Incyte Earnings: Maintaining Our $88 Fair Value Estimate Following Strong Fourth-Quarter Results

Incyte’s product and royalty revenue grew 13% in the fourth quarter, with hematology drug Jakafi (sales up 7% in the U.S.) and dermatology drug Opzelura (78% growth) standing out as the biggest drivers of growth. These results and 2024 guidance are both relatively in line with our expectations, and we’re maintaining our $88 per share fair value estimate. We see shares as undervalued, with the market failing to recognize the potential in Incyte’s pipeline. Incyte ended the year with $3.7 billion in cash, which it could also use to supplement its portfolio with bolt-on acquisitions as the Jakafi patent expiration in 2028 starts to enter the radar of investors. We think the firm’s Jakafi franchise, as well as new launches like Opzelura, secure Incyte a narrow moat.