) reported earnings of 5 cents per share in the second quarter of
2013, below the Zacks Consensus Estimate of 8 cents but above the
year-ago earnings of 3 cents per share. The year-over-year rise
in earnings was due to higher revenues.
Quarter in Detail
Total revenue in the reported quarter jumped 17.5% to $101.7
million. Revenues were boosted by the increase in Jakafi sales
and an inclusion of product royalty revenues. Jakafi, Incyte's
sole marketed product, was launched in the U.S. in Nov 2011, for
treating patients suffering from intermediate or high-risk
myelofibrosis (MF). Revenues were however short of the Zacks
Consensus Estimate of $107 million.
Total revenue comprised net product revenues, product royalty
revenues, contract revenues and others.
Incyte recorded net product revenues of approximately $54.1
million from Jakafi sales in the second quarter of 2013, up 82%
year over year. Revenues from the drug were up 12% sequentially.
Incyte has a collaborative agreement with
) to market Jakafi outside the U.S. The drug is also approved by
the European Commission to treat adults suffering from primary
MF, post-polycythemia vera MF or post-essential thrombocythemia
We note that Jakafi is being studied for additional indications.
Novartis is currently evaluating Jakafi in two phase III clinical
trials (RESPONSE and RELIEF), for the treatment of patients
suffering from polycythemia vera (PV). The company intends to
submit a supplemental new drug application for Jakafi in the PV
indication in the first half of 2014 based on the positive
results from the RESPONSE trial.
Jakafi is also being evaluated in a phase II trial in combination
) Xeloda for the treatment of refractory metastatic pancreatic
cancer. Top-line results from the study are expected soon. The
company is looking to expand Jakafi's label in other oncology
indications as well.
Incyte's product royalty revenues came in at $5.8 million during
the reported quarter. The company did not record any product
royalty revenues in the year-earlier quarter. Contract revenues
declined 26.4% to $41.7 million during the quarter. Other
revenues were $39,000, down 50% from the year-ago quarter.
Both research and development (R&D) expenses (up 18.1% to
$61.0 million) and selling, general and administrative (SG&A)
expenses (up 17.9% to $23.2 million) climbed during the quarter.
Incyte's efforts to develop its pipeline were primarily
responsible for the rise in R&D expenses in the second
quarter of 2013. Higher costs related to the marketing of Jakafi
pushed the SG&A costs up.
Apart from releasing the second quarter 2013 quarterly results,
the company also updated its guidance for 2013. The company upped
its net product sales guidance for Jakafi to the range of
$220-$230 million from the previous range of $210-$225 million.
The net sales guidance excludes any product royalty revenues
received from Novartis on sales of Jakavi (EU trade name of
We are encouraged by the strong Jakafi sales during the second
quarter of 2013. Incyte also has a robust pipeline. Successful
development and commercialization of these candidates should
drive growth at the company.
Incyte, a biopharma company, currently carries a Zacks Rank #3
(Hold). Other biopharma stocks such as
) currently look better positioned with a Zacks Rank #1 (Strong
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