A few years ago, all a biotech had to do see large sustained gains was get its drug approved. Nothing else really mattered.
Not anymore -- sales of newly approved drugs are no longer a foregone conclusion.
My guess is that investors are a little worried about the launch given the lackluster performances by Dendreon's
The FDA approval came earlier than expected -- the PDUFA date wasn't until Dec. 3 -- but Incyte doesn't seem to be caught too off-guard. The company said Jakafi will be available in pharmacies next week.
Incyte has priced the drug at a wholesale price of $7,000 per month, which works out to $84,000 per year before markups by middlemen. But the company took pains to stress that a high price wouldn't cause the same issues Provenge has. Because it's an oral product, Jakafi is covered as a pharmacy benefit, so doctors don't have to shell out money to purchase it, hoping to be reimbursed by insurance companies or Medicare.
Incyte has another thing going for it: Jakafi is the only drug approved to treat myelofibrosis, a disease characterized by scar tissue replacing bone marrow. Without competition, Incyte's biggest barrier to sales will be getting the word out to doctors.
I've pointed out that the sales ramp isn't nearly as important as the peak sales for the long-term valuation of a biotech, but in Jakafi's case, the two might be intrinsically linked. YM BioSciences
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