Pipeline Momentum Makes Biotech Stock Incyte Worth Watching

In a report published Thursday, Barclays analyst Geoff Meacham initiated coverage of

with an Overweight rating and a price target of $125. Analyst Geoff Meacham believes that the forthcoming 18 months could transform Incyte "from a single-product company into a deep, diversified oncology company with a strong foothold in immuno-oncology (I/O) and multiple value drivers." Phase 2 combination data for Incyte's wholly-owned IDO1 inhibitor, epacadostat, is expected through 2016. This data could have read-through across multiple tumor types, and may strengthen the company's position in the PD-1/PD-L1 segment. Meacham added that Incyte could have "meaningful first-mover advantage" in the IDO space. Barclays estimates the peak potential of epacadostat at more than $6B, while saying that it could provide Incyte with "significant optionality." Meacham also believes that the Jakafi franchise remains underappreciated. "Jakafi growth has re-accelerated following the recent PV label expansion, which combined with MF growth, should drive the company to profitability next year. Indeed, we see upside to Jakafi near-term estimates, which should keep investors engaged ahead of the epacadostat data," the report stated. Meacham believes that 2016 could be compelling for Incyte in view of its pipeline momentum.