Incyte settles royalty dispute with Novartis for $280 million

WILMINGTON, DE—Incyte Corporation (NASDAQ:INCY), a pharmaceutical company with a market capitalization of $11.77 billion and strong financial health according to InvestingPro analysis, has reached a settlement with Novartis (SIX:NOVN) Pharma AG concerning a dispute over royalty payments, according to a recent SEC filing. The agreement, dated May 11, 2025, resolves litigation initiated by Novartis related to the duration of royalties owed by Incyte under a 2009 collaboration and license agreement.

As part of the settlement, Incyte will pay Novartis $280 million to settle disputed royalties on net sales of the drug JAKAFI in the United States up to December 31, 2024. With a current ratio of 2.04 and minimal debt-to-equity ratio of 0.01, the company appears well-positioned to handle this payment. Additionally, the parties have agreed to a 50% reduction in the royalty rate for future net sales of JAKAFI in the United States starting January 1, 2025, for a period specified in the agreement. The reduced royalty amount for the first quarter of 2025 is approximately $14.9 million.

Prior to the settlement, Incyte’s accrued royalties in contention totaled around $537.1 million, as recorded on the company’s condensed consolidated balance sheet as of March 31, 2025. The settlement will result in a $242.2 million difference between the accrued royalties and the settlement amount, which will be reflected in Incyte’s condensed consolidated statement of operations for the quarter ending June 30, 2025.

The settlement effectively brings to a close the ongoing royalty payment dispute between Incyte and Novartis, providing clarity on the financial obligations of Incyte for sales of JAKAFI in the U.S. market. With revenue growth of 17.13% in the last twelve months and its next earnings report due on August 5, 2025, investors can access comprehensive analysis and additional insights through InvestingPro’s detailed research reports, which cover over 1,400 US stocks including Incyte. The information in this article is based on a press release statement.

In other recent news, Incyte Corporation reported strong first-quarter 2025 financial results, exceeding Wall Street expectations. The company achieved an earnings per share of $1.16, surpassing the projected $1.04, and recorded revenue of $1.05 billion, which was higher than the anticipated $990.99 million. Jakafi, a key product for Incyte, generated revenues of $709 million, outperforming both BofA Securities’ estimate of $634 million and the consensus of $641 million. Despite a 27% quarter-over-quarter decline in Opzelura revenues, Incyte remains optimistic about its growth, particularly with plans to expand into pediatric atopic dermatitis later this year. Furthermore, Incyte has increased its full-year 2025 revenue guidance for Jakafi to a range of $2.95 to $3 billion. BofA Securities raised the price target for Incyte shares from $87 to $89, maintaining a Buy rating, reflecting confidence in the company’s market position. Additionally, the successful launch of Nictimvo in the third-line chronic GVHD market and the anticipation of further product launches in 2025 highlight Incyte’s strategic initiatives to drive future growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.