Incyte Corporation’s (INCY) first quarter 2011 loss of $0.21 per share was narrower than the Zacks Consensus loss Estimate by $0.10 and the year-ago adjusted loss by $0.06. The narrower loss was attributable to the jump in revenues which more than offset the rise in total cost and expenses.
Total revenues in the reported quarter jumped to $32.0 million from $17.3 million in the year-ago quarter, up 85%. Revenues were boosted by the recognition of $15.0 million by Incyte of a milestone payment from Novartis (NVS) under the agreement between the two companies. Revenues in the first quarter of 2011 zoomed past the Zacks Consensus Estimate of $18 million.
Total cost and expenses in the reported quarter climbed 28.8% to $47.8 million. Both research and development (R&D) expenses (up 15.4%) and selling, general and administrative (SG&A) expenses (up 86.8%) were on the upswing during the quarter. Incyte’s efforts to develop its pipeline contributed to the rise in R&D expenses.
The massive jump in SG&A expenses was attributable to the expenses incurred by the company for INCB18424 (also known as INC424). The candidate is being developed to treat patients suffering from myelofibrosis (MF), a rare bone marrow disorder. Incyte expects to submit applications in the US and Europe seeking marketing approval for the MF candidate in June 2011.
2011 Outlook
Incyte raised its revenue guidance for 2011 to include the $15 million milestone payment from Novartis. The company now expects to end 2011 with revenues of $82 million as against $67 million forecasted earlier. Incyte has maintained its outlook for R&D and SG&A expenses.
R&D expenses for 2011 are expected in the range of $175 million-$185 million. SG&A expenses are expected in the range of $50 million-$55 million in 2011. Incyte also projects 2011 cash usage in the range of $185 million-$200 million.
Our Recommendation
Currently, we have a Neutral stance on Incyte in the long-run, which is supported by the Zacks #3 Rank (short-term Hold recommendation).
INCYTE CORP (INCY): Free Stock Analysis Report
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