EUR 850.00 For Business Accounts Only

Morningstar | Incyte's Myelofibrosis Franchise Warrants a Narrow Moat.

Incyte's lead drug, Jakafi, initially gained traction in 2011 as the only drug approved for severe myelofibrosis, a rare blood disorder. Jakafi's monopoly on the MF market is likely to continue, especially after two leading competitor drugs have left the playing field after lackluster pivotal trial data. Incyte expanded Jakafi’s label to polycythemia vera in late 2014 and is evaluating the drug in essential thrombocythemia and steroid refractory acute graft versus host disease, which should push peak U.S sales over $2.5 billion. Incyte's other marketed drug is its JAK inhibitor, Olumiant (baricitinib), which was approved in Europe for rheumatoid arthritis in early 2017, in the U.S. in 2018, and is partnered with Eli Lilly. We estimate that RA is a $20 billion-plus market and represents a compelling opportunity for oral treatments like Olumiant, which could support higher treatment penetration rates and grow the market. Pfizer's oral JAK inhibitor Xeljanz was first to market, but safety concerns regarding serious infection rates and malignancies have weighed on its market penetration. Olumiant looks slightly better on these particular safety issues, though its additional black box label of thrombocytosis is expected to cloud its launch in the U.S. We believe the RA market could support multiple JAK inhibitors given the high patient churn through therapies, and Olumiant is in phase 3 in atopic dermatitis and lupus as well. The company also has a robust late-stage pipeline focusing primarily on oncology and other autoimmune indications, which provides attractive long-term growth opportunities for the firm. While Incyte's once-promising IDO1 inhibitor program recently faced a major trial failure, we believe the rest of the company's robust pipeline supports a long-term growth trajectory. Incyte has used the cash generated from its successful Jakafi franchise to build out a suite of assets to be evaluated in combinations for immuno-oncology indications.