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Incyte stock popped Tuesday after the biotech
easily topped first-quarter earnings and sales forecasts, though revenue from cancer treatment Jakafi was light.XShares of Incyte (INCY) jumped 3.3%, to 76.80, on today's stock market. Volume was higher than average.Incyte stock has toppled 10.7% this month amid far-reaching worries of a "Medicare for All" proposal. Shares have a Composite Rating of 93 out of a best-possible 99. The CR is an overall score of a stock's key fundamental and technical factors. Incyte stock ranks in the top 7% of all stocks.RBC Capital Markets analyst Brian Abrahams noted the slight miss in first-quarter Jakafi sales was offset by positive Phase 2 data for Jakafi cream as a skin-condition treatment. The biotech also opted out of a codevelopment deal with Eli Lilly (LLY) for arthritis drug Olumiant.The latter news was "not a huge surprise," he said in a report to clients. Lilly will fund continued development of Olumiant on its own. As a result Incyte will receive a lower royalty on Olumiant sales. This will give Incyte "incrementally greater financial flexibility," Abrahams said.Incyte Earnings, Sales Beat ConsensusFor the first quarter ended March 31, adjusted Incyte earnings were 62 cents per share, turning around from a 7-cent per-share loss in the year-earlier period. That topped estimates from analysts polled by Zacks Investment Research, which called for Incyte earnings of 40 cents a share.Sales flew 30.2% to $497.86 million, far above expectations for $476 million. But revenue from cancer treatment Jakafi was short at $376 million. Jakafi sales advanced 20% year over year. Analysts called for Jakafi sales of $384 million, Abrahams said.However, Incyte reiterated its outlook for $1.58 billion to $1.65 billion in full-year sales of the cancer treatment."We believe the (first-quarter) miss was likely primarily due to seasonal gross/net unfavorability," Abrahams said.Further, Incyte received $46 million in royalties on Jakavi, the same drug by a slightly different name. That was slightly below analyst estimates for $51 million in Jakavi royalties, though royalties grew 12.2% year over year. Novartis (NVS) sells Jakavi outside the U.S.Incyte Stock Bounds On Olumiant DealAbrahams expected the restructured deal with Lilly for Olumiant to be well received. Olumiant treats rheumatoid arthritis and belongs to a class of medicines called janus kinase, or JAK, inhibitors. Lilly is also testing the drug in eczema, lupus and alopecia.But the competitive landscape for JAK inhibitors is stout. Pfizer's (PFE) Xeljanz is also a JAK inhibitor that treats rheumatoid arthritis and ulcerative colitis. Pfizer is also testing Xeljanz as a treatment for another form of arthritis called ankylosing spondylitis.Safety issues for Xeljanz could hurt the JAK inhibitor class.In February, the Food and Drug Administration reported an increased risk of blood clots and death for patients taking a 10-milligram dose of Xeljanz. Xeljanz is only approved at a 5-milligram twice daily dose in rheumatoid arthritis. But Xeljanz is available as a higher dose for ulcerative colitis.As a result, Abrahams sees a diminishing likelihood a higher dose of Olumiant will grab approval in rheumatoid arthritis. So, opting out of further Olumiant development "may be more favorable now given the drug's growing limitations, and we believe it could help conserve some cash," he said.Follow Allison Gatlin on Twitter at @IBD_AGatlin.YOU MIGHT ALSO LIKE:Why Novartis Earnings Provided A Bullish Signal For This Biotech StockGut Check: The Bacteria In Your Intestines Could Help Cure CancerShort-Term Trades Can Add Up To Big Profits. IBD's SwingTrader Shows You HowLooking For The Next Apple Or Amazon? Start With These S&P 500-Beating ListsHow To Buy Stocks Online: A Step-By-Step Guide For BeginnersThe post This Biotech Stock Just Topped Expectations — And Became Profitable appeared first on Investor's Business Daily. Weiter zum vollständigen Artikel bei "Investors Business Daily"
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