This Analyst Predicts Bullish Growth Outlook For Incyte

Argus said in a note that it sees bullish growth outlook for Incyte Corporation INCY given its solid late-stage pipeline and key strategic R&D partnerships with companies such as Merck & Co., Inc. MRK, Novartis AG (ADR)NVS, Bristol-Myers Squibb Co BMY and Eli Lilly and Co LLY.

The firm has a Buy rating on the shares of the company and a $150 price target.

Analyst Jasper Hellweg noted that the company's main drug Jakafi is the first and only drug approved for the treatment of myelofibrosis and polycythemia vera, two types of rare blood cancer. The analyst said he likes the growth outlook for Jakafi.

The analyst also noted that Jakafi's net product revenue was up 33 percent year-over-year in the second quarter to $276 million, helped by patient demand for both of its approved indications. Since the second quarter, the analyst noted that the number of patients on Jakafi rose at a CAGR of 46.5 percent.

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Additionally, Argus is upbeat about the company's other approved drugs and their pipeline, including other oncology drugs and treatments for rheumatoid arthritis and atopic dermatitis.

The firm said Incyte is perpetually a potential M&A candidate for a larger biotech or big Pharma company. However, the firm noted that the company is not consistently profitable and that its shares are volatile.

Accordingly, the firm said Incyte is appropriate only for risk-tolerant investors as part of a diversified portfolio.

Meanwhile, the firm noted that the shares of Incyte have outperformed the S&P 500 over the past quarter, as they have run up by 7.1 percent even as the market has gained only 2.4 percent. However, since the beginning of September, the stock has pulled back by 10 percent.

The firm recommended using the recent weakness as a buying opportunity.

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