While large-cap pharmas Johnson & Johnson (NYSE:JNJ) and Schering-Plough (NYSE:SGP) were presenting final phase 3 data that's ready for regulators at this year's European League Against Rheumatism meeting, developmental-stage Incyte (NASDAQ:INCY) was presenting tantalizing phase 2 data.

INCB18424 -- henceforth called "the drug," heh, heh -- is a JAK protein inhibitor being tested in a wide range of autoimmune and other diseases where JAK is thought to act. The results presented Thursday were from a trial testing the drug in rheumatoid arthritis patients. In the small trial -- results from only 16 patients, four of whom received placebo, were reported -- the drug seemed to diminish symptoms quickly and effectively. For instance, after four weeks of treatment, half the treated patients experienced a 50% improvement in their symptoms based on the American College of Rheumatology (ACR) criteria. Incyte is still evaluating the drug at higher and lower concentrations as part of the phase 2 trial, but these early results do look promising.

The great thing about the rheumatoid arthritis drugs being developed by Incyte and others is that they can be taken orally. That's stating the obvious, but treatments  like Abbott Labs' (NYSE:ABT) Humira, Amgen (NASDAQ:AMGN) and Wyeth's (NYSE:WYE) Enbrel, and J&J and Schering's Remicade all need to be injected or transfused, meaning an oral medication that works just as well could penetrate the market pretty easily.

That being said, Incyte might be a tad overpriced at this point. There's still a lot of risk involved because the drug's long-term safety profile still isn't known. Incyte doesn't have any drugs in phase 3 trials, so I'm not sure it deserves a market cap that's more than 20% larger than Exelixis (NASDAQ:EXEL) -- a drugmaker with the same number of compounds in phase 2 development.