Why Incyte Shares Are Falling Today

Incyte Corporation's INCY shares are plunging today after the company missed Wall Street's expectations.

The company's Q1 adjusted EPS reached $0.37, compared to $0.55 posted a year ago. Analysts had estimated $0.75. Q1 total revenues increased by 11% Y/Y to $808.67 million, missing the consensus of $857.52 million.

Jakafi product revenues grew 7% Y/Y to $580 million, driven by strong underlying patient demand growth (+7% Y/Y), including an 8% growth in new patients. Wall Street estimate stood at $615 million.

The company calls out lower-than-normal channel inventory at the end of the first quarter, representing an $11 million impact.

Opzelura revenues of $56.55 million came in below the Street's estimate of $68.5 million.

Related: Incyte Discontinues LIMBER-304 On Doubts Regarding Meeting Primary Goal, Analyst Says It Underpins Some Investor Concerns.

William Blair says that a lack of revenue growth quarter-over-quarter this early in the launch of two indications is clearly not going to increase investor confidence in the franchise's potential.

"Furthermore, in Q1, we made a decision to focus our development efforts on eight programs that have high potential value for us and discontinued six other programs," said Hervé Hoppenot, CEO.

The company discontinued the development of parsaclisib in warm autoimmune hemolytic anemia (wAIHA) and the adenosine targeting programs (INCB106385 and INCA00186).

The analyst says that investors continue to watch the launch of Vonjo, given the potential to address patients unable to tolerate Jakafi due to either thrombocytopenia or anemia and watch for commentary around expectations and preparations for the potential launch of momelotinib in June.

Guidance: Incyte expects FY23 Jakafi net product revenues at $2.55 - $2.63 billion and other Hematology/Oncology net product revenues of $215 - $225 million.

Price Action: INCY shares are down 8.80% at $68.71 on the last check Tuesday.

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