Incyte Corporation (NASDAQ:INCY) and Merck (NYSE:MRK), known as MSD outside the United States and Canada, today announced the expansion of the companies’ ongoing clinical collaboration to include a Phase 3 study evaluating the combination of epacadostat, Incyte’s investigational selective IDO1 inhibitor, with Keytruda®(pembrolizumab), Merck’s anti-PD-1 therapy, as first-line treatment for patients with advanced or metastatic melanoma. The Phase 3 study, which is expected to begin in the first half of 2016, will be co-funded by Incyte and Merck.

“We are very pleased to expand our collaboration with Merck and to move the clinical development program for epacadostat in combination with Keytruda into Phase 3,” said Hervé Hoppenot, President and Chief Executive Officer of Incyte. “We believe the combination of these two immunotherapies shows promise and, if successfully developed, may help to improve clinical outcomes for patients with metastatic melanoma.”

“The initiation of this large Phase 3 study with Incyte in the first-line advanced melanoma treatment setting is an important addition to our robust immunotherapy clinical development program for Keytruda,” said Dr. Roger Dansey, senior vice president and therapeutic area head, oncology late-stage development, Merck Research Laboratories. “We continue to explore the benefit that Keytruda brings to patients suffering from advanced melanoma when used alone, and we are pleased to be able to add this important combination study with epacadostat to our Keytruda development program.”

Under the terms of the agreement Incyte and Merck have also agreed, for a period of two years, not to initiate new pivotal studies of an IDO1 inhibitor in combination with a PD-1/PD-L1 antagonist as first-line therapy in advanced or metastatic melanoma with any third party. During this time, the companies will each offer the other the opportunity to collaborate on any new pivotal study involving an IDO1 inhibitor in combination with a PD-1/PD-L1 antagonist for types of melanoma and lines of therapy outside of the current collaboration agreement.

The agreement is between Incyte and certain subsidiaries and Merck through its subsidiaries.

Epacadostat and Keytruda are part of a class of cancer treatments known as immunotherapies that are designed to enhance the body’s own defenses in fighting cancer; the two therapies target distinct regulatory components of the immune system. IDO1 is an immunosuppressive enzyme that has been shown to induce regulatory T cell generation and activation, and allow tumors to escape immune surveillance. Keytruda is a humanized monoclonal antibody that blocks the interaction between PD-1 and its ligands, PD-L1 and PD-L2. Preclinical evidence suggests that the combination of these two agents may lead to an enhanced anti-tumor immune response compared with either agent alone.

Safety and efficacy data from the ongoing Phase 1/2 study evaluating the combination of epacadostat with Keytruda in patients with advanced malignancies is scheduled to be highlighted as a late-breaking oral presentation (Abstract #142) at the upcomingSociety for Immunotherapy of Cancer 30th Anniversary Annual Meeting & Associated Programs, November 4–8, 2015 at the Gaylord National Resort & Convention Center inNational Harbor, MD. (Original Source)

Shares of Incyte closed yesterday at $106.01 . INCY has a 1-year high of $133.62 and a 1-year low of $43.86. The stock’s 50-day moving average is $115.59 and its 200-day moving average is $107.81.

On the ratings front, Incyte has been the subject of a number of recent research reports. In a report issued on October 6, Nomura analyst Ian Somaiya reiterated a Buy rating on INCY, with a price target of $146, which represents a potential upside of 37.7% from where the stock is currently trading. Separately, on September 15, Cowen’s Eric Schmidt reiterated a Buy rating on the stock .

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ian Somaiya and Eric Schmidt have a total average return of 19.8% and 31.4% respectively. Somaiya has a success rate of 56.8% and is ranked #123 out of 3775 analysts, while Schmidt has a success rate of 47.8% and is ranked #65.

The street is mostly Bullish on INCY stock. Out of 9 analysts who cover the stock, 8 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $135.25, which implies an upside of 27.6% from current levels.

Incyte Corpis a biopharmaceutical company. It discovers, develops and commercializes proprietary small molecule drugs to treat serious unmet medical needs, mainlyin oncology.