Form 8-K INCYTE CORP For: May 04


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Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

Incyte Reports 2021 First Quarter Financial
Results
and Provides Updates on Key Clinical Programs

 

Total product and royalty revenues of $605 million in Q1 2021 (+6% vs
Q1
 2020)

 

Jakafi® (ruxolitinib) revenues of $466 million in Q1 2021
(+1% vs Q1
 2020); reaffirming full year guidance of $2.125-$2.20
billion

 

Pemazyre® (pemigatinib) now also approved in Europe and
Japan, becoming the first internally discovered product to be globally commercialized by Incyte

 

Three regulatory submissions accepted by the FDA for Priority
Review, including potential approval of ruxolitinib cream in the U.S. for atopic dermatitis in June

 

Conference Call and Webcast Scheduled Today at
8:00 a.m. EDT

 

WILMINGTON, Del. – May 4, 2021 – Incyte (Nasdaq:
INCY) today reports 2021 first quarter financial results, and provides a status update on the Company’s development portfolio.

 

“In the first quarter, we continued to make significant progress
in our strategy to drive growth and diversification. While Jakafi® (ruxolitinib) net sales were affected by typical seasonal
effects and softer patient demand growth due to the ongoing pandemic, we remain confident in our full-year outlook. We are already seeing
a return of new patient starts to pre-COVID levels and are excited for the potential launch in steroid-refractory chronic graft-versus-host
disease (GVHD) later this year. The launches of Monjuvi® (tafasitamab) and Pemazyre® (pemigatinib) continue
to progress with good uptake by both academic and community physicians,” stated Hervé Hoppenot, Chief Executive Officer,
Incyte. “We expect an exciting year ahead for Incyte with the potential for multiple approvals, including ruxolitinib cream in
atopic dermatitis, and several regulatory filings, notably parsaclisib in NHL and ruxolitinib cream in vitiligo. We are also initiating
pivotal trials across key development programs for both tafasitamab and LIMBER this year.”

 

Portfolio Update

 

MPNs and GVHD – key highlights

 

Ruxolitinib in GVHD: The supplemental New Drug Application (sNDA)
seeking approval of ruxolitinib for the treatment of steroid-refractory chronic GVHD has been accepted for Priority Review by the U.S.
Food and Drug Administration (FDA); the Prescription Drug User Fee Act (PDUFA) date is June 22, 2021. The application for approval was
based on the successful randomized REACH3 trial comparing ruxolitinib with best available therapy (BAT).

 

 

LIMBER: Our Leadership In MPNs BEyond
Ruxolitinib (LIMBER) development program continues to progress with once daily (QD) ruxolitinib in stability testing, and multiple
ongoing and planned combination trials with ruxolitinib on track. Both monotherapy trials of INCB57643 (BET) and INCB00928 (ALK2) are
ongoing, and combination trials of both agents with ruxolitinib in patients with myelofibrosis (MF) are expected to initiate later this
year. Two Phase 3 trials of ruxolitinib in combination with parsaclisib as a first-line therapy for patients with MF (LIMBER-313) and
as a therapy for MF patients with a suboptimal response to ruxolitinib monotherapy (LIMBER-304) are ongoing.

 

    Indication and status
Once-a-day ruxolitinib
(JAK1/JAK2)
 

Myelofibrosis, polycythemia vera & GVHD: clinical pharmacology studies

 

ruxolitinib
+
parsaclisib
(JAK1/JAK2 + PI3Kδ)

 

  Myelofibrosis: Phase 3 (first-line therapy) (LIMBER-313)
Myelofibrosis: Phase 3 (suboptimal responders to ruxolitinib) (LIMBER-304)
ruxolitinib + INCB57643
(JAK1/JAK2 + BET)
  Myelofibrosis: Phase 2 in preparation
ruxolitinib + INCB00928
(JAK1/JAK2 + ALK2)
  Myelofibrosis: Phase 2 in preparation
itacitinib
(JAK1)
  Myelofibrosis: Phase 2 (low platelets)
ruxolitinib + CK08041
(JAK1/JAK2 + CB-Tregs)
  Myelofibrosis: PoC in preparation

ruxolitinib
(JAK1/JAK2)

 

Steroid-refractory chronic GVHD2: sNDA under Priority Review

 

itacitinib
(JAK1)

 

  Treatment-naïve chronic GVHD: Phase 3 (GRAVITAS-309)
 
 

 

1) Development collaboration with Cellenkos, Inc.
2) Clinical development of ruxolitinib in GVHD conducted in collaboration
with Novartis

 

Other Hematology/Oncology – key highlights

 

Tafasitamab: Incyte and MorphoSys strategy to evaluate
tafasitamab as a backbone therapy in multiple combinations for the treatment of various B-cell malignancies is underway. The Phase 3 inMIND
trial, evaluating tafasitamab in combination with lenalidomide plus rituximab (R2) versus R2 in patients with
follicular lymphoma and marginal zone lymphoma is ongoing. Preparations are underway for the Phase 3 frontMIND trial
evaluating tafasitamab plus lenalidomide in addition to rituximab, cyclophosphamide, doxorubicin, vincristine and prednisone
(R-CHOP) compared to R-CHOP alone as a first-line treatment for patients with newly diagnosed diffuse-large B-cell lymphoma (DLBCL).
A proof-of-concept trial evaluating tafasitamab plus parsaclisib (topMIND) is expected to start later this year and a second
proof-of-concept trial with tafasitamab plus lenalidomide in addition to plamotamab is expected to start later this year or early next.

 

 

Pemigatinib: In March, Pemazyre® (pemigatinib)
was approved by the Japanese Ministry of Health, Labour and Welfare (MHLW) for the treatment of patients with unresectable biliary tract
cancer (BTC) with a fibroblast growth factor receptor 2 (FGFR2) fusion gene, worsening after cancer chemotherapy. Additionally, the European
Commission (EC) approved Pemazyre for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast
growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed after at least one prior line of systemic therapy. The upcoming
launches in Europe and Japan along with the continued launch in the U.S., signifies the first internally discovered product to be globally
commercialized by Incyte. The Phase 2 tumor agnostic study of pemigatinib is ongoing and continues to enroll well.

 

Retifanlimab: In March, the Marketing Authorization Application
(MAA) seeking approval of retifanlimab in squamous cell carcinoma of the anal canal (SCAC) was validated by the European Medicines Agency
(EMA). This follows the Biologics License Application (BLA) acceptance by the FDA for the same indication earlier this year.

 

    Indication and status

pemigatinib
(FGFR1/2/3)

 

 

 

 

 

  CCA: Phase 2 (FIGHT-202), Phase 3 (FIGHT-302)
 
8p11 MPN: Phase 2 (FIGHT-203)
 
Tumor agnostic: Phase 2 (FIGHT-207)
 
 

tafasitamab

(CD19)1

 

 

 

 

 

 

 

 

 

 

 

 

 

r/r DLBCL: Phase 2 (L-MIND); Phase 3 (B-MIND); MAA under review

 

1L
DLBCL: Phase 1b (firstMIND); Phase 3 (frontMIND) in preparation

 

r/r
FL and r/r MZL: Phase 3 (inMIND)

 

r/r
B-cell malignancies: PoC (topMIND) with parsaclisib (PI3Kδ) in preparation

 

r/r B-cell malignancies: PoC with lenalidomide and plamotamab in preparation2

 

 

 

parsaclisib

(PI3Kδ)

 

 

 

 

 

 

 

  r/r FL: Phase 2 (CITADEL-203)
 
r/r MZL: Phase 2 (CITADEL-204)
 
r/r MCL: Phase 2 (CITADEL-205)
r/r FL and r/r MZL: Phase 3 (CITADEL-302) in preparation
1L MCL: Phase 3 (CITADEL-310) in preparation
 
 
retifanlimab
(PD-1)3
  SCAC: Phase 2 (POD1UM-202); Phase 3 (POD1UM-303); BLA and MAA under review
 
MSI-high endometrial cancer: Phase 2 (POD1UM-101, POD1UM-204)
 
Merkel cell carcinoma: Phase 2 (POD1UM-201)
 
NSCLC: Phase 3 (POD1UM-304)
 
 

 

CCA = cholangiocarcinoma; DLBCL = diffuse large B-cell lymphoma; SCAC
= squamous cell anal carcinoma; FL = follicular lymphoma; MZL = marginal zone lymphoma; MCL = mantle cell lymphoma

 

1) Development of tafasitamab in collaboration with MorphoSys
2) Clinical collaboration with MorphoSys and Xencor, Inc. to investigate the combination of tafasitamab plus lenalidomide in combination
with Xencor’s CD20xCD3 XmAb bispecific antibody, plamotamab.
3) retifanlimab licensed from MacroGenics

 

 

Inflammation and Autoimmunity (IAI) – key highlights

 

Dermatology

 

Ruxolitinib cream: The NDA seeking approval of ruxolitinib cream
for the treatment of atopic dermatitis (AD) has been accepted for Priority Review by the FDA and the PDUFA date has been set for
June 21, 2021. The application is supported by data from the Phase 3 TRuE-AD clinical trial program – pooled results presented last month
at the American Academy of Dermatology (AAD) virtual conference provided additional context regarding the impact of ruxolitinib cream
on itch relief as well as sleep disturbance and sleep impairment.

 

Also at AAD, Incyte presented 104-week data from the Phase 2
program evaluating ruxolitinib cream in patients with vitiligo. Results showed patients on ruxolitinib cream achieved continued
efficacy through 104 weeks, with a longer duration of treatment being associated with greater levels of repigmentation. Incyte also
presented additional follow-up data which demonstrated a potential for maintenance of repigmentation after discontinuation of
therapy (following two years of treatment with ruxolitinib cream). The two Phase 3 trials in the TRuE-V program are ongoing with
results expected in Q2’21.

 

INCB54707: In March, Incyte initiated a Phase 2 trial evaluating
INCB54707 in vitiligo. A Phase 2 trial in hidradenitis suppurativa remains ongoing.

 

    Indication and status

ruxolitinib cream
(JAK1/JAK2)

 

 

 

Atopic dermatitis: NDA under Priority Review
 
Vitiligo: Phase 3 (TRuE-V1, TRuE-V2; recruitment complete in both trials)

 

INCB54707

(JAK1)

 

 

 

  Hidradenitis suppurativa: Phase 2b
 
Vitiligo: Phase 2
 
 

parsaclisib

(PI3Kδ)

  Autoimmune hemolytic anemia: Phase 2
 
 
INCB00928
(ALK2)
  Fibrodysplasia ossificans progressiva: Phase 2 in preparation

 

Discovery and early development – key highlights

 

INCB106385/INCA00186: At AACR, Incyte shared clinical and pre-clinical
data from INCB106385, our novel A2A/A2B adenosine receptor antagonist, and INCA00186, our novel CD73 monoclonal antibody—both of
which highlight our ongoing efforts targeting the adenosine pathway. Incyte also presented preclinical data for our triplet combination
with retifanlimab, highlighting one of our strategies to overcome adenosine mediated PD-1 suppression.

 

 

Modality   Candidates

Small molecules

 

 

 

INCB01158 (ARG)1, INCB81776 (AXL/MER), epacadostat (IDO1), INCB86550 (PD-L1), INCB106385 (A2A/A2B)

 

Monoclonal antibodies2

 

 

INCAGN1876 (GITR), INCAGN2385 (LAG-3), INCAGN1949 (OX40), INCAGN2390 (TIM-3), INCA00186 (CD73)

 

Bispecific antibodies   MCLA-145 (PD-L1xCD137)3

 

1) INCB01158 development in collaboration with Calithera
2) Discovery collaboration with Agenus
3) MCLA-145 development in collaboration with Merus

 

Partnered – key highlights

 

Baricitinib: In April, Incyte and Lilly announced the FDA extended
the review period for the sNDA for baricitinib for the treatment of moderate to severe atopic dermatitis by three months to allow time
for additional data analyses. The PDUFA action date is now expected in early Q3.

 

In March, Incyte and Lilly announced positive results from
BRAVE-AA2 evaluating the efficacy and safety of once-daily baricitinib 2-mg and 4-mg in adults with severe alopecia areata (AA), an
autoimmune disorder that can cause unpredictable hair loss on the scalp, face and other areas of the body. In April, positive
results from a second Phase 3 study, BRAVE-AA1, were announced, with data consistent with the findings from BRAVE-AA2. Lilly plans
to submit an sNDA to the FDA for baricitinib in AA in the second half of 2021. There are currently no FDA-approved therapies for AA,
highlighting the potential for baricitinib to address a significant unmet medical need.

 

    Indication and status
baricitinib
(JAK1/JAK2)1
 

Atopic dermatitis: Phase 3 (BREEZE-AD); approved in EU and Japan; sNDA under review
 
Severe alopecia areata: Phase 3 (BRAVE-AA1, BRAVE-AA2)
 
Systemic lupus erythematosus: Phase 3 (BRAVE I, BRAVE II)

 

capmatinib
(MET)2
  NSCLC (with MET exon 14 skipping mutations): Approved as Tabrecta in U.S. and Japan
 
 

 

1) Worldwide rights to baricitinib 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
2) Worldwide rights to capmatinib licensed to Novartis

 

 

 

Potential therapies for patients with COVID-19

 

Ruxolitinib: In March, Incyte announced results from the Phase
3 DEVENT study assessing ruxolitinib plus standard of care (SoC) versus SoC in patients on mechanical ventilation with COVID-19 associated
Acute Respiratory Disease Syndrome (ARDS). While results indicate a trend towards improvement in mortality in the overall study population,
statistical significance was not reached in the primary endpoint (mortality due to any cause through Day 29). In the U.S. study population
(91% of total study participants), however, there was a clinically and statistically significant improvement in mortality in each of the
5mg and 15mg ruxolitinib arms versus placebo.

 

Baricitinib: In April, Incyte and Lilly announced the primary
endpoint in the Phase 3 COV-BARRIER study evaluating baricitinib in hospitalized COVID-19 patients – difference in the proportion of participants
progressing to the first occurrence of non-invasive ventilation including high flow oxygen or invasive mechanical ventilation including
extracorporeal membrane oxygenation (ECMO) or death by Day 28) – was not met. There was, however, a 38% reduction in mortality by Day
28 in patients treated with baricitinib in addition to SoC. Lilly will share these data with regulatory authorities in the U.S., European
Union and other geographies to evaluate next steps.

 

2021 First Quarter Financial Results

 

The financial
measures presented in this press release for the three months ended March 31, 2021 and 2020 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.

 

 

Financial Highlights

Financial Highlights
(unaudited, in thousands, except per share amounts)
             
    Three Months Ended  
    March 31,  
    2021     2020  
Total GAAP revenue   $ 604,718     $ 568,507  
                 
Total GAAP operating income (loss)     98,797       (664,004 )
Total Non-GAAP operating income (loss)     170,303       (609,480 )
GAAP net income (loss)     53,535       (720,642 )
Non-GAAP net income (loss)     148,756       (618,920 )
                 
GAAP basic EPS   $ 0.24     $ (3.33 )
Non-GAAP basic EPS   $ 0.68     $ (2.86 )
GAAP diluted EPS   $ 0.24     $ (3.33 )
Non-GAAP diluted EPS   $ 0.67     $ (2.86 )

 

 

Revenue Details

Revenue Details
(unaudited, in thousands)
                   
    Three Months Ended        
    March 31,     %  
    2021     2020     Change  
Revenues:                        
Jakafi net product revenues   $ 465,710     $ 459,479       1 %
Iclusig net product revenues     25,645       27,248       (6 )%
Pemazyre net product revenues     13,456              NM  
Jakavi product royalty revenues     65,602       56,333       16 %
Olumiant product royalty revenues     32,258       25,447       27 %
Tabrecta product royalty revenues     2,047              NM  
Product and royalty revenues     604,718       568,507       6 %
Total GAAP revenues   $ 604,718     $ 568,507       6 %
                         
NM = not meaningful                        

 

Product and Royalty Revenues Product and royalty revenues for
the quarter ended March 31, 2021 increased 6% over the prior year comparative period as a result of increases in Jakafi net product revenues,
the launch of Pemazyre and higher product royalty revenues from Jakavi and Olumiant. The year-over-year growth rate in Jakafi net product
revenues was impacted by a decline in new patient starts due to the COVID-19 pandemic, and higher patient demand and channel inventory
stocking in the prior year comparative period, due to concerns over potential COVID-19 related supply disruptions.

 

Operating Expenses

Operating Expense Summary
(unaudited, in thousands)
                   
    Three Months Ended        
    March 31,     %  
    2021     2020     Change  
GAAP cost of product revenues   $ 29,220     $ 27,319       7 %
Non-GAAP cost of product revenues1     23,596       21,710       9 %
                         
GAAP research and development     306,896       1,085,287       (72 )%
Non-GAAP research and development2     277,022       1,056,574       (74 )%
                         
GAAP selling, general and administrative     153,795       111,148       38 %
Non-GAAP selling, general and administrative3     123,313       97,573       26 %
                         
GAAP change in fair value of acquisition-related contingent consideration     5,526       6,627       (17 )%
Non-GAAP change in fair value of acquisition-related contingent consideration4                    
                         
GAAP collaboration loss sharing     10,484       2,130        NM  
Non-GAAP collaboration loss sharing     10,484       2,130        NM  

 

 

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.

3. Non-GAAP selling, general and administrative expenses
exclude the cost of stock-based compensation and a legal reserve.

4. Non-GAAP change in fair value of acquisition-related
contingent consideration is null.

 

Research
and development expenses
 GAAP and Non-GAAP research and development
expense for the quarter ended March 31, 2021 decreased 72% and 74%, respectively, compared to the same period in 2020, primarily due to
upfront consideration of $805 million related to our collaborative agreement with MorphoSys incurred during the quarter ended March 31,
2020. Excluding the impact of upfront consideration and milestones, research and development expense for the quarter ended March 31, 2021
increased approximately 5% compared to the same period in 2020 reflecting costs to support the continued progression of our pipeline of
programs.

 

Selling,
general and administrative expenses
 GAAP and Non-GAAP
selling, general and administrative expenses for the quarter ended March 31, 2021 increased 38% and 26%, respectively, compared to
the same period in 2020, primarily due to expenses related to the establishment of our dermatology commercial organization and
activities to support the potential launch of ruxolitinib cream for the treatment of atopic dermatitis, a $13 million reserve
related to a settlement in principle in connection with the 2018 civil investigative demand from the U.S. Department of Justice, and
the timing of certain expenses. Excluding the impact of the legal reserve, GAAP selling, general and administrative expenses for the
quarter ended March 31, 2021 increased approximately 26% compared to the same period in 2020.

 

Other Financial Information

 

Operating income (loss) GAAP and Non-GAAP operating income (loss)
for the quarter ended March 31, 2021 increased compared to the same period in 2020 primarily due to the decrease in upfront consideration
and milestones related to our collaborative agreements and the growth in product and royalty revenues.

 

Cash, cash
equivalents and marketable securities position
 As of March 31,
2021 and December 31, 2020, cash, cash equivalents and marketable securities totaled $2.0 billion and $1.8 billion, respectively.

 

 

 

2021 Financial Guidance

 

The Company has reaffirmed its full year 2021 financial guidance, as
detailed below. Guidance does not include revenue from any potential new product launches. However, GAAP and Non-GAAP selling, general
and administrative expense guidance for 2021 includes costs to support the potential launches of ruxolitinib cream as a treatment for
atopic dermatitis in the U.S., pemigatinib as a treatment for cholangiocarcinoma in the EU and Japan, and tafasitamab as a treatment for
DLBCL in the EU. The 2021 financial guidance does not include the impact of any potential future strategic transactions.

 

    Current   Previous
Jakafi net product revenues   $2,125 – $2,200 million   Unchanged
Other Hematology/Oncology net product revenues   $145 – $160 million   Unchanged
GAAP Cost of product revenues   6 – 7% of net product revenues   Unchanged
Non-GAAP Cost of product revenues1   5 – 6% of net product revenues     Unchanged
GAAP Research and development expenses   $1,350 – $1,390 million   Unchanged
Non-GAAP Research and development expenses2   $1,220 – $1,250 million   Unchanged
GAAP Selling, general and administrative expenses   $735 – $775 million   Unchanged
Non-GAAP Selling, general and administrative expenses3   $665 – $700 million   Unchanged

1. Adjusted 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.

2. Adjusted to exclude the estimated cost of stock-based
compensation.

3. Adjusted to exclude the estimated cost of stock-based
compensation and a legal reserve.

 

 

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, 13718346.

 

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, 13718346.

 

The conference call will also be webcast live and can be accessed
at investor.incyte.com.

 

About Incyte

 

Incyte is a Wilmington, Delaware-based, global biopharmaceutical company
focused on finding solutions for serious unmet medical needs through the discovery, development and commercialization of proprietary
therapeutics. For additional information on Incyte, please visit Incyte.com and follow @Incyte.

 

About Jakafi® (ruxolitinib)

 

Jakafi is a first-in-class JAK1/JAK2 inhibitor approved by the U.S.
FDA for treatment of steroid-refractory acute GVHD in adult and pediatric patients 12 years and older.

 

Jakafi is also indicated for treatment of polycythemia vera (PV) in
adults who have had an inadequate response to or are intolerant of hydroxyurea as well as adults with intermediate or high-risk myelofibrosis
(MF), including primary MF, post-polycythemia vera MF and post-essential thrombocythemia MF.

 

Jakafi is
marketed by Incyte in the United States and by Novartis as Jakavi®
 (ruxolitinib)
outside the United States. Jakafi is a registered trademark of Incyte Corporation. Jakavi is a registered trademark of Novartis AG in
countries outside the United States.

 

About Tafasitamab

 

Tafasitamab is a humanized Fc-modified cytolytic CD19 targeting monoclonal
antibody. In 2010, MorphoSys licensed exclusive worldwide rights to develop and commercialize tafasitamab from Xencor, Inc. Tafasitamab
incorporates an XmAb® engineered Fc domain, which mediates B-cell lysis through apoptosis and immune effector mechanism
including antibody-dependent cell-mediated cytotoxicity (ADCC) and antibody-dependent cellular phagocytosis (ADCP).

 

Monjuvi® (tafasitamab-cxix) is approved by the U.S.
Food and Drug Administration in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse
large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous
stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval
for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).

 

 

In January 2020, MorphoSys and Incyte entered into a collaboration
and licensing agreement to further develop and commercialize tafasitamab globally. Monjuvi® is being co-commercialized
by Incyte and MorphoSys in the United States. Incyte has exclusive commercialization rights outside the United States.

 

A marketing authorization application (MAA) seeking the approval
of tafasitamab in combination with lenalidomide in the EU has been validated by the European Medicines Agency (EMA) and is currently
under review for the treatment of adult patients with relapsed or refractory DLBCL, including DLBCL arising from low grade lymphoma,
who are not candidates for ASCT.

 

Tafasitamab is being clinically investigated as a therapeutic option
in B-cell malignancies in a number of ongoing combination trials.

 

Monjuvi® is a registered trademark of MorphoSys AG.

 

XmAb® is a registered trademark of Xencor, Inc.

 

About Pemazyre® (pemigatinib)

 

Pemazyre is a kinase inhibitor indicated in the United States for the
treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor
receptor 2 (FGFR2) fusion or other rearrangement as detected by an FDA-approved test1.
This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for
this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).

 

In Japan, Pemazyre is approved for the treatment of patients with unresectable
biliary tract cancer (BTC) with a fibroblast growth factor receptor 2 (FGFR2) fusion gene, worsening after cancer chemotherapy.

 

In Europe, Pemazyre is approved for the treatment of adults with locally
advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed
after at least one prior line of systemic therapy.

 

Pemazyre is a potent, selective, oral inhibitor of FGFR isoforms 1,
2 and 3 which, in preclinical studies, has demonstrated selective pharmacologic activity against cancer cells with FGFR alterations.

 

Pemazyre is marketed by Incyte in the United States, Europe and Japan.
Incyte has granted Innovent Biologics, Inc. rights to develop and commercialize pemigatinib in hematology and oncology in Mainland China,
Hong Kong, Macau and Taiwan. Incyte has retained all other rights to develop and commercialize pemigatinib outside of the United States.

 

Pemazyre is a trademark of Incyte Corporation.

 

 

About Iclusig® (ponatinib)
tablets

 

Iclusig targets not only native BCR-ABL but also its isoforms that
carry mutations that confer resistance to treatment, including the T315I mutation, which has been associated with resistance to other
approved TKIs.

 

In the EU, Iclusig is approved for the treatment of adult patients
with chronic phase, accelerated phase or blast phase chronic myeloid leukemia (CML) who are resistant to dasatinib or nilotinib; who are
intolerant to dasatinib or nilotinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I
mutation, or the treatment of adult patients with Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL) who are resistant
to dasatinib; who are intolerant to dasatinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have
the T315I mutation.

 

Incyte has an exclusive license from ARIAD Pharmaceuticals, Inc., since
acquired by Takeda Pharmaceutical Company Limited, to develop and commercialize Iclusig in the European Union and 22 other countries,
including Switzerland, Norway, Turkey, Israel and Russia.

 

Forward-Looking Statements

 

Except for
the historical information set forth herein, the matters set forth in this release contain predictions, estimates and other forward-looking
statements, including without limitation statements regarding
the potential
launch of Jakafi in steroid-refractory chronic GVHD; the potential for multiple approvals, including ruxolitinib cream in atopic dermatitis,
and several regulatory filings, including parsaclisib in NHL and ruxolitinib cream in vitiligo; expectations regarding the initiation
of multiple pivotal trials across key development programs for both tafasitamab and LIMBER; expectations for the timing of the receipt
and presentation of clinical trial results for the Company’s and its collaboration partners’ product candidates, including
ruxolitinib cream for vitiligo; the expected PDUFA action date for baricitinib for atopic dermatitis; the expected sNDA submission date
for baricitinib for alopecia areata; and the Company’s reaffirmed financial guidance for 2021 and the expectations underlying such
guidance.

 

 

These forward-looking statements are based on the Company’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 actual time required by the FDA to review the Company’s NDA for approval for ruxolitinib cream in atopic
dermatitis and the Company’s sNDA for ruxolitinib in steroid-refractory chronic GVHD and the results of such reviews; further research
and development and the results of clinical trials possibly being unsuccessful or insufficient to meet applicable regulatory standards
or warrant continued development; the ability to enroll sufficient numbers of subjects in clinical trials and the ability to enroll subjects
in accordance with planned schedules; the effects of the COVID-19 pandemic and measures to address the pandemic on the Company’s
clinical trials, supply chain and other third-party providers, sales and marketing efforts, and business, development and discovery operations;
determinations made by the FDA and regulatory agencies outside of the United States; the Company’s dependence on its relationships with
and changes in the plans of its collaboration partners; the efficacy or safety of the Company’s products and the products of the
Company’s collaboration partners; the acceptance of the Company’s products and the products of the Company’s collaboration
partners in the marketplace; market competition; unexpected variations in the demand for the Company’s products and the products
of the Company’s collaboration partners; the effects of announced or unexpected price regulation or limitations on reimbursement
or coverage for the Company’s products and the products of the Company’s collaboration partners; sales, marketing, manufacturing
and distribution requirements, including the Company’s and its collaboration partners’ ability to successfully commercialize
and build commercial infrastructure for newly approved products and any additional products that become approved; greater than expected
expenses, including expenses relating to litigation or strategic activities; and other risks detailed from time to time in the Company’s
reports filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2020.
The Company disclaims any intent or obligation to update these forward-looking statements.

 

# # #

 

Incyte Contacts      
       
Media   Investors  
Catalina Loveman +1 302 498 6171 Christine Chiou +1 302 274 4773
  cloveman@incyte.com   cchiou@incyte.com

 

 

 

INCYTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
             
    Three Months Ended  
    March 31,  
    2021     2020  
    GAAP  
Revenues:                
Product revenues, net   $ 504,811     $ 486,727  
Product royalty revenues     99,907       81,780  
Total revenues     604,718       568,507  
                 
Costs and expenses:                
Cost of product revenues (including definite-lived intangible amortization)     29,220       27,319  
Research and development     306,896       1,085,287  
Selling, general and administrative     153,795       111,148  
Change in fair value of acquisition-related contingent consideration     5,526       6,627  
Collaboration loss sharing     10,484       2,130  
Total costs and expenses     505,921       1,232,511  
                 
Income (loss) from operations     98,797       (664,004 )
Other income (expense), net     (1,407 )     8,662  
Interest expense     (359 )     (602 )
Unrealized loss on long term investments     (27,709 )     (48,132 )
Income (loss) before provision for income taxes     69,322       (704,076 )
Provision for income taxes     15,787       16,566  
Net income (loss)   $ 53,535     $ (720,642 )
                 
Net income (loss) per share:                
Basic   $ 0.24     $ (3.33 )
Diluted   $ 0.24     $ (3.33 )
                 
Shares used in computing net income (loss) per share:                
Basic     219,801       216,721  
Diluted     221,876       216,721  

 

 

INCYTE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
             
    March 31,     December 31,  
    2021     2020  
ASSETS                
Cash, cash equivalents and marketable securities   $ 1,962,393     $ 1,801,377  
Accounts receivable     397,357       481,994  
Property and equipment, net     594,670       559,625  
Finance lease right-of-use assets, net     27,987       28,451  
Inventory     40,379       35,973  
Prepaid expenses and other assets     113,976       103,313  
Long term investments     202,174       222,301  
Other intangible assets, net     166,907       172,291  
Goodwill     155,593       155,593  
Total assets   $ 3,661,436     $ 3,560,918  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Accounts payable, accrued expenses and other liabilities   $ 636,121     $ 648,793  
Finance lease liabilities     34,471       34,857  
Acquisition-related contingent consideration     263,000       266,000  
Stockholders’ equity     2,727,844       2,611,268  
Total liabilities and stockholders’ equity   $ 3,661,436     $ 3,560,918  

 

 

INCYTE CORPORATION
RECONCILIATION OF GAAP NET INCOME (LOSS) TO SELECTED NON-GAAP ADJUSTED INFORMATION
(unaudited, in thousands, except per share amounts)
             
    Three Months Ended  
    March 31,  
    2021     2020  
GAAP Net Income (Loss)   $ 53,535     $ (720,642 )
Adjustments1:                
Non-cash stock compensation from equity awards (R&D)2     29,874       28,713  
Non-cash stock compensation from equity awards (SG&A)2     17,242       13,575  
Non-cash stock compensation from equity awards (COGS)2     240       225  
Non-cash interest expense related to convertible notes3           223  
Changes in fair value of equity investments4     27,709       48,132  
Amortization of acquired product rights5     5,384       5,384  
Change in fair value of contingent consideration6     5,526       6,627  
Legal reserve7     13,240        
Tax effect of Non-GAAP adjustments8     (3,994 )     (1,157 )
Non-GAAP Net Income (Loss)   $ 148,756     $ (618,920 )
                 
Non-GAAP net income (loss) per share:                
Basic   $ 0.68     $ (2.86 )
Diluted   $ 0.67     $ (2.86 )
                 
Shares used in computing Non-GAAP net income (loss) per share:                
Basic     219,801       216,721  
Diluted     221,876       216,721  

 

1. Included within the Research and development expenses
line item in the Condensed Consolidated Statements of Operations (in thousands) for the three months ended March 31, 2021 and 2020 are
upfront consideration and milestones of $11,500 and $805,532, respectively, related to our collaborative partners.

2. As included within the Cost of product revenues (including
definite-lived intangible amortization) line item; the Research and development expenses line item; and the Selling, general and administrative
expenses line item in the Condensed Consolidated Statements of Operations.

3. As included within the Interest expense line item in
the Condensed Consolidated Statements of Operations.

4. As included within the Unrealized loss on long
term investments line item in the Condensed Consolidated Statements of Operations.

5. As included within the Cost of product revenues (including
definite-lived intangible amortization) line item in the Condensed Consolidated Statements of Operations. Acquired product rights of licensed
intellectual property for Iclusig is amortized utilizing a straight-line method over the estimated useful life of 12.5 years.

6. As included within the Change in fair value of acquisition-related
contingent consideration line item in the Condensed Consolidated Statements of Operations.

7. As included within Selling, general and administrative
expenses line item in the Condensed Consolidated Statements of Operations.

8. As included within the Provision for income taxes line
item in the Condensed Consolidated Statements of Operations. Income tax effects of Non-GAAP adjustments are calculated using the applicable
statutory tax rate for the jurisdictions in which the charges are incurred, while taking into consideration any valuation allowances.

 

1
Pemazyre® (pemigatinib) [Package Insert]. Wilmington, DE: Incyte; 2020.

 

 

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