinib (Jakafi) trials in both acute and chronic steroid-refractory GVHD.
Pemigatinib, which should be filed in second-line cholangiocarcinoma in the third quarter, is also entering pivotal studies in first-line cholangiocarcinoma and first-line bladder cancer this year as well as a pan-tumor trial in FGF/FGFR driver mutation patients. In inflammation, ruxolitinib cream is in phase 3 in atopic dermatitis (2020E data) and entering phase 3 in vitiligo (phase 2 data expected this year). Olumiant also recently met primary endpoints in two atopic dermatitis studies, and royalties from partnered Lilly for the approved indication of rheumatoid arthritis are beginning to ramp.
Incyte is a biopharmaceutical company focused on the discovery, development and commercialization of therapeutics. JAKAFI (ruxolitinib) has been approved for the treatment of patients with intermediate or high-risk myelofibrosis, for the treatment of patients with polycythemia vera, and for the treatment of steroid-refractory acute graft-versus-host disease in adult and pediatric patients 12 years and older. The company has also obtained a license to develop and commercialize ICLUSIG (ponatinib) in Europe and other select countries. In the European Union, ICLUSIG is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase chronic myeloid leukemia.
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