A month has gone by since the last earnings report for Incyte Corporation INCY. Shares have added about 26.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Incyte’s Earnings & Revenues Up Y/Y
Incyte reported fourth-quarter earnings of $0.15 beating the Zacks Consensus Estimate of $0.14. Incyte had reported earnings of $0.29 per share in the year-ago quarter.
Quarterly revenues came in at $326.5 million, up 33.9% year over year, and beat the Zacks Consensus Estimate of $325.7 million. The strong top-line growth was driven by higher sales of Jakafi in the U.S. and Iclusig in Europe as well as royalties from ex-U.S. sales of Jakavi.
Quarter in Detail
Jakafi sales grew 30%, year over year to $237.5 million. Net product revenue of Iclusig amounted to $12.9 million. Product royalty revenues from Novartis for the commercialization of Jakafi in ex-U.S. markets surged 41% to $33.2 million. Contract revenues rose approximately 12.2% to $42.9 million.
Research and development (R&D) expenses were up 38.5% to $161.6 million. Selling, general and administration (SG&A) expenses amounted to $96.0 million, up 83.1% year over year.
2016 Results
Revenues for 2016 came in at $1.1 billion, up 46.7% from $753.7 million in 2015. The reported revenues were in line with the Zacks Consensus Estimate of $1.1 billion. Earnings per share came in at $0.54, up from $0.03 in 2015.
2017 Outlook
The company expects Jakafi revenues in the range of $1.02 – $1.07 million. Iclusig revenues are, however, still expected in the range of $60–$65 million.
R&D expenses are now expected in the range of $785–$835 million. SG&A expenses are still expected in the range of $340–$360 million.
Pipeline Update
Concurrent with the quarterly result, Incyte announced that the European Commission approved Olumiant (baricitinib) for patients with rheumatoid arthritis (RA). The drug has been licensed to Eli Lilly and Company and is under regulatory reviews. The approval triggers a $65 million payment to Incyte from Lilly, along with additional potential milestone payments, as well as royalties on sales of Olumiant. Lilly announced that it plans to begin a phase III trial on Olumiant in patients with psoriatic arthritis during 2017.