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Why Incyte Shares Roared Higher

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology firm Incyte (Nasdaq: INCY  ) jumped as much as 11% today, following the release of better-than-expected third-quarter earnings results.

So what: The big news here wasn't so much the earnings report -- which did provide a $0.03 EPS beat and revenue growth of 260.5% over the previous year, thanks to a $43.7 million in recognized Jakafi revenue -- as it was the company's updated guidance for Jakafi sales. Incyte upped the low-end of its sales forecast for Jakafi, which is being marketed with Novartis (NYSE: NVS  ) to treat moderate and high-risk myelofibrosis, to a range of $130 million-$135 million from a previous forecast of $120 million-$135 million.

Now what: Although myelofibrosis has relatively few cases each year (just 3,000 annually in the U.S.), the simple fact that it's an unmet need should allow Incyte to grab hold of the lion's share of the treatment market. In addition, Incyte also has a line of inflammation drug hopefuls on which it partnered with Eli Lilly (NYSE: LLY  ) , as well as an ongoing phase 3 trial for ruxolitinib, which treats a rare type of blood cancer. It may not seem like it now but, in my opinion, after producing another quarterly loss, Incyte offers investors good long-term potential, even after today's pop.

Craving more input? Start by adding Incyte to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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Related Tickers

10/21/2016 4:00 PM
INCY $87.72 Down -0.77 -0.87%
Incyte CAPS Rating: **
LLY $78.25 Down -0.49 -0.62%
Eli Lilly and Co. CAPS Rating: ***
NVS $75.54 Down -0.38 -0.50%
Novartis CAPS Rating: ****