Please ensure Javascript is enabled for purposes of website accessibility

Why Incyte's Shares Are Tumbling Today

By George Budwell – Feb 11, 2016 at 11:19AM

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

Jakafi's solid tumor program goes belly up.

Image source: Freestockphotos.

What: Shares of Incyte Corporation (INCY 0.04%) fell by more than 21% in early morning trading today after the company announced that it is discontinuing the clinical development of Jakafi (ruxolitinib) in solid tumors due to insufficient efficacy. 

So what: The Street expected about half of Jakafi's peak sales to eventually come from solid tumors.  

Now what: Despite this clinical setback, Jakafi's sales still rose by a healthy 68% in the fourth quarter compared to a year ago, as a treatment for myelofibrosis and polycythemia vera. The concern, though, is that Jakafi could have significant competition in the hematological malignancy arena in the not-so-distant future.

After all, Geron (GERN 1.30%) and its partner Johnson & Johnson (JNJ -0.71%) are developing the telomerase inhibitor imetelstat as a disease-modifying treatment for myelofibrosis. In early stage trials, for instance, imetelstat produced both partial and complete responses in a handful of myelofibrosis patients.

Jakafi, on the other hand, mostly lessens the symptoms associated with myelofibrosis, implying that it would probably be at a significant competitive disadvantage if pitted against imetelstat.

Having said that, imetelstat has run into problems from a safety standpoint in the past, meaning that its approval is far from a sure thing. Even so, Incyte shareholders will definitely need to keep a close eye on this growing competitive threat, especially after this disappointing news regarding Jakafi's solid tumor program. 

George Budwell has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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
$66.64 (0.04%) $0.03
Johnson & Johnson Stock Quote
Johnson & Johnson
$163.36 (-0.71%) $-1.17
Geron Corporation Stock Quote
Geron Corporation
$2.34 (1.30%) $0.03

*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 10/02/2022.

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.