WILMINGTON, Del.--(BUSINESS WIRE)--Incyte Corporation (Nasdaq:INCY) today reports 2019 third quarter financial results and provides a status update on the Company’s development portfolio.

“Revenue growth continues to be very strong, driven by robust demand for Jakafi (ruxolitinib) in all three approved indications and, as a result, we are raising guidance for full year Jakafi net sales,” stated Hervé Hoppenot, Chief Executive Officer, Incyte. “At the beginning of 2019, we laid out an ambitious set of development goals for our late-stage portfolio, and in the third quarter we have continued to execute against them. The recent clinical success in the REACH2 trial of ruxolitinib in steroid-refractory acute GVHD; the updated data from pemigatinib in cholangiocarcinoma and subsequent NDA submission; and the recently-presented 52-week data from the randomized Phase 2 trial of ruxolitinib cream in vitiligo are all illustrative of the significant progress we have made this year.”

Portfolio Update

Oncology – key highlights

The positive result of REACH2, the Phase 3 study evaluating ruxolitinib in patients with steroid-refractory acute graft-versus-host disease (GVHD), was announced in October. The study met its primary endpoint of superior overall response rate (ORR) at Day 28 with ruxolitinib treatment compared to best available therapy. No new safety signals were observed, and the ruxolitinib safety profile in REACH2 was consistent with that seen in previously reported studies in steroid-refractory acute GVHD.

A recent interim efficacy and safety analysis conducted by an Independent Data Monitoring Committee (IDMC) recommended that the Phase 3 REACH3 trial of ruxolitinib in patients with steroid-refractory chronic GVHD should continue without modification. The result of REACH3 is expected in 2020.

The top-line result from GRAVITAS-301, the Phase 3 trial of itacitinib as a treatment for patients with newly diagnosed acute GVHD, is expected to be available at the end of 2019. GRAVITAS-309, a Phase 3 trial of itacitinib as a treatment for patients with newly diagnosed chronic GVHD, was initiated in January of this year with results expected in 2021.

The NDA seeking approval for pemigatinib as a second-line treatment for cholangiocarcinoma patients with FGFR2 fusions or rearrangements was submitted to the U.S. Food and Drug Administration (FDA) under Breakthrough Therapy designation. Data from FIGHT-202, which supported the NDA, were presented at the recent European Society for Medical Oncology (ESMO) Congress.

Enrollment in the continuous dosing cohort of FIGHT-201, the Phase 2 trial of pemigatinib in patients with bladder cancer, is expected to complete by the end of 2019 and FIGHT-207, a Phase 2 solid tumor-agnostic trial evaluating pemigatinib in patients with driver-activations of FGF/FGFR, has been initiated.

2019 Third-Quarter and Year-to-Date Financial Results

The financial measures presented in this press release for the three and nine months ended September 30, 2019 and 2018 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers.

Beginning in the first quarter of 2019, after reviewing our Reconciliation of GAAP Net Income to Selected Non-GAAP Adjusted Information with the U.S. Securities & Exchange Commission, we no longer adjust for upfront consideration and milestones that are part of collaboration agreements with new or existing partners. This revised methodology is reflected in this press release for the three and nine months ended September 30, 2019 and 2018.

Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.

The Company’s 2019 financial guidance related to research and development and selling, general and administrative expenses does not include estimates associated with any potential future strategic transactions.

Revenues

For the quarter ended September 30, 2019, net product revenues of Jakafi were $433 million as compared to $348 million for the same period in 2018, representing 25 percent growth. For the nine months ended September 30, 2019, net product revenues of Jakafi were $1.2 billion as compared to $1.0 billion for the same period in 2018, representing 21 percent growth. For the quarter ended September 30, 2019, net product revenues of Iclusig® (ponatinib) were $21 million as compared to $20 million for the same period in 2018. For the nine months ended September 30, 2019, net product revenues of Iclusig were $66 million as compared to $61 million for the same period in 2018.

For the quarter and nine months ended September 30, 2019, product royalties from sales of Jakavi® (ruxolitinib), which has been out-licensed to Novartis outside of the United States, were $58 million and $161 million, respectively, as compared to $51 million and $139 million, respectively, for the same periods in 2018. For the quarter and nine months ended September 30, 2019, product royalties from sales of Olumiant® (baricitinib), which has been out-licensed to Lilly globally, were $22 million and $57 million, respectively, as compared to $11 million and $26 million, respectively, for the same periods in 2018.

For the quarter and nine months ended September 30, 2019, milestone and contract revenues earned from our collaborative partners were $18 million and $78 million, respectively, as compared to $20 million and $120 million, respectively, for the same periods in 2018.

For the quarter and nine months ended September 30, 2019, total revenues were $552 million and $1.6 billion, respectively, as compared to $450 million and $1.4 billion, respectively, for the same periods in 2018.

Cost of product revenues GAAP cost of product revenues for the quarter and nine months ended September 30, 2019 was $30 million and $82 million, respectively, as compared to $25 million and $68 million, respectively, for the same periods in 2018. Non-GAAP cost of product revenues for the quarter and nine months ended September 30, 2019 was $24 million and $65 million, respectively, as compared to $19 million and $52 million, respectively, for the same periods in 2018. Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation.

Research and development expenses GAAP research and development expenses for the quarter and nine months ended September 30, 2019 were $281 million and $841 million, respectively, as compared to $293 million and $894 million, respectively, for the same periods in 2018. The decrease in GAAP research and development expenses over the prior year quarter and prior year nine month period was driven primarily by our decision to no longer co-fund the development of baricitinib with Lilly and lower costs related to the epacadostat program, partially offset by costs to advance our other internal development programs.

Non-GAAP research and development expenses for the quarter and nine months ended September 30, 2019 were $251 million and $756 million, respectively, including upfront and milestone expenses related to collaborative agreements of $0 million and $25 million, respectively. Non-GAAP research and development expenses for the quarter and nine months ended September 30, 2018 were $266 million and $818 million, respectively, including upfront and milestone expenses related to collaborative agreements of $15 million and $47 million, respectively. Non-GAAP research and development expenses exclude the cost of stock-based compensation.

Selling, general and administrative expenses GAAP selling, general and administrative expenses for the quarter and nine months ended September 30, 2019 were $103 million and $333 million, respectively, as compared to $97 million and $326 million, respectively, for the same periods in 2018.

Non-GAAP selling, general and administrative expenses for the quarter and nine months ended September 30, 2019 were $90 million and $294 million, respectively, as compared to $85 million and $291 million, respectively, for the same periods in 2018. Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation.

Change in fair value of acquisition-related contingent consideration GAAP change in fair value of acquisition-related contingent consideration for the quarter and nine months ended September 30, 2019 and was $3 million and $17 million, respectively, as compared to $5 million and $19 million, respectively, for the same periods in 2018.

Unrealized gain (loss) on long term investments GAAP unrealized gain on long term investments for the quarter and nine months ended September 30, 2019 was $2 million and $19 million, respectively. GAAP unrealized loss on long term investments for the quarter and nine months ended September 30, 2018 was $10 million and $22 million, respectively. The unrealized gain (loss) on long term investments represents the fair market value adjustments of the Company’s investments in Agenus, Calithera, Merus and Syros.

Net income GAAP net income for the quarter ended September 30, 2019 was $128 million, or $0.60 per basic and $0.59 per diluted share, as compared to net income of $29 million, or $0.14 per basic and diluted share for the same period in 2018. GAAP net income for the nine months ended September 30, 2019 was $336 million, or $1.57 per basic and $1.55 per diluted share, as compared to net income of $40 million, or $0.19 per basic and diluted share for the same period in 2018.

Non-GAAP net income for the quarter ended September 30, 2019 was $179 million, or $0.83 per basic and $0.82 per diluted share, as compared to Non-GAAP net income of $87 million, or $0.41 per basic and diluted share for the same period in 2018. Non-GAAP net income for the nine months ended September 30, 2019 was $476 million, or $2.22 per basic and $2.19 per diluted share, as compared to Non-GAAP net income of $208 million, or $0.98 per basic and $0.97 per diluted share for the same period in 2018.

Cash, cash equivalents and marketable securities position As of September 30, 2019 and December 31, 2018, cash, cash equivalents and marketable securities totaled $2.0 billion and $1.4 billion, respectively.

About Incyte

Incyte Corporation is a Wilmington, Delaware-based biopharmaceutical company focused on the discovery, development and commercialization of proprietary therapeutics. For additional information on Incyte, please visit the Company’s website at www.incyte.com.