Incyte Corporation (INCY) Shares Tumble on FDA Setback for Rheumatoid Arthritis Drug


Incyte Corporation (NASDAQ:INCY) investors are heading for the hills, after the drug maker, along with its partner Eli Lilly (NYSE:LLY), announced that the FDA issued a Complete Response Letter (CRL) for baricitinib (Olumiant), its once daily oral JAK-inhibitor for Rheumatoid Arthritis.

Incyte shares reacted to the news, falling nearly 11% in pre-market trading Monday.

The letter indicates that the FDA is unable to approve the application in its current form. Specifically, the FDA indicated that additional clinical data are needed to determine the most appropriate doses. The FDA also stated that additional data are necessary to further characterize safety concerns across treatment arms. The companies disagree with the Agency’s conclusions. The timing of a resubmission will be based on further discussions with the FDA.

“We are disappointed with this action. We remain confident in the benefit/risk of baricitinib as a new treatment option for adults with moderate-to-severe RA,” said Christi Shaw, president of Lilly Bio-Medicines. “We will continue to work with the FDA to determine a path forward and ultimately bring baricitinib to patients in the U.S.”



On the ratings front, INCY has been the subject of a number of recent research reports. In a report released today, Jefferies analyst Brian Abrahams maintained a Buy rating on INCY, with a price target of $148, which implies an upside of 5% from current levels. Separately, on the same day, Suntrust Robinson Humphrey’s Peter Lawson maintained a Buy rating on the stock and has a price target of $145.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian Abrahams and Peter Lawson have a yearly average return of 5.2% and 11% respectively. Abrahams has a success rate of 49% and is ranked #733 out of 4555 analysts, while Lawson has a success rate of 54% and is ranked #581.

Sentiment on the street is mostly bullish on INCY stock. Out of 13 analysts who cover the stock, 10 suggest a Buy rating and 3 recommend to Hold the stock. The 12-month average price target assigned to the stock is $160.50, which represents a potential upside of 14% from where the stock is currently trading.

Incyte Corp. is a biopharmaceutical company, which focuses on the discovery, development, development, formulation, manufacturing and commercialization of proprietary therapeutics to treat serious unmet medical needs, primarily in oncology. Its product, Jakafi, a JAK1 and JAK2 inhibitor, is currently approved in the U.S. for the treatment of intermediate or high-risk myelofibrosis and is in development as a potential treatment for other cancers. 

 

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