Incyte: Making Hay While The Sun Shines

Jan. 22, 2023 7:48 AM ETIncyte Corporation (INCY)AZN2 Comments
Robert Honeywill profile picture
Robert Honeywill


  • It is useful to understand the financial implications for Incyte with its major product, JAKAFI, facing loss of exclusivity ("LOE") in 2028.
  • 2028 is still five years away and JAKAFI continues to provide a powerful and growing stream of earnings and cash.
  • The underlying earnings for JAKAFI are camouflaged by large R&D expenditures, providing an extensive portfolio of opportunities to offset the JAKAFI LOE by 2028.
  • I find it useful to attempt some quantification of the financial outlook for Incyte from now through 2029, following JAKAFI LOE.

Medical Research, Phases of Vaccine Clinical Trials.

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Incyte: Investment Thesis

Incyte (NASDAQ:INCY) should experience strong cash inflows from both JAKAFI and OPZELURA over the next 6 years before JAKAFI LOE during 2028. JAKAFI LOE in 2028 will likely see underlying

Table 1

SEC filings

Figure 1

Incyte FY 2021 annual report

Table 2.1

SEC filings

Table 2.2

SEC filings

Table 3

SEC filings

Table 4.1

Seeking Alpha premium and SEC filings

Table 4.2

Seeking Alpha premium and SEC filings

This article was written by

Robert Honeywill profile picture
I am a retired accountant with a background in large mining projects, from feasibility to full-scale operation, large scale primary industry and food processing, commercialisation of university intellectual property, and consulting to small businesses, government departments and insolvency practitioners. I have gained a wealth of experience from having the extreme good fortune to work, in a cooperative environment, with so many people far more intelligent and smarter than me; from scientists and engineers with MBA qualifications, to University professors across a range of disciplines. Through the accident of mergers, acquisitions and dispositions, I held, at various times, financial controller positions within Utah International Inc, General Electric Inc, and BHP Billiton organizations. If I have a special skill, it is in methods of assessment of projects with long lives, where costs are front loaded and/or future revenues are subject to considerable degrees of uncertainty. In relation to stocks, I have a theory, using projections to calculate a present value per share is far less useful for a share buying decision, than using those same projections for calculating future value per share for determining potential exit value and rate of return.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. I do not recommend that anyone act upon any investment information without first consulting an investment advisor and/or a tax advisor as to the suitability of such investments for their specific situation. Neither information nor any opinion expressed in this article constitutes a solicitation, an offer, or a recommendation to buy, sell, or dispose of any investment, or to provide any investment advice or service. An opinion in this article can change at any time without notice.

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