Incyte: Maintaining Our $88 FVE Despite Disappointing News on Recently Acquired Escient Pipeline

We’re maintaining our $88 fair value estimate for Incyte following two pieces of disappointing information for the firm’s dermatology pipeline. Enrollment in a phase 2 trial for MRGPRX2 in chronic spontaneous urticaria has been paused following findings in preclinical toxicology data that likely add uncertainty to the drug’s potential safety profile. In addition, a phase 2 trial for MRGPRX4 in cholestatic pruritus did not support advancement in this indication. However, it is unclear if this was due to lackluster efficacy or safety concerns. Both drug candidates were acquired with Escient Pharmaceuticals earlier this year, and both represented potentially novel oral treatments that could launch later this decade. Incyte is focused on bringing new drugs to market by the end of the decade, as this could help defend from the upcoming 2028 patent cliff for key hematology drug Jakafi. However, we had only included a small placeholder for sales of these drug candidates in our model, ahead of proof-of-concept data anticipated in 2025. We have removed both drug candidates from our forecast, but we continue to think Incyte’s portfolio—led by Jakafi and dermatology drug Opzelura—supports a narrow moat.