On Jan 6, we reiterated our Neutral recommendation on
) largely due to its modest third quarter 2013 performance. Our
investment thesis is supported by a Zacks Rank #3 (Hold).
Why the Reiteration?
On Oct 31, 2013, Incyte reported a loss 13 cents per share for
the third quarter of 2013, in line with the Zacks Consensus
Estimate. However, sales of Jakafi, Incyte's sole marketed
product, increased 37.8% to $60.2 million during the quarter.
The company now expects net product sales for 2013 on the
higher end of its previously guided range of $220-$230 million.
We note that Jakafi has performed well since its launch in the
U.S. in Nov 2011 for treating patients suffering from
intermediate or high-risk myelofibrosis.
We are encouraged by Incyte's efforts to expand Jakafi's label
further. Jakafi is undergoing two global phase III studies
(RESPONSE and RELIEF) for the polycythemia vera (PV) indication.
The company expects results from the RESPONSE trial in early
2014. Incyte intends to file a supplemental new drug application
in the U.S. for the PV indication on the basis of results from
the RESPONSE trial in the first half of 2014 with approval
expected by the end of the year.
Jakafi is also being studied for the treatment of solid/other
hematologic tumor and pancreatic cancer. Successful label
expansion of the drug should drive growth further. We expect
investor focus to remain on Jakafi's performance and updates on
its label expansion in the coming quarters.
However, we are concerned about Incyte's over-dependence on
Jakafi for growth. Consequently, the company's pipeline needs to
deliver. We prefer to remain on the sidelines until more
visibility is obtained on the pipeline.
FOREST LABS A (FRX): Free Stock Analysis
INCYTE CORP (INCY): Free Stock Analysis
JAZZ PHARMACEUT (JAZZ): Free Stock Analysis
LANNETT INC (LCI): Free Stock Analysis Report
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