Incyte Stock Sinks as Sales Forecast for Key Drugs Falls Short

Incyte Corporation (NASDAQ:INCY), a biopharmaceutical company specializing in the development of therapeutics for hematology/oncology and inflammation/autoimmunity, reported its fourth quarter and full-year 2024 financial results on February 10, 2025. While the company's revenue beat analyst estimates, its earnings per share (EPS) missed expectations, leading to a 1.7% decline in its stock price to $75.40 immediately after reporting. The main concern for investors was the lower-than-expected sales forecasts for Incyte's key drugs, Jakafi and Opzelura.

Incyte's revenue for the quarter was $1.18 billion, surpassing Wall Street estimates by 3% and marking a 16.3% year-on-year growth. However, its adjusted EPS of $1.43 missed analyst expectations by 8% and grew only 14.1% annually compared to the 14.5% revenue growth. The company's operating margin improved to 25.6% from 18.5% in the same quarter last year, but its EPS declined by 14.1% annually despite the revenue growth.

The lower-than-expected sales forecasts for Jakafi and Opzelura were a significant factor in the stock price decline. Incyte's guidance for Jakafi net revenues in 2025 is set between $2.925 billion and $2.975 billion, which is below the consensus estimate of $3.05 billion. Similarly, the company's guidance for Opzelura net product revenues in 2025 is $630 million to $670 million, compared to the consensus estimate of $680 million.

Incyte's CEO, Hervé Hoppenot, attributed the lower sales forecasts to increased competition in the market for cancer and inflammatory disorder treatments, rising scrutiny over drug pricing, regulatory unknowns, and competition from larger, more resourced pharmaceutical companies. The company's cash, cash equivalents, and marketable securities totalled $2.16 billion, a 41% decrease year-over-year, which raised concerns about its financial health.



Incyte's stock price has been volatile in recent months, with analysts' opinions divided on its future prospects. While some analysts maintain a "Buy" rating, others have downgraded their recommendations due to concerns about the company's financial health and the lower-than-expected sales forecasts for its key drugs. Investors should closely monitor Incyte's progress in developing new products and expanding its pipeline to determine if the company can overcome these challenges and regain its growth momentum.