Incyte Reports 2019 First Quarter Financial Results and Provides Updates on Key Clinical Programs
April 30, 2019-
Total revenues of $498 million (+30% vs Q1 2018) and total
product-related revenues of $458 million (+20% vs Q1 2018) for the
quarter ended March 31, 2019 -
Jakafi® (ruxolitinib) revenues of $376
million in Q1 2019 (+20% vs Q1 2018), reaffirming full
year 2019 revenue guidance range of $1.58-1.65 billion -
Primary endpoint met in Phase 2 trial of ruxolitinib cream for the
treatment of vitiligo; preparations now underway for Phase 3
development -
Decision taken to no longer participate in the co-funding of the
development of baricitinib
Conference Call and Webcast Scheduled Today at 8:00 a.m. EDT
WILMINGTON, Del.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24INCY&src=ctag” target=”_blank”gt;$INCYlt;/agt;–Incyte Corporation (Nasdaq:INCY) today reports 2019 first quarter
financial results and provides a status update on the Company’s
development portfolio.
“Underlying demand for Jakafi is strong, and we look forward to the U.S.
Food and Drug Administration’s (FDA) decision on ruxolitinib’s approval
in steroid-refractory acute graft-versus-host disease (GVHD),” stated
Hervé Hoppenot, Chief Executive Officer, Incyte. “We continue to make
progress across multiple programs and towards our key strategic goals of
further diversifying our revenue base and accelerating near-term growth.
We expect to present data from ruxolitinib cream in patients with
vitiligo later in the second quarter and to progress the program into
Phase 3 development. In addition, we expect to file a New Drug
Application (NDA) with the FDA for pemigatinib and to receive the
results from three Phase 3 trials of JAK inhibition in GVHD by the end
of this year.”
Portfolio Update
Oncology – key highlights
The FDA review of the sNDA seeking approval of ruxolitinib for the
treatment of steroid-refractory acute GVHD is ongoing; the Prescription
Drug User Fee Act (PDUFA) date is May 24, 2019. Data from the successful
REACH1 trial provided the basis for the application, and Incyte is ready
for the U.S. launch should ruxolitinib be approved in this new
indication.
The Phase 3 GRAVITAS-301 trial of itacitinib as a treatment for patients
with newly-diagnosed acute GVHD has now completed enrollment, and
results are expected before the end of 2019. If successful, Incyte
expects to submit applications seeking marketing approval for itacitinib
in major markets globally. GRAVITAS-309, a Phase 3 trial of itacitinib
as a treatment for patients with newly-diagnosed chronic GVHD, was
launched in January of this year.
Incyte expects to submit the NDA for pemigatinib as a second-line
treatment for patients with FGFR2 translocated cholangiocarcinoma in the
second half of 2019, and to initiate the Phase 3 trial for the
first-line treatment of patients with cholangiocarcinoma in the coming
months. The presentation of additional data from FIGHT-202, the Phase 2
trial evaluating pemigatinib as a second-line therapy in patients with
cholangiocarcinoma, is planned in the second half of the year.
Enrollment in the continuous dosing cohort of the Phase 2 trial of
pemigatinib in patients with bladder cancer is expected to complete by
the end of 2019, and a Phase 2 tumor agnostic study of pemigatinib is
expected to open before the end of 2019.
| Indication and status | ||||
|
Ruxolitinib (JAK1/JAK2) |
Steroid-refractory acute GVHD: sNDA under review (REACH1), Phase 3
|
|||
|
Itacitinib (JAK1) |
Treatment-naïve acute GVHD: Phase 3 (GRAVITAS-301) recruitment
|
|||
|
Pemigatinib (FGFR1/2/3) |
Cholangiocarcinoma: Phase 2 (FIGHT-202), Phase 3 (FIGHT-302) now
|
|||
|
Parsaclisib (PI3Kδ) |
Follicular lymphoma: Phase 2 (CITADEL-203)
|
|||
|
INCMGA0012 (PD-1)1 |
MSI-high endometrial cancer: Phase 2 (POD1UM-101)
|
|||
Notes:
1) INCMGA0012 licensed from MacroGenics
Inflammation and autoimmunity (IAI) – key highlights
The primary endpoint was met in the randomized Phase 2 trial of
ruxolitinib cream in patients with vitiligo, and Incyte expects data
from this trial to be presented at a medical meeting later in the second
quarter of 2019. Preparations for the Phase 3 development of ruxolitinib
cream in patients with vitiligo are now underway.
| Indication and status | ||||
|
Ruxolitinib cream
|
Atopic dermatitis: Phase 3 (TRuE-AD)
|
|||
|
INCB54707 (JAK1)
|
Hidradenitis suppurativa: Phase 2 | |||
|
Itacitinib
|
Ulcerative colitis: Phase 2 | |||
|
Parsaclisib |
Autoimmune hemolytic anemia: Phase 2
|
|||
Plans for the evaluation of PI3Kδ inhibition as a treatment for patients
with pemphigus vulgaris have been withdrawn; proof-of-concept trials of
PI3Kδ inhibition in autoimmune hemolytic anemia and Sjögren’s syndrome
are ongoing.
Discovery and early development – key highlights
The discovery and preclinical characteristics of Incyte’s oral PD-L1
inhibitor program were highlighted in two oral presentations at the
recent American Association for Cancer Research (AACR) annual meeting,
the lead compound of which (INCB86550) is now in clinical trials.
Presentations at AACR also included the generation and characterization
of MCLA-145, a bispecific antibody that engages human CD137 and PD-L1.
MCLA-145 is expected to enter clinical trials in the second quarter of
2019.
Incyte’s portfolio of earlier-stage clinical candidates is detailed
below.
| Modality | Candidates | |||
| Small molecules |
INCB01158 (ARG)1, INCB81776 (AXL/MER), INCB62079
|
|||
| Monoclonal antibodies2 |
INCAGN1876 (GITR), INCAGN2385 (LAG-3), INCAGN1949 (OX40),
|
|||
| Bispecific antibodies |
MCLA-145 (PD-L1xCD137)3
|
|||
Notes:
1) INCB01158 development in collaboration with Calithera
2)
Discovery collaboration with Agenus
3) MCLA-145 development in
collaboration with Merus
Partnered – key highlights
Incyte has elected to no longer co-fund the development of baricitinib
in order to reallocate capital, over time, to other promising internal
projects that could help it reach its objectives of diversification and
growth. The Company will continue to receive royalties on global net
sales of Olumiant (baricitinib), pursuant to the terms of its agreement
with Lilly.
Lilly plans to share data from BREEZE-AD1 and BREEZE-AD2, two Phase 3
trials of baricitinib in patients with moderate-to-severe atopic
dermatitis, at future scientific venues later this year, and also
expects to provide topline results from other ongoing Phase 3 trials in
this indication later in 2019. Lilly no longer plans to initiate Phase 3
development of baricitinib for psoriatic arthritis.
Novartis expects to submit an NDA for capmatinib for the treatment of
patients with non-small cell lung cancer (NSCLC) harboring MET exon 14
skipping mutations in the second half of 2019.
| Indication and status | ||||
|
Baricitinib |
Atopic dermatitis: Phase 3 (BREEZE-AD)
|
|||
| Capmatinib (MET)2 |
NSCLC (with MET exon 14 skipping mutations): NDA expected this
|
|||
Notes:
1) Worldwide rights to baricitinib licensed to Lilly:
approved as Olumiant in multiple territories globally for certain
patients with moderate to severe rheumatoid arthritis
2) Worldwide
rights to capmatinib licensed to Novartis
2019 First-Quarter Financial Results
The financial measures presented in this press release for the three
months ended March 31, 2019 and 2018 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.
Beginning in the first quarter of 2019, after reviewing our
Reconciliation of GAAP Net Income (Loss) to Selected Non-GAAP Adjusted
Information with the U.S. Securities & Exchange Commission, we no longer
adjust for upfront consideration and milestones that are part of
collaboration agreements with new or existing partners. This revised
methodology is reflected in this press release for the three months
ended March 31, 2019 and 2018.
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.
The Company’s 2019 financial guidance related to research and
development and selling, general and administrative expenses does not
include estimates associated with any potential future strategic
transactions.
Revenues For the quarter ended March 31, 2019, GAAP net product
revenues of Jakafi were $376 million as compared to $314 million for the
same period in 2018, representing 20 percent growth. For the quarter
ended March 31, 2019 and 2018, GAAP net product revenues of Iclusig®
(ponatinib) were $21 million.
For the quarter ended March 31, 2019 and 2018, GAAP product royalties
from sales of Jakavi® (ruxolitinib), which has been
out-licensed to Novartis outside of the United States, were $46 million
and $41 million, respectively. For the quarter ended March 31, 2019 and
2018, GAAP product royalties from sales of Olumiant, which has been
out-licensed to Lilly globally, were $16 million and $6 million,
respectively.
For the quarter ended March 31, 2019 and 2018, GAAP milestone and
contract revenues earned from our collaborative partners were $40
million and $0 million, respectively.
For the quarter ended March 31, 2019 and 2018, total GAAP revenues were
$498 million and $382 million, respectively.
| Year Over Year Revenue Growth | ||||||||||||
| (in thousands, unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | % | |||||||||||
| 2019 | 2018 | Change | ||||||||||
| Revenues: | ||||||||||||
| Jakafi net product revenue | $ 375,611 | $ 313,720 | 20% | |||||||||
| Iclusig net product revenue | 20,638 | 20,785 | -1% | |||||||||
| Jakavi product royalty revenues | 45,571 | 41,337 | 10% | |||||||||
| Olumiant product royalty revenues | 16,037 | 6,379 | 151% | |||||||||
| Product-related revenues | 457,857 | 382,221 | 20% | |||||||||
| Milestone and contract revenues | 40,000 | – | ||||||||||
|
Other revenues |
– | 61 | ||||||||||
| Total GAAP revenues | $ 497,857 | $ 382,282 | 30% | |||||||||
Cost of product revenues GAAP cost of product revenues for the
quarter ended March 31, 2019 and 2018 was $23 million and $18 million,
respectively. Non-GAAP cost of product revenues for the quarter ended
March 31, 2019 and 2018 was $17 million and $13 million, respectively.
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.
Research and development expenses GAAP research and development
expenses for the quarter ended March 31, 2019 and 2018 were $271 million
and $303 million, respectively. The decrease in GAAP research and
development expenses over the prior year quarter was driven primarily by
a decrease in upfront consideration and milestone expenses related to
our collaboration agreements and our decision to no longer co-fund the
development of baricitinib with Lilly.
Non-GAAP research and development expenses for the quarter ended March
31, 2019 and 2018 were $243 million and $279 million, respectively,
including upfront and milestone expenses related to collaborative
agreements of $0 million and $12 million, respectively. Non-GAAP
research and development expenses for the quarter ended March 31, 2019
and 2018 exclude the cost of stock-based compensation.
Selling, general and administrative expenses GAAP selling,
general and administrative expenses for the quarter ended March 31, 2019
and 2018 were $124 million and $121 million, respectively.
Non-GAAP selling, general and administrative expenses for the quarter
ended March 31, 2019 and 2018 were $111 million and $109 million,
respectively. Non-GAAP selling, general and administrative expenses
exclude the cost of stock-based compensation.
Change in fair value of acquisition-related contingent consideration GAAP
change in fair value of acquisition-related contingent consideration for
the quarter ended March 31, 2019 and 2018 was $7 million.
Unrealized gain on long term investments GAAP unrealized gain on
long-term investments for the quarter ended March 31, 2019 and 2018 was
$21 million and $23 million, respectively. The unrealized gain on
long-term investments represents the fair market value adjustments of
the Company’s investments in Agenus, Calithera, Merus and Syros.
Net income (loss) GAAP net income for the quarter ended March 31,
2019 was $102 million, or $0.48 per basic and $0.47 per diluted share,
as compared to net loss of $41 million, or $0.19 per basic and diluted
share for the same period in 2018.
Non-GAAP net income for the quarter ended March 31, 2019 was $135
million, or $0.63 per basic and $0.62 per diluted share, as compared to
Non-GAAP net loss of $15 million, or $0.07 per basic and diluted share
for the same period in 2018.
Cash, cash equivalents and marketable securities position As of
March 31, 2019 and December 31, 2018, cash, cash equivalents and
marketable securities totaled $1.6 billion and $1.4 billion,
respectively.
2019 Financial Guidance
The Company has updated its full year 2019 financial guidance, as
detailed below.
| Current | Previous | |||||||
| GAAP and Non-GAAP Jakafi net product revenues | $1,580 – $1,650 million | Unchanged | ||||||
| GAAP and Non-GAAP Iclusig net product revenues | $90 – $100 million | Unchanged | ||||||
| GAAP Cost of product revenues | $112 – $117 million | Unchanged | ||||||
| Non-GAAP Cost of product revenues(1) | $90 – $95 million | Unchanged | ||||||
| GAAP Research and development expenses | $1,145 – $1,195 million | $1,185 – $1,255 million | ||||||
| Non-GAAP Research and development expenses(2) | $1,020 – $1,070 million | $1,060 – $1,130 million(3) | ||||||
| GAAP Selling, general and administrative expenses | $471 – $521 million | Unchanged | ||||||
| Non-GAAP Selling, general and administrative expenses(2) | $420 – $470 million | Unchanged | ||||||
|
GAAP Change in fair value of acquisition-related contingent consideration |
$30 million | Unchanged | ||||||
|
Non-GAAP Change in fair value of acquisition-related contingent consideration(4) |
$0 million | Unchanged | ||||||
(1) Adjusted 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.
(2) Adjusted to exclude the estimated
cost of stock-based compensation.
(3) Previously, Non-GAAP R&D
guidance excluded $30 million upfront consideration and milestones under
certain collaboration agreements.
(4) Adjusted to exclude the
change in fair value of estimated future royalties relating to sales of
Iclusig in the licensed territory relating to the acquisition of the
European business of ARIAD Pharmaceuticals, Inc.
Future Non-GAAP financial measures may also exclude impairment of
goodwill or other assets, changes in the fair value of equity
investments in our collaboration partners, non-cash interest expense
related to the amortization of the initial discount on our 2020 Senior
Notes and the impact on our tax provision of discrete changes in our
valuation allowance position on deferred tax assets.
Conference Call and Webcast Information
Incyte will hold a conference call and webcast this morning at 8:00 a.m.
EDT. 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, 13689554.
If you are unable to participate, a replay of the conference call will
be available for 30 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, 13689554.
The conference call will also be webcast live and can be accessed at www.incyte.com
in the Investors section under “Events and Presentations”.
About Incyte
Incyte Corporation is a Wilmington, Delaware-based biopharmaceutical
company focused on the discovery, development and commercialization of
proprietary therapeutics. For additional information on Incyte, please
visit the Company’s website at www.incyte.com.
Follow @Incyte on Twitter at https://twitter.com/Incyte.
About Jakafi® (ruxolitinib)
Jakafi is a first-in-class JAK1/JAK2 inhibitor approved by the U.S. Food
and Drug Administration for treatment of people with polycythemia vera
(PV) who have had an inadequate response to or are intolerant of
hydroxyurea. Jakafi is also indicated for treatment of people with
intermediate or high-risk myelofibrosis (MF), including primary MF,
post–polycythemia vera MF, and post–essential thrombocythemia MF.
Jakafi is marketed by Incyte in the United States and by Novartis as
Jakavi® (ruxolitinib) outside the United States.
About Iclusig® (ponatinib) tablets
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.
Incyte has an exclusive license from ARIAD Pharmaceuticals, Inc., since
acquired by Takeda Pharmaceutical Company Limited, to develop and
commercialize Iclusig in the European Union and 22 other countries,
including Switzerland, Norway, Turkey, Israel and Russia.
Forward-Looking Statements
Except for the historical information set forth herein, the matters set
forth in this release contain predictions, estimates and other
forward-looking statements, including without limitation statements
regarding: the reaffirmation of the Company’s 2019 revenue guidance
range; the expected timing of submission of NDAs for pemigatinib and
capmatinib; the expected timing of the receipt or presentation of data
from the trials evaluating itacitinib and ruxolitinib in GVHD,
ruxolitinib cream in vitiligo, and pemigatinib in cholangiocarcinoma;
the expected timing of a Phase 3 trial evaluating pemigatinib as a
first-line treatment in patients with cholangiocarcinoma and a Phase 2
tumor agnostic study of pemigatinib; the expected date of completion of
enrollment in the Phase 2 trial of pemigatinib in patients with bladder
cancer; the expected timing of data from the Phase 2 program of
ruxolitinib cream in patients with vitiligo; the expected timing of the
initiation of clinical trials of MCLA-145; expectations of the Company’s
collaboration partners for the submission of NDAs and the sharing of
data from clinical trials; and the Company’s updated financial guidance
for 2019 and the expectations underlying such guidance.
These forward-looking statements are based on the Company’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: unanticipated delays; further
research and development and the results of clinical trials possibly
being unsuccessful or insufficient to meet applicable regulatory
standards or warrant continued development; the ability to enroll
sufficient numbers of subjects in clinical trials; determinations made
by the FDA; the Company’s dependence on its relationships with and
changes in the plans of its collaboration partners; the efficacy or
safety of the Company’s products and the products of the Company’s
collaboration partners; the acceptance of the Company’s products and the
products of the Company’s collaboration partners in the marketplace;
market competition; sales, marketing, manufacturing and distribution
requirements; greater than expected expenses; expenses relating to
litigation or strategic activities; and other risks detailed from time
to time in the Company’s reports filed with the Securities and Exchange
Commission, including its annual report on Form 10-K for the year ended
December 31, 2018. The Company disclaims any intent or obligation to
update these forward-looking statements.
| INCYTE CORPORATION | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (unaudited, in thousands, except per share amounts) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2019 | 2018 | ||||||||
| GAAP | |||||||||
| Revenues: | |||||||||
| Product revenues, net | $ 396,249 | $ 334,505 | |||||||
| Product royalty revenues | 61,608 | 47,716 | |||||||
| Milestone and contract revenues | 40,000 | – | |||||||
| Other revenues | – | 61 | |||||||
| Total revenues | 497,857 | 382,282 | |||||||
| Costs and expenses: | |||||||||
|
Cost of product revenues (including definite-lived intangible amortization) |
22,588 | 18,106 | |||||||
| Research and development | 270,545 | 303,103 | |||||||
| Selling, general and administrative | 123,983 | 121,498 | |||||||
| Change in fair value of acquisition-related contingent consideration | 6,671 | 6,685 | |||||||
| Total costs and expenses | 423,787 | 449,392 | |||||||
| Income (loss) from operations | 74,070 | (67,110) | |||||||
| Other income (expense), net | 9,373 | 4,462 | |||||||
| Interest expense | (335) | (385) | |||||||
| Unrealized gain on long term investments | 20,989 | 22,679 | |||||||
| Income (loss) before provision for income taxes | 104,097 | (40,354) | |||||||
| Provision for income taxes | 1,785 | 786 | |||||||
| Net income (loss) | $ 102,312 | $ (41,140) | |||||||
| Net income (loss) per share: | |||||||||
| Basic | $ 0.48 | $ (0.19) | |||||||
| Diluted | $ 0.47 | $ (0.19) | |||||||
| Shares used in computing net income (loss) per share: | |||||||||
| Basic | 214,065 | 211,681 | |||||||
| Diluted | 217,061 | 211,681 | |||||||
| INCYTE CORPORATION | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (unaudited, in thousands) | |||||||||
| March 31, | December 31, | ||||||||
| 2019 | 2018 | ||||||||
| ASSETS | |||||||||
| Cash, cash equivalents and marketable securities | $ 1,581,024 | $ 1,438,323 | |||||||
| Accounts receivable | 244,081 | 307,598 | |||||||
| Property and equipment, net | 338,331 | 319,751 | |||||||
| Inventory | 11,005 | 10,405 | |||||||
| Prepaid expenses and other assets | 93,959 | 99,529 | |||||||
| Long term investments | 120,188 | 99,199 | |||||||
| Other intangible assets, net | 209,980 | 215,364 | |||||||
| Goodwill | 155,593 | 155,593 | |||||||
| Total assets | $ 2,754,161 | $ 2,645,762 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| Accounts payable, accrued expenses and other liabilities | $ 363,947 | $ 415,360 | |||||||
| Convertible senior notes | 17,647 | 17,434 | |||||||
| Acquisition-related contingent consideration | 287,000 | 287,001 | |||||||
| Stockholders’ equity | 2,085,567 | 1,925,967 | |||||||
| Total liabilities and stockholders’ equity | $ 2,754,161 | $ 2,645,762 | |||||||
Contacts
Media
Catalina Loveman
+1 302 498 6171
[email protected]
Investors
Michael Booth, DPhil
+1 302 498 5914
[email protected]