Analyst Conference Summary



conference date: February 9, 2021 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2020 (Q4, fourth quarter 2020)

Forward-looking statements

Overview: Modest revenue growth, new pipeline filings.

Basic data (GAAP):

Revenue was $605 million, down 23% sequentially from $790 million, and up 6% from $569 million in the year-earlier period.

Net income was $54 million, down 64% sequentially from $150 million, and up from negative $721 million year-earlier.

Diluted EPS was $0.24, down 65% sequentially from $0.68, and up from negative $3.33 year-earlier.


Reaffirmed guidance including full year 2021 Jakafi revenue $2.125 to $2.2 billion.

Conference Highlights:

Hervé Hoppenot, Incyte's CEO, said "While Jakafi net sales were affected by typical seasonal effects and softer patient demand growth due to the ongoing pandemic, we remain confident in our full-year outlook. We are already seeing a return of new patient starts to pre-COVID levels and are excited for the potential launch in steroid-refractory chronic graft-versus-host disease later this year. The launches of Monjuvi and Pemazyre continue to progress with good uptake by both academic and community physicians. We expect an exciting year ahead for Incyte with the potential for multiple approvals, including ruxolitinib cream in atopic dermatitis, and several regulatory filings, notably parsaclisib in NHL and ruxolitinib cream in vitiligo. We are also initiating pivotal trials across key development programs for both tafasitamab and LIMBER this year." Saw both typical Q1 seasonality (high gross to net) and continued impact from pandemic on new patient starts.

Expects strong revenue growth for rest of year.

The sNDA seeking approval of ruxolitinib for the treatment of steroid-refractory chronic GVHD was been accepted for Priority Review by the FDA; the PDUFA date is June 22, 2021. The application for approval was based on the successful randomized REACH3 trial comparing ruxolitinib with best available therapy.

Both monotherapy trials of INCB57643 (BET) and INCB00928 (ALK2) are ongoing, and combination trials of both agents with ruxolitinib in patients with myelofibrosis are expected to initiate later in 2021. Two Phase 3 trials of ruxolitinib in combination with parsaclisib as a first-line therapy for patients with MF (LIMBER-313) and as a therapy for MF patients with a suboptimal response to ruxolitinib monotherapy (LIMBER-304) are ongoing.

In April 2021, Incyte and Lilly announced the FDA extended the review period for the sNDA for baricitinib for the treatment of moderate to severe atopic dermatitis by three months to allow time for additional data analyses. The PDUFA action date is now expected in early Q3 2021. In April 2021, Incyte and Lilly announced the primary endpoint in the Phase 3 COV-BARRIER study evaluating baricitinib in hospitalized COVID-19 patients was not met. There was, however, a 38% reduction in mortality by Day 28 in patients treated with baricitinib in addition to SoC.

The NDA for Ruxolitinib cream for atopic dermatitis now has an FDA PDUFA date of June 21, 2021. For vitiligo Phase 3 treatment recruitment is complete, with topline data expected in 2021. Preparing for launch.

Capmatinib was approved as Tabrecta in metastatic NSCLC (with MET exon 14 skipping mutations) in Q3 2020. Worldwide rights are licensed to Novartis. Also approved in Japan.

Product revenue was $505 milion; royalties $100 million; milestone and contract revenue $0 million.

Incyte Revenue by Type
(in $ millions) Q1 2021 Q4 2020 Q1 2020 y/y
Jakafi product
Jakavi royalty
Iclusig product
Pemazyre product
Olumiant royalty
Tabrecta royalty
milestone, other
Total revenue:

Jakafi royalty revenue is from sales by Novartis outside the U.S.

Monjuvi sales do not appear as revenue yet because offset by Morphosys loss sharing, but were $15.5 million in Q1 2020. Expects ramp to accelerate as the year progresses.

Non-GAAP numbers: Net income $149 million, down sequentially from $205 million, and up from negative $619 million year-earlier. Diluted EPS $0.67, down sequentially from $0.93, and up from negative $2.86 year-earlier.

Cash and equivalents ended at $1.96 billion, up sequentially from $1.80 billion. No debt. There is a $266 million acquisition-related contingent consideration liability.

In March, Pemazyre (pemigatinib) was approved in the Japan for the treatment of patients with unresectable biliary tract cancer (BTC) with a fibroblast growth factor receptor 2 (FGFR2) fusion gene, worsening after cancer chemotherapy. The European Commission approved Pemazyre for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed after at least one prior line of systemic therapy. Along with the continued launch in the U.S., this signifies the first internally discovered product to be globally commercialized by Incyte. The Phase 2 tumor agnostic study of pemigatinib is ongoing and continues to enroll well.

In December 2020, Incyte and Cellenkos announced a development collaboration to investigate the combination of ruxolitinib and Cellenkos' CK0804, cryopreserved CXCR4 enriched, allogeneic, umbilical cord blood-derived T-regulatory cells, in patients with myelofibrosis. Incyte obtained an exclusive option to acquire sole rights to develop and commercialize CK0804, and genetically-modified variants of CK0804, in benign and malignant hematology indications.

In December 2020, Incyte and Lilly announced that Olumiant had been approved in Japan as a treatment of patients with atopic dermatitis who have inadequate response to conventional therapies. In November 2020, Incyte and Lilly announced that the FDA) issued an Emergency Use Authorization (EUA) for emergency use of baricitinib in combination with remdesivir in hospitalized patients with suspected or laboratory confirmed COVID-19 who require supplemental oxygen or mechanical ventilation.

INCB54707 showed positive results, presented in October 2020 for moderate-to-severe hidradenitis suppurativa (HS). A Phase 2b, randomized, double-blind, placebo-controlled trial is ongoing.

INCB00928 Phase 2 trial for fibrodysplasia ossificans progressiva is underway.

In March 2021, the Marketing Authorization Application seeking approval of retifanlimab in squamous cell carcinoma of the anal canal (SCAC) was validated by the EMA. This follows the Biologics License Application (BLA) acceptance by the FDA for the same indication earlier in 2021.

INCB39110 (now Itacitinib) Phase 3 GRAVITAS-301 trial for treatment of patients with newly-diagnosed acute GVHD continues. If successful, Incyte expects to submit applications for itacitinib in major markets globally. GRAVITAS-309, a Phase 3 trial of itacitinib as a treatment for patients with newly-diagnosed chronic GVHD, was launched in January 2020 with results expected in 2021. An NSCLC combination trial is in Phase 1/2.

INCMGA0012 (PD-1) is now in Phase 2 for endometrial cancer, merkel cell carcinoma, and anal cancer, with data expected in 2020, and possible future combination studies.

Tafacitimab (Monjuvi) trials in DLBCL and other cancers are expected to begin in 2021. Phase 3 FL trial is now ongoing.

See also Incyte pipeline.

Cost of product revenue was $29 million. GAAP operating expenses were: $307 million for research and development; $154 million for selling, general and administrative expenses; $10 million collaboration loss sharing; and a $6 million charge for change in value of a contingent consideration. Total costs $506 million. Leaving income from operations of $99 million. Interest and other expense was $2 million. Unrealized loss on investment was $28 million. Income tax $16 million.

Q&A Summary:

Monjuvi ramp confidence? DLBCL patient visits are down abut 10% from the pandemic. Our combination has a very good profile, but we need to continue our education efforts.

New entrant v. Monjuvi? It is in the third-line setting, Monjuvi is second line. We believe new entries all have toxicity problems compared to Monjuvi.

Rux cream expectations for vitiligo? Readout should be this quarter, should replicate Phase 2 data, including repigmentation. The longer term updates show improvements.

Rux cream atopic dermatitis talks with FDA? Talks have gone as expected, remain on track for PDUFA date.

Rux durability of effect, use chronically rather than just a bridge to biologics? For dermatitis the public data shows it is best to date, plus an outstanding itch response. Durability is treat to remission, then restart when systems recur. 3 to 4 x 60 gm tubes per year estimate.

Jakofi competition in MF? The only Fedratinib in second line, from BMS, revenue not growing. We are seeing growth in MF as patients come back to the office.

54707 v. Rux for dermatitis? Has a different profile, could help as an oral therapy in more severe cases.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is investment journalism, really my personal notes, not financial advice.

Copyright 2021 William P. Meyers