The shares of Incyte Corporation (INCY) have been trading above $40 for almost a month and the recent presentation of Jakafi trial results at the 2013 ASH has only helped the shares to increase. The results from the multiple trials showed that Jakafi - FDA approved myelofibrosis drug - effectively improved the overall survival in myelofibrosis patients. Jakafi is the first and only approved drug for myelofibrosis and results suggested that Jakafi treatment has the potential to reduce the risk of death by almost 50% as compared to conventional treatment.
Additionally, the company, effective December 23, 2013, will be added to the NASDAQ OMX Q-50 index, based on the re-ranking. This index tracks performance of those securities that qualify for inclusion in the NASDAQ-100 index. This speaks for the continued positive performance of Incyte's stocks.
The company presented multiple trial results for its JAK inhibitors at the 2013 American Society of Hematology (ASH) annual meeting between December 7 and 10, 2013. The INCB39110 is a JAK1 inhibitor, whereas ruxolitnib is a JAK1/JAK2 inhibitor.
The 12 week interim analysis for the proof-of-concept phase II study for JAK1 inhibitor, INCB39110, for myelofibrosis patients (n=85), was presented. The trial included doses of 100 mg twice daily, 200 mg twice daily and 600 mg once daily, with the 200 mg and 600 mg doses providing improvement in myelofibrosis related symptoms. In the 12 weeks, 50% improvement in total symptom score from baseline was achieved by 22.2% in 100 mg dose, 34.9% in 200 mg dose, and 50% in 600 mg dose. The reduction in spleen volume at week 12 were 5%, -14.1%, and -9.9% over the three dose groups. The findings suggested that JAK1 inhibitor when compared to other JAK inhibitors may result in less myelosuppression. This allows the company to investigate the benefits JAK1 inhibitors provide, and presents a major opportunity, with an initial focus on solid tumors.
2. COMFORT I - 3 Years
COMFORT-I was a study conducted in the U.S., Australia and Canada by Incyte, for myelofibrosis patients who were refractory to or not eligible for available therapy. The 3 year follow up analysis of COMFORT-I patients, treated with ruxolitinib maintained the previous spleen volume reduction and improved quality of life measures. The overall survival rate was better in ruxolitinib as compared to placebo, with 42 and 54 deaths, respectively. It must be noted that due to COMFORT-I's crossover design, patients switched to ruxolitinib at a median of two years, thus the overall survival results may be underestimated compared to placebo. Additionally, the side effects of grade 3 or 4 anemia and thrombocytopenia appeared earlier during the treatment but decreased with long-term therapy. These results speak for the long-term benefits of the drug and give it a head start in competition.
3. Pooled Survival Analysis
The COMFORT-II trial was conducted in Europe by Novartis for Jakafi versus the best available therapy options for myelofibrosis. Results of the pooled survival analysis of COMFORT-I and COMFORT-II study when compared to placebo or available therapy showed significant prolonged survival (HR=0.65; 95% CI, 0.46-0.90; P=0.01). The high risk MF patients treated with ruxolitinib showed a similar estimated survival to intermediate 2 MF patients in control group.
4. Bone Marrow Morphology
The analysis of bone marrow morphology in 68 patients over five years in phase II of ruxolitinib suggests that it may show improvement in the bone marrow fibrosis in the MF patients. It was concluded that continued JAK1/JAK2 inhibition may have a disease modifying impact on myelofibrosis.
Incyte's Jakafi has indeed shown to be effective years after therapy as reported at ASH and is the only approved drug for treating myelofibrosis. The drug has been compared to Geron Corporation's (GERN) Imetelstat, which in its recent trial was able to provide not only clinical benefit but also sent myelofibrosis patients into complete remission, a feat Jakafi hasn't been able to prove. Admittedly this poses a major threat to Jakafi, but it must be noted that Imetelstat is years away from reaching the market, thus until than Jakafi can reap the profits.
The company is financially sound, with a sales generating product in the market expected to reach $230 million for 2013; and cash of approximately $520 million sufficient to fund its trials. The cash position improved due to the proceeds from the equity financing of $750 million, and provided the company with much needed funds. However, the company is still to turn cash flow positive, and may have a long time to reach that point, as the company is still running multiple clinical trials and the sales from Jakafi are still not colossal.
All in all, the shares of the company are expected to continue their upward trend, with the positive results that garner a positive sentiment and with the recent price target raise from Canaccord, based on the trial results presented at ASH. They raised the price target from $47 to $55. However, there have been no substantial insider purchases for an extended period of time, which is slightly worrisome. Despite this the catalysts in 2014 will further help the cause of the company and it is indeed a good long-term investment.