Analyst Conference Summary



conference date: August 3, 2021 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2021 (Q2, second quarter 2021)

Forward-looking statements

Overview: Strong y/y product revenue growth, but relatively easy comparison. Overall revenue growth was week because of milestone payments in Q2 2020.

Basic data (GAAP):

Revenue was $706 million, up 17% sequentially from $605 million, and up 3% from $688 million in the year-earlier period.

Net income was $149 million, up 176% sequentially from $54 million, and down 49% from $290 million year-earlier.

Diluted EPS was $0.67, up 179% sequentially from $0.24, and down 46% from $1.24 year-earlier.


Slight changes to prior guidance. Jakafi revenue $2.125 to $2.17 billion. Other product revenue $155 to $170 million. GAAP SG&A expense $725 to $755 million (lower), non-GAAP $655-580 million (lower).

Conference Highlights:

Hervé Hoppenot, Incyte's CEO, said "In the second quarter, we saw an acceleration of growth of Jakafi and encouraging uptake in Europe for Pemazyre. In addition, the recent positive CHMP opinion for tafasitamab and the potential subsequent launch of Minjuvi in Europe represents another significant growth opportunity for Incyte. We continue to achieve clinical development success across our portfolio with positive outcomes from multiple programs, including topline results from ruxolitinib cream's pivotal trials in vitiligo, 52-week safety and efficacy data of ruxolitinib cream in atopic dermatitis , Phase 2 data of parsaclisib in autoimmune hemolytic anemia (AIHA) and the achievement of bioequivalence with once-daily, QD, ruxolitinib."

In Q2 was encouraged by patient returns to doctors' offices, with a more gradual return of oncology patients. Jakafi growth is returning to pre-pandemic levels.

QD ruxolitinib NDA submission planned for early 2022. Clinical studies evaluating ruxolitinib in combination with parsaclisib, INCB57643 (BET) and INCB00928 (ALK2), are progressing as expected.

The sNDA seeking approval of ruxolitinib for the treatment of steroid-refractory chronic GVHD delayed by the FDA, with a new PDUFA date of September 22, 2021. The application for approval was based on the successful randomized REACH3 trial comparing ruxolitinib with best available therapy. In Q2 2021 data from the trial was published in The New England Journal of Medicine.

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 September 21, 2021. In May, 2021, Incyte announced positive topline results from its pivotal Phase 3 TRuE-V program of ruxolitinib cream in adolescent and adult patients with vitiligo. Both studies met the primary and key secondary endpoints. Preparing for launch.

Pemazyre sales benefitting from increased testing for FGFR2+ alterations.

Surveys show doctor willingness to prescribe Rux cream when it is approved.

Product revenue was $575 milion; royalties $121 million; milestone and contract revenue $10 million.

Incyte Revenue by Type
(in $ millions) Q2 2021 Q1 2021 Q2 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. Expects ramp to accelerate as the year progresses.

Non-GAAP numbers: Net income $179 million, up sequentially from $149 million, and down from $273 million year-earlier. Diluted EPS $0.80, up sequentially from $0.67, and up from $1.24 year-earlier.

Cash and equivalents ended at $2.08 billion, up sequentially from $1.96 billion. No debt. There is a $259 million acquisition-related contingent consideration liability.

In March 2021, 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.

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 Q2 2021 3 year r/r DLBCL trial of tafasitamab showed durable responses. A positive CHMP opinion was received in June 2021.

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.

Tafacitimab (Monjuvi) trials in DLBCL and other cancers are expected to begin in 2021. Phase 3 FL trial is now ongoing. More pivotal and proof of concept trials are to start in 2021.

See also Incyte pipeline.

Cost of product revenue was $38 million. GAAP operating expenses were: $344 million for research and development; $169 million for selling, general and administrative expenses; $10 million collaboration loss sharing; and a $5 million charge for change in value of a contingent consideration. Total costs $565 million. Leaving income from operations of $141 million. Interest and other expense was $4 million. Unrealized gain on investment was $27 million. Income tax $22 million.

Q&A Summary:

JAK regulatory environment? Rux cream has a strong profile.

Reduction in spending? We are just tightening as we go through the year.

Jakafi, effect of new pandemic wave? Concerning, but currently new patient starts are increasing and sites are opening up for access to our field reps.

Jakafi and spleen issues, once-daily dosing? The PK profile max is lower, under the curve is the same. There may be less anemia with once daily. Not sure myelosuppression is linked to spleen issues.

Limber trial dose escalation timeline? In the combinations, the programs are on track. After the programs are complete we can decide how aggressive to be. If we see improvements in anemia with a combination, that would be great because anemia is one of the main reasons patients discontinue Rux.

340b orders are expanding because of changes in the industry, negatively impacting gross-to-net, but that is anticipated in our guidance.

Monjuvi duration of use? The first patients typically have multiple prior lines of therapy and are sicker. So duration was short. Now we are seeing more true second line patients and duration is improving.

Other companies that are combining Jakafi with their drug in tests are using it once per day.

Our adult dermatitis programs enrolled quickly, we expect the pediatric trials to also enroll quickly. Important because many children start treatment for dermatitis.

Re expected pemazyre label expansion trials, in most cancers FGFR2 mutations are only 5% to 10%. More info later in year.

Strategy for topical rux in EU? Submit for vitilago in 2H 2021, which will help on pricing. Then we will look at atopic dermatitis after approval.

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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