Incyte Earnings: Maintaining $88 FVE on Solid Jakafi, Opzelura Foundation, and Promising Pipeline

We're maintaining our $88 fair value estimate for Incyte following a solid quarter and continued progress in the firm's pipeline. Incyte reported 9% revenue growth in the second quarter, driven mostly by 3% growth in US sales of hematology drug Jakafi and 52% growth for dermatology drug Opzelura. Incyte's decision to discontinue several early-stage oncology programs due to the competitive landscape appears wise, as it saves cash for accelerating development of more novel programs. We think Incyte's innovation in both hematology and immunology help support its narrow moat and that the market is failing to properly value the firm's potential to grow past Jakafi's patent expiration in 2028. Management cited 10 potential "high-impact" launches by 2030, and data from several early programs expected by the end of 2025 could bring upside to our fair value estimate.