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.