On Tuesday, Jefferies analyst Kelly Shi revised the price target for Incyte Corporation (NASDAQ:INCY) stock, reducing it to $75 from the previous $81, while maintaining a Buy rating on the stock. The revision comes as the stock has declined nearly 9% over the past week to $62.01, with technical indicators from InvestingPro suggesting the stock is currently in oversold territory. The adjustment comes after Incyte announced Phase 3 trial results for its drug candidate, which met the primary endpoints at week 12 but showed a smaller than expected improvement in disease symptoms.
The drug, which is being evaluated for the treatment of a skin condition, exhibited a 10.6-13.7% improvement, slightly below the 15-20% that Street analysts had anticipated. Moreover, the results did not fully meet the expectations set by key opinion leaders (KOLs) at the recent American Academy of Dermatology (AAD) meeting, who projected an efficacy greater than that of Cosentyx, estimated between 11-15%.
Despite the lower-than-anticipated efficacy, Shi highlighted the positive aspects of the trial, noting the drug’s post-biologic efficacy and favorable safety profile. The evolving landscape of treatments for the skin condition, known as Hidradenitis Suppurativa (HS), presents challenges in positioning the drug based on the current data. According to InvestingPro data, Incyte maintains strong financial health with minimal debt exposure (Debt/Equity ratio of 0.02) and robust revenue growth of nearly 15% over the last twelve months. Shi mentioned that further updates, particularly on higher efficacy endpoints such as HiSCR90/100, are awaited to better understand the drug’s potential market position.
In response to the recent developments, Jefferies has updated its penetration rate estimate for the drug, lowering it from 15% to 12.5%. This revised estimate is reflected in the new price target of $75 for Incyte stock. As the company and analysts await more comprehensive data, the maintained Buy rating suggests a continued positive outlook on Incyte’s stock performance. InvestingPro analysis indicates the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of Incyte’s financial health, valuation metrics, and growth prospects.
In other recent news, Incyte Corporation announced the results of its Phase 3 clinical trials for povorcitinib, an oral treatment for hidradenitis suppurativa (HS). The trials met their primary endpoints, demonstrating a significant improvement in patient symptoms compared to placebo. Despite these positive outcomes, the efficacy was lower than anticipated, leading to mixed reactions from analysts. William Blair downgraded Incyte from Outperform to Market Perform, citing the trial results as not meeting earlier expectations and potentially limiting the drug’s market reach. Meanwhile, Citi maintained a Buy rating with a price target of $88, expressing confidence in the drug’s potential as an oral alternative to current treatments. RBC Capital also maintained a Sector Perform rating with a $68 target, noting the drug’s potential as a later-line treatment option. The company plans to submit these findings for regulatory approval, hoping to expand treatment options for patients with this chronic skin condition. Further data on secondary endpoints is expected to be presented at future scientific meetings.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.