On April 30, 2024 Incyte (Nasdaq:INCY) reported 2024 first quarter financial results, and provides a status update on the Company’s clinical development portfolio (Press release, Incyte, APR 30, 2024, View Source [SID1234642464]).

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"In the first quarter of 2024, total revenues grew 9% year-over-year driven by patient demand growth in the U.S. for Opzelura (ruxolitinib) cream and Jakafi (ruxolitinib). As anticipated, the revenue growth during the quarter was offset by an inventory drawdown for Jakafi and the typical first quarter net pricing dynamics," said Hervé Hoppenot, Chief Executive Officer, Incyte. "We made important progress with our clinical pipeline including the initiation of two Phase 1 studies evaluating our JAK2V617F inhibitor and KRASG12D inhibitor. We also recently announced an agreement to acquire Escient Pharmaceuticals, pending the appropriate regulatory review process. Escient’s lead compound EP262, is a first-in-class, potent, highly selective, once-daily small molecule designed to block mast cell activation, independent from IgE. We believe this novel mechanism has broad clinical utility in a number of conditions including chronic spontaneous urticaria (CSU), chronic inducible urticaria (CIndU) and other diseases."

Key First Quarter 2024 Company Updates

•In February 2024, Incyte announced that the U.S. Food and Drug Administration (FDA) accepted for Priority Review the Biologics License Application (BLA) for axatilimab, an anti-CSF-1R antibody, for the treatment of chronic graft-versus-host disease (GVHD) after failure of at least two prior lines of systemic therapy.
•In February 2024, Incyte entered into an asset purchase agreement with MorphoSys AG which gave Incyte exclusive global rights for tafasitamab, a humanized Fc-modified CD19-targeting immunotherapy marketed in the U.S. as Monjuvi (tafasitamab-cxix) and outside of the U.S. as Minjuvi (tafasitamab).
•In March 2024, multiple abstracts featuring data from Incyte’s dermatology portfolio were presented at the 2024 American Academy of Dermatology (AAD) Annual Meeting, including two late-breaking oral presentations for ruxolitinib cream (Opzelura) in hidradenitis suppurativa (HS) and povorcitinib in prurigo nodularis (PN).
•In April 2024, Incyte and China Medical System Holdings Limited announced the Companies entered into a Collaboration and License Agreement, through a wholly-owned dermatology medical aesthetic subsidiary CMS Skinhealth, for the development and commercialization of povorcitinib, a selective oral JAK1 inhibitor, in Mainland China, Hong Kong, Macau, Taiwan Region and eleven Southeast Asian countries.
•In April 2024, Incyte and Escient Pharmaceuticals, a clinical-stage drug development company advancing novel small molecule therapeutics for systemic immune and neuro-immune disorders, entered into a definitive agreement under which Incyte has agreed to acquire Escient and its clinical development portfolio, including EP262, a first-in-class, potent, highly selective, once-daily small molecule antagonist of Mas-related G protein-coupled receptor (MRGPRX2) and EP547, a first-in-class oral MRGPRX4 antagonist. Under the terms of the agreement, Incyte will acquire Escient and its assets for $750 million plus Escient’s net cash remaining at the close of the transaction, subject to customary adjustments. The acquisition is subject to clearance under the Hart-Scott-Rodino Act, among other customary conditions, and will become effective promptly following the satisfaction or waiver of these conditions.
Jakafi:
Net product revenues for the first quarter 2024 of $572 million (-1% Y/Y):
▪Total paid patients increased 5% in the first quarter of 2024 versus the same quarter in the prior year, with growth across all indications and leading to the highest quarterly paid patient demand for Jakafi since launch.
▪Patients on free drug in the fourth quarter of 2023 gradually returned to paid demand during the first quarter of 2024; as a result, the percent of patients on free drug returned to more normalized levels during the first quarter of 2024.
▪Channel inventory at the end of the first quarter of 2024 decreased by approximately $55 million versus the fourth quarter of 2023.
Opzelura:
Net product revenues for the first quarter 2024 of $86 million (+52% Y/Y):
▪Net product revenues growth in the first quarter of 2024 were driven by patient demand, refills and expansion in payer coverage as the launch in atopic dermatitis (AD) and vitiligo continues.
▪Net product revenues of $6 million in the first quarter of 2024 in Europe where the launch is ongoing in Germany, Austria and initial uptake has begun in France.
Additional Pipeline Updates
Myeloproliferative Neoplasms (MPNs) and Graft-Versus-Host Disease (GVHD) – key highlights
▪Combination trials of ruxolitinib twice daily (BID) with zilurgisertib (INCB000928) and BETi (INCB057643) are ongoing and continue to enroll. A Phase 3 study for BETi is anticipated to initiate in the second half of 2024 and clinical proof-of-concept for zilurgisertib is anticipated by mid-2024.
▪The Phase 1 studies evaluating INCA033989 (mCALR) and INCB100658 (JAK2V617F) are ongoing and enrolling patients.

MPN and GVHD Programs Indication and status
Ruxolitinib XR (QD)
(JAK1/JAK2) Myelofibrosis, polycythemia vera and GVHD
Ruxolitinib + zilurgisertib
(JAK1/JAK2 + ALK2) Myelofibrosis: Phase 2
Ruxolitinib + INCB57643
(JAK1/JAK2 + BET) Myelofibrosis: Phase 2
Ruxolitinib + CK08041
(JAK1/JAK2 + CB-Tregs)
Myelofibrosis: Phase 1
Axatilimab (anti-CSF-1R)2
Chronic GVHD: Pivotal Phase 2 (third-line plus therapy) (AGAVE-201); BLA under review in the U.S.
Ruxolitinib + axatilimab2
(JAK1/JAK2 + anti-CSF-1R)
Chronic GVHD: Phase 2 in preparation
Steroids + axatilimab2
(Steroids + anti-CSF-1R)
Chronic GVHD: Phase 3 in preparation
INCA033989
(mCALR) Myelofibrosis, essential thrombocythemia: Phase 1
INCB160058
(JAK2V617Fi) Phase 1

1 Development collaboration with Cellenkos, Inc.
2 Clinical development of axatilimab in GVHD conducted in collaboration with Syndax Pharmaceuticals.
Other Hematology/Oncology – key highlights
•In January 2024, Incyte highlighted promising early clinical efficacy data for its selective small molecule inhibitor of CDK2 (INCB123667), which demonstrated its potential use as monotherapy or combination therapy for late-stage cancers. In a Phase 1 study of INCB123667, early clinical activity was observed with several partial responses (PR) achieved in patients with amplification/over expression of CCNE1, a cell cycle regulator and potential predictive biomarker. Tumor shrinkage was observed across multiple tumor types, including CCNE1+ patients with ovarian cancer. The safety profile of INCB123667 aligns with the mechanism of action. Additional data is expected to be presented in 2024.
•In April 2024, Incyte presented new preclinical data at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2024 highlighting its KRASG12D inhibitor (INCB161734). INCB161734 is a potent, selective, and orally bioavailable KRAS G12D inhibitor which is efficacious against KRAS G12D mutant tumors in preclinical models. The potential benefit of INCB161734 for patients with KRAS G12D mutant disease is under investigation in an ongoing Phase 1 study. The KRASG12D mutation is found in 40% of pancreatic ductal adenocarcinoma patients, 15% of colorectal cancer patients, and 5% of non-small cell lung cancer patients and with no approved G12D-targeting agents, represents a significant medical need.
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Oncology Programs Indication and status
Pemigatinib (Pemazyre)
(FGFR1/2/3)
Myeloid/lymphoid neoplasms (MLN): approved in the U.S. and Japan
Cholangiocarcinoma (CCA): Phase 3 (FIGHT-302)
Tafasitamab (Monjuvi/Minjuvi)
(CD19)
Relapsed or refractory diffuse large B-cell lymphoma (DLBCL): Phase 3 (B-MIND)
First-line DLBCL: Phase 3 (frontMIND)
Relapsed or refractory follicular lymphoma (FL) and relapsed or refractory marginal zone lymphoma (MZL): Phase 3 (inMIND)
Retifanlimab (Zynyz)1
(PD-1)
Merkel cell carcinoma (MCC): approved in the U.S.
Squamous cell anal cancer (SCAC): Phase 3 (POD1UM-303)
Non-small cell lung cancer (NSCLC): Phase 3 (POD1UM-304)
MSI-high endometrial cancer: Phase 2 (POD1UM-101, POD1UM-204)
INCB99280
(Oral PD-L1) Solid tumors (combination): Phase 1
Solid tumors (monotherapy): Phase 2
Cutaneous squamous cell carcinoma (cSCC): Phase 2
INCB99318
(Oral PD-L1) Solid tumors: Phase 1
INCB123667
(CDK2i) Solid tumors with Amplification/ Overexpression of CCNE1: Phase 1
INCB161734
(KRASG12D) Advanced metastatic solid tumors with a KRAS G12D mutation: Phase 1

1 Retifanlimab licensed from MacroGenics.
Inflammation and Autoimmunity (IAI) – key highlights
Dermatology
Opzelura
▪In March 2024, Incyte presented data at the 2024 AAD Annual Meeting from its randomized, placebo-controlled, Phase 2 study evaluating the safety and efficacy of ruxolitinib cream (Opzelura) in adults with mild/moderate HS. At Week 16, patients receiving ruxolitinib cream 1.5% twice daily (BID) had significantly greater decreases from baseline versus placebo in total abscess and inflammatory nodule (AN) count, the primary endpoint of the study. The overall safety profile of ruxolitinib cream was consistent with previous data, and no new safety signals were observed. A Phase 3 study is currently being evaluated.
▪Ruxolitinib cream in other indications: Phase 2 studies in lichen planus and lichen sclerosus have completed enrollment. Two Phase 3 trials evaluating ruxolitinib cream in PN are ongoing.
Povorcitinib (INCB54707)
▪The Phase 2, randomized, double-blind, placebo-controlled, dose ranging study evaluating the efficacy and safety of povorcitinib in participants with PN were presented at the 2024 AAD Annual Meeting with the study meeting its primary and secondary endpoints following 16 weeks of treatment across all dosing groups, reinforcing povorcitinib’s potential role in treating PN. A Phase 3 study in PN is being planned.
▪Asthma and chronic spontaneous urticaria: Two Phase 2 trials in asthma and chronic spontaneous urticaria are enrolling.
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IAI and Dermatology Programs Indication and status
Ruxolitinib cream (Opzelura)1
(JAK1/JAK2)
Atopic dermatitis: Phase 3 pediatric study (TRuE-AD3)
Vitiligo: Approved in the U.S. and Europe
Lichen planus: Phase 2
Lichen sclerosus: Phase 2
Hidradenitis suppurativa: Phase 2; Phase 3 being evaluated
Prurigo nodularis: Phase 3 (TRuE-PN1, TRuE-PN2)
Ruxolitinib cream + UVB
(JAK1/JAK2 + phototherapy) Vitiligo: Phase 2
Povorcitinib
(JAK1) Hidradenitis suppurativa: Phase 3 (STOP-HS1, STOP-HS2)
Vitiligo: Phase 3 (STOP-V1, STOP-V2)
Prurigo nodularis: Phase 3 to start in 2024
Asthma: Phase 2
Chronic spontaneous urticaria: Phase 2
INCA034460
(anti-IL-15Rβ) Vitiligo: Phase 1 initiated

1 Novartis’ rights to ruxolitinib outside of the United States under our Collaboration and License Agreement with Novartis do not include topical administration.
Other
Other Program Indication and Phase
Zilurgisertib
(ALK2) Fibrodysplasia ossificans progressiva: Pivotal Phase 2

Discovery and other early development
Modality Candidates
Monoclonal antibodies
INCAGN2385 (LAG-3)1, INCAGN2390 (TIM-3)1
Bi-specific antibodies
INCA32459 (LAG-3xPD-1)2, INCA33890 (TGFβR2xPD-1)2

1 Discovery collaboration with Agenus.
2 Development in collaboration with Merus.
Partnered
Partnered Programs Indication and Phase
Ruxolitinib (Jakavi)1
(JAK1/JAK2)
Acute and chronic GVHD: Approved in Europe and Japan
Baricitinib (Olumiant)2
(JAK1/JAK2)
AD: Approved in Europe and Japan
Severe alopecia areata (AA): Approved in the U.S., Europe and Japan
Capmatinib (Tabrecta)3
(MET)
NSCLC (with MET exon 14 skipping mutations): Approved in the U.S., Europe and Japan

1 Ruxolitinib (Jakavi) licensed to Novartis ex-U.S. for use in hematology and oncology excluding topical administration.
2 Baricitinib (Olumiant) licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis; approved as Olumiant in EU and Japan for certain patients with atopic dermatitis.
3 Capmatinib (Tabrecta) licensed to Novartis.
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2024 First Quarter Financial Results
The financial measures presented in this press release for the three months ended March 31, 2024 and 2023 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers.
Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.
As changes in exchange rates are an important factor in understanding period-to-period comparisons, Management believes the presentation of certain revenue results on a constant currency basis in addition to reported results helps improve investors’ ability to understand its operating results and evaluate its performance in comparison to prior periods. Constant currency information compares results between periods as if exchange rates had remained constant period over period. The Company calculates constant currency by calculating current year results using prior year foreign currency exchange rates and generally refers to such amounts calculated on a constant currency basis as excluding the impact of foreign exchange or being on a constant currency basis. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as the Company presents them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.
Financial Highlights
Financial Highlights
(unaudited, in thousands, except per share amounts)
Three Months Ended
March 31,
2024 2023
Total GAAP revenues $ 880,889 $ 808,673
Total GAAP operating income 91,898 24,770
Total Non-GAAP operating income 161,183 89,729
GAAP net income 169,548 21,703
Non-GAAP net income 145,269 84,577
GAAP basic EPS $ 0.76 $ 0.10
Non-GAAP basic EPS $ 0.65 $ 0.38
GAAP diluted EPS $ 0.75 $ 0.10
Non-GAAP diluted EPS $ 0.64 $ 0.37

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Revenue Details
Revenue Details
(unaudited, in thousands)
Three Months Ended
March 31, %
Change
(as reported)
%
Change
(constant currency)1
2024 2023
Net product revenues:
Jakafi $ 571,839 $ 579,969 (1 %) (1 %)
Opzelura 85,724 56,552 52 % 51 %
Iclusig 30,343 27,685 10 % 8 %
Pemazyre 17,676 22,475 (21 %) (22 %)
Minjuvi/Monjuvi 23,874 6,556 264 % 262 %
Zynyz 467 — NM NM
Total net product revenues 729,923 693,237 5 % 5 %
Royalty revenues:
Jakavi 89,595 76,692 17 % 19 %
Olumiant 30,589 34,155 (10 %) (8 %)
Tabrecta 5,234 4,177 25 % NA
Pemazyre 548 412 33 % NM
Total royalty revenues 125,966 115,436 9 %
Total net product and royalty revenues 855,889 808,673 6 %
Milestone and contract revenues 25,000 — NM NM
Total GAAP revenues $ 880,889 $ 808,673 9 %

NM = not meaningful
NA = not available
1.Percentage change in constant currency is calculated using 2023 foreign exchange rates to recalculate 2024 results.
Product and Royalty Revenues Product revenues and product and royalty revenues for the quarter ended March 31, 2024 increased 5% and 6%, respectively, over the prior year comparative period, primarily driven by a 52% year-over-year increase in Opzelura net product revenue due to the growth in new patient starts and refills, an increase in Minjuvi/Monjuvi net product revenues, following the acquisition of the exclusive global rights to tafasitamab in February 2024, and an increase in Jakavi royalty revenues.
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Operating Expenses
Operating Expense Summary
(unaudited, in thousands)
Three Months Ended
March 31, %
Change
2024 2023
GAAP cost of product revenues $ 60,956 $ 56,822 7 %
Non-GAAP cost of product revenues1
54,959 50,669 8 %
GAAP research and development 429,260 406,641 6 %
Non-GAAP research and development2
388,437 375,620 3 %
GAAP selling, general and administrative 300,256 315,606 (5 %)
Non-GAAP selling, general and administrative3
277,335 294,017 (6 %)
GAAP (gain) loss on change in fair value of acquisition-related contingent consideration (456) 6,196 (107 %)
Non-GAAP (gain) loss on change in fair value of acquisition-related contingent consideration4
— — — %
GAAP (profit) and loss sharing under collaboration agreements (1,025) (1,362) (25 %)

1 Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation.
2 Non-GAAP research and development expenses exclude the cost of stock-based compensation and MorphoSys transition costs.
3 Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation and MorphoSys transition costs.
4 Non-GAAP (gain) loss on change in fair value of acquisition-related contingent consideration is null.
Cost of product revenues GAAP and Non-GAAP cost of product revenues for the quarter ended March 31, 2024 increased 7% and 8%, respectively, compared to the same period in 2023 primarily due to growth in net product revenues.
Research and development expenses GAAP and Non-GAAP research and development expense for the quarter ended March 31, 2024 increased 6% and 3%, respectively, compared to the same period in 2023 primarily due to continued investment in our late stage development assets.
Selling, general and administrative expenses GAAP and Non-GAAP selling, general and administrative expenses for the quarter ended March 31, 2024 decreased 5% and 6%, respectively, compared to the same period in 2023 primarily due to the timing of consumer marketing activities and of certain other expenses.
Other Financial Information
Change in fair value of acquisition-related contingent consideration The change in fair value of contingent consideration during the quarter ended March 31, 2024, compared to the same periods in 2023, was due primarily to fluctuations in foreign currency exchange rates impacting future revenue projections of Iclusig.
Operating income GAAP and Non-GAAP operating income for the three months ended March 31, 2024 increased 271% and 80%, respectively, compared to the same period in 2023, driven by growth in total revenues and stable operating expenses.
Cash, cash equivalents and marketable securities position As of March 31, 2024 and December 31, 2023, cash, cash equivalents and marketable securities totaled $3.9 billion and $3.7 billion, respectively.
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2024 Financial Guidance
Incyte is maintaining its full year 2024 revenue and expense guidance. Incyte’s guidance is summarized below. Guidance does not include revenue from any potential new product launches or the impact of the acquisition of Escient Pharmaceuticals or any other potential future strategic transactions.
Guidance
Jakafi net product revenues $2,690 – $2,750 million
Other Hematology/Oncology net product revenues(1)
$325 – $360 million
GAAP Cost of product revenues 7 – 8% of net product revenues
Non-GAAP Cost of product revenues(2)
6 – 7% of net product revenues
GAAP Research and development expenses $1,720 – $1,760 million
Non-GAAP Research and development expenses(3)
$1,580 – $1,615 million
GAAP Selling, general and administrative expenses $1,210 – $1,240 million
Non-GAAP Selling, general and administrative expenses(3)
$1,115 – $1,140 million

1Pemazyre in the U.S., EU and Japan; Monjuvi and Zynyz in the U.S.; and Iclusig and Minjuvi in the EU.
2Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the estimated cost of stock-based compensation.
3 Adjusted to exclude the estimated cost of stock-based compensation.
Conference Call and Webcast Information
Incyte will hold a conference call and webcast this morning at 8:00 a.m. ET. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13745743.
If you are unable to participate, a replay of the conference call will be available for 90 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, 13745743.
The conference call will also be webcast live and can be accessed at investor.incyte.com.