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Why Incyte Stock Climbed 12.2% in November

By Keith Noonan – Dec 4, 2019 at 9:56AM

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Strong sales for the company's main drug and potential new applications and treatments have pushed the pharma stock up 48% in 2019.

What happened

Shares of Incyte (INCY 1.73%) gained 12.2% last month, according to data from S&P Global Market Intelligence. The pharmaceutical company's stock  benefited from a strong third-quarter earnings release at the end of October and continued to climb in November, thanks to market momentum, news of upcoming presentations at the American Society of Hematology's annual conference, and an expedited Food and Drug Administration (FDA) drug review.

INCY Chart

INCY data by YCharts.

Incyte published its third-quarter earnings results on Oct. 29. Total sales for the period climbed roughly 23% year over year to reach $551.6 million, and revenue from Jakafi (the company's drug for treating myelofibrosis and polycythemia vera) rose 25% year over year to $433.4 million.

The strong quarterly results and increased full-year guidance for Jakafi helped the stock climb 13% in October, and Incyte posted another month of double-digit gains in November with the help of some promising press releases.

A man touching an arrow pointing up.

Image source: Getty Images.

So what

Incyte published a press release on Nov. 25 announcing that it would be presenting abstracts and data from its clinical development programs for the active ingredients in its Jakafi and Iclusig drugs at the American Society of Hematology from Dec. 7 through Dec. 10. The announcement may have been viewed as an indication that the company's making progress on finding new applications for ruxolitinib (used in Jakafi) and itacitinib and ponatinib (used in Iclusig).

Incyte then published a press release on Nov. 27 announcing that the FDA had accepted its bile-duct cancer drug pemigatinib for Priority Review. Here's what Incyte's vice president of oncology drug development Peter Langmuir responded to the drug's Priority Review status in the company's press release:

We are very pleased that the FDA has accepted our NDA for Priority Review which we believe represents an important step toward providing the first treatment option for patients with previously treated, locally advanced or metastatic cholangiocarcinoma with FGFR2 fusions or rearrangements. We intend to work closely with the FDA to bring this innovative targeted therapy to patients suffering from this devastating disease as soon as possible.

Priority Review is a process granted by the FDA for drugs that may help with otherwise untreatable illnesses and shortens the length of the review process from the standard 12-month period to an eight-month period. 

Now what

Incyte is seeing strong demand for Jakafi and raised its full-year sales target for the drug to between $1.65 billion and $1.68 billion in its third-quarter earnings release, up from its previous guidance for sales of between $1.61 billion and $1.65 billion. Sales for the Iclusig drug are expected to be between $90 million and $100 million. As Motley Fool contributor Maxx Chatsko has written, investors are hoping that the company's research-and-development efforts will lead to the introduction of new marketable drugs and new approved uses for Jakafi and other products containing the drug's core active ingredient ruxolitinib. 

Incyte is valued at roughly 9.4 times this year's expected earnings and 34 times expected sales.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Incyte. The Motley Fool has a disclosure policy.

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