Incyte Reports 2012 Third-Quarter Financial Results; Updates Shareholders on
Launch of Jakafi and Lead Clinical Programs
*$43.7 million of Jakafi^® (ruxolitinib) recognized as third-quarter U.S.
net product revenue including $9.0 million of previously deferred revenue
*Third quarter dispenses to patients increased 16 percent over second
*Ruxolitinib approved for use in the European Union
Conference Call Scheduled Today at 8:30 a.m. ET
WILMINGTON, Del. -- November 01, 2012
Incyte Corporation (Nasdaq: INCY) today reported third-quarter 2012 financial
results, including revenue from its first commercial product, Jakafi^®
(ruxolitinib), which was approved by the U.S. Food & Drug Administration (FDA)
for the treatment of patients with intermediate or high-risk myelofibrosis
(MF) in November 2011. Novartis, the Company’s collaboration partner,
announced that Jakafi, marketed as Jakavi^® outside the United States,
received approval from the European Commission for the treatment of
disease-related splenomegaly or symptoms in adult patients with primary MF,
post-polycythemia vera MF or post-essential thrombocythemia MF. Jakafi/Jakavi
is the first medicine to receive FDA and European Commission approval to treat
patients with myelofibrosis and the first JAK inhibitor to be approved for any
“We’re encouraged by the underlying demand for Jakafi, and we are building a
strong foundation for long-term growth. With continued efforts to expand the
use of Jakafi among new and existing prescribers, extensive educational
efforts around the optimal use of Jakafi, and additional data being presented
at the upcoming American Society of Hematology annual meeting, we’re confident
that we will continue to see steady, consistent growth,” stated Paul A.
Friedman, M.D., Incyte’s President and Chief Executive Officer.
2012 Third-Quarter Financial Results
For the quarter and nine months ended September 30, 2012, net product revenues
of Jakafi were $43.7 million and $92.7 million, respectively.
As expected, in the third quarter, the Company transitioned to the sell-in
revenue recognition method from the sell-through method. Under the sell-in
method, revenue is recognized when product is received by the specialty
pharmacy, whereas under the sell-through method, revenue is recognized when
the specialty pharmacy sends product to the patient, which reflects clinical
demand. As a result, the $43.7 million of net product revenues for the third
quarter of 2012 included $9.0 million of previously deferred revenue,
representing product held by the specialty pharmacies at June 30, 2012.
For comparative purposes, the following table presents the Company’s net
product revenues as recognized for the three months ended March 31, 2012, and
June 30, 2012, under the sell-through method, and as if the Company were still
using the sell-through method for the three months ended September 30, 2012,
which reflects a 16 percent increase in dispenses to patients from the second
quarter to the third quarter:
Three Months Three Months Three Months Ended
Sell-Through Method Ended Ended
March 31, 2012 June 30, 2012 September 30, 2012
Product revenues, net
$ 19.3 $ 29.7 $ 34.5*
* The $34.5 million excludes $9.0 million of previously deferred revenue and
$0.2 million of gross-to-net adjustments and changes in inventory levels at
the specialty pharmacies during the quarter.
2012 Guidance Update
The Company is updating its 2012 guidance and now anticipates that Jakafi net
product revenues will be in the range of $130 million to $135 million, a
change from the previous range of $120 million to $135 million.
Total revenues for the quarter and nine months ended September 30, 2012, were
$60.5 million and $183.2 million, respectively, as compared to $16.8 million
and $65.6 million, respectively, for the same periods in 2011. Included in
total revenues for the quarter and nine months ended September 30, 2012, were
net product revenues of $43.7 million and $92.7 million, respectively.
Included in total revenues for the nine months ended September 30, 2012, was a
$40 million European Union regulatory milestone payment received from Novartis
related to Jakavi. Included in total revenues for the nine months ended
September 30, 2011, was a $15 million milestone payment received from Novartis
related to INCB28060.
Net loss for the quarter ended September 30, 2012, was $21.7 million, or $0.17
per basic and diluted share, as compared to $53.1 million, or $0.42 per basic
and diluted share, for the same period in 2011. Net loss for the nine months
ended September 30, 2012, was $63.1 million, or $0.49 per basic and diluted
share, as compared to a net loss of $131.5 million, or $1.05 per basic and
diluted share, for the same period in 2011. Included in net loss for the nine
months ended September 30, 2012, was a $40 million European Union regulatory
milestone payment received from Novartis related to Jakavi. Included in net
loss for the nine months ended September 30, 2011, was a $15 million milestone
payment received from Novartis related to INCB28060.
Also included in net loss for the quarter and nine months ended September 30,
2012, were $9.5 million and $29.4 million, respectively, of non-cash expenses
related to the impact of expensing employee stock options, compared to $7.4
million and $21.5 million, respectively, for the same periods in 2011.
Research and development expenses for the quarter and nine months ended
September 30, 2012, were $50.1 million and $150.6 million, respectively, as
compared to $44.6 million and $126.8 million, respectively, for the same
periods in 2011. Included in research and development expenses for the quarter
and nine months ended September 30, 2012, were non-cash expenses of $6.4
million and $19.6 million, respectively, related to the impact of expensing
employee stock options, as compared to $4.8 million and $14.0 million,
respectively, for the same periods in 2011.
The increases in research and development expenses for the quarter and nine
months ended September 30, 2012, compared to the prior year periods were
primarily a result of increased clinical development costs related to the
advancement of the Company's pipeline and increased non-cash employee stock
option expense. The Company expects its research and development expenses to
vary from period to period, mainly due to the timing of its clinical
Selling, general and administrative expenses for the quarter and nine months
ended September 30, 2012, were $20.5 million and $61.6 million, respectively,
as compared to $14.3 million and $37.1 million, respectively, for the same
periods in 2011. Included in selling, general and administrative expenses for
the quarter and nine months ended September 30, 2012, were non-cash expenses
of $3.1 million and $9.8 million, respectively, related to the impact of
expensing employee stock options, as compared to $2.6 million and $7.5
million, respectively, for the same periods in 2011.
Increased selling, general and administrative expenses for the quarter and
nine months ended September 30, 2012, compared to the prior year periods
reflected the additional costs related to the Company's sales force and the
commercialization efforts for the launch of Jakafi.
Interest expense for the quarter and nine months ended September 30, 2012, was
$11.6 million and $34.3 million, respectively, as compared to $11.0 million
and $32.7 million, respectively, for the comparable periods in 2011. Included
in interest expense for the quarter and nine months ended September 30, 2012,
were $6.8 million and $20.0 million, respectively, of non-cash charges to
amortize the discount on the Company's 4.75% Convertible Senior Notes due
2015, as compared to $6.3 million and $18.4 million, respectively, for the
same periods in 2011.
As of September 30, 2012, cash, cash equivalents and marketable securities
totaled $243.6 million compared to $277.6 million as of December 31, 2011.
These amounts exclude $9.5 million and $19.0 million, as of September 30,
2012, and December 31, 2011, respectively, of restricted cash and investments
held in an escrow account reserved for interest payments through October 2012
on the 4.75% Convertible Senior Notes.
Recent Clinical Highlights
Jakafi^® (ruxolitinib) - a JAK1 and JAK2 Inhibitor
*The use of Jakafi to treat patients with intermediate or high-risk
myelofibrosis (MF) is further supported by presentations to be made at the
American Society of Hematology annual meeting in December, including
updates from COMFORT-I and COMFORT-II.
*Verstovsek, S, et al. Long-Term Outcome of Ruxolitinib Treatment in
Patients with Myelofibrosis: Durable Reductions in Spleen Volume,
Improvements in Quality of Life, and Overall Survival Advantage in
Comfort-I. Dec. 10, 2012, at 6:30 p.m.
*Cervantes, F, et al. Long-Term Safety, Efficacy, and Survival
Findings From Comfort-II, a Phase 3 Study Comparing Ruxolitinib with
Best Available Therapy (BAT) for the Treatment of Myelofibrosis (MF).
Dec. 10, 2012, at 6:45 p.m.
*Vannucchi, A, et al. Reductions in JAK2 V617F Allele Burden with
Ruxolitinib Treatment in Comfort-II, A Phase 3 Study Comparing the
Efficacy and Safety of Ruxolitinib with Best Available Therapy (BAT).
Dec. 10, 2012, at 7 p.m.
*Two Phase III clinical trials (RESPONSE and RELIEF), in partnership with
Novartis, are underway to evaluate ruxolitinib in patients with
polycythemia vera (PV) with results expected to be part of a supplemental
new drug application submission in 2014. The FDA has granted fast track
designation for PV, specifically for the treatment of patients with PV who
are resistant to or intolerant of hydroxyurea.
*A randomized Phase II trial of ruxolitinib in combination with
capecitabine is actively recruiting patients with recurrent or treatment
refractory metastatic pancreatic cancer (the RECAP trial). The RECAP trial
is designed to enroll approximately 130 patients by late 2012, with final
results expected in the second half of 2013.
*Multiple investigator-sponsored trials evaluating ruxolitinib are ongoing,
including two Phase I/II trials in adults with advanced hematologic
malignancies (acute myeloid leukemia, acute lymphocytic leukemia,
myelodysplastic syndrome and chronic myelogenous leukemia) and relapsed or
refractory acute leukemia; a Phase I/II trial in children with hematologic
malignancies and solid tumors; and a Phase II trial in patients with
lymphoma. In addition, the first of several planned investigator-sponsored
Phase II trials to evaluate ruxolitinib in treating patients with breast
cancer was recently initiated.
Baricitinib, formerly known as LY3009104 (INCB28050) - a JAK1 and JAK2
*Data from the six-month Phase IIb trial of baricitinib in patients with
rheumatoid arthritis, conducted by our collaboration partner Eli Lilly and
Company, will be presented at the American College of Rheumatology Annual
Scientific Meeting in November 2012.
*A Phase III trial of baricitinib in patients with rheumatoid arthritis,
conducted by Lilly, began screening patients in October 2012.
*A Phase IIb trial in patients with moderate to severe psoriasis, conducted
by Lilly, is ongoing with primary endpoint results expected in 2013.
*A Phase II trial in patients with diabetic nephropathy, conducted by
Lilly, was initiated in August 2012, and results are expected in 2014.
INCB28060 (also known as INC280) – a c-MET Inhibitor
*The initial Phase I trial in patients with solid tumors is nearing
completion. This compound is licensed to Novartis as part of the
Incyte-Novartis collaboration, and further development will be conducted
INCB24360 – an Indoleamine Dioxygenase-1 (IDO1) Inhibitor
*INCB24360 is currently in Phase I/II clinical development for metastatic
melanoma in combination with ipilimumab and as monotherapy for ovarian
Early-Stage Development and Discovery Programs
*Several early development and discovery programs in oncology and
inflammation are also ongoing.
Conference Call Information
Incyte will hold its third-quarter 2012 financial results conference call this
morning at 8:30 a.m. ET. To access the conference call, please dial
877-407-8037 for domestic callers or 201-689-8037 for international callers.
When prompted, provide the conference identification number, 401502.
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,
The conference call will also be webcast live and can be accessed at
www.incyte.com under Investor Relations – Events and Webcasts.
Incyte Corporation is a Wilmington, Delaware-based biopharmaceutical company
focused on the discovery, development and commercialization of proprietary
small molecule drugs for oncology and inflammation. For additional information
on Incyte, please visit the Company’s website at www.incyte.com.
Jakafi is a prescription medicine used to treat people with intermediate or
high-risk myelofibrosis (MF), including primary MF, post–polycythemia vera MF
and post–essential thrombocythemia MF.
Important Safety Information
*Treatment with Jakafi can cause hematologic adverse reactions, including
thrombocytopenia, anemia and neutropenia, which are each dose-related
effects, with the most frequent being thrombocytopenia and anemia. A
complete blood count must be performed before initiating therapy with
Jakafi. Complete blood counts should be monitored as clinically indicated
and dosing adjusted as required. The three most frequent non-hematologic
adverse reactions were bruising, dizziness and headache
*Patients with platelet counts <200 × 10^9/L at the start of therapy are
more likely to develop thrombocytopenia during treatment. Thrombocytopenia
was generally reversible and was usually managed by reducing the dose or
temporarily withholding Jakafi. If clinically indicated, platelet
transfusions may be administered
*Patients developing anemia may require blood transfusions. Dose
modifications of Jakafi for patients developing anemia may also be
*Neutropenia (ANC <0.5 × 10^9/L) was generally reversible and was managed
by temporarily withholding Jakafi
*Patients should be assessed for the risk of developing serious bacterial,
mycobacterial, fungal and viral infections. Active serious infections
should have resolved before starting Jakafi. Physicians should carefully
observe patients receiving Jakafi for signs and symptoms of infection
(including herpes zoster) and initiate appropriate treatment promptly
*A dose modification is recommended when administering Jakafi with strong
CYP3A4 inhibitors or in patients with renal or hepatic impairment [see
Dosage and Administration]. Patients should be closely monitored and the
dose titrated based on safety and efficacy
*There are no adequate and well-controlled studies of Jakafi in pregnant
women. Use of Jakafi during pregnancy is not recommended and should only
be used if the potential benefit justifies the potential risk to the fetus
*Women taking Jakafi should not breast-feed. Discontinue nursing or
discontinue the drug, taking into account the importance of the drug to
For Full Prescribing Information for Jakafi, visit www.Jakafi.com.
Except for the historical information set forth herein, the matters set forth
in this press release, including without limitation statements regarding our
plans and expectations with respect to Jakafi (ruxolitinib), including the
potential efficacy and therapeutic and commercial value of Jakafi, our
expectation regarding continued steady, consistent growth, our expectation
that results from the RESPONSE and RELIEF trials are expected to be part of a
sNDA submission in 2014, our expectation that the RECAP trial will enroll
approximately 130 patients by late 2012 with final results expected in the
second half of 2013, our expectation that results from the trials conducted by
our collaboration partner Eli Lilly and Company evaluating baricitinib in
patients with moderate to severe psoriasis and diabetic nephropathy will be
available in 2013 and 2014, respectively, our expectation that the initial
Phase I trial evaluating INCB28060 is nearing completion, updated financial
guidance about expected net product revenues, and expectations regarding
variations in research and development expenses, contain predictions,
estimates and other forward-looking statements.
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 the
efficacy or safety of Jakafi, the acceptance of Jakafi in the marketplace,
risks related to market competition, the results of further research and
development, risks and uncertainties associated with sales, marketing and
distribution requirements, risks that results of clinical trials may be
unsuccessful or insufficient to meet applicable regulatory standards, the
ability to enroll sufficient numbers of subjects in clinical trials, other
market or economic factors and technological advances, unanticipated delays,
the ability of Incyte to compete against parties with greater financial or
other resources, risks associated with Incyte's dependence on its
relationships with its collaboration partners, and other risks detailed from
time to time in Incyte’s reports filed with the Securities and Exchange
Commission, including our Form 10-Q for the quarter ended June 30, 2012.
Incyte disclaims any intent or obligation to update these forward-looking
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Product revenues, net $ 43,695 $ - $ 92,700 $ -
Contract revenues 16,737 16,737 90,211 65,211
Other revenues 60 45 302 354
Total revenues 60,492 16,782 183,213 65,565
Costs and expenses:
Cost of product revenues 31 - 58 -
Research and development 50,079 44,604 150,627 126,830
Selling, general and 20,520 14,282 61,634 37,067
Other expenses - - - 712
Total costs and expenses 70,630 58,886 212,319 164,609
Loss from operations (10,138) (42,104) (29,106) (99,044)
Interest and other 27 45 393 249
Interest expense (11,573) (11,019) (34,293) (32,666)
Loss before income taxes (21,684) (53,078) (63,006) (131,461)
Provision for income 26 - 93 -
Net loss $ (21,710) $ (53,078) $ (63,099) $ (131,461)
Basic and diluted net $ (0.17) $ (0.42) $ (0.49) $ (1.05)
loss per share
Shares used in computing
basic and diluted net 130,851 126,260 129,093 125,019
loss per share
Condensed Consolidated Balance Sheet Data
September 30, December 31,
Cash, cash equivalents, and short-term $ 243,599 $ 277,594
Accounts receivable, net 16,540 6,415
Deferred revenue – Product revenues - 2,332
Total assets 296,535 328,962
Convertible senior notes 315,874 298,193
Convertible subordinated notes 18,725 17,960
Total stockholders’ deficit (219,950) (227,077)
Pamela M. Murphy
Vice President, Investor Relations & Corporate Communications
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