Incyte (NASDAQ:INCY) hasn't exactly been a highflier in recent years. Over the last five years, the stock is up less than 30%. During that same period, the S&P 500 more than doubled.  

The biotech reported its fourth-quarter results before the market opened on Tuesday. Did Incyte give any reasons for investors to raise their expectations? Here are highlights from the company's quarterly update.

Scientist looking through a microscope in a lab

Image source: Getty Images.

By the numbers

Incyte reported revenue in the fourth quarter of $789.5 million, a 36% increase from the prior-year total of $579.4 million. It also easily beat the consensus Wall Street estimate of $662.94 million.

The company announced net income of $149.9 million, or $0.68 per share, in the fourth quarter based on generally accepted accounting principles (GAAP). This represented a solid increase from GAAP earnings of $111 million, or $0.51 per share, reported in the same quarter of 2019. 

On an adjusted basis, Incyte's net income in the fourth quarter totaled $204.8 million, or $0.93 per share. This was a lot higher than the adjusted earnings of $141.9 million, or $0.65 per share, in the prior-year period. It also blew past the average analyst's adjusted earnings estimate of $0.75 per share.

Behind the numbers

Incyte's fortunes ride primarily on the success of JAK inhibitor Jakafi. Sales of the blood-cancer drug jumped 11% year over year in the fourth quarter to $516.9 million. The biotech also receives royalties from Novartis' (NYSE:NVS) sales of the drug outside the U.S. (where it's marketed under the brand name Jakavi). Incyte's Jakavi royalties soared 34% in the quarter to $87 million.

Tabrecta is Incyte's other commercialized product from its collaboration with Novartis. Incyte's fourth-quarter royalties for the cancer drug totaled $2 million. The Food and Drug Administration approved Tabrecta as a treatment for aggressive non-small cell lung cancer in May 2020.

Incyte's partnership with Eli Lilly (NYSE:LLY) on rheumatoid arthritis drug Olumiant also continued to pay off in the fourth quarter. The biotech's royalties from Olumiant jumped 31% year over year to nearly $31 million.

Incyte also saw continued momentum for its other two fully owned products. Sales for leukemia drug Iclusig rose 18% to $28.6 million. Sales for Pemazyre, which the FDA approved for treating bile duct cancer in April 2020, totaled $14 million in the fourth quarter. 

Looking ahead

Could accelerating growth propel the biotech stock higher this year? Incyte expects Jakafi sales will be between $2.125 billion and $2.2 billion for full-year 2021. The midpoint of that range reflects a year-over-year increase of around 11.5% -- good but not jaw-dropping. The company also looks for its other hematology/oncology product revenue to come in between $145 million and $160 million. 

Incyte and Lilly will face what could be the biggest drug competition in 2021 with Olumiant going head-to-head against several other rivals. But Incyte's fortunes will be mainly driven by Jakafi.

CEO Herve Hoppenot said that the company expects regulatory decisions on seven applications seeking approval, including four in the U.S, two in Europe, and one in Japan. Hoppenot also mentioned that Incyte is working toward the potential U.S. launch of a ruxolitinib (Jakafi) cream. The company expects it to be approved by the FDA by the middle of the year.

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