Incyte‘s (INCY) third-quarter loss per share came was 39 cents, marginally better than the Zacks Consensus Estimate for a loss of 41 cents. In the year-ago quarter, the company’s loss was 48 cents. INCY reported revenues of $0.9 million, compared to $1.1 million last year. We believe the current investor focus is more on the developments of the company’s portfolio rather than the financials.
In addition to releasing the third-quarter results, Incyte provided an update on its pipeline candidates. The most advanced pipeline candidate, INCB18424, is being developed under the company’s Janus Kinase Inhibitor Program. The oral formulation of the compound is undergoing phase III trials for the treatment of myelofibrosis, Polycythemia Vera and Essential Thrombocythemia. Patient enrollment for the trial is going on in both the US and Europe. We are pleased to note that this development program has received Fast Track designation from the FDA.
Operating expenses during the third quarter declined 20.44% year over year to $32.5 million, primarily on account of a 28% decline in R&D expenses. Although the company has many pipeline candidates, prioritization of its development efforts has brought down R&D expenses. As a reminder, earlier this year, due to the challenging economic environment, Incyte decided to focus its resources on programs with greatest near term value.
At the end of the third quarter, Incyte had $395.2 million of cash and marketable securities, up from $217.8 million at the end of December 2008. The company carried out a major debt restructuring program during the quarter. INCY made a private placement of $400 million of convertible senior notes due 2015 (net proceeds $388 million) to retire its earlier debt of approximately $380 million (at the end of December 2008) due in 2011. However the new notes carry a higher interest rate of 4.75% and a lower conversion price of $8.78 per share, compared to the earlier 3.5% interest rate and a conversion price of $11.22 per share. In addition, Incyte made an equity financing of 20.7 million shares, resulting in net proceeds of $132.7 million.
We are pleased to see the advancement in the company’s pipeline candidates. In our opinion, these are valuable assets, which have the potential to drive growth forward at Incyte. Since the results from many of these trials have been encouraging so far, we believe the company will be able to make partnership deals once it is able to tide over the current liquidity crisis.
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