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April 26, 2012, 7:00 a.m. EDT
Incyte Reports 2012 First-Quarter Financial Results; Updates Shareholders on Commercial Activity and Key Clinical Programs
$19.3 million in first-quarter net product revenue from JakafiTM (ruxolitinib); $25.1 million of Jakafi shipped to specialty pharmacies during the quarter
WILMINGTON, Del., Apr 26, 2012 (BUSINESS WIRE) -- --Phase III studies of Jakafi published in The New England Journal of Medicine demonstrate significant clinical benefit for patients with myelofibrosis
--Conference Call Scheduled Today at 8:30 a.m. ET
Incyte Corporation INCY
+5.52% today reported first-quarter 2012 financial results,
including revenue from its first commercial product, Jakafi(TM) (ruxolitinib), which was approved by the US Food & Drug Administration (FDA) for the treatment of patients with intermediate or high-risk myelofibrosis (MF) in November 2011. The Company also provided updated information about key clinical programs.
"The early response to Jakafi is encouraging, and our launch is proceeding well. Already a fairly broad base of hematologists and oncologists are prescribing primarily for their more severely ill patients," stated Paul A. Friedman, M.D., Incyte's President and Chief Executive Officer. "As physicians become more familiar with Jakafi and more community-based hematologists and oncologists experience the compelling benefits Jakafi provides in terms of spleen reduction and symptom improvement, we expect to see a gradual increase in the use of Jakafi among appropriate patients with less severe disease."
Product Revenues
During the first quarter, the Company shipped $25.1 million of Jakafi to its specialty pharmacies.
The Company currently uses the sell-through method for product revenue recognition, which means revenue is deferred until the specialty pharmacy ships product to the patient. For the first quarter of 2012, $21.2 million of product was delivered to patients and recognized as gross revenue. The gross to net adjustment for product revenue recognized was approximately $1.9 million, resulting in net product revenue of $19.3 million for the first quarter.
The Company's cumulative net product deferred revenue as of March 31, 2012, was $6.0 million.
The Company expects to transition from the sell-through method to the sell-in method to recognize revenue (i.e., when the specialty pharmacy receives product) once a sufficient period of time has elapsed to enable the Company to estimate product returns.
Recent Clinical Highlights
Jakafi(TM) (ruxolitinib) - a JAK1 and JAK2 Inhibitor
-- The New England Journal of Medicine published results from two Phase III studies (COMFORT-I and COMFORT-II) of Jakafi, which showed that Jakafi significantly reduced spleen volume and improved symptoms of MF. The authors of COMFORT-I also described an updated analysis based on four additional months of patient follow-up that suggests a survival advantage for Jakafi over placebo.(1,2)
-- The global Phase III trial evaluating ruxolitinib in patients with advanced polycythemia vera who are resistant to or intolerant of hydroxyurea (the RESPONSE trial) continues to enroll patients and is targeted to complete recruitment in 2012. Results from the RESPONSE trial are expected in the second half of 2013.
-- A randomized Phase II trial of ruxolitinib in combination with capecitabine is actively recruiting patients with recurrent or treatment refractory metastatic pancreatic cancer (the RECAP trial). The RECAP trial is designed to enroll approximately 130 patients with results expected in the second half of 2013.
-- Multiple investigator-sponsored trials evaluating ruxolitinib are ongoing including two Phase I/II trials in adults with advanced hematologic malignancies (acute myeloid leukemia, acute lymphocytic leukemia, myelodysplastic syndrome and chronic myelogenous leukemia) and relapsed or refractory acute leukemia; a Phase I/II trial in children with hematologic malignancies and solid tumors; and a Phase II trial in patients with lymphoma.
LY3009104 (formerly known as INCB28050) - a JAK1 and JAK2 Inhibitor
-- The six-month dose-ranging Phase IIb trial in patients with rheumatoid arthritis, conducted by our collaboration partner Eli Lilly and Company, is complete. Three-month data have been accepted as a late-breaker oral presentation at the European League Against Rheumatism's Annual European Congress of Rheumatology in June 2012. The six-month data are expected to be presented later in 2012.
-- Plans for a Phase III trial in patients with rheumatoid arthritis are underway.
-- A Phase IIb trial in patients with moderate to severe psoriasis is ongoing with primary endpoint results expected in 2013.
INCB28060 (also known as INC280) -- a c-MET Inhibitor
-- The initial Phase I trial in patients with solid tumors is ongoing and expected to continue until a maximum-tolerated or maximum-feasible dose is identified. This compound is licensed to Novartis as part of the Incyte-Novartis collaboration.
INCB24360 -- an IDO Inhibitor
-- The dose-escalation phase of a Phase I trial is ongoing.
-- A Phase II trial in patients with melanoma was recently initiated, and a second Phase II trial in patients with ovarian cancer is expected to begin later this year.
Early-Stage Development and Discovery Programs
-- Several early development and discovery programs in oncology and inflammation are also underway, which will be described more fully at a later time.
2012 First-Quarter Financial Results
Revenues
Total revenues for the quarter ended March 31, 2012, were $36.2 million as compared to $32.0 million for the same period in 2011. First quarter 2012 revenues include net product revenues of $19.3 million. Revenue for the quarter ended March 31, 2011, included a $15.0 million milestone payment from the Company's collaborative agreement with Novartis for INCB28060.
As a result of the $40 million EU regulatory milestone earned from Novartis in April 2012, we are increasing our 2012 revenue guidance from $67 million to $107 million. This guidance excludes net product revenue and any potential future milestones from partners.
Net Loss
Net loss for the quarter ended March 31, 2012, was $45.4 million, or $0.36 per share, as compared to a net loss of $26.5 million, or $0.21 per share, for the same period in 2011. Included in net loss for the quarter ended March 31, 2012, was $9.9 million of non-cash expense related to the impact of expensing employee stock options, compared to $6.9 million included in net loss for the same period in 2011.
Operating Expenses
Research and development expenses for the quarter ended March 31, 2012, were $49.0 million, as compared to $36.3 million for the same period in 2011. Included in research and development expenses for the quarter ended March 31, 2012, was a non-cash expense of $6.7 million related to the impact of expensing employee stock options, as compared to $4.4 million for the same period in 2011.
The increase in research and development expenses for the quarter ended March 31, 2012, compared to the prior year period was primarily a result of increased clinical development costs related to the advancement of the Company's pipeline and increased non-cash employee stock option expense. The Company expects its research and development expenses to vary from period to period, mainly due to the timing of its clinical development activities.
Selling, general and administrative expenses for the quarter ended March 31, 2012, were $21.4 million, as compared to $10.8 million for the same period in 2011. Included in selling, general and administrative expenses for the quarter ended March 31, 2012, was a non-cash expense of $3.2 million related to the impact of expensing employee stock options as compared to $2.5 million for the same period in 2011.
Increased selling, general and administrative expenses for the quarter ended March 31, 2012, compared to the prior year period reflected the additional costs related to the Company's sales force and the commercialization efforts for the launch of Jakafi for intermediate or high-risk MF.
Interest Expense
Interest expense for the quarter ended March 31, 2012, was $11.3 million as compared to $10.8 million for the comparable period in 2011. Included in interest expense for the quarter ended March 31, 2012, was $6.5 million of non-cash charges to amortize the discount on the Company's 4.75% Convertible Senior Notes due 2015, as compared to $6.0 million for the same period in 2011.
Cash Position
As of March 31, 2012, cash, cash equivalents and marketable securities totaled $236.4 million compared to $277.6 million as of December 31, 2011. These amounts exclude $19.0 million of restricted cash and investments held in an escrow account reserved for interest payments through October 2012 on the 4.75% Convertible Senior Notes.
Conference Call Information
Incyte will hold its first quarter 2012 financial results conference call this morning at 8:30 a.m. ET. To access the conference call, please dial 877-407-8037 for domestic callers or 201-689-8037 for international callers. When prompted, provide the conference identification number, 391589.
If you are unable to participate, a replay of the conference call will be available for thirty days. The replay dial-in number for the U.S. is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference account number 278 and the identification number 391589.
The conference call will also be webcast live and can be accessed at www.incyte.com under Investor Relations -- Events and Webcasts. http://www.marketwatch.com/story/...linical-programs-2012-04-26
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