We are maintaining our Neutral recommendation on
Incyte Corporation
(
INCY
) with a target price of $23.00. This is in line with the Zacks #3
Rank (Hold rating) carried by the stock in the short run.
Incyte is a Wilmington, Delaware-based drug discovery and
development company focused on oral compounds to treat inflammation
and cancer.
We are pleased by the November 2011 U.S. approval and subsequent
launch of Jakafi for myelofibrosis (MF). Even though the target
population for MF is not very high, we believe that the experience
gained from marketing Jakafi should be helpful for future product
launches.
The European approval of the drug (to be marketed as Jakavi) for
the MF indication is on track with the Committee for Medicinal
Products for Human Use (CHMP) recommending its approval. The
positive opinion has triggered a milestone payment of $40 million
from partner
Novartis
(
NVS
).
The amount is expected to be received shortly. A further $60
million milestone payment would be due to Incyte following the
achievement of reimbursement and pricing approval in certain E.U.
nations by Novartis.
Incyte also has a collaboration with another established player,
Eli Lilly
(
LLY
). We believe its association with big pharmaceutical companies
will bolster the company's financial position and experience.
However, apart from Jakafi for the polycythemia vera indication,
the other candidates are several years away from hitting the
market. Any hiccup in their development process will weigh heavily
on the stock.
We note that Incyte suffered a setback with its sheddase
inhibitor program when the development of INCB7839 was halted for
metastatic breast cancer. Incyte had faced pipeline setbacks
earlier, as well. The company terminated the development of a CCR5
antagonist compound INCB9471 (INCB15050) as a once daily oral
treatment for HIV/AIDS.
Moreover, since Jakafi was launched for MF only in November
2011, we prefer to adopt a wait-and-watch stance regarding its
sales ramp up.
INCYTE CORP (INCY): Free Stock Analysis Report
LILLY ELI & CO (LLY): Free Stock Analysis
Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis
Report
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