Revenues surge for Incyte, but baricitinib rejection clouds future
- Incyte Corp. on Thursday reported year-over-year revenue growth of 46% in the first quarter of 2017, driven by growing demand for Jakafi (ruxolitinib) in the U.S. and by Iclusig (ponatinib) in Europe, along with increases in product royalty and contract revenue.
- On the other side of the ledger, R&D costs climbed to $408 million, compared with $157 million a year ago, and included both clinical portfolio expansion and upfront and milestone costs in the Agenus, Calithera and Merus deals.
- While Incyte has seen the first royalties from the launch of Olumiant (baricitinib) in Europe, the Food and Drug Administration's surprise rejection of the drug means approval and development milestones have been removed from 2017 financial guidance. The revised milestone guidance is for up to $130 million this year, of which Incyte has already recognized $90 million.
Although its income grew, Incyte is still in the shadow of last month's complete response letter (CRL) from the Food and Drug Administration for baricitinib, the hotly anticipated rheumatoid arthritis drug it licensed to Eli Lilly & Co.
Despite approval in February 2017 in Europe as Olumiant and subsequent launch, the FDA requested further clinical data over appropriate dose and safety concerns before U.S. approval.
"Given the review process and regulatory outcome in Europe last year and the approval this year, we were both surprised and disappointed that this was the outcome of the FDA review. We remain confident in the benefit/risk of baricitinib as a new treatment option for adults with rheumatoid arthritis. Lilly will be meeting with the FDA to discuss the CRL within the next 60 days and to discuss the FDA's concerns and next steps," said Steven Stein, Incyte's chief medical officer, on an earnings call with analysts Thursday.
Although Incyte declined to provide further details on clinical development of the drug outside of rheumatoid arthritis, it appears studies in atopic dermatitis and psoriatic arthritis will continue.
"We look forward to working with Lilly in the development of baricitinib in rheumatoid arthritis and beyond. The atopic dermatitis and psoriatic arthritis programs are run by Lilly and driven by them with our appropriate input. They've guided to the fact that these continue to proceed forward. At this junction in time, we can't comment further," Stein said.
Lilly has said it plans to begin a pivotal trial for baricitinib in 2017 for psoriatic arthritis, and the drug is in Phase 2 development for in systemic lupus erythematosus and atopic dermatitis, with a data read out for the latter indication expected within the next 12 months.
Baricitinib's rejection hung over over Lilly's otherwise positive first quarter earnings and has led Incyte to revise its guidance for expected milestone revenues.
However, according to Incyte CEO Hervé Hoppenot, the setback won't derail Incyte's overall development:
"The CRL for baricitinib in the U.S. is obviously a disappointment, but we do not believe it changes the fundamental momentum and direction at Incyte, which has been driven by strong growth in product-related revenue as well as the significant expansion of our clinical activities across many parts of our development portfolio."
- Incyte Corporation Press release
- BioPharma Dive Context: After EU yes, FDA says no to Lilly's baricitinib
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