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Incyte Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 15, 2004
Period End
December 31, 2003
Security
INCY
In the record · 2016–202610-K1510-Q348-K107

INCY filed 15 annual reports (10-K), 34 quarterly reports (10-Q) and 107 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Dec ’16Dec ’16
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Jan ’22Jan ’22
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 15, 2004. Cited figures are marked; the original filing is the authoritative source.

Incyte Corporation (formerly Incyte Genomics, Inc.) reported a net loss of $166.5 milliona for fiscal 2003, up from $136.9 million in 2002, or $2.33 per share.

Revenues fell to $47.1 millionb from $101.6 million, as the company's genomic information products business continued to decline. Cash, cash equivalents and marketable securities totaled $293.8 million at December 31, 2003, down from $429.0 million a year earlier, and the accumulated deficit reached $571.5 million. The company is pivoting to small-molecule drug discovery and development, focusing on HIV, inflammation, cancer and diabetes.

Its lead candidate, Reverset, is in Phase II trials for HIV, where a 10-day trial showed viral load reductions of 1.67 to 1.77 log10 across three doses. A CCR2 receptor antagonist program is expected to enter clinical trials in the first half of 2004. In February 2004, the company announced the closure of its Palo Alto headquarters and a restructuring expected to cost up to $47 millionc in 2004 and reduce annual expenses by up to $50 million.

The company strengthened its balance sheet after year-end by issuing $200 milliond of 3.5% convertible subordinated notes due 2011 in February 2004, with an additional $50 million issued in March 2004. Investors should weigh these financing actions against ongoing losses, the early stage of the pipeline, and an pending arbitration with Iconix Pharmaceuticals over $28.25 million in alleged payments.

02—Key points

Key Highlights

  1. Net loss of $166.5 million, or $2.33 per share, in 2003, compared with $136.9 million, or $2.03 per share, in 2002.
  2. Revenues declined to $47.1 million in 2003 from $101.6 million in 2002, reflecting reduced demand for information products.
  3. Cash, cash equivalents and marketable securities were $293.8 million at December 31, 2003, down from $429.0 million at December 31, 2002.
  4. Reverset (HIV, NRTI) is in Phase II trials; a 180-patient Phase II trial in treatment-experienced patients is planned for the first half of 2004.
  5. The CCR2 receptor antagonist program is expected to enter clinical trials in the first half of 2004, and a protease inhibitor lead compound is expected to enter trials late in 2004.
  6. February 2004 restructuring to close the Palo Alto headquarters: up to $47 million in charges in 2004 and up to $50 million in annual expense reductions.
  7. Issued $200 million in February 2004 and an additional $50 million in March 2004 of 3.5% convertible subordinated notes due 2011.

03—Questions

Frequently Asked Questions

  1. Why did Incyte's revenue fall so sharply in 2003?

    The filing attributes the decline to a softening market for genomic information, reduced research spending by pharmaceutical and biotechnology companies amid industry consolidation, and the impact on renewals and pricing of its information products. The company expects revenues from information products in 2004 to be significantly less than in 2003.

  2. What is Incyte's most advanced product candidate and what did the Phase II data show?

    The most advanced candidate is Reverset, a once-daily nucleoside analog reverse transcriptase inhibitor for HIV. In a Phase II trial of treatment-naive patients, viral load fell on average by 1.67 to 1.77 log10 after 10 days across three doses, and no serious drug-related adverse events were reported. The company cautions that efficacy in patients with resistant virus is not yet established.

  3. How is Incyte funding its operations and what debt does it carry?

    At December 31, 2003, Incyte had $166.5 million of 5.5% convertible subordinated notes due 2007 and $293.8 million in cash and marketable securities. In February and March 2004 it issued $250 million of 3.5% convertible notes due 2011, with net proceeds of about $194.0 million and $48.5 million. Management believes existing resources and these proceeds will be adequate for at least the next twelve months.

  4. What are the main legal risks disclosed?

    Incyte is in arbitration with Iconix Pharmaceuticals, which alleges Incyte owes $28.25 million through 2009; Incyte disputes this and has asserted counterclaims. The Invitrogen patent suit was settled in January 2004 with Invitrogen taking a license, and the court ordered dismissal on February 9, 2004.

04—Continue

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