On May 4, 2017 Incyte Corporation (Nasdaq: INCY) reported 2017 first-quarter financial results, highlighting strong revenue growth driven by increased sales of Jakafi (ruxolitinib) in the U.S. and Iclusig (ponatinib) in Europe, and royalties from ex-U.S. sales of Jakavi (ruxolitinib) by Novartis; and now including royalties from European sales of Olumiant (baricitinib) by Lilly (Press release, Incyte, MAY 4, 2017, View Source [SID1234518842]). Schedule your 30 min Free 1stOncology Demo! Incyte continues to expand its development portfolio. The pivotal program studying ruxolitinib in patients with graft-versus-host disease (GVHD) is underway, and the pivotal program studying ruxolitinib in patients with essential thrombocythemia (ET) is expected to start soon. The Company recently announced details of its expanded collaboration with Merck, growing the pivotal program studying epacadostat in combination with pembrolizumab to a total of five tumor types. Additionally, Incyte expanded its collaboration with Bristol-Myers Squibb evaluating epacadostat in combination with nivolumab in pivotal studies in two tumor types. Data recently presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) meeting showcased the clinical profile of Incyte’s selective FGFR1/2/3 inhibitor which is now in Phase 2 trials in three indications and which, if successful, may be registration-enabling.
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"The strong growth of Jakafi is very exciting as we continue to see more patients benefiting from treatment in both approved indications," stated Hervé Hoppenot, Chief Executive Officer, Incyte. "We believe that our clinical portfolio is progressing well, with epacadostat moving rapidly into multiple pivotal programs and numerous other programs in or planned to enter potentially registration-enabling studies."
Portfolio Update
Cancer – Targeted Therapies
In March, the first patient entered REACH2, the Novartis-sponsored randomized Phase 3 trial of ruxolitinib for the treatment of patients with steroid-refractory acute GVHD. REACH3, a Phase 3 trial of ruxolitinib as a treatment for patients with steroid-refractory chronic GVHD, is expected to begin in 2017. REACH3 is to be conducted in collaboration with Novartis.
In February, the first patient was dosed in the Phase 2 CITADEL-202 trial, studying the selective PI3Kδ inhibitor INCB50465 as monotherapy in patients with diffuse large B-cell lymphoma (DLBCL).
In April, initial clinical data from INCB54828, Incyte’s selective FGFR1/2/3 inhibitor, was presented at the 2017 AACR (Free AACR Whitepaper) meeting, including safety and efficacy in patients with bladder cancer, cholangiocarcinoma and 8p11 MPNs.
Indication Status Update
Ruxolitinib (JAK1/JAK2) Steroid-refractory acute GVHD Pivotal Phase 2 (REACH1) and Phase 3 (REACH2) underway
Ruxolitinib (JAK1/JAK2) Steroid-refractory chronic GVHD Phase 3 (REACH3) expected to begin in 2017
Ruxolitinib (JAK1/JAK2) Essential thrombocythemia Pivotal program expected to begin in 2017
Itacitinib (JAK1) Treatment-naïve acute GVHD Pivotal program expected to begin in 2017
Itacitinib (JAK1) Non-small cell lung cancer Phase 1/2 in combination with osimertinib (EGFR)
INCB52793 (JAK1) Advanced malignancies Phase 1/2 dose-escalation
INCB50465 (PI3Kδ) Diffuse large B-cell lymphoma Phase 2 (CITADEL-202)
INCB54828 (FGFR1/2/3)
Bladder cancer, cholangiocarcinoma; 8p11 MPNs
Phase 2 (FIGHT-201, FIGHT-202, FIGHT-203)
INCB54329 (BRD) Advanced malignancies Phase 1/2 dose-escalation
INCB57643 (BRD) Advanced malignancies Phase 1/2 dose-escalation
INCB53914 (PIM) Advanced malignancies Phase 1/2 dose-escalation
INCB59872 (LSD1) Acute myeloid leukemia, small cell lung cancer Phase 1/2 dose-escalation
INCB62079 (FGFR4) Hepatocellular carcinoma Phase 1/2 dose-escalation expected to begin in 2017
Cancer – Immune Therapies
In March 2017, Incyte and Merck announced the details of the expanded clinical development program investigating epacadostat with pembrolizumab. Incyte and Merck will move into pivotal programs in four additional tumor types beyond melanoma – non-small cell lung cancer (NSCLC), bladder, renal, and head & neck cancers – across six Phase 3 trials. These trials are expected to begin in 2017.
In April 2017, Incyte and Bristol-Myers Squibb announced an expanded collaborative clinical development program investigating epacadostat with nivolumab in pivotal programs for both NSCLC and head & neck cancer. Phase 3 trials are expected to begin in 2017.
Indication Status Update
Epacadostat (IDO1) Unresectable or metastatic melanoma Phase 3 (ECHO-301) in combination with pembrolizumab (PD-1)
Epacadostat (IDO1) NSCLC, renal, bladder and head & neck cancer Phase 3 in combination with pembrolizumab (PD-1) expected to begin in 2017
Epacadostat (IDO1) NSCLC, head & neck cancer Phase 3 in combination with nivolumab (PD-1) expected to begin in 2017
Epacadostat (IDO1) Multiple tumor types Phase 2 (ECHO-202) expansion cohorts in combination with pembrolizumab (PD-1)
Epacadostat (IDO1) Multiple tumor types Phase 2 (ECHO-204) expansion cohorts in combination with nivolumab (PD-1)
Epacadostat (IDO1) Multiple tumor types Phase 2 (ECHO-203) expansion cohorts in combination with durvalumab (PD-L1)
Epacadostat (IDO1) NSCLC, bladder cancer Phase 1/2 (ECHO-110) dose-escalation in combination with atezolizumab (PD-L1)
INCB01158 (ARG)1 Solid tumors Phase 1/2 dose-escalation
INCSHR1210 (PD-1)2 Solid tumors Phase 1/2 dose-escalation completed; enrollment suspended
INCAGN1876 (GITR)3 Solid tumors Phase 1/2 dose-escalation
INCAGN1949 (OX40)3 Solid tumors Phase 1/2 dose-escalation
PD-1 platform study Solid tumors Phase 1/2, pembrolizumab (PD-1) in combination with itacitinib (JAK1) or INCB50465 (PI3Kδ)
JAK1 platform study Solid tumors
Phase 1/2, itacitinib (JAK1) in combination with epacadostat (IDO1) or INCB50465 (PI3Kδ)
Notes:
1) INCB01158 co-developed with Calithera
2) INCSHR1210 licensed from Hengrui
3) INCAGN1876 & INCAGN1949 from discovery alliance with Agenus
Non-oncology
In January, Incyte initiated a Phase 2 trial of topical ruxolitinib for the treatment of patients with atopic dermatitis, and a Phase 2 trial in patients with vitiligo is expected to begin in 2017. After 24 weeks of treatment, Incyte has determined that data from the recently-completed randomized Phase 2 trial of topical ruxolitinib in patients with alopecia areata do not justify progression of the program into pivotal studies.
Indication Status Update
Topical ruxolitinib (JAK1/JAK2) Atopic dermatitis Phase 2
Topical ruxolitinib (JAK1/JAK2) Vitiligo Phase 2 expected to begin in 2017
Partnered
In February 2017, the European Commission approved Olumiant (baricitinib) for the treatment of moderate to severe active rheumatoid arthritis in adult patients who have responded inadequately to, or who are intolerant to, one or more disease-modifying anti-rheumatic drugs (DMARDs).
In April 2017, the FDA issued a complete response letter (CRL) for baricitinib in which the FDA indicated that additional clinical data are needed to determine the most appropriate doses. The FDA also stated that additional data are necessary to further characterize safety concerns across treatment arms. Incyte and Lilly disagree with the agency’s conclusions and Incyte currently expects that Lilly will now engage with the FDA to discuss the agency’s concerns and determine a potential path forward.
Novartis anticipates submitting an NDA for capmatinib, Incyte’s potent and selective c-MET inhibitor, in 2018.
Indication Status Update
Baricitinib (JAK1/JAK2)1 Rheumatoid arthritis Approved in Europe; CRL issued by FDA
Baricitinib (JAK1/JAK2)1 Psoriatic arthritis Lilly expects Phase 3 to begin in 2017
Baricitinib (JAK1/JAK2)1 Atopic dermatitis, systemic lupus erythematosus Phase 2
Capmatinib (c-MET)2 Non-small cell lung cancer, liver cancer Phase 2 in EGFR wild-type ALK negative NSCLC patients with c-MET amplification and mutation
Notes:
1) Baricitinib licensed to Lilly
2) Capmatinib licensed to Novartis
2017 First-Quarter Financial Results
Revenues For the quarter ended March 31, 2017, net product revenues of Jakafi were $251 million as compared to $183 million for the same period in 2016, representing 37 percent growth. For the quarter ended March 31, 2017, net product revenues of Iclusig were $14 million1.
For the quarter ended March 31, 2017, product royalties from sales of Jakavi outside of the United States received from Novartis were $29 million as compared to $22 million for the same period in 2016. For the quarter ended March 31, 2017, product royalties from sales of Olumiant outside of the United States received from Lilly were $0.4 million.
For the quarter ended March 31, 2017, contract revenues were $90 million as compared to $58 million for the same period in 2016. The increase in contract revenues relates to milestone payments earned.
For the quarter ended March 31, 2017, total revenues were $384 million as compared to $263 million for the same period in 2016.
Year Over Year Revenue Growth
(in thousands, unaudited)
Three Months Ended
March 31, %
2017 2016 Change
Revenues:
Jakafi net product revenue $ 251,077 $ 183,267 37 %
Iclusig net product revenue 13,730 - -
Product royalty revenues 29,221 21,903 33 %
Contract revenues 90,000 58,214 -
Other revenues 54 80 -
Total revenues $ 384,082 $ 263,464 46 %
Research and development expenses Research and development expenses for the quarter ended March 31, 2017 were $408 million as compared to $157 million for the same period in 2016. Included in research and development expenses for the quarter ended March 31, 2017 were non-cash expenses related to equity awards to our employees of $22 million. The increase in research and development expenses was primarily due to the expansion of the Company’s clinical portfolio as well as upfront and milestone expenses of $209 million related to our collaboration and license agreements with Agenus, Calithera and Merus.
Selling, general and administrative expenses Selling, general and administrative expenses for the quarter ended March 31, 2017 were $87 million as compared to $65 million for the same period in 2016. Included in selling, general and administrative expenses for the quarter ended March 31, 2017 were non-cash expenses related to equity awards to our employees of $9 million. Increased selling, general and administrative expenses are driven primarily by additional costs related to the commercialization of Jakafi and the geographic expansion in Europe.
Change in fair value of acquisition-related contingent consideration The change in fair value of acquisition-related contingent consideration of $7 million for the quarter ended March 31, 2017 represents the fair market value adjustments of the Company’s contingent liability related to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.
Unrealized loss on long term investments Unrealized loss on long term investments for the quarter ended March 31, 2017 were $6 million as compared to $3 million for the same period in 2016. The unrealized loss on long term investments for the quarter ended March 31, 2017 represents the fair market value adjustments of the Company’s investments in Agenus and Merus.
Expense related to senior note conversions Expense related to senior note conversions for the quarter ended March 31, 2017 was $54 million related to the conversions of our 2018 and 2020 convertible senior notes.
Net income (loss) Net loss for the quarter ended March 31, 2017 was $187 million, or $0.96 per basic and diluted share, as compared to net income of $24 million, or $0.13 per basic and $0.12 per diluted share for the same period in 2016.
Cash, cash equivalents and marketable securities position As of March 31, 2017, cash, cash equivalents and marketable securities totaled $512 million as compared to $809 million as of December 31, 2016.
2017 Financial Guidance
The Company has updated its full year 2017 financial guidance, as detailed below.
Current Previous
Jakafi net product revenues $1,020-$1,070 million Unchanged
Iclusig net product revenues $60-$65 million Unchanged
Research and development expenses* $1,000-$1,100 million $990-$1,040 million
Selling, general and administrative expenses $340-$360 million Unchanged
Change in fair value of acquisition-related contingent consideration $30-$35 million Unchanged
* Includes upfront and milestone expenses of $209 million related to the amended Agenus collaboration, and the Merus and Calithera collaborations