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Incyte Reports 2015 Third-Quarter Financial Results And

The following excerpt is from the company's SEC filing.

Updates Shareholders on Key Clinical Programs

$161 million of 2015 third-quarter net product revenues from Jakafi

(ruxolitinib), representing 65 percent growth over the same period last year

Positive results from two pivotal trials of baricitinib to be highlighted at ACR; baricitinib superior to both methotrexate (RA-BEGIN) and to Humira

(adalimumab) (RA-BEAM) in reducing the signs and symptoms of rheumatoid arthritis

Agreement announced with Merck to expand clinical collaboration to include a pivotal trial of epacadostat plus pembrolizumab in first-line advanced or metastatic melanoma; proof-of-concept data from the ongoing Phase I/II trial to be presented at SITC

Conference Call and Webcast Scheduled Today at 10:00 a.m. ET

WILMINGTON, DE November 3, 2015 Incyte Corporation (Nasdaq: INCY) today reported 2015 third-quarter financial results, including revenue from Jakafi.

The Company highlighted the continued strong revenue growth from Jakafi in the U.S. and royalties from sales of Jakavi

(ruxolitinib) outside of the U.S. by the Companys collaborator, Novartis, as well as significant progress across its development portfolio. During November 2015, Incyte expects detailed data from the remaining two Phase III trials of the global registration program for baricitinib in patients with rheumatoid arthritis (RA) to be presented at the American College of Rheumatology (ACR), as well as the first presentation of data from the proof-of-concept trial of epacadostat, Incytes selective IDO1 inhibitor, in combination with Mercks anti-PD-1 antibody, pembrolizumab, at the Society for Immunotherapy of Cancer (SITC). The Company recently announced an agreement with Merck to expand their clinical collaboration to include a pivotal trial of epacadostat plus pembrolizumab in first-line advanced or metastatic melanoma. Incyte has also recently initiated clinical trials of INCSHR1210, an anti-PD-1 monoclonal antibody, in patients with solid tumors, INCB53914, a selective pan-PIM kinase inhibitor, in hematological malignancies and topical ruxolitinib cream for the treatment of patients with alopecia areata.

We are very pleased with the continued revenue growth from Jakafi during the third quarter, which was driven by strong underlying demand from both of its approved indications, stated Hervé Hoppenot, Incytes President and Chief Executive Officer. We are successfully executing on our aggressive clinical development plans, and believe that the positive outcome of the pivotal RA development program for baricitinib and the progression of epacadostat into a global Phase III trial are both landmark events as we continue our transformation into a world-leading biopharmaceutical business.

2015 Third-Quarter Financial Results

Revenues

For the quarter ended September 30, 2015, net product revenues of Jakafi were $161 million as compared to $98 million for the same period in 2014, representing 65 percent growth. For the nine months ended September 30, 2015, net product revenues of Jakafi were $419 million as compared to $252 million for the same period in 2014, representing 67 percent growth. For the quarter and nine months ended September 30, 2015, product royalties from sales of Jakavi outside of the United States received from Novartis were $18

million and $51 million, respectively, as compared to $12 million and $34 million, respectively, for the same periods in 2014. For the quarter ended September 30, 2015, contract revenues were $8 million as compared to $88 million for the same period in 2014. For the nine months ended September 30, 2015, contract revenues were $40 million as compared to $102 million for the same period in 2014. The $62 million decrease in contract revenues for the nine months ended September 30, 2015 compared to the same period in 2014 relates to a decrease in milestone payments earned from Novartis. For the quarter ended September 30, 2015, total revenues were $188 million as compared to $198 million for the same period in 2014. For the nine months ended September 30, 2015, total revenues were $510 million as compared to $388 million for the same period in 2014.

Year Over Year Revenue Growth

(in thousands, unaudited)

Three Months Ended

Nine Months Ended

Change

Revenues:

Jakafi net product revenue

161,259

97,837

418,994

251,513

Product royalty revenues

18,138

12,093

51,175

34,259

Contract revenues

88,214

39,643

101,643

Other revenues

Total revenues

187,611

198,147

509,870

387,522

Research and development expenses

Research and development expenses for the quarter and nine months ended September 30, 2015 were $132 million and $363 million, respectively, as compared to $89 million and $249 million, respectively, for the same periods in 2014. Included in research and development expenses for the quarter and nine months ended September 30, 2015 were non-cash expenses related to equity awards to our employees of $10 million and $30 million, respectively. The increase in research and development expenses was primarily due to the expansion of the Companys clinical portfolio, including costs related to external alliances. Also included in research and development expenses for the nine months ended September 30, 2015 was the one-time upfront payment to Agenus related to our license, development and commercialization agreement and for the quarter and nine months ended September 30, 2015, the one-time upfront payment to Jiangsu Hengrui Medicine Co., Ltd. related to our global...


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