Incyte PDUFA Date Pushed Back, JMP Discusses Impact

There has been a three-month delay in the Food and Drug Administration Prescription Drug User Fee Act date for Incyte Corporation INCY's partnered rheumatoid arthritis drug, baricitinib. The U.S. approval and launch of the drug is now expected in Q2 2017, JMP Securities analysts said in a report. They reiterated a Market Outperform rating on the company, with a price target of $130.

The PDUFA allows the FDA to collect fees from drug manufacturers to fund the new drug approval process. The FDA has pushed the new PDUFA date for baricitinib to April. Incyte’s partner for this drug, Eli Lilly and Co LLY, has submitted additional data for analysis.

Impact Of Delay

Meanwhile, the PDUFA date for competitor Xeljanz (tofacitinib) from Pfizer Inc. PFE for the same indication has been delayed for safety reasons.

“We continue to anticipate approval [for baricitinib] is forthcoming, but will be postponed by three months as we await the FDA to review the new data,” the analysts wrote. They added, “The delay is immaterial to our price target as the postponed royalty is small.”

There is a milestone of $100 million associated with the approval. However, the delay is only for three months and is partially offset by a milestone of $30 million for psoriatic arthritis.

“Our thesis on the shares of INCY remains intact and we recommend buying shares on weakness as we expect tremendous value creation through the development of the oncology pipeline and opportunistic indications,” the JMP report noted.

In Tuesday's pre-market session, shares of Incyte were seen down 0.85 percent at $116.75.