2018 median employee pay: $228,006
2018 number of employees: 1,367
CEO: Hervé Hoppenot
2018 CEO pay: $9.31 million
CEO-to-employee pay ratio: 40.9:1
Incyte CEO Hervé Hoppenot took a big 42% pay cut in 2018, to $9.31 million. The median annual pay of Incyte’s employees also suffered, only to a smaller extent, dropping 10% to reach $228,006.
The decline, at least for Hoppenot, can largely be tied to the high-profile phase 3 failure of IDO inhibitor epacadostat. The trial flop pushed his cash bonus down to just 81% of target, but the major blow came from the decrease in the value of his equity grants after the company’s stock went south.
In much-anticipated data unveiled last April, epacadostat and Merck & Co.’s PD-1 blockbuster Keytruda, a combo once billed as a potential challenger to Bristol-Myers Squibb’s Opdivo-Yervoy regimen for advanced melanoma, failed to beat Keytruda alone at fending off cancer's advance.
It was one of the earliest pivotal readouts for the IDO inhibitor class and possibly one key nail in the coffin for the IDO theory. For Incyte, the drug was so important that it accounted for 35% of the evaluation for executives’ bonuses, the highest among all of its metrics—even above the 25% assigned to its commercial goal. But the results were so disappointing that not only was that trial abandoned, but Incyte also pulled the plug on six other late-stage tests and downgraded two pivotal Keytruda-pairing trials to phase 2. As a result, Hoppenot’s performance-based stock awards suffered, landing at 83% of target.
Incyte still sells itself as a groundbreaking workplace: “If you have a passion for innovative science and want to make a difference, Incyte is the company for you.” It still ranked 7th on Forbes' "The World's Most Innovative Companies 2018" list, the highest among biopharmas. And that was its fourth listing in a row—even if it was a one-place drop.
Last year, the Delaware company parachuted into Science's top 20 employers list, taking the No. 2 spot. According to Science's survey, only 17% of Incyte respondents planned to seek a new job in 2019. “We have guidelines instead of being driven by strict rules, regulations, and policies that restrict how we handle situations,” Incyte's EVP of human resources, Paula Swain, told the magazine. “We focus on people as individuals.”
Swain and Hoppenot have lunch with all new employees six months after they are hired, to hear what they like and don’t like about their jobs.
Incyte recently shook up its C suite and expanded its employee team. In April 2018, it welcomed Maria Pasquale, formerly Celgene’s chief compliance officer, as general counsel. Then in December, Dashyant Dhanak, Ph.D, previously a Janssen executive, took on the chief scientific officer title from Reid Huber, Ph.D., who went on to become a partner at Third Rock Ventures. Christiana Stamoulis, who served stints at Vertex Pharmaceuticals and Unum Therapeutics, joined as chief financial officer in February.
The company’s headcount also expanded to 1,367 at the end of 2018, from 1,208 the prior year. Every function had some new blood: R&D staffers increased to 748, while 129 work in medical affairs, and sales and marketing added 43, to 289.
It helps that the company’s top line has been growing in the double digits. The company brought in $1.7 billion in total revenues for 2018, up 25% over 2017. Lead drug Jakafi contributed $1.39 billion, a 22% year-over-year increase. The JAK inhibitor recently added a third U.S. indication to treat acute graft-versus-host disease in patients who’ve failed steroid treatment.
The rest of Incyte’s approved lineup didn’t do as well. By acquiring the European operations of Ariad Pharmaceuticals in 2016, Incyte gained EU rights to leukemia drug Iclusig, whose serious blood-clotting risks have limited its uptake. In 2018, the drug only hauled in $79.9 million.
Olumiant, a new JAK inhibitor Incyte developed and licensed to Eli Lilly, had its own safety problem. The arthritis drug finally won the FDA go-ahead last June after a previous complete response letter. But only the lower 2-mg dose was approved, and its label bears a boxed warning that includes blood clots as a potential problem. Not to mention it’s limited to patients who’ve failed to respond to at least one anti-TNF drug.
Lilly isn’t giving up on the 4-mg dose. Patients treated with the unapproved higher dose over seven years showed about the same rate of adverse events such as deep vein thrombosis or pulmonary embolism as those on placebo, the pair recently stated. Meanwhile, they’re looking to add atopic dermatitis as its second indication after two phase 3 studies met the primary endpoint.