Maintaining Our $120 Incyte FVE Following Weak First Quarter; Rux Cream Launch a Key Catalyst

We're maintaining our $120 fair value estimate for Incyte following first-quarter results that were slightly below our expectations, reflecting continued COVID-19-related pressure on U.S. sales of hematology drug Jakafi. We think recovery in patient demand in March and management's decision to maintain prior full-year guidance for Jakafi sales bode well for growth for the remainder of the year, and we're only slightly lowering our own estimate for 2021 U.S. Jakafi sales from $2.2 billion to $2.1 billion. Sales of Jakafi in the U.S. grew 1% in the quarter to reach $466 million, as COVID-19-related stocking in the first quarter of last year and increased discounting this quarter were countered by demand growth. Incyte's total revenue grew 6%, driven by the launch of Pemazyre in cholangiocarcinoma as well as double-digit royalty growth from international sales of Jakavi (Novartis) and global sales of immunology drug Olumiant (Lilly). We think Incyte's differentiated therapy Jakafi as well as a growing portfolio in hematology and immunology continue to support a narrow moat.