Incyte Corporation (Nasdaq:INCY) today reported fourth quarter
and full year 2009 financial results, provided an update on key
fourth quarter accomplishments and 2010 objectives, and announced
its 2010 financial guidance.
Paul A. Friedman, M.D., Incyte's President and Chief Executive
Officer, stated, “We achieved all of our corporate goals in 2009
including the initiation of a global Phase III program for our lead
compound, INCB18424, for myelofibrosis, the completion of a
successful corporate financing and the establishment of two major
alliances with top-tier pharmaceutical firms. Consequently, we are
in a strong position to advance our pipeline and prepare for the
potential launch of INCB18424 in myelofibrosis.
“Key objectives for 2010 include completing our US Phase III
registration trial for INCB18424 in myelofibrosis, determining
product registration requirements for INCB18424 as a treatment for
polycythemia vera and possibly essential thrombocythemia, and
reporting Phase II results for INCB28050 for rheumatoid arthritis
which we expect will support moving forward into a larger Phase IIb
trial with our partner, Eli Lilly.”
David C. Hastings, Incyte’s Executive Vice President and Chief
Financial Officer, stated, “By successfully completing our equity
and senior convertible note offering in 2009 we strengthened our
balance sheet and removed a significant financial overhang from the
Company. Additionally, with the completion of two collaborative
agreements in the fourth quarter, we ended the year, on a pro forma
basis, with approximately $624 million in cash, cash equivalents
and marketable securities.”
Below is a summary of recent accomplishments:
Business Development
- Novartis: Collaboration and
license agreement for two hematology-oncology programs; INCB18424,
JAK1/JAK2 Inhibitor, and INCB28060, cMET inhibitor
- Lilly: Collaboration for
development and commercialization of oral anti-inflammatory and
autoimmune therapies for INCB28050, JAK1/JAK2 Inhibitor
Clinical Programs
JAK1/JAK2 Inhibitor: INCB18424 (oral formulation) for
Myelofibrosis (MF), Polycythemia Vera (PV) and Essential
Thrombocythemia (ET)
- Continued patient enrollment of
the Phase III registration trials, COMFORT-I and COMFORT- II:
- COMFORT-I is expected to enroll
approximately 240 MF patients and includes over 90 clinical sites
in the US, Canada and Australia. We expect recruitment for this
study to complete in the first quarter of this year.
- COMFORT-II is fully enrolled
with over 200 MF patients at approximately 65 clinical sites in
Europe.
- Presented positive clinical
results from three ongoing Phase II trials at the 2009 American
Society of Hematology Annual Meeting in December involving patients
with myelofibrosis, patients with advanced polycythemia vera and
essential thrombocythemia refractory to hydroxyurea and patients
with relapsed or refractory hematological malignancies.
JAK1/JAK2 Inhibitor: INCB28050 for Rheumatoid Arthritis (RA) and
Other Inflammatory Conditions
- Completed patient enrollment for
a six-month double-blind placebo-controlled dose-ranging Phase II
trial involving 127 RA patients. The three and six month results
from this trial are expected to be available in the first and
second half of 2010, respectively.
Sheddase Inhibitor: INCB7839 for Breast Cancer
- Data from a Phase I/II trial
presented at the 32nd San Antonio Breast Cancer Symposium suggest
that INCB7839, in combination with trastuzumab (Herceptin®) based
regimens, may provide additional benefits over traditional
trastuzumab based regimens in a defined subgroup of breast cancer
patients.
2010 Clinical Program Goals
Oncology Programs
JAK1/JAK2 Inhibitor: INCB18424 (oral formulation)
- Complete and present results
from the Comfort-I Phase III US trial and begin preparation of the
New Drug Application for MF to insure earliest possible filing in
2011
- Confirm regulatory requirements
with the FDA for approval in two other myeloproliferative
neoplasms, first in PV followed by ET
- In conjunction with the
Children’s Oncology Group at the National Cancer Institute, support
initiation of a Phase I/II trial in children with relapsed or
refractory solid tumors, hematological malignancies and
myeloproliferative neoplasms
Sheddase Inhibitor: INCB7839
- Meet with the FDA to discuss
registration requirements for use in patients with p95 HER2
positive breast cancer provided results from the ongoing clinical
development program in this subset of patients continues to
demonstrate positive results
Early Stage Oncology Programs
- cMET Inhibitor, INCB28060:
Complete an initial Phase I/II trial in patients with solid tumors
and transfer the program to Novartis
- IDO Inhibitor, INCB24360:
Initiate a Phase I/II trial in patients with solid tumors
- Discovery: File an
Investigational New Drug Application for another oncology compound
that addresses a new target
Inflammation Programs
JAK1/JAK2 Inhibitor: INCB28050
- Complete the Phase II trial and
present top-line results for the three-month portion of the study
in the first half of this year; present the full six month results
at the American College of Rheumatology Annual Meeting
- Based on these results, decide
whether to exercise our co-development option and participate in
the Phase IIb program
JAK1/JAK2 Inhibitor: INCB18424 (topical formulation)
- Present full results from the
three-month Phase IIb trial at a scientific meeting
- Decide on the appropriate next
clinical trials
- Evaluate potential strategic
alliance opportunities
2009 Fourth Quarter and Full Year Financial Results
Net Loss
Quarter Ended December 31, 2009
Net loss for the fourth quarter ended December 31, 2009 was
$88.4 million, or $0.74 per share, as compared to $48.4 million, or
$0.50 per share, for the same period in 2008. Included in the net
loss for the quarter ended December 31, 2009 were the
following:
- a one-time non-cash charge of
$34.3 million or $0.29 per share related to a mark-to-market
adjustment in the value of the embedded derivative liability
related to the 4.75% Convertible Senior Notes due 2015; and
- a non-cash expense of $4.7
million or $0.04 per share related to the amortization of the
discount on the 4.75% Convertible Senior Notes.
Excluding these items, the net loss for the quarter was $0.41
per share. (1)
As a result of the completion of its 4.75% Convertible Senior
Notes private placement, the Company decreased the original
carrying value of the Notes by $148.1 million to reflect an
embedded derivative liability related to the underlying number of
common shares available at the time of the Notes issuance. On
November 24, 2009, the Company’s stockholders approved an increase
in the Company’s authorized common shares, and the Company recorded
a mark-to-market adjustment in the value of the embedded derivative
liability that resulted in a $34.3 million one-time non-cash
charge. As a result of the increase in authorized common shares,
the Company is no longer required to account for the embedded
derivative as a liability and has reclassified it to
additional-paid-in-capital.
Also included in net loss for the quarter ended December 31,
2009 was $1.9 million of non-cash expense related to the impact of
expensing share-based payments, including employee stock options,
compared to $3.9 million for the same period in 2008.
Year Ended December 31, 2009
Net loss for the full year 2009 was $211.9 million, or $2.06 per
share as compared to $178.9 million, or $1.99 per share, for the
full year 2008. Included in the net loss for the year ended
December 31, 2009 were the following:
- the aforementioned $34.3 million
one-time non-cash charge associated with the 4.75% Convertible
Senior Notes, or $0.33 per share on a year to date basis;
- the aforementioned non-cash
expense related to the amortization of the discount of $4.7 million
on the 4.75% Convertible Senior Notes, or $0.05 per share on a year
to date basis; and a
- a non-cash charge of $5.7
million or $0.06 per share related to the repurchase of 3 1/2%
Convertible Senior and Subordinated Notes.
Excluding these items, the net loss for the year was $1.62 per
share. (1)
Also included in net loss for the year ended December 31, 2009
was $10.0 million of non-cash expense related to the impact of
expensing share-based payments, including employee stock options,
compared to $15.0 million for the same period in 2008.
Cash Position
As of December 31, 2009, cash, short-term and long-term
marketable securities totaled $473.9 million, excluding $56.2
million in restricted cash for an escrow account reserved for the
first 3 years of interest payments on the 4.75% Convertible Senior
Notes, compared to $217.8 million as of December 31, 2008. In
January 2010, the Company received an additional $60 million
milestone payment from Novartis for the initiation of the COMFORT
II clinical trial and $90 million upfront payment related to its
recent collaborative agreement with Lilly.
Excluding the proceeds from its follow on equity offering and
its private placement of the 4.75% Convertible Senior Notes,
repurchases of a portion of the 3 1/2% Convertible Senior Notes and
3 1/2% Convertible Subordinated Notes, funding of the interest
escrow, and the upfront payment received under the collaboration
and license agreement with Novartis, the Company used $133.0
million in cash and marketable securities in the year ended
December 31, 2009 including legal and transaction fees related to
its recent collaborative agreements with Novartis and Lilly.
Revenues
Total revenues for the fourth quarter and full year ended
December 31, 2009 were $6.9 million and $9.3 million, respectively,
as compared to $0.9 million and $3.9 million for the same periods
in 2008. The increase was primarily the result of revenues
recognized in the fourth quarter under the Company’s collaborative
agreements with Novartis and Lilly.
Operating Expenses
Research and development expenses for the quarter ended December
31, 2009 were $34.3 million, as compared to $38.3 million for the
same period in 2008. Included in research and development expenses
for the quarter ended December 31, 2009 was a non-cash expense of
$1.3 million related to the impact of expensing share-based
payments, including employee stock options, as compared to $2.6
million for the same period in 2008.
Research and development expenses for the full year 2009 were
$119.4 million, as compared to $146.4 million for 2008. Included in
research and development expenses for the full year 2009 was a
non-cash expense of $7.1 million related to the impact of expensing
share-based payments, including employee stock options, as compared
to $10.7 million for 2008.
The decrease in research and development expenses for the
quarter and full year 2009 were due to prioritization of its
pipeline to focus on products the Company believes have a greater
likelihood of creating near-term value. The Company expects its
research and development expenses to vary from quarter to quarter,
primarily due to the timing of its clinical development
activities.
Selling, general and administrative expenses for the quarter
ended December 31, 2009 were $13.8 million, as compared to $4.6
million for the same period in 2008. Included in selling, general
and administrative expenses for the quarter ended December 31, 2009
was a non-cash expense of $0.6 million related to the impact of
expensing share-based payments, including employee stock options,
as compared to $1.3 million for the same period in 2008.
Selling, general and administrative expenses for the full year
2009 were $27.6 million, as compared to $17.1 million for 2008.
Included in selling, general and administrative expenses for the
full year 2009 was a non-cash expense of $2.9 million related to
the impact of expensing share-based payments, including employee
stock options, as compared to $4.3 million for 2008.
Increased selling, general and administrative expenses for the
quarter and full year 2009 reflected the Company’s initial sales
and marketing activities for the potential commercialization of
INCB18424 for myeloproliferative neoplasms and legal and
transaction costs for its recent collaborative agreements with
Novartis and Lilly.
Interest Income and Interest Expense
Interest income for the three and twelve months ended December
31, 2009 was $0.2 million and $1.2 million, respectively, as
compared to $1.0 million and $5.8 million, respectively, for the
comparable periods in 2008. The decrease was due to a lower yield
and a lower average cash balance for the quarter and year ended
December 31, 2009 as compared to the same periods in 2008.
Included in interest and other income (expense), net for the year
ended December 31, 2009 was a $1.3 million non-cash
other-than-temporary impairment charge.
Interest expense for the three and twelve months ended December
31, 2009 was $12.9 million and $32.1 million, respectively, as
compared to $6.3 million and $24.9 million for the comparable
periods in 2008. Included in interest expense for the quarter and
the year ended December 31, 2009, was $1.0 million and $8.0
million, respectively, of non-cash charges to amortize the discount
on the Company’s 3 1/2% Convertible Senior Notes as compared to
$2.3 million and $8.8 million, respectively, for the same periods
in 2008. Also included in interest expense for the quarter and the
year ended December 31, 2009 was $4.7 million of non-cash charges
to amortize the discount on the Company’s 4.75% Convertible Senior
Notes.
2010 Financial Guidance
The Company expects cash use in 2010 to range from $165 million
to $175 million, not including any potential milestones from its
collaborative partners. This increase as compared to 2009 is
primarily a result of the Company’s increased investments in its
clinical pipeline, particularly INCB18424 in MF and two of the
other myeloproliferative neoplasms, PV and ET, pre product launch
manufacturing and marketing costs for INCB18424 and the Phase II
development of INCB28050 for rheumatoid arthritis. This cash use
guidance also includes approximately $7 million for net lease
related costs for the Company’s closed California facilities.
Excluded from this guidance are $19 million of cash escrowed for
interest payments on the Company’s 4.75% Convertible Senior Notes
and any amounts used to redeem its 3 1/2% Convertible Senior and
Subordinated Notes. On January 28, 2010, Incyte announced that it
will redeem all of the outstanding 3 1/2% Convertible Senior and
Subordinated Notes on February 22, 2010. The Company will use
approximately $175.6 million in cash to redeem these Notes,
assuming none of these Notes are converted.
The Company’s guidance is as follows:
- Revenues of $66 - $68 million,
including $66 million of amortization of deferred revenue related
to the Company’s collaborations with Novartis and Lilly, but
excluding any potential milestones received from
collaborations;
- Research and development
expenses of $138 - $145 million, including a non-cash expense of
$10 - $12 million related to the impact of expensing share-based
payments, including employee stock options;
- Selling, general and
administrative expenses of $40 - $45 million, including a non-cash
expense of $6 - $7 million related to the impact of expensing
share-based payments, including employee stock options; increased
selling, general and administrative expenses reflect the increase
in sales and marketing activity as the Company prepares for the
potential commercialization of INCB18424 for myeloproliferative
neoplasms;
- Interest income of $0.5 - $1.0
million;
- Interest expense of
approximately $44 million, including a non-cash expense of $23.5
million related primarily to the amortization of the discount on
the 4.75% Convertible Senior Notes; and
- A non-cash charge on the pending
redemption of the 3 1/2% Senior and Subordinated Convertible Notes
of up to $5.1 million.
(1) Net loss – as adjusted and basic and diluted net loss per
share – as adjusted (excluding a one-time non-cash charge related
to a mark-to-market adjustment in the value of the embedded
derivative liability related to the 4.75% Convertible Senior Notes,
a recurring non-cash expense related to the amortization of the
discount on the 4.75% Convertible Senior Notes, and a non-cash
charge related to the repurchase of a portion of the 3 1/2%
convertible senior and subordinated notes) is a non-GAAP financial
measure and should not be considered a replacement for GAAP
results. A reconciliation of this non-GAAP financial measure to the
most directly comparable GAAP financial measure is presented below.
The Company believes that presentation of this non-GAAP financial
measure provides useful supplementary information to and
facilitates additional analysis by investors by showing the effect
of the issuance of the Company’s 4.75% Convertible Senior Notes and
the repurchase of a portion of the 3 ½% Convertible Senior and
Subordinated Notes on its net loss.
INCYTE CORPORATION Reconciliation of
Non-GAAP Measures (in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, 2009 December 31,
2009 Net loss - as reported $ (88,443 ) $
(211,870 ) Loss on embedded derivative liability 34,300
34,300
Recurring amortization of debt
discount on the 4.75% Convertible Senior Notes
4,672 4,729
Loss on repurchase of convertible
senior and subordinated notes
358 5,727 Net loss - as adjusted $ (49,113 ) $
(167,114 ) Basic and diluted net loss per share - as
reported $ (0.74 ) $ (2.06 ) Loss on embedded derivative
liability 0.29 0.33
Recurring amortization of debt
discount on the 4.75% Convertible Senior Notes
0.04 0.05
Loss on repurchase of convertible
senior and subordinated notes
- 0.06 Basic and diluted net loss per share - as
adjusted $ (0.41 ) $ (1.62 )
Conference Call Information
Incyte will hold its fourth quarter 2009 financial results
conference call this morning at 8:30 a.m. ET Thursday, February 18,
2010. To access the conference call, please dial 877-407-8037 for
domestic callers or 201-689-8037 for international callers. When
prompted, provide the passcode, which is 344827.
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 dial-in number for international
callers is 201-612-7415. To access the replay you will need the
conference account number 278 and the ID number 344827.
The conference call will also be webcast live on CCBN and can be
accessed at www.incyte.com under Investor Relations, Events and
Webcasts.
About Incyte
Incyte Corporation is a Wilmington, Delaware-based drug
discovery and development company focused on developing proprietary
small molecule drugs for oncology and inflammation. Incyte’s most
advanced compound, INCB18424, is in Phase III development for
myelofibrosis. For additional information on Incyte, visit the
Company's web site at www.incyte.com.
Forward-Looking Statements
Except for the historical information contained herein, the
matters set forth in this press release, including statements with
respect to the potential launch of INCB18424, Incyte’s key
objectives for 2010 and the expectation that Phase II results for
INCB28050 for rheumatoid arthritis will support moving forward into
a larger Phase IIb trial, the expected number of patients and
clinical sites for COMFORT-I and the expected timing for completion
of recruitment for COMFORT-I, the expected timing for availability
of three and six month results from the Phase II trial for
INCB28050 for RA, the Company’s 2010 clinical program goals for
oncology and inflammation, the expected variability of quarterly
research and development expenses, and 2010 financial guidance
about expected cash use, revenues, research and development
expenses, selling, general and administrative expenses, interest
income and interest expense, and non-cash charges, are all
forward-looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of
1995.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially,
including the high degree of risk and uncertainty associated with
drug development and clinical trials, the uncertainty associated
with the regulatory approval processes, risks related to the timing
of and patient enrollment in clinical trials, unanticipated
developments in and risks related to the efficacy or safety of
Incyte’s compounds in clinical trials, the results of further
research and development, risks associated with Incyte’s dependence
on its relationships with its collaboration partners, risks and
uncertainties that may cause the parties not to achieve some or all
of the commercial and developmental milestones set forth in the
collaborative agreements, the risks related to market competition,
and other risks detailed from time to time in Incyte's filings with
the Securities and Exchange Commission, including its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2009.
Incyte disclaims any intent or obligation to update these
forward-looking statements.
INCYTE CORPORATION Condensed
Consolidated Statements of Operations (in thousands, except
per share amounts)
Three Months Ended
December
31,
Twelve Months Ended
December
31,
2009
2008
2009
2008 Revenues: Contract
revenues $ 5,755 $ - $ 5,755 $ 659 License and royalty revenues
1,111 937
3,510 3,260
Total revenues
6,866
937 9,265
3,919 Costs and expenses: Research and
development 34,286 38,326 119,442 146,362 Selling, general and
administrative 13,832 4,611 27,580 17,073 Other expenses
(29 ) 668
2,011 (227
) Total costs and expenses
48,089 43,605
149,033 163,208
Loss from operations (41,223 ) (42,668 ) (139,768 ) (159,289
) Interest and other income, net 313 560 50 5,306 Interest expense
(12,875 ) (6,298 ) (32,125 ) (24,937 ) Loss on embedded derivative
liability (34,300 ) - (34,300 ) -
Loss on repurchase of convertible
senior and subordinated notes
(358 )
-
(5,727 )
-
Net loss
$ (88,443 )
$ (48,406 ) $
(211,870 ) $
(178,920 ) Basic and diluted net
loss per share: $ (0.74 ) $ (0.50 ) $ (2.06 ) $ (1.99 )
Shares used in computing basic and
diluted net loss per share
118,759 97,283
102,943
89,785 INCYTE
CORPORATION Condensed Consolidated Balance Sheet Data
(in thousands)
December 31,
2009
December 31,
2008
Cash, cash equivalents, and
short-term and long-term marketable securities
$ 473,931 $ 217,783 Total assets 712,390 232,388 Convertible senior
notes(1) 308,059 130,969 Convertible subordinated notes 135,079
265,198 Total stockholders’ deficit (102,384 ) (220,750 )
(1) Net of unamortized debt discount of $147.5 million and $20.8
million at December 31, 2009 and December 31, 2008, respectively.
Incyte (NASDAQ:INCY)
Historical Stock Chart
From May 2024 to Jun 2024
Incyte (NASDAQ:INCY)
Historical Stock Chart
From Jun 2023 to Jun 2024