Incyte Reports 2012 Fourth-Quarter and Full-Year Financial Results; Provides 2013 Financial Guidance; Updates Shareholders on Key Clinical Programs
Conference Call Scheduled Today at 8:30 a.m. ET
Incyte Corporation (Nasdaq: INCY) today reported fourth-quarter and
full-year 2012 financial results, including revenue from Jakafi®
(ruxolitinib), which is approved by the U.S. Food & Drug Administration
(FDA) for the treatment of patients with intermediate or high-risk
myelofibrosis (MF). The Company also provided 2013 financial guidance
and updated information about key clinical programs, including key Phase
III data for Jakafi that was presented at the 2012 American Society of
Hematology (ASH) Annual Meeting.
“The recent data from ASH highlighting long-term results from COMFORT-I
and II show that continued use of Jakafi by appropriate patients with
myelofibrosis not only provides durable benefits for spleen reduction
and symptom improvement, but also improved survival, suggesting an
overall survival benefit,” stated Paul A. Friedman, M.D., Incyte’s
President and Chief Executive Officer. “I believe these data, over time,
will lead to earlier use in the course of this progressive disease.”
“We are very pleased with our quarter over quarter growth in underlying
demand, which was 17 percent,” stated Jim Daly, Incyte’s Executive Vice
President and Chief Commercial Officer. “Given the solid foundation
we’ve established for Jakafi, I’m confident that we’ll continue to see
consistent growth over the next several years and have set net product
revenue guidance for 2013 in the range of $210 million to $225 million.”
2012 Fourth-Quarter and Full-Year Financial Results
Cash Position
As of December 31, 2012, cash, cash equivalents and marketable
securities totaled $228.4 million compared to $277.6 million as of
December 31, 2011. The December 31, 2012, amount does not include the
$50.0 million milestone payment from Lilly for the advancement of
baricitinib into Phase III clinical trials, which was earned in the
fourth-quarter of 2012 and received in January 2013.
Product Revenues and Royalties
For the quarter and full year ended December 31, 2012, net product
revenues of Jakafi were $43.3 million and $136.0 million, respectively.
For the same periods in 2011, net product revenues were $2.0 million,
which represents product revenues from the launch of Jakafi on November
22, 2011, to December 31, 2011. Product royalties from sales of Jakavi®
outside the United States by our collaboration partner Novartis for the
quarter and full year ended December 31, 2012, were $3.7 million; there
were no product royalties earned in 2011.
Total Revenues
Total revenues for the quarter ended December 31, 2012, were $113.8
million as compared to $28.9 million for the same period in 2011. Total
revenues for the full year ended December 31, 2012, were $297.1 million
as compared to $94.5 million for the same period in 2011. The increase
in total revenue from 2011 to 2012 was primarily related to a full year
of Jakafi product revenue, $90.0 million in milestone payments earned
under our collaborations with Eli Lilly and Novartis, and $3.7 million
of Jakavi product royalties from Novartis. Total revenues for the full
year ended December 31, 2011, included $25.0 million in milestone
payments received under our collaboration with Novartis.
Net Income/Loss
Quarter Ended December 31, 2012
Net income for the quarter ended December 31, 2012, was $18.8 million,
or $0.14 per basic and diluted share, as compared to a net loss of $55.1
million, or $0.44 per basic and diluted share, for the same period in
2011. The change from a net loss in the fourth quarter of 2011 to net
income in the fourth quarter of 2012 is primarily due to a full quarter
of Jakafi product revenues and a $50.0 million milestone payment earned
under our collaboration with Lilly related to baricitinib.
Year Ended December 31, 2012
Net loss for the full year 2012 was $44.3 million, or $0.34 per basic
and diluted share as compared to a net loss of $186.5 million, or $1.49
per basic and diluted share, for the full year 2011. The decrease in net
loss from 2011 to 2012 is primarily due to a full year of Jakafi product
revenue and $90.0 million in milestone payments earned under our
collaborations with Lilly and Novartis.
Non-Cash Stock Option Expense
Included in net income for the quarter ended December 31, 2012, was $9.1
million of non-cash expense related to employee stock options, of which
$6.0 million was included in research and development expenses and $3.1
million was included in selling, general and administrative expenses.
Included in net loss for the quarter ended December 31, 2011, was $7.4
million of non-cash expense related to employee stock options, of which
$4.6 million was included in research and development expenses and $2.8
million was included in selling, general and administrative expenses.
Included in net loss for the year ended December 31, 2012, was $38.5
million of non-cash expense related to employee stock options, of which
$25.5 million was included in research and development expenses and
$13.0 million was included in selling, general and administrative
expenses. Included in net loss for the year ended December 31, 2011, was
$29.0 million of non-cash expense related to employee stock options, of
which $18.6 million was included in research and development expenses
and $10.4 million was included in selling, general and administrative
expenses.
Operating Expenses
Research and development expenses for the quarter ended December 31,
2012, were $59.8 million, as compared to $51.9 million for the same
period in 2011. Research and development expenses for the full year 2012
were $210.4 million, as compared to $178.7 million for 2011.
The increase in research and development expenses for the quarter and
full year ended December 31, 2012, compared to the comparable prior year
periods was due to the advancement of the Company’s pipeline and
increased non-cash employee stock option expense. The Company expects
its research and development expenses to vary from period to period,
primarily due to the timing of its clinical development activities.
Selling, general and administrative expenses for the quarter ended
December 31, 2012, were $23.7 million, as compared to $21.2 million for
the same period in 2011. Selling, general and administrative expenses
for the full year 2012 were $85.4 million, as compared to $58.2 million
for 2011.
Increased selling, general and administrative expenses for the quarter
and full year ended December 31, 2012, compared to the comparable prior
year periods reflected the additional costs related to the
commercialization of Jakafi.
Interest Expense
Interest expense for the quarter and full year ended December 31, 2012,
was $11.8 million and $46.1 million, respectively, as compared to $11.2
million and $43.8 million for the comparable periods in 2011. Included
in interest expense for the quarter and the year ended December 31,
2012, was $7.0 million and $27.1 million, respectively, of non-cash
charges to amortize the discount on the Company’s 4.75% Convertible
Senior Notes due 2015, as compared to $6.4 million and $24.8 million for
the same periods in 2011. Increased interest expense for the full year
2012 is primarily attributable to the accretion of the discount related
to the 4.75% Convertible Senior Notes.
2013 Financial Guidance
-
Product Revenues: The Company expects that Jakafi net product revenues
will be in the range of $210 million to $225 million. This range
excludes any product royalty revenues received from Novartis on sales
of Jakavi.
-
Contract Revenues: The Company expects to receive a $60 million
milestone payment under its collaboration with Novartis when European
Union pricing approval for Jakavi in specific countries is received.
Excluding any other potential milestones received under
collaborations, the Company expects revenues of $66 million from the
amortization of the upfront payments received under the Novartis and
Lilly collaborative agreements.
-
Research and Development Expenses: The Company expects that research
and development expenses will be in the range of $260 million to $270
million, including a non-cash expense of approximately $25 million to
$28 million related to the impact of expensing employee stock options.
The increase in research and development expense is primarily the
result of co-development of baricitinib in Phase III studies in
rheumatoid arthritis with Lilly and broad investment expected in our
clinical pipeline to support multiple ongoing research and development
activities.
-
Selling, General and Administrative Expenses: The Company expects
selling, general and administrative expenses to be in the range of
$100 million to $110 million, including a non-cash expense of
approximately $14 million to $17 million related to the impact of
expensing employee stock options. The increase in selling, general and
administrative expenses is primarily the result of additional programs
to support the ongoing commercialization of Jakafi.
-
Interest Expense: The Company expects interest expense to be
approximately $47 million, including a non-cash expense of $28 million
related primarily to the amortization of the discount on the 4.75%
Convertible Senior Notes.
Recent Clinical Highlights
Jakafi® (ruxolitinib) - a JAK1 and JAK2 Inhibitor
The use of Jakafi to treat patients with intermediate or high-risk
myelofibrosis (MF) is further supported by presentations made at the
American Society of Hematology annual meeting in December 2012,
including updates from COMFORT-I and COMFORT-II. The long-term results
from COMFORT-I, which compared Jakafi to placebo, showed that continued
use of Jakafi provided durable reductions in spleen volume, durable
improvements in quality of life measures and improved survival,
suggesting an overall survival advantage. The COMFORT-II two-year
follow-up showed a similar increase in survival for patients initially
randomized to Jakafi compared to those randomized to best available
therapy.
Data presented at ASH included results from a three-year follow-up of
patients with polycythemia vera (PV) in a Phase II study, showing that
ruxolitinib treatment resulted in durable overall response rates by
modified European Leukemia Net criteria and improvements in PV-related
symptoms.
Two Phase III clinical trials (RESPONSE and RELIEF), in partnership with
Novartis, are underway to evaluate ruxolitinib in patients with PV, and
results are expected to be part of a supplemental new drug application
submission in 2014. The FDA has granted fast track designation for PV,
specifically for the treatment of patients with PV who are resistant to
or intolerant of hydroxyurea. Recruitment of the RESPONSE study has been
completed.
A randomized Phase II trial of ruxolitinib in combination with
capecitabine is fully enrolled with approximately 135 patients with
recurrent or treatment refractory metastatic pancreatic cancer (the
RECAP trial), with final results expected in the second half of 2013.
Multiple investigator-sponsored trials evaluating ruxolitinib are
ongoing, including two Phase I/II trials in adults with advanced
hematologic malignancies (acute myeloid leukemia, acute lymphocytic
leukemia, myelodysplastic syndrome and chronic myelogenous leukemia) and
relapsed or refractory acute leukemia; a Phase I/II trial in children
with hematologic malignancies and solid tumors; and a Phase II trial in
patients with lymphoma. In addition, two of several planned
investigator-sponsored Phase II trials to evaluate ruxolitinib in
treating patients with breast cancer have been initiated.
Baricitinib - a JAK1 and JAK2 Inhibitor
Data from the six-month Phase IIb trial of baricitinib in patients with
rheumatoid arthritis, conducted by our collaboration partner Eli Lilly,
were presented at the American College of Rheumatology Annual Scientific
Meeting in November 2012. Positive results from the 12- to 24-week
portion of the study, which did not include continuation of the placebo
control past week 12, showed that patients who received 2 mg, 4 mg or 8
mg baricitinib once-daily doses maintained or improved ACR20, ACR50 and
ACR70 responses.
The Phase III program to evaluate baricitinib in patients with
rheumatoid arthritis, conducted by Lilly, started randomized treatments
in November 2012.
A Phase IIb trial in patients with moderate to severe psoriasis,
conducted by Lilly, is ongoing with primary endpoint results expected in
2013.
A Phase II trial in patients with diabetic nephropathy, conducted by
Lilly, was initiated in August 2012, and results are expected in 2014.
INCB28060 (also known as INC280) – a c-MET Inhibitor
The initial Phase I trial in patients with solid tumors has been
completed. This compound is licensed to Novartis as part of the
Incyte-Novartis collaboration, and further development will be conducted
by Novartis.
INCB24360 – an Indoleamine Dioxygenase-1 (IDO1) Inhibitor
INCB24360 is currently in Phase I/II clinical development for metastatic
melanoma in combination with ipilimumab and as monotherapy for ovarian
cancer.
Early-Stage Development and Discovery Programs
Several early development and discovery programs in oncology and
inflammation are also ongoing.
Conference Call Information
Incyte will hold its fourth-quarter 2012 financial results conference
call this morning at 8:30 a.m. ET. To access the conference call, please
dial 877-407-8037 for domestic callers or 201-689-8037 for international
callers. When prompted, provide the conference identification number,
407848.
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, 407848.
The conference call will also be webcast live and can be accessed at www.incyte.com
under Investor Relations – Events and Webcasts.
About Incyte
Incyte Corporation is a Wilmington, Delaware-based biopharmaceutical
company focused on the discovery, development and commercialization of
proprietary small molecule drugs for oncology and inflammation. For
additional information on Incyte, please visit the Company’s website at www.incyte.com.
About Jakafi
Jakafi is a prescription medicine used to treat people with intermediate
or high-risk myelofibrosis (MF), including primary MF, post–polycythemia
vera MF and post–essential thrombocythemia MF.
Important Safety Information
-
Treatment with Jakafi can cause hematologic adverse reactions,
including thrombocytopenia, anemia and neutropenia, which are each
dose-related effects, with the most frequent being thrombocytopenia
and anemia. A complete blood count must be performed before initiating
therapy with Jakafi. Complete blood counts should be monitored as
clinically indicated and dosing adjusted as required. The three most
frequent non-hematologic adverse reactions were bruising, dizziness
and headache
-
Patients with platelet counts <200 × 109/L at the start
of therapy are more likely to develop thrombocytopenia during
treatment. Thrombocytopenia was generally reversible and was usually
managed by reducing the dose or temporarily withholding Jakafi. If
clinically indicated, platelet transfusions may be administered
-
Patients developing anemia may require blood transfusions. Dose
modifications of Jakafi for patients developing anemia may also be
considered
-
Neutropenia (ANC <0.5 × 109/L) was generally reversible
and was managed by temporarily withholding Jakafi
-
Patients should be assessed for the risk of developing serious
bacterial, mycobacterial, fungal and viral infections. Active serious
infections should have resolved before starting Jakafi. Physicians
should carefully observe patients receiving Jakafi for signs and
symptoms of infection (including herpes zoster) and initiate
appropriate treatment promptly
-
A dose modification is recommended when administering Jakafi with
strong CYP3A4 inhibitors or in patients with renal or hepatic
impairment [see Dosage and Administration]. Patients should be
closely monitored and the dose titrated based on safety and efficacy
-
There are no adequate and well-controlled studies of Jakafi in
pregnant women. Use of Jakafi during pregnancy is not recommended and
should only be used if the potential benefit justifies the potential
risk to the fetus
-
Women taking Jakafi should not breast-feed. Discontinue nursing or
discontinue the drug, taking into account the importance of the drug
to the mother
For Full Prescribing Information for Jakafi, visit www.Jakafi.com.
Forward-Looking Statements
Except for the historical information set forth herein, the matters set
forth in this press release, including without limitation statements
regarding financial guidance about expected net product revenues,
contract revenues, research and development expenses, selling, general
and administrative expenses and interest expense, expectations regarding
variations in research and development expenses, our plans and
expectations with respect to Jakafi (ruxolitinib), including the
potential efficacy and therapeutic and commercial value of Jakafi, our
expectation regarding continued consistent growth, our expectation that
results from the RESPONSE and RELIEF trials are expected to be part of a
sNDA submission in 2014, our expectation of final results from the RECAP
trial in the second half of 2013, and our expectation that results from
the trials conducted by our collaboration partner Eli Lilly evaluating
baricitinib in patients with moderate to severe psoriasis and diabetic
nephropathy will be available in 2013 and 2014, respectively, contain
predictions, estimates and other forward-looking statements.
These forward-looking statements are based on Incyte’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 efficacy or safety of Jakafi,
the acceptance of Jakafi in the marketplace, risks related to market
competition, the results of further research and development, risks and
uncertainties associated with sales, marketing and distribution
requirements, risks that results of clinical trials may be unsuccessful
or insufficient to meet applicable regulatory standards, the ability to
enroll sufficient numbers of subjects in clinical trials, other market
or economic factors and technological advances, unanticipated delays,
the ability of Incyte to compete against parties with greater financial
or other resources, risks associated with Incyte's dependence on its
relationships with its collaboration partners, and other risks detailed
from time to time in Incyte’s reports filed with the Securities and
Exchange Commission, including our Form 10-Q for the quarter ended
September 30, 2012.
Incyte disclaims any intent or obligation to update these
forward-looking statements.
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INCYTE CORPORATION
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Condensed Consolidated Statements of Operations
|
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(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product revenues, net
|
|
$
|
43,301
|
|
|
$
|
2,012
|
|
|
$
|
136,001
|
|
|
$
|
2,012
|
|
|
Product royalty revenues
|
|
|
3,652
|
|
|
|
—
|
|
|
|
3,652
|
|
|
|
—
|
|
|
Contract revenues
|
|
|
66,737
|
|
|
|
26,737
|
|
|
|
156,948
|
|
|
|
91,948
|
|
|
Other revenues
|
|
|
155
|
|
|
|
140
|
|
|
|
458
|
|
|
|
495
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
113,845
|
|
|
|
28,889
|
|
|
|
297,059
|
|
|
|
94,455
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
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Cost of product revenues
|
|
|
99
|
|
|
|
—
|
|
|
|
157
|
|
|
|
—
|
|
|
Research and development
|
|
|
59,763
|
|
|
|
51,877
|
|
|
|
210,391
|
|
|
|
178,707
|
|
|
Selling, general and administrative
|
|
|
23,729
|
|
|
|
21,152
|
|
|
|
85,363
|
|
|
|
58,219
|
|
|
Other expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
712
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
83,591
|
|
|
|
73,029
|
|
|
|
295,911
|
|
|
|
237,638
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
30,254
|
|
|
|
(44,140
|
)
|
|
|
1,148
|
|
|
|
(143,183
|
)
|
|
Interest and other income, net
|
|
|
371
|
|
|
|
213
|
|
|
|
764
|
|
|
|
462
|
|
|
Interest expense
|
|
|
(11,765
|
)
|
|
|
(11,153
|
)
|
|
|
(46,058
|
)
|
|
|
(43,819
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
18,860
|
|
|
|
(55,080
|
)
|
|
|
(44,146
|
)
|
|
|
(186,540
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
81
|
|
|
|
—
|
|
|
|
174
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
18,779
|
|
|
$
|
(55,080
|
)
|
|
$
|
(44,320
|
)
|
|
$
|
(186,540
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.14
|
|
|
$
|
(0.44
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(1.49
|
)
|
|
Diluted
|
|
$
|
0.14
|
|
|
$
|
(0.44
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(1.49
|
)
|
|
Shares used in computing basic and diluted net income (loss) per
share
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic
|
|
|
131,711
|
|
|
|
126,388
|
|
|
|
129,747
|
|
|
|
125,362
|
|
|
Diluted
|
|
|
139,118
|
|
|
|
126,388
|
|
|
|
129,747
|
|
|
|
125,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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INCYTE CORPORATION
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Condensed Consolidated Balance Sheet Data
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Cash, cash equivalents, and short-term marketable securities
|
|
$
|
228,418
|
|
|
$
|
277,594
|
|
|
Accounts receivable, net
|
|
|
70,951
|
|
|
|
6,415
|
|
|
Total assets
|
|
|
330,419
|
|
|
|
328,962
|
|
|
Convertible senior notes(1)
|
|
|
322,043
|
|
|
|
298,193
|
|
|
Convertible subordinated notes
|
|
|
9,033
|
|
|
|
17,960
|
|
|
Total stockholders’ deficit
|
|
|
(174,957
|
)
|
|
|
(227,077
|
)
|
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(1) Net of unamortized debt discount of $78.0 million and $101.8 million
at December 31, 2012, and December 31, 2011, respectively.
