Incyte Reports 2022 Fourth Quarter and Year-end Financial Results, Provides 2023 Financial Guidance and Updates on Key Clinical Programs

– Total FY’22 net product revenues grew 18% to $2.75 billion; total FY’22 revenues of $3.4 billion (+14% Y/Y)

– Jakafi^® (ruxolitinib) net revenues of $647 million (+9% Y/Y) in Q4’22 and $2.41 billion (+13%) in FY’22; Jakafi net revenues guidance range of $2.53 – $2.63 billion for FY 2023

– Opzelura™ (ruxolitinib) Cream net revenues of $61 million in Q4’22 and $129 million in FY’22, driven by strong demand in atopic dermatitis, a successful launch in vitiligo and broadening formulary access

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

WILMINGTON, Del.–(BUSINESS WIRE)–$INCY–Incyte (Nasdaq:INCY) today reports 2022 fourth quarter financial results, provides 2023 financial guidance and provides a status update on the Company’s clinical development portfolio.

“We are entering 2023 with significant momentum, following a year of strong commercial performance and progress of several important mid-to-late stage programs across our pipeline. Opzelura has now become the market share leader among branded agents for new atopic dermatitis patients and the adoption in vitiligo has been strong,” said Hervé Hoppenot, Chief Executive Officer, Incyte. “We are well positioned for strong growth with our current product portfolio and we expect to deliver many important updates this year as we continue to execute on our growth and diversification strategy.”

Portfolio Updates

MPNs and GVHD – key highlights

LIMBER (Leadership In MPNs and GVHD BEyond Ruxolitinib) program: Important LIMBER updates were presented at the American Society of Hematology (ASH) Annual Meeting in December 2022:

• Parsaclisib + ruxolitinib in myelofibrosis (MF): Final results from the Phase 2 trial in MF patients with a suboptimal response to ruxolitinib demonstrated additional spleen volume response and symptom improvement with the addition of parsaclisib. Add-on parsaclisib was generally well-tolerated. A Phase 3 trial evaluating parsaclisib as an add-on to ruxolitinib in suboptimal responders is ongoing with results expected at the end of 2023.

• Zilurgisertib (ALK2) ± ruxolitinib in MF: Initial results from the Phase 1 study evaluating zilurgisertib as monotherapy or in combination with ruxolitinib in patients with anemia due to MF were presented, establishing proof of mechanism in improving anemia. Updated combination data with ruxolitinib are expected later this year.

• INCA33989 (mCALR) in MF and essential thrombocythemia (ET): A novel anti-mutant calreticulin (mCALR) monoclonal antibody was unveiled during the ASH plenary session. These data highlight Incyte’s discovery capabilities and research progress in MF and ET; two patient populations where 25-35% of patients have a CALR mutation. INCA33989 is expected to enter the clinic later this year.

Ruxolitinib extended release (XR) formulation: The New Drug Application (NDA) was accepted by the U.S. Food and Drug Administration (FDA) with a Prescription Drug User Fee Act (PDUFA) target action date of March 23, 2023.

Axatilimab in chronic graft-versus-host disease (GVHD): In December, Syndax and Incyte announced that results from the Phase 1/2 trial of axatilimab in patients with recurrent or refractory chronic GVHD following two or more prior lines of therapy were published in the Journal of Clinical Oncology. The data demonstrate that treatment with axatilimab resulted in an overall response rate (ORR) by cycle 7, day 1 of 67% across all patients. AGAVE-201, a global pivotal Phase 2 trial of axatilimab in patients with cGVHD, is ongoing with results expected mid-2023. A Phase 1/2 combination trial of axatilimab with ruxolitinib in patients with newly-diagnosed cGVHD is expected to initiate later this year.

Jakafi patent extension: Incyte was granted pediatric exclusivity which adds six months to the expiration for all ruxolitinib patents, thereby extending the patent expiry for Jakafi through December 2028.

		Indication and status
Ruxolitinib XR (QD) (JAK1/JAK2)		Myelofibrosis, polycythemia vera and GVHD: NDA under review
Ruxolitinib + parsaclisib (JAK1/JAK2 + PI3Kδ)		Myelofibrosis: Phase 3 (first-line therapy) (LIMBER-313) Myelofibrosis: Phase 3 (suboptimal responders to ruxolitinib) (LIMBER-304)
Ruxolitinib + INCB57643 (JAK1/JAK2 + BET)		Myelofibrosis: Phase 2
Ruxolitinib + zilurgisertib (JAK1/JAK2 + ALK2)		Myelofibrosis: Phase 2
Ruxolitinib + CK08041 (JAK1/JAK2 + CB-Tregs)		Myelofibrosis: Phase 1 (LIMBER-TREG108)
Axatilimab (anti-CSF-1R)2		Chronic GVHD: Pivotal Phase 2 (third-line plus therapy) (AGAVE-201)
Ruxolitinib + axatilimab2 (JAK1/JAK2 + anti-CSF-1R)		Chronic GVHD (newly diagnosed): Phase 1/2 in preparation

1	Development collaboration with Cellenkos, Inc.
2	Clinical development of axatilimab in GVHD conducted in collaboration with Syndax Pharmaceuticals.

Other Hematology/Oncology – key highlights

Oral PD-L1: In November, data from Incyte’s oral, small molecule PD-L1 program, including Phase 1 data evaluating the safety and tolerability of INCB99280 and INCB99318, were presented at the Society for Immunotherapy of Cancer (SITC) meeting. Both INCB99280 and INCB99318 demonstrated clinical activity with tumor shrinkage and were generally well-tolerated. Updated data are expected later in 2023.

INCB99280 (Oral PD-L1) + adagrasib (KRAS^G12C): In November, Incyte and Mirati announced a clinical trial collaboration and supply agreement to investigate the combination of INCB99280 and adagrasib, a KRAS^G12C selective inhibitor, in patients with KRAS^G12C-mutated solid tumors. We expect to initiate a Phase 1/1b trial evaluating the combination this year.

		Indication and status
Pemigatinib (Pemazyre®) (FGFR1/2/3)		Myeloid/lymphoid neoplasms (MLN): approved by FDA Cholangiocarcinoma (CCA): Phase 3 (FIGHT-302) Glioblastoma: Phase 2 (FIGHT-209) Non-small cell lung cancer (NSCLC): Phase 2 (FIGHT-210)
Tafasitamab (Monjuvi®/Minjuvi®)1 (CD19)		Relapsed or refractory diffuse large B-cell lymphoma (DLBCL): Phase 2 (L-MIND); 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)
Parsaclisib (PI3Kδ)		Warm autoimmune hemolytic anemia: Phase 3 (PATHWAY)
Retifanlimab2 (PD-1)		Squamous cell anal cancer (SCAC): Phase 3 (POD1UM-303) MSI-high endometrial cancer: Phase 2 (POD1UM-101, POD1UM-204) Merkel cell carcinoma: Phase 2 (POD1UM-201) Non-small cell lung cancer (NSCLC): Phase 3 (POD1UM-304)
INCB99280 (Oral PD-L1)		Solid tumors: Phase 1 KRASG12C-mutated solid tumors: Phase 1/1b in combination with adagrasib, in preparation
INCB99318 (Oral PD-L1)		Solid tumors: Phase 1

1	Development of tafasitamab in collaboration with MorphoSys.
2	Retifanlimab licensed from MacroGenics.

Inflammation and Autoimmunity (IAI) – key highlights

Dermatology

Opzelura growth coming from both atopic dermatitis (AD) and vitiligo in the U.S.: More than 84,000 units of Opzelura were shipped in the fourth quarter of 2022 driven by strong growth in new patient starts across AD and vitiligo, as well as broadening formulary coverage. Refills grew across both indications, helping drive net product revenues to $61 million, a growth of 61% versus the third quarter. Additionally, in late 2022, Incyte received an issued patent and allowed claims directed to the treatments of atopic dermatitis and vitiligo, respectively, with expiration dates of 2040.

Ruxolitinib cream in pediatric AD: A Phase 3 trial of ruxolitinib cream in pediatric AD is ongoing, with results expected by end of year. There are an estimated 2 million pediatric AD patients ages 2 to 11 in the U.S.

Ruxolitinib cream in vitiligo in Europe: A marketing authorization application (MAA) is under review at the European Medicines Agency (EMA), with the Committee for Medicinal Products for Human Use (CHMP) opinion expected in the first half of 2023.

Ruxolitinib cream in other indications: Incyte continues to expand the development of ruxolitinib cream into new indications to maximize the opportunity with Opzelura. In December, a Phase 2 trial evaluating ruxolitinib cream in mild to moderate hidradenitis suppurativa (HS) was initiated. Two Phase 2 trials in lichen planus (LP) and lichen sclerosus (LS) are ongoing. There are no topical therapies approved in hidradenitis suppurativa, lichen planus or lichen sclerosus.

Povorcitinib in multiple indications: In December, two Phase 3 trials (STOP-HS1 and STOP-HS2) in moderate to severe HS were initiated. Additionally, two Phase 2 trials in vitiligo and prurigo nodularis are ongoing, with results expected in 2023.

		Indication and status
Ruxolitinib cream (OpzeluraTM)1 (JAK1/JAK2)		AD: Phase 3 pediatric study (TRuE-AD3) Vitiligo: Phase 3 (TRuE-V1, TRuE-V2); approved by FDA; MAA under review Lichen planus: Phase 2 Lichen sclerosus: Phase 2 Hidradenitis suppurativa: Phase 2
Ruxolitinib cream + UVB (JAK1/JAK2 + phototherapy)		Vitiligo: Phase 2
Povorcitinib (JAK1)		Hidradenitis suppurativa: Phase 2b; Phase 3 (STOP-HS1, STOP-HS2) Vitiligo: Phase 2 Prurigo nodularis: Phase 2
Auremolimab (anti-IL-15Rβ)		Vitiligo: Phase 1 in preparation

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

Discovery and early development – key highlights

Incyte’s portfolio of other earlier-stage clinical candidates is below.

Modality		Candidates
Small molecules		INCB81776 (AXL/MER), INCB106385 (A2A/A2B), INCB123667 (CDK2)
Monoclonal antibodies		INCAGN1876 (GITR)1, INCAGN2385 (LAG-3)1, INCAGN2390 (TIM-3)1, INCA00186 (CD73), INCA33989 (mCALR)
Bi-specific antibodies		INCA32459 (LAG-3xPD-1)2

1	Discovery collaboration with Agenus.
2	Development in collaboration with Merus

Partnered – key highlights

		Indication and status
Ruxolitinib1 (JAK1/JAK2)		Acute and chronic GVHD: approved in Europe; J-NDA under review
Baricitinib2 (JAK1/JAK2)		AD: approved in Europe and Japan Severe AA: approved in the U.S., Europe and Japan
Capmatinib3 (MET)		NSCLC (with MET exon 14 skipping mutations): approved in the U.S., Europe and Japan

1	ruxolitinib licensed to Novartis ex-US for use in hematology and oncology excluding topical administration.
2	baricitinib 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 licensed to Novartis.

2022 Fourth Quarter and Year-end Financial Results

The financial measures presented in this press release for the quarter and year ended December 31, 2022 and 2021 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 December 31,							Twelve Months Ended December 31,
		2022			2021				2022			2021
Total GAAP revenues	$	926,700		$	862,853			$	3,394,635		$	2,986,267
Total GAAP operating income		70,093			110,734				579,440			585,777
Total Non-GAAP operating income		152,503			166,013				801,545			825,032
GAAP provision (benefit) for income taxes		52,154			(443,831	)			188,456			(378,137	)
GAAP net income		28,461			563,851				340,660			948,581
Non-GAAP net income		139,661			22,565				622,676			611,978
GAAP basic EPS	$	0.13		$	2.55			$	1.53		$	4.30
Non-GAAP basic EPS	$	0.63		$	0.10			$	2.80		$	2.78
GAAP diluted EPS	$	0.13		$	2.54			$	1.52		$	4.27
Non-GAAP diluted EPS	$	0.62		$	0.10			$	2.78		$	2.76

Revenue Details

Revenue Details
(unaudited, in thousands)
	Three Months Ended December 31,						% Change (as reported)		% Change (constant currency)1		Twelve Months Ended December 31,						% Change (as reported)		% Change (constant currency)1
		2022			2021							2022			2021
Net product revenues:
Jakafi	$	647,493		$	592,370		9%		9%		$	2,409,225		$	2,134,508		13%		13%
Iclusig		27,616			27,039		2%		8%			105,838			109,395		(3%)		8%
Pemazyre		23,016			19,607		17%		37%			83,445			68,531		22%		26%
Minjuvi		4,809			4,354		10%		54%			19,654			4,910		300%		350%
Opzelura		61,281			4,668		NM		NM			128,735			4,668		NM		NM
Total net product revenues		764,215			648,038		18%		19%			2,746,897			2,322,012		18%		19%
Royalty revenues:
Jakavi		91,189			95,696		(5%)		10%			331,575			337,991		(2%)		11%
Olumiant		35,858			66,000		(46%)		(31%)			134,547			220,875		(39%)		(32%)
Tabrecta		4,233			3,119		36%		NA			15,411			10,389		48%		NA
Pemazyre		1,205			—		NM		NM			1,205			—		NM		NM
Total royalty revenues		132,485			164,815		(20%)					482,738			569,255		(15%)
Total net product and royalty revenues		896,700			812,853		10%					3,229,635			2,891,267		12%
Milestone and contract revenues		30,000			50,000		(40%)		(40%)			165,000			95,000		74%		74%
Total GAAP revenues	$	926,700		$	862,853		7%				$	3,394,635		$	2,986,267		14%

NM = not meaningful

NA = not available

1.Percentage change in constant currency is calculated using 2021 foreign exchange rates to recalculate 2022 results.

Product and Royalty Revenues Product and royalty revenues for the quarter and year ended December 31, 2022 increased over the prior year comparative periods as a result of net product revenues increasing 18% for both periods year-over-year, primarily driven by increases in Jakafi and Opzelura net product revenues. Jakafi net product revenues for the year ended December 31, 2022 increased 13% over the prior year comparative period, primarily driven by growth in patient demand across all indications. Jakavi and Olumiant royalties for the year were impacted by unfavorable changes in foreign currency exchange rates, while Olumiant royalties were also impacted by a decrease in net product sales of Olumiant for use as a treatment for COVID-19.

Operating Expenses

Operating Expense Summary
(unaudited, in thousands)
	Three Months Ended December 31,							% Change			Twelve Months Ended December 31,						% Change
		2022				2021						2022			2021
GAAP cost of product revenues	$	59,163			$	43,874		35	%		$	206,997		$	150,991		37	%
Non-GAAP cost of product revenues1		53,022				37,886		40	%			182,737			127,749		43	%
GAAP research and development		501,360				472,827		6	%			1,585,936			1,458,179		9	%
Non-GAAP research and development2		469,048				442,693		6	%			1,473,420			1,343,863		10	%
GAAP selling, general and administrative		272,819				226,202		21	%			1,002,140			739,560		36	%
Non-GAAP selling, general and administrative3		253,209				208,718		21	%			928,960			652,604		42	%
GAAP loss on change in fair value of acquisition-related contingent consideration		24,347				1,673		1355	%			12,149			14,741		(18	%)
Non-GAAP loss on change in fair value of acquisition-related contingent consideration4		—				—		—	%			—			—		—	%
GAAP (profit) and loss sharing under collaboration agreements		(1,082	)			7,543		(114	%)			7,973			37,019		(78	%)

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.
3	Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation and legal settlements.
4	Non-GAAP loss on change in fair value of acquisition-related contingent consideration is null.

Research and development expenses GAAP and Non-GAAP research and development expense for the quarter ended December 31, 2022 increased 6% and for the year ended December 31, 2022 increased 9% and 10%, respectively, compared to the same periods in 2021 primarily due to continued investment in our late stage development assets and the $70 million upfront payment made as part of the Villaris acquisition.

Selling, general and administrative expenses GAAP and Non-GAAP selling, general and administrative expenses for the quarter ended December 31, 2022 increased 21% and for the year ended December 31, 2022 increased 36% and 42%, respectively, compared to the same periods in 2021, primarily due to expenses related to our dermatology commercial organization and activities to support the launch of Opzelura for the treatments of atopic dermatitis and vitiligo.

Other Financial Information

Operating income GAAP and Non-GAAP operating income for the year ended December 31, 2022 decreased 1% and 3%, respectively, compared to the same period in 2021, primarily due to expenses related to our dermatology commercial organization and activities to support the launch of Opzelura for the treatments of atopic dermatitis and vitiligo.

Cash, cash equivalents and marketable securities position As of December 31, 2022 and 2021, cash, cash equivalents and marketable securities totaled $3.2 billion and $2.3 billion, respectively.

2023 Financial Guidance

Guidance does not include revenue from any potential new product launches or the impact of any potential future strategic transactions. Incyte’s guidance is summarized below.

	Current
Jakafi net product revenues	$2.53 – $2.63 billion
Other Hematology/Oncology net product revenues(1)	$215 – $225 million
GAAP Cost of product revenues	7 – 8% of net product revenues
Non-GAAP Cost of product revenues(2)	6 – 7% of net product revenues
GAAP Research and development expenses	$1,610 – $1,650 million
Non-GAAP Research and development expenses(3)	$1,485 – $1,520 million
GAAP Selling, general and administrative expenses	$1,050 – $1,150 million
Non-GAAP Selling, general and administrative expenses(3)	$965 – $1,060 million

1	Pemazyre in the U.S., EU and Japan and Iclusig and Minjuvi in the EU.
2	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.
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, 13735569.

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, 13735569.

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

About Incyte

Incyte is a Wilmington, Delaware-based, global biopharmaceutical company focused on finding solutions for serious unmet medical needs through the discovery, development and commercialization of proprietary therapeutics. For additional information on Incyte, please visit Incyte.com and follow @Incyte.

About Jakafi^® (ruxolitinib)

Jakafi is a first-in-class JAK1/JAK2 inhibitor approved by the U.S. FDA for treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older.

Jakafi is also indicated for treatment of polycythemia vera (PV) in adults who have had an inadequate response to or are intolerant of hydroxyurea, in adults with intermediate or high-risk myelofibrosis (MF), including primary MF, post-polycythemia vera MF and post-essential thrombocythemia MF and for treatment of steroid-refractory acute GVHD in adult and pediatric patients 12 years and older.

Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi^® (ruxolitinib) outside the United States. Jakafi is a registered trademark of Incyte Corporation. Jakavi is a registered trademark of Novartis AG in countries outside the United States.

About Opzelura™ (ruxolitinib) Cream

Opzelura, a novel cream formulation of Incyte’s selective JAK1/JAK2 inhibitor ruxolitinib, is the first and only topical JAK inhibitor approved for use in the United States, indicated for the topical treatment of nonsegmental vitiligo in adult and pediatric patients 12 years of age and older and 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 October 2021, Incyte announced the validation of the European Marketing Authorization Application (MAA) for ruxolitinib cream as a potential treatment for adolescents and adults (age >12 years) with non-segmental vitiligo with facial involvement.

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

Opzelura is a trademark of Incyte.

About Monjuvi^®/Minjuvi^® (tafasitamab)

Tafasitamab is a humanized Fc-modified cytolytic CD19 targeting immunotherapy.

Contacts

Media
Catalina Loveman

+1 302 498 6171

[email protected]

Investors
Christine Chiou

+1 302 274 4773

[email protected]

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