A month has gone by since the last earnings report for Incyte (INCY). Shares have added about 2.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Incyte due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Q3 Earnings Miss Estimates, Revenues Beat on Higher Product Sales
Incyte reported third-quarter 2024 adjusted earnings of $1.07 per share, which missed the Zacks Consensus Estimate of $1.12. The company recorded earnings of $1.10 per share in the year-ago quarter.
Total revenues in the reported quarter were $1.14 billion, which grew 23.8% year over year, driven by the sustained performance of its lead drug, Jakafi (ruxolitinib), and increased sales of Opzelura (ruxolitinib) cream on strong launch and demand. The top line beat the Zacks Consensus Estimate of $1.09 billion.
Q3 Results in Detail
Jakafi’s (a first-in-class JAK1/JAK2 inhibitor approved for polycythemia vera, myelofibrosis and refractory acute graft-versus-host disease) revenues was $741.2 million, up 16% from the year-ago quarter, owing to a 10% increase in total demand. Jakafi's sales beat the Zacks Consensus Estimate of $717.5 million.
Opzelura (ruxolitinib) cream, approved for atopic dermatitis and vitiligo, generated $139.3 million in sales, which rose 52% year over year and surpassed the Zacks Consensus Estimate of $130.8 million. The year-over-year rise in sales was driven by continued growth in new patient starts and refills in the United States and increased contribution from the EU, driven by continued uptake in Germany and the launch in France.
The newly approved medicine Zynyz (retifanlimab-dlwr) generated sales of $0.69 million. The company obtained accelerated approval for Zynyz to treat metastatic or recurrent locally advanced Merkel cell carcinoma. The net product revenues of Iclusig were $29.7 million, up 7% year over year. The figure beat the Zacks Consensus Estimate of $28.1 million. Pemazyre generated $20.7 million in sales, indicating a year-over-year decrease of 9%.
The figure missed the Zacks Consensus Estimate of $22.2 million.
Minjuvi's revenues totaled $31.4 million, surging 277% from the prior-year quarter’s number, following the acquisition of the exclusive global rights to the drug in February 2024. The figure, however, missed the Zacks Consensus Estimate of $33.9 million. Incyte gained worldwide exclusive global rights for tafasitamab from MorphoSys AG, which is marketed as Monjuvi in the United States and as Minjuvi in the ex-U.S. markets in February.
Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi in ex-U.S. markets. Jakavi royalty revenues from Novartis for commercialization in ex-U.S. markets rose 20% to $115.7 million. Jakavi royalties beat the Zacks Consensus Estimate of $104.7 million.
Incyte also receives royalties from the sales of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small-cell lung cancer. Its partner, Novartis, has exclusive worldwide development and commercialization rights for Tabrecta. The royalty revenues from the drug’s sales amounted to $5.9 million, up 43% year over year.
Olumiant’s (baricitinib) product royalty revenues from Eli Lilly totaled $34.8 million, up 17% year over year. The figure missed the Zacks Consensus Estimate of $35.2 million. Incyte has a collaboration agreement with Eli Lilly for Olumiant. The drug is a once-daily oral JAK inhibitor discovered by Incyte and licensed to LLY. It is approved for several types of autoimmune diseases.
Adjusted research and development expenses totaled $525.3 million, up 51% year over year. This increase was primarily due to the $100 million milestone payment made to MacroGenics during the third quarter of 2024 and continued investment in the company’s late-stage development assets.
Adjusted selling, general and administrative expenses were $277.3 million, up 15% from the prior year quarter’s number, primarily due to the timing of consumer marketing activities and that of certain other expenses. Incyte’s cash, cash equivalents and marketable securities totaled $1.8 billion as of Sept. 30, 2024, compared with $1.4 billion as of June 30, 2024.
Updated 2024 Guidance
Incyte raised the 2024 revenue guidance for Jakafi. The company now expects Jakafi revenues in the range of $2.74-$2.77 billion compared with the earlier projection of $2.71-$2.75 billion.
Adjusted research and development expenses are now expected in the band of $2.395-$2.435 billion compared with the earlier projection of $2.295-$2.335 billion. Adjusted selling, general and administrative expenses are expected in the range of $1.115-$1.140 billion.
Key Recent Developments
In August 2024, Incyte and partner Syndax Pharmaceuticals obtained FDA approval for axatilimab-csfr, an anti-CSF-1R antibody, for the treatment of chronic graft-versus-host disease after the failure of at least two prior lines of systemic therapy in adult and pediatric patients weighing at least 40 kg. The candidate was approved under the brand name Niktimvo.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.38% due to these changes.
VGM Scores
At this time, Incyte has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Incyte has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Incyte belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Alkermes (ALKS), has gained 11.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Alkermes reported revenues of $378.14 million in the last reported quarter, representing a year-over-year change of -0.7%. EPS of $0.73 for the same period compares with $0.64 a year ago.
Alkermes is expected to post earnings of $0.82 per share for the current quarter, representing a year-over-year change of +70.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +6.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Alkermes. Also, the stock has a VGM Score of A.
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