Tuesday, Truist Securities adjusted its price target on Incyte Corporation (NASDAQ:INCY) to $72.00, down from the previous $74.00, while maintaining a Hold rating on the stock. The revision follows the release of Phase 3 data for povorcitinib, also known as povo, in treating Hidradenitis Suppurativa (HS). The stock, currently trading at $60.46, has experienced a sharp 8.9% decline over the past week, with InvestingPro data indicating oversold conditions.
The analyst at Truist Securities noted that although the data from the trial were statistically significant, the magnitude of the benefit did not meet expectations. The observed efficacy of povo was described as modest, which could limit its market potential despite the anticipation of regulatory approval for the treatment of HS. Despite these concerns, InvestingPro data shows Incyte maintains strong financial health with robust revenue growth of 14.76% and more cash than debt on its balance sheet.
The report further indicated that the potential for a black box warning might also restrict the peak opportunity for the drug. The updated financial model from Truist now estimates peak sales for povo at $550 million, a decrease from the consensus estimate of $900 million.
Truist Securities’ stance remains cautious, referring to povo as a second-line and beyond opportunity in the HS market. The firm is awaiting further data and regulatory clarity before changing its position. The new price target reflects these updated sales forecasts and the perceived competitive landscape for the drug.
Incyte’s progress with povo will be closely monitored by Truist Securities, especially beyond the HS indication, as the firm looks for additional evidence to support the drug’s potential in the broader market. With analyst price targets ranging from $52 to $100, investors seeking deeper insights can access comprehensive analysis and 13 additional ProTips through InvestingPro’s detailed research reports.
In other recent news, Incyte Corporation announced the results of its Phase III trials for povorcitinib, a treatment for hidradenitis suppurativa (HS), which met primary endpoints but showed lower efficacy than anticipated. Analysts from Jefferies revised the price target for Incyte to $75, maintaining a Buy rating, following these results. Citi analysts also maintained a Buy rating with an $88 target, acknowledging the drug’s potential as an oral alternative to injectable treatments. Meanwhile, William Blair downgraded Incyte from Outperform to Market Perform due to concerns over the drug’s market reach and competition from other treatments like Rinvoq. RBC Capital maintained a Sector Perform rating with a $68 target, noting that the drug may serve as a later-line treatment for patients previously treated with biologics. Mizuho kept a Neutral rating with a $77 target, highlighting the modest improvements shown in clinical trials. The drug’s safety profile was consistent across studies, with no new safety concerns reported. Analysts are now awaiting further data on higher efficacy endpoints to better assess the drug’s market position.
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