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Incyte Reports 2012 Fourth-Quarter and Full-Year Financial Results; Provides 2013 Financial Guidance; Updates Shareholders on

  Incyte Reports 2012 Fourth-Quarter and Full-Year Financial Results; Provides
  2013 Financial Guidance; Updates Shareholders on Key Clinical Programs

  *$43.3 million of fourth-quarter and $136.0 million of full-year 2012 net
    product revenues from Jakafi^® (ruxolitinib)
  *Net product revenue guidance for 2013 in the range of $210 million to $225
    million
  *$50 million milestone earned from Eli Lilly for initiation of Phase III
    clinical program for baricitinib in rheumatoid arthritis

               Conference Call Scheduled Today at 8:30 a.m. ET

Business Wire

WILMINGTON, Del. -- February 14, 2013

Incyte Corporation (Nasdaq: INCY) today reported fourth-quarter and full-year
2012 financial results, including revenue from Jakafi^® (ruxolitinib), which
is approved by the U.S. Food & Drug Administration (FDA) for the treatment of
patients with intermediate or high-risk myelofibrosis (MF). The Company also
provided 2013 financial guidance and updated information about key clinical
programs, including key Phase III data for Jakafi that was presented at the
2012 American Society of Hematology (ASH) Annual Meeting.

“The recent data from ASH highlighting long-term results from COMFORT-I and II
show that continued use of Jakafi by appropriate patients with myelofibrosis
not only provides durable benefits for spleen reduction and symptom
improvement, but also improved survival, suggesting an overall survival
benefit,” stated Paul A. Friedman, M.D., Incyte’s President and Chief
Executive Officer. “I believe these data, over time, will lead to earlier use
in the course of this progressive disease.”

“We are very pleased with our quarter over quarter growth in underlying
demand, which was 17 percent,” stated Jim Daly, Incyte’s Executive Vice
President and Chief Commercial Officer. “Given the solid foundation we’ve
established for Jakafi, I’m confident that we’ll continue to see consistent
growth over the next several years and have set net product revenue guidance
for 2013 in the range of $210 million to $225 million.”

2012 Fourth-Quarter and Full-Year Financial Results

Cash Position

As of December 31, 2012, cash, cash equivalents and marketable securities
totaled $228.4 million compared to $277.6 million as of December 31, 2011. The
December 31, 2012, amount does not include the $50.0 million milestone payment
from Lilly for the advancement of baricitinib into Phase III clinical trials,
which was earned in the fourth-quarter of 2012 and received in January 2013.

Product Revenues and Royalties

For the quarter and full year ended December 31, 2012, net product revenues of
Jakafi were $43.3 million and $136.0 million, respectively. For the same
periods in 2011, net product revenues were $2.0 million, which represents
product revenues from the launch of Jakafi on November 22, 2011, to December
31, 2011. Product royalties from sales of Jakavi^® outside the United States
by our collaboration partner Novartis for the quarter and full year ended
December 31, 2012, were $3.7 million; there were no product royalties earned
in 2011.

Total Revenues

Total revenues for the quarter ended December 31, 2012, were $113.8 million as
compared to $28.9 million for the same period in 2011. Total revenues for the
full year ended December 31, 2012, were $297.1 million as compared to $94.5
million for the same period in 2011. The increase in total revenue from 2011
to 2012 was primarily related to a full year of Jakafi product revenue, $90.0
million in milestone payments earned under our collaborations with Eli Lilly
and Novartis, and $3.7 million of Jakavi product royalties from Novartis.
Total revenues for the full year ended December 31, 2011, included $25.0
million in milestone payments received under our collaboration with Novartis.

Net Income/Loss

Quarter Ended December 31, 2012

Net income for the quarter ended December 31, 2012, was $18.8 million, or
$0.14 per basic and diluted share, as compared to a net loss of $55.1 million,
or $0.44 per basic and diluted share, for the same period in 2011. The change
from a net loss in the fourth quarter of 2011 to net income in the fourth
quarter of 2012 is primarily due to a full quarter of Jakafi product revenues
and a $50.0 million milestone payment earned under our collaboration with
Lilly related to baricitinib.

Year Ended December 31, 2012

Net loss for the full year 2012 was $44.3 million, or $0.34 per basic and
diluted share as compared to a net loss of $186.5 million, or $1.49 per basic
and diluted share, for the full year 2011. The decrease in net loss from 2011
to 2012 is primarily due to a full year of Jakafi product revenue and $90.0
million in milestone payments earned under our collaborations with Lilly and
Novartis.

Non-Cash Stock Option Expense

Included in net income for the quarter ended December 31, 2012, was $9.1
million of non-cash expense related to employee stock options, of which $6.0
million was included in research and development expenses and $3.1 million was
included in selling, general and administrative expenses. Included in net loss
for the quarter ended December 31, 2011, was $7.4 million of non-cash expense
related to employee stock options, of which $4.6 million was included in
research and development expenses and $2.8 million was included in selling,
general and administrative expenses.

Included in net loss for the year ended December 31, 2012, was $38.5 million
of non-cash expense related to employee stock options, of which $25.5 million
was included in research and development expenses and $13.0 million was
included in selling, general and administrative expenses. Included in net loss
for the year ended December 31, 2011, was $29.0 million of non-cash expense
related to employee stock options, of which $18.6 million was included in
research and development expenses and $10.4 million was included in selling,
general and administrative expenses.

Operating Expenses

Research and development expenses for the quarter ended December 31, 2012,
were $59.8 million, as compared to $51.9 million for the same period in 2011.
Research and development expenses for the full year 2012 were $210.4 million,
as compared to $178.7 million for 2011.

The increase in research and development expenses for the quarter and full
year ended December 31, 2012, compared to the comparable prior year periods
was due 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, primarily due to the
timing of its clinical development activities.

Selling, general and administrative expenses for the quarter ended December
31, 2012, were $23.7 million, as compared to $21.2 million for the same period
in 2011. Selling, general and administrative expenses for the full year 2012
were $85.4 million, as compared to $58.2 million for 2011.

Increased selling, general and administrative expenses for the quarter and
full year ended December 31, 2012, compared to the comparable prior year
periods reflected the additional costs related to the commercialization of
Jakafi.

Interest Expense

Interest expense for the quarter and full year ended December 31, 2012, was
$11.8 million and $46.1 million, respectively, as compared to $11.2 million
and $43.8 million for the comparable periods in 2011. Included in interest
expense for the quarter and the year ended December 31, 2012, was $7.0 million
and $27.1 million, respectively, of non-cash charges to amortize the discount
on the Company’s 4.75% Convertible Senior Notes due 2015, as compared to $6.4
million and $24.8 million for the same periods in 2011. Increased interest
expense for the full year 2012 is primarily attributable to the accretion of
the discount related to the 4.75% Convertible Senior Notes.

2013 Financial Guidance

  *Product Revenues: The Company expects that Jakafi net product revenues
    will be in the range of $210 million to $225 million. This range excludes
    any product royalty revenues received from Novartis on sales of Jakavi.
  *Contract Revenues: The Company expects to receive a $60 million milestone
    payment under its collaboration with Novartis when European Union pricing
    approval for Jakavi in specific countries is received. Excluding any other
    potential milestones received under collaborations, the Company expects
    revenues of $66 million from the amortization of the upfront payments
    received under the Novartis and Lilly collaborative agreements.
  *Research and Development Expenses: The Company expects that research and
    development expenses will be in the range of $260 million to $270 million,
    including a non-cash expense of approximately $25 million to $28 million
    related to the impact of expensing employee stock options. The increase in
    research and development expense is primarily the result of co-development
    of baricitinib in Phase III studies in rheumatoid arthritis with Lilly and
    broad investment expected in our clinical pipeline to support multiple
    ongoing research and development activities.
  *Selling, General and Administrative Expenses: The Company expects selling,
    general and administrative expenses to be in the range of $100 million to
    $110 million, including a non-cash expense of approximately $14 million to
    $17 million related to the impact of expensing employee stock options. The
    increase in selling, general and administrative expenses is primarily the
    result of additional programs to support the ongoing commercialization of
    Jakafi.
  *Interest Expense: The Company expects interest expense to be approximately
    $47 million, including a non-cash expense of $28 million related primarily
    to the amortization of the discount 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 made at the American
Society of Hematology annual meeting in December 2012, including updates from
COMFORT-I and COMFORT-II. The long-term results from COMFORT-I, which compared
Jakafi to placebo, showed that continued use of Jakafi provided durable
reductions in spleen volume, durable improvements in quality of life measures
and improved survival, suggesting an overall survival advantage. The
COMFORT-II two-year follow-up showed a similar increase in survival for
patients initially randomized to Jakafi compared to those randomized to best
available therapy.

Data presented at ASH included results from a three-year follow-up of patients
with polycythemia vera (PV) in a Phase II study, showing that ruxolitinib
treatment resulted in durable overall response rates by modified European
Leukemia Net criteria and improvements in PV-related symptoms.

Two Phase III clinical trials (RESPONSE and RELIEF), in partnership with
Novartis, are underway to evaluate ruxolitinib in patients with PV, and
results are 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. Recruitment of the RESPONSE study has been
completed.

A randomized Phase II trial of ruxolitinib in combination with capecitabine is
fully enrolled with approximately 135 patients with recurrent or treatment
refractory metastatic pancreatic cancer (the RECAP trial), 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, two of several planned investigator-sponsored Phase II trials to
evaluate ruxolitinib in treating patients with breast cancer have been
initiated.

Baricitinib - a JAK1 and JAK2 Inhibitor

Data from the six-month Phase IIb trial of baricitinib in patients with
rheumatoid arthritis, conducted by our collaboration partner Eli Lilly, were
presented at the American College of Rheumatology Annual Scientific Meeting in
November 2012. Positive results from the 12- to 24-week portion of the study,
which did not include continuation of the placebo control past week 12, showed
that patients who received 2 mg, 4 mg or 8 mg baricitinib once-daily doses
maintained or improved ACR20, ACR50 and ACR70 responses.

The Phase III program to evaluate baricitinib in patients with rheumatoid
arthritis, conducted by Lilly, started randomized treatments in November 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 has been completed.
This compound is licensed to Novartis as part of the Incyte-Novartis
collaboration, and further development will be conducted by Novartis.

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 cancer.

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 fourth-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, 407848.

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,
407848.

The conference call will also be webcast live and can be accessed at
www.incyte.com under Investor Relations – Events and Webcasts.

About Incyte

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.

About Jakafi

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
    considered
  *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
    the mother

For Full Prescribing Information for Jakafi, visit www.Jakafi.com.

Forward-Looking Statements

Except for the historical information set forth herein, the matters set forth
in this press release, including without limitation statements regarding
financial guidance about expected net product revenues, contract revenues,
research and development expenses, selling, general and administrative
expenses and interest expense, expectations regarding variations in research
and development expenses, our plans and expectations with respect to Jakafi
(ruxolitinib), including the potential efficacy and therapeutic and commercial
value of Jakafi, our expectation regarding continued 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 of final results from
the RECAP trial in the second half of 2013, and our expectation that results
from the trials conducted by our collaboration partner Eli Lilly evaluating
baricitinib in patients with moderate to severe psoriasis and diabetic
nephropathy will be available in 2013 and 2014, respectively, 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 September 30, 2012.

Incyte disclaims any intent or obligation to update these forward-looking
statements.


INCYTE CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
                                                 
                        Three Months Ended          Twelve Months Ended
                        December 31,                December 31,
                        2012         2011          2012         2011
Revenues:
Product revenues, net   $ 43,301      $ 2,012       $ 136,001     $ 2,012
Product royalty           3,652         —             3,652         —
revenues
Contract revenues         66,737        26,737        156,948       91,948
Other revenues           155         140         458         495      
                                                                  
Total revenues           113,845     28,889      297,059     94,455   
                                                                  
Costs and expenses:
Cost of product           99            —             157           —
revenues
Research and              59,763        51,877        210,391       178,707
development
Selling, general and      23,729        21,152        85,363        58,219
administrative
Other expenses           —           —           —           712      
                                                                  
Total costs and          83,591      73,029      295,911     237,638  
expenses
                                                                  
Income (loss) from        30,254        (44,140 )     1,148         (143,183 )
operations
Interest and other        371           213           764           462
income, net
Interest expense         (11,765 )    (11,153 )    (46,058 )    (43,819  )
                                                                  
Income (loss) before      18,860        (55,080 )     (44,146 )     (186,540 )
income taxes
                                                                  
Provision for income     81          —           174         —        
taxes
                                                                  
Net income (loss)       $ 18,779     $ (55,080 )   $ (44,320 )   $ (186,540 )
                                                                  
Net income (loss) per
share
Basic                   $ 0.14        $ (0.44   )   $ (0.34   )   $ (1.49    )
Diluted                 $ 0.14        $ (0.44   )   $ (0.34   )   $ (1.49    )
Shares used in
computing basic and
diluted net income
(loss) per share
Basic                     131,711       126,388       129,747       125,362
Diluted                   139,118       126,388       129,747       125,362
                                                                             


INCYTE CORPORATION
Condensed Consolidated Balance Sheet Data
(in thousands)
                                                               
                                                   December 31,   December 31,
                                                   2012           2011
                                                                  
Cash, cash equivalents, and short-term             $ 228,418      $ 277,594
marketable securities
Accounts receivable, net                             70,951         6,415
Total assets                                         330,419        328,962
Convertible senior notes(1)                          322,043        298,193
Convertible subordinated notes                       9,033          17,960
Total stockholders’ deficit                          (174,957 )     (227,077 )
                                                                             

(1) Net of unamortized debt discount of $78.0 million and $101.8 million at
December 31, 2012, and December 31, 2011, respectively.

Contact:

Incyte Corporation
Pamela M. Murphy
Vice President, Investor Relations & Corporate Communications
302-498-6944
 
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