Incyte (INCY) Surges 44% YTD On Jakafi's Strong Performance

Shares of biopharmaceutical company Incyte Corporation (NASDAQ:INCY) have surged 43.8% in the year so far, outperforming 10.3% growth recorded by the industry.

Incyte’s lead drug Jakafi (ruxolitinib) is a first-in-class JAK1/JAK2 inhibitor, approved in the United States for the treatment of patients with polycythemia vera (PV), who have had an inadequate response to or are intolerant to hydroxyurea. It is also approved for treating patients with intermediate or high-risk myelofibrosis (MF) including primary MF, post-PV MF, and post-essential thrombocythemia MF.

The FDA recently approved Jakafi for the treatment of steroid-refractory acute GVHD in adult and pediatric patients aged 12 years or above. This is the third indication for which the drug has been approved in the United States. The drug’s performance has been stellar in the year so far. Based on the strong performance of Jakafi in the first nine months of 2019, the company upped its revenue guidance for the same.

Incyte is working to expand the drug’s label into additional indications, which should further boost sales.

Incyte’s efforts to develop its pipeline are highly encouraging. The company has elected to not participate in the development of baricitinib with Eli Lilly (NYSE:LLY) in order to reallocate capital over time to other promising internal projects. The company has some very encouraging candidates, including pemigatinib, itacitinib and capmatinib in its pipeline.

Incyte submitted an NDA to the FDA for pemigatinib seeking approval as a second-line treatment for patients with FGFR2 translocated cholangiocarcinoma under Breakthrough Therapy designation. The FDA has accepted the same. With the FDA granting priority review to the NDA, a decision from the regulatory body is expected on May 30, 2020. Incyte is evaluating itacitinib in patients with treatment-naïve GVHD in the GRAVITAS program.

Top-line results from GRAVITAS-301, the phase III study of itacitinib as a treatment for patients with newly diagnosed acute GVHD, are expected shortly.
Capmatinib is being developed in collaboration with Novartis (NYSE:NVS) for non-small cell lung cancer (NSCLC) with MET exon-14 skipping mutations. In June 2019, the FDA granted Breakthrough Therapy designation to capmatinib as a treatment for patients with metastatic NSCLC harboring MET exon-14 skipping mutation with disease progression on or after platinum-based chemotherapy.

Hence, we expect the company to maintain momentum in 2020 backed by solid growth in Jakafi and encouraging pipeline progress.

Zacks Rank & Another Stock to Consider

Incyte currently carries a Zacks Rank #2 (Buy). Another top-ranked stock in the biotech sector is Alexion Pharmaceuticals (NASDAQ:ALXN) , which carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings estimates for 2019 have increased by 40 cents for Alexion in the past 90 days.

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