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Monday, RBC Capital analysts maintained a Sector Perform rating and a $68.00 price target on Incyte Corporation (NASDAQ:INCY), a $13.1 billion biopharmaceutical company with annual revenues of $4.2 billion, following the release of Phase III trial results for the company’s drug candidate, povo, in treating Hidradenitis Suppurativa (HS). According to InvestingPro data, the company has demonstrated strong revenue growth of 14.8% over the last twelve months. The trial showed a statistically significant benefit in the HiSCR50 endpoint, albeit with a lower efficacy than some had anticipated.
Incyte reported top-line data showing a 10.5-13.7% improvement in HiSCR50 with the 45mg dose, and a 10.9-13.7% improvement with the 75mg dose. These results were slightly below expectations, with the placebo response and drug effect aligning closely with RBC Capital’s predictions. The company believes the data are sufficient to support regulatory submission.
Analysts at RBC Capital highlighted that the drug’s performance was stronger in patients who had previously been treated with biologics, suggesting povo may find its place as a later-line treatment option. They predict a market penetration of around 20% in this segment, leading to worldwide sales of approximately $600 million, compared to the consensus estimate of $1.2 billion. Based on InvestingPro’s Fair Value analysis, Incyte appears to be currently undervalued, with 12 additional exclusive ProTips available to subscribers.
The safety profile of povo remained consistent with no new safety signals, which was expected given the short duration of the trial. RBC Capital anticipates that the consensus estimate for sales may decrease slightly due to the drug’s potential positioning as a treatment option after other biologics.
In conclusion, the analysts expect the stock to show modest weakness following the data release but maintain a neutral stance on Incyte shares. They await further details on key secondary endpoints, such as HiSCR75 and NRS scores, which may be presented at future medical meetings. The company maintains a strong financial position with more cash than debt on its balance sheet and a healthy current ratio of 1.97. For comprehensive analysis including detailed financial metrics and growth prospects, investors can access the full Pro Research Report available on InvestingPro.
In other recent news, Incyte Corporation announced successful results from its Phase 3 STOP-HS clinical trials for povorcitinib, an oral treatment for moderate to severe hidradenitis suppurativa (HS). The trials met their primary endpoints, showing significant improvement in symptoms compared to placebo, with a rapid onset of response and consistent safety profile. Incyte plans to submit these results for regulatory approval worldwide. Additionally, Incyte has entered a strategic collaboration with Genesis Therapeutics to utilize its AI platform for developing new small molecule drugs, with Genesis receiving an upfront payment of $30 million and potential milestone payments.
In the realm of analyst ratings, TD Cowen maintained a Buy rating for Incyte with a price target of $88, following positive results from the TRuE-PN1 trial for Opzelura, a treatment for prurigo nodularis. Meanwhile, JMP Securities maintained a Market Perform rating, emphasizing Incyte’s strong financial position and balanced view of recent trial outcomes. Despite the mixed results from the TRuE-PN2 trial, analysts noted the potential for Opzelura’s off-label use. These developments highlight Incyte’s ongoing efforts in drug development and strategic collaborations.
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