Incyte Corporation (NYSE: INCY) is a Wilmington, DE-based drug discovery and development company with a focus on oral compounds to treat HIV, inflammation, cancer, and diabetes. The company has transformed from a genomic-based information supplier to a fully integrated drug discovery and development organization. The company's lead internal compound, Ruxolitinib, has completed phase III clinical trials for the treatment of myelofibrosis and submitted an NDA application to the FDA in June of 2011.
The ability of Incyte to push its lead compounds through regulatory approval and to maintain the cash required to do so will impact Incyte Corporation's long-term success.
In 2010, total revenues for Incyte were $170 million, reflecting milestone payments received from drug development partners. These milestone payments include $50 million from Novartis AG (NVS) for the initiation of the RESPONSE clincal trial, $49 million from Eli Lilly and Company (LLY) for two early stage drugs, and $67 million in amortized payments made earlier by the two partner companies.
Net loss for 2010 was $31.8 million, down from a 2009 net loss of $212 million.
To date, all of Incyte's revenue has been earned from milestone payments paid by pharmaceutical partners for the development of its flagship product, Ruxolitinib. In order to make the full transition from a development-stage company to a fully commercial pharmaceutical company, Incyte needs to obtain regulatory approval for its drugs. Incyte submitted an NDA application for the use of Ruxolitinib to treat myelofibrosis in 2011 and will receive a response from the FDA in late 2012 or early 2013. The outcome of that response will profoundly impact Incyte's valuation.
In the absence of organic revenue, Incyte is reliant on its cash on hand to fund ongoing operations. As of the end of 2010, Incyte had $418 million in cash. In 2011, Incyte expects to cash use to range between $185 and $200 million. Incyte's ability to maintain positive cash as it develops its lead products will impact its ability to bring these drugs to market and develop a revenue stream of its own.
Ruxolitinib belongs to a class of drugs called Jak inhibitors. The following companies are developing drugs within this class: