Incyte Corporation (INCY) Earnings

Management highlights

### Strategic Transition Progress - Insight is successfully transitioning from a single cornerstone product (Jackify) to a diversified company with multiple growth drivers, and is on track to reach $3 to $4 billion in annual net sales for the core business (excluding Jackify) by 2030. - The newly acquired Vega Therapeutics transaction added latarsabart, a novel phase three asset for von Willebrand disease, expanding Insight's hematology franchise while preserving balance sheet flexibility. - The company now has the commercial infrastructure and team to launch and scale multiple products in parallel, a core capability for its next growth phase. ### Regulatory Milestones - JackifyXR received U.S. approval and launched in Q2 2026, and is on track to hit 50% to 70% formulary coverage by end of 2026, with major payers (ESI, CVS, Optum) already covering the product. - Opsalura received a positive CHMP opinion for moderate atopic dermatitis in Europe, with a final European Commission approval expected in Q3 2026. - Regulatory reviews are ongoing for Povacitinib (for hidradenitis suppurativa) and Monjuvian (for first-line diffuse large B-cell lymphoma), with approvals and launches expected through early 2027. ### Pipeline Advancement - Three new phase three trials were initiated for 989 (second-line essential thrombocythemia), 734 (pancreatic ductal adenocarcinoma), and 890 (colorectal cancer). There will be 10 total data readouts across the pipeline in H2 2026, including registration trial data for multiple lead assets. - Development of O58, the lead JAK2V617F targeted asset for myeloproliferative neoplasms, was discontinued after totality of data showed it did not meet the differentiated profile required for advancement. Next-generation JAK2V617F targeted assets are progressing through IND-enabling studies, with preclinical data expected by end of 2026. - A global collaboration with Halozyme was established to develop an enhanced subcutaneous formulation of 989, adding optionality to the program and improving potential patient experience beyond the ongoing internal subcutaneous development. ### Financial Performance - GAAP operating expenses totaled $976 million in Q2, growing 5% year-over-year when adjusting for a 2025 one-time favorable settlement. GAAP R&D expenses were $517 million (up 4% year-over-year), driven by investment in late-stage assets, and GAAP SG&A expenses were $352 million (up 6% year-over-year), driven by upcoming product launch preparations. The quarter ended with $4.5 billion in cash and cash equivalents.

Guidance

- Full year 2026 total net sales guidance was raised to $5.13 billion to $5.26 billion, up from prior guidance, driven by upward revisions to Opsalura and hematology/oncology guidance. - Opsalura full year 2026 net sales guidance was updated to $1.05 billion to $1.10 billion, which includes a $246 million one-time non-cash benefit from the CMS settlement recorded in Q2, plus an estimated $40 to $50 million in incremental net sales from an improved gross-to-net profile in H2 2026. - Hematology and oncology full year 2026 net sales guidance was narrowed and raised to $860 million to $890 million, reflecting stronger-than-expected performance in the first half of the year. - Full year 2026 GAAP R&D and SG&A operating expense guidance was updated to $4.915 billion to $4.995 billion, and non-GAAP R&D and SG&A guidance was raised to $4.625 billion to $4.695 billion. The increase reflects the $127 million upfront payment and transaction costs for the Vega acquisition, plus $50 million in incremental ongoing development costs for latarsabart.

Segment performance

For Q2 2026, Insight reported total revenue of $1.67 billion, representing 38% year-over-year growth, and total net sales of $1.49 billion, representing 40% year-over-year growth. Excluding a one-time non-cash benefit from the CMS Medicaid rebate litigation settlement, total net sales grew 17% year-over-year. 1. Jackify (foundational product): Q2 net sales were $817 million, up 7% year-over-year, accounting for 54.8% of total Q2 net sales. Prescription demand grew 9% across all indications, with polycythemia vera as the largest growth driver. JackifyXR, the extended-release formulation, generated $10 million in Q2 sales (mostly initial inventory build), and is included in full-year Jackify guidance. 2. Opsalura (largest non-Jackify product): Q2 total sales were $450 million, including $204 million in net product sales and a $246 million one-time non-cash benefit from the CMS settlement, accounting for 30.2% of total Q2 net sales. Excluding the one-time benefit, U.S. sales grew 22% year-over-year to $161 million, with prescriptions growing 26% (outpacing the 21% overall market growth) and capturing 46% of branded topical new prescription volume. International Opsalura sales were $43 million, up 34% year-over-year, with strong growth in the vitiligo indication. 3. Hematology and Oncology: Q2 net sales grew 69% year-over-year to $222 million, accounting for 14.9% of total Q2 net sales. Nictimbo net sales were $60 million, up 67% year-over-year, with over 300 new patients initiating treatment in the quarter and holding approximately one third of the third-line plus market. Monjuvi net sales were $54 million, up 72% year-over-year, driven by uptake in follicular lymphoma and a recent launch in Japan. Zyna net sales were $50 million, a 4x year-over-year increase, holding over 40% market share for first-line SEAC in the U.S. 12 months post-launch. 4. Core business excluding Jackify: Q2 net sales were $671 million, up 127% year-over-year; excluding the one-time Opsalura benefit, sales grew 44% year-over-year.

Risks & headwinds

- Actual future results may differ materially from forward-looking statements due to inherent risks and uncertainties, as referenced in the company's SEC filings. - Pricing and reimbursement environments remain dynamic, requiring continued focus to maintain broad formulary access and a disciplined gross-to-net profile. - Clinical development carries inherent attrition risk; late-stage assets may still fail to meet efficacy, safety, or regulatory endpoints required for approval or commercial success. - Competitive pressure in oncology and dermatology may limit market share for new products even if approved. - The timing and outcome of regulatory discussions for 9A9's novel clinical trial endpoints (including inclusion of hemoglobin improvement and disease-modifying effects) remain uncertain, which could impact trial initiation timelines.

Analyst Q&A

• Q: What outstanding regulatory questions remain for 9A9's myelofibrosis trial design, and what is the timeline for initiation? /

  A: Management is in ongoing constructive discussions with the FDA about trial design. The standard path uses traditional endpoints SVR35 and TSS50, but 9A9's novel mechanism delivers clinically meaningful hemoglobin improvements and disease-modifying effects, so management is discussing adding these endpoints to better reflect the drug's patient benefits. Initiation of the second-line trial is planned for 2026, with first-line initiation planned for 2027, and the trial will enroll all patient subtypes at differing starting dose levels. (317 characters)

• Q: After the Vega acquisition, what is Insight's approach to business development and R&D spending ahead of Jackify's loss of exclusivity? /

  A: Management actively continues to pursue opportunities that meet the same strategic and financial criteria as the Vega acquisition, and will act quickly when suitable deals appear, while remaining patient if no opportunities meet the bar. The company is not pursuing growth at all costs, but is willing to accept near-term margin compression if it correlates to materially higher risk-adjusted pipeline value. 80% of R&D investment is focused on four high-potential assets that can drive growth beyond Jackify, and underperforming programs are discontinued promptly. (421 characters)

• Q: What should we expect from the 734 (G12D inhibitor) data presentation at ESMO, and how does Insight see its competitive positioning? /

  A: ESMO will present mature data from ~50 first-line pancreatic cancer patients (split evenly between two chemotherapy combinations) plus data for 734 in colorectal cancer, which management says will be a significant de-risking event for the program. Pancreatic cancer is unlikely to be a winner-take-all market, and Insight is one of only two companies with a G12D inhibitor in phase 3 for first-line pancreatic cancer. Management believes 734 has best-in-class potential in combination with chemotherapy, with opportunity across multiple tumor types and lines of therapy. (398 characters)

• Q: Could latarsabart for von Willebrand disease become a Hemlibra-sized opportunity, and could it expand beyond VWD? /

  A: KOL and patient feedback from the recent ISTH meeting was very positive on latarsabart's clinical profile, and there is unmet need for better prophylaxis across a broader VWD patient population. The severe VWD patient population that would benefit most from latarsabart is roughly 10,000 people, which could make latarsabart one of Insight's largest products if phase 3 data meets expectations. Management's current priority is executing the phase 3 trial to get approval, but the substrate for large, transformative commercial success exists. (392 characters)

• Q: How is JackifyXR conversion tracking, and when will payer reimbursement be active? /

  A: Payer reimbursement is already active, with multiple major payers already adding JackifyXR to formularies. The company is on track to hit its 50% to 70% end-of-year formulary coverage target. Management expects 3% to 5% of total Jackify demand to be for XR by end of 2026, putting full-year 2026 XR sales in the $40 million to $50 million range, on track to hit 10% to 30% conversion before Jackify's loss of exclusivity, with demand acceleration expected in 2027. (353 characters)