On Friday, Jefferies, a global investment banking firm, initiated coverage on shares of biopharmaceutical company Incyte (NASDAQ:INCY), assigning a Buy rating to the stock, along with a price target of $81.00. The firm's analysis indicates a positive outlook on the company's potential to generate new revenue streams.
Incyte's key product, Jakafi, has been a significant growth driver for the company over the past ten years. However, with the anticipated loss of exclusivity (LOE) in 2028, there is an expected revenue gap of approximately $2.6B. Jefferies projects that Incyte's developing dermatology franchise could fill this gap more quickly than the market anticipates.
The firm forecasts that Incyte's topical Opzelura, aimed at treating eczema and vitiligo, could reach peak sales of $1.9B. Additionally, the oral JAK inhibitor povorcitinib, currently in development for Hidradenitis Suppurativa (HS) and vitiligo, is projected to achieve peak sales of $1.4B. These estimates are above the consensus, indicating a more optimistic view of the drug's market performance.
Jefferies believes that these new dermatological treatments have the potential to create a robust product lineup for Incyte, which could compensate for the upcoming revenue shortfall when Jakafi's exclusivity ends. The firm suggests that any further extensions of the franchise could be seen as additional benefits, reinforcing their positive stance on the stock with a Buy rating and an $81 price target.
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