) reported a loss of 13 cents per share in the third quarter of
2013, in line with the loss hinted by the Zacks Consensus
Estimate but narrower than the year-ago loss of 17 cents per
share. The year-over-year narrower loss was due to higher
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Quarter in Detail
Total revenue in the reported quarter increased 40.7% to $85.1
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 $92 million.
Total revenue comprised net product revenues, product royalty
revenues, contract revenues and others.
Incyte recorded net product revenue of approximately $60.2
million from Jakafi sales in the third quarter of 2013, up 37.8%
year over year. Revenues from the drug were also up 11.3%
Incyte has a collaborative agreement with
) to market Jakafi outside the U.S. The drug has also been
approved by the European Commission to treat adults suffering
from primary MF, post-polycythemia vera MF or post-essential
We note that Jakafi is being studied for additional indications
as well. Incyte, in collaboration with 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 Jun 2014 based on the positive results from the RESPONSE
trial. Results from the RELIEF trial are expected in mid-2014.
Jakafi is expected to be approved in this new indication by the
end of next year.
In August, the Incyte announced positive top-line results from
the phase II RECAP trial (n=136) on Jakafi in combination with
) Xeloda (capecitabine) for the treatment of refractory
metastatic pancreatic cancer. Results revealed that overall
survival in patients under the Jakafi arm was higher than that of
the placebo arm. The drug is also being studied for the treatment
of advanced solid tumors.
Incyte received product royalty revenues of $8.2 million from
Novartis during the reported quarter. The company did not record
any product royalty revenues in the year-earlier quarter.
Contract revenues during the third quarter of 2013 remained flat
at $16.7 million. Other revenues accounted for the balance.
Both research and development (R&D) expenses (up 43.2% to
$71.7 million) and selling, general and administrative (SG&A)
expenses (up 28.9% to $26.4 million) climbed during the quarter.
Incyte's efforts to develop its pipeline were primarily
responsible for the rise in R&D expenses in the third quarter
Apart from releasing third-quarter 2013 results, the company
updated its guidance 2013. The company now expects net product
sales for 2013 to be at the higher end of its previous guidance
range of $220-$230 million. The net sales guidance excludes any
product royalty revenues received from Novartis on sales of
Jakavi (EU trade name for Jakafi).
We are encouraged by the strong Jakafi sales during the third
quarter of 2013. Incyte also has a robust pipeline. Successful
development and commercialization of these candidates should
drive growth. We expect investor focus to remain on Jakafi's
performance in the coming quarters.
Incyte, a biopharma company, currently carries a Zacks Rank #3
(Hold). Biopharma stocks such as
) currently look better positioned with a Zacks Rank #1 (Strong