Analyst Conference Summary

biotechnology

conference date: October 29, 2024 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2024 (Q3, third quarter 2024)

Forward-looking statements

Overview: Continued rapid revenue growth, driven mainly by Opzelura. But keep in mind Jakafi patent expires end of 2028.

Basic data (GAAP):

Revenue was $1.14 billion, up 19% sequentially from $1.04 billion, and up 24% from $919 million in the year-earlier period.

Net income was $106 million, up sequentially from negative $445 million, and down from $171 million year-earlier.

Diluted EPS was $0.55, up sequentially from negative $2.04, and down from $0.76 year-earlier.

Guidance:

Raised full year 2024 Jakafi revenue estimate to $2.71 to $1.75 billion. Other $325 to $360 million. Cost of product revenue 7 to 8% GAAP, 6 to 7% non-GAAP. R&D cost down to $2.295 to $2.335 billion non-GAAP. SG&A unchanged $1.115 to $1.14 non-GAAP.

Conference Highlights:

Hervé Hoppenot, Incyte CEO, said "In the third quarter of 2024, we delivered significant achievements, including strong revenue growth for both Jakafi (ruxolitinib) and Opzelura (ruxolitinib) cream, and the advancement of our clinical pipeline highlighted by the submission to the FDA of the supplemental New Drug Application (sNDA) for ruxolitinib cream in pediatric atopic dermatitis and several key data readouts including CDK2i, retifanlimab, tafasitamab, povorcitinib and ruxolitinib cream, which all hold near to mid-term launch potential. Additionally, in August, the FDA approved Niktimvo (axatilimab-csfr) for patients with chronic graft-versus-host disease, after failure of two prior lines of therapy, making it the first anti-CSF-1R antibody approved to target the inflammation and fibrosis associated with chronic GVHD. We are on track to achieve over ten impactful launches by 2030."

In Q3 2024 Niktimvo (axatilimab-csfr), an anti-CSF-1R antibody, got FDA approval for chronic graft-versus-host disease after failure of at least two prior lines of systemic therapy. With Syndax Pharmaceuticals.

In Q3 2024 Incyte submitted an sNDA for ruxolitinib cream for pediatric atopic dermatitis. Expects approval in 2H 2025. Phase 3 results for prurigo nodularis is expected in 2025.

Zynyz (retifanlimab) Phase 3 data for squamous cell anal carcinoma was positive. Plans to file an sNDA in Q4 2024. Also had positive results in Phase 3 NSCLC trial, with full data to be presented in Q4 2024.

In Q3 2024 announced positive results from Phase 3 Monjuvi trial in follicular lymphoma. Full data at a medical meeting. sNDA in Q4 2024.

Povorcitinib is in studies for hidradenitis suppurativa, vitiligo, prurigo nodularis, chronic spontaneous urticaria, and moderate/sever asthma, with some data readouts in 2025.

INCB000262 (MRGPRX2)is in Phase 2 trials for CSU, chronic inducible urticaria, and atopic dermatitis. Data for the trials is due in Q1 2025.

Jakafi patent protection now expected to expire towards the end of 2028. But Opzelura protected until 2040.

Product revenue was $963 million; royalties $157 million; milestone and contract revenue $18 million.

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

Non-GAAP numbers: Net income $210 million, up sequentially from negative $396 million, and down 16% from $249 million year-earlier. Diluted EPS $1.07, up sequentially from negative $1.82, and down 3% from $1.10 year-earlier.

Cash and equivalents ended at $1.8 billion, up sequentially from $1.4 billion. No debt.

Incyte has numerous other trials in multiple therapies and indications underway, plus preclinical agents.

See also Incyte pipeline.

GAAP operating expenses were: cost of product revenue $86 million. $573 million for research and development; $309 million for selling, general and administrative expenses; $0 million collaboration profit sharing; and a $23 million loss for change in value of a contingent consideration. Total costs $992 billion. Leaving income from operations of $146 million. Interest and other income was $24 million. Unrealized loss on investment was $13 million. Income taxes $50 million.

Q&A Selective Summary:

Povorcitinib competitiveness of data? If we replicate the incredibly strong Phase 2 data, we will have an extemely favorable HS profile. Pain relief will also differentiate this. We got good enrollment on both studies.

BET inhibitor timeline? We are happy with our data so far, but it is not randomized and blinded data. Plan remains unchanged, with updated data this year, then advance into a Phase 3 study.

SCN support portfolio development? Two programs, PSU and CIU. MRGPRX2 should have an excellent safety profile, could be first drug to advance to after antihistimines. MRGPRX4 will have first data in 1H 2025, then will announce next steps.

There is a lot of unmet need in mild to moderate HS.

262 25mg arm added? Competing with BTK data? Just to explore the full range of doses, in case we have positive data in the current study. We don't expect the same level of efficacy as a KIT inhibitor. But it would have a very good safety profile, so an ideal pill for patients before they need a more aggressive alternative.

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