Incyte stock plummeted Tuesday as seasonality hacked at first-quarter revenue and profit with notable sales misses from blockbuster drug Jakafi and skin cream Opzelura.
Jakafi is Incyte's biggest moneymaker. It treats graft-versus-host disease and two forms of cancer. In the March quarter, Jakafi generated $580 million in sales. Sales grew 7% year over year, but missed forecasts for $613 million to $627 million, based on analysts' consensus. Opzelura sales skyrocketed 343% to $57 million, but missed expectations for $70 million.
More patients are now using Jakafi, RBC Capital Markets analyst Brian Abrahams said in a report. That's a bullish sign for long-term growth.
This suggests "that the shortfall is indeed all related to gross-to-net dynamics and an $11 million unfavorable inventory impact reported by the company," he said. "There are no major fundamental issues at play (at least not until the second half of 2023 when additional Jakafi competitors enter the market)."
On today's stock market, Incyte stock toppled 7.1% to close at 69.96. That put shares at their lowest point since late March. Shares are now trading at the lower edge of a consolidation with a buy point at 86.39, according to MarketSmith.com.
Incyte Stock: Revenue Climbs Overall
Overall, first-quarter revenue climbed 10% to $808.7 million. But that lagged expectations for $859 million to $864 million, Piper Sandler analyst Christopher Raymond said in a note. Product sales — which excludes roughly $115.5 million in royalty revenue — advanced 14% to $693.2 million.
Adjusted profit came in at 37 cents per share, well below forecasts for 72-80 cents, he said. Earnings fell almost 33%.
In addition to light Jakafi and Opzelura sales, revenue from Incyte's other cancer treatments was mixed. Inclusig and Minjuvi sales beat forecasts while Pemazyre sales missed.
"One bright spot, however, is that the lower end of fiscal year 2023 Jakafi guidance comes up by $20 million," he said.
Raymond kept his overweight rating and 100 price target on Incyte stock.
Incyte's Outlook For 2023
For the year, Incyte guided to $2.55 billion to $2.63 billion in Jakafi sales and to $215 million to $255 million in sales of its hematology/oncology treatments. The company also trimmed a number of programs in testing for cancer, autoimmune and metabolic disorders.
"We do not believe these discontinued programs were viewed as major value contributors, and some pipeline attrition/refinement is likely welcome, though it does reduce overall shots on goal," RBC analyst Abrahams said.
He has a sector perform rating and 79 price target on Incyte stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
