Please ensure Javascript is enabled for purposes of website accessibility

Incyte's Fourth-Quarter Report Signals Better Times Ahead

By Cory Renauer – Feb 13, 2020 at 11:18AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Though the pharmaceutical company reported a big clinical trial failure last month, there are other reasons for optimism.

On Thursday, Incyte (INCY -1.75%) reported results from 2019's fourth quarter that suggest 2020 could be a great year for the company, despite disappointing clinical trial results announced in January. 

Revenue surged 24% year over year to $579 million, which was slightly above the consensus estimate. On the bottom line, Incyte reported adjusted earnings of $0.65 per share for the quarter, which exceeded analysts' average expectation by 12%.


Doctor holding up a dollar sign.

Image source: Getty Images.

Jakafi's still growing

Sales of Jakafi, which provide Incyte's most important revenue stream, are still growing at a good clip following its approval last May to treat acute graft vs. host disease in patients who aren't helped enough by regular steroids. That label expansion helped drive sales of Jakafi 23% higher to $466 million in the fourth quarter.

Combined with royalties that Incyte receives from Novartis (NVS -0.51%) based on sales of Jakavi outside of the U.S., Incyte's lead drug was responsible for a whopping 92% of its total revenue during the fourth quarter. Royalty revenue from Eli Lilly for sales of Olumiant, a rheumatoid arthritis treatment that Lilly launched in 2018, soared 70% year over year in the fourth quarter to $24 million.

Redemption ahead

Incyte disappointed a lot of investors in January when it announced a late-stage clinical trial failure for itacitinib, but there are plenty of potential growth drivers in the company's late-stage pipeline. Earlier this week, the FDA granted a priority review to a potential new cancer drug called capmatinib that Novartis licensed from Incyte years ago.

Incyte could also get a revenue boost from a new topical cream containing ruxolitinib, Jakafi's active ingredient, for patients with mild-to-moderate eczema. The first of two pivotal studies with this large patient group has produced positive results already, and data from the second should become available this quarter.

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Incyte Corporation Stock Quote
Incyte Corporation
$68.42 (-1.75%) $-1.22
Novartis AG Stock Quote
Novartis AG
$75.65 (-0.51%) $0.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.