On Tuesday, Mizuho Securities sustained its Neutral stance on Incyte Corporation (NASDAQ:INCY), with a consistent price target of $77.00. The stock, which has experienced a sharp 8.9% decline over the past week, appears undervalued according to InvestingPro analysis. With a robust balance sheet showing more cash than debt and a healthy current ratio of 1.97, Incyte maintains strong financial fundamentals. The research firm’s analyst, Mara Goldstein, provided insights into the latest clinical trial results for Incyte’s investigational drug, povo. The STOP-HS1 and STOP-HS2 trials evaluated povo at dosages of 45mg and 75mg, revealing statistically significant, but modest, improvements over placebo at 12 weeks. Specifically, the placebo-adjusted HiSCR50 was 10.6% and 10.9% for the respective doses in STOP-HS1, and 13.8% for both doses in STOP-HS2.
The trials included a subgroup of patients previously treated with biologics, where povo demonstrated a higher placebo-adjusted HiSCR50, with 12.3% and 15.9% for the 45mg and 75mg doses in STOP-HS1, and 25.5% and 20.5% in STOP-HS2. When combining results from both trials, the pooled placebo-adjusted HiSCR50 was 19.1% for the 45mg dose and 18.3% for the 75mg dose. This clinical development comes as Incyte demonstrates strong revenue growth of 14.76% over the last twelve months, reflecting its continued expansion in the pharmaceutical market.
Goldstein noted that povo was well tolerated and did not present new safety concerns. The analyst also considered the positioning of povo in the United States market, suggesting it could be significant, particularly for patients who have already initiated treatment with TNF-alpha inhibitors. This could represent an underappreciated opportunity, according to Goldstein, although there remain several unanswered questions regarding the drug’s efficacy and market potential.
The report highlighted the variability in clinical trial outcomes for Hidradenitis Suppurativa (HS), which may account for the differing results observed between the two studies. Despite some promising data points, the overall results did not exceed the expectations of investors.
Incyte’s shares maintain their Neutral rating as the market continues to assess the potential of povo in the treatment landscape for moderate to severe HS, considering the current clinical evidence and future market dynamics. Currently, analysts have set price targets ranging from $52 to $100, with several analysts recently revising their earnings expectations upward. For deeper insights into Incyte’s financial health and growth prospects, including 13 additional ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed analysis in our Pro Research Report.
In other recent news, Incyte Corporation announced the results of its Phase 3 clinical trials for povorcitinib, a treatment for Hidradenitis Suppurativa (HS), which showed statistically significant outcomes but fell short of some expectations. The trials demonstrated a 10.5-13.7% improvement in the HS Clinical Response scale (HiSCR50), a result that was lower than the anticipated 15-20% improvement. Despite this, the drug’s safety profile remained favorable, and Incyte plans to use the data for regulatory submissions. Analysts from Jefferies have lowered the stock’s price target to $75, maintaining a Buy rating, while Citi analysts have kept a Buy rating with a target of $88. William Blair downgraded Incyte from Outperform to Market Perform due to concerns over the drug’s market potential. RBC Capital maintained a Sector Perform rating with a $68 target, noting the drug’s potential as a later-line treatment. The market’s reaction to the trial results has been mixed, with some analysts predicting adjustments in sales estimates due to modest efficacy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.