On February 13, 2020 Incyte (Nasdaq:INCY) reported 2019 fourth quarter and year-end financial results, announces 2020 guidance and provides a status update on the Company’s development portfolio (Press release, Incyte, FEB 13, 2020, View Source [SID1234554268]).
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"Revenue growth continues to be very strong, driven by robust demand across all three indications for Jakafi," stated Hervé Hoppenot, Chief Executive Officer, Incyte. "As we enter 2020, we have multiple opportunities for additional growth. We recently announced successful initial results from the Phase 3 TRuE-AD program, which we plan to include as part of the NDA in the fourth quarter of 2020 seeking approval of ruxolitinib cream for the treatment of patients with mild-to-moderate atopic dermatitis. We also look forward to the FDA decisions on the potential approvals of pemigatinib and capmatinib later this year. The recent progress made within both oncology and dermatology, as well as the recently announced MorphoSys collaboration for tafasitamab, positions Incyte very well as we deliver on our objectives for diversification and growth."
Portfolio Update
LIMBER – key highlights
The LIMBER program, a key development priority designed to maintain our Leadership In MPNs BEyond Ruxolitinib, is evaluating multiple monotherapy and combination strategies to deliver improved therapies for patients with myeloproliferative neoplasms (MPNs). The program has three key areas of focus: new formulations of ruxolitinib; JAK inhibitor-based combinations; and new targets beyond JAK inhibition.
A once-a-day formulation of ruxolitinib is being developed and is currently being evaluated in clinical pharmacology studies. Following positive proof-of-concept data of ruxolitinib plus parsaclisib in myelofibrosis (MF) patients with a suboptimal response to ruxolitinib monotherapy, a randomized pivotal trial is being prepared in this setting. Additional JAK-based combinations are either ongoing or in preparation.
Recruitment has been discontinued in the RESET trial evaluating ruxolitinib as a potential treatment for patients with essential thrombocythemia.
Oncology beyond MPNs – key highlights
Data from the randomized Phase 3 REACH2 trial of ruxolitinib versus best available therapy (BAT) in patients with steroid-refractory acute graft-versus-host disease (GVHD) have been accepted for presentation within the Presidential Symposium of the 46th annual meeting of the European Society for Blood and Marrow Transplantation (EBMT, March 22-25). As previously announced, the trial, which was conducted in collaboration with Novartis, met its primary endpoint of improving overall response rate (ORR) at Day 28 with ruxolitinib treatment compared to BAT.
REACH3, the Phase 3 trial of ruxolitinib in patients with steroid-refractory chronic GVHD being run in collaboration with Novartis, is ongoing and results are expected in the second half of 2020. If successful, and if approved, steroid-refractory chronic GVHD would be the fourth Jakafi indication available to patients in the US.
In January, it was announced that GRAVITAS-301, the Phase 3 trial of itacitinib as a treatment for patients with newly diagnosed acute GVHD, did not meet the primary endpoint.
Clinical development of itacitinib also includes GRAVITAS-309, a Phase 3 trial of itacitinib as a treatment for patients with newly diagnosed chronic GVHD.
In November, the FDA accepted the New Drug Application (NDA) for pemigatinib in second-line cholangiocarcinoma for Priority Review. The Prescription Drug User Fee Act (PDUFA) target action date is May 30, 2020. In early January, Incyte announced that the Marketing Authorization Application (MAA) seeking approval in Europe for pemigatinib as a second-line treatment for cholangiocarcinoma patients with FGFR2 fusions or rearrangements was validated by the EMA.
The CITADEL program is evaluating parsaclisib as a monotherapy across three types of non-Hodgkin lymphoma: follicular lymphoma; marginal zone lymphoma; and mantle cell lymphoma.
Clinical development of INCMGA0012 includes ongoing evaluation as a monotherapy in niche cancer opportunities as well as a planned program for the first-line treatment of patients with non-small cell lung cancer (NSCLC).
Incyte recently announced a global collaboration with MorphoSys for the development and commercialization of tafasitamab, an anti-CD19 monoclonal antibody. Pending clearance by antitrust authorities, the collaboration agreement is expected to become effective in the first half of 2020.
1)Clinical development of ruxolitinib in GVHD conducted in collaboration with Novartis
2)INCMGA0012 licensed from MacroGenics
Inflammation and Autoimmunity (IAI) – key highlights
TRuE-AD2, the first of two Phase 3 trials in the TRuE-AD development program of ruxolitinib cream in patients with mild-to-moderate atopic dermatitis, met its primary endpoint. The overall efficacy and safety profile observed in TRuE-AD2 was consistent with previous data, and no new safety signals were observed.
The results of TRuE-AD1, the second of two Phase 3 trials required for regulatory submission, are anticipated to be available in the first quarter of 2020. The NDA submission, seeking approval of ruxolitinib cream in atopic dermatitis, is expected in the fourth quarter of 2020 following long-term safety and efficacy data from both pivotal trials.
The two Phase 3 trials in the TRuE-V pivotal program evaluating ruxolitinib cream in patients with vitiligo are recruiting well and results are expected in 2021.
Phase 2 trials of INCB54707 in hidradenitis suppurativa and parsaclisib in autoimmune hemolytic anemia are progressing as planned.
The clinical program of INCB00928, Incyte’s ALK2 inhibitor, is in preparation in patients with fibrodysplasia ossificans progressiva, a disorder in which muscle tissue and connective tissue such as tendons and ligaments are gradually replaced by bone.
The Phase 2 trial of low-dose itacitinib in patients with ulcerative colitis has been discontinued, and initial data from the clinical evaluation of parsaclisib in patients with Sjögren’s syndrome did not warrant continuation of the trial.
Discovery and early development – key highlights
Incyte’s portfolio of earlier-stage clinical candidates is summarized below.
1)INCB01158 development in collaboration with Calithera
2)Discovery collaboration with Agenus
3)MCLA-145 development in collaboration with Merus
Partnered – key highlights
In January, Incyte and Lilly announced initial results of BREEZE-AD4 and BREEZE-AD5, the final two trials in the pivotal program evaluating baricitinib in patients with moderate-to-severe atopic dermatitis. Lilly recently submitted baricitinib for regulatory review in Europe as a treatment for patients with moderate-to-severe atopic dermatitis, and has announced plans to submit for approval in the U.S. and Japan in 2020.
In February, Incyte and Novartis announced that the NDA for capmatinib was accepted for Priority Review by the FDA, seeking approval in patients with NSCLC and MET exon 14 skipping mutations.
(MET)2NSCLC (with MET exon 14 skipping mutations): NDA submitted (by Novartis)
1)Worldwide rights to baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis
2)Worldwide rights to capmatinib licensed to Novartis
2019 Fourth Quarter and Year-End Financial Results
The financial measures presented in this press release for the quarter and year ended December 31, 2019 and 2018 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.
Beginning in the first quarter of 2019, after reviewing our Reconciliation of GAAP Net Income to Selected Non-GAAP Adjusted Information with the U.S. Securities & Exchange Commission, we no longer adjust for upfront consideration and milestones that are part of collaboration agreements with new or existing partners. This revised methodology is reflected in this press release for the quarter and year ended December 31, 2019 and 2018.
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.
Research and development expenses GAAP and Non-GAAP research and development expense for the quarter ended December 31, 2019 increased 3% and 2%, respectively, compared to the same periods in 2018. This increase was primarily due to our existing pipeline programs progressing to later stages of development and was partially offset by our election to end additional co-funding of development of baricitinib with Lilly effective as of January 1, 2019. GAAP and Non-GAAP research and development expense for the year ended December 31, 2019 decreased 4% and 5%, respectively, compared to the same periods in 2018, primarily due to our election to end additional co-funding of the development of baricitinib and a decrease in upfront and milestone expenses related to collaborative agreements.
Selling, general and administrative expenses GAAP and Non-GAAP selling, general and administrative expenses for the quarter ended December 31, 2019 increased 26% and 27%, respectively, and for the year ended December 31, 2019 increased 8% compared to the same period in 2018, primarily due to the growth in commercialization efforts related to Jakafi.
Other Financial Information
Operating income GAAP and Non-GAAP operating income increased for the quarter and year ended December 31, 2019 compared to the same periods in 2018 due to the growth in total revenues exceeding the growth in operating expenses.
Cash, cash equivalents and marketable securities position As of December 31, 2019 and 2018, cash, cash equivalents and marketable securities totaled $2.1 billion and $1.4 billion, respectively.
2020 Financial Guidance
The Company’s 2020 financial guidance as detailed below excludes the financial impact of the recently announced collaboration with MorphoSys, which is pending clearance by antitrust authorities. In addition, the 2020 financial guidance does not include the impact of any potential future strategic transactions.
Conference Call and Webcast Information
Incyte will hold a conference call and webcast this morning at 8:00 a.m. EST. 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, 13698234.
If you are unable to participate, a replay of the conference call will be available for 30 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, 13698234.
The conference call will also be webcast live and can be accessed at investor.incyte.com.