JMP Securities analyst Reni Benjamin has reiterated their neutral stance on INCY stock, giving a Hold rating today.
Reni Benjamin has given his Hold rating due to a combination of factors surrounding Incyte’s latest strategic move and overall financial outlook. The acquisition of Escient Pharmaceuticals for $750 million is a significant venture into the inflammation and autoimmune (IAI) space with potential treatments for various inflammatory disorders. However, Benjamin views this acquisition as premature and expensive, especially given that the new assets, EP262 and EP547, are not expected to launch until 2029. This timeline does not offer immediate relief to investor concerns about Incyte’s upcoming 2028 patent cliff for its ruxolitinib franchise, which is a substantial revenue source for the company. Moreover, the deal has noticeably reduced Incyte’s cash reserves to around $3 billion, leading to the assessment that the stock is appropriately valued at current levels.
Benjamin’s analysis also takes into account the unique mechanism of action of the acquired molecules, which target Mas-related G protein-coupled receptors (MRGPRs) involved in inflammatory responses. The safety profiles of EP262 and EP547 appear promising, with Phase 1 trials showing favorable safety outcomes. Despite this potential, the lack of imminent, significant milestones and the considerable investment required for this acquisition contribute to the cautious stance. As Incyte embarks on multiple Phase 2 trials for these assets, the proof-of-concept data will be critical in determining the future potential of these treatments and their impact on Incyte’s valuation.
According to TipRanks, Benjamin is an analyst with an average return of -8.7% and a 33.27% success rate. Benjamin covers the Healthcare sector, focusing on stocks such as Iovance Biotherapeutics, Blueprint Medicines, and Incyte.
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Incyte (INCY) Company Description:
Incyte Corp. is a biopharmaceutical company, which engages in the discovery, development and commercialization of proprietary therapeutics. Its portfolio includes compounds in various stages, ranging from preclinical to late stage development, and commercialized products such as JAKAFI (ruxolitinib), and ICLUSIG (ponatinib). The company was founded by Roy A. Whitfield in April 1991 and is headquartered in Wilmington, DE.
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