Incyte stock tumbled to a nearly five-year low Monday after GSK gained Food and Drug Administration approval for a rival myelofibrosis treatment.
RBC Capital Markets analyst Brian Abrahams says GSK's new drug, dubbed Ojjaara, could cut Jakafi's market share by up to 20% over the next two years. Incyte's Jakafi treats myelofibrosis, a rare cancer of the bone marrow, but can cause anemia. Ojjaara, on the other hand, gained FDA approval specifically for myelofibrosis patients with anemia.
"With anemia present in about 30% to 40% of patients at diagnosis, anemia a side effect of Jakafi and the majority of myelofibrosis patients developing anemia at some point in their disease course, we think the drug could represent meaningful competition for Incyte's Jakafi in myelofibrosis," Leerink Partners analyst Andrew Berens said in a report.
On the stock market today, Incyte stock toppled 4.9% to 59.51. GSK stock sank a fraction to 37.35.
Incyte Stock: Moneymaking Jakafi
Jakafi is Incyte's biggest moneymaker. In the June quarter, Jakafi generated roughly 82.5% of Incyte's total sales, at $682 million. It treats myelofibrosis, as well as a type of blood cancer called polycythemia vera and graft-versus-host disease. The latter occurs when a patient's body rejects a transplant.
GSK's approval puts Ojjaara directly in Jakafi's competitive path, RBC's Abrahams said in a report. That pushed Incyte stock to its lowest point since December 2018.
"Indeed, with Ojjaara's potential to improve or not worsen anemia, our survey work and (key opinion leader) feedback is that 70% of physicians would consider non-Jakafi options," he said. "That said, we continue to see Jakafi's proven overall survival benefit and significant entrenchment as somewhat limiting the near-term impact from new entrants such as Ojjaara and Vonjo."
CTI Biopharma sells Vonjo. It's being acquired by Swedish biopharma company Sobi.
Competition Increasing For Jakafi
Abrahams kept his neutral rating and 73 price target on Incyte stock.
"The approval does highlight the growing competitive dynamics in the myelofibrosis space and Incyte's need to deliver further innovation," he said.
Incyte is working on combination approaches to handle anemia in Jakafi patients. Incyte is expected to present updated Phase 1 and Phase 2 data in the second half of 2023, Leerink's Berens said. The company could potentially outline its path to approval by the end of 2023 or early 2024.
Berens maintained his market perform rating on Incyte stock.
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