01—Abstract
Summary
Summary of the 10-Q filed July 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Incyte reported total revenues of $1.22 billiona for the three months ended June 30, 2025, up from $1.04 billion a year earlier.
Net income was $405.0 millionb, or $2.04 per diluted share, compared with a net loss of $444.6 million in the prior-year quarter. That loss included $679.4 million of acquired in-process research and development expense tied to the Escient acquisition. Product revenues were $1.06 billion, led by JAKAFI at $763.8 million, OPZELURA at $164.5 million and NIKTIMVO at $36.2 million.
Quarterly results also include a $242.3 millionc credit recorded as contract dispute settlement after the May 2025 settlement with Novartis over the duration of JAKAFI royalty payments. Under that settlement, Incyte paid Novartis $280.0 million and agreed to reduce by 50% the royalty rate on future U.S. JAKAFI net sales beginning January 1, 2025. For the six months ended June 30, 2025, total revenues were $2.27 billion and net income was $563.2 million, or $2.84 per diluted share.
Operating cash flow was $310.8 milliond, compared with a use of $356.8 million in the prior-year period. Research and development expense was $494.9 million for the quarter, versus $1,138.4 million a year earlier, and selling, general and administrative expense was $331.0 million, versus $306.0 million. At June 30, 2025, cash, cash equivalents and marketable securities totaled $2.4 billion, and the $500.0 million revolving credit facility had no outstanding borrowings.
Key risks remain concentrated in JAKAFI. Apotex, Hikma, Sun and Granules have filed paragraph IV challenges seeking approval of generic versions, and Incyte has sued them on certain patents. Incyte has accrued $165.2 million related to its lawsuit against CMS over whether OPZELURA should be treated as a line extension of JAKAFI for Medicaid rebates, which the filing says affected the quarter's gross-to-net deductions by 6.6%.
In July 2025, Incyte entered into a settlement and license agreement with Sun Pharmaceuticals resolving patent litigation over Leqselvi (deuruxolitinib). The company is still evaluating the effects of the One Big Beautiful Bill Act, enacted July 4, 2025. The effective tax rate was 27.4% for the quarter and 28.9% for the six months.
02—Key points
Key Highlights
- Q2 2025 total revenues of $1,215.5 million, up from $1,043.8 million in Q2 2024; six-month revenues of $2,268.4 million versus $1,924.6 million.
- Q2 2025 net income of $405.0 million ($2.04 diluted EPS) versus a net loss of $444.6 million in Q2 2024, which included $679.4 million of Escient-related IPR&D expense.
- JAKAFI net revenues of $763.8 million in Q2 2025 versus $706.0 million; OPZELURA net revenues of $164.5 million versus $121.7 million; NIKTIMVO net revenues of $36.2 million.
- A $242.3 million credit in contract dispute settlement from the May 2025 Novartis settlement, after Incyte paid Novartis $280.0 million and agreed to a 50% royalty rate reduction on future U.S. JAKAFI net sales.
- Six-month operating cash flow of $310.8 million versus a $356.8 million use in the prior-year period; cash, cash equivalents and marketable securities of $2.4 billion at June 30, 2025.
- Pending paragraph IV generic challenges to JAKAFI from Apotex, Hikma, Sun and Granules, with listed patents expiring in June 2028 and December 2028 including pediatric extension.
- A $165.2 million accrual tied to the CMS line-extension dispute over OPZELURA, with the filing stating a 6.6% impact on quarterly gross-to-net deductions, and a July 2025 Sun settlement licensing Leqselvi in the U.S.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Incyte kept $0.33.
- Revenue$1.22B100.0%
- Cost of revenue−$78.8M6.5%
- Gross profit$1.14B93.5%
- Operating costs−$606.4M49.9%
- Operating income$530.3M43.6%
- Interest, other & tax−$125.3M10.3%
- Net income$405.0M33.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 29, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $1.22B$1.04B | +16.5% |
| Cost of Revenue | $78.77M$76.63M | +2.8% |
| Gross Profit | $1.14B$967.13M | +17.5% |
| R&D Expenses | $494.92M$1.14B | −56.5% |
| SG&A Expenses | $331.02M$305.98M | +8.2% |
| Operating Expenses | $685.22M$1.52B | −55.0% |
| Operating Income | $530.31M-$478.13M | +210.9% |
| Net Income | $405.00M-$444.60M | +191.1% |
| EPS (Basic) | $2.09$-2.04 | +202.5% |
| EPS (Diluted) | $2.04$-2.04 | +200.0% |
| Shares Outstanding (Basic) | 194.00M218.18M | −11.1% |
| Shares Outstanding (Diluted) | 198.74M218.18M | −8.9% |
05—Questions
Frequently Asked Questions
What drove the swing from a net loss to net income in the second quarter?
The prior-year quarter included $679.4 million of in-process R&D expense from the Escient acquisition, which pushed R&D expense to $1,138.4 million. In Q2 2025, R&D expense was $494.9 million, and the company also recorded a $242.3 million credit in contract dispute settlement. Product revenues rose to $1,059.4 million from $906.6 million.
What was the Novartis contract dispute settlement?
In May 2025, Incyte and Novartis settled litigation initiated by Novartis over the duration of royalties Incyte owes on JAKAFI. Incyte paid Novartis $280.0 million for disputed royalties on U.S. JAKAFI net sales through December 31, 2024, and agreed to reduce by 50% the royalty rate on future U.S. JAKAFI net sales beginning January 1, 2025. The difference of $242.2 million between accrued royalties of $537.1 million at March 31, 2025 and the amount paid was recorded as a credit in contract dispute settlement.
How much cash does Incyte have and does it have debt?
At June 30, 2025, Incyte had cash and cash equivalents of $1,954.969 million, and total cash, cash equivalents and marketable securities of $2.4 billion. The company had no outstanding borrowings under its $500.0 million senior unsecured revolving credit facility, which matures in June 2027, and was in compliance with its covenants.
What are the main risks to JAKAFI revenue?
JAKAFI accounted for $763.8 million of Q2 2025 product revenues. Apotex, Hikma, Sun and Granules have filed paragraph IV certifications seeking approval of generic versions, and Incyte has filed patent infringement actions against them in the U.S. District Court for the District of New Jersey, which remain pending. The filing also notes that in July 2025 Incyte settled its patent litigation with Sun over Leqselvi through a license agreement.
What is the OPZELURA Medicaid rebate dispute?
Incyte sued CMS, alleging that a regulation defining a line extension for the Medicaid rebate program is too broad and would treat OPZELURA as a line extension of JAKAFI. As of June 30, 2025, Incyte had accrued approximately $165.2 million for the incremental rebates that would be owed if that treatment applied. The filing states the impact on OPZELURA gross-to-net deductions for the quarter was approximately 6.6%. If the company prevails, it would reverse the accrual and have a lower future gross-to-net deduction.
06—Continue