Shares of Incyte Corp. (INCY) have gained nearly 38% year-to-date compared to a modest 8.77% rise in the iShares NASDAQ Biotech Index ETF (IBB) during the same period.
Incyte is a drug discovery and development company with its therapeutic focus primarily on oncology.
The Company received its first FDA approval in November 2011 and it was for Jakafi, a JAK1 and JAK2 inhibitor, indicated for the treatment of patients with myelofibrosis and polycythemia vera. The drug is marketed outside the U.S. by Novartis (NVS).
Jakafi has provided Incyte with dynamic growth and is expected to be a long-term revenue driver for the Company.
The net product revenue of Jakafi, which was $136 million in 2012, rose to $235 million in 2013; $358 million in 2014; $601 million in 2015 and $853 million in 2016.Looking ahead to 2017, the Company expects Jakafi net product revenue to range between $1.02 billion to $1.07 billion.
Awaiting word from the FDA is the Company's once-daily oral selective JAK1 and JAK2 inhibitor Baricitinib for the treatment of moderately-to-severely active rheumatoid arthritis.
The worldwide rights to Baricitinib are licensed to Eli Lilly and Co. (LLY) under a collaboration agreement signed in December 2009.
The NDA for Baricitinib was submitted to the FDA on January 19, 2016, following which Incyte received a milestone payment of $35 million from Lilly. If Baricitinib gets the FDA nod, Incyte will receive a milestone payment of $100 million from Lilly, and could earn additional global regulatory as well as sales-based milestone payments and royalties on global net sales of the drug.
The FDA is expected to announce its decision by April 19, 2017. (The due date is only an estimate).
Baricitinib was approved in the European Union, under trade name Olumiant, as recently as February of this year for the treatment of moderate-to-severe active rheumatoid arthritis.
The European Commission's approval of Baricitinib makes Incyte eligible to receive a milestone payment of $65 million from Lilly, which it expects to record in full in the first quarter of 2017.
Cowen & Co analyst Eric Schmidt foresees peak annual sales of Baricitinib to hit nearly $1.5 billion.
Shares of Incyte have traded in a range of $68.03 to $153.15 over the past 52 weeks. At the time of this writing, the stock is up 0.99% to $139.64.
Updated on April 14, 2017:
The FDA has turned down Baricitinib stating that additional clinical data are needed not only to determine the most appropriate doses but also to further characterize safety concerns across treatment arms.
Commenting on the FDA decision, Christi Shaw, president of Lilly Bio-Medicines said, " We are disappointed with this action. We remain confident in the benefit/risk of baricitinib as a new treatment option for adults with moderate-to-severe RA. We will continue to work with the FDA to determine a path forward and ultimately bring baricitinib to patients in the U.S."
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