Replies to post #131256 on Biotech Values

[JJM760]

Anyone surprised INCY only closed up a few percentage points after approval of their lead drug?

I'm not surprised but definitively disappointed. INCY has taken a beating in the last few months. Seems like Biotech is in one of it's out of favor trends these days.

FWIW, the mean/median sell-side price tag is around $23.

[NP1986]

Anyone surprised INCY only closed up a few percentage points after approval of their lead drug?

I am a bit surprised because I thought the label looked quite clean and will allow fairly broad use of Jakafi. I don't think the current market price reflects fair value for INCY, and I think it would be a good buyout candidate.

There was the issue raised by the Mayo Clinic physicians about a high discontinuation rate and a possible withdrawal effect. However, the discontinuation rates in the two phase III studies were relatively low. Furthermore, the data also indicate that Jakafi might improve overall survival which tips the risk:benefit profile in INCY's failure. I haven't looked at the ASH abstracts in depth, but IIRC they also seem to suggest a benefit in most patients regardless of baseline factors such as Hg counts and platelet counts. The label for Jakafi paints a very different picture from the NEJM letter.

IMHO, I think the chances of commercial success are fairly high. It may not end up being best-in-class, but YMI's JAK inhibitor is at least a few away from approval which gives INCY sufficient time to make inroads into the MF space. By the time YMI's JAK inhibitor is approved (assuming it doesn't face any hiccups along the way), INCY should hopefully have an indication for polycythemia vera as well.

[poorgradstudent]

INCY:

Not too surprised. I think there are two pieces of "uncertainty" hanging around the company:

1) The (imo) false uncertainty that after one year of treatment, the drug is no different than the standard of care in treating MF patients. This is the worry that was kicked off by the NEJM letter.

2) The (imo) real uncertainty centers around sales expectations and the size of the addressable market. Analysts are usually able to say "well, drug X sells this much in indication Y" and make extrapolations for new drugs for indication Y. For MF, they really have no reference point whatsoever.

[pcrutch]

I am pretty surprised, especially given a very favorable label that doesnt have a blackbox warning, REMS program, no need for a post-marketing study and little restrictions on blood platelet count. Their label covers more than 70% of all MF patients too. [ All of which the Street had not priced in their expectations.]

MF is a chronic disease like CML in some ways, so patients will be presumably be on Jakafi for a number of years. INCY's patents on Jakafi go out to 2026, so they have a number of years to profit from this. I think INCY is cheap here.

On the call, they also announced that NVS had received 120-day questions already and was preparing response to the EMA, so MAA approval could be coming early next quarter.[not sure if they got an accelerated review, but would be surprised if they didnt.]

[jq1234]

I don't think anyone should be surprised approval doesn't lead sharp uptick of stock price in today's market unless approval is really unexpected. DNDN an HGSI really put dampners on new drug launch.

I think Jakafi will do well over time. Drug is in well defined hematology patient population, doesn't need big sale force, and no other treatment option really available. Look at COMFORT-II which was the longer of two pivotal trials, at 48 weeks, comparator arm best availabe therapy (BAT) had 0% response rate. This is the reason FDA allowed INCY to change SPA for PV pivotal trial, decreasing trial size from 300 to 200, shortening the length of trial from 80 weeks to 48 weeks.