Incyte Corporation Update Target Price $79

INCY : NASDAQ : US$62.42
Target: US$79.00

Incyte is a drug development company focused on
discovering and developing novel, small-molecule drugs
for the treatment of cancer and inflammatory diseases.
INCY’s lead product is Jakafi, a JAK1/2 inhibitor
partnered with NVS, which is approved for the treatment
of myelofibrosis in the U.S., and is being developed for
the treatment polycythemia vera (in P3) and other
indications. Incyte is headquartered in Wilmington, DE

Life Sciences — Biotechnology
The new
CEO Hervé Hoppenot, who stated his decision to join the company was
driven by his passion for the discovery-driven treatment approach and
multiple pipeline angles – aided by his unique vantage point as a partner
(NVS for Jakafi). Investor focus was on the MF landscape (competitors are >3
years behind), expectations for Jakafi for PV (we expect positive P3 data in
mid-H1) and data at ASCO (May 30 – June 3), specifically P1/2 INCB24360
(IDO) for melanoma and full P2 Jakafi for pancreatic cancer (biomarkerdefined
subset may be announced earlier). We view INCY as a top pick for
2014 on positive data/pipeline progress – and are now attributing $1.5B
($9/share) to the remainder of the pipeline (IDO (360), JAK1s (110 and 986),
c-MET (060) and PI3K-delta (093)).
 We would own INCY into ASCO: A key focus was on the IDO 360,
particularly P1/2 data at ASCO in combination with Yervoy for melanoma.
Three cohorts (~20 patients) will be evaluable, with a fourth in progress.
While they see anti-PD-1/PD-L1s as natural partners for combination with
360 (discussions ongoing, although no patients have been dosed in
combination to date), competition with Yervoy is possible given a better
efficacy/safety profile. The focus of P2 Jakafi data in pancreatic cancer will
be on the identity of the pre-specified subgroup (related to inflammation;
between 30-70% of cancers fall into the category).
 2019 from 87K patients at launch. Given recent sales force hires, no
additional expansion for PV is expected.



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