Incyte Reports 2024 Second Quarter Financial Results and Provides Updates on Key Clinical Programs

Rhea-AI Summary

Incyte (NASDAQ: INCY) reported its Q2 2024 financials, showing a 9% increase in total revenues year-over-year, reaching $1.044 billion.

Key drivers: Jakafi® (ruxolitinib) revenues grew 3% to $706 million, and Opzelura® revenues surged 52% to $122 million. The company completed a $2 billion share repurchase, reflecting confidence in its portfolio.

Incyte's strategic focus is on high-impact clinical programs, with positive Phase 3 results for retifanlimab in SCAC and NSCLC. The acquisition of Escient Pharmaceuticals added promising assets to its R&D pipeline.

However, the company faced a GAAP net loss of $444.6 million for Q2 2024, driven by high R&D expenses, including costs from the Escient acquisition.

Incyte raised the lower end of its full-year Jakafi revenue guidance to $2,710-2,750 million and adjusted R&D expense guidance to reflect ongoing investments.

Positive

• Total revenues grew 9% year-over-year to $1.044 billion.
• Jakafi® revenues increased 3% year-over-year to $706 million.
• Opzelura® revenues surged 52% year-over-year to $122 million.
• $2 billion share repurchase reflecting confidence in the commercial portfolio.
• Positive Phase 3 results for retifanlimab in SCAC and NSCLC.
• Raised lower end of full-year Jakafi revenue guidance to $2,710-2,750 million.

Negative

• GAAP net loss of $444.6 million for Q2 2024.
• High R&D expenses driven by costs related to the Escient Pharmaceuticals acquisition.

Financial Analyst

Incyte's Q2 2024 results show solid financial performance and pipeline progress, though with some mixed signals:

• Total revenues of $1.04 billion grew 9% year-over-year, surpassing the $1 billion mark for the quarter. This was driven by strong growth in Opzelura and Jakafi.
• Jakafi net product revenues increased 3% to $706 million, with 9% growth in paid demand offset by inventory fluctuations. The company raised the low end of full-year Jakafi guidance.
• Opzelura net product revenues grew 52% to $122 million, showing continued strong uptake.
• However, GAAP operating income swung to a loss of $478 million, largely due to $679.4 million in expenses related to the Escient acquisition.
• The $2 billion share repurchase completed in Q2 demonstrates confidence in the business but reduced cash reserves to $1.4 billion.

While core product growth remains strong, the significant R&D expenses and acquisition costs impacted profitability. The pipeline refocus and Escient acquisition show Incyte is investing heavily in future growth, but this comes at the expense of near-term profits. Investors will need to weigh the long-term potential against short-term earnings pressure.

Medical Research Analyst

Incyte's Q2 update reveals significant developments in their clinical pipeline:

• Strategic pipeline review: The company is increasing focus on high-impact programs, including povorcitinib for dermatology, mCALR and JAK2V617Fi for MPNs/GVHD and novel oncology assets like CDK2i and KRASG12Di. This targeted approach could potentially yield more transformative therapies.
• Positive Phase 3 results: Retifanlimab (Zynyz) met primary endpoints in squamous cell anal carcinoma (SCAC) and non-small cell lung cancer (NSCLC) trials. These results could expand Zynyz's indications significantly.
• Escient acquisition: This brings in EP262 (MRGPRX2 antagonist) and EP547 (MRGPRX4 antagonist), expanding Incyte's dermatology and immunology pipeline with first-in-class assets.
• Opzelura expansion: Positive Phase 2 data in hidradenitis suppurativa suggests potential for additional indications beyond atopic dermatitis and vitiligo.
• Povorcitinib progress: Positive Phase 2 results in prurigo nodularis, with Phase 3 trials planned, indicate another potential dermatology win.

These developments showcase Incyte's commitment to expanding its pipeline in core therapeutic areas. The focus on novel mechanisms and first-in-class assets could differentiate Incyte in competitive markets like dermatology and oncology. However, the success of these programs will depend on future clinical results and regulatory approvals.

– Total revenues of $1,044 million in the second quarter (Q2'24) (+9% Y/Y)

– Jakafi^® (ruxolitinib) net product revenues of $706 million in Q2'24 (+3% Y/Y), total patients increased +7% Y/Y; raising the bottom end of full year 2024 guidance to a new range of $2,710 - $2,750 million

– Opzelura^® (ruxolitinib) net product revenues of $122 million in Q2'24 (+52% Y/Y); continued uptake in atopic dermatitis (AD) and vitiligo in the U.S.; launch momentum and reimbursement expansion in vitiligo in Europe

– Incyte announces increased R&D focus on innovative high impact clinical programs; acquisition of Escient Pharmaceuticals completed

– $2.0 billion share repurchase completed, underscoring confidence in commercial portfolio and R&D pipeline 

Conference Call and Webcast Scheduled Today at 8:00 a.m. ET

WILMINGTON, Del.--(BUSINESS WIRE)-- Incyte (Nasdaq:INCY) today reports 2024 second quarter financial results, and provides a status update on the Company’s clinical development portfolio.

"In the second quarter of 2024, total revenues grew 9% year-over-year, surpassing $1.0 billion for the quarter. The commercial performance during this period was driven by strong patient demand for Opzelura^® (ruxolitinib) and growth across all indications for Jakafi^® (ruxolitinib)," said Hervé Hoppenot, Chief Executive Officer, Incyte. "In R&D, we completed a strategic review of our pipeline and have further intensified our focus on clinical programs that we believe can be transformational for patients. The $2.0 billion share repurchase completed during the second quarter, underscores our confidence in our commercial portfolio, clinical pipeline and Incyte's long-term value."

Transformation of Pipeline

• Incyte announces a strategic review of its pipeline with an increased focus on high potential impact programs including, but not limited to:
  
  
  • IAI/Dermatology: povorcitinib and MRGPRX2 and MRGPRX4, which were recently acquired from Escient Pharmaceuticals
    
    
  • MPNs/GVHD: mCALR, JAK2V617Fi, BETi, and ALK2i
    
    
  • Oncology: CDK2i, KRASG12Di and TGFßR2×PD-1
    
    
• The Company will discontinue further development of both oral, small molecule PD-L1 inhibitors, as well as LAG-3 monoclonal antibody, TIM-3 monoclonal antibody and LAG-3xPD-1 bispecific.

Recent Company Updates

• Incyte announces positive topline results from two Phase 3 clinical studies evaluating retifanlimab (Zynyz^®), a humanized monoclonal antibody targeting programmed cell death receptor-1 (PD-1), in squamous cell anal carcinoma (SCAC) and non-small cell lung cancer (NSCLC). The Phase 3 PODIUM-303 study in SCAC met its primary endpoint of progression free survival and the Phase 3 PODIUM-304 study in NSCLC met its primary endpoint of overall survival. The safety analysis from both studies demonstrated that retifanlimab was generally well-tolerated with no new safety signals observed. Incyte plans to share the Phase 3 data from both studies in the second half of 2024. POD1UM-303 is a Phase 3, global, multicenter, randomized, double-blind study evaluating carboplatin-paclitaxel with retifanlimab or placebo in patients with inoperable locally recurrent or metastatic SCAC who have not previously been treated with chemotherapy. POD1UM-304 is a Phase 3, global, multicenter, randomized, double-blind study evaluating platinum-based chemotherapy with retifanlimab or placebo in patients with first-line, metastatic squamous or nonsquamous NSCLC.
  
  
• In June 2024, Incyte repurchased a total of 33,325,849 shares of its common stock at a price of $60.00 per share, for a total cost of approximately $2.0 billion, excluding fees and expenses. These shares represented approximately 14.8 percent of the Company’s total outstanding shares of common stock as of June 7, 2024.
  
  
• In May 2024, Incyte announced it completed the acquisition of Escient Pharmaceuticals, a clinical-stage drug discovery and development company advancing novel small molecule therapeutics for systemic immune and neuro-immune disorders. Under the terms of the agreement, Incyte acquired Escient and its clinical development portfolio, including EP262, a first-in-class, potent, highly selective, once-daily small molecule antagonist of Mas-related G protein-coupled receptor (MRGPRX2) and EP547, a first-in-class oral MRGPRX4 antagonist.
  
  
• In April 2024, Incyte and China Medical System Holdings Limited announced the Companies entered into a Collaboration and License Agreement, through a wholly-owned dermatology medical aesthetic subsidiary CMS Skinhealth, for the development and commercialization of povorcitinib, a selective oral JAK1 inhibitor, in Mainland China, Hong Kong, Macau, Taiwan Region and eleven Southeast Asian countries.

Jakafi:

Net product revenues for the second quarter 2024 of $706 million (+3% Y/Y):

• Paid demand increased 9% in the second quarter of 2024 versus the same quarter in the prior year, with growth across all indications.
  
  

• Year over year net product revenue growth was lower than paid demand growth due to higher channel inventory levels at the end of the second quarter of 2023 versus the same period of 2024. Channel inventory at the end of the second quarter of 2024 was within the normal range.

Opzelura:

Net product revenues for the second quarter 2024 of $122 million (+52% Y/Y):

• Net product revenues growth in the second quarter of 2024 were driven by patient demand, refills and expansion in payer coverage in both atopic dermatitis (AD) and vitiligo.
  
  

• Net product revenues of $11 million in the second quarter of 2024 in Europe. Incyte achieved full reimbursement in Spain and Italy at the end of the second quarter 2024 and in France in July 2024.

Additional Pipeline Updates

Myeloproliferative Neoplasms (MPNs) and Graft-Versus-Host Disease (GVHD) – key highlights

• Combination trials of ruxolitinib twice daily (BID) with zilurgisertib and BETi are ongoing and continue to enroll. A Phase 3 study for BETi is expected to advance into Phase 3 with an expected update later this year. Clinical proof-of-concept for zilurgisertib is anticipated in the second half of 2024.
  
  

• The Phase 1 studies evaluating mCALR and JAK2V617Fi are ongoing and enrolling patients. Initial data for both studies is anticipated in 2025.

MPN and GVHD Programs		Indication and status
Ruxolitinib XR (QD) (JAK1/JAK2)		Myelofibrosis, polycythemia vera and GVHD
Ruxolitinib + zilurgisertib (JAK1/JAK2 + ALK2i)		Myelofibrosis: Phase 2
Ruxolitinib + INCB57643 (JAK1/JAK2 + BETi)		Myelofibrosis: Phase 2
Axatilimab (anti-CSF-1R)1		Chronic GVHD: Pivotal Phase 2 (third-line plus therapy) (AGAVE-201); BLA under review in the U.S.
Ruxolitinib + axatilimab1 (JAK1/JAK2 + anti-CSF-1R)		Chronic GVHD: Phase 2 in preparation
Steroids + axatilimab1 (Steroids + anti-CSF-1R)		Chronic GVHD: Phase 3 in preparation
INCA33989 (mCALR)		Myelofibrosis, essential thrombocythemia: Phase 1
INCB160058 (JAK2V617Fi)		Phase 1

1	Clinical development of axatilimab in GVHD conducted in collaboration with Syndax Pharmaceuticals.

Other Hematology/Oncology – key highlights

Heme/Oncology Programs		Indication and status
Pemigatinib (Pemazyre®) (FGFR1/2/3)		Myeloid/lymphoid neoplasms (MLN): approved in the U.S. and Japan Cholangiocarcinoma (CCA): Phase 3 (FIGHT-302)
Tafasitamab (Monjuvi®/Minjuvi®) (CD19)		Relapsed or refractory diffuse large B-cell lymphoma (DLBCL): Phase 3 (B-MIND) First-line DLBCL: Phase 3 (frontMIND) Relapsed or refractory follicular lymphoma (FL) and relapsed or refractory marginal zone lymphoma (MZL): Phase 3 (inMIND)
Retifanlimab (Zynyz®)1 (PD-1)		Merkel cell carcinoma (MCC): approved in the U.S. and Europe Squamous cell anal cancer (SCAC): Phase 3 (POD1UM-303) Non-small cell lung cancer (NSCLC): Phase 3 (POD1UM-304) MSI-high endometrial cancer: Phase 2 (POD1UM-101, POD1UM-204)
INCB123667 (CDK2i)		Solid tumors with Amplification/ Overexpression of CCNE1: Phase 1
INCB161734 (KRASG12D)		Advanced metastatic solid tumors with a KRAS G12D mutation: Phase 1
INCA33890 (TGFßR2×PD-1)2		Advanced or metastatic solid tumors: Phase 1

1	Retifanlimab licensed from MacroGenics.
2	Development in collaboration with Merus.

Inflammation and Autoimmunity (IAI) – key highlights

Dermatology

Opzelura

• In March 2024, Incyte presented data at the 2024 AAD Annual Meeting from its randomized, placebo-controlled, Phase 2 study evaluating the safety and efficacy of ruxolitinib cream (Opzelura^®) in adults with mild/moderate hidradenitis suppurativa (HS). At Week 16, patients receiving ruxolitinib cream 1.5% twice daily (BID) had significantly greater decreases from baseline versus placebo in total abscess and inflammatory nodule (AN) count, the primary endpoint of the study. The overall safety profile of ruxolitinib cream was consistent with previous data, and no new safety signals were observed. A Phase 3 study is expected to initiate in 2025.
  
  

• Ruxolitinib cream in other indications: Phase 2 studies in lichen planus and lichen sclerosus have completed enrollment. Two Phase 3 trials evaluating ruxolitinib cream in prurigo nodularis (PN) are ongoing.

Povorcitinib (INCB54707)

• The Phase 2, randomized, double-blind, placebo-controlled, dose ranging study evaluating the efficacy and safety of povorcitinib in participants with PN were presented at the 2024 AAD Annual Meeting with the study meeting its primary and secondary endpoints following 16 weeks of treatment across all dosing groups, reinforcing povorcitinib’s potential role in treating PN. A Phase 3 study in PN is expected to initiate in 2024.
  
  

• Two Phase 2 trials in asthma and chronic spontaneous urticaria are enrolling.

IAI and Dermatology Programs		Indication and status
Ruxolitinib cream (Opzelura®)1 (JAK1/JAK2)		Atopic dermatitis: Phase 3 pediatric study (TRuE-AD3) Vitiligo: Approved in the U.S. and Europe Lichen planus: Phase 2 Lichen sclerosus: Phase 2 Hidradenitis suppurativa: Phase 2; Phase 3 expected to initiate in 2025 Prurigo nodularis: Phase 3 (TRuE-PN1, TRuE-PN2)
Ruxolitinib cream + UVB (JAK1/JAK2 + phototherapy)		Vitiligo: Phase 2
Povorcitinib (JAK1)		Hidradenitis suppurativa: Phase 3 (STOP-HS1, STOP-HS2) Vitiligo: Phase 3 (STOP-V1, STOP-V2) Prurigo nodularis: Phase 3 expected to initiate in 2024 Asthma: Phase 2 Chronic spontaneous urticaria: Phase 2
INCB000262 (EP262) (MRGPRX2)		Chronic spontaneous urticaria: Phase 2 Chronic inducible urticaria: Phase 1b Atopic dermatitis: Phase 2a
INCB000547 (EP547) (MRGPRX4)		Cholestatic pruritus: Phase 2a
INCA034460 (anti-IL-15Rβ)		Vitiligo: Phase 1

1	Novartis’ rights to ruxolitinib outside of the United States under our Collaboration and License Agreement with Novartis do not include topical administration.

Other

Other Program		Indication and Phase
Zilurgisertib (ALK2)		Fibrodysplasia ossificans progressiva: Pivotal Phase 2

Partnered

Partnered Programs		Indication and Phase
Ruxolitinib (Jakavi®)1 (JAK1/JAK2)		Acute and chronic GVHD: Approved in Europe and Japan
Baricitinib (Olumiant®)2 (JAK1/JAK2)		AD: Approved in Europe and Japan Severe alopecia areata (AA): Approved in the U.S., Europe and Japan
Capmatinib (Tabrecta®)3 (MET)		NSCLC (with MET exon 14 skipping mutations): Approved in the U.S., Europe and Japan

1	Ruxolitinib (Jakavi®) licensed to Novartis ex-U.S. for use in hematology and oncology excluding topical administration.
2	Baricitinib (Olumiant®) licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis; approved as Olumiant in EU and Japan for certain patients with atopic dermatitis.
3	Capmatinib (Tabrecta®) licensed to Novartis.

2024 Second Quarter Financial Results

The financial measures presented in this press release for the three and six months ended June 30, 2024 and 2023 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers.

Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.

As changes in exchange rates are an important factor in understanding period-to-period comparisons, Management believes the presentation of certain revenue results on a constant currency basis in addition to reported results helps improve investors’ ability to understand its operating results and evaluate its performance in comparison to prior periods. Constant currency information compares results between periods as if exchange rates had remained constant period over period. The Company calculates constant currency by calculating current year results using prior year foreign currency exchange rates and generally refers to such amounts calculated on a constant currency basis as excluding the impact of foreign exchange or being on a constant currency basis. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as the Company presents them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.

Financial Highlights

Financial Highlights
(unaudited, in thousands, except per share amounts)

	Three Months Ended June 30,							Six Months Ended June 30,
		2024				2023			2024				2023
Total GAAP revenues	$	1,043,759			$	954,610		$	1,924,648			$	1,763,283
Total GAAP operating (loss) income		(478,130	)			193,780			(386,232	)			218,550
Total Non-GAAP operating (loss) income		(378,801	)			262,058			(217,618	)			351,787
GAAP net (loss) income		(444,601	)			203,548			(275,053	)			225,251
Non-GAAP net (loss) income		(396,132	)			223,029			(263,413	)			307,606
GAAP basic EPS	$	(2.04	)		$	0.91		$	(1.24	)		$	1.01
Non-GAAP basic EPS	$	(1.82	)		$	1.00		$	(1.19	)		$	1.38
GAAP diluted EPS1	$	(2.04	)		$	0.90		$	(1.24	)		$	1.00
Non-GAAP diluted EPS1	$	(1.82	)		$	0.99		$	(1.19	)		$	1.36

1.All stock options and stock awards were excluded from the diluted share calculation for the three and six months ended June 30, 2024 because their effect would have been anti-dilutive, as we were in a net loss position.

Revenue Details

Revenue Details
(unaudited, in thousands)

	Three Months Ended June 30,						% Change (as reported)			% Change (constant currency)1		Six Months Ended June 30,						% Change (as reported)			% Change (constant currency)1
		2024			2023								2024			2023
Net product revenues:
Jakafi	$	705,973		$	682,384		3	%		3%		$	1,277,812		$	1,262,353		1	%		1%
Opzelura		121,695			80,233		52	%		52%			207,419			136,785		52	%		52%
Iclusig		26,862			29,087		(8	%)		(7%)			57,205			56,772		1	%		—%
Pemazyre		20,269			21,572		(6	%)		(6%)			37,945			44,047		(14	%)		(14%)
Minjuvi/ Monjuvi		31,116			13,159		136	%		137%			54,990			19,715		179	%		179%
Zynyz		651			570		14	%		NM			1,118			570		96	%		NM
Total net product revenues		906,566			827,005		10	%		10%			1,636,489			1,520,242		8	%		8%
Royalty revenues:
Jakavi		99,317			90,448		10	%		14%			188,912			167,140		13	%		16%
Olumiant		31,702			32,009		(1	%)		4%			62,291			66,164		(6	%)		(3%)
Tabrecta		5,298			4,799		10	%		NA			10,532			8,976		17	%		NA
Pemazyre		876			349		151	%		NM			1,424			761		87	%		NM
Total royalty revenues		137,193			127,605		8	%					263,159			243,041		8	%
Total net product and royalty revenues		1,043,759			954,610		9	%					1,899,648			1,763,283		8	%
Milestone and contract revenues		—			—		—	%		—%			25,000			—		NM			NM
Total GAAP revenues	$	1,043,759		$	954,610		9	%				$	1,924,648		$	1,763,283		9	%

NM = not meaningful

NA = not available

1.Percentage change in constant currency is calculated using 2023 foreign exchange rates to recalculate 2024 results.

Product and Royalty Revenues Product revenues and product and royalty revenues for the quarter ended June 30, 2024 increased 10% and 9%, respectively, over the prior year comparative period, primarily driven by the following;

• Jakafi net product revenue increased 3% driven by a 9% increase in paid demand. Year over year net product revenue growth was lower than paid demand growth due to higher channel inventory levels at the end of the second quarter of 2023 versus the same period of 2024. Channel inventory at the end of the second quarter of 2024 was within the normal range.
  
  
• Opzelura net product revenue increased 52% due to continued growth in new patient starts and refills.
  
  
• Minjuvi/Monjuvi net product revenue increased 136% following the acquisition of the exclusive global rights to tafasitamab in February 2024.
  
  
• Jakavi royalty revenues increased 10%.

Operating Expenses

Operating Expense Summary
(unaudited, in thousands)

	Three Months Ended June 30,							% Change			Six Months Ended June 30,								% Change
		2024			2023							2024				2023
GAAP cost of product revenues	$	76,634		$	68,326			12	%		$	137,590			$	125,148			10	%
Non-GAAP cost of product revenues1		70,899			62,150			14	%			125,858				112,819			12	%
GAAP research and development		1,138,380			400,750			184	%			1,567,640				807,391			94	%
Non-GAAP research and development2		1,089,089			367,921			196	%			1,477,526				743,541			99	%
GAAP selling, general and administrative		305,982			283,929			8	%			606,238				599,535			1	%
Non-GAAP selling, general and administrative3		262,572			263,030			—	%			539,907				557,047			(3	%)
GAAP (gain) loss on change in fair value of acquisition-related contingent consideration		893			8,374			(89	%)			437				14,570			(97	%)
Non-GAAP (gain) loss on change in fair value of acquisition-related contingent consideration4		—			—			—	%			—				—			—	%
GAAP (profit) and loss sharing under collaboration agreements		—			(549	)		—	%			(1,025	)			(1,911	)		(46	%)

1 Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation.

2 Non-GAAP research and development expenses exclude the cost of stock-based compensation, MorphoSys transition costs, and Escient acquisition related compensation expense related to cash settled unvested Escient equity awards and severance payments.

3 Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation, MorphoSys transition costs, and Escient acquisition related compensation expense related to cash settled unvested Escient equity awards and severance payments.

4 Non-GAAP (gain) loss on change in fair value of acquisition-related contingent consideration is null.

Cost of product revenues GAAP and Non-GAAP cost of product revenues for the quarter ended June 30, 2024 increased 12% and 14%, respectively, compared to the same period in 2023 primarily due to growth in net product revenues.

Research and development expenses GAAP and Non-GAAP research and development expense for the quarter ended June 30, 2024 increased 184% and 196%, respectively, compared to the same period in 2023 primarily due to $679.4 million of expense relating to the IPR&D assets acquired in the Escient acquisition, $12.5 million of Escient acquisition related compensation expense related to cash settled unvested Escient equity awards and severance payments, as well as continued investment in our late stage development assets. Excluding the upfront consideration paid related to the Escient transaction and other upfront and milestone payments, research and development expense for the quarter ended June 30, 2024 increased 13% compared to the same period in 2023 due to continued investment in our late stage development assets and timing of certain expenses.

Selling, general and administrative expenses GAAP selling, general and administrative expenses for the quarter ended June 30, 2024 increased 8% compared to the same period in 2023 primarily due to $21.5 million of Escient acquisition related compensation expense related to cash settled unvested Escient equity awards and severance payments and timing of consumer marketing activities and of certain other expenses. Excluding the upfront consideration paid related to the Escient transaction, selling, general and administrative expenses for the quarter ended June 30, 2024 were flat compared to the same period in 2023.

Other Financial Information

Change in fair value of acquisition-related contingent consideration The change in fair value of contingent consideration during the quarter ended June 30, 2024, compared to the same period in 2023, was due primarily to fluctuations in foreign currency exchange rates impacting future revenue projections of Iclusig.

Operating income GAAP and Non-GAAP operating income for the three months ended June 30, 2024 decreased 347% and 245%, respectively, compared to the same period in 2023, driven primarily by the aforementioned costs relating to the Escient acquisition.

Provision for income taxes The income tax expense for the three months ended June 30, 2024 was $54.8 million on a pre-tax loss of $389.8 million primarily due to the impact of non-tax deductible charges of $710.9 million associated with the acquisition of Escient.

Cash, cash equivalents and marketable securities position As of June 30, 2024 and December 31, 2023, cash, cash equivalents and marketable securities totaled $1.4 billion and $3.7 billion, respectively. The decrease in cash, cash equivalents and marketable securities during 2024 was driven primarily by the $2.0 billion share repurchase completed during June 2024, and the total cash consideration paid to Escient shareholders of $783 million.

Share Repurchase In June 2024, Incyte completed a $2.0 billion share repurchase reflecting our confidence in the future outlook of our business, the strength of our commercial portfolio and the clinical development pipeline. In total, approximately 33.3 million shares of common stock were repurchased at $60.00 per share and represented approximately 14.8% of our common shares outstanding at the time of the repurchase. As of June 30, 2024, there were 191.6 million common shares outstanding.

2024 Financial Guidance

Incyte is raising the low end of its full year 2024 Jakafi revenue guidance as well as updating its full year 2024 research and development guidance to reflect the ongoing impact of the acquisition of Escient Pharmaceuticals. The research and development guidance excludes $691 million of upfront consideration recorded relating to the acquisition of Escient Pharmaceuticals. Incyte is maintaining its full year 2024 other hematology/oncology revenue guidance, as well as its cost of product revenue and selling, general and administrative guidance. Incyte’s guidance is summarized below. Guidance does not include revenue from any potential new product launches or the impact of any potential future strategic transactions.

	Current	Previous
Jakafi net product revenues	$2,710 - $2,750 million	$2,690 - $2,750 million
Other Hematology/Oncology net product revenues(1)	Unchanged	$325 - $360 million
GAAP Cost of product revenues	Unchanged	7 – 8% of net product revenues
Non-GAAP Cost of product revenues(2)	Unchanged	6 – 7% of net product revenues
GAAP Research and development expenses	$1,755 - $1,800 million	$1,720 - $1,760 million
Non-GAAP Research and development expenses(3)	$1,615 - $1,655 million	$1,580 - $1,615 million
GAAP Selling, general and administrative expenses	Unchanged	$1,210 - $1,240 million
Non-GAAP Selling, general and administrative expenses(3)	Unchanged	$1,115 - $1,140 million

1Pemazyre in the U.S., EU and Japan; Monjuvi and Zynyz in the U.S.; and Iclusig and Minjuvi in the EU.

2Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the estimated cost of stock-based compensation.

3 Adjusted to exclude the estimated cost of stock-based compensation.

Conference Call and Webcast Information

Incyte will hold a conference call and webcast this morning at 8:00 a.m. ET. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13747471.

If you are unable to participate, a replay of the conference call will be available for 90 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13747471.

The conference call will also be webcast live and can be accessed at investor.incyte.com.

About Incyte

A global biopharmaceutical company on a mission to Solve On., Incyte follows the science to find solutions for patients with unmet medical needs. Through the discovery, development and commercialization of proprietary therapeutics, Incyte has established a portfolio of first-in-class medicines for patients and a strong pipeline of products in Oncology and Inflammation & Autoimmunity. Headquartered in Wilmington, Delaware, Incyte has operations in North America, Europe and Asia.

For additional information on Incyte, please visit Incyte.com or follow us on social media: LinkedIn, X, Instagram, Facebook, YouTube.

About Jakafi^® (ruxolitinib)

Jakafi^® (ruxolitinib) is a JAK1/JAK2 inhibitor approved by the U.S. FDA for treatment of polycythemia vera (PV) in adults who have had an inadequate response to or are intolerant of hydroxyurea; intermediate or high-risk myelofibrosis (MF), including primary MF, post-polycythemia vera MF and post-essential thrombocythemia MF in adults; steroid-refractory acute GVHD in adult and pediatric patients 12 years and older; and chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older.

Jakafi is a registered trademark of Incyte.

About Opzelura^® (ruxolitinib) Cream

Opzelura^® (ruxolitinib) cream, a novel cream formulation of Incyte’s selective JAK1/JAK2 inhibitor ruxolitinib, approved by the U.S. Food & Drug Administration for the topical treatment of nonsegmental vitiligo in patients 12 years of age and older, is the first and only treatment for repigmentation approved for use in the United States. Opzelura is also approved in the U.S. for the topical short-term and non-continuous chronic treatment of mild to moderate atopic dermatitis (AD) in non-immunocompromised patients 12 years of age and older whose disease is not adequately controlled with topical prescription therapies, or when those therapies are not advisable. Use of Opzelura in combination with therapeutic biologics, other JAK inhibitors, or potent immunosuppressants, such as azathioprine or cyclosporine, is not recommended.

In Europe, Opzelura (ruxolitinib) cream 15mg/g is approved for the treatment of non-segmental vitiligo with facial involvement in adults and adolescents from 12 years of age.

Incyte has worldwide rights for the development and commercialization of ruxolitinib cream, marketed in the United States as Opzelura.

Opzelura and the Opzelura logo are registered trademarks of Incyte.

About Monjuvi^® (tafasitamab-cxix)

Monjuvi^® (tafasitamab-cxix) is a humanized Fc-modified cytolytic CD19 targeting monoclonal antibody. In 2010, MorphoSys licensed exclusive worldwide rights to develop and commercialize tafasitamab from Xencor, Inc. Tafasitamab incorporates an XmAb^® engineered Fc domain, which mediates B-cell lysis through apoptosis and immune effector mechanism including Antibody-Dependent Cell-Mediated Cytotoxicity (ADCC) and Antibody-Dependent Cellular Phagocytosis (ADCP). MorphoSys and Incyte entered into: (a) in January 2020, a collaboration and licensing agreement to develop and commercialize tafasitamab globally; and (b) in February 2024, an agreement whereby Incyte obtained exclusive rights to develop and commercialize tafasitamab globally.

In the United States, Monjuvi^® (tafasitamab-cxix) received accelerated approval by the U.S. Food and Drug Administration in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). In Europe, Minjuvi^® (tafasitamab) received conditional Marketing Authorization from the European Medicines Agency in combination with lenalidomide, followed by Minjuvi monotherapy, for the treatment of adult patients with relapsed or refractory DLBCL who are not eligible for ASCT.

XmAb^® is a registered trademark of Xencor, Inc.

Monjuvi, Minjuvi, the Minjuvi and Monjuvi logos and the “triangle” design are (registered) trademarks of Incyte.

About Pemazyre^® (pemigatinib)

Pemazyre^® (pemigatinib) is a kinase inhibitor indicated in the United States for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or other rearrangement as detected by an FDA-approved test*. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).

Pemazyre is also the first targeted treatment approved for use in the United States for treatment of adults with relapsed or refractory myeloid/lymphoid neoplasms (MLNs) with FGFR1 rearrangement.

In Japan, Pemazyre is approved for the treatment of patients with unresectable biliary tract cancer (BTC) with a fibroblast growth factor receptor 2 (FGFR2) fusion gene, worsening after cancer chemotherapy.

In Europe, Pemazyre is approved for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed after at least one prior line of systemic therapy.

Pemazyre is a potent, selective, oral inhibitor of FGFR isoforms 1, 2 and 3 which, in preclinical studies, has demonstrated selective pharmacologic activity against cancer cells with FGFR alterations.

Pemazyre is marketed by Incyte in the United States, Europe and Japan.

Pemazyre and the Pemazyre logo are registered trademarks of Incyte.

^* Pemazyre^® (pemigatinib) [Package Insert]. Wilmington, DE: Incyte; 2020.

About Iclusig^® (ponatinib) tablets

Ponatinib (Iclusig^®) targets not only native BCR-ABL but also its isoforms that carry mutations that confer resistance to treatment, including the T315I mutation, which has been associated with resistance to other approved TKIs.

In the EU, Iclusig is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase chronic myeloid leukemia (CML) who are resistant to dasatinib or nilotinib; who are intolerant to dasatinib or nilotinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation, or the treatment of adult patients with Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL) who are resistant to dasatinib; who are intolerant to dasatinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation.

Click here to view the Iclusig EU Summary of Medicinal Product Characteristics.

Incyte has an exclusive license from Takeda Pharmaceuticals International AG to commercialize ponatinib in the European Union and 29 other countries, including Switzerland, UK, Norway, Turkey, Israel and Russia. Iclusig is marketed in the U.S. by Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited.

About Zynyz^® (retifanlimab-dlwr)

Zynyz (retifanlimab-dlwr), is an intravenous PD-1 inhibitor indicated in the U.S. for the treatment of adult patients with metastatic or recurrent locally advanced Merkel cell carcinoma (MCC). This indication is approved under accelerated approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

Zynyz is marketed by Incyte in the U.S. In 2017, Incyte entered into an exclusive collaboration and license agreement with MacroGenics, Inc. for global rights to retifanlimab.

Zynyz and the Zynyz logo are registered trademarks of Incyte.

Forward-Looking Statements

Except for the historical information set forth herein, the matters set forth in this press release contain predictions, estimates and other forward-looking statements, including any discussion of the following: Incyte’s potential for continued performance and growth; Incyte’s financial guidance for 2024, including its expectations regarding sales of Jakafi; expectations regarding demand for and sales of Opzelura, among other products; expectations regarding reimbursement for Opzelura in Europe; where we intend to focus R&D efforts; plans to deliver sustainable innovation through 2028 and beyond; expectations regarding the potential and progress of our pipeline, including expectations for ruxolitinib cream, povorcitinib, INCB000262, INCB000547, axatilimab, mCALR, JAK2V617Fi, retifanlimab, INCB123667, KRASG12Di and our TGF-β program; Incyte’s ability to develop new transformative therapies to treat myeloid disease and cure MPNs; expectations regarding ongoing clinical trials and clinical trials to be initiated; expectations regarding data flow/readouts; expectations regarding regulatory filings, potential regulatory approvals and potential product launches; and expectations regarding 2024 newsflow items.

These forward-looking statements are based on Incyte’s current expectations and subject to risks and uncertainties that may cause actual results to differ materially, including unanticipated developments in and risks related to: further research and development and the possibility that results of clinical trials will be negative and/or insufficient to meet applicable regulatory standards or warrant continued development; the ability to enroll sufficient numbers of subjects in clinical trials and the ability to enroll subjects in accordance with planned schedules; determinations made by FDA, EMA, and other regulatory agencies; Incyte’s dependence on its relationships with and changes in the plans of its collaboration partners; the efficacy or safety of Incyte’s products and the products of Incyte’s collaboration partners; the acceptance of Incyte’s products and the products of Incyte’s collaboration partners in the marketplace; market competition; unexpected variations in the supply of and/or demand for Incyte’s products and the products of Incyte’s collaboration partners; the effects of announced or unexpected price regulation or limitations on reimbursement or coverage for Incyte’s products and the products of Incyte’s collaboration partners; sales, marketing, manufacturing and distribution requirements, including Incyte’s and its collaboration partners’ ability to successfully commercialize and build commercial infrastructure for newly approved products and any additional products that become approved; greater than expected expenses, including expenses relating to litigation or strategic activities; variations in foreign currency exchange rates; and other risks detailed in Incyte’s reports filed with the Securities and Exchange Commission, including its annual report on form 10-K for the year ended December 31, 2023. Incyte disclaims any intent or obligation to update these forward-looking statements.

INCYTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
	GAAP								GAAP
Revenues:
Product revenues, net	$	906,566			$	827,005			$	1,636,489			$	1,520,242
Product royalty revenues		137,193				127,605				263,159				243,041
Milestone and contract revenues		—				—				25,000				—
Total revenues		1,043,759				954,610				1,924,648				1,763,283
Costs, expenses and other:
Cost of product revenues (including definite-lived intangible amortization)		76,634				68,326				137,590				125,148
Research and development		1,138,380				400,750				1,567,640				807,391
Selling, general and administrative		305,982				283,929				606,238				599,535
Loss on change in fair value of acquisition-related contingent consideration		893				8,374				437				14,570
(Profit) and loss sharing under collaboration agreements		—				(549	)			(1,025	)			(1,911	)
Total costs, expenses and other		1,521,889				760,830				2,310,880				1,544,733
(Loss) income from operations		(478,130	)			193,780				(386,232	)			218,550
Interest income and other, net		49,769				42,668				94,513				75,541
Interest expense		(657	)			(655	)			(1,087	)			(1,124	)
Realized and unrealized gain on equity investments		39,241				41,811				139,188				36,493
(Loss) income before provision for income taxes		(389,777	)			277,604				(153,618	)			329,460
Provision for income taxes		54,824				74,056				121,435				104,209
Net (loss) income	$	(444,601	)		$	203,548			$	(275,053	)		$	225,251
Net (loss) income per share:
Basic	$	(2.04	)		$	0.91			$	(1.24	)		$	1.01
Diluted	$	(2.04	)		$	0.90			$	(1.24	)		$	1.00
Shares used in computing net (loss) income per share:
Basic		218,175				223,248				221,329				223,104
Diluted		218,175				225,649				221,329				225,541

INCYTE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
	June 30, 2024			December 31, 2023
ASSETS
Cash, cash equivalents and marketable securities	$	1,449,500		$	3,656,043
Accounts receivable		739,050			743,557
Property and equipment, net		762,009			751,513
Finance lease right-of-use assets, net		25,535			25,535
Inventory		355,972			269,937
Prepaid expenses and other assets		231,504			236,782
Short and long term equity investments		99,543			187,716
Other intangible assets, net		113,536			123,545
Goodwill		155,593			155,593
Deferred income tax asset		729,561			631,886
Total assets	$	4,661,803		$	6,782,107
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, accrued expenses and other liabilities	$	1,438,125		$	1,347,669
Finance lease liabilities		32,619			32,601
Acquisition-related contingent consideration		194,000			212,000
Stockholders’ equity		2,997,059			5,189,837
Total liabilities and stockholders’ equity	$	4,661,803		$	6,782,107

INCYTE CORPORATION
RECONCILIATION OF GAAP NET (LOSS) INCOME TO SELECTED NON-GAAP ADJUSTED INFORMATION
(unaudited, in thousands, except per share amounts)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
GAAP Net (Loss) Income	$	(444,601	)		$	203,548			$	(275,053	)		$	225,251
Adjustments1:
Non-cash stock compensation from equity awards (R&D)2		34,541				32,829				71,333				63,850
Non-cash stock compensation from equity awards (SG&A)2		21,748				20,899				44,121				42,488
Non-cash stock compensation from equity awards (COGS)2		351				792				964				1,561
Non-cash interest3		144				139				252				247
Realized and unrealized gain on equity investments4		(39,241	)			(41,811	)			(139,188	)			(36,493	)
Amortization of acquired product rights5		5,384				5,384				10,768				10,768
Loss on change in fair value of contingent consideration6		893				8,374				437				14,570
MorphoSys transition costs7		2,373				—				6,952				—
Escient acquisition related compensation expense8		34,039				—				34,039				—
Tax effect of Non-GAAP pre-tax adjustments9		(11,763	)			(7,125	)			(18,038	)			(14,636	)
Non-GAAP Net (Loss) Income9	$	(396,132	)		$	223,029			$	(263,413	)		$	307,606
Non-GAAP net (loss) income per share:
Basic	$	(1.82	)		$	1.00			$	(1.19	)		$	1.38
Diluted10	$	(1.82	)		$	0.99			$	(1.19	)		$	1.36
Shares used in computing Non-GAAP net (loss) income per share:
Basic		218,175				223,248				221,329				223,104
Diluted10		218,175				225,649				221,329				225,541

1 Included within the Milestone and contract revenues line item in the Condensed Consolidated Statements of Operations (in thousands) for the three and six months ended June 30, 2024 are milestones of $0 and $25,000 earned from our collaborative partners, as compared to no milestones earned for the three and six months ended June 30, 2023. Included within the Research and development expenses line item in the Condensed Consolidated Statements of Operations (in thousands) for the three and six months ended June 30, 2024 are upfront consideration and milestones of $414 and $1,414, respectively, related to our collaborative partners as compared to upfront consideration and milestones of $7,000 and $9,700, respectively, for the three and six months ended June 30, 2023.

2 As included within the Cost of product revenues (including definite-lived intangible amortization) line item; the Research and development expenses line item; and the Selling, general and administrative expenses line item in the Condensed Consolidated Statements of Operations.

3 As included within the Interest expense line item in the Condensed Consolidated Statements of Operations.

4 As included within the Realized and unrealized gain on equity investments line item in the Condensed Consolidated Statements of Operations.

5 As included within the Cost of product revenues (including definite-lived intangible amortization) line item in the Condensed Consolidated Statements of Operations. Acquired product rights of licensed intellectual property for Iclusig is amortized utilizing a straight-line method over the estimated useful life of 12.5 years.

6 As included within the (Gain) loss on change in fair value of acquisition-related contingent consideration line item in the Condensed Consolidated Statements of Operations.

7 Included within the Research and development line item in the Condensed Consolidated Statements of Operations is $2,232 and $6,263 for the three and six months ended June 30, 2024, respectively, and included within the Selling, general and administrative expenses line item in the Condensed Consolidated Statements of Operations is $141 and $689 for the three and six months ended June 30, 2024, respectively. MorphoSys transition costs primarily represent employee related costs to transition research and development and selling, general and administrative activities to us under the former collaboration agreement with MorphoSys.

8 Included within the Research and development line item in the Condensed Consolidated Statements of Operations is $12,518 for the three and six months ended June 30, 2024, and included within the Selling, general and administrative expenses line item in the Condensed Consolidated Statements of Operations is $21,521 for the three and six months ended June 30, 2024. Escient acquisition related compensation expense represents non-recurring charges associated with (i) cash settled unvested Escient equity awards in connection with the acquisition, and (ii) severance payments to former Escient employees.

9 Income tax effects of Non-GAAP pre-tax adjustments are calculated using an estimated annual effective tax rate, taking into consideration any permanent items and valuation allowances against related deferred tax assets. The Non-GAAP net income for the three months ended March 31, 2024 should have been $132,719 compared to the $145,269 previously disclosed to correct a transposition error in the tax effect of Non-GAAP pre-tax adjustments. For the three months ended March 31, 2024, the tax effect of Non-GAAP pre-tax adjustments should have been ($6,275) instead of $6,275.

10.All stock options and stock awards were excluded from the diluted share calculation for the three and six months ended June 30, 2024 because their effect would have been anti-dilutive, as we were in a net loss position.

 

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FAQ

What were Incyte's Q2 2024 total revenues?

Incyte reported total revenues of $1.044 billion for Q2 2024, a 9% increase year-over-year.

How did Jakafi® perform financially in Q2 2024?

Jakafi® net product revenues increased 3% year-over-year to $706 million in Q2 2024.

What was the revenue growth for Opzelura® in Q2 2024?

Opzelura® net product revenues surged 52% year-over-year to $122 million in Q2 2024.

What was Incyte's net income for Q2 2024?

Incyte reported a GAAP net loss of $444.6 million for Q2 2024.

What is Incyte's updated full-year Jakafi revenue guidance?

Incyte raised its full-year Jakafi revenue guidance to a range of $2,710-2,750 million.

What were the results of Incyte's Phase 3 studies for retifanlimab?

Incyte reported positive topline results from Phase 3 studies evaluating retifanlimab in SCAC and NSCLC, meeting primary endpoints.

How much did Incyte spend on share repurchase in Q2 2024?

Incyte completed a $2 billion share repurchase during Q2 2024.