) reported earnings of 14 cents per share in the fourth quarter
of 2012 as opposed to a loss of 44 cents per share suffered in
the year-ago quarter. The Zacks Consensus Estimate had called for
breakeven earnings for the quarter. The strong performance in the
final quarter was attributed to higher revenues.
The company however suffered a loss of 34 cents per share in
full year 2012, narrower than the Zacks Consensus Estimate of a
loss of 48 cents and the year-ago loss of $1.49 per share.
Incyte's full year revenues were $297.1 million compared with
$95.5 million in the year-ago quarter. Incyte's full year
revenues were ahead of the Zacks Consensus Estimate of $276
Quarter in Details
Total revenues in the reported quarter jumped to $113.8
million from $28.9 million in the year-ago quarter. Revenues were
boosted by the presence of Jakafi sales. Jakafi, Incyte's sole
marketed product, was launched in the US in Nov 2011, for
treating patients suffering from intermediate or high-risk
myelofibrosis (MF). Revenues beat the Zacks Consensus Estimate of
Total revenues comprised net product revenues, royalty
revenues, contract revenues and others.
Incyte recorded net product revenues of approximately $43.3
million from Jakafi sales in the drug's fourth full quarter in
the market. The company recorded $2 million as net product sales
of Jakafi in the year-ago period.
Incyte has a collaborative agreement with
) to market Jakafi outside the US. The drug is now 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 as well. Novartis is currently evaluating Jakafi in
two phase III clinical trials, for the treatment of patients
suffering from polycythemia vera (PV). The company expects to
submit a supplemental new drug application in 2014.
Jakafi is also being evaluated in a phase II trial in
Roche Holding AG
) Xeloda for the treatment of refractory metastatic pancreatic
cancer. Final results from the study are expected by the end of
Incyte's product royalty revenues came in at $3.7 million
during the reported quarter. Contract revenues shot up 149.6%
year over year to $66.7 million. Other revenues were $155,000, up
10.7% from the year-ago quarter.
Both research and development (R&D) expenses (up 15.2% to
$59.8 million) and selling, general and administrative (SG&A)
expenses (up 12.2% to $23.7 million) climbed during the quarter.
Incyte's efforts to develop its pipeline were primarily
responsible for the rise in R&D expenses in the fourth
quarter of 2012. Higher costs related to the marketing of Jakafi
were primarily responsible for pushing the SG&A costs up.
Apart from disclosing its financial results, Incyte also
provided its guidance for 2013. The company expects total
revenues from net product sales of Jakafi in the range of
$210-$225 million, excluding any product royalty revenues
received from Novartis on sales of Jakavi.
Incyte also expects to receive $60 million as contract
revenues from Novartis if Jakafi gets pricing approval in certain
EU countries. Incyte also expects to earn another $66 million as
amortization of the upfront payments under a collaborative
agreement in 2013.
R&D expenses for full year 2013 are expected in the range
of $260 million to $270 million including a non-cash expense of
approximately $25 million to $28 million from the impact of
expensing employee stock options.
Incyte's SG&A expenses for 2013 are expected to be
$100-$110 million, which includes non-cash expense of
approximately $14 million to $17 million from the impact of
expensing employee stock options.
We believe that investor focus will be on the market
performance of Jakafi going forward. Incyte currently carries a
Zacks Rank #4 (Sell). However, other bio-pharma stocks such as
) carry a Zacks Rank #2 (Buy).
INCYTE CORP (INCY): Free Stock Analysis
NOVARTIS AG-ADR (NVS): Free Stock Analysis
(RHHBY): ETF Research Reports
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