01—Abstract
Summary
Summary of the 10-K filed February 8, 2022. Cited figures are marked; the original filing is the authoritative source.
Incyte Corporation reported total revenues of $2.99 billiona for 2021, up from $2.67 billion in 2020, and net income of $948.6 million, compared with a net loss of $295.7 million in 2020.
The results were helped by a $569.0 millionb income tax benefit from releasing the valuation allowance on most of its U.S. deferred tax assets. Product revenues, net, were $2.32 billion, led by JAKAFI at $2.13 billion, while product royalty revenues rose to $569.3 million, driven by JAKAVI, OLUMIANT and TABRECTA. Milestone and contract revenues fell to $95.0 million from $205.0 million.
Research and development expense fell to $1.46 billionc from $2.22 billion, mainly because 2020 included large upfront and milestone payments under collaboration agreements, including the MorphoSys agreement. Selling, general and administrative expense rose to $739.6 million from $516.9 million, reflecting the build-out of the dermatology commercial organization for OPZELURA, which was approved in September 2021. Cash, cash equivalents and marketable securities totaled $2.35 billion at year-end, and the company had an undrawn $500.0 million revolving credit facility.
The filing also highlights regulatory and commercial risks. JAKAFI is the company's dominant product, and the filing notes a September 2021 FDA labeling update adding warnings for JAK inhibitors.
In January 2022 the company withdrew the parsaclisib NDA, and FDA actions on baricitinib for atopic dermatitis remained uncertain. The company also disclosed an accumulated deficit of $0.8 billiond and a Yverdon, Switzerland large molecule production facility expected to be operational in the second half of 2022.
02—Key points
Key Highlights
- Total revenues of $2.99 billion in 2021, up from $2.67 billion in 2020
- Net income of $948.6 million in 2021, versus a net loss of $295.7 million in 2020, including a $569.0 million tax benefit from valuation allowance release
- JAKAFI net revenues of $2.13 billion, up from $1.94 billion; total product revenues, net, of $2.32 billion
- Product royalty revenues of $569.3 million, including OLUMIANT ($220.9 million) and JAKAVI ($338.0 million)
- R&D expense fell to $1.46 billion from $2.22 billion; SG&A rose to $739.6 million from $516.9 million
- Cash, cash equivalents and marketable securities of $2.35 billion at December 31, 2021, with an undrawn $500.0 million revolving credit facility
- OPZELURA approved by the FDA in September 2021 for mild to moderate atopic dermatitis; parsaclisib NDA withdrawn in January 2022
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Incyte kept $0.32.
- Revenue$2.99B100.0%
- Cost of revenue−$151.0M5.1%
- Gross profit$2.84B94.9%
- Operating costs−$2.25B75.3%
- Operating income$585.8M19.6%
- Interest, other & tax$362.8M12.1%
- Net income$948.6M31.8%
Where FY2021 revenue went
$2.99B- R&D: $1.46B, 49% of revenue
- SG&A: $739.6M, 25% of revenue
- Operating income: $585.8M, 20% of revenue
- Cost of revenue: $151.0M, 5.1% of revenue
- Other operating costs: $51.8M, 1.7% of revenue
Kept 20% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 8, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $2.99B$2.67B | +12.0% |
| Cost of Revenue | $150.99M$131.33M | +15.0% |
| Gross Profit | $2.84B$2.54B | +11.8% |
| R&D Expenses | $1.46B$2.22B | −34.2% |
| SG&A Expenses | $739.56M$516.92M | +43.1% |
| Operating Expenses | $2.40B$2.93B | −18.1% |
| Operating Income | $585.78M-$263.68M | +322.2% |
| Interest Expense | $1.91M$2.17M | −12.2% |
| Net Income | $948.60M-$295.70M | +420.8% |
| EPS (Basic) | $4.30$-1.36 | +416.2% |
| EPS (Diluted) | $4.27$-1.36 | +414.0% |
| Shares Outstanding (Basic) | 220.43M218.07M | +1.1% |
| Shares Outstanding (Diluted) | 222.07M218.07M | +1.8% |
05—Questions
Frequently Asked Questions
What drove the swing from a net loss in 2020 to net income in 2021?
Net income of $948.6 million in 2021 reflected higher revenues and lower R&D expense, which fell to $1.46 billion from $2.22 billion because 2020 included large collaboration upfront and milestone payments. The filing also reports a $569.0 million benefit from releasing the valuation allowance on most U.S. deferred tax assets, which increased net income by $2.58 per basic share.
How dependent is Incyte on JAKAFI?
Heavily. JAKAFI product revenues were $2.13 billion of the $2.99 billion in total revenues for 2021. The filing states the company expects JAKAFI product sales to continue contributing a significant percentage of total revenues over the next several years, and it describes risks from competition, generic challenges and label changes.
What regulatory setbacks did the company disclose?
The company withdrew the NDA for parsaclisib in January 2022 after discussions with the FDA on confirmatory studies, and it withdrew the MAA for retifanlimab in squamous cell carcinoma of the anal canal in October 2021 after a complete response letter. In September 2021 the FDA also added JAK-inhibitor class warnings to the JAKAFI label.
What are the company's main growth drivers beyond JAKAFI?
The filing points to OPZELURA, approved in September 2021 and launched in October 2021; PEMAZYRE, with 2021 revenues of $68.5 million; and ICLUSIG and MINJUVI. It also cites a late-stage pipeline including ruxolitinib cream for vitiligo, which has a PDUFA target action date of April 18, 2022, and axatilimab for chronic GVHD.
06—Continue