Incyte: Good Company, But Potentially Overvalued Given Patent Cliffs

(15min)

Summary

  • Incyte's valuation is on the higher side given looming patent expiries for Jakafi and Opzelura, and uncertain pipeline prospects.
  • Despite a strong R&D pipeline, new drugs may only offset, not surpass, revenue loss from expiring patents, limiting growth potential.
  • Current financials show solid revenue and earnings growth, but future top-line expansion is at risk post-2028 patent cliffs.
  • Given these factors, I recommend a 'Sell' rating for Incyte stock on a long-term view, despite its impressive history and pipeline.

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Investment Overview

If you had invested in Incyte (NASDAQ:INCY) stock in March 2009, when shares traded at a value of <$2.5, based on the Wilmington, Delaware headquartered Pharma company's current price of $65, your return on investment to date would be >2,500%. On a five

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This article was written by

13.42K Followers

Edmund Ingham is a biotech consultant. He has been covering biotech, healthcare, and pharma for over 5 years, and has put together detailed reports of over 1,000 companies. He leads the investing group Haggerston BioHealth.

The group is for both novice and experienced biotech investors. It provides catalysts to look out for and buy and sell ratings. It also provides product sales and forecasts for all the Big Pharmas, forecasting, integrated financial statements, discounted cash flow analysis and market by market analysis. Learn more.

Analyst’s 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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