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WIKI ANALYSIS
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.
Business Growth[1]
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.
Pipeline[2][3]
- Ruxolitinib: Incyte's flagship product, Ruxolitinib is currently in two Phase III studies, COMFORT and RESPONSE to study its use as a treatment for myelofibrosis and polycythemia vera, two rare diseases without current approved treatments. The COMFORT trial has been completed and Incyte submitted an NDA application to the FDA in June of 2011.[4] The RESPONSE trial began in the fourth quarter of 2010. Ruxolitinib is also involved in Phase I and II trials to treat leukemia and other blood-based diseases.[5]
- Sheddase Inhibitors: Incyte is developing INCB7839 to treat Her-2 positive breast cancer. Phase II trials have been completed and Incyte will decide whether to progress to Phase III trials.
Trends and Forces
Incyte Needs to Obtain Regulatory Approval in Order to Earn Significant Revenue
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.[6]
Cash on Hand will Impact Incyte's Ability to Maintain Operations
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.[7] In 2011, Incyte expects to cash use to range between $185 and $200 million.[8] 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.
Competition
Ruxolitinib belongs to a class of drugs called Jak inhibitors. The following companies are developing drugs within this class:
- YM BioSciences (YMI): Developing a Jak inhibitor for myelofibrosis that could be a direct competitor to Ruxolitinib. YM BioSciences' drug is in Phase II clinical trials.[9]
- Sanofi-Aventis SA (SNY): In 2010, Sanofi-Aventis purchased TargeGen, whose flagship drug is a Jak inhibitor being developed to treat myelofibrosis.[10]
References
- ↑ Incyte Reports 2010 Financial Results; Provides 2011 Key Objectives And Financial Guidance
- ↑ INCY 2011 10K
- ↑ Incyte Product Pipeline
- ↑ Incyte Submits NDA For Ruxolitinib For Rare Blood Cancer
- ↑ Incyte Corporation's CEO Discusses Q1 2011 Results- Earnings Call Transcript
- ↑ Incyte Corporation's CEO Discusses Q1 2011 Results- Earnings Call Transcript
- ↑ INCY 2011 10K
- ↑ Incyte Reports 2010 Financial Results; Provides 2011 Key Objectives And Financial Guidance
- ↑ Incyte and YM Biosciences in Race to Market Strongest JAK Inhibitor
- ↑ On a spree, Sanofi scoops up TargeGen in $635M Deal
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