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Incyte Reports a Q1 Loss Due to MorphoSys Deal

By Keith Speights - May 5, 2020 at 11:02AM

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The biotech's revenue soared thanks to the continued success of Jakafi, but its bottom line was weighed down by a licensing deal.

Incyte (INCY 2.24%) delivered its first-quarter results before the market opened on Tuesday, reporting revenue up 14% year over year to $569 million, which topped the analysts' average estimate of $556 million. But the biotech recorded a GAAP net loss of $720.6 million, or $3.33 per share, and an adjusted net loss of $618.9 million, or $2.86 per share. The consensus Wall Street forecast had been for earnings of $0.61 per share. 

Why the mixed results

Incyte's revenue growth was fueled largely by Jakafi, which generated sales of $459.5 million, a 22% year-over-year jump. The biotech also made $56.3 million in royalties from Novartis' (NVS -0.20%) international sales of the drug under the name Jakavi.

Gloved hand holding a beaker with a $100 bill in it and $100 bills underneath it

Image source: Getty Images.

Sales of leukemia drug Iclusig increased by 32% year over year to $27.2 million in Q1. Incyte's royalty revenue from Eli Lilly's (LLY 0.15%) sales of rheumatoid arthritis drug Olumiant totaled $25.4 million in Q1, up 59% from the prior-year period.

The company's net loss stemmed from primarily from an $805 million upfront payment to MorphoSys (MOR 3.73%) related to a licensing and collaboration deal for experimental blood cancer drug tafasitamab. Without this payment, Incyte would have posted positive earnings. 

2020 outlook

Incyte maintained its previously announced full-year guidance. The biotech expects Jakafi net product revenue between $1.88 billion and $1.95 billion. It projects Iclusig net product revenue between $100 million and $105 million. Incyte stated that it hasn't experienced any commercial impact from the COVID-19 pandemic so far, but new patient enrollment for some of its clinical studies could be hindered by the pandemic.

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Stocks Mentioned

Incyte Corporation Stock Quote
Incyte Corporation
INCY
$77.67 (2.24%) $1.70
Eli Lilly and Company Stock Quote
Eli Lilly and Company
LLY
$324.71 (0.15%) $0.48
Novartis AG Stock Quote
Novartis AG
NVS
$84.36 (-0.20%) $0.17
MorphoSys AG Stock Quote
MorphoSys AG
MOR
$5.01 (3.73%) $0.18

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

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