Incyte Corporation (INCY), Pfizer Inc. (PFE): This Biotech Has So Many Reasons to Be Liked

Strong pipeline
In addition to trials concerning pancreatic cancer, Jakafi is being studied for solid and hematologic tumors, polycythemia vera and ovarian cancer as well. The studies are in mid-stage trials, so it’s anyone’s guess as to what could happen if it is approved for all indications.

Incyte Corporation (NASDAQ:INCY) also has two more JAK inhibitors in the pipeline: baricitinib and INCB39110. These drugs are being developed to treat RA, psoriasis, and diabetic nephropathy, with RA being the most prominent use. Current treatments of RA include NSAIDs, steroids, disease-modifying antirheumatic drugs and TNF alpha biologics. The RA market, which was worth $11.1 billion in 2011, is expected to grow to $15.2 billion by 2021 in United States, France, Germany, Italy, Spain, the United Kingdom and Japan.

Baricitinib is in early Phase 3 trials. Assuming that it comes up for approval by the end of next year, Pfizer Inc. (NYSE:PFE)’s JAK inhibitor Xeljanz would have completed two years in the market and established a niche for JAK inhibitors as a treatment for RA. Analysts predict that the market for Xeljanz is worth $2.6 billion. A new treatment for RA can prove to be an opportunity as big, if not bigger, than Jakafi; if the new drugs are approved, they should bring in billions.

My take
Incyte Corporation (NASDAQ:INCY)’s stock has jumped around 50% since the beginning of August, around the time when I started getting interested in the stock. A major part of that appreciation happened after the Aug. 20 release of positive data supporting hopes of a new indication for Jakafi. While investors should expect minor corrections going forward, the company’s stock could present a good investment opportunity.

The article This Biotech Has So Many Reasons to Be Liked originally appeared on Fool.com.

Kanak Kanti De has no position in any stocks mentioned. The Motley Fool recommends Celgene. 

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