Incyte Reports First-Quarter 2013 Financial Results; Updates Shareholders on Key Clinical Programs

  Incyte Reports First-Quarter 2013 Financial Results; Updates Shareholders on
  Key Clinical Programs

   - $48.3 million of first-quarter 2013 net product revenues from Jakafi^®
                                (ruxolitinib)

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

Business Wire

WILMINGTON, Del. -- May 02, 2013

Incyte Corporation (Nasdaq: INCY) today reported first-quarter 2013 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 updated
information about key clinical programs.

“We continue to see solid growth for Jakafi, which means that more patients
are experiencing the benefits of the first FDA-approved treatment for
intermediate or high-risk myelofibrosis,” stated Paul A. Friedman, M.D.,
Incyte’s President and Chief Executive Officer. “Additionally, as we gain
important visibility into several mid-stage trials, we continue to broaden the
scope of our R&D efforts, as evidenced by the introduction of a second JAK1
inhibitor into clinical development.”

First-Quarter 2013 Financial Results

Cash Position

As of March 31, 2013, cash, cash equivalents and marketable securities totaled
$270.2 million compared to $228.4 million as of December 31, 2012.

Product Revenues and Royalties

For the quarter ended March 31, 2013, net product revenues of Jakafi were
$48.3 million as compared to $19.3 million for the comparable period in 2012.
Product royalties from sales of Jakavi^® outside the United States by our
collaboration partner, Novartis, for the quarter ended March 31, 2013, were
$5.9 million; there were no product royalties earned in the comparable period
in 2012.

Total Revenues

Total revenues for the quarter ended March 31, 2013, were $71.1 million as
compared to $36.2 million for the same period in 2012. The increase in total
revenues from the first quarter of 2012 to the first quarter of 2013 was
primarily related to increased Jakafi product revenue and $5.9 million of
Jakavi product royalties from Novartis.

Net Loss

Quarter Ended March 31, 2013

Net loss for the quarter ended March 31, 2013, was $15.7 million, or $0.12 per
basic and diluted share, as compared to a net loss of $45.4 million, or $0.36
per basic and diluted share, for the same period in 2012. The decrease in net
loss in the first quarter of 2013 from the first quarter of 2012 is primarily
due to increased Jakafi product revenue and $5.9 million of Jakavi product
royalties from Novartis.

Non-Cash Stock Option Expense

Included in net loss for the quarter ended March 31, 2013, was $9.2 million of
non-cash expense related to employee stock options, of which $6.5 million was
included in research and development expenses and $2.7 million was included in
selling, general and administrative expenses. Included in net loss for the
quarter ended March 31, 2012, was $9.9 million of non-cash expense related to
employee stock options, of which $6.7 million was included in research and
development expenses and $3.2 million was included in selling, general and
administrative expenses.

Operating Expenses

Research and development expenses for the quarter ended March 31, 2013, were
$52.8 million, as compared to $49.0 million for the same period in 2012. The
increase in research and development expenses for the quarter ended March 31,
2013, compared to the prior year period was due to the advancement of the
Company’s pipeline. 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 March 31,
2013, were $22.3 million, as compared to $21.4 million for the same period in
2012. Increased selling, general and administrative expenses for the quarter
ended March 31, 2013, compared to the comparable prior year period reflected
additional costs related to the commercialization of Jakafi.

Interest Expense

Interest expense for the quarter ended March 31, 2013, was $11.7 million as
compared to $11.3 million for the comparable period in 2012. Included in
interest expense for the quarter ended March 31, 2013, was $7.0 million of
non-cash charges to amortize the discount on the Company’s 4.75% Convertible
Senior Notes due 2015, as compared to $6.5 million for the same period in
2012. Increased interest expense is primarily attributable to the accretion of
the discount related to the 4.75% Convertible Senior Notes.

Recent Clinical Highlights

Jakafi^® (ruxolitinib) - a JAK1 and JAK2 Inhibitor

Results of RESPONSE, a study in partnership with Novartis to evaluate
ruxolitinib in patients with polycythemia vera (PV), are expected in early
2014. Completion of this pivotal trial, if positive, should allow for the
filing of a supplemental new drug application submission in the first half of
2014. The RELIEF trial continues to recruit, and when completed, we plan to
submit the results to support labeling claims on symptomatic benefit in PV.

A randomized Phase II trial of ruxolitinib in combination with capecitabine is
ongoing with approximately 135 patients with recurrent or treatment refractory
metastatic pancreatic cancer (the RECAP trial). The primary endpoint is
overall survival, with results expected in the second half of 2013.

An open-label Phase I trial of ruxolitinib in combination with chemotherapy in
patients with advanced solid tumors was initiated in April 2013. The primary
endpoint is identification of the maximum tolerated dose of ruxolitinib in
combination with gemcitabine or in combination with gemcitabine and
nab-paclitaxel. The estimated completion date for the trial is the second half
of 2014.

Multiple investigator-sponsored trials evaluating ruxolitinib are ongoing,
including a Phase I/II trial in adults with advanced hematologic malignancies
(acute myeloid leukemia, acute lymphocytic leukemia, myelodysplastic syndrome
and chronic myelogenous leukemia); a Phase I/II trial in patients with
relapsed or refractory acute leukemia; a Phase II trial in patients with
lymphoma; and two Phase II trials in patients with breast cancer.

Baricitinib - a JAK1 and JAK2 Inhibitor

Lilly, our strategic partner for our second JAK1 and JAK 2 inhibitor,
baricitinib, has several programs underway for this compound, including four
Phase III trials in patients with rheumatoid arthritis, a Phase II trial in
patients with moderate to severe psoriasis, and a Phase II trial in patients
with diabetic nephropathy.

INC280 (formerly INCB28060) – a c-MET Inhibitor

This compound is licensed to Novartis as part of the Incyte-Novartis
collaboration, and further development will be conducted by Novartis, which
recently initiated a Phase II clinical trial evaluating INC280 as monotherapy
in patients with advanced hepatocellular carcinoma.

INCB24360 – an IDO1 Inhibitor

INCB24360 is currently in Phase I/II clinical development for metastatic
melanoma in combination with ipilimumab and as monotherapy for ovarian cancer.

INCB39110 – a JAK1 Inhibitor

Three proof-of-concept studies evaluating INCB39110 in patients with
myelofibrosis, psoriasis and rheumatoid arthritis are underway, with
preliminary results expected in the second half of 2013. The results of these
studies are expected to inform us as to the most appropriate indications for
further development.

INCB47986 – a JAK1 Inhibitor

A second JAK1 inhibitor, INCB47986, recently entered Phase I clinical
development.

Conference Call Information

Incyte will hold its first-quarter 2013 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, 412369.

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,
412369.

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
expected 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 of
results from the RESPONSE trial evaluating ruxolitinib in PV in early 2014 and
the filing of a supplemental new drug application in the first half of 2014,
our plan to submit results from the RELIEF trial to support labeling claims on
symptomatic benefit in PV, our expectation of results from the RECAP trial in
the second half of 2013, our expectation that the Phase I trial of ruxolitinib
in combination with chemotherapy in patients with advanced solid tumors will
be completed in the second half of 2014 and our expectation of preliminary
results from the three proof-of-concept studies evaluating INCB39110 in
patients with myelofibrosis, psoriasis and rheumatoid arthritis in the second
half of 2013 and these results being expected to inform us as to the most
appropriate indications for further development, 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-K for the year ended December 31, 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

                                                     March 31,
                                                     2013         2012
Revenues:                                                        
Product revenues, net                                $ 48,289      $ 19,279
Product royalty revenues                               5,909         -
Contract revenues                                      16,737        16,737
Other revenues                                        142         163     
                                                                   
Total revenues                                        71,077      36,179  
                                                                   
Costs and expenses:
Cost of product revenues                               150           11
Research and development                               52,763        48,960
Selling, general and administrative                   22,261      21,396  
                                                                   
Total costs and expenses                              75,174      70,367  
                                                                   
Loss from operations                                   (4,097  )     (34,188 )
Interest and other income, net                         199           52
Interest expense                                      (11,728 )    (11,290 )
                                                                   
Loss before income taxes                               (15,626 )     (45,426 )
                                                                   
Provision for income taxes                            43          -       
                                                                   
Net loss                                             $ (15,669 )   $ (45,426 )
                                                                   
Basic and diluted net loss per share                 $ (0.12   )   $ (0.36   )
                                                                   
Shares used in computing basic and diluted net       134,345    127,203 
loss per share
                                                                   


INCYTE CORPORATION
Condensed Consolidated Balance Sheet Data
(in thousands)
                                                               
                                                     March 31,    December 31,
                                                     2013         2012
                                                                  
Cash, cash equivalents, and short-term marketable    270,179      228,418
securities
Accounts receivable, net                             28,041       70,951
Total assets                                         330,282      330,419
Convertible senior notes(1)                          328,354      322,043
Convertible subordinated notes                       9,159        9,033
Total stockholders’ deficit                          (163,526 )   (174,957  )
                                                                  

(1) Net of unamortized debt discount of $71.6 million and $78.0 million at
March 31, 2013 and December 31, 2012, respectively.

Contact:

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