Incyte crosses $1B in quarterly revenue for the first time, even as Jakafi faces off against GSK rival

Buoyed by JAK inhibitor market-leader Jakafi and its cream counterpart Opzelura, Incyte crossed the $1 billion threshold in quarterly revenues for the first time. But only one of the drugs met Wall Street’s expectations.

The company’s $1.01 billion fourth-quarter revenues marked a 9% increase year over year, coming in slightly ahead of analysts’ consensus expectations.

The beat was primarily driven by Opzelura, William Blair analysts pointed out in a Tuesday note. With approvals in atopic dermatitis and vitiligo, Opzelura brought in $109 million sales in the quarter, compared with the Street’s estimate of $102 million.

Jakafi also delivered 7% growth, but its $695 million in sales came in slightly weaker than expected. The performance came just as GSK launched its rival JAK inhibitor, Ojjaara, for anemic myelofibrosis.

Still, Incyte’s North America general manager, Barry Flannelly, suggested that competition was not the reason behind Jakafi’s performance. Instead, he pointed to a significant increase in Medicare Part D patients who received free drugs from Incyte because they ran out of financial assistance to cover their out-of-pocket expenses.

Despite Ojjaara’s market entry in September, Jakafi maintained around 53% to 54% of the total myelofibrosis market share, plus 60% to 63% of new patient share, during each month from September to December, Flannelly said during an investor call Tuesday.

“Based on market research, other competitors have not had an impact on Jakafi in regard to total patient market share or new patients,” Flannelly said.

Flannelly seems to be depicting a different picture than GSK’s comment two weeks ago that it is “very pleased with the strong uptake for Ojjaara.” During GSK’s fourth-quarter earnings call, chief commercial officer Luke Miels said Ojjaara had reached 750 patients who made up 15% of the patient share in the anemic population during that period. Ojjaara had also reached about 25% share in second-line treatment, the GSK exec said.

Moving forward, Incyte expects Jakafi sales to grow from $2.59 billion in 2023 to a range between $2.69 billion and $2.75 billion in 2024. Flannelly also noted that the new $2,000 out-of-pocket cap for Medicare Part D that’s slated to go into effect in 2025 under the Inflation Reduction Act could help Jakafi eventually reach Incyte’s target of $3 billion in sales by 2028.

“We think that there’s an opportunity at least for those patients who abandoned drug or just thought they could not afford the drug […] they can come back or opt into this drug therapy now,” Flannelly said of the policy change.

Meanwhile, Incyte is developing an extended-release version of Jakafi. After a regulatory setback, Incyte has agreed with the FDA on a path forward in which the company will repeat some tests with a new formulation that has a slightly higher strength, Incyte’s chief medical officer, Steven Stein, said on the call. The tests themselves won’t take too long, but analyzing the data and putting them into a new application will push a potential approval to about two years from now, he said.

Outside the U.S., Incyte is partnered with Novartis on Jakavi. The Swiss pharma has yet to sign on to the long-acting formulation, but it has the opportunity to co-develop the drug if it wishes, Incyte CEO Hervé Hoppenot, who was previously with Novartis until 2014, said on the Tuesday call.

As Jakafi slows down, Opzelura has become a rising star at Incyte. With $338 million in sales last year, Opzelura has been established as “one of the best recent dermatology launches,” Flannelly said. He highlighted how the drug is outperforming Dermavant’s Vtama and Arcutis’ Zoryve on prescription volumes and sales during their respective launch phases.

At the beginning of Opzelura’s launch, investors were concerned about the topical drug’s heavy discount. For 2023, Opzelura’s average discount rate reached around 55%, CFO Christiana Stamoulis said. But Incyte will in the future be focused on maximizing the reported net sales rather than on the discount level, she added.

“If going forward we make the decision to provide any additional discounts, it would be because we expect that these will improve access and will have a disproportionate impact on volume and thus lead to higher net sales.”

Incyte on Tuesday didn’t provide sales guidance for Opzelura in 2024. Stamoulis said the drug’s first-quarter 2024 sales are expected to decline sequentially because of some typical seasonal dynamics.