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What changed in Incyte's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Incyte's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+502 added−598 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-10)

Top changes in Incyte's 2025 10-K

502 paragraphs added · 598 removed · 382 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

139 edited+55 added−162 removed95 unchanged
Biggest changeAs more fully described in Note 5 of Notes to the Consolidated Financial Statements, in February 2024, we entered into a purchase agreement with MorphoSys, and as a result, we now hold exclusive global rights for tafasitamab, and the collaboration and license agreement was terminated. 9 Table of Contents In July 2020, we and MorphoSys announced that the FDA had approved MONJUVI (tafasitamab-cxix), which is indicated in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT).
Biggest changeIn July 2020, the FDA approved MONJUVI (tafasitamab-cxix), in combination with lenalidomide, for the treatment of adult patients with relapsed or refractory (“r/r”) diffuse large B-cell lymphoma (“DLBCL”) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (“ASCT”).
Ruxolitinib phosphate salt patents are issued in the US, EU and Japan with anticipated expiration dates of late-2028 in the US and mid-2028 in the EU and Japan. 4. Ruxolitinib cream formulation patents are issued in the US, EU and Japan with anticipated expiration dates of 2031 in each jurisdiction.
Ruxolitinib phosphate salt patents are issued in the US, the EU, and Japan with anticipated expiration dates of late-2028 in the US and mid-2028 in the EU and Japan. 4. Ruxolitinib cream formulation patents are issued in the US, the EU, and Japan with anticipated expiration dates of 2031 in each jurisdiction.
The opinion of this EMA Committee is then forwarded to the Commission, for the start of the decision making process. As in the centralized procedure, this process entails consulting various European Commission Directorates General and the Standing Committee on Human Medicinal Products or Veterinary Medicinal Products, as appropriate.
The opinion of this EMA committee is then forwarded to the European Commission, for the start of the decision making process. As in the centralized procedure, this process entails consulting various European Commission Directorates General and the Standing Committee on Human Medicinal Products or Veterinary Medicinal Products, as appropriate.
The requirements governing the conduct of clinical trials, marketing authorization, pricing and reimbursement vary widely from country to country. At present, foreign marketing authorizations are applied for at a national level, although within the European Union (EU) regional registration procedures are available to companies wishing to market a product in more than one EU member state.
The requirements governing the conduct of clinical trials, marketing authorization, pricing and reimbursement vary widely from country to country. At present, foreign marketing authorizations are applied for at a national level, although within the European Union (“EU”) regional registration procedures are available to companies wishing to market a product in more than one EU member state.
The FDA’s fast track, breakthrough therapy, accelerated approval, and priority review designation programs are intended to facilitate the development and expedite the review and approval of drug candidates intended for the treatment of serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs for these conditions.
The FDA’s fast track, breakthrough therapy, accelerated approval, priority review designation and priority voucher programs are intended to facilitate the development and/or expedite the review and approval of drug candidates intended for the treatment of serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs for these conditions.
The mutual recognition procedure (MRP) for the approval of human drugs is an alternative approach to facilitate individual national marketing authorizations within the EU. The MRP may be applied for all human drugs for which the centralized procedure is not obligatory.
The mutual recognition procedure (“MRP”) for the approval of human drugs is an alternative approach to facilitate individual national marketing authorizations within the EU. The MRP may be applied for all human drugs for which the centralized procedure is not obligatory.
We continue to expand our marketing, medical and operational infrastructure within the United States and outside of the United States to support the commercial launch of recently approved products and to prepare for potential approval of other products.
We continue to expand our marketing, medical and operational infrastructure both within and outside the United States to support the commercial launch of recently approved products and to prepare for potential approval of other products.
We also conduct clinical development and commercial operations from our European headquarters in Morges, Switzerland and our other offices across Europe, as well as our Japanese office in Tokyo and our Canadian headquarters in Montreal.
We also conduct clinical development and commercial operations from our European headquarters in Morges, Switzerland, and our other offices across Europe, as well as our Japanese headquarters in Tokyo and our Canadian headquarters in Montreal.
Legislation similar to the Orphan Drug Act has been enacted in other countries outside of the United States, including the EU. The orphan legislation in the EU is available for therapies addressing conditions that affect five or fewer out of 10,000 persons, are life-threatening or chronically debilitating conditions and for which no satisfactory treatment is authorized.
Legislation similar to the Orphan Drug Act has been enacted in other jurisdictions outside of the United States, including the EU. The orphan legislation in the EU is available for therapies addressing conditions that affect five or fewer out of 10,000 persons, are life-threatening or chronically debilitating conditions and for which no satisfactory treatment is authorized.
Once the CTA is approved in accordance with the requirements in the concerned countries, clinical trial development may proceed in those countries and are conducted in accordance with GCP and other applicable regulatory requirements. To obtain regulatory approval of an investigational drug under EU regulatory systems, we must submit a marketing authorization application (MAA).
Once the CTA is approved in accordance with the requirements in the concerned countries, clinical trial development may proceed in those countries and are conducted in accordance with GCP and other applicable regulatory requirements. To obtain regulatory approval of an investigational drug under EU regulatory systems, we must submit a marketing authorization application (“MAA”).
Each protocol must be submitted to the FDA as part of the IND and each trial must be reviewed and approved by an institutional review board (IRB) before it can begin. Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined.
Each protocol must be submitted to the FDA as part of the IND and each trial must be reviewed and approved by an institutional review board (“IRB”) before it can begin. Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined.
We cannot be sure that submission of an IND will result in the FDA allowing clinical trials to commence. Clinical trials involve the administration of the investigational drug to human subjects under the supervision of qualified investigators and in accordance with Good Clinical Practice (GCP) regulations covering the protection of human subjects.
We cannot be sure that submission of an IND will result in the FDA allowing clinical trials to commence. Clinical trials involve the administration of the investigational drug to human subjects under the supervision of qualified investigators and in accordance with Good Clinical Practice (“GCP”) regulations covering the protection of human subjects.
In the European Union, ICLUSIG is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase CML who are resistant to dasatinib or nilotinib; who are intolerant to dasatinib or nilotinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation, or the treatment of adult patients with Ph+ ALL who are resistant to dasatinib; who are intolerant to dasatinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation.
In the European Union, ICLUSIG is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase CML who are resistant to dasatinib or nilotinib; who are intolerant to dasatinib or nilotinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who have the T315I mutation.
In June 2018, the FDA approved the 2mg dose of OLUMIANT for the treatment of adults with moderately-to-severely active rheumatoid arthritis (RA) who have had an inadequate response to one or more tumor necrosis factor (TNF) inhibitor therapies. Atopic Dermatitis.
In June 2018, the FDA approved the 2mg dose of OLUMIANT for the treatment of adults with moderately-to-severely active rheumatoid arthritis who have had an inadequate response to one or more tumor necrosis factor inhibitor therapies. Atopic Dermatitis.
Regulation of Manufacturing Process Even when NDA or BLA approval is obtained, a marketed product, such as JAKAFI, its manufacturer and its manufacturing facilities are subject to continual review and periodic inspections by the FDA. The manufacturing process for pharmaceutical products is highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations.
Regulation of Manufacturing Process Even when NDA or BLA approval is obtained, a marketed product, its manufacturer and its manufacturing facilities are subject to continual review and periodic inspections by the FDA. The manufacturing process for pharmaceutical products is highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations.
Under the Biologics Price Competition and Innovation Act, the FDA may grant 12 years of data exclusivity for innovative biological products. Foreign Regulation Outside the United States, our ability to market a product is contingent upon receiving a marketing authorization from the appropriate regulatory authorities in specific regions or countries.
Under the Biologics Price Competition and Innovation Act, the FDA may grant 12 years of data exclusivity for innovative biological products. 24 Table of Contents Foreign Regulation Outside the United States, our ability to market a product is contingent upon receiving a marketing authorization from the appropriate regulatory authorities in specific regions or countries.
Under our collaboration agreement with our collaboration partner Novartis Pharmaceutical International Ltd., Novartis received exclusive development and commercialization rights to ruxolitinib outside of the United States for all hematologic and oncologic indications and sells ruxolitinib outside of the United States under the name JAKAVI.
Under our collaboration agreement with Novartis Pharmaceutical International Ltd. (“Novartis”), Novartis received exclusive development and commercialization rights to ruxolitinib outside of the United States for all hematologic and oncologic indications and sells ruxolitinib outside of the United States under the name JAKAVI.
The steps generally required before a drug may be marketed in the United States include: • preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s Good Laboratory Practice and Good Manufacturing Practice regulations; • submission to the FDA of an Investigational New Drug application (IND) for human clinical testing, which must become effective before human clinical trials may commence; • performance of adequate and well-controlled clinical trials in three phases, as described below, to establish the safety and efficacy of the drug for each indication; • submission of an NDA or Biologics License Application (BLA) to the FDA for review; • random inspections of clinical sites to ensure validity of clinical safety and efficacy data; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing practices; • FDA approval of the NDA or BLA; and • payment of user and program fees, if applicable.
The steps generally required before a drug may be marketed in the United States include: • preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s Good Laboratory Practice and Good Manufacturing Practice regulations; • submission to the FDA of an Investigational New Drug application (“IND”) for human clinical testing, which must become effective before human clinical trials may commence; • performance of adequate and well-controlled clinical trials in three phases, as described below, to establish the safety and efficacy of the drug for each indication; 20 Table of Contents • submission of an NDA or Biologics License Application (“BLA”) to the FDA for review; • random inspections of clinical sites to ensure validity of clinical safety and efficacy data; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing practices; • FDA approval of the NDA or BLA; and • payment of user and program fees, if applicable.
The following table sets forth the year in which the basic exclusivity loss is currently estimated to occur in the United States, the European Union, and Japan for each of our approved medicines and for those compounds in our portfolio that have been submitted to regulatory authorities seeking approval or are in registration-directed clinical trials.
The following table sets forth the year in which the basic exclusivity loss is currently estimated to occur in the United States, the European Union, and Japan for each of our approved drug products and for those compounds in our portfolio that have been submitted to regulatory authorities seeking approval or are in registration-directed clinical trials.
National marketing authorizations shall be granted within 30 days after acknowledgement of the agreement. 32 Table of Contents Should any member state refuse to recognize the marketing authorization by the reference member state, the member states shall make all efforts to reach a consensus. If this fails, the procedure is submitted to an EMA scientific committee for arbitration.
National marketing authorizations shall be granted within 30 days after acknowledgement of the agreement. Should any member state refuse to recognize the marketing authorization by the reference member state, the member states shall make all efforts to reach a consensus. If this fails, the procedure is submitted to an EMA scientific committee for arbitration.
If the FDA agrees in writing, its agreement may not be changed after the trial begins, except when agreed by FDA or in limited circumstances, such as when a substantial scientific issue essential to determining the safety and effectiveness of a drug candidate is identified after a Phase 3 clinical trial is commenced and agreement is obtained with the FDA.
If the FDA agrees in writing, its agreement may not be changed after the trial begins except in limited circumstances, such as when a substantial scientific issue essential to determining the safety and effectiveness of a drug candidate is identified after a Phase 3 clinical trial is commenced and agreement is obtained with the FDA.
There may be additional patents for our approved medicines that claim the medicine or a method of using it that are listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book)—or for our unapproved clinical candidates that will be eligible to be listed in the Orange Book upon FDA approval.
There may be additional patents for our approved drug products that claim the drug product or a method of using it that are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book)—or for our unapproved clinical candidates that will be eligible to be listed in the Orange Book upon FDA approval.
Refer to the “License Agreements and Business Relationships” section above for information regarding our collaborations and strategic relationships. Patents, Other Intellectual Property, and Product Exclusivity We regard the protection of patents and other enforceable intellectual property rights that we own or license as critical to our business and competitive position.
Refer to the “License Agreements and Business Relationships” section above for information regarding our collaborations and strategic relationships. 16 Table of Contents Patents, Other Intellectual Property, and Product Exclusivity We regard the protection of patents and other enforceable intellectual property rights that we own or license as critical to our business and competitive position.
Therefore, the table below also identifies the expiration dates of certain additional patents that are Orange-Book listed for our approved medicines—or that, for our unapproved clinical candidates, are eligible for Orange-Book listing upon product approval—in the United States, as well as the expiration dates of certain related patents in the European Union, and Japan, which we refer to as the “Additional Patents Expiry Dates.” 24 Table of Contents Product/Drug Candidate 1,2 US EU Japan JAKAFI (ruxolitinib) Estimated Minimum Market Exclusivity Dates 2028 2027 2028 Additional Patents Expiry Dates 3 2028 2028 2028 OPZELURA (ruxolitinib) cream Estimated Minimum Market Exclusivity Dates 2028 2027 2026 Additional Patents Expiry Dates 3,4 2028, 2031 & 2040 2028 & 2031 2028 & 2031 OLUMIANT (baricitinib) Estimated Minimum Market Exclusivity Dates 2032 5 2032 2033 Additional Patents Expiry Dates 2032 2032 - TABRECTA (capmatinib) Estimated Minimum Market Exclusivity Dates 2032 5 2032 6 2032 Additional Patents Expiry Dates 2035 2035 2035 PEMAZYRE (pemigatinib) Estimated Minimum Market Exclusivity Dates 2035 2036 6 2036 Additional Patents Expiry Dates 2039 & 2040 - - ICLUSIG (ponatinib) Estimated Minimum Market Exclusivity Dates - 2028 - Additional Patents Expiry Dates - - - ZYNYZ (retifanlimab) 8 Estimated Minimum Market Exclusivity Dates 2036 2036 2036 MONJUVI (tafasitamab) 9 Estimated Minimum Market Exclusivity Dates 2033 5 2032 6 2027 NIKTIMVO (axatilimab) 10 Estimated Minimum Market Exclusivity Dates 2036 7 2034 2034 ruxolitinib XR Estimated Minimum Market Exclusivity Dates 2028 - - Additional Patents Expiry Dates 3,11 2028 & 2033 - - povorcitinib Estimated Minimum Market Exclusivity Dates 2034 2034 2034 Additional Patents Expiry Dates 2039 & 2041 2039 - 1.
Therefore, the table below also identifies the expiration dates of certain additional patents that are Orange-Book listed for our approved drug products—or that, for our unapproved clinical candidates, are eligible for Orange-Book listing upon product approval—in the United States, as well as the expiration dates of certain related patents in the European Union, and Japan, which we refer to as the “Additional Patents Expiry Dates.” 17 Table of Contents Product/Drug Candidate 1,2 US EU Japan JAKAFI/JAKAVI (ruxolitinib) Estimated Minimum Market Exclusivity Dates 2028 2028 2028 Additional Patents Expiry Dates 3 2028 2028 2028 OPZELURA (ruxolitinib) cream Estimated Minimum Market Exclusivity Dates 2028 2028 2028 Additional Patents Expiry Dates 3,4 2028, 2031 & 2040 2028 & 2031 2028 & 2031 OLUMIANT (baricitinib) Estimated Minimum Market Exclusivity Dates 2032 5 2032 2034 Additional Patents Expiry Dates - - - TABRECTA (capmatinib) Estimated Minimum Market Exclusivity Dates 2032 5 2032 6 2032 Additional Patents Expiry Dates 2035 2037 2035 PEMAZYRE (pemigatinib) Estimated Minimum Market Exclusivity Dates 2035 2036 6 2036 Additional Patents Expiry Dates 2039 & 2040 - - ICLUSIG (ponatinib) Estimated Minimum Market Exclusivity Dates - 2028 - Additional Patents Expiry Dates - - - ZYNYZ (retifanlimab) 8 Estimated Minimum Market Exclusivity Dates 2036 2036 2036 MONJUVI (tafasitamab) 9 Estimated Minimum Market Exclusivity Dates 2033 5 2032 6 2027 NIKTIMVO (axatilimab) 10 Estimated Minimum Market Exclusivity Dates 2036 7 2034 2034 ruxolitinib XR Estimated Minimum Market Exclusivity Dates 2028 - - Additional Patents Expiry Dates 3,11 2028, 2033 & 2034 - - povorcitinib Estimated Minimum Market Exclusivity Dates 2034 2034 2034 Additional Patents Expiry Dates 2039 2039 2039 1.
We believe the key benefits to entering into such strategic relationships include the potential to expedite the development and commercialization of certain of our compounds, as well as the opportunity to 23 Table of Contents receive upfront payments and future milestones and royalties in exchange for certain rights to those compounds.
We believe the key benefits to entering into such strategic relationships include the potential to expedite the development and commercialization of certain of our compounds, as well as the opportunity to receive upfront payments and future milestones and royalties in exchange for certain rights to those compounds.
The FDA regulates, among other things, the research, development, testing, manufacture, safety, efficacy, record-keeping, labeling, storage, approval, advertising, promotion, sale and distribution and import and export, of these products. 27 Table of Contents FDA Review and Approval Process The regulatory review and approval process is lengthy, expensive and uncertain.
The FDA regulates, among other things, the research, development, testing, manufacture, safety, efficacy, record-keeping, labeling, storage, approval, advertising, promotion, sale and distribution and import and export, of these products. FDA Review and Approval Process The regulatory review and approval process is lengthy, expensive and uncertain.
PV is a myeloproliferative neoplasm typically characterized by elevated hematocrit, the volume percentage of red blood cells in whole blood, which can lead to a thickening of the blood and an increased risk of blood clots, as well as an elevated white blood cell and platelet count.
PV is an MPN typically characterized by elevated hematocrit, the volume percentage of red blood cells in whole blood, which can lead to a thickening of the blood and an increased risk of blood clots, as well as an elevated white blood cell and platelet count.
Patents extend for varying periods according to the date of patent filing and the legal term of patents in the various countries where patent protection is obtained.
Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection is obtained.
In October 2024, OPZELURA cream 1.5% was granted a Notice of Compliance by Health Canada for the topical treatment of both mild to moderate atopic dermatitis and nonsegmental vitiligo in patients 12 years of age and older.
In October 2024, OPZELURA cream 1.5% was granted a Notice of Compliance by Health Canada for the topical treatment of both mild to moderate AD and nonsegmental vitiligo in patients 12 years of age and older.
In October 2020, Lilly announced that the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe AD in adult patients who are candidates for systemic therapy. In December 2020, baricitinib was approved by the MHLW for the treatment of patients with moderate-to-severe AD. Alopecia Areata .
In October 2020, the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe AD in adult patients who are candidates for systemic therapy. In December 2020, baricitinib was approved by the MHLW for the treatment of patients with moderate-to-severe AD. Alopecia Areata .
In the European Union, a CTA must be submitted for each trial to the competent health authority and to independent ethics committees by national procedure for a single country trial or by EMA submission portal CTIS for a multinational study.
In the EU, a CTA must be submitted for each trial to the competent health authority and to independent ethics committees by national procedure for a single country trial or by EMA submission portal CTIS for a multinational study.
The European Medicines Agency implemented the centralized procedure for the approval of human drugs to facilitate marketing authorizations that are valid throughout the EU. This procedure results in a single marketing authorization granted by the European Commission that is valid across the EU.
The EMA implemented the centralized procedure for the approval of human drugs to facilitate marketing authorizations that are valid throughout the EU. This procedure results in a single marketing authorization granted by the European Commission that is valid across the EU.
In August 2024, we and Syndax announced the FDA approval of NIKTIMVO (axatilimab-csfr) for the treatment of chronic GVHD after failure of at least two prior lines of systemic therapy in adult and pediatric patients. NIKTIMVO is the first approved anti-CSF-1R antibody targeting the drivers of inflammation and fibrosis seen in chronic GVHD.
In August 2024, the FDA approved NIKTIMVO (axatilimab-csfr) for the treatment of chronic GVHD after failure of at least two prior lines of systemic therapy in adult and pediatric patients. NIKTIMVO is the first approved anti-CSF-1R antibody targeting the drivers of inflammation and fibrosis seen in chronic GVHD.
As a general matter, we endeavor to obtain patent term extensions (PTEs) in the United States and Japan, and other countries where available, and supplementary protection certificates (SPCs) in each European country, upon approval by the respective regulatory agency, if patent rights are granted in such country.
As a general matter, we endeavor to obtain patent term extensions (“PTEs”) in the United States and Japan, and other countries where available, and supplementary protection certificates (“SPCs”) in each European country, upon approval by the respective regulatory agency, if patent rights are granted in such country.
We refer to the basic exclusivity loss as the “Estimated Minimum Market Exclusivity Date,” which is, unless otherwise indicated, the latter of (i) the expiration date of the earliest anticipated expiring composition of matter patent rights, or (ii) the date of regulatory data protection (RDP) loss for such product or clinical candidate.
We refer to the basic exclusivity loss as the “Estimated Minimum Market Exclusivity Date,” which is, unless otherwise indicated, the later of (i) the expiration date of the earliest anticipated expiring composition of matter patent rights, or (ii) the date of regulatory data protection (“RDP”) loss for such product or clinical candidate.
Moreover, increased attention to the containment of health care costs in the United States and in foreign markets could result in new government regulations which could have a material adverse effect on our business.
Moreover, increased attention to the containment of healthcare costs in the United States and in foreign markets could result in new government regulations which could have a material adverse effect on our business.
In addition, because of the significant lead times involved in our supply chain for ruxolitinib phosphate, we may have less flexibility to adjust our supply in response to changes in demand than if we had shorter lead times.
In addition, because of the significant lead times involved in our supply chain, we may have less flexibility to adjust our supply in response to changes in demand than if we had shorter lead times.
Incyte’s Commercial Strategy Our strategy is to develop and commercialize compounds that we have internally discovered or have acquired rights to in the markets where we believe that a company of our size can successfully compete. We currently commercialize six compounds in the United States, three in Europe and one in Japan.
Incyte’s Commercial Strategy Our strategy is to develop and commercialize compounds that we have internally discovered or have acquired rights to in the markets where we believe that we can successfully compete. We currently commercialize six compounds in the United States, three in Europe and one in Japan.
Clinical Programs in Other IAI In May 2022, we initiated a Phase 2 trial evaluating zilurgisertib (INCB00928) in patients with fibrodysplasia ossificans progressiva (FOP), a disorder in which muscle tissue and connective tissue are gradually replaced by bone. The FDA has granted Fast Track designation and orphan drug designation to zilurgisertib as a treatment for patients with FOP.
INCB00928 (zilurgisertib) In May 2022, we initiated a Phase 2 trial evaluating zilurgisertib (INCB00928) in patients with fibrodysplasia ossificans progressiva (“FOP”), a disorder in which muscle tissue and connective tissue are gradually replaced by bone. The FDA has granted Fast Track designation and orphan drug designation to zilurgisertib as a treatment for patients with FOP.
Our ability to compete successfully will depend, in part, on our ability to: • develop proprietary products; • develop and maintain products that reach the market first, are technologically superior to and/or are of lower cost than other products in the market; • attract and retain scientific, product development and sales and marketing personnel; • obtain patent or other proprietary protection for our products and technologies; • obtain required regulatory approvals; and • manufacture, market, distribute and sell any products that we develop.
Our ability to compete successfully will depend, in part, on our ability to: • develop proprietary products; • develop and maintain products that reach the market first, are technologically superior to and/or are of lower cost than other products in the market; • execute our strategic plan and commercialize new assets; • attract and retain scientific, product development and sales and marketing personnel; • obtain patent or other proprietary protection for our products and technologies; • obtain required regulatory approvals; and • manufacture, market, distribute and sell any products that we develop.
Certain countries outside of the United States have a process that requires the submission of a clinical trial application, or CTA, much like an IND prior to the commencement of human clinical trials.
Certain countries outside of the United States have a process that requires the submission of a clinical trial application (“CTA”) much like an IND prior to the commencement of human clinical trials.
Food and Drug Administration (FDA) in November 2011 for the treatment of adults with intermediate or high-risk myelofibrosis (MF); in December 2014 for the treatment of adults with polycythemia vera (PV) who have had an inadequate response to or are intolerant of hydroxyurea; in May 2019 for the treatment of steroid-refractory acute graft-versus-host disease (GVHD) in adult and pediatric patients 12 years and older; and in September 2021 for the treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older .
Food and Drug Administration (“FDA”) in November 2011 for the treatment of adults with intermediate or high-risk myelofibrosis (“MF”); in December 2014 for the treatment of adults with polycythemia vera (“PV”) who have had an inadequate response to or are intolerant of hydroxyurea; in May 2019 for the treatment of steroid-refractory acute graft-versus-host disease ( “ GVHD ” ) in adult and pediatric patients 12 years and older; and in September 2021 for the treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older .
Baricitinib We have a second JAK1 and JAK2 inhibitor, baricitinib, which is subject to our collaboration agreement with Lilly, in which Lilly received exclusive worldwide development and commercialization rights to the compound for inflammatory and autoimmune diseases. Rheumatoid Arthritis.
Baricitinib We have a second JAK1 and JAK2 inhibitor, baricitinib, which is subject to our collaboration agreement with Lilly, in which Lilly received exclusive worldwide development and commercialization rights to the compound for inflammatory and autoimmune diseases. 13 Table of Contents Rheumatoid Arthritis.
The Yverdon facility started to manufacture MONJUVI/MINJUVI drug substance during the fourth quarter of 2022. The drug substance is usable in patients after regulatory approval, which was granted in the fourth quarter of 2023 for the European market and is currently expected in the second quarter of 2025 in the United States.
The Yverdon facility started to manufacture MONJUVI/MINJUVI drug substance during the fourth quarter of 2022. The drug substance is usable in patients after regulatory approval, which was granted in the fourth quarter of 2023 for the European market and the third quarter of 2025 for the United States.
The FDA also enforces the requirements of the Prescription Drug Marketing Act, or PDMA, which, among other things, imposes various requirements in connection with the distribution of product samples to physicians.
The FDA also enforces the requirements of the Prescription Drug Marketing Act (“PDMA”), which, among other things, imposes various requirements in connection with the distribution of product samples to physicians.
Estimated Minimum Market Exclusivity Dates are subject to the payment of maintenance fees, and include the period of PTE that has been granted by the respective regulatory agency, where applicable, or include the period of anticipated SPC term for approved products in the EU, where applicable, even though SPCs may remain pending in some countries. 2.
Estimated Minimum Market Exclusivity Dates are subject to the payment of maintenance fees, and include the period of PTE that has been granted by the respective regulatory agency, where applicable, or include the period of anticipated SPC term for approved products in the EU, where applicable, even though SPCs may remain pending in some countries, and also may include the period of granted or anticipated pediatric extensions even through applications for pediatric extension may remain pending in some countries. 2.
For approved medicines in the US, the brand name for the US product is used, whereas for candidates that have not been approved in the US, the name of the active ingredient is used.
For approved drug products in the US, the brand name for the US product is used, whereas for candidates that have not been approved in the US, the name of the active ingredient is used.
Date reflects the RDP in the US due to product approval. 8. Retifanlimab licensed from MacroGenics. 9. Tafasitamab licensed from Xencor, Inc. 10. Axatilimab licensed from Syndax. 11. Once-a-day (QD) ruxolitinib formulation patents are issued in the US with anticipated expiration dates of 2033.
Date reflects the RDP in the US due to product approval. 8. Retifanlimab licensed from MacroGenics, Inc. 9. Tafasitamab licensed from Xencor, Inc. 10. Axatilimab licensed from Syndax Therapeutics, Inc. 11. QD ruxolitinib formulation patents are issued in the US with anticipated expiration dates of 2033 and 2034.
Under the centralized procedure, the maximum timeframe for the evaluation of a marketing authorization application by the EMA is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the Committee for Medicinal Products for Human Use).
Under the centralized procedure, the maximum timeframe for the evaluation of a marketing authorization application by the EMA is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP).
There are a variety of state laws and regulations that apply in the states or localities where JAKAFI and our new drug candidates are or may be marketed.
There are a variety of state laws and regulations that apply in the states or localities where our approved products and drug candidates are or may be marketed.
In March 2023, the FDA issued a complete response letter for ruxolitinib extended-release (XR) tablets for once-daily (QD) use in the treatment of certain types of MF, PV and GVHD. In December 2023, we received FDA feedback and agreed on the requirements to address the complete response letter.
In March 2023, the FDA issued a complete response letter (“CRL”) for ruxolitinib XR tablets for QD use in the treatment of certain types of MF, PV and GVHD. In December 2023, we received FDA feedback and agreed on the requirements to address the CRL.
In February 2017, we and Lilly announced that the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe rheumatoid arthritis in adult patients who have responded inadequately to, or who are intolerant to, one or more disease-modifying antirheumatic drugs (DMARDs).
In February 2017, the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe rheumatoid arthritis in adult patients who have responded inadequately to, or who are intolerant to, one or more disease-modifying antirheumatic drugs.
In September 2021, the FDA approved JAKAFI for the treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older.
In May 2019, the FDA approved JAKAFI for the treatment of steroid-refractory acute GVHD in adult and pediatric patients 12 years and older. In September 2021, the FDA approved JAKAFI for the treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older.
In May 2022, we and Novartis announced the European Commission approval of ruxolitinib as JAKAVI for the treatment of acute or chronic GVHD in patients aged 12 years and older who have inadequate response to corticosteroids or other systemic therapies.
In May 2022, the European Commission approved ruxolitinib as JAKAVI for the treatment of acute or chronic GVHD in patients aged 12 years and older who have an inadequate response to corticosteroids or other systemic therapies.
We contract with third parties to manufacture JAKAFI, ICLUSIG, MONJUVI/MINJUVI, PEMAZYRE, OPZELURA, ZYNYZ, NIKTIMVO and our drug candidates for clinical and commercial purposes. Third-party manufacturers supply raw materials, and other third-party manufacturers convert these raw materials into API or convert the API into final dosage form.
For our small molecule products, we contract with third parties to manufacture JAKAFI, ICLUSIG, PEMAZYRE, OPZELURA and our drug candidates for clinical and commercial purposes. Third-party manufacturers supply raw materials, and other third-party manufacturers convert these raw materials into API or convert the API into final dosage form.
In April 2020, we announced that the FDA had approved PEMAZYRE (pemigatinib), a selective fibroblast growth factor receptor (FGFR) kinase inhibitor, for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or other rearrangement as detected by an FDA-approved test.
In April 2020, the FDA approved PEMAZYRE (pemigatinib), a selective fibroblast growth factor receptor kinase inhibitor, for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (“FGFR2”) fusion or other rearrangement as detected by an FDA-approved test.
The EUA now provides for the use of baricitinib for treatment of COVID-19 in hospitalized adults and pediatric patients two years of age or older requiring supplemental oxygen, non-invasive or invasive mechanical ventilation or extracorporeal membrane oxygenation (ECMO).
The FDA’s Emergency Use Authorization provides for the use of baricitinib for the treatment of COVID-19 in hospitalized adults and pediatric patients two years of age or older requiring supplemental oxygen, non-invasive or invasive mechanical ventilation or extracorporeal membrane oxygenation (“ECMO”).
If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
In all cases, the clinical trials are conducted in accordance with GCP and the other applicable regulatory requirements. If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
In October 2023, we announced that the Phase 2, randomized, double-blind, placebo-controlled, dose ranging study evaluating the efficacy and safety of povorcitinib in participants with PN had met its primary endpoint. In October 2024, following the positive Phase 2 results, two Phase 3 studies in patients with PN were initiated. Asthma and Chronic Spontaneous Urticaria.
In October 2023, we announced that the Phase 2, randomized, double-blind, placebo-controlled, dose ranging study evaluating the efficacy and safety of povorcitinib in participants with PN had met its primary endpoint. In October 2024, following the positive Phase 2 results, two Phase 3 studies (STOP-PN1 and STOP-PN2) evaluating povorcitinib in patients with moderate to severe PN were initiated .
The primary target for ICLUSIG is BCR-ABL, an abnormal tyrosine kinase that is expressed in chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ ALL).
The primary target for ICLUSIG is BCR-ABL, an abnormal tyrosine kinase that is expressed in chronic myeloid leukemia (“CML”) and Philadelphia-chromosome positive acute lymphoblastic leukemia (“Ph+ ALL”).
Additionally, FDA approval of a product can include restrictions on the product’s use or distribution (such as permitting use only for specified medical conditions or limiting distribution to physicians or facilities with special training or experience). Approval of such designated products can be conditioned on additional clinical trials after approval.
Additionally, FDA approval of a product can include restrictions on the product’s use or distribution (such as permitting use only for specified medical conditions or limiting distribution to physicians or facilities with special training or experience).
This growth is largely a result of continued expansion of our global commercial reach for our business operations. Among our employees, 896 are in research and development, 212 in medical affairs, 807 in sales and marketing and 702 in operations support and administrative positions.
This growth is largely a result of continued expansion of our global commercial reach for our business operations. Among our employees, 940 are in research and development, 213 in medical affairs, 975 in sales and marketing and 716 in operations support and administrative positions.
Rheumatoid arthritis is an autoimmune disease characterized by aberrant or abnormal immune mechanisms that lead to joint inflammation and swelling and, in some patients, the progressive destruction of joints. Rheumatoid arthritis also can affect connective tissue in the skin and organs of the body.
Rheumatoid arthritis is an autoimmune disease characterized by aberrant or abnormal immune mechanisms that lead to joint inflammation and swelling and, in some patients, the progressive destruction of joints.
In September 2021, we announced that the FDA approved OPZELURA (ruxolitinib) cream, a novel cream formulation of Incyte’s selective JAK1/JAK2 inhibitor ruxolitinib, for the topical short-term and non-continuous chronic treatment of mild to moderate atopic dermatitis (AD) in non-immunocompromised patients 12 years of age and older whose disease is not adequately controlled with topical prescription therapies, or when those therapies are not advisable.
In September 2021, the FDA approved OPZELURA (ruxolitinib) cream for the topical short-term and non-continuous chronic treatment of mild to moderate atopic dermatitis (“AD”) in non-immunocompromised patients 12 years of age and older whose disease is not adequately controlled with topical prescription therapies, or when those therapies are not advisable.
Manufacturing Our manufacturing strategy is to contract with third parties to manufacture the raw materials, our active pharmaceutical ingredients, or API, and finished dosage form for clinical and commercial uses. We currently do not operate manufacturing facilities for clinical or commercial production of JAKAFI, ICLUSIG, PEMAZYRE, OPZELURA, MONJUVI/MINJUVI, ZYNYZ and NIKTIMVO or our drug candidates.
Manufacturing For our small molecule products, our manufacturing strategy is to contract with third parties to manufacture the raw materials, our active pharmaceutical ingredients (“API”) and finished dosage form for clinical and commercial uses. We currently do not operate manufacturing facilities for clinical or commercial production of JAKAFI, ICLUSIG, PEMAZYRE and OPZELURA.
Even after initial FDA approval has been obtained, post-approval trials, or Phase 4 studies, may be required to provide additional data, and will be required to obtain approval for the sale of a product as a treatment for a clinical indication other than that for which the product was initially tested and approved.
The FDA is not obligated to approve an NDA or BLA as a result of an SPA agreement, even if the clinical outcome is positive. 21 Table of Contents Even after initial FDA approval has been obtained, post-approval trials, or Phase 4 studies, may be required to provide additional data, and will be required to obtain approval for the sale of a product as a treatment for a clinical indication other than that for which the product was initially tested and approved.
Our strategy is to maintain 18 to 24 months of safety stock of API to be able to respond to changes in demand to provide on-time supply of drug product as well as at least 6 months of semi-finished goods inventory. 34 Table of Contents Access to Supplies and Materials Our third-party manufacturers need access to certain supplies and products to manufacture our products and drug candidates.
Our strategy is to maintain sufficient levels of safety stock of API and semi-finished goods to be able to respond to changes in demand to provide on-time supply of drug product. Access to Supplies and Materials Our third-party manufacturers need access to certain supplies and products to manufacture our products and drug candidates.
In April 2023, we announced that the European Commission had approved OPZELURA for the topical treatment of nonsegmental vitiligo with facial involvement in adults and adolescents 12 years and older following a positive opinion from the CHMP.
OPZELURA was approved for continuous use and no limits to duration as a treatment for nonsegmental vitiligo. In April 2023, the European Commission approved OPZELURA for the topical treatment of nonsegmental vitiligo with facial involvement in adults and adolescents 12 years and older following a positive opinion from the CHMP.
For JAKAFI and ICLUSIG, we have two qualified third-party manufacturers from which we can source commercial drug product. Secondary packaging of ICLUSIG is performed by a qualified third-party manufacturer. Primary packaged product for ICLUSIG can be used for clinical and commercial purposes. For PEMAZYRE, we have one qualified third-party manufacturer from which we can source commercial drug product.
Primary packaged product for ICLUSIG can be used for clinical and commercial purposes. For PEMAZYRE, we have one qualified third-party manufacturer from which we can source commercial drug product.
In May 2020, we amended our agreement with Lilly to enable Lilly to commercialize baricitinib for the treatment of COVID-19.
In May 2020, we amended our agreement with Lilly to enable Lilly to commercialize baricitinib for the treatment of COVID-19 and, in October 2025, we further amended the agreement to enable Lilly to commercialize baricitinib for the treatment of Type 1 diabetes mellitus.
Manufacturing facilities are always subject to inspection by the applicable regulatory authorities. 30 Table of Contents We and our third-party manufacturers are subject to current Good Manufacturing Practices, or cGMP's, which are extensive regulations governing manufacturing processes and controls, including but not limited to release and stability testing, record keeping and quality standards as defined by FDA 21CFR, parts 210 and 211, the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use, or ICH, and the European Medicines Agency.
We and our third-party manufacturers are subject to current Good Manufacturing Practices (“cGMP’s”) which are extensive regulations governing manufacturing processes and controls, including but not limited to release and stability testing, record keeping and quality standards as defined by the FDA in 21 CFR, parts 210 and 211, the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use and the EMA.
In April 2024, the European Commission approved ZYNYZ (retifanlimab) as monotherapy for the first-line treatment of adult patients with metastatic or recurrent locally advanced MCC not amenable to curative surgery or radiation therapy following a positive opinion from the Committee for Medicinal Products for Human Use (CHMP).
In April 2024, the European Commission approved ZYNYZ (retifanlimab) as a monotherapy for the first-line treatment of adult patients with metastatic or recurrent locally advanced MCC not amenable to curative surgery or radiation therapy. Squamous Cell Carcinoma of the Anal Canal.
Geographically, 72% of our employees were based in the United States and Canada, 26% in Europe and 2% in Asia. In terms of gender diversity, 1,341 are female, 1,260 are male and 16 are non-binary/prefer not to say. Our employees in Austria, Belgium and Spain are covered by collective agreements, and management considers relations with our employees to be good.
Geographically, 70% of our employees were based in the United States and Canada, 27% in Europe and 3% in Asia. In terms of gender diversity, 1,456 are female and 1,364 are male. Our employees in Austria, Belgium and Spain are covered by collective agreements, and management considers relations with our employees to be good.
Vitiligo is a chronic autoimmune depigmenting skin disease characterized by patches of the skin losing their pigment. OPZELURA is the first and only FDA approved treatment for repigmentation of vitiligo lesions.
In July 2022, the FDA approved OPZELURA for the topical treatment of nonsegmental vitiligo in adult and pediatric patients 12 years of age and older. Vitiligo is a chronic autoimmune depigmenting skin disease characterized by patches of the skin losing their pigment. OPZELURA is the first and only FDA approved treatment for repigmentation of vitiligo lesions.
If the FDA identifies deficiencies that would preclude substantive review, the FDA will refuse to accept the NDA or BLA and will inform the sponsor of the deficiencies that must be corrected prior to resubmission.
Upon receipt, the FDA initially reviews the NDA or BLA to determine whether it is sufficiently complete to initiate a substantive review. If the FDA identifies deficiencies that would preclude substantive review, the FDA will refuse to accept the NDA or BLA and will inform the sponsor of the deficiencies that must be corrected prior to resubmission.
GVHD is a condition that can occur after an allogeneic HSCT (the transfer of genetically dissimilar stem cells or tissue). In GVHD, the donated bone marrow or peripheral blood stem cells view the recipient’s body as foreign and attack various tissues. In June 2016, we announced that the FDA granted Breakthrough Therapy designation for ruxolitinib in patients with acute GVHD.
GVHD is a condition that can occur after an allogeneic HSCT (the transfer of genetically dissimilar stem cells or tissue) where the donated bone marrow or peripheral blood stem cells view the recipient’s body as foreign and attack various tissues.
Under the SPA procedure, a sponsor may seek the FDA’s agreement on the design and size of a clinical trial intended to form the primary basis of an effectiveness claim.
As a separate amendment to an IND, a clinical trial sponsor may submit to the FDA a request for a Special Protocol Assessment (“SPA”). Under the SPA procedure, a sponsor may seek the FDA’s agreement on the design and size of a clinical trial intended to form the primary basis of an effectiveness claim.
For OPZELURA, we have two qualified third-party manufacturer from which we can source commercial drug product for the United States market, and one qualified third-party manufacture from which we can source commercial drug product for markets outside of the United States.
For OPZELURA, we have two qualified third-party manufacturers from which we can source commercial drug product for the United States market, and one qualified third-party manufacturer from which we can source commercial drug product for markets outside of the United States. For our large molecule products, tafasitamab, the API for MONJUVI/MINJUVI has three qualified manufacturers.
Capmatinib (TABRECTA) licensed to Novartis. 21 Table of Contents License Agreements and Business Relationships We establish business relationships, including collaborative arrangements with other companies and medical research institutions to assist in the clinical development and/or commercialization of certain of our drugs and drug candidates and to provide support for our research programs.
In August 2023, Novartis announced that JAKAVI had been approved in Japan for use in GVHD after HSCT . 14 Table of Contents License Agreements and Business Relationships We establish business relationships, including collaborative arrangements with other companies and medical research institutions, to assist in the clinical development and/or commercialization of certain of our drugs and drug candidates and to provide support for our research programs.
We cannot predict the likelihood, nature or extent of adverse governmental regulation which might arise from future legislative or administrative action, either in the United States or abroad. 31 Table of Contents Marketing Exclusivity The FDA may grant five years of exclusivity in the United States for the approval of NDAs for new chemical entities, and three years of exclusivity for supplemental NDAs, for among other things, new indications, dosages or dosage forms of an existing drug, if new clinical investigations that were conducted or sponsored by the applicant are essential to the approval of the supplemental application.
Marketing Exclusivity The FDA may grant five years of exclusivity in the United States for the approval of NDAs for new chemical entities, and three years of exclusivity for supplemental NDAs, for, among other things, new indications, dosages or dosage forms of an existing drug, if new clinical investigations that were conducted or sponsored by the applicant are essential to the approval of the supplemental application.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe commercial success of JAKAFI and our ability to maintain and continue to increase revenues from the sale of JAKAFI will depend on a number of factors, including: • the number of patients with intermediate or high-risk myelofibrosis, uncontrolled polycythemia vera or steroid-refractory graft-versus-host disease who are diagnosed with the diseases and the number of such patients that may be treated with JAKAFI; • the acceptance of JAKAFI by patients and the healthcare community; • whether physicians, patients and healthcare payors view JAKAFI as therapeutically effective and safe relative to cost and any alternative therapies, as well as whether patients will continue to use JAKAFI; • the ability to obtain and maintain sufficient coverage or reimbursement by third-party payors and pricing; • the ability of our third-party manufacturers to manufacture JAKAFI in sufficient quantities that meet all applicable quality standards; • the ability of our company and our third-party providers to provide marketing and distribution support for JAKAFI; • the label and promotional claims allowed by the FDA; • the maintenance of regulatory approval for the approved indications in the United States; and • our ability to develop, obtain regulatory approval for and commercialize ruxolitinib in the United States for additional indications or in combination with other therapeutic modalities; and • the effects of a public health pandemic or epidemic such as the COVID-19 pandemic or of adverse geopolitical events, regulatory, legislative or administrative developments. 36 Table of Contents If we are not able to maintain revenues from JAKAFI in the United States, or our revenues from JAKAFI decrease, our business may be materially harmed and we may need to delay other drug discovery, development and commercialization initiatives or even significantly curtail operations, and our ability to license or acquire new products to diversify our revenue base could be limited.
Biggest changeHowever, we expect that JAKAFI product sales will begin to decline upon the expiration of our patent exclusivity in 2028. 28 Table of Contents The continued commercial success of JAKAFI and our ability to maintain and continue to increase revenues from the sale of JAKAFI will depend on a number of factors, including: • the number of patients diagnosed with intermediate or high-risk myelofibrosis, uncontrolled polycythemia vera or steroid-refractory graft-versus-host disease and the number of such patients that may be treated with JAKAFI; • the acceptance of JAKAFI by patients and the healthcare community; • whether physicians, patients and healthcare payors view JAKAFI as therapeutically effective and safe relative to cost and any alternative therapies, as well as whether patients will continue to use JAKAFI; • the ability to obtain and maintain sufficient coverage or reimbursement by third-party payors and pricing; • the ability of our third-party manufacturers to manufacture JAKAFI in sufficient quantities that meet all applicable quality standards; • the ability of our company and our third-party providers to provide marketing and distribution support for JAKAFI; • the label and promotional claims allowed by the U.S.
Third party pharmacy benefit managers, or PBMs, other similar organizations and payors can limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication, and to exclude drugs from their formularies in favor of competitor drugs or alternative treatments, or place drugs on formulary tiers with higher patient co-pay obligations, and/or to mandate stricter utilization criteria.
Third party pharmacy benefit managers (PBMs) , other similar organizations and payors can limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication, and to exclude drugs from their formularies in favor of competitor drugs or alternative treatments, or place drugs on formulary tiers with higher patient co-pay obligations, and/or to mandate stricter utilization criteria.
For example, in addition to our Novartis, Lilly, and our other existing collaborations, we are evaluating strategic relationships with respect to several of our other programs. However, because collaboration and license arrangements are complex to negotiate, we may not be successful in our attempts to establish these arrangements.
For example, in addition to Novartis, Lilly, and our other existing collaborations, we are evaluating strategic relationships with respect to several of our other programs. However, because collaboration and license arrangements are complex to negotiate, we may not be successful in our attempts to establish these arrangements.
Future revenues from research and development collaborations depend upon continuation of the collaborations, the achievement of milestones and royalties we earn from any future products developed from our research. If we are unable to successfully achieve milestones or our collaborators fail to develop successful products, we will not earn the future revenues contemplated under our collaborative agreements.
Future revenues from research and development collaborations depend upon the continuation of the collaborations, the achievement of milestones, and any royalties we earn from any future products developed from our research. If we are unable to successfully achieve milestones or our collaborators fail to develop successful products, we will not earn the future revenues contemplated under our collaborative agreements.
There are inherent costs and risks associated with implementing the enhancements to our IT systems, including potential delays in access to, or errors in, critical business and financial information, substantial capital expenditures, additional administrative time and operating expenses, retention of sufficiently skilled personnel to implement and operate the enhanced systems, demands on management time, and costs of delays or difficulties in transitioning to the enhanced systems, any of which could harm our business and results of operations.
There are inherent costs and risks associated with implementing enhancements to our IT systems, including potential delays in access to, or errors in, critical business and financial information, substantial capital expenditures, additional administrative time and operating expenses, retention of sufficiently skilled personnel to implement and operate the enhanced systems, demands on management time, and costs of delays or difficulties in transitioning to the enhanced systems, any of which could harm our business and results of operations.
These strategic transactions are complex, time consuming and expensive and entail numerous risks, including: • unanticipated costs, delays or other operational or financial problems related to integrating the products, product candidates, technologies, business operations, systems, controls and personnel of an acquired company or asset with our company; • failure to successfully develop and commercialize acquired products, product candidates or technologies or to achieve other strategic objectives; • delays or inability to progress preclinical programs into clinical development or unfavorable data from clinical trials evaluating acquired or licensed products or product candidates; • disruption of our ongoing business and diversion of our management’s and employees’ attention from ongoing development of our existing business and other opportunities and challenges; • inability to achieve planned synergies or cost savings; • the potential loss of key employees of an acquired company; • entry into markets in which we have no or limited direct prior experience or where competitors in such markets have stronger market positions; • uncertainties in our ability to maintain key business relationships of business we acquire; • exposure to unknown or contingent liabilities or the incurrence of unanticipated expenses, including those with respect to intellectual property, pre-clinical or clinical data, safety, compliance or internal controls, and including as a result of the failure of the due diligence processes to identify significant problems, liabilities or challenges of an acquired company or asset; • the risk that acquired businesses may have differing or inadequate cybersecurity and data protection controls; and • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, the strategic transaction, including claims from terminated employees, customers, former equity holders or other third parties.
These strategic transactions are complex, time consuming and expensive and entail numerous risks, including: • unanticipated costs, delays or other operational or financial problems related to integrating the products, product candidates, technologies, business operations, systems, controls and personnel of an acquired company or asset with our company; • failure to successfully develop and commercialize acquired products, product candidates or technologies or to achieve other strategic objectives; • delays or inability to progress preclinical programs into clinical development or unfavorable data from clinical trials evaluating acquired or licensed products or product candidates; • disruption of our ongoing business and diversion of our management’s and employees’ attention from ongoing development of our existing business and other opportunities and challenges; • inability to achieve planned synergies or cost savings; • the potential loss of key employees of an acquired company; • entry into markets in which we have no or limited direct prior experience or where competitors in such markets have stronger market positions; • uncertainties in our ability to maintain the key business relationships of any business we acquire; • exposure to unknown or contingent liabilities or the incurrence of unanticipated expenses, including those with respect to intellectual property, pre-clinical or clinical data, safety, compliance or internal controls, and including as a result of the failure of the due diligence processes to identify significant problems, liabilities or challenges of an acquired company or asset; • the risk that acquired businesses may have differing or inadequate cybersecurity and data protection controls; and • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, the strategic transaction, including claims from terminated employees, customers, former equity holders or other third parties.
Even if any of our applications receives an FDA Fast Track or priority review designation (including based on a priority review voucher, one of which we recently acquired and used in connection with our submission seeking FDA approval of ruxolitinib cream for atopic dermatitis), these designations may not result in faster review or approval for our product candidate compared to product candidates considered for approval under conventional FDA procedures and, in any event, do not assure ultimate approval of our product candidate by FDA.
Even if any of our applications receives an FDA Fast Track or priority review designation (including based on a priority review voucher, one of which we recently acquired and used in connection with our submission seeking FDA approval of ruxolitinib cream for atopic dermatitis), these designations may not result in faster review or approval for our product candidate compared to product candidates considered for approval under conventional FDA procedures and, in any event, do not assure ultimate approval of our product candidate by the FDA.
In addition to the risks described above under “—Risks Relating to Commercialization of Our Products—If the use of our products harms patients, or is perceived to harm patients even when such harm is unrelated to our products, our regulatory approvals could be revoked or otherwise negatively impacted or we could be subject to costly and damaging product liability claims,” the conduct of clinical trials of medical products that are intended for human use entails an inherent risk of product liability.
In addition to the risks described above under “Risks Relating to Commercialization of Our Products—If the use of our products harms patients, or is perceived to harm patients even when such harm is unrelated to our products, our regulatory approvals could be revoked or otherwise negatively impacted or we could be subject to costly and damaging product liability claims,” the conduct of clinical trials of medical products that are intended for human use entails an inherent risk of product liability.
Delays in any marketing approval by the FDA, European or other regulatory authorities, or any label modifications or restrictions in connection with any such approval, or the existence of other risks relating to approved drug products, including those described under “Risks Relating to Commercialization of Our Products,” could delay the receipt of and reduce resulting potential royalty and milestone revenue from baricitinib or any of our other out-licensed drug candidates.
Delays in any marketing approval by the FDA, European or other regulatory authorities, or any label modifications or restrictions in connection with any such approval, or the existence of other risks relating to approved drug products, including those described under “Risks Relating to Commercialization of Our Products,” could delay the receipt of and reduce resulting potential royalty and milestone revenue from our out-licensed drug candidates.
These obligations may increase our costs of doing business and the varying requirements among all countries and jurisdictions in which we work can complicate our compliance efforts. Increasing use of social media and new technology, including artificial intelligence software, could give rise to liability, breaches of data security, or reputational damage.
These obligations may increase our costs of doing business and the varying requirements among all countries and jurisdictions in which we work can complicate our compliance efforts. Increasing use of social media and new technology, including artificial intelligence, could give rise to liability, breaches of data security, or reputational damage.
Additionally, conflicts have from time to time occurred, and may in the future arise, relating to, among other things, disputes about the achievement and payment of milestone amounts and royalties owed, the ownership of intellectual property that is developed during the course of a collaborative relationship or the operation or interpretation of other provisions in our collaboration agreements.
Additionally, conflicts have from time to time occurred, and may in the future arise, relating to, among other things, disputes about the achievement and payment of milestone amounts and royalties owed, the ownership of intellectual property that is developed during the course of a collaborative relationship or the operation or interpretation of other provisions in our collaboration and license agreements.
Factors similar to those listed above also apply to our license collaborators in the jurisdictions in which they have development and commercialization rights. If we market our products in a manner that violates various laws and regulations, we may be subject to civil or criminal penalties.
Factors similar to those listed above also apply to our collaborators in the jurisdictions in which they have development and commercialization rights. If we market our products in a manner that violates various laws and regulations, we may be subject to civil or criminal penalties.
International operations and business expansion plans are subject to numerous additional risks, including: • multiple, conflicting and changing laws and regulations such as tax laws, privacy regulations, tariffs, export and import restrictions, employment, immigration and labor laws, regulatory requirements, and other governmental approvals, permits and licenses, compliance with which can increase in complexity as we enter into additional jurisdictions; • difficulties in staffing and managing operations in diverse countries and difficulties in connection with assimilating and integrating any operations and personnel we might acquire into our company; • risks associated with obtaining and maintaining, or the failure to obtain or maintain, regulatory approvals for the sale or use of our products in various countries; • complexities associated with managing government payor systems, multiple payor-reimbursement regimes or patient self-pay systems; • financial risks, such as longer payment cycles, difficulty obtaining financing in foreign markets, difficulty enforcing contracts and intellectual property rights, difficulty collecting accounts receivable and exposure to foreign currency exchange rate fluctuations; • general political and economic conditions in the countries in which we operate, including inflation, political or economic instability, terrorism and political unrest and geopolitical events; • public health risks, including epidemics and pandemics, and related effects on new patient starts, clinical trial activity, regulatory agency response times, supply chain, travel and employee health and availability; and • regulatory and compliance risks that relate to maintaining accurate information and control over activities that may fall within the purview of the U.S.
International operations and business expansion plans are subject to numerous additional risks, including: • multiple, conflicting and changing laws and regulations such as tax laws, privacy regulations, tariffs, export and import restrictions, employment, immigration and labor laws, regulatory requirements, and other governmental approvals, permits and licenses, compliance with which can increase in complexity and cost as we enter into additional jurisdictions; • difficulties in staffing and managing operations in diverse countries and difficulties in connection with assimilating and integrating any operations and personnel we might acquire into our company; • risks associated with obtaining and maintaining, or the failure to obtain or maintain, regulatory approvals for the sale or use of our products in various countries; • complexities associated with managing government payor systems, multiple payor-reimbursement regimes or patient self-pay systems; • financial risks, such as longer payment cycles, difficulty obtaining financing in foreign markets, difficulty enforcing contracts and intellectual property rights, difficulty collecting accounts receivable, exposure to foreign currency exchange rate fluctuations and increased costs due to tariffs; • general political and economic conditions in the countries in which we operate, including inflation, political or economic instability, terrorism and political unrest and geopolitical events; • public health risks, including epidemics and pandemics, and related effects on new patient starts, clinical trial activity, regulatory agency response times, supply chain, travel and employee health and availability; and • regulatory and compliance risks that relate to maintaining accurate information and control over activities that may fall within the purview of the U.S.
If we do not control the intellectual property rights in-licensed to us with respect to a drug candidate and the entity that controls the intellectual property rights does not adequately protect those rights, our rights may be impaired, which may impact our ability to develop, market and commercialize the in-licensed drug candidate.
If we do not control the intellectual property rights in-licensed to us with respect to a drug candidate and the entity that controls such intellectual property rights does not adequately protect those rights, our rights may be impaired, which may impact our ability to develop, market and commercialize the in-licensed drug candidate.
If we make or incur contractual obligations to make significant upfront payments in connection with licenses for late-stage drug candidates, and if any of those drug candidates do not receive marketing approval or commercial sales as anticipated or we have to fund additional clinical trials before marketing approval can be obtained, we will have expended significant funds that might otherwise be applied for other uses or have to expend funds that were not otherwise budgeted or anticipated in connection with the collaboration, and such developments could have a material adverse effect on our stock price and our ability to pursue other transactions.
If we make or incur contractual obligations to make significant upfront payments in connection with licenses for late-stage drug candidates, and if any of those drug candidates do not receive marketing approval or commercial sales as anticipated or we have to fund additional clinical trials before marketing approval can be obtained, we will have expended significant funds that might have been applied for other uses or we may have to expend funds that were not otherwise budgeted or anticipated in connection with the collaboration, and such developments could have a material adverse effect on our stock price and our ability to pursue other transactions.
We anticipate that our drug discovery and development efforts and related expenditures will increase as we focus on the studies, including preclinical tests and clinical trials prior to seeking regulatory approval, that are required before we can sell a drug product.
We anticipate that our drug discovery and development efforts and related expenditures will increase as we expand our focus on the studies, including preclinical tests and clinical trials prior to seeking regulatory approval, that are required before we can sell a drug product.
For example, in January 2022, we decided to opt-out of the continued development with Merus of MCLA-145, which was the most advanced compound under our collaboration with Merus, and in 2022 and 2023, we decided to terminate our collaborations with Calithera Biosciences and Syros Pharmaceuticals.
For example, in January 2022, we decided to opt-out of the continued development with Merus of MCLA-145, which was the most advanced compound under our collaboration with Merus, and in 2022 and 2023, we decided to terminate our collaborations with Calithera Biosciences, Inc. and Syros Pharmaceuticals, Inc.
Further, many countries and jurisdictions in which we work globally have enacted and/or are proposing privacy and data protection laws and regulations which govern the collection and use of personal information and these may impose large fines and penalties for noncompliance.
Further, many countries and jurisdictions in which we work globally have enacted or are proposing privacy and data protection laws and regulations which govern the collection and use of personal information and which may impose large fines and penalties for noncompliance.
The FDA has recently increased its attention on mandated confirmatory trials for oncology drug candidates with accelerated approvals, and the logistics, cost and timing required for confirmatory trials may conflict with the investment thesis for drug candidates, resulting in withdrawal of approval applications.
The FDA has recently increased its attention on mandated confirmatory trials for oncology drug candidates with accelerated approvals, and the logistics, cost and timing required for confirmatory trials may conflict with our investment thesis for drug candidates, resulting in withdrawal of approval applications.
Our expenses associated with building and maintaining the sales force and distribution capabilities may be disproportional compared to the revenues we may be able to generate on sales of our products. We are continuing to establish and maintain sales, marketing and distribution capabilities for OPZELURA.
Our expenses associated with building and maintaining the sales force and distribution capabilities may be disproportional compared to the revenues we may be able to generate on sales of our products. We are continuing to establish and maintain sales, marketing and distribution capabilities for our products.
We do have a biologics production facility located in Yverdon, Switzerland, currently registered for MINJUVI drug substance manufacturing. For ZYNYZ, together with our collaborator MacroGenics, we are responsible for the sourcing and manufacturing of ZYNYZ.
We do have a biologics production facility located in Yverdon, Switzerland, currently registered for MONJUVI/MINJUVI drug substance manufacturing. We are responsible for the sourcing and manufacturing of ZYNYZ together with our collaborator MacroGenics.
Risks relating to compliance with laws and regulations may be heightened as we continue to expand our global operations and enter new therapeutic areas with different patient populations, which due to different product distribution methods, marketing programs or patient assistance programs may result in additional regulatory burdens and obligations. 52 Table of Contents The illegal distribution and sale by third parties of counterfeit or unfit versions of our or our collaborators’ products or stolen products could harm our business and reputation.
Risks relating to compliance with laws and regulations may be heightened as we continue to expand our global operations and enter new therapeutic areas with different patient populations, which due to different product distribution methods, marketing programs or patient assistance programs may result in additional regulatory burdens and obligations. 44 Table of Contents The illegal distribution and sale by third parties of counterfeit or unfit versions of our or our collaborators’ products or stolen products could harm our business and reputation.
This ruling may create uncertainty and make it more difficult to settle patent litigation if a company seeking to manufacture a generic version of one of our products challenges the patents covering that product prior to the expiration date of those patents. 61 Table of Contents International patent protection is particularly uncertain and costly, and our involvement in opposition proceedings in foreign countries may result in the expenditure of substantial sums and management resources.
This ruling may create uncertainty and make it more difficult to settle patent litigation if a company seeking to manufacture a generic version of one of our products challenges the patents covering that product prior to the expiration date of those patents. 53 Table of Contents International patent protection is particularly uncertain and costly, and our involvement in opposition proceedings in foreign countries may result in the expenditure of substantial sums and management resources.
Conflicts may arise between our collaborators and licensees and us, or our collaborators and licensees may choose to terminate their agreements with us, which may adversely affect our business.” could affect potential future royalty and milestone and contract revenue. 59 Table of Contents RISKS RELATING TO INTELLECTUAL PROPERTY AND LEGAL MATTERS If we are subject to arbitration, litigation and infringement claims, they could be costly and disrupt our drug discovery and development efforts.
Conflicts may arise between our collaborators and licensees and us, or our collaborators and licensees may choose to terminate their agreements with us, which may adversely affect our business,” could affect potential future royalty and milestone and contract revenue. 51 Table of Contents RISKS RELATING TO INTELLECTUAL PROPERTY AND LEGAL MATTERS If we are subject to arbitration, litigation and infringement claims, they could be costly and disrupt our drug discovery and development efforts.
For example, from late 2013 through 2014, ICLUSIG was subject to review by the European Medicines Agency, or EMA, of the benefits and risks of ICLUSIG to better understand the nature, frequency and severity of events obstructing the arteries or veins, the potential mechanism that leads to these side effects and whether there needed to be a revision in the dosing recommendation, patient monitoring and a risk management plan for ICLUSIG.
For example, from late 2013 through 2014, ICLUSIG was subject to review by the European Medicines Agency (“EMA”), of the benefits and risks of ICLUSIG to better understand the nature, frequency and severity of events obstructing the arteries or veins, the potential mechanism that leads to these side effects and whether there needed to be a revision in the dosing recommendation, patient monitoring and a risk management plan for ICLUSIG.
Numerous states and localities have enacted or are considering enacting legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports or make periodic public disclosures on sales, marketing, pricing, clinical trials, and other activities. Additionally, as part of the Patient Protection and Affordable Care Act, the federal government has enacted the Physician Payment Sunshine provisions.
Numerous states and localities have enacted or are considering enacting legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports or make periodic public disclosures on sales, marketing, pricing, clinical trials, and other activities. Additionally, as part of the Patient Protection and Affordable Care Act, the U.S. federal government has enacted the Physician Payment Sunshine provisions.
Furthermore, the enactment of some or all of the recommendations set forth or that may be forthcoming in the Organization for Economic Co-Operation and Development, or OECD, project on “Base Erosion and Profit Shifting,” commonly known as BEPS 2.0, by tax authorities and economic blocs in the countries in which we operate, could unfavorably impact our effective tax rate.
Furthermore, the enactment of some or all of the recommendations set forth or that may be forthcoming in the Organization for Economic Co-Operation and Development (“OECD”) project on “Base Erosion and Profit Shifting,” commonly known as BEPS 2.0, by tax authorities and economic blocs in the countries in which we operate, could unfavorably impact our effective tax rate.
If we are unable to compete successfully, our commercial opportunities will be reduced and our business, results of operations and financial conditions may be materially harmed. 42 Table of Contents Present and potential competitors for JAKAFI include major pharmaceutical and biotechnology companies, as well as specialty pharmaceutical firms. In addition, JAKAFI could face competition from generic products.
If we are unable to compete successfully, our commercial opportunities will be reduced and our business, results of operations and financial conditions may be materially harmed. 34 Table of Contents Present and potential competitors for JAKAFI include major pharmaceutical and biotechnology companies, as well as specialty pharmaceutical firms. In addition, JAKAFI could face competition from generic products.
Additional factors that may affect our future funding requirements include: • the acquisition of businesses, technologies, or drug candidates, or the licensing of technologies or drug candidates, if any; • the amount of revenues generated from our business activities; • any changes in the breadth of our research and development programs; 57 Table of Contents • the results of research and development, preclinical testing and clinical trials conducted by us or our current or future collaborators or licensees, if any; • our exercise of any co-development options with collaborators that may require us to fund future development; • costs for future facility requirements; • our ability to maintain and establish new corporate relationships and research collaborations; • competing technological and market developments; • the time and costs involved in filing, prosecuting, defending and enforcing patent and intellectual property claims; • the receipt or payment of contingent licensing or milestone fees or royalties on product sales from our current or future collaborative and license arrangements, if established; and • the timing of regulatory approvals, if any.
Additional factors that may affect our future funding requirements include: • the acquisition of businesses, technologies, or drug candidates, or the licensing of technologies or drug candidates, if any; • the amount of revenues generated from our business activities; 49 Table of Contents • any changes in the breadth of our research and development programs; • the results of research and development, preclinical testing and clinical trials conducted by us or our current or future collaborators or licensees, if any; • our exercise of any co-development options with collaborators that may require us to fund future development; • costs for future facility requirements; • our ability to maintain and establish new corporate relationships and research collaborations; • competing technological and market developments; • the time and costs involved in filing, prosecuting, defending and enforcing patent and intellectual property rights; • the receipt or payment of contingent licensing or milestone fees or royalties on product sales from our current or future collaborative and license arrangements, if established; and • the timing of regulatory approvals, if any.
Reforms or other changes to these payment systems may change the availability, methods and rates of reimbursements from Medicare, private insurers and other third-party payors for our current and any future approved products. These reforms may affect future investments in our drug development, should the reforms affect our risk-benefit 46 Table of Contents analysis of investing in a drug candidate.
Reforms or other changes to these payment systems may change the availability, methods and rates of reimbursements from Medicare, private insurers and other third-party payors for our current and any future 38 Table of Contents approved products. These reforms may affect future investments in our drug development, should the reforms affect our risk-benefit analysis of investing in a drug candidate.
The continuing efforts of legislatures, health agencies and third-party payors to contain or reduce the costs of health care, any denial of private or government payor coverage or inadequate reimbursement for our drug candidates could materially and adversely affect our business strategy, operations, future revenues and profitability, and the future revenues and profitability of our potential customers, suppliers, collaborators and licensees and the availability of capital.
The continuing efforts of legislatures, health agencies and third-party payors to contain or reduce the costs of healthcare, any denial of private or government payor coverage or inadequate reimbursement for our drug candidates could materially and adversely affect our business strategy, operations, future revenues and profitability, and the future revenues and profitability of our potential customers, suppliers, collaborators and licensees and the availability of capital.
If we are unable to manage our growth effectively, our business could be harmed and our ability to execute our business strategy could suffer. 53 Table of Contents We may acquire businesses or assets, form joint ventures or make investments in other companies that may be unsuccessful, divert our management’s attention and harm our operating results and prospects.
If we are unable to manage our growth effectively, our business could be harmed and our ability to execute our business strategy could suffer. 45 Table of Contents We may acquire businesses or assets, form joint ventures or make investments in other companies that may be unsuccessful, divert our management’s attention and harm our operating results and prospects.
Any new tax legislation or initiatives could not only significantly increase our tax provision, cash tax liabilities, and effective tax rate, but could also significantly increase tax uncertainty due to differing interpretations and increased audit scrutiny. We derive a substantial portion of our revenues from royalties, milestone payments and other payments under our collaboration agreements.
Any new tax legislation or initiatives could not only significantly increase our tax provision, cash tax liabilities, compliance costs and effective tax rate, but could also significantly increase tax uncertainty due to differing interpretations and increased audit scrutiny. We derive a substantial portion of our revenues from royalties, milestone payments and other payments under our collaboration agreements.
The new law also reduced the out-of-pocket prescription drug costs for Medicare Part D beneficiaries, and to help pay for this change in benefit design, the law imposes a new discount program starting in 2025, in which manufacturers pay specified discounts on Medicare Part D utilization of their drugs as a condition of selling such drugs in the Medicare Part D program.
The new law also reduced the out-of-pocket prescription drug costs for Medicare Part D beneficiaries, and to help pay for this change in benefit design, the law imposes a new discount program which started in 2025 in which manufacturers pay specified discounts on Medicare Part D utilization of their drugs as a condition of selling such drugs in the Medicare Part D program.
These disputes have led and could in the future lead to litigation or arbitration, which could be costly and divert the efforts of our management and scientific staff and could diminish the expected effectiveness of the collaboration. Our existing collaborative and license agreements can be terminated by our collaborators and licensees for convenience, among other circumstances.
These disputes have led and could in the future lead to litigation or arbitration, which could be costly and divert the efforts of our management and scientific staff and could diminish the expected effectiveness of the collaboration. Our existing collaborative and license agreements can be terminated by our collaborators and licensees for convenience, in addition to other circumstances.
Of the compounds or biologics that we identify as potential drug products or that we may in-license from other companies, including potential products for which we are conducting clinical trials, only a few, if any, are likely to lead to successful drug development programs and commercialized drug products. 44 Table of Contents If we or our collaborators are unable to obtain regulatory approval for our drug candidates in the United States and foreign jurisdictions, we or our collaborators will not be permitted to commercialize products resulting from our research.
Of the compounds or biologics that we identify as potential drug products or that we in-license from other companies, including potential products for which we are conducting clinical trials, only a few, if any, are likely to lead to successful drug development programs and commercialized drug products. 36 Table of Contents If we or our collaborators are unable to obtain regulatory approval for our drug candidates in the United States or foreign jurisdictions, we or our collaborators will not be permitted to commercialize products resulting from our research.
Criminal Finances Act, which may have similarly broad extraterritorial reach. 55 Table of Contents In addition, our revenues are subject to foreign currency exchange rate fluctuations due to the global nature of our operations and unfavorable changes in foreign currency exchange rates may adversely affect our revenues and net income.
Criminal Finances Act, which may have similarly broad extraterritorial reach. 47 Table of Contents In addition, our revenues are subject to foreign currency exchange rate fluctuations due to the global nature of our operations and unfavorable changes in foreign currency exchange rates may adversely affect our revenues and net income.
Biotechnology and pharmaceutical patent law outside the United States is even more uncertain and costly than in the United States and is currently undergoing review and revision in many countries. Further, the laws of some foreign countries may not protect our intellectual property rights to the same extent as United States laws.
Biotechnology and pharmaceutical patent law outside the United States is even more uncertain and costly than in the United States and is currently undergoing review and revision in many countries. Further, the laws of some foreign countries may not protect our intellectual property rights to the same extent as U.S. laws.
Our ability to commercialize our current and any future approved products successfully will depend in part on the prices we are able to charge for these products and the extent to which adequate coverage and reimbursement levels for the cost of our products and related treatment are obtained from third-party payors, such as private insurers, government insurance programs, including Medicare and Medicaid, health maintenance organizations (HMOs) and other health care related organizations in the United States and abroad.
Our ability to commercialize our current and any future approved products successfully will depend in part on the prices we are able to charge for these products and the extent to which adequate coverage and reimbursement levels for the cost of our products and related treatment are obtained from third-party payors, such as private insurers, government insurance programs, including Medicare and Medicaid, health maintenance organizations and other healthcare related organizations in the United States and abroad.
Although we have contracted with a number of specialty pharmacies and wholesalers, they are expected generally to carry a very limited inventory and may be reluctant to be part of our distribution network in the future if demand for the product does not increase.
Although we have contracted with a number of specialty pharmacies and wholesalers, they are expected generally to carry a very limited inventory and may be reluctant to be part of our distribution network in the future if demand for our products does not increase.
In addition, antitrust scrutiny by regulatory agencies and changes to regulatory approval process in the U.S. and foreign jurisdictions may cause approvals to take longer than anticipated to obtain, not be obtained at all, or contain burdensome conditions such as required divestitures, which may jeopardize, delay or reduce the anticipated benefits of acquisitions to us and could impede the execution of our business strategy. 54 Table of Contents As a result of these or other problems and risks, businesses, products or technologies we acquire or invest in or obtain licenses to may not produce the revenues, earnings, business synergies or other benefits that we anticipated, within the expected timeframe or at all.
In addition, antitrust scrutiny by regulatory agencies and changes to regulatory approval processes in the U.S. and foreign jurisdictions may cause approvals to take longer than anticipated to obtain, or may not be obtained at all, or contain burdensome conditions such as required divestitures, which may jeopardize, delay or reduce the anticipated benefits of acquisitions to us and could impede the execution of our business strategy. 46 Table of Contents As a result of these or other problems and risks, the businesses, products or technologies we acquire or invest in or obtain licenses to may not produce the revenues, earnings, business synergies or other benefits that we anticipated within the expected timeframe or at all.
In addition, revenues from our other products and our receipt of royalties under our collaboration agreements, including our agreements with Novartis for sales of JAKAVI outside the United States and TABRECTA globally and with Eli Lilly and Company for worldwide sales of OLUMIANT, will depend on factors similar to those listed above, with similar regulatory, pricing and reimbursement issues driven by applicable regulatory authorities and governmental and third-party payors affecting jurisdictions outside the United States.
In addition, revenues from our other products and our receipt of royalties under our collaboration agreements, including our agreements with Novartis Pharmaceutical International Ltd. for sales of JAKAVI outside the United States and TABRECTA globally and with Eli Lilly and Company for worldwide sales of OLUMIANT, will depend on factors similar to those listed above, with similar regulatory, pricing and reimbursement issues driven by applicable regulatory authorities and governmental and third-party payors affecting jurisdictions outside the United States.
We may also experience a significant drop in the sales of JAKAFI, experience harm to our reputation and the reputation of JAKAFI in the marketplace or become subject to lawsuits, including class actions. Any of these results could decrease or prevent sales of JAKAFI or substantially increase the costs and expenses of commercializing JAKAFI.
We may also experience a significant drop in the sales of our products, experience harm to our reputation and the reputation of our products in the marketplace or become subject to lawsuits, including class actions. Any of these results could decrease or prevent sales of our products or substantially increase the costs and expenses of commercializing our products.
Also, in March 2023, we received a complete response letter for ruxolitinib extended-release (XR) tablets, which identified additional requirements for approval. 45 Table of Contents Compounds or biologics developed by us or with or by our collaborators and licensees may not prove to be safe and effective in clinical trials and may not meet all of the applicable regulatory requirements needed to receive marketing approval.
Also, in March 2023, we received a complete response letter for ruxolitinib extended release tablets, which identified additional requirements for approval. 37 Table of Contents Compounds or biologics developed by us or with or by our collaborators and licensees may not prove to be safe and effective in clinical trials and may not meet all of the applicable regulatory requirements needed to receive marketing approval.
Our business is increasingly dependent on critical, complex, and interdependent information technology (IT) systems, including Internet-based systems, some of which are managed or hosted by third parties, to support business processes as well as internal and external communications.
Our business is increasingly dependent on critical, complex, and interdependent information technology (“IT”) systems, including Internet-based systems, some of which are managed or hosted by third parties, to support business processes as well as internal and external communications.
Competitors and potential competitors for PEMAZYRE, ZYNYZ and NIKTIMVO include major pharmaceutical and biotechnology companies, as well as specialty pharmaceutical firms. Competitors for OPZELURA include existing over-the-counter topical treatments and prescription topical treatments, as well as oral and injectable therapies, from major pharmaceutical and biotechnology companies, and companies that produce generic version of prescription treatments.
Competitors and potential competitors for PEMAZYRE, ZYNYZ and NIKTIMVO include major pharmaceutical and biotechnology companies, as well as specialty pharmaceutical firms. Competitors for OPZELURA include existing over-the-counter topical treatments and prescription topical treatments, as well as oral and injectable therapies, from major pharmaceutical and biotechnology companies, and companies that produce generic versions of prescription treatments.
Any loss in value of our equity investments could adversely affect our financial position on the consolidated balance sheets and consolidated statements of operations. 58 Table of Contents Changes in tax laws or regulations could adversely affect our results of operations, business and financial condition.
Any loss in value of our equity investments could adversely affect our financial position on the consolidated balance sheets and consolidated statements of operations. 50 Table of Contents Changes in tax laws or regulations could adversely affect our results of operations, business and financial condition.
Should an agreement be terminated before we have realized the benefits of the collaboration or license, our reputation could be harmed, we may not obtain revenues that we anticipated receiving, and our business could be adversely affected. The success of our drug discovery and development efforts may depend on our ability to find suitable collaborators to fully exploit our capabilities.
Should an agreement be terminated before we have realized the benefits of the collaboration or license, our reputation could be harmed, we may not obtain revenues that we anticipated receiving, and our business could be adversely affected. 40 Table of Contents The success of our drug discovery and development efforts may depend on our ability to find suitable collaborators to fully exploit our capabilities.
We do not currently operate manufacturing facilities for most of our clinical or commercial products, including JAKAFI, PEMAZYRE, ICLUSIG, OPZELURA and NIKTIMVO, and our drug candidates. Our current manufacturing strategy for these products and drug candidates is to contract with third parties to manufacture the related raw materials, active pharmaceutical ingredient (API), and finished drug product.
We do not currently operate manufacturing facilities for most of our clinical or commercial products, including JAKAFI, PEMAZYRE, ICLUSIG, OPZELURA, ZYNYZ and NIKTIMVO, and our drug candidates. Our current manufacturing strategy for these products and drug candidates is to contract with third parties to manufacture the related raw materials, active pharmaceutical ingredient (“API”), and finished drug product.
If we are unsuccessful in obtaining and maintaining broad coverage and reimbursement for our products, our anticipated revenue from and growth prospects for our products could be negatively affected. If third parties institute high co-payment amounts or other benefit limits for our products, the demand for our products and, accordingly, our revenues and results of operations, could be adversely affected.
If we are unsuccessful in obtaining and maintaining broad coverage and reimbursement for our products, our anticipated revenue from and growth prospects for our products could be negatively affected. 30 Table of Contents If third parties institute high co-payment amounts or other benefit limits for our products, the demand for our products and, accordingly, our revenues and results of operations, could be adversely affected.
Federal and state anti-kickback laws prohibit, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any health care item or service reimbursable under Medicare, Medicaid, or other federally- or state-financed health care programs.
Federal and state anti-kickback laws prohibit, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid, or other federally- or state-financed healthcare programs.
These Physician Payment Sunshine provisions and similar laws and regulations in other jurisdictions where we do business require manufacturers to publicly report certain payments or other transfers of value made to physicians and teaching hospitals. Many of these requirements are new and uncertain, and the penalties for failure to comply with these requirements are unclear.
These provisions and similar laws and regulations in other jurisdictions where we do business require manufacturers to publicly report certain payments or other transfers of value made to physicians and teaching hospitals. Many of these requirements are new and uncertain, and the penalties for failure to comply with these requirements are unclear.
See also “—Other Risks Relating to our Business—If we fail to comply with the extensive legal and regulatory requirements affecting the health care industry, we could face increased costs, penalties and a loss of business” below. Competition for our products could harm our business and result in a decrease in our revenue.
See also “—Other Risks Relating to our Business—If we fail to comply with the extensive legal and regulatory requirements affecting the healthcare industry, we could face increased costs, penalties and a loss of business” below. Competition for our products could harm our business and result in a decrease in our revenue.
For example in the European Union, under the General Data Protection Regulation, potential fines for noncompliance are up to €20 million or 4% of the annual global revenue, whichever is greater. Further, some jurisdictions provide for private rights of action if data breaches result in the loss or theft of personal data.
For example, in the EU under the General Data Protection Regulation, potential fines for noncompliance are up to €20 million or 4% of annual global revenue, whichever is greater. Further, some jurisdictions provide for private rights of action if data breaches result in the loss or theft of personal data.
Future changes to environmental, health, workplace and safety laws could cause us to incur additional expense or may restrict our operations or impair our research, development and production efforts. 56 Table of Contents Business disruptions could seriously harm our operations, future revenues and financial condition and increase our costs and expenses.
Future changes to environmental, health, workplace and safety laws could cause us to incur additional expense or may restrict our operations or impair our research, development and production efforts. 48 Table of Contents Business disruptions and uncertainties could seriously harm our operations, future revenues and financial condition and increase our costs and expenses.
For example, one of our collaborators may disclose proprietary information pertaining to our drug discovery efforts. In addition, while we have filed numerous patent applications with respect to ruxolitinib and our drug candidates in the United States and in foreign countries, our patent applications may fail to result in issued patents.
For example, one of our collaborators may disclose proprietary information pertaining to our drug discovery efforts. In addition, while we have filed numerous patent applications with respect to our approved products and drug candidates in the United States and in foreign countries, our patent applications may fail to result in issued patents.
We expect that the health care reform measures that have been adopted in the United States and in foreign markets, and further reforms that may be adopted in the future, could result in more rigorous coverage criteria and additional downward pressure on the prices that we may receive for our approved products.
We expect that the healthcare reform measures that have been adopted in the United States and in foreign markets, and further reforms that may be adopted in the future, could result in more rigorous coverage criteria and additional downward pressure on the prices that we may receive for our approved products.
Additionally, any product liability lawsuit could cause injury to our reputation, participants and investigators to withdraw from clinical trials, and potential collaborators or licensees to seek other partners, any of which could impact our results of operations. Our product liability insurance policy may not fully cover our potential liabilities.
Additionally, any product liability lawsuit could damage our reputation, cause participants and investigators to withdraw from clinical trials, and encourage potential collaborators or licensees to seek other partners, any of which could impact our results of operations. Our product liability insurance policy may not fully cover our potential liabilities.
For example, in December 2022, the European Union member states agreed to implement in their domestic tax laws a 15% global minimum tax on the profits of large multinational enterprises with a target effective date for fiscal years beginning on or after December 31, 2023.
For example, in December 2022, the EU member states agreed to implement in their domestic tax laws a 15% global minimum tax on the profits of large multinational enterprises with a target effective date for fiscal years beginning on or after December 31, 2023.
On January 15, 2025, the OECD released new guidance addressing implementation of the Pillar Two global minimum tax rules, which were effective for us in tax year 2024.
In January 2025, the OECD released new guidance addressing implementation of the Pillar Two global minimum tax rules, which were effective for us in tax year 2024.
It is expected that this provision, as implemented by the Centers for Medicare and Medicaid Services, or CMS, will have the effect of increasing Medicaid rebate liability, particularly in the case of medicines that have experienced price increases at a rate in excess of inflation.
It is expected that this provision, as implemented by the Centers for Medicare and Medicaid Services (“CMS”) will have the effect of increasing Medicaid rebate liability, particularly in the case of medicines that have experienced price increases at a rate in excess of inflation.
Also, we may not have drug candidates that are desirable to other parties, or we may be unwilling to license a drug candidate to a particular party because such party interested in it is a competitor or for other reasons. The terms of any such arrangements that we establish may not be favorable to us.
Also, we may not have drug candidates that are desirable to other parties, or we may be unwilling to license a drug candidate to a particular party because such party is a competitor or for other reasons. The terms of any such arrangements that we establish may not be favorable to us.
Even if we were able to find another company to perform a preclinical test or clinical trial, the delay in the test or trial may result in significant additional expenditures.
Even if we were able to find another entity to perform a preclinical test or clinical trial, the delay in the test or trial may result in significant additional expenditures.
Actions taken by federal or local governments, legislative bodies and enforcement agencies with respect to these legal and regulatory compliance matters could also result in reduced demand for our products, reduced coverage of our products by health care payors, or both.
Actions taken by federal or local governments, legislative bodies and enforcement agencies with respect to these legal and regulatory compliance matters could also result in reduced demand for our products, reduced coverage of our products by healthcare payors, or both.
Any increases in the cost of our drug candidates or drug products, whether through conditions affecting the cost and availability of raw materials, such as inflation, decreases in available manufacturing capacity, or otherwise, would adversely affect our results of operations.
Any increases in the cost of our drug candidates or drug products, whether through 43 Table of Contents conditions affecting the cost and availability of raw materials, such as inflation, decreases in available manufacturing capacity, or otherwise, would adversely affect our results of operations.
We cannot assure you that any acquisitions or investments we may make in the future will be completed or that, if completed, the acquired business, licenses, investments, products, or technologies will generate sufficient revenue to offset the costs or other negative effects on our business.
We cannot be sure that any acquisitions or investments we may make in the future will be completed or that, if completed, the acquired business, licenses, investments, products, or technologies will generate sufficient revenue to offset the costs or other negative effects on our business.
In addition to FDA and related regulatory requirements, we are subject to health care “fraud and abuse” laws, such as the federal False Claims Act, the anti-kickback provisions of the federal Social Security Act, and other state and federal laws and regulations.
In addition to FDA and related regulatory requirements, we are subject to healthcare “fraud and abuse” laws, such as the federal False Claims Act, the anti-kickback provisions of the federal Social Security Act, and other state and federal laws and regulations.
For example, the FDA has in the past required, and could in the future require, that we or our collaborators conduct additional trials of any of our drug candidates, which would result in delays and could result in our termination of a drug development program.
Further, the FDA has in the past required, and could in the future require, that we or our collaborators conduct additional trials of any of our drug candidates, which would result in delays and could result in our termination of a drug development program.
For example, February 2024, we entered into a purchase agreement with MorphoSys under which we acquired rights to tafasitamab (MONJUVI/MINJUVI) that resulted in our holding exclusive global development and commercialization rights to tafasitamab.
For example, in February 2024 we entered into a purchase agreement with MorphoSys AG and MorphoSys US Inc. under which we acquired rights to tafasitamab (MONJUVI/MINJUVI) that resulted in our holding exclusive global development and commercialization rights to tafasitamab.
In addition, the trend toward managed health care in the United States, the organizations for which could control or significantly influence the purchase of health care services and products, as well as legislative and regulatory proposals to reform health care or address the cost of government insurance programs, may all result in lower prices for or rejection of our products.
In addition, the trend toward managed healthcare in the United States as well as legislative and regulatory proposals to reform healthcare or address the cost of government insurance programs may all result in lower prices for, or rejection of, our products. Managed healthcare organizations could control or significantly influence the purchase of healthcare services and products.
In addition, generic versions of imatinib are available and, while we currently believe that generic versions of imatinib will not materially impact our commercialization of ICLUSIG, given ICLUSIG’s various indication statements globally that are currently focused on resistant or intolerant CML, we cannot be certain how physicians, payors, patients, regulatory authorities and other market participants will respond to the availability of generic versions of imatinib.
Given ICLUSIG’s various indication statements globally that are currently focused on resistant or intolerant CML, we currently believe that generic versions of imatinib will not materially impact our commercialization of ICLUSIG but we cannot be certain how physicians, payors, patients, regulatory authorities and other market participants will respond to the availability of generic versions of imatinib.
For example, delays in or other limitations with respect to the approval of baricitinib in the United States for the treatment of moderate-to-severe rheumatoid arthritis, or the failure to obtain such approval as a first line therapy, as discussed under “—We depend on our collaborators and licensees for the future development and commercialization of some of our drug candidates.
For example, delays in or other limitations with respect to the approval of baricitinib in the United States for the treatment of moderate-to-severe rheumatoid arthritis, or the failure to obtain such approval as a first line therapy, as discussed under “Other Risks Relating to Our Business—We depend on our collaborators and licensees for the future development and commercialization of some of our drug candidates.
For example, as part of our plans to expand our activities outside of the United States, we now conduct some of our operations in Canada, commercial and clinical development activities in Japan, have opened an office in China and are working with partners in additional markets.
For example, as part of our plans to expand our activities outside of the United States, we conduct some of our operations in Canada, have commercial and clinical development activities in Japan, maintain an office in China and are working with collaborative partners in additional markets.
Any failure of our collaborators and licensees to perform their obligations under our agreements with them or otherwise to support our drug candidates could negatively impact the development of our drug candidates, lead to our loss of potential revenues from product sales and milestones and delay our achievement, if any, of profitability.
Any failure of our collaborators and licensees to perform their obligations under our agreements with them or otherwise to support our drug candidates could negatively impact the development of our drug candidates and lead to our loss of potential revenues from product sales and milestones.
We may encounter delays and difficulties in scaling up production at our new facility or in obtaining necessary regulatory approvals and registrations to do so. If we fail to comply with the extensive legal and regulatory requirements affecting the health care industry, we could face increased costs, penalties and a loss of business.
We may encounter delays and difficulties in scaling up production at our Swiss facility or in obtaining necessary regulatory approvals and registrations to do so. If we fail to comply with the extensive legal and regulatory requirements affecting the healthcare industry, we could face increased costs, penalties and a loss of business.
If any of our collaborators or licensees terminates its agreement with us, or terminates its rights with respect to certain indications or drug candidates, we may not be able to find a new collaborator for them, and our business could be adversely affected.
If any of our collaborators or licensees terminates its agreement with us, or terminates its rights with respect to certain indications or drug candidates, we may not be able to find a replacement collaborator and our business could be adversely affected.
Further, non-profit organizations’ ability to provide assistance to patients is dependent on funding from external sources, and we cannot guarantee that such funding will be provided at adequate levels, or at all.
Further, the ability of non-profit organizations to provide assistance to patients is dependent on funding from external sources, and we cannot guarantee that such funding will be provided at adequate levels, or at all.
Use of artificial intelligence based software may also lead to the release of confidential proprietary information, which may impact our ability to realize the benefit of our intellectual property. 63 Table of Contents Item 1B. Unresolved Staff Comments None.
Use of artificial intelligence may also lead to the release of confidential proprietary information, which may impact our ability to realize the benefit of our intellectual property. 55 Table of Contents Item 1B. Unresolved Staff Comments None.
The occurrence of any of these business disruptions could seriously harm our operations, future revenues and financial condition and increase our costs and expenses.
The occurrence of any of these business disruptions or other uncertainties could seriously harm our operations, future revenues and financial condition and increase our costs and expenses.
In addition, we are studying and expect to continue to study JAKAFI in diseases for potential additional indications in controlled clinical settings, and independent investigators are doing so as well.
In addition, we are studying and expect to continue to study our approved products in diseases for potential additional indications in controlled clinical settings, and independent investigators are doing so as well.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThey regularly report directly to the Audit and Finance Committee or the Board of Directors on our cybersecurity program and our efforts to prevent, detect, mitigate and remediate cybersecurity incidents. In addition, we have an escalation process in place to inform senior management and the Board of Directors of any material issues as they arise. 64 Table of Contents
Biggest changeIn addition, we have an escalation process in place to inform senior management and the Board of Directors of any material issues as they arise.
These include, among other things, having mechanisms in place to detect and monitor unusual network activity, utilizing vulnerability assessment scans and tools, and conducting external and internal penetration tests and security assessments using the National Institute of Standards and Technology (NIST) Cybersecurity Framework.
These include, among other things, having mechanisms in place to detect and monitor unusual network activity, utilizing vulnerability assessment scans and tools, and conducting external and internal penetration tests and security assessments using the National Institute of Standards and Technology Cybersecurity Framework.
Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. See "Item 1A. Risk Factors" for more information on our cybersecurity risks. We aim to incorporate and align with industry best practices throughout our cybersecurity program.
Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. See “Item 1A. Risk Factors” for more information on our cybersecurity risks. We aim to incorporate and align with industry best practices throughout our cybersecurity program.
Cybersecurity reviews by the Audit and Finance Committee or the Board of Directors generally occur at least twice annually, or more frequently as determined to be necessary or advisable. Incyte’s Chief Information Security Officer (CISO) runs our cybersecurity program.
Cybersecurity reviews by the Audit and Finance Committee or the Board of Directors generally occur at least twice annually, or more frequently as determined to be necessary or advisable. Incyte’s Chief Information Security Officer (“CISO”) runs our cybersecurity program. Our CISO, who holds numerous cybersecurity and related certifications, reports in to our Chief Information Officer (“CIO”).
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Our CISO, who holds numerous cybersecurity and related certifications, including Certified Information Systems Security Professional, reports in to our Chief Information Officer (CIO). Our CISO and CIO have extensive experience assessing and managing cybersecurity programs and cybersecurity risk.
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Our CISO and CIO have extensive experience assessing and managing cybersecurity programs and cybersecurity risk. They regularly report directly to the Audit and Finance Committee or the Board of Directors on our cybersecurity program and our efforts to prevent, detect, mitigate and remediate cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn May 2024, we purchased additional property in Wilmington, Delaware, including land, office buildings and parking garages, adding an additional approximately 517,000 square feet of office space in Wilmington, Delaware. The acquired office buildings are undergoing renovations and we currently expect to occupy the office buildings in 2026.
Biggest changeWe own three buildings comprising approximately 541,000 square feet of laboratory and office space at this site. 56 Table of Contents In May 2024, we purchased additional property in Wilmington, Delaware, including land, office buildings and parking garages, adding an additional approximately 517,000 square feet of office space in Wilmington, Delaware.
Item 2. Properties Our global headquarters is located in Wilmington, Delaware, where we conduct global clinical development and commercial operations. We own three buildings comprising approximately 541,000 square feet of laboratory and office space at this site.
Item 2. Properties Our global headquarters is located in Wilmington, Delaware, where we conduct global clinical development and commercial operations.
Added
During December 2025, the downtown Wilmington properties that we acquired in May 2024 met the criteria to be classified as assets held for sale on our consolidated balance sheet as of December 31, 2025.
Added
As a result of this classification, we recorded an asset impairment charge on our consolidated statement of operations relating to the downtown Wilmington properties as of December 31, 2025. Additional information relating to the asset impairment can be found in Note 8 of Notes to the Consolidated Financial Statements.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe do not expect any such current legal proceedings to have a material adverse impact on our business or financial condition.
Biggest changeWe do not expect any current legal proceedings to have a material adverse impact on our business or financial condition.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeMatteo Trotta, age 46, joined Incyte as Executive Vice President, General Manager, Dermatology US in March 2024. Prior to joining Incyte, Mr. Trotta served as the Head of Novartis U.S. Immunology, where he led a 400-person organization across dermatology, rheumatology, auto-inflammatory, rare diseases and allergy.
Biggest changeTrotta served as the Head of Novartis U.S. Immunology, where he led a 400-person organization across dermatology, rheumatology, auto-inflammatory, rare diseases and allergy. He additionally held leadership roles in U.S. marketing and sales, enterprise strategy and global manufacturing and quality.
Mohamed Issa, age 42, joined Incyte in January 2025 as Executive Vice President, Head of US Oncology. He has almost 20 years of global leadership experience in pharmaceuticals, consumer healthcare and med-tech, with expertise spanning strategy, commercialization and business development. Before joining Incyte, he spent 13 years at Johnson & Johnson, where he held senior roles leading U.S.
Mohamed Issa, age 43, joined Incyte in January 2025 as Executive Vice President, Head of US Oncology. He has more than 20 years of global leadership experience in pharmaceuticals, consumer healthcare and med-tech, with expertise spanning strategy, commercialization and business development. Before joining Incyte, he spent 13 years at Johnson & Johnson, where he held senior roles leading U.S.
Heeson was Executive Vice President, Commercial International, of Seagen Inc., a biopharmaceutical company, from February 2022 to September 2024. From February 2020 to February 2022, he was President International of Vifor Pharma Ltd., a pharmaceuticals company.
Prior to joining Incyte, Mr. Heeson was Executive Vice President, Commercial International, of Seagen Inc., a biopharmaceutical company, from February 2022 to September 2024. From February 2020 to February 2022, he was President International of Vifor Pharma Ltd., a pharmaceuticals company.
Prior to joining Laronde and Flagship, he served as President and Chief Executive Officer of Rubius Therapeutics, Inc., a biotechnology company, from June 2018 until November 2022. From May 2015 until June 2018, Dr. Cagnoni served as President and Chief Executive Officer of Tizona Therapeutics, Inc., a privately held biotechnology company. Dr.
Cagnoni served as Chief Executive of Laronde (now Sail Biomedicines), a Flagship Pioneering Company, and Executive Partner at Flagship Pioneering. Prior to joining Laronde and Flagship, he served as President and Chief Executive Officer of Rubius Therapeutics, Inc., a biotechnology company, from June 2018 until November 2022. From May 2015 until June 2018, Dr.
From 2007 to 2009, Dr. Cagnoni was Senior Vice President and Chief Medical Officer at Allos Therapeutics (acquired by Spectrum Pharmaceuticals) and, prior to that, Chief Medical Officer of OSI Pharmaceuticals (acquired by Astellas Pharma Inc.). Dr.
Cagnoni was Senior Vice President and Global Head of Clinical Development at Novartis Oncology from October 2009 to March 2013. From 2007 to 2009, Dr. Cagnoni was Senior Vice President and Chief Medical Officer at Allos Therapeutics (acquired by Spectrum Pharmaceuticals) and, prior to that, Chief Medical Officer of OSI Pharmaceuticals (acquired by Astellas Pharma Inc.). Dr.
Cagnoni received an M.D. from the University Buenos Aires School of Medicine and completed post-doctoral work in Hematology and Oncology at the Mount Sinai Medical Center, New York, and in Stem Cell Transplantation at the University of Colorado Health Sciences Center. 65 Table of Contents Sheila Denton , age 59, joined Incyte in October 2023 as Executive Vice President, General Counsel and Corporate Secretary.
Cagnoni received an M.D. from the University Buenos Aires School of Medicine and completed post-doctoral work in Hematology and Oncology at the Mount Sinai Medical Center, New York, and in Stem Cell Transplantation at the University of Colorado Health Sciences Center. David Gardner, age 43, joined Incyte in September 2025 as Executive Vice President and Chief Strategy Officer. Mr.
Cagnoni previously served as President of Onyx Pharmaceuticals, Inc., a biopharmaceutical company, from October 2013 to April 2015 and Executive Vice President, Global Research and Development and Technical Operations from March 2013 to October 2013. Prior to Onyx, Dr. Cagnoni was Senior Vice President and Global Head of Clinical Development at Novartis Oncology from October 2009 to March 2013.
Cagnoni served as President and Chief Executive Officer of Tizona Therapeutics, Inc., a privately held biotechnology company. Dr. Cagnoni previously served as President of Onyx Pharmaceuticals, Inc., a biopharmaceutical company, from October 2013 to April 2015 and Executive Vice President, Global Research and Development and Technical Operations from March 2013 to October 2013. Prior to Onyx, Dr.
From February 2005 until joining Incyte, Mr. Morrissey worked at Celgene International, a subsidiary of Celgene Corporation, a biopharmaceutical company, where he last served as Corporate Vice President, Head of International Technical Operations. Prior to Celgene, he worked for Roche for 15 years in various positions. Mr.
He has more than 30 years of global pharmaceutical industry experience through his prior positions in Research and Development, Quality Assurance, and Manufacturing. From February 2005 until joining Incyte, Mr. Morrissey worked at Celgene International, a subsidiary of Celgene Corporation, a biopharmaceutical company, where he last served as Corporate Vice President, Head of International Technical Operations.
Stein held a post-doctoral fellowship in hematology/oncology at the University of Pennsylvania from 1998 to 2001, and earned his M.D. from the University of Witwatersrand in Johannesburg, South Africa, in 1990. Paula J.
Stein held a post-doctoral fellowship in hematology/oncology at the University of Pennsylvania from 1998 to 2001, and earned his M.D. from the University of Witwatersrand in Johannesburg, South Africa, in 1990. Matteo Trotta, age 47, joined Incyte as Executive Vice President, General Manager, Dermatology US in March 2024. Prior to joining Incyte, Mr.
Morrissey received a B.Sc. in Physics and Applied Mathematics from the University of London, United Kingdom. Christiana Stamoulis, age 54, joined Incyte in February 2019 as Executive Vice President and Chief Financial Officer.
Morrissey received a B.Sc. in Physics and Applied Mathematics from the University of London, United Kingdom. 58 Table of Contents Steven Stein, age 59, has served as Executive Vice President and Chief Medical Officer since May 2016 and joined Incyte as Senior Vice President and Chief Medical Officer in March 2015.
Trotta received his Engineering Degree from Politecnico di Torino, his M.S. in Engineering from the University of Illinois Chicago, and his M.B.A. from Columbia Business School. 67 Table of Contents PART II
Before joining Novartis in 2012, he was an Engagement Manager at McKinsey & Company, where he served pharmaceutical and payor clients as part of their healthcare practice. Mr. Trotta received his Engineering Degree from Politecnico di Torino, his M.S. in Engineering from the University of Illinois Chicago, and his M.B.A. from Columbia Business School. 59 Table of Contents PART II
Item 4. Mine Safety Disclosures Not applicable. Information about our Executive Officers Our executive officers are as follows: Hervé Hoppenot, age 65, joined Incyte as President and Chief Executive Officer and a Director in January 2014 and was appointed Chairman of the Board in May 2015. Mr.
Item 4. Mine Safety Disclosures Not applicable. Information about our Executive Officers Our executive officers are as follows: William J. Meury , age 57, joined Incyte in June 2025 as President and Chief Executive Officer. Prior to joining Incyte, Mr.
John’s University and an M.B.A. in finance and economics from New York University’s Stern School of Business. Vijay Iyengar , age 52, joined Incyte in May 2016 as Executive Vice President, Global Strategy and Corporate Development. Prior to joining Incyte, from April 2014 to April 2016, he was the President of Genoptix Corporation, a Novartis Company.
John’s University and an M.B.A. in finance and economics from New York University’s Stern School of Business. Michael Morrissey , age 62, has served as Executive Vice President and Head of Global Technical Operations since June 2019 and joined Incyte in January 2016 as Corporate Senior Vice President and Head of Global Technical Operations.
Pablo J. Cagnoni, age 62, joined Incyte in June 2023 as President and Head of Research and Development. From November 2022 to May 2023, Dr. Cagnoni served as Chief Executive of Laronde (now Sail Biomedicines), a Flagship Pioneering Company, and Executive Partner at Flagship Pioneering.
Basi earned her M.A. and Ph.D. in Social Psychology from Bowling Green State University. 57 Table of Contents Pablo J. Cagnoni, age 63, joined Incyte in June 2023 as President and Head of Research and Development. From November 2022 to May 2023, Dr.
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Hoppenot served as the President of Novartis Oncology, Novartis Pharmaceuticals Corporation, the U.S. subsidiary of Novartis AG, a pharmaceutical company, from January 2010 to January 2014. Prior to that, Mr.
Added
Meury served as President and Chief Executive Officer of Anthos Therapeutics, Inc., a privately-held biopharmaceutical company, from April 2024 until its acquisition by Novartis in April 2025. From January 2023 through March 2024, Mr. Meury served as President and Chief Executive Officer of Karuna Therapeutics, Inc., a publicly traded biopharmaceutical company that was acquired by Bristol-Myers Squibb Company.
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Hoppenot served in other executive positions at Novartis Pharmaceuticals Corporation, serving from September 2006 to January 2010 as Executive Vice President, Chief Commercial Officer of Novartis Oncology and Head of Global Product Strategy & Scientific Development of Novartis Pharmaceuticals Corporation and from 2003 to September 2006 as Senior Vice President, Head of Global Marketing of Novartis Oncology.
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From May 2020 through December 2022, Mr. Meury served as a Partner at Hildred Capital Management, a private equity firm focusing on the healthcare industry. Prior to joining Hildred Capital Management, Mr. Meury served as the Chief Commercial Officer of Allergan plc, a global pharmaceutical company, from May 2016 through its acquisition by AbbVie Inc. in May 2020. Mr.
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Prior to joining Novartis, Mr. Hoppenot served in various increasingly senior roles at Aventis S.A. (formerly Rhône-Poulenc S.A.), a pharmaceutical company, including as Vice President Oncology U.S. of Aventis Pharmaceuticals, Inc. from 2000 to 2003 and Vice President U.S. Oncology Operations of Rhone-Poulenc Rorer Pharmaceuticals, Inc. from 1998 to 2000. Mr. Hoppenot holds a Diploma from ESSEC International Business School.
Added
Meury previously served as Allergan’s President, Branded Pharma from March 2015 to May 2016 and joined Allergan in July 2014 as Executive Vice President, Commercial, North American Brands. He has significant experience in launching and commercializing healthcare products. Prior to joining Allergan, Mr.
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Ms. Denton most recently served as Senior Vice President, General Counsel and Corporate Secretary of Boehringer Ingelheim USA, Inc., where she was responsible for the legal, compliance and policy teams for the human health, animal health and biopharmaceutical businesses. During her 19-year tenure with Boehringer Ingelheim, Ms.
Added
Meury served as Executive Vice President, Sales and Marketing at Forest Laboratories, Inc., a specialty pharmaceutical company that was acquired by Actavis plc in July 2014. He joined Forest in 1993 and held multiple roles of increasing responsibility in marketing, new products, business development, and sales. Before joining Forest, Mr.
Removed
Denton held a number of other key leadership positions both in the United States and abroad, in multiple areas such as acquisitions, the generic businesses, and litigation. Prior to joining Boehringer Ingelheim, Ms. Denton was a partner in a New England-based law firm. Ms.
Added
Meury worked in public accounting for Reznick, Fedder & Silverman and in financial reporting for MCI Communications, Inc. Mr. Meury earned his B.A. in Economics from the University of Maryland. Soni Basi, age 51, joined Incyte in August 2025 as Executive Vice President and Chief Human Resources Officer (CHRO). Ms.
Removed
Denton received her J.D. from Western New England College School of Law, and her B.S. in Business and Political Science from Sacred Heart University. Lee Heeson, age 54, joined Incyte in October 2024 as Executive Vice President, Incyte International. Prior to joining Incyte, Mr.
Added
Basi has more than 25 years of experience in global HR and business leadership and is recognized for leading high-performing teams and guiding organizations through transformation. Before joining Incyte, Ms.
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From December 2011 to March 2014, he was the Vice President and Rare Diseases Franchise Head at Novartis Oncology and from July 2009 to December 2011, he was the Vice President and Oncology General Manager of Novartis Greece.
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Basi provided professional consulting services through SKB People Advisory, a private consulting practice, from June 2024 until August 2025, and served as CHRO at Edelman, a strategic global communications firm, from May 2022 to May 2024. Prior to Edelman, Ms.
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From October 2007 to June 2009, he was the Global Brand Executive Director at Novartis Pharmaceuticals, and from January 2006 to October 2007, he was the Global Brand Director, Oncology at Novartis Pharmaceuticals. Dr. Iyengar received his B.S. in Biology from Stanford University and earned his M.D. from Harvard Medical School.
Added
Basi was the Head of Global Talent Management at American International Group, Inc., a global insurance organization, from August 2020 to April 2022, and she previously held senior talent leadership roles at Allergan Pharmaceuticals, The Estée Lauder Companies and Schering-Plough. Ms.
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Michael Morrissey , age 61, has served as Executive Vice President and Head of Global Technical Operations since June 2019 and joined Incyte in January 2016 as Corporate Senior Vice President and Head of Global Technical Operations. He has more than 30 years of global pharmaceutical industry experience through his prior positions in Research and Development, Quality Assurance, and Manufacturing.
Added
Gardner has more than 20 years of experience in biopharmaceutical investing and advising, most recently at Rock Springs Capital Management from May 2015 until September 2025, where he led strategy across Oncology, Neurology, Immunology and Rare Diseases in multiple roles of increasing responsibility. Prior to Rock Springs, Mr.
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Prior to joining Incyte, she served as President from February 2018 until January 2019 and Chief Financial Officer from January 2015 to January 2019 of Unum Therapeutics Inc., a biopharmaceutical company. Prior to joining Unum, Ms. Stamoulis was a Senior Vice President of Corporate Strategy and Business Development at Vertex Pharmaceuticals, Inc., a biopharmaceutical company. Prior to joining Vertex, Ms.
Added
Gardner spent a decade at BlackRock as Vice President and Equity Research Analyst where he was responsible for investments across the healthcare sector. Mr. Gardner holds an M.B.A. from Columbia Business School and a bachelor’s degree from the University of Virginia’s McIntire School of Commerce. Lee Heeson, age 55, joined Incyte in October 2024 as Executive Vice President, Incyte International.
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Stamoulis spent nearly 15 years in the investment banking and management consulting industries. She was a Managing Director in the Investment Banking division of Citigroup and, prior to that, she was a senior investment banker in the Healthcare Investment Banking Group of Goldman, Sachs & Co., where she spent the majority of her investment banking career. Ms.
Added
Richard Hoffman, age 64, joined Incyte in December 2025 as Executive Vice President and General Counsel. Mr. Hoffman has more than 20 years of experience advising and supporting biopharmaceutical and life science companies.
Removed
Stamoulis started her career as a strategy consultant at The Boston Consulting Group. Ms.
Added
Prior to joining Incyte, he was a Partner in the Life Sciences group at Goodwin Procter LLP from October 2016 to October 2025, where he counseled a diverse portfolio of emerging and established biopharma organizations on corporate governance, strategic transactions, financings and litigation. Earlier in his career, Mr.
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Stamoulis holds two B.S. degrees from the Massachusetts Institute of Technology (MIT) and an M.B.A. from the MIT Sloan School of Management. 66 Table of Contents Steven Stein, age 58, has served as Executive Vice President and Chief Medical Officer since May 2016 and joined Incyte as Senior Vice President and Chief Medical Officer in March 2015.
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Hoffman was a partner at WilmerHale and he has previously held senior leadership positions in the biotechnology industry at Hybridon and Avitech. He holds a B.A. from Harvard College, a J.D. from Columbia Law School and an M.B.A. from The Wharton School of the University of Pennsylvania.
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Swain , age 67, has served as Executive Vice President, Human Resources since August 2002 and joined Incyte as Senior Vice President of Human Resources in January 2002. Ms. Swain served as Senior Vice President of Human Resources at Bristol-Myers Squibb Company from October 2001 to January 2002, after it acquired DuPont Pharmaceuticals Company.
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Prior to Celgene, he worked for Roche for 15 years in various positions. Mr.
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From July 1998 to October 2001, Ms. Swain was Senior Vice President of Human Resources at DuPont Pharmaceuticals. From October 1992 to July 1998, Ms. Swain held a variety of human resources positions of increasing responsibility at DuPont Pharmaceuticals. Ms. Swain received her B.A. in Psychology and Industrial Relations from Rockhurst University.
Removed
He additionally held leadership roles in U.S. marketing and sales, enterprise strategy and global manufacturing and quality. Before joining Novartis in 2012, he was an Engagement Manager at McKinsey & Company, where he served pharmaceutical and payer clients as part of their healthcare practice. Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+0 added−0 removed1 unchanged
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock, $.001 par value per share, is traded on The Nasdaq Global Select Market under the symbol “INCY.” As of December 31, 2024, our common stock was held by 107 stockholders of record.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock, $.001 par value per share, is traded on The Nasdaq Global Select Market under the symbol “INCY.” As of December 31, 2025, our common stock was held by 97 stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+16 added−17 removed47 unchanged
Biggest changeThe following table provides a summary of those realized and unrealized gains and (losses): For the Years Ended, December 31, 2024 2023 (in millions) Agenus $ (8.2) $ (18.9) Merus 106.1 45.2 MorphoSys 30.7 22.9 Syndax (11.9) (5.5) Other (0.7) 0.2 Total realized and unrealized gain on equity investments $ 116.0 $ 43.9 During the year ended December 31, 2024, we sold all remaining investments in Agenus Inc., Merus and MorphoSys AG as described further in in Note 7 of the Notes to the Consolidated Financial Statements.
Biggest changeThe following table provides a summary of those gains and (losses): For the Years Ended December 31, 2025 2024 (in millions) Agenus $ — $ (8.2) Merus — 106.1 MorphoSys — 30.7 Syndax 11.1 (11.9) Prelude 10.3 — Other (0.1) (0.7) Total gain on equity investments $ 21.3 $ 116.0 Provision for income taxes The provision for income taxes for the years ended December 31, 2025 and 2024 was $377.8 million and $284.0 million, respectively. 68 Table of Contents Our effective tax rate for the year ended December 31, 2025 was higher than the U.S. statutory rate primarily due to state income taxes and an increase in our valuation allowance against certain U.S. deferred tax assets.
While we exercise significant judgment when applying complex tax laws and regulations in these various taxing jurisdictions, many of our tax returns are open to audit, and may be subject to future tax, interest, and penalty assessments.
While we exercise significant judgment when applying complex tax laws and regulations in these various taxing jurisdictions, many of our tax returns are open to audit and we may be subject to future tax, interest, and penalty assessments.
Loss on change in fair value of acquisition-related contingent consideration Acquisition-related contingent consideration, which consists of our future royalty obligations to ARIAD/Takeda, was recorded on the acquisition date, June 1, 2016, at the estimated fair value of the obligation, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured quarterly.
(Gain) loss on change in fair value of acquisition-related contingent consideration Acquisition-related contingent consideration, which consists of our future royalty obligations to ARIAD/Takeda, was recorded on the acquisition date, June 1, 2016, at the estimated fair value of the obligation, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured quarterly.
Centers for Medicare and Medicaid Services (“CMS”) alleging that a recent regulation issued by CMS on the definition of “line extension” for purposes of the Medicaid rebate program is too broad and has the unintended consequence of treating OPZELURA as a “line extension” of JAKAFI under this program.
Centers for Medicare and Medicaid Services (“CMS”) alleging that a regulation issued by CMS on the definition of “line extension” for purposes of the Medicaid rebate program is too broad and has the unintended consequence of treating OPZELURA as a “line extension” of JAKAFI under this program.
Our global headquarters is located in Wilmington, Delaware, where we conduct discovery, clinical development and commercial operations. We also conduct clinical development and commercial operations from our European headquarters in Morges, Switzerland and our other offices across Europe, as well as our Japanese office in Tokyo and our Canadian headquarters in Montreal.
Our global headquarters is located in Wilmington, Delaware, where we conduct discovery, clinical development and commercial operations. We also conduct clinical development and commercial operations from our European headquarters in Morges, Switzerland, and our other offices across Europe, as well as our Japanese headquarters in Tokyo and our Canadian headquarters in Montreal.
See Part I, Item 1A of this report, “Risk Factors” for a further discussion of certain factors that could impact our future product revenues. 68 Table of Contents License Agreements, Business Relationships and Acquisitions We establish business relationships, including collaborative arrangements with other companies and medical research institutions to assist in the clinical development and/or commercialization of certain of our drugs and drug candidates and to provide support for our research programs.
See Part I, Item 1A, “Risk Factors” of this report for a further discussion of certain factors that could impact our future product revenues. 60 Table of Contents License Agreements, Business Relationships and Acquisitions We establish business relationships, including collaborative arrangements with other companies and medical research institutions, to assist in the clinical development and/or commercialization of certain of our drugs and drug candidates and to provide support for our research programs.
Our capital expenditures for construction activities and our non-operating contractual operating and finance lease obligations are discussed in Note 8 of Notes to the Consolidated Financial Statements. 77 Table of Contents In August 2021, we entered into a $500.0 million, senior unsecured revolving credit facility, which was subsequently amended in May 2023 and June 2024 (as amended, the “Credit Agreement”).
Our capital expenditures for construction activities and our non-operating contractual operating and finance lease obligations are discussed in Note 8 of Notes to the Consolidated Financial Statements. 69 Table of Contents In August 2021, we entered into a $500.0 million, senior unsecured revolving credit facility, which was subsequently amended in May 2023 and June 2024 (as amended, the “Credit Agreement”).
We recognize revenues for product received by our customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance programs, and government rebates, such as the Medicaid Drug Rebate Program and Medicare Part D coverage gap reimbursements in the United States and mandated discounts in Europe.
We recognize revenues for product received by our customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance programs, and government rebates, such as the Medicaid Drug Rebate Program and Medicare Part D prescription drug coverage reimbursements in the United States and mandated discounts in Europe.
During 2024, net cash used in financing activities was $2.0 billion and was primarily driven by expenditures associated with the share repurchase of $2.0 billion.
During 2024, net cash used in financing activities was $2.0 billion, and was primarily driven by expenditures associated with the share repurchase.
Rebates and Discounts: We accrue rebates for mandated discounts under the Medicaid Drug Rebate Program in the United States and mandated discounts in Europe in markets where government-sponsored healthcare systems are the primary payers for healthcare. These accruals are based on statutory discount rates and expected utilization as well as historical data we have accumulated since product launch.
Rebates and Discounts: We accrue rebates for mandated discounts under the Medicaid Drug Rebate Program in the United States and mandated discounts in Europe in markets where government-sponsored healthcare systems are the primary payors for healthcare. These accruals are based on statutory discount rates and expected utilization as well as historical data we have accumulated since product launch.
If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. 69 Table of Contents Chargebacks: Chargebacks are discounts that occur when certain indirect contracted customers purchase directly from our wholesalers at a discounted price.
If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. 61 Table of Contents Chargebacks: Chargebacks are discounts that occur when certain indirect contracted customers purchase directly from our wholesalers at a discounted price.
Salary and benefits related expense increased from 2023 to 2024 due primarily to increased headcount to sustain our development pipeline. Stock compensation expense may fluctuate from period to period based on the number of awards granted, stock price volatility and expected award lives, as well as expected award forfeiture rates which are used to value equity-based compensation.
Salary and benefits related expense increased from 2024 to 2025 due primarily to increased headcount to sustain our development pipeline. Stock compensation expense may fluctuate from period to period based on the number of awards granted, stock price volatility and expected award lives, as well as expected award forfeiture rates which are used to value equity-based compensation.
The wholesalers, in turn, charges back to us the difference between the price initially paid by the wholesalers and the discounted price paid by the contracted customers. In addition to actual chargebacks received, we maintain an accrual for chargebacks based on the estimated contractual discounts on the inventory levels on hand in our distribution channel.
The wholesalers, in turn, charge back to us the difference between the price initially paid by the wholesalers and the discounted price paid by the contracted customers. In addition to actual chargebacks received, we maintain an accrual for chargebacks based on the estimated contractual discounts on the inventory levels on hand in our distribution channel.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Consolidated Financial Data” and the Consolidated Financial Statements and related Notes included elsewhere in this Report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and related Notes included elsewhere in this report.
Given the high level of uncertainty of achievement, variable consideration associated with milestones are fully constrained until confirmation of the satisfaction or completion of the milestone by the third-party. We review our estimate of the transaction price each period, and make revisions to such estimates as necessary. Stock Compensation.
Given the high level of uncertainty of achievement, variable consideration associated with milestones are fully constrained until confirmation of the satisfaction or completion of the milestone by the third-party. We review our estimate of the transaction price each period, and make revisions to such estimates as necessary. 62 Table of Contents Stock Compensation.
During 2024, net cash provided by investing activities was $157.5 million, which primarily represented sales of equity investments of $284.8 million and sale and maturity of marketable securities of $231.3 million, offset in part by purchases of marketable securities of $258.4 million, payments for intangible assets of $13.9 million, and capital expenditures of $86.3 million.
During 2024, net cash provided by investing activities was $157.5 million, which primarily represented sales of equity investments of $284.8 million and maturity of marketable securities of $231.3 million, offset in part by purchases of marketable securities of $258.4 million, payments for intangible assets of $13.9 million, and capital expenditures of $86.3 million. Cash provided by (used in) financing activities.
Share-based payment transactions with employees, which include stock options, restricted stock units (RSUs) and performance shares (PSUs), are recognized as compensation expense over the requisite service period based on their estimated fair values at the date of grant as well as expected forfeiture rates based on actual experience, subject to customary retirement provisions that may accelerate the requisite service period for expense recognition purposes.
Share-based payment transactions with employees, which include stock options, restricted stock units (“RSUs”) and performance shares (“PSUs”), are recognized as compensation expense over the requisite service period based on their estimated fair values at the date of grant as well as expected forfeiture rates based on actual experience, subject to customary retirement provisions that may accelerate the requisite service period for expense recognition purposes.
Our company-sponsored patient savings program in which we provide financial assistance to enable commercially-insured patients to afford their insurance premium and co-pays may fluctuate as the commercial insurance landscape evolves and may impact net revenues, particularly for drugs like OPZELURA. We also adjust our allowance for product returns based on new information regarding actual returns as it becomes available.
Our company-sponsored patient savings program, by which we provide financial assistance to enable commercially-insured patients to afford their insurance premiums and co-pays, may fluctuate as the commercial insurance landscape evolves and may impact net revenues, particularly for drugs like OPZELURA. We also adjust our allowance for product returns based on new information regarding actual returns as it becomes available.
A discussion of our financial performance for the year ended December 31, 2024 as compared to the year ended December 31, 2023 appears below under the captions “Results of Operations” and “Liquidity and Capital Resources.” A discussion of our financial performance for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under the same captions in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 13, 2024, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.incyte.com/financial-information/annual-reports .
A discussion of our financial performance for the year ended December 31, 2025 as compared to the year ended December 31, 2024 appears below under the captions “Results of Operations” and “Liquidity and Capital Resources.” A discussion of our financial performance for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found under the same captions in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 10, 2025, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.incyte.com/financials/annual-reports .
Many factors can affect the cost and timing of our clinical trials, including requests by regulatory agencies for more information, inconclusive results requiring additional clinical trials, slow patient enrollment, adverse side effects among patients, insufficient supplies for our clinical trials, timing of drug supply, including API, and real or perceived lack of effectiveness or safety of our investigational drugs in our clinical trials.
Many factors can affect the cost and timing of our clinical trials, including requests by regulatory agencies for more information, inconclusive results requiring additional clinical trials, slow patient enrollment, adverse side effects among patients, insufficient supplies for our clinical trials, timing of drug supply, including active pharmaceutical ingredients, and real or perceived lack of effectiveness or safety of our investigational drugs in our clinical trials.
Our estimates for the expected Medicare Part D coverage gap are based on historical invoices received and in part from data received from our customers.
Our estimates for the expected Medicare Part D coverage gap were based on historical invoices received and in part from data received from our customers.
Realized and unrealized gain (loss) on equity investments Realized and unrealized gains and losses on equity investments will fluctuate from period to period, based on sales of securities and the change in fair value of the securities we hold in our publicly held collaboration partners.
Gain on equity investments Gains and losses on equity investments will fluctuate from period to period, based on sales of securities and the change in fair value of the securities we hold in our publicly held collaboration partners.
For additional information, including information on the expirations of patents for various products, see Part I, Item 1 of this report, “Business—Patents and Other Intellectual Property” and “Business—Competition.” We devote substantial resources to research and development activities and to acquire rights to new product candidates and technologies, but successful product development in the biopharmaceutical industry is highly uncertain.
For additional information, including information on the expirations of patents for various products, see Part I, Item 1 of this report, under the headings “Business—Patents, Other Intellectual Property, and Product Exclusivity” and “Business—Competition.” We devote substantial resources to research and development activities and to acquire rights to new product candidates and technologies, but successful product development in the biopharmaceutical industry is highly uncertain.
As of December 31, 2024, we had no outstanding borrowings and were in compliance with all covenants under this facility. The Credit Agreement is described further in Note 16 of Notes to the Consolidated Financial Statements.
As of December 31, 2025, we had no outstanding borrowings and were in compliance with all covenants under this facility. The Credit Agreement is described further in Note 17 of Notes to the Consolidated Financial Statements.
As of December 31, 2024, a 5% change in our sales allowance and accruals would have had an approximate $79.9 million impact on our income before taxes. Customer Credits: Our customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts.
As of December 31, 2025, a 5% change in our sales allowance and accruals would have had an approximate $103.8 million impact on our income before taxes. Customer Credits: Our customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts.
Additionally, as described in Note 5 of the Notes to the Consolidated Financial Statements, as part of the Escient acquisition, we recognized compensation expense in research and development of $11.3 million associated with the accelerated vesting for certain Escient stock awards in connection with the acquisition on our consolidated statements of operations.
Additionally, as described in Note 5 of the Notes to the Consolidated Financial Statements, as part of the Escient acquisition, we recognized compensation expense in research and development of $11.3 million on our consolidated statements of operations during the year ended December 31, 2024 associated with the accelerated vesting for certain Escient stock awards in connection with the acquisition.
As of December 31, 2024, we have accrued approximately $127.6 million within accrued and other current liabilities on the consolidated balance sheet, relating to the incremental rebates that would be owed were OPZELURA considered a line extension of JAKAFI. The impact on OPZELURA gross to net deductions for the quarter ending December 31, 2024, is approximately 6.3%.
As of December 31, 2025, we have accrued approximately $218.5 million within accrued and other current liabilities on the consolidated balance sheet, relating to the incremental rebates that would be owed were OPZELURA considered a line extension of JAKAFI. The impact on OPZELURA gross to net deductions for the quarter ending December 31, 2025, is approximately 6.9%.
We expect our sales allowances to fluctuate from quarter to quarter due to changes in the volume of purchases eligible for government mandated discounts and rebates as well as changes in discount percentages, which are impacted by potential future price increases, rate of inflation, and other factors, such as changes to the 340B drug pricing program.
We expect our sales allowances to fluctuate from quarter to quarter as a result of the volume of purchases eligible for government mandated discounts and rebates as well as changes in discount percentages which are impacted by potential future price increases, rate of inflation, and other factors.
Research and development expenses for the year ended December 31, 2024 also include the $679.4 million of expense related to the acquired in-process research and development assets as part of the Escient acquisition. 74 Table of Contents The increase in clinical research and outside services expense from 2023 to 2024 was primarily due to continued investment in our late-stage development assets, additional expenses resulting from the Escient acquisition and timing of certain expenses.
Research and development expenses for the year ended December 31, 2024 also include the $679.4 million of expense related to the acquired in-process research and development assets as part of the Escient acquisition. The increase in clinical research and outside services expense from 2024 to 2025 was primarily due to continued investment in our late-stage development assets.
Funding of the coverage gap is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters.
Funding of the Medicare Part D Discount Program is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters.
Our portfolio focuses on areas of high unmet medical need and includes compounds in various stages, ranging from preclinical to late-stage development, and commercialized products JAKAFI (ruxolitinib), ICLUSIG (ponatinib), PEMAZYRE (pemigatinib), OPZELURA (ruxolitinib cream), MINJUVI (tafasitamab), MONJUVI (tafasitamab-cxix) and ZYNYZ (retifanlimab-dlwr), as well as NIKTIMVO (axatilimab-csfr), which was approved for medical use in the United States in August 2024 and will be co-commercialized.
Our portfolio focuses on areas of high unmet medical need and includes compounds in various stages, ranging from preclinical to late-stage development and commercialized products. Our approved products are JAKAFI (ruxolitinib), ICLUSIG (ponatinib), PEMAZYRE (pemigatinib), OPZELURA (ruxolitinib cream), MINJUVI (tafasitamab), MONJUVI (tafasitamab-cxix) and ZYNYZ (retifanlimab-dlwr), as well as NIKTIMVO (axatilimab-csfr) which is co-commercialized.
Selling, general and administrative expenses For the Year Ended December 31, 2024 2023 (in millions) Salary and benefits related $ 349.6 $ 300.1 Stock compensation 102.5 86.1 Escient acquisition related compensation expense 20.2 — Other contract services and outside costs 769.9 775.1 Total selling, general and administrative expenses $ 1,242.2 $ 1,161.3 Salary and benefits related expense increased from 2023 to 2024 due primarily to increased headcount.
Selling, general and administrative expenses For the Year Ended December 31, 2025 2024 (in millions) Salary and benefits related $ 419.7 $ 349.6 Stock compensation 95.6 102.5 Escient acquisition related compensation expense — 20.2 Other contract services and outside costs 860.9 769.9 Total selling, general and administrative expenses $ 1,376.2 $ 1,242.2 Salary and benefits related expense increased from 2024 to 2025 due primarily to increased headcount.
The change in fair value of the acquisition-related contingent consideration for the years ended December 31, 2024 and 2023 was expense of $19.8 million and $29.2 million, respectively, which is recorded in loss on change in fair value of acquisition-related contingent consideration on the consolidated statements of operations.
The change in fair value of the acquisition-related contingent consideration for the years ended December 31, 2025 and 2024 was a gain of $6.1 million and loss of $19.8 million, respectively, which is recorded in (gain) loss on change in fair value of acquisition-related contingent consideration on the consolidated statements of operations.
Research and development expenses include upfront and milestone expenses related to our collaborative agreements, which were $104.4 million and $36.7 million for the years ended December 31, 2024 and 2023, respectively. Research and development expenses for the years ended December 31, 2024 and 2023 were net of $29.9 million and $49.1 million, respectively, of costs reimbursed by our collaborative partners.
Research and development expenses include upfront and milestone expenses related to our collaborative agreements, which were $97.6 million and $104.4 million for the years ended December 31, 2025 and 2024, respectively. Research and development expenses for the years ended December 31, 2025 and 2024 were net of $16.0 million and $29.9 million, respectively, of costs reimbursed by our collaborative partners.
Operating Expenses Research and development expenses For the Year Ended December 31, 2024 2023 (in millions) Salary and benefits related $ 505.9 $ 399.1 Stock compensation 161.3 126.7 Escient acquisition related compensation expense 11.3 — Escient IPR&D expense 679.4 — Clinical research and outside services 1,074.7 936.7 Occupancy and all other costs 174.2 165.1 Total research and development expenses $ 2,606.8 $ 1,627.6 We account for research and development costs by natural expense line and not costs by project.
Operating Expenses Research and development expenses For the Year Ended December 31, 2025 2024 (in millions) Salary and benefits related $ 557.9 $ 505.9 Stock compensation 150.2 161.3 Escient acquisition related compensation expense — 11.3 Escient IPR&D expense — 679.4 Clinical research and outside services 1,184.7 1,074.7 Occupancy and all other costs 157.4 174.2 Total research and development expenses $ 2,050.2 $ 2,606.8 66 Table of Contents We account for research and development costs by natural expense line and not costs by project.
At December 31, 2024, we had available cash, cash equivalents and marketable securities of $2.2 billion. Our cash and marketable securities balances are held in a variety of interest-bearing instruments, including money market accounts and U.S. government debt securities. Available cash is invested in accordance with our investment policy’s primary objectives of liquidity, safety of principal and diversity of investments.
Our cash and marketable securities balances are held in a variety of interest-bearing instruments, including money market accounts and U.S. government debt securities. Available cash is invested in accordance with our investment policy’s primary objectives of liquidity, safety of principal and diversity of investments. Cash provided by operating activities.
This increased headcount was due primarily to the establishment of our dermatology commercial organization. Stock compensation expense may fluctuate from period to period based on the number of awards granted, stock price volatility and expected award lives, as well as expected award forfeiture rates which are used to value equity-based compensation.
Stock compensation expense may fluctuate from period to period based on the number of awards granted, stock price volatility and expected award lives, as well as expected award forfeiture rates which are used to value equity-based compensation.
Our revenues depend on continued sales of our products, and we depend substantially on product revenues from JAKAFI. We must develop and commercialize new products to achieve revenue growth and to offset revenue losses from when products lose their exclusivity or when competing products are launched.
Our revenues depend on continued sales of our products, and we depend substantially on product revenues from JAKAFI. We must develop and commercialize new products to achieve revenue growth and to offset revenue losses from the loss of product exclusivity of JAKAFI in 2028 and the launch of competing products.
We also establish business relationships with other companies and medical research institutions to acquire products or rights to products and technologies that are complementary to our business.
We also evaluate opportunities for acquiring products or rights to products and technologies that are complementary to our business from other companies and medical research institutions.
During 2023, net cash used in financing activities was $20.0 million, consisting primarily of cash paid to ARIAD/Takeda for contingent consideration, offset in part by proceeds from the issuance of common stock under our stock plans net of tax withholdings.
During 2025, net cash provided by financing activities was $101.0 million and was primarily driven by proceeds from the issuance of common stock under our stock plans net of tax withholdings, offset in part by excise taxes relating to the June 2024 share repurchase and cash paid to ARIAD/Takeda for contingent consideration.
Liquidity and Capital Resources 2024 2023 (in millions) December 31: Cash, cash equivalents, and marketable securities $ 2,158.1 $ 3,656.0 Working capital $ 1,597.2 $ 3,405.0 Year ended December 31: Cash provided by (used in): Operating activities $ 335.3 $ 496.5 Investing activities $ 157.5 $ (207.7) Financing activities $ (2,021.5) $ (20.0) Capital expenditures (included in investing activities above) $ (86.3) $ (32.5) Sources and Uses of Cash.
Liquidity and Capital Resources 2025 2024 (in millions) December 31: Cash, cash equivalents, and marketable securities $ 3,580.6 $ 2,158.1 Working capital $ 3,508.7 $ 1,597.2 Year ended December 31: Cash provided by (used in): Operating activities $ 1,413.5 $ 335.3 Investing activities $ (102.6) $ 157.5 Financing activities $ 101.0 $ (2,021.5) Capital expenditures (included in investing activities above) $ (58.9) $ (86.3) Sources and Uses of Cash At December 31, 2025, we had available cash, cash equivalents and marketable securities of $3.6 billion.
Given we do not record a valuation allowance on the majority of our U.S. deferred tax assets, we expect that our reported income tax expense (current plus deferred) for future periods will be higher than that recorded for prior periods.
Given we do not record a valuation allowance on the majority of our U.S. deferred tax assets, we expect that our reported income tax expense (current plus deferred) for future periods will be higher than that recorded for prior periods. 63 Table of Contents Results of Operations Years Ended December 31, 2025 and 2024 We recorded net income for the years ended December 31, 2025 and 2024 of $1,286.7 million and $32.6 million, respectively.
Cost of Product Revenues For the Year Ended December 31, 2024 2023 (in millions) Product costs $ 129.0 $ 89.2 Salary and benefits related 16.2 11.9 Stock compensation 2.3 3.1 Royalty expense 141.0 128.2 Amortization of definite-lived intangible assets 23.6 22.6 Total cost of product revenues $ 312.1 $ 255.0 Cost of product revenues includes all product related costs, reserves for obsolescence, employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products, royalties owed under our collaborative agreements and amortization of our licensed intellectual property rights for ICLUSIG and the amortization of capitalized milestone payments.
During the year ended December 31, 2024, our milestone and contract revenues were derived from a combination of upfront payments received from our third party collaborators for the transfer of functional intellectual property, as well as developmental milestones received from our third party collaborators. 65 Table of Contents Cost of Product Revenues For the Year Ended December 31, 2025 2024 (in millions) Product costs $ 149.3 $ 129.0 Salary and benefits related 25.1 16.2 Stock compensation 3.5 2.3 Royalty expense 124.6 141.0 Profit share 44.0 — Amortization of definite-lived intangible assets 25.6 23.6 Total cost of product revenues $ 372.1 $ 312.1 Cost of product revenues includes all product related costs, reserves for obsolescence, employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products, royalties and profit sharing under our collaborative agreements and amortization of our licensed intellectual property rights for ICLUSIG and the amortization of capitalized milestone payments.
Results of Operations Years Ended December 31, 2024 and 2023 We recorded net income for the years ended December 31, 2024 and 2023 of $32.6 million and $597.6 million, respectively. On a per share basis, basic net income was $0.16 and diluted net income was $0.15 for the year ended December 31, 2024.
On a per share basis, basic net income was $6.59 and diluted net income was $6.41 for the year ended December 31, 2025. On a per share basis, basic net income was $0.16 and diluted net income was $0.15 for the year ended December 31, 2024.
Refer to Note 5 of Notes to the Consolidated Financial Statements for further information related to the acquisition. Our product revenues may fluctuate from period to period due to our customers’ purchasing patterns over the course of a year, including as a result of increased inventory building by customers in advance of expected or announced price increases.
The increase in total royalty revenues from 2024 to 2025 was primarily driven by growth in JAKAVI royalty revenue. Our product revenues may fluctuate from period to period due to our customers’ purchasing patterns over the course of a year, including as a result of increased inventory building by customers in advance of expected or announced price increases.
Additionally, as described in Note 5 of the Notes to the Consolidated Financial Statements, as part of the Escient acquisition, we recognized compensation expense in selling, general and administrative expenses of $20.2 million associated with the accelerated vesting for certain Escient stock awards in connection with the acquisition on our consolidated statements of operations.
Additionally, as described in Note 5 of the Notes to the Consolidated Financial Statements, as part of the Escient acquisition, we recognized compensation expense in selling, general and administrative expenses of $20.2 million on our consolidated statements of operations during the year ended December 31, 2024 associated with the accelerated vesting for certain Escient stock awards in connection with the acquisition. 67 Table of Contents Asset impairment As described further in Note 8 of Notes to the Consolidated Financial Statements, during December 2025, the downtown Wilmington, Delaware properties that we acquired in May 2024 met the criteria to be classified as assets held for sale.
For the years ending December 31, 2024 and 2023, our Black-Scholes assumptions included a weighted-average stock price volatility of 30% in 2024 and 32% in 2023, average expected option life of approximately five years and an estimated annualized forfeiture rate of 5%.
For the years ending December 31, 2025 and 2024, our Black-Scholes assumptions included a weighted-average stock price volatility of 29% in 2025 and 30% in 2024, and average expected option life of approximately five years. The average risk-free interest rate assumption used in the Black-Scholes valuations decreased from 4.15% in 2024 to 4.10% in 2025.
Our effective tax rate for 2024 was higher than the U.S. statutory rate primarily due to non-deductible charges of $710.9 million associated with the Escient acquisition.
This was partially offset by tax rate benefits associated with research and development and orphan drug tax credit generations and the foreign derived intangible income deduction. Our effective tax rate for the year ended December 31, 2024 was higher than the U.S. statutory rate primarily due to non-deductible charges of $710.9 million associated with the Escient acquisition.
Royalty revenues on commercial sales for OLUMIANT by Lilly are estimated based on information provided by Lilly. Royalty revenues on commercial sales for PEMAZYRE by Innovent are estimated based on information provided by Innovent. We recognize royalty revenues in the period the sales occur.
Royalty revenues on commercial sales for OLUMIANT by Lilly are estimated based on information provided by Lilly. We recognize royalty revenues in the period the sales occur. We exercise judgment in determining whether the information provided is sufficiently reliable for us to base our royalty revenue recognition thereon.
Historically, adjustments to these estimates to reflect actual royalty revenues have not been material to our financial results and have been less than 1% of royalty revenues.
If actual royalties vary from estimates, we may need to adjust the prior period, which would affect royalty revenue and receivables in the period of adjustment. Historically, adjustments to these estimates to reflect actual royalty revenues have not been material to our financial results and have been less than 1% of royalty revenues.
The average risk-free interest rate assumption used in the Black-Scholes valuations increased from 4.01% in 2023 to 4.15% in 2024. 70 Table of Contents The fair value of stock options, which are subject to graded vesting, are recognized as compensation expense over the requisite service period using the accelerated attribution method.
The fair value of stock options, which are subject to graded vesting, are recognized as compensation expense over the requisite service period using the accelerated attribution method.
Cash provided by operating activities. The decrease in cash provided by operating activities from 2023 to 2024 was due primarily to the Escient acquisition and changes in working capital. Cash used in investing activities. Our investing activities, other than purchases, sales and maturities of marketable securities, have consisted predominantly of capital expenditures and sales of long term investments.
Our investing activities, other than purchases, sales and maturities of marketable securities, have consisted predominantly of capital expenditures and sales of long term investments.
If actual future chargebacks vary from these estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Medicare Part D Coverage Gap: Medicare Part D prescription drug benefit mandates manufacturers to fund 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients.
If actual future chargebacks vary from these estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Medicare Part D Rebates: Changes to our Medicare Part D prescription drug coverage reimbursements (“Part D Discount Program”) became effective January 1, 2025 pursuant to the Inflation Reduction Act of 2022.
In 2025, we expect to see a reduction in our sales allowances owed under Medicare Part D, due to changes from the Inflation Reduction Act, which effective January 1, 2025, replaced the manufacturer's coverage gap liability with a different discount structure.
In 2025, we saw a reduction in our sales allowances owed under Medicare Part D, due to changes to the Part D Discount Program.
Non-operating Income and Expenses Interest income Interest income for the years ended December 31, 2024 and 2023 was $128.7 million and $158.4 million, respectively.
Non-operating Income and Expenses Interest income Interest income for the years ended December 31, 2025 and 2024 was $105.6 million and $128.7 million, respectively. The decrease in Interest income for the year ended December 31, 2025 is primarily due to a lower interest rate environment in 2025 as compared to 2024.
During the year ended December 31, 2024, our milestone and contract revenues were derived from a $25.0 million upfront payment received during the first quarter of 2024 upon our transfer of functional intellectual property to China Medical Systems Holdings Limited, and we recognized $18.0 million of upfront and milestone payments from two of our collaboration partners during the third quarter of 2024.
During the year ended December 31, 2025, our milestone and contract revenues were derived from a combination of upfront payments received from our third party collaborators for the transfer of functional intellectual property, primarily the $100.0 million payment received from Lilly in the fourth quarter of 2025, as well as developmental milestones received from our third party collaborators.
During 2023, net cash used in investing activities was $207.7 million, which represents purchases of marketable securities of $456.0 million, capital expenditures of $32.5 million, payments for intangible assets of $15.0 million, and purchases of long term investments of $10.0 million, offset in part by the sale and maturity of marketable securities of $305.8 million. Cash used in financing activities.
During 2025, net cash used in investing activities was $102.6 million, which primarily represented purchases of marketable securities of $295.5 million, capital expenditures of $58.9 million and payments for intangible assets of $25.0 million, offset in part by maturities of marketable securities of $284.6 million.
On a per share basis, basic net income was $2.67 and diluted net income was $2.65 for the year ended December 31, 2023. 71 Table of Contents Revenues For the Year Ended, December 31, 2024 2023 (in millions) JAKAFI revenues, net $ 2,792.1 $ 2,593.7 OPZELURA revenues, net 508.3 337.9 ICLUSIG revenues, net 114.3 111.6 PEMAZYRE revenues, net 81.7 83.6 MINJUVI/MONJUVI revenues, net 119.3 37.1 ZYNYZ revenues, net 3.2 1.3 Total product revenues, net 3,618.9 3,165.2 JAKAVI product royalty revenues 418.8 367.6 OLUMIANT product royalty revenues 135.6 136.1 TABRECTA product royalty revenues 22.7 17.8 PEMAZYRE product royalty revenues 2.2 1.9 Total product royalty revenues 579.3 523.4 Milestone and contract revenues 43.0 7.0 Total revenues $ 4,241.2 $ 3,695.6 The increase in JAKAFI product revenues from 2023 to 2024 was comprised of a volume increase of $142.3 million and a price increase of $56.1 million.
Revenues For the Year Ended, December 31, 2025 2024 (in millions) JAKAFI revenues, net $ 3,092.5 $ 2,792.1 OPZELURA revenues, net 678.5 508.3 ICLUSIG revenues, net 134.1 114.3 PEMAZYRE revenues, net 86.7 81.7 MINJUVI/MONJUVI revenues, net 144.6 119.3 NIKTIMVO revenues, net 151.6 — ZYNYZ revenues, net 66.3 3.2 Total product revenues, net 4,354.3 3,618.9 JAKAVI product royalty revenues 457.7 418.8 OLUMIANT product royalty revenues 144.6 135.6 TABRECTA product royalty revenues 26.7 22.7 Other product royalty revenues 7.9 2.2 Total product royalty revenues 636.9 579.3 Milestone and contract revenues 150.0 43.0 Total revenues $ 5,141.2 $ 4,241.2 The increase in JAKAFI product revenues from 2024 to 2025 was primarily driven by an increase in paid demand across all indications.
Our revenue recognition policies require estimates of the aforementioned sales allowances each period. 72 Table of Contents The following table provides a summary of activity with respect to our sales allowances and accruals (in thousands): Year Ended December 31, 2024 Discounts and Distribution Fees Government Rebates and Chargebacks Co-Pay Assistance and Other Discounts Product Returns Total Balance at January 1, 2024 $ 20,479 $ 264,422 $ 13,016 $ 11,021 $ 308,938 Allowances for current period sales 152,167 1,282,224 131,979 23,251 1,589,621 Allowances for prior period sales 429 2,718 (68) 4,386 7,465 Credits/payments for current period sales (129,777) (1,049,069) (127,400) (238) (1,306,484) Credits/payments for prior period sales (15,858) (117,737) (4,237) (15,407) (153,239) Balance at December 31, 2024 $ 27,440 $ 382,558 $ 13,290 $ 23,013 $ 446,301 U.S. government rebates and chargebacks are the most significant component of our sales allowances.
Our revenue recognition policies require estimates of the aforementioned sales allowances each period. 64 Table of Contents The following table provides a summary of activity with respect to our sales allowances and accruals (in thousands): Year Ended December 31, 2025 Discounts and Distribution Fees Government Rebates and Chargebacks Co-Pay Assistance and Other Discounts Product Returns Total Balance at January 1, 2025 $ 27,440 $ 382,558 $ 13,290 $ 23,013 $ 446,301 Allowances for current period sales 229,701 1,692,462 146,685 23,045 2,091,893 Allowances for prior period sales (1,863) (9,652) 46 (3,928) (15,397) Credits/payments for current period sales (195,354) (1,317,604) (137,751) (62) (1,650,771) Credits/payments for prior period sales (21,144) (185,597) (8,081) (11,113) (225,935) Balance at December 31, 2025 $ 38,780 $ 562,167 $ 14,189 $ 30,955 $ 646,091 U.S. government rebates and chargebacks are the most significant component of our sales allowances.
The increase in cost of product revenues from 2023 to 2024 was primarily due to growth in net product revenues, increased royalty expense and increased manufacturing related costs.
The increase in cost of product revenues from 2024 to 2025 was driven by growth in net product revenues, the NIKTIMVO profit share and increased manufacturing related costs, partially offset by the impact from the reduced royalty rate agreed to as part of the contract dispute settlement with Novartis discussed below.
Product royalty revenues on commercial sales of PEMAZYRE by Innovent are based on net sales of licensed products in licensed territories as provided by Innovent. 73 Table of Contents Our milestone and contract revenues were $43.0 million and $7.0 million for the years ended December 31, 2024 and 2023, respectively.
Our milestone and contract revenues were $150.0 million and $43.0 million for the years ended December 31, 2025 and 2024, respectively.
We are also eligible to receive milestones and royalties on molecules discovered by us and licensed to third parties.
We are focused in three therapeutic areas that are defined by the indications of our approved medicines and the diseases for which our clinical candidates are being developed. These therapeutic areas are: Hematology, Oncology, and Inflammation and Autoimmunity (“IAI”). We are also eligible to receive milestones and royalties on molecules discovered by us and licensed to third parties.
Removed
Through the discovery, development and commercialization of proprietary therapeutics, Incyte has established a portfolio of first-in-class and best-in-class medicines for patients and a strong pipeline of products focused in three core therapeutic areas: Oncology, Inflammation & Autoimmunity, and Myeloproliferative Neoplasms (MPNs) & Graft-Versus-Host Disease (GVHD).
Added
Under the revised Part D Discount Program, manufacturers must give a 10 percent discount on Part D drugs in the initial coverage phase, and a 20 percent discount on Part D drugs in the so-called “catastrophic phase” (the phase after the patient incurs costs above the initial phase out-of-pocket threshold, which is $2,000 beginning in 2025).
Removed
We exercise judgment in determining whether the information provided is sufficiently reliable for us to base our royalty revenue recognition thereon. If actual royalties vary from estimates, we may need to adjust the prior period, which would affect royalty revenue and receivable in the period of adjustment.
Added
The Inflation Reduction Act includes certain exemptions for small biotech drug manufacturers, including Incyte. These exemptions apply on a drug-specific basis, and qualifying drugs will be exempt from possible negotiation through 2028 and subject to reduced discounts that will be phased-in over a number of years under the new Part D benefit.
Removed
The increase for the year ended December 31, 2024 as compared to the corresponding period in 2023 was primarily driven by an increase in paid demand across all indications. The increase in OPZELURA net product revenues from 2023 to 2024 was comprised of a volume increase of $165.3 million and a price increase of $5.1 million.
Added
Prior to the changes in the Medicare Part D Discount Program effective January 1, 2025, the Medicare Part D prescription drug benefit previously mandated manufacturers to fund 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients.
Removed
The increase was driven by continued growth in new patient starts and refills, and approximately $60.7 million of OPZELURA net product revenues for 2024 were from Europe.
Added
JAKAFI inventory levels were within normal range at the end of the fourth quarter of 2025. The increase in OPZELURA net product revenues from 2024 to 2025 was primarily due to increased patient demand and refills in the U.S. in both atopic dermatitis and vitiligo.
Removed
The increase in MINJUVI/MONJUVI net product revenues for the year ended December 31, 2024 compared to the prior period was driven by the acquisition completed in February 2024, under which we gained exclusive global rights to tafasitamab marketed in the United States as MONJUVI (tafasitamab-cxix).
Added
Additionally, $130.0 million of net product revenues for 2025 were from outside of the U.S., driven by continued uptake in France and Italy to treat vitiligo. OPZELURA inventory levels were within normal range at the end of the fourth quarter of 2025.
Removed
During the year ended December 31, 2023, our milestone and contract revenues were primarily derived from a regulatory milestone under the Novartis collaboration and license agreement.
Added
NIKTIMVO net product revenues for 2025 reflect continued strong uptake of the product following its commercial launch during the first quarter of 2025. The increase in ZYNYZ net product revenues from 2024 to 2025 was primarily driven by the approval of the product in squamous cell anal carcinoma in the second quarter of 2025.
Removed
The loss on change in fair value of the contingent consideration during the years ended December 31, 2024 and 2023 was due primarily to fluctuations in foreign currency exchange rates impacting future revenue projections of ICLUSIG and the passage of time. 75 Table of Contents Profit sharing from co-commercialization activities Under the former collaboration and license agreement with MorphoSys, which was executed in March 2020 and continued through February 5, 2024 as described further in Note 5 of the Notes to the Consolidated Financial Statements, we and MorphoSys were both responsible for the commercialization efforts of tafasitamab in the United States and shared equally the profits and losses from the co-commercialization efforts.
Added
Contract Dispute Settlement As described further in Note 7 of Notes to the Consolidated Financial Statements, during May 2025, we and Novartis entered into a settlement agreement with respect to litigation initiated by Novartis relating to the duration of royalty payments owed by us to Novartis under our Collaboration and License Agreement.
Removed
For the period from January 1, 2024 through February 5, 2024, our 50% share of the profits for tafasitamab was $1.0 million, as recorded in (profit) and loss sharing under collaboration agreements on the consolidated statement of operations.
Added
As of March 31, 2025, we had approximately $537.1 million of accrued royalties relating to the dispute with Novartis included in accrued and other current liabilities on our consolidated balance sheet.
Removed
For the year ended December 31, 2023, our 50% share of the costs for tafasitamab was $2.0 million, as recorded in (profit) and loss sharing under collaboration agreements on the consolidated statement of operations.
Added
Under the settlement agreement, we paid Novartis $280.0 million as the settlement of disputed royalties on net sales of JAKAFI in the United States through December 31, 2024, and agreed to reduce by 50% the royalty rate payable by us on future net sales of JAKAFI in the United States beginning January 1, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, marketable securities were $470.3 million. Due to the nature of these investments, if market interest rates were to increase immediately and uniformly by 10% from levels as of December 31, 2024, the decline in fair value would not be material. 78 Table of Contents
Biggest changeAs of December 31, 2025, our marketable securities were $482.8 million. Due to the nature of these investments, if market interest rates were to increase immediately and uniformly by 10% from levels as of December 31, 2025, the decline in fair value would not be material. 70 Table of Contents

Other INCY 10-K year-over-year comparisons