IncyteINCY

Key highlights

• Total revenue jumps: Total revenue grew 38% to $1.67 billion, which was $170 million more than what analysts predicted. While much of this was a one-time accounting gain, underlying sales across all products grew 17% compared to the same time last year.
• Opzelura windfall: The skin cream Opzelura generated $450 million in sales, but this included a $246 million one-time benefit from a government settlement. Excluding that gain, sales rose 24% to $204 million as more patients used the treatment for vitiligo and atopic dermatitis.
• Acquisition costs rising: The company completed a $1.25 billion purchase of Vega Therapeutics in July to add a new Phase 3 blood disease drug to its collection. Because of this deal, Incyte now expects its 2026 total operating expenses to reach between $4.915 billion and $4.995 billion, up from the $3.675 billion limit it previously guided.
• Hematology growth accelerates: Sales from the hematology and oncology division, which includes newer cancer treatments, rose 69% to $222 million. This growth helps the company rely less on its main drug, Jakafi, which saw sales grow at a steadier 7% rate to $817 million.
• Stronger sales outlook: Management raised its full year revenue guidance to a range of $5.13 billion to $5.26 billion, up from a previous high of $4.94 billion. This higher target is driven by the government settlement and strong demand for the company's newer specialty drugs.

Our take: A very strong quarter that shows the business is successfully moving beyond its older blockbuster drugs. The big one-time settlement payment for Opzelura makes the profit look better than usual, but even without it, the core business is growing fast. This performance gives us more confidence that the company can replace older revenue streams with its newer pipeline.