) second-quarter 2012 earnings of 3 cents per share compared
favorably with the year-ago loss of 41 cents per share. Results
were boosted by higher revenues. The Zacks Consensus Estimate
hinted at breakeven earnings.
Total revenues in the reported quarter jumped to $86.5 million
from $16.8 million in the year-ago quarter. Revenues were boosted
by the presence of Jakafi sales and milestone payment received from
). Jakafi, Incyte's sole marketed product, was launched in the US
in November 2011, for treating patients suffering from intermediate
or high-risk myelofibrosis. Revenues were above the Zacks Consensus
Estimate of $85 million.
Total revenues comprised net product revenues, contract revenues
and license and royalty revenues.
Incyte recorded net product revenues of approximately $29.7
million from Jakafi sales in the drug's second full quarter in the
market. Jakafi sales were up more than 53.9% sequentially.
Contract revenues climbed to $56.7 million from $16.7 million.
We note that contractual revenues include a $40 million milestone
payment from Novartis. This milestone payment was triggered by a
positive opinion issued by the Committee for Medicinal Products for
Human Use (CHMP) regarding the EU approval of Jakafi.
License and royalty revenues were $78 million, up 5.4% from the
Both research and development (R&D) expenses (up 12.0% to
$51.6 million) and selling, general and administrative (SG&A)
expenses (up 66.3% to $19.7 million) were on the upswing during the
quarter. The company's efforts to develop its pipeline coupled with
higher stock-based compensation expenses pushed up the R&D
expenses in the second quarter of 2012. Higher costs related to the
marketing of Jakafi was primarily responsible for pushing the
SG&A costs up.
Apart from disclosing financial results, Incyte also provided
guidance for 2012. The company expects net sales of Jakafi in the
range of $120 - $135 million.
We believe that investor focus will be on the market performance
of Jakafi going forward. Currently, we have a Neutral stance on
Incyte in the long run. The stock carries a Zacks #2 Rank (Buy
rating) in the short run.
INCYTE CORP (INCY): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis
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