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What changed in Incyte's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Incyte's 2023 and 2024 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 2024 report.

+363 added−339 removedSource: 10-K (2025-02-10) vs 10-K (2024-02-13)

Top changes in Incyte's 2024 10-K

363 paragraphs added · 339 removed · 269 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

111 edited+51 added−38 removed234 unchanged
Biggest changeA placebo-controlled Phase 3 trial (inMIND) of tafasitamab added to lenalidomide plus rituximab (R 2 ) in patients with relapsed or refractory follicular or marginal zone lymphomas is ongoing. In January 2021, the FDA granted orphan drug designation to tafasitamab as a treatment for patients with follicular lymphoma.
Biggest changeIn January 2021, the FDA granted orphan drug designation to tafasitamab as a treatment for patients with follicular lymphoma. In December 2024, we announced the full results from the pivotal Phase 3 inMIND trial evaluating treatment with tafasitamab in combination with lenalidomide and rituximab compared with placebo plus lenalidomide and rituximab in patients with relapsed or refractory follicular lymphoma (FL).
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 and ZYNYZ or our drug candidates.
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.
Accordingly, we rely on patent, trademark, trade secret and copyright law, as well as nondisclosure and other contractual arrangements, to protect our intellectual property. We have established a patent portfolio of patents and patent applications owned or licensed by us that cover aspects of all our drug products and drug candidates.
Accordingly, we rely on patent, trademark, trade secret and copyright law, as well as nondisclosure and other contractual arrangements, to protect our intellectual property. We have established a patent portfolio of patents and patent applications owned or licensed by us that cover aspects of our drug products and drug candidates.
INCA033989 (mCALR) In December 2022, new research detailing the development and mechanism of action of INCA033989, an Incyte-discovered, investigational novel anti-mutant calreticulin (CALR)-targeted monoclonal antibody, was featured in the Plenary Scientific Session at the 64th American Society of Hematology (ASH) Annual Meeting.
In December 2022, new research detailing the development and mechanism of action of INCA033989, an Incyte-discovered, investigational novel anti-mutant calreticulin (CALR)-targeted monoclonal antibody, was featured in the Plenary Scientific Session at the 64th American Society of Hematology (ASH) Annual Meeting.
We contract with third parties to manufacture JAKAFI, ICLUSIG, MONJUVI/MINJUVI, PEMAZYRE, OPZELURA, ZYNYZ 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.
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.
Under these licenses, such as our licenses from Agenus, ARIAD/Takeda, MacroGenics, Merus, and Syndax, we may be required to pay up-front fees, license fees, milestone payments and royalties on sales of future products.
Under these licenses, such as our licenses from Agenus, ARIAD/Takeda, MacroGenics, Merus Xencor and Syndax, we may be required to pay up-front fees, license fees, milestone payments and royalties on sales of future products.
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; 27 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 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.
We face significant competition from organizations, particularly fully integrated pharmaceutical companies, that are pursuing pharmaceuticals that are competitive with JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ and our drug candidates.
We face significant competition from organizations, particularly fully integrated pharmaceutical companies, that are pursuing pharmaceuticals that are competitive with JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ, NIKTIMVO and our drug candidates.
Novartis’ rights for ruxolitinib outside of the United States under our Collaboration and License Agreement with Novartis do not include topical administration. Earlier-Stage Development Programs in Dermatology INCA034460 In November 2022, we acquired Villaris Therapeutics, Inc., an asset-centric biopharmaceutical company focused on the development of novel antibody therapeutics for vitiligo.
Novartis’ rights for ruxolitinib outside of the United States under our Collaboration and License Agreement with Novartis do not include topical administration. Earlier-Stage Development Programs in Dermatology INCA034460 (anti-CD122) In November 2022, we acquired Villaris Therapeutics, Inc., an asset-centric biopharmaceutical company focused on the development of novel antibody therapeutics for vitiligo.
Additional information regarding our collaboration agreements, including their financial and accounting impact on our business and results of operations, can be found at Note 7 of Notes to the Consolidated Financial Statements. Out-License Agreements Novartis In November 2009, we entered into a Collaboration and License Agreement with Novartis.
Additional information regarding our collaboration agreements, including their financial and accounting impact on our business and results of operations, can be found in Note 5 and Note 7 of Notes to the Consolidated Financial Statements. Out-License Agreements Novartis In November 2009, we entered into a Collaboration and License Agreement with Novartis.
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 five 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 a company of our size can successfully compete. We currently commercialize six compounds in the United States, three in Europe and one in Japan.
The most common non-hematologic adverse events (incidence >10%) were headache, abdominal pain, diarrhea, dizziness, fatigue, pruritus, dyspnea and muscle spasms. In March 2016, the FDA approved supplemental labeling for JAKAFI to include additional safety data as well as efficacy analyses from the RESPONSE trial to assess the durability of response in JAKAFI treated patients after 80 weeks.
The most common non-hematologic adverse events (incidence >10%) were headache, abdominal pain, diarrhea, dizziness, fatigue, pruritus, dyspnea and muscle spasms. 8 Table of Contents In March 2016, the FDA approved supplemental labeling for JAKAFI to include additional safety data as well as efficacy analyses from the RESPONSE trial to assess the durability of response in JAKAFI treated patients after 80 weeks.
Under the Biologics Price Competition and Innovation Act, the FDA may grant 12 years of data exclusivity for innovative biological products. 31 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 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.
Lilly announced that alignment with the FDA on the indicated population had not yet been reached and given the FDA’s position, there would be the possibility of a Complete Response Letter (CRL). In January 2020, Lilly announced that baricitinib had been submitted for regulatory review in Europe as a treatment for patients with moderate-to-severe AD.
Lilly announced that alignment with the FDA on the indicated population had not yet been reached and given the FDA’s position, there would be the possibility of a Complete Response Letter (CRL). 19 Table of Contents In January 2020, Lilly announced that baricitinib had been submitted for regulatory review in Europe as a treatment for patients with moderate-to-severe AD.
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. 22 Table of Contents Below is a brief description of our significant business relationships and collaborations and related license agreements that expand our pipeline and provide us with certain rights to existing and potential new products and technologies.
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. Below is a brief description of our significant business relationships and collaborations and related license agreements that expand our pipeline and provide us with certain rights to existing and potential new products and technologies.
The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the country. 25 Table of Contents We may seek to license rights relating to technologies, drug candidates or drug products in connection with our drug discovery and development programs and commercialization activities.
The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the country. We may seek to license rights relating to technologies, drug candidates or drug products in connection with our drug discovery and development programs and commercialization activities.
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.
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.
A strong safety culture is a fundamental part of how we work, and our philosophy is that everyone at Incyte has a responsibility to create and maintain a safe and healthy workplace to reduce risk and prevent injuries. 34 Table of Contents We appreciate one another’s differences and strengths and are proud to be an Equal Opportunity Employer.
A strong safety culture is a fundamental part of how we work, and our philosophy is that everyone at Incyte has a responsibility to create and maintain a safe and healthy workplace to reduce risk and prevent injuries. We appreciate one another’s differences and strengths and are proud to be an Equal Opportunity Employer.
Significantly more patients treated with OPZELURA achieved Investigator’s Global Assessment (IGA) Treatment Success at Week 8 (defined as an IGA score of 0 or 1 with at least a 2-point improvement from baseline, the primary endpoint: 53.8% in TRuE-AD1 and 51.3% in TRuE-AD2, compared to vehicle (15.1% in TRuE-AD1, 7.6% in TRuE-AD2; P Vitiligo.
Significantly more patients treated with OPZELURA achieved Investigator’s Global Assessment (IGA) Treatment Success at Week 8 (defined as an IGA score of 0 or 1 with at least a 2-point improvement from baseline, the primary endpoint: 53.8% in TRuE-AD1 and 51.3% in TRuE-AD2, compared to vehicle (15.1% in TRuE-AD1, 7.6% in TRuE-AD2; P 1 In collaboration with Merus. 15 Table of Contents Vitiligo.
TABRECTA is the first and only treatment approved to specifically target NSCLC with this driver mutation and is approved for first-line and previously treated patients regardless of prior treatment type. 21 Table of Contents The FDA approval of TABRECTA was based on results from the pivotal GEOMETRY mono-1 study.
TABRECTA is the first and only treatment approved to specifically target NSCLC with this driver mutation and is approved for first-line and previously treated patients regardless of prior treatment type. The FDA approval of TABRECTA was based on results from the pivotal GEOMETRY mono-1 study.
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.
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.
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. 20 Table of Contents Alopecia Areata .
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 .
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.
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.
Other IAI Program Indication and Phase Zilurgisertib (ALK2) Fibrodysplasia ossificans progressiva: Pivotal Phase 2 Collaborative Partnered Programs As described below under “License Agreements and Business Relationships,” we are eligible for milestone payments and royalties on certain products that we licensed to third parties.
Other IAI Program Indication and Phase Zilurgisertib (ALK2) Fibrodysplasia ossificans progressiva: Pivotal Phase 2 18 Table of Contents Collaborative Partnered Programs As described below under “License Agreements and Business Relationships,” we are eligible for milestone payments and royalties on certain products that we licensed to third parties.
Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in non-US countries prior to the commencement of clinical trials or marketing of the product in those countries.
Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S. countries prior to the commencement of clinical trials or marketing of the product in those countries.
Hematology and Oncology Our hematology and oncology franchise comprises five approved products, which are JAKAFI (ruxolitinib), MONJUVI (tafasitamab-cxix)/MINJUVI (tafasitamab), PEMAZYRE (pemigatinib), ICLUSIG (ponatinib) and ZYNYZ (retifanlimab-dlwr), as well as numerous clinical development programs. JAKAFI (ruxolitinib) JAKAFI (ruxolitinib) is our first product to be approved for sale in the United States. It was approved by the U.S.
Hematology and Oncology Our hematology and oncology franchise comprises six approved products, which are JAKAFI (ruxolitinib), MONJUVI (tafasitamab-cxix)/MINJUVI (tafasitamab), PEMAZYRE (pemigatinib), ICLUSIG (ponatinib), ZYNYZ (retifanlimab-dlwr), and NIKTIMVO (axatilimab-csfr), as well as numerous clinical development programs. JAKAFI (ruxolitinib) JAKAFI (ruxolitinib) is our first product to be approved for sale in the United States. It was approved by the U.S.
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. 19 Table of Contents 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. Rheumatoid Arthritis.
In January 2016, Lilly submitted a New Drug Application (NDA) to the FDA and an MAA to the EMA for baricitinib as treatment for rheumatoid arthritis.
In January 2016, Lilly submitted a New Drug Application (NDA) to the FDA and an MAA to the European Medicines Agency (EMA) for baricitinib as treatment for rheumatoid arthritis.
Ruxolitinib 1.5% cream BID met the primary efficacy endpoint as measured by a change from baseline in abscess and nodule count at Week 16 versus placebo in patients with mild to moderate HS. Ruxolitinib cream was well tolerated and consistent with its known safety profile. A Phase 3 study is currently under evaluation.
Ruxolitinib 1.5% cream BID met the primary efficacy endpoint as measured by a change from baseline in abscess and nodule count at Week 16 versus placebo in patients with mild to moderate HS. Ruxolitinib cream was well tolerated and consistent with its known safety profile. A Phase 3 study is expected to initiate in 2025.
Refer to the “License Agreements and Business Relationships” section above for information regarding our collaborations and strategic relationships. 24 Table of Contents Patents and Other Intellectual Property 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. 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.
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 Committee for Medicinal Products for Human Use (CHMP).
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.
In August 2020, we and MorphoSys announced that MONJUVI in combination with lenalidomide had been included in the latest National Comprehensive Cancer Network (NCCN) Clinical Practice Guidelines in Oncology for B-cell Lymphomas.
In August 2020, we and MorphoSys announced that MONJUVI in combination with lenalidomide had been included in the latest NCCN Clinical Practice Guidelines in Oncology for B-cell Lymphomas.
In November 2022, we initiated two Phase 2 trials evaluating ruxolitinib cream in lichen planus and lichen sclerosus. Lichen planus is a recurrent inflammatory condition affecting the skin and mucosal surfaces and can result in itchy, purple bumps on the skin.
In November 2022, we initiated two Phase 2 trials evaluating ruxolitinib cream in lichen planus and lichen sclerosus. Lichen planus is a recurrent inflammatory condition affecting the skin and mucosal surfaces and can result in itchy, purple bumps on the skin. Two Phase 3 trials evaluating ruxolitinib cream in prurigo nodularis were initiated in 2023.
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.
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.
Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. 35 Table of Contents
Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.
In July 2023, we announced that the Phase 3 trial (TRuE-AD3) evaluating ruxolitinib cream in pediatric AD patients (age > 2 and In January, 2024, we announced positive topline results from a randomized controlled Phase 2 study evaluating ruxolitinib cream in Hidradenitis Suppurativa (HS).
In July 2023, we announced that the Phase 3 trial (TRuE-AD3) evaluating ruxolitinib cream in pediatric AD patients (age > 2 and 16 Table of Contents In January 2024, we announced positive topline results from a randomized controlled Phase 2 study evaluating ruxolitinib cream in HS.
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.
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 December 2023, a Biologics License Application (BLA) was submitted to the FDA for axatilimab for the treatment of patients with chronic GVHD after failure of two or more lines of systemic therapy.
In December 2023, a Biologics License Application (BLA) was submitted to the FDA for axatilimab for the treatment of patients with chronic GVHD after failure of two or more lines of systemic therapy and accepted for Priority Review in February 2024.
Under this agreement, which became effective in January 2017, the parties have agreed to collaborate with respect to the research, discovery and development of bispecific antibodies utilizing Merus’ technology platform. The collaboration encompasses up to ten independent programs.
Under this agreement, which became effective in January 2017, the parties have agreed to collaborate with respect to the research, discovery and development of bispecific antibodies utilizing Merus’ technology platform.
In March 2022, PEMAZYRE was approved by the National Medical Products Administration (NMPA) of the People ’ s Republic of China for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth receptor 2 (FGFR2) fusion or rearrangement as confirmed by a validated diagnostic test that has progressed after at least one prior line of systemic therapy.
In March 2022, PEMAZYRE was approved by the National Medical Products Administration (NMPA) of the People ’ s Republic of China for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth receptor 2 (FGFR2) fusion or rearrangement as confirmed by a validated diagnostic test that has progressed after at least one prior line of systemic therapy. 10 Table of Contents Cholangiocarcinoma is a rare cancer that arises from the cells within the bile ducts.
ZYNYZ (retifanlimab-dlwr) In October 2017, we and MacroGenics, Inc., announced an exclusive global collaboration and license agreement for MacroGenics’ retifanlimab (formerly INCMGA0012), an investigational monoclonal antibody that inhibits PD-1. Under this collaboration, we obtained exclusive worldwide rights for the development and commercialization of retifanlimab in all indications.
ZYNYZ (retifanlimab-dlwr) In October 2017, we and MacroGenics, Inc., announced an exclusive global collaboration and license agreement for MacroGenics’ retifanlimab (formerly INCMGA0012), a humanized monoclonal antibody targeting programmed death receptor-1 (PD-1). Under this collaboration, we obtained exclusive worldwide rights for the development and commercialization of retifanlimab in all indications.
The Yverdon facility started to manufacture MONJUVI/MINJUVI drug substance during the fourth quarter of 2022. The drug substance will be usable in patients after regulatory approval, which is currently expected in the first quarter of 2024 for the European market and in the first 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 is currently expected in the second quarter of 2025 in the United States.
Cholangiocarcinoma is a rare cancer that arises from the cells within the bile ducts. It is often diagnosed late (stages III and IV) and the prognosis is poor. The incidence of cholangiocarcinoma with FGFR2 fusions or rearrangements is increasing, and it is currently estimated that there are 2,000-3,000 patients in the United States, Europe and Japan.
It is often diagnosed late (stages III and IV) and the prognosis is poor. The incidence of cholangiocarcinoma with FGFR2 fusions or rearrangements is increasing, and it is currently estimated that there are 2,000-3,000 patients in the United States, Europe and Japan.
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).
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.
In all cases, again, 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.
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.
We currently plan to initiate a Phase 1 study of INCB160058 in the second quarter of 2024. Tafasitamab Tafasitamab is an anti-CD19 antibody and is being investigated as a therapeutic option in B cell malignancies in a number of ongoing and planned combination trials.
A Phase 1 study of INCB160058 was initiated in the first quarter of 2024. Tafasitamab Tafasitamab is an anti-CD19 antibody and is being investigated as a therapeutic option in B cell malignancies in a number of ongoing and planned combination trials.
Plans are underway to initiate two combination trials with axatilimab in cGVHD in mid-2024, including a randomized Phase 2 combination trial with ruxolitinib and a randomized Phase 3 combination trial with steroids, both directed at treating patients with cGVHD in earlier lines of therapy.
We have initiated two combination trials with axatilimab in cGVHD in 2024, including a randomized Phase 2 combination trial with ruxolitinib and a randomized Phase 3 combination trial with steroids, both directed at treating patients with cGVHD in earlier lines of therapy.
While we require all employees, consultants and potential business partners to enter into confidentiality agreements, we may not be able to adequately protect our trade secrets or other proprietary information. Others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets.
While, as a general matter, we seek to protect our interests by entering into confidentiality agreements with our employees, consultants and potential business partners, we may not be able to adequately protect our trade secrets or other proprietary information. Others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets.
Our quality assurance program extends to our licensed facilities that oversee the manufacturing and distribution activities. For our future products, we intend to continue to establish third-party suppliers to manufacture sufficient quantities of our drug candidates to undertake clinical trials and to manufacture sufficient quantities of any product that is approved for commercial sale.
For our future products, we intend to continue to establish third-party suppliers to manufacture sufficient quantities of our drug candidates to undertake clinical trials and to manufacture sufficient quantities of any product that is approved for commercial sale.
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. 28 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.
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.
MF is a rare, life-threatening condition. MF, considered the most serious of the myeloproliferative neoplasms, can occur either as primary MF, or as secondary MF that develops in some patients who previously had polycythemia vera or essential thrombocythemia. We estimate there are between 16,000 and 18,500 patients with MF in the United States.
MF is a rare, life-threatening condition. MF, considered the most serious of the myeloproliferative neoplasms, can occur either as primary MF, or as secondary MF that develops in some patients who previously had polycythemia vera or essential thrombocythemia.
Partnered Programs Indication and Phase Ruxolitinib (JAKAVI) 1 (JAK1/JAK2) Acute and chronic GVHD: Approved in Europe and Japan Baricitinib (OLUMIANT) 2 (JAK1/JAK2) AD: Approved in Europe and Japan Severe alopecia areata (AA): Approved in the U.S., Europe and Japan Capmatinib (TABRECTA) 3 (MET) NSCLC (with MET exon 14 skipping mutations): Approved in the U.S., Europe and Japan 1. ruxolitinib licensed to Novartis outside of the United States for use in hematology and oncology excluding topical administration. 2. baricitinib licensed to Lilly. 3. capmatinib licensed to Novartis.
Partnered Programs Indication and Phase Ruxolitinib (JAKAVI) 1 (JAK1/JAK2) Acute and chronic GVHD: Approved in Europe and Japan Baricitinib (OLUMIANT) 2 (JAK1/JAK2) AD: Approved in Europe and Japan Severe alopecia areata (AA): Approved in the U.S., Europe and Japan RA: Approved in the U.S., Europe and Japan Capmatinib (TABRECTA) 3 (MET) NSCLC (with MET exon 14 skipping mutations): Approved in the U.S., Europe and Japan 1.
In May 2020, we and Novartis announced the FDA approval of capmatinib as TABRECTA for the treatment of adult patients with metastatic NSCLC whose tumors have a mutation that leads to MET exon 14 skipping (METex14) as detected by an FDA-approved test.
Dysregulation of the MET pathway is seen in many types of cancers, including lung, kidney, liver, stomach, breast and brain. 20 Table of Contents In May 2020, we and Novartis announced the FDA approval of capmatinib as TABRECTA for the treatment of adult patients with metastatic NSCLC whose tumors have a mutation that leads to MET exon 14 skipping (METex14) as detected by an FDA-approved test.
In March 2023, we announced that the FDA had approved ZYNYZ (retifanlimab-dlwr), a humanized monoclonal antibody targeting programmed death receptor-1 (PD-1), under accelerated approval, for the treatment of adults with metastatic or recurrent locally advanced Merkel cell carcinoma (MCC).
In March 2023, we announced that the FDA had approved ZYNYZ (retifanlimab-dlwr) under accelerated approval, for the treatment of adults with metastatic or recurrent locally advanced Merkel cell carcinoma (MCC). This represents the first regulatory approval for our PD-1 inhibitor.
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.
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.
Povorcitinib We also are developing povorcitinib (formerly INCB54707), which is an oral small molecule selective JAK1 inhibitor. Povorcitinib is undergoing evaluation in patients with hidradenitis suppurativa (HS), nonsegmental vitiligo, prurigo nodularis (PN), asthma and chronic spontaneous urticaria (CSU). Hidradenitis Suppurativa. HS is a chronic skin condition where lesions develop as a result of inflammation and infection of the sweat glands.
Povorcitinib is undergoing evaluation in patients with hidradenitis suppurativa, nonsegmental vitiligo, prurigo nodularis, asthma and chronic spontaneous urticaria (CSU). Hidradenitis Suppurativa. HS is a chronic skin condition where lesions develop as a result of inflammation and infection of the sweat glands.
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. A Phase 3 study in PN is being planned. 18 Table of Contents 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 in patients with PN were initiated. Asthma and Chronic Spontaneous Urticaria.
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.
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.
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. For OPZELURA, we have one qualified third-party manufacturer from which we can source commercial drug product.
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.
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.
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.
AD is a skin disorder that causes long term inflammation of the skin resulting in itchy, red, swollen and cracked skin. Onset can occur at any age, but is more common in infants and children.
AD is a skin disorder that causes long term inflammation of the skin resulting in itchy, red, swollen and cracked skin. Onset can occur at any age but is more common in infants and children. In the United States, we estimate that there are approximately 10 million diagnosed adolescent and adult patients with AD.
For most of our drug candidates, once our raw materials are produced, we rely on one third-party to manufacture the API, another to make finished drug product and a third to package and label the finished product. For ruxolitinib phosphate, the API for JAKAFI and OPZELURA, we have two qualified third-party contract manufacturers from which we can source drug substance.
For most of our drug candidates, once our raw materials are produced, we rely on one third-party to manufacture the API, another to make finished drug product and a third to package and label the finished product.
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.
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.
OPZELURA subsequently was approved by the FDA and European Commission for vitiligo in July 2022 and April 2023, respectively. Incyte’s IAI efforts also include numerous clinical development programs. OPZELURA (ruxolitinib) cream Atopic Dermatitis .
Inflammation and AutoImmunity (IAI) Incyte Dermatology launched its first approved product, OPZELURA (ruxolitinib) cream, in October 2021, following FDA approval for atopic dermatitis in September 2021. OPZELURA subsequently was approved by the FDA and European Commission for vitiligo in July 2022 and April 2023, respectively. Our IAI efforts also include numerous clinical development programs. OPZELURA (ruxolitinib) cream Atopic Dermatitis .
Discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions on the product, manufacturer or facility, including recalls or withdrawal of the product from the market. Manufacturing facilities are always subject to inspection by the applicable regulatory authorities.
Discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions on the product, manufacturer or facility, including recalls or withdrawal of the product from the market.
Under the terms of this agreement, we received exclusive commercialization rights to axatilimab outside of the United States, and co-commercialization rights in the United States. 23 Table of Contents Incyte’s Approach to Drug Discovery and Development Our productivity in drug discovery is primarily a result of our core competency in medicinal chemistry which is tightly integrated with, and supported by, an experienced team of biologists and pharmaceutical scientists with expertise in multiple therapeutic areas.
Incyte’s Approach to Drug Discovery and Development Our productivity in drug discovery is primarily a result of our core competency in medicinal chemistry which is tightly integrated with, and supported by, an experienced team of biologists and pharmaceutical scientists with expertise in multiple therapeutic areas.
In the United States, we estimate that there are approximately 10 million diagnosed adolescent and adult patients with AD. 16 Table of Contents The approval of OPZELURA was based on data from two randomized, double-blind, vehicle-controlled Phase 3 studies (TRuE-AD1 and TRuE-AD 2) evaluating the safety and efficacy of OPZELURA in adolescents and adults with mild to moderate AD.
The approval of OPZELURA was based on data from two randomized, double-blind, vehicle-controlled Phase 3 studies (TRuE-AD1 and TRuE-AD 2) evaluating the safety and efficacy of OPZELURA in adolescents and adults with mild to moderate AD.
Many companies and institutions, either alone or together with their collaborative partners, have substantially greater financial resources, larger drug discovery, development and commercial staffs and significantly greater experience than we do in: • drug discovery; • developing products; • undertaking preclinical testing and clinical trials; • obtaining FDA and other regulatory approvals of products; and • manufacturing, marketing, distributing and selling products.
Many companies and institutions, either alone or together with their collaborative partners, have substantially greater financial resources, larger drug discovery, development and commercial staffs and significantly greater experience than we do in: • drug discovery; • developing products; • undertaking preclinical testing and clinical trials; • obtaining FDA and other regulatory approvals of products; and • manufacturing, marketing, distributing and selling products. 26 Table of Contents Accordingly, our competitors may succeed in obtaining patent protection, receiving FDA and other regulatory approval or commercializing products that compete with JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ, NIKTIMVO or our drug candidates.
The following table sets forth the status of the patents and patent applications in the United States, the European Union, and Japan for 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: Drug/Drug Candidate (Target) Status of U.S.
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.
We cannot guarantee that the FDA will grant any of our requests for any of these expedited program designations, that any such designations would affect the time of review or that the FDA will approve the NDA or BLA submitted for any of our drug candidates, whether or not these designations are granted.
The FDA has recently increased its focus on accelerated approvals for oncology drugs and the confirmatory trials required for those drugs. 29 Table of Contents We cannot guarantee that the FDA will grant any of our requests for any of these expedited program designations, that any such designations would affect the time of review or that the FDA will approve the NDA or BLA submitted for any of our drug candidates, whether or not these designations are granted.
Dysregulation of the MET pathway triggers tumor growth, formation of new blood vessels that supply the tumor with nutrients, and causes cancer to spread to other organs. Dysregulation of the MET pathway is seen in many types of cancers, including lung, kidney, liver, stomach, breast and brain.
Dysregulation of the MET pathway triggers tumor growth, formation of new blood vessels that supply the tumor with nutrients and causes cancer to spread to other organs.
Phase 2 trials combining ruxolitinib with investigational agents from our portfolio such as INCB57643 (BET) and INCB00928 (Zilurgisertib) in patients with MF are ongoing, and updated data demonstrating early signals of clinical activity of both agents in monotherapy and in combination with ruxolitinib were presented in June 2023 at the American Society of Clinical Oncology (ASCO) annual meeting and in December 2023 at the American Society of Hematology (ASH) meeting.
Phase 2 trials combining ruxolitinib with investigational agents from our portfolio such as INCB57643 (BET) in patients with MF are ongoing with data presented demonstrating early signals of clinical activity in monotherapy and in combination with ruxolitinib.
Tafasitamab is an Fc-engineered antibody against CD19 currently in clinical development for the treatment of B cell malignancies. Under the terms of the collaboration and license agreement, we received rights to co-commercialize tafasitamab in the United States with MorphoSys, and exclusive development and commercialization rights outside of the United States.
Under the terms of the collaboration and license agreement, we received rights to co-commercialize tafasitamab in the United States with MorphoSys, and exclusive development and commercialization rights outside of the United States.
The manufacturing of ponatinib, the API for ICLUSIG, is the sole responsibility of Takeda, the intellectual property holder. We procure API from Takeda, which outsources the API manufacturing to a third party. For pemigatinib, the API for PEMAZYRE, we have one qualified third-party contract manufacturer from which we can source drug substance.
For ruxolitinib phosphate, the API for JAKAFI and OPZELURA, we have three qualified third-party contract manufacturers from which we can source drug substance, one of which is currently active. The manufacturing of ponatinib, the API for ICLUSIG, is the sole responsibility of Takeda, the intellectual property holder.
PEMAZYRE is the first FDA-approved treatment for this indication, which was approved under accelerated approval based on overall response rate and duration of response (DOR). 10 Table of Contents In March 2021, PEMAZYRE was approved by the Japanese Ministry of Health, Labour and Welfare (MHLW) for the treatment of patients with unresectable biliary tract cancer (BTC) with an FGFR2 fusion gene, worsening after cancer chemotherapy.
In March 2021, PEMAZYRE was approved by the Japanese Ministry of Health, Labour and Welfare (MHLW) for the treatment of patients with unresectable biliary tract cancer (BTC) with an FGFR2 fusion gene, worsening after cancer chemotherapy.
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).
As 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).
IAI and Dermatology Programs Indication and Phase Ruxolitinib cream (OPZELURA) 1 (JAK1/JAK2) AD: Phase 3 pediatric study (TRuE-AD3) Vitiligo: Approved in the U.S. and Europe Lichen planus: Phase 2 Lichen sclerosus: Phase 2 Hidradenitis suppurativa: Phase 2; Phase 3 being evaluated Prurigo nodularis: Phase 3 (TRuE-PN1, TRuE-PN2) Ruxolitinib cream + UVB (JAK1/JAK2 + phototherapy) Vitiligo: Phase 2 Povorcitinib (JAK1) Hidradenitis suppurativa: Phase 3 (STOP-HS1, STOP-HS2) Vitiligo: Phase 3 (STOP-V1, STOP-V2) Prurigo nodularis: Phase 2; Phase 3 in planning Asthma: Phase 2 Chronic spontaneous urticaria: Phase 2 INCA034460 (anti-IL-15Rβ) Vitiligo: Phase 1 initiated 1.
IAI and Dermatology Programs Indication and Phase Ruxolitinib cream (OPZELURA) 1 (JAK1/JAK2) Atopic dermatitis: Phase 3 pediatric study (TRuE-AD3) Hidradenitis suppurativa: Phase 2; Phase 3 expected to initiate in 2025 Prurigo nodularis: Phase 3 (TRuE-PN1, TRuE-PN2) Povorcitinib (JAK1) Hidradenitis suppurativa: Phase 3 (STOP-HS1, STOP-HS2) Vitiligo: Phase 3 (STOP-V1, STOP-V2) Prurigo nodularis: Phase 3 (STOP-PN1, STOP-PN2) Chronic spontaneous urticaria: Phase 2 Asthma: Phase 2 INCA034460 (anti-CD122) Vitiligo: Phase 1 1.
In April 2023, we presented data at the American Association for Cancer Research (AACR) Annual Meeting, demonstrating that INCB123667 exhibited significant single-agent activity in vivo, in CCNE1 high breast cancer xenograft and patient-derived xenograft models.
In April 2023, we presented data at the American Association for Cancer Research (AACR) Annual Meeting, demonstrating that INCB123667 exhibited significant single-agent activity in vivo, in CCNE1 high breast cancer xenograft and patient-derived xenograft models. INCB123667 currently is being evaluated in a Phase 1 clinical trial in patients with advanced malignancies including CCNE1 high TNBC and HR+HER2- tumors post-CDK4/6 inhibitors.
We also rely on third-party contract manufacturers to tablet or capsulate all of our active pharmaceutical ingredients for clinical and commercial uses. 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.
We procure API from Takeda, which outsources the API manufacturing to a third party. For pemigatinib, the API for PEMAZYRE, we have one qualified third-party contract manufacturer from which we can source drug substance. 33 Table of Contents We also rely on third-party contract manufacturers to tablet or capsulate all of our active pharmaceutical ingredients for clinical and commercial uses.
If any of these single source suppliers were to become unable or unwilling to supply us with API or finished product that complies with applicable regulatory requirements, we could incur significant delays in our clinical trials or interruption of commercial supply which could have a material adverse effect on our business. 33 Table of Contents We have established a quality assurance program intended to ensure that our third-party manufacturers and service providers produce materials and provide services, as applicable, in accordance with the FDA and EMA’s current Good Manufacturing Practices and other applicable regulations.
If any of these single source suppliers were to become unable or unwilling to supply us with API or finished product that complies with applicable regulatory requirements, we could incur significant delays in our clinical trials or interruption of commercial supply which could have a material adverse effect on our business.

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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.
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.
Similar results could occur with respect to our commercialization of ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA and ZYNYZ. Patients who have been enrolled in our clinical trials or who may use our products in the future often have severe and advanced stages of disease and known as well as unknown significant pre-existing and potentially life-threatening health risks.
Similar results could occur with respect to our commercialization of ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ and NIKTIMVO. Patients who have been enrolled in our clinical trials or who may use our products in the future often have severe and advanced stages of disease and known as well as unknown significant pre-existing and potentially life-threatening health risks.
The costs of JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA and ZYNYZ are not insignificant and almost all patients will require some form of third-party coverage to afford their cost. Our future revenues and profitability will be adversely affected if we cannot depend on government and other third-party payors to defray the cost of our products to the patient.
The costs of JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ and NIKTIMVO are not insignificant and almost all patients will require some form of third-party coverage to afford their cost. Our future revenues and profitability will be adversely affected if we cannot depend on government and other third-party payors to defray the cost of our products to the patient.
We do not currently operate manufacturing facilities for most of our clinical or commercial products, including JAKAFI, PEMAZYRE, ICLUSIG and OPZELURA, 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 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.
To date, we do not have any drug products that have generated significant revenues other than from sales of JAKAFI and OPZELURA and we cannot assure you that we will generate substantial revenues from the drug candidates that we license or develop, including ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI and ZYNYZ, for several years, if ever.
To date, we do not have any drug products that have generated significant revenues other than from sales of JAKAFI and OPZELURA and we cannot assure you that we will generate substantial revenues from the drug candidates that we license or develop, including ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, ZYNYZ and NIKTIMVO for several years, if ever.
If we are unsuccessful in obtaining and maintaining broad coverage and reimbursement for OPZELURA, our anticipated revenue from and growth prospects for OPZELURA 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. 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.
While we also sell our and our licensors’ other approved products ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA and ZYNYZ and our exclusive licensees sell OLUMIANT and TABRECTA, we anticipate that JAKAFI product sales will continue to contribute a significant percentage of our total revenues over the next several years.
While we also sell our and our licensors’ other approved products ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ and NIKTIMVO and our exclusive licensees sell OLUMIANT and TABRECTA, we anticipate that JAKAFI product sales will continue to contribute a significant percentage of our total revenues over the next several years.
Even if we are successful in obtaining regulatory approvals for manufacturing and commercializing drug products in addition to JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA and ZYNYZ, we may incur losses if our drug products do not generate significant revenues. We may need additional capital in the future.
Even if we are successful in obtaining regulatory approvals for manufacturing and commercializing drug products in addition to JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ and NIKTIMVO we may incur losses if our drug products do not generate significant revenues. We may need additional capital in the future.
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. 53 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 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, the increased use of social media by our employees and contractors could result in inadvertent disclosure of sensitive data or personal information, including but not limited to, confidential information, trade secrets and other intellectual property. 61 Table of Contents Any such disruption or security breach, as well as any action by us or our employees or contractors that might be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable within the United States and elsewhere where we conduct business, could result in enforcement actions by U.S. states, the U.S.
In addition, the increased use of social media by our employees and contractors could result in inadvertent disclosure of sensitive data or personal information, including but not limited to, confidential information, trade secrets and other intellectual property. 62 Table of Contents Any such disruption or security breach, as well as any action by us or our employees or contractors that might be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable within the United States and elsewhere where we conduct business, could result in enforcement actions by U.S. states, the U.S.
As noted above under “—Risks Relating to Commercialization of Our Products—Competition for our products could potentially harm our business and result in a decrease in our revenue,” a potential generic drug company competitor has challenged certain patents relating to JAKAFI. 59 Table of Contents Additionally, when we do not control the prosecution, maintenance and enforcement of certain important intellectual property, such as a drug candidate in-licensed to us or subject to a collaboration with a third-party, the protection of the intellectual property rights may not be in our hands.
As noted above under “—Risks Relating to Commercialization of Our Products—Competition for our products could potentially harm our business and result in a decrease in our revenue,” a potential generic drug company competitor has challenged certain patents relating to JAKAFI. 60 Table of Contents Additionally, when we do not control the prosecution, maintenance and enforcement of certain important intellectual property, such as a drug candidate in-licensed to us or subject to a collaboration with a third-party, the protection of the intellectual property rights may not be in our hands.
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. 51 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. 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.
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. 60 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. 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.
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. 58 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. 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.
P ayors could decide to exclude OPZELURA from formulary coverage lists, impose step edits that require patients to try alternative, including generic, treatments before authorizing payment for OPZELURA, limit the types of diagnoses for which coverage will be provided or impose a moratorium on coverage for products while the payor makes a coverage decision.
P ayors could decide to exclude our products from formulary coverage lists, impose step edits that require patients to try alternative, including generic, treatments before authorizing payment for our products, limit the types of diagnoses for which coverage will be provided or impose a moratorium on coverage for products while the payor makes a coverage decision.
If we are unable to manage our growth effectively, our business could be harmed and our ability to execute our business strategy could suffer. 52 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. 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.
The testing of JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA and ZYNYZ, the manufacturing, marketing and sale of JAKAFI, PEMAZYRE and OPZELURA and the marketing and sale of ICLUSIG, MONJUVI/MINJUVI and ZYNYZ expose us to product liability and other risks.
The testing of JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ and NIKTIMVO, the manufacturing, marketing and sale of JAKAFI, PEMAZYRE, OPZELURA and NIKTIMVO and the marketing and sale of ICLUSIG, MONJUVI/MINJUVI and ZYNYZ expose us to product liability and other risks.
An inability to maintain adequate formulary positions could increase patient cost-sharing for OPZELURA and cause some patients to determine not to use OPZELURA. Any delays or unforeseen difficulties in reimbursement approvals could limit patient access, depress therapy adherence rates, and adversely impact our ability to successfully commercialize OPZELURA.
An inability to maintain adequate formulary positions could increase patient cost-sharing for our products and cause some patients to determine not to use our products. Any delays or unforeseen difficulties in reimbursement approvals could limit patient access, depress therapy adherence rates, and adversely impact our ability to successfully commercialize our products.
Criminal Finances Act, which may have similarly broad extraterritorial reach. 54 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. 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.
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. 55 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. 56 Table of Contents Business disruptions could seriously harm our operations, future revenues and financial condition and increase our costs and expenses.
In addition, 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 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.
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.
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.
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. Item 1B. Unresolved Staff Comments None. 62 Table of Contents
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.
Failure to comply with the laws and regulations administered by the FDA or other agencies could result in: • administrative and judicial sanctions, including warning letters; • fines and other civil penalties; • suspension or withdrawal of regulatory approval to market or manufacture our products; • interruption of production; • operating restrictions; 39 Table of Contents • product recall or seizure; • injunctions; and • criminal prosecution.
Failure to comply with the laws and regulations administered by the FDA or other agencies could result in: • administrative and judicial sanctions, including warning letters; • fines and other civil penalties; • suspension or withdrawal of regulatory approval to market or manufacture our products; • interruption of production; • operating restrictions; • product recall or seizure; • injunctions; and • criminal prosecution.
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. 47 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.
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.
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 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 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.
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. 41 Table of Contents 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 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.
The same risks apply to our compounds developed and marketed by our collaborators, and our future potential milestone and royalty revenues could be affected in a similar manner. We depend on our collaborators and licensees for the future development and commercialization of some of our drug candidates.
The same risks apply to our compounds developed and marketed by our collaborators, and our future potential milestone and royalty revenues could be affected in a similar manner. 47 Table of Contents We depend on our collaborators and licensees for the future development and commercialization of some of our drug candidates.
Any increases in the cost of our 50 Table of Contents 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 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.
Factors similar to those listed above also apply to our license collaborators in the jurisdictions in which they have development and commercialization rights. 40 Table of Contents 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 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.
In this regard, 37 Table of Contents while we have entered into agreements with a number of PBMs, we are in the process of negotiating agreements with additional PBMs and payor accounts to provide rebates to those entities related to formulary coverage for OPZELURA, and we cannot guarantee that we will be able to agree to or maintain acceptable coverage terms with these PBMs and other third party payors.
In this regard, while we have entered into agreements with a number of PBMs, we are in the process of negotiating agreements with additional PBMs and payor accounts to provide rebates to those entities related to formulary coverage for OPZELURA, and we cannot guarantee that we will be able to agree to or maintain acceptable coverage terms with these PBMs and other third party payors for OPZELURA or additional products in the future.
Our marketable securities and long term investments are subject to risks that could adversely affect our overall financial position. We invest our cash in accordance with an established internal policy and customarily in short-term instruments, money market funds, U.S. government backed-funds and Treasury securities, which are investment grade and historically have been highly liquid and carried relatively low risk.
Our marketable securities and equity investments are subject to risks that could adversely affect our overall financial position. We invest our cash in accordance with an established internal policy and customarily in money market funds, U.S. government backed-funds and Treasury securities, which are investment grade and historically have been highly liquid and carried relatively low risk.
Our ability to discover and develop drug candidates and to commercialize additional drug products and indications will depend on our ability to: • hire and retain key employees; • identify high quality therapeutic targets; • identify potential drug candidates; • develop products internally or license or acquire drug candidates from others; • identify and enroll suitable human subjects, either in the United States or abroad, for our clinical trials; • complete laboratory testing; • commence, conduct and complete safe and effective clinical trials on humans; • obtain and maintain necessary intellectual property rights to our products; • obtain and maintain necessary regulatory approvals for our products, both in the United States and abroad; • enter into arrangements with third parties to provide services or to manufacture our products on our behalf; • deploy sales, marketing, distribution and manufacturing resources effectively or enter into arrangements with third parties to provide these functions in compliance with all applicable laws; • obtain appropriate coverage and reimbursement levels for the cost of our products from governmental authorities, private health insurers and other third-party payors; • lease facilities at reasonable rates to support our growth; and • enter into arrangements with third parties to license and commercialize our products. 43 Table of Contents The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.
Our ability to discover and develop drug candidates and to commercialize additional drug products and indications will depend on our ability to: • hire and retain key employees; • identify high quality therapeutic targets; • identify potential drug candidates; • develop products internally or license or acquire drug candidates from others; • identify and enroll suitable human subjects, either in the United States or abroad, for our clinical trials; • complete laboratory testing; • commence, conduct and complete safe and effective clinical trials on humans; • obtain and maintain necessary intellectual property rights to our products; • obtain and maintain necessary regulatory approvals for our products, both in the United States and abroad; • enter into arrangements with third parties to provide services or to manufacture our products on our behalf; • deploy sales, marketing, distribution and manufacturing resources effectively or enter into arrangements with third parties to provide these functions in compliance with all applicable laws; • obtain appropriate coverage and reimbursement levels for the cost of our products from governmental authorities, private health insurers and other third-party payors; • lease facilities at reasonable rates to support our growth; and • enter into arrangements with third parties to license and commercialize our products.
Our future funding requirements will depend on many factors and we anticipate that we may need to raise additional capital to fund our business plan and research and development efforts going-forward. 56 Table of Contents 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; • 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; • 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.
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 September 2022, we decided to terminate our collaboration with Calithera Biosciences.
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.
Conflicts may arise between our collaborators and licensees and us, or our collaborators and licensees may 48 Table of Contents choose to terminate their agreements with us, which may adversely affect our business,” conflicts or other issues may arise with our licensors.
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,” conflicts or other issues may arise with our licensors.
In September 2023, we received a notice letter regarding an ANDA that requested approval to market a generic version of OPZELURA and purported to challenge patents covering ruxolitinib phosphate cream and its uses that expire in 2031 and 2040.
In September 2023, we received a notice letter from Padagis Israel Pharmaceuticals Ltd. regarding its filing of an ANDA that requested approval to market a generic version of OPZELURA and purported to challenge patents covering ruxolitinib phosphate cream and its uses that expire in 2031 and 2040.
Satisfaction of regulatory requirements typically takes many years. To obtain regulatory approval, we or our collaborators, as the case may be, must first show that our or our collaborators’ drug candidates are safe and effective for target indications through preclinical testing (animal testing) and clinical trials (human testing).
To obtain regulatory approval, we or our collaborators, as the case may be, must first show that our or our collaborators’ drug candidates are safe and effective for target indications through preclinical testing (animal testing) and clinical trials (human testing).
We have limited internal resources and capacity to perform preclinical testing and clinical trials. As part of our development strategy, we often hire contract research organizations, or CROs, to perform preclinical testing and clinical trials for drug candidates.
As part of our development strategy, we often hire contract research organizations, or CROs, to perform preclinical testing and clinical trials for drug candidates.
Our rate of commencement and completion of clinical trials may be delayed, and existing clinical trials with our or our collaborators’ drug candidates may be stopped, due to many potential factors, including: • the high degree of risk and uncertainty associated with drug development; • our inability to formulate or manufacture sufficient quantities of materials for use in clinical trials; • variability in the number and types of patients available for each study; • difficulty in maintaining contact with patients after treatment, resulting in incomplete data; • unforeseen safety issues or side effects; • poor or unanticipated effectiveness of drug candidates during the clinical trials; or • government or regulatory delays. 44 Table of Contents Data obtained from clinical trials are susceptible to varying interpretation, which may delay, limit or prevent regulatory approval.
Our rate of commencement and completion of clinical trials may be delayed, and existing clinical trials with our or our collaborators’ drug candidates may be stopped, due to many potential factors, including: • the high degree of risk and uncertainty associated with drug development; • our inability to formulate or manufacture sufficient quantities of materials for use in clinical trials; • variability in the number and types of patients available for each study; • difficulty in maintaining contact with patients after treatment, resulting in incomplete data; • unforeseen safety issues or side effects; • poor or unanticipated effectiveness of drug candidates during the clinical trials; or • government or regulatory delays.
The notice letter does not challenge the ruxolitinib composition of matter patent, which expires in December 2027. To date, to our knowledge, the FDA has taken no action with respect to this ANDA.
The notice letter does not challenge the ruxolitinib composition of matter patent, which expires (with pediatric extension) in June 2028. To date, to our knowledge, the FDA has taken no action with respect to this ANDA.
Some countries set prices by reference to prices in other countries, and countries may refuse to reimburse or may restrict the reimbursed population for a drug product based on their national health technology assessments and cost effectiveness thresholds. In addition, governmental authorities in many countries may reduce prices for approved drug products from previously established prices.
Some countries set prices by reference to prices in other countries, and countries may refuse to reimburse or may restrict the reimbursed population for a drug product based on their national health technology assessments and cost effectiveness thresholds.
The notice letter does not challenge ruxolitinib nor the ruxolitinib phosphate composition of matter patents, providing patent coverage (with pediatric extension) until December 2028. To date, to our knowledge, the FDA has taken no action with respect to this ANDA.
The notice letter does not challenge ruxolitinib nor the ruxolitinib phosphate composition of matter patents, providing patent coverage (with pediatric extension) until December 2028. To date, to our knowledge, the FDA has taken no action with respect to this ANDA. In November 2023, we initiated a patent infringement action against Padagis in the U.S.
The occurrence of any such event may have a material adverse effect on our business. 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.
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.
Although we continue to evaluate and assess the potential impact of the recent U.S. legislation and BEPS 2.0 on us, the minimum tax rules could result in tax increases in both the United States and many foreign jurisdictions where we operate or have a presence.
Although we continue to evaluate and monitor the potential impact of BEPS 2.0 on us, and the OECD minimum tax rules do not currently have a material impact on us, these minimum tax rules could in the future result in tax increases in both the United States and many foreign jurisdictions where we operate or have a presence.
The extent to which a public health pandemic and the measures taken to limit the disease's spread can impact our operations and those of our suppliers, collaborators, service providers and healthcare organizations serving patients, as well as demand for our drug products, will depend on developments, that are highly uncertain, including the duration of the outbreak and any related government actions.
The extent to which a public health pandemic and the measures taken to limit the disease's spread can impact our operations and those of our suppliers, collaborators, service providers and healthcare organizations serving patients, as well as demand for our drug products, will depend on developments, that are highly uncertain, including the duration of the outbreak and any related government actions. 49 Table of Contents As a result of the COVID-19 pandemic, we experienced, and as a result of future pandemics we may in the future experience disruptions that could severely impact our business, results of operations and financial condition.
Side effects and other problems experienced by patients from the use of our products could: • lessen the frequency with which physicians decide to prescribe our products; • encourage physicians to stop prescribing our products to their patients who previously had been prescribed our products; • cause serious harm to patients that may give rise to product liability claims against us; and • result in our need to withdraw or recall our products from the marketplace.
Side effects and other problems experienced by patients from the use of our products could: • lessen the frequency with which physicians decide to prescribe our products; • encourage physicians to stop prescribing our products to their patients who previously had been prescribed our products; • cause serious harm to patients that may give rise to product liability claims against us; and • result in our need to withdraw or recall our products from the marketplace. 40 Table of Contents If our products are used by a wide patient population, new risks and side effects may be discovered, the rate of known risks or side effects may increase, and risks previously viewed as less significant could be determined to be significant.
Third-party payors are increasingly challenging the prices charged for medical products and services, and payors and employers are adopting benefit plan changes that shift a greater portion of prescription drug costs to patients.
In addition, governmental authorities in many countries may reduce prices for approved drug products from previously established prices. 37 Table of Contents Third-party payors are increasingly challenging the prices charged for medical products and services, and payors and employers are adopting benefit plan changes that shift a greater portion of prescription drug costs to patients.
The promotion of medicinal products that are not subject to a marketing authorization is also prohibited in the EU. Violations of the rules governing the promotion of medicinal products in the EU and in other territories could be penalized by administrative measures, fines and imprisonment.
Violations of the rules governing the promotion of medicinal products in the EU and in other territories could be penalized by administrative measures, fines and imprisonment.
We depend upon a limited number of specialty pharmacies and wholesalers for a significant portion of any revenues from JAKAFI and most of our other drug products, and the loss of, or significant reduction in sales to, any one of these specialty pharmacies or wholesalers could adversely affect our operations and financial condition.
Our collaborators Novartis and Eli Lilly are affected by similar considerations for the drugs that they market and for which we may receive royalties. 38 Table of Contents We depend upon a limited number of specialty pharmacies and wholesalers for a significant portion of any revenues from JAKAFI and most of our other drug products, and the loss of, or significant reduction in sales to, any one of these specialty pharmacies or wholesalers could adversely affect our operations and financial condition.
A number of our collaborations involve the manufacture of antibodies. Either we or our collaborators have primary responsibility for manufacturing activities, and we intend to continue to use third-party contract manufacturing organizations for the manufacture of antibodies in conjunction with our manufacturing facility in Switzerland.
Either we or our collaborators have primary responsibility for manufacturing activities, and we intend to continue to use third-party contract manufacturing organizations for the manufacture of antibodies in conjunction with our manufacturing facility in Switzerland. Manufacturing antibodies and products containing antibodies is a more complex process than manufacturing small molecule drugs and subject to additional risks.
For example, the American Rescue Plan Act of 2021 includes a provision that became effective in January 2024 that eliminates the statutory cap on rebates that drug manufacturers pay to Medicaid.
Comprehensive reforms to the U.S. healthcare system were enacted, including changes to the methods for, and amounts of, Medicare reimbursement. For example, the American Rescue Plan Act of 2021 includes a provision that became effective in January 2024 that eliminates the statutory cap on rebates that drug manufacturers pay to Medicaid.
Any such hearing or investigation could also result in significant negative publicity and harm to our reputation, reduced market acceptance and demand, which could adversely affect our financial results and growth prospects. 46 Table of Contents 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 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.
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.
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.
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. 36 Table of Contents If we are unable to obtain, or maintain at anticipated levels, coverage and reimbursement for our products from government health administration authorities, private health insurers and other organizations, our pricing may be affected and our product sales, results of operations and financial condition could be harmed.
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.
Despite investing significant resources, we may not be successful in discovering, developing, or commercializing additional drug products or our existing drug products in new indications. Discovery and development of drug candidates are expensive, uncertain and time-consuming, and we do not know if our efforts will lead to discovery of any drug candidates that can be successfully developed and marketed.
Discovery and development of drug candidates are expensive, uncertain and time-consuming, and we do not know if our efforts will lead to discovery of any drug candidates that can be successfully developed and marketed.
We derived a substantial portion of our revenues for the years ended December 31, 2023 and December 31, 2022 from JAKAVI and OLUMIANT product royalties and from milestone payments under our collaboration agreements.
We derive a substantial portion of our total revenues from product royalties and milestone payments under our collaboration agreements, with royalties on JAKAVI and OLUMIANT representing most of our product royalty, milestone and contract revenues for each of the three years ended December 31, 2024.
If we are not able to establish collaboration or license arrangements, we may not be able to develop and commercialize a drug product, which could adversely affect our business, our revenues and our future revenue prospects.
If we are not able to establish collaboration or license arrangements, we may not be able to develop and commercialize a drug product, which could adversely affect our business, our revenues and our future revenue prospects. 48 Table of Contents We will likely not be able to control the amount and timing of resources that our collaborators or licensees devote to our programs or drug candidates.
Our reliance on other parties to manufacture our drug products and drug candidates could result in a short supply of the drugs, delays in clinical trials or drug development, increased costs, and withdrawal or denial of a regulatory authority’s approval.
Events such as these may result in delays in our obtaining regulatory approval for our drug candidates or our ability to commercialize our products and could result in increased expenditures that would adversely affect our operating results. 50 Table of Contents Our reliance on other parties to manufacture our drug products and drug candidates could result in a short supply of the drugs, delays in clinical trials or drug development, increased costs, and withdrawal or denial of a regulatory authority’s approval.
Even if it is later determined we are not in violation of these laws, we may be faced with negative publicity, incur significant expenses defending our position and have to divert significant management resources from other matters.
Even if it is later determined we are not in violation of these laws, we may be faced with negative publicity, incur significant expenses defending our position and have to divert significant management resources from other matters. 41 Table of Contents The European Union and member countries, as well as governmental authorities in other countries, impose similar strict restrictions on the promotion and marketing of drug products.
The loss of any large specialty pharmacy or wholesaler as part of our distribution network, a significant reduction in sales we make to specialty pharmacies or wholesalers, or any failure to pay for the products we have shipped to them could materially and adversely affect our results of operations and financial condition. 38 Table of Contents If we are unable to establish and maintain effective sales, marketing and distribution capabilities, or to enter into agreements with third parties to do so, we will not be able to successfully commercialize our products.
The loss of any large specialty pharmacy or wholesaler as part of our distribution network, a significant reduction in sales we make to specialty pharmacies or wholesalers, or any failure to pay for the products we have shipped to them could materially and adversely affect our results of operations and financial condition.
In addition, to the extent we may seek to sell or otherwise monetize those investments, we may not be able to do so at our desired price or valuation levels, or at all, due to the limited liquidity of some or all of those investments. 57 Table of Contents Any loss in value of our long term investments could adversely affect our financial position on the consolidated balance sheets and consolidated statements of operations.
In addition, to the extent we may seek to sell or otherwise monetize those investments, we may not be able to do so at our desired price or valuation levels, or at all, due to the limited liquidity of some or all of those investments.
We may not be able to adequately manage and oversee the manufacturers we choose, they may not perform as agreed or they may terminate their agreements with us. Foreign manufacturing approval processes typically include all of the risks associated with the FDA approval process for manufacturing and may also include additional risks.
We may not be able to adequately manage and oversee the manufacturers we choose, they may not perform as agreed or they may terminate their agreements with us.
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 (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.
Because of the rapidly moving nature of technology and the increasing sophistication of cybersecurity threats, our measures to prevent, respond to and minimize such risks may be unsuccessful.
Because of the rapidly moving nature of technology and the increasing sophistication of cybersecurity threats, our measures to prevent, respond to and minimize such risks may be unsuccessful. Disruptions or data security breaches within other healthcare companies could also affect our business, results of operations and financial condition.
The Hatch-Waxman Act provides significant incentives to generic manufacturers to challenge U.S. patents on successful innovative pharmaceutical products. In February 2016, we received a notice letter regarding an ANDA that requested approval to market a generic version of JAKAFI and purported to challenge patents covering ruxolitinib phosphate and its use that expire in 2028.
In February 2016, we received a notice letter from Apotex, Inc. regarding its filing of an ANDA that requested approval to market a generic version of JAKAFI and purported to challenge patents covering ruxolitinib phosphate and its use that expire (with pediatric extension) in December 2028.
There can be no assurance that our patents will be upheld or that any litigation in which we might engage with any such generic manufacturer would be successful in protecting JAKAFI’s exclusivity.
District Court for the District of New Jersey asserting certain FDA Orange Book listed patents. That action remains pending. There can be no assurance that our patents will be upheld or that any litigation in which we might engage with any generic manufacturer would be successful in protecting exclusivity of our products.
Many companies in the pharmaceutical and biopharmaceutical industry, including our company, have suffered significant setbacks in advanced clinical trials, even after achieving promising results in earlier clinical trials. In addition, regulatory authorities may refuse or delay approval as a result of other factors, such as changes in regulatory policy during the period of product development and regulatory agency review.
In addition, regulatory authorities may refuse or delay approval as a result of other factors, such as changes in regulatory policy during the period of product development and regulatory agency review.
The European Union and member countries, as well as governmental authorities in other countries, impose similar strict restrictions on the promotion and marketing of drug products. The off-label promotion of medicinal products is prohibited in the EU and in other territories, and the EU also maintains strict controls on advertising and promotional materials.
The off-label promotion of medicinal products is prohibited in the EU and in other territories, and the EU also maintains strict controls on advertising and promotional materials. The promotion of medicinal products that are not subject to a marketing authorization is also prohibited in the EU.
The decision to withdraw the NDA followed discussions with FDA regarding confirmatory clinical trials that we determined cannot be completed within the time period to support the investment. Also, in March 2023, we received a complete response letter for ruxolitinib extended-release (XR) tablets, which identified additional requirements for approval.
The decision to withdraw the NDA followed discussions with FDA regarding confirmatory clinical trials that we determined cannot be completed within the time period to support the investment.
Data security breaches could also result in loss of clinical trial data or damage to the integrity of that data. Malicious attacks by third parties are of ever-increasing sophistication and can be made by groups and individuals with a wide range of motives, including nation states, organized criminal groups, “hacktivists” and others acting with malicious intent.
Malicious cyber attacks are growing in frequency and sophistication, including the use of artificial intelligence, and can be made by groups and individuals with a wide range of motives, including nation states, organized criminal groups, “hacktivists” and others acting with malicious intent.
In addition, we may decide not to continue to commercialize a product if competitors develop and commercialize similar or superior products or have proprietary rights that preclude us from ultimately marketing our products. 49 Table of Contents We have limited capacity to conduct preclinical testing and clinical trials, and our resulting dependence on other parties could result in delays in and additional costs for our drug development efforts.
In addition, we may decide not to continue to commercialize a product if competitors develop and commercialize similar or superior products or have proprietary rights that preclude us from ultimately marketing our products.
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. 58 Table of Contents Changes in tax laws or regulations could adversely affect our results of operations, business and financial condition.
The occurrence of any of these business disruptions could seriously harm our operations, future revenues and financial condition and increase our costs and expenses. We have engaged CROs to conduct clinical trials outside the United States, including a limited number of trials in Ukraine and Russia.
The occurrence of any of these business disruptions could seriously harm our operations, future revenues and financial condition and increase our costs and expenses.
These regulations continue to apply after product marketing approval, and cover, among other things, testing, manufacturing, quality control and assurance, labeling, advertising, promotion, risk mitigation, and adverse event reporting requirements.
These regulations continue to apply after product marketing approval, and cover, among other things, testing, manufacturing, quality control and assurance, labeling, advertising, promotion, risk mitigation, and adverse event reporting requirements. 39 Table of Contents The commercialization of our products is subject to post-regulatory approval product surveillance, and our products may have to be withdrawn from the market or subject to restrictions if previously unknown problems occur.
In recent years, through legislative and regulatory actions and executive orders, the U.S. federal government has made substantial changes to various payment systems under the Medicare and other federal health care programs. Comprehensive reforms to the U.S. healthcare system were enacted, including changes to the methods for, and amounts of, Medicare reimbursement.
Health care reform measures could impact the pricing and profitability of pharmaceuticals, and adversely affect the commercial viability of our or our collaborators’ products and drug candidates. In recent years, through legislative and regulatory actions and executive orders, the U.S. federal government has made substantial changes to various payment systems under the Medicare and other federal health care programs.
Separately, in January 2018 the Patent Trial and Appeal Board (PTAB) of United States Patent and Trademark Office denied a petition challenging our patent covering deuterated ruxolitinib analogs and the PTAB subsequently denied the petitioner’s request for rehearing in May 2018. Nevertheless, the petitioner still has the right separately to challenge the validity of our patent in federal court.
The PTAB subsequently denied the petitioner’s request for rehearing in May 2018. Although the PTAB's decision is now final, the petitioner still has the right separately to challenge the validity of our patent in federal court.
Competitors and potential competitors for PEMAZYRE and ZYNYZ include major pharmaceutical and biotechnology companies, as well as specialty pharmaceutical firms. 42 Table of Contents Competitors for OPZELURA include existing over-the-counter topical treatments, prescription topical treatments, including generic versions, such as tacrolimus, pimecrolimus, topical steroids, and EUCRISA (crisaborole) from Pfizer Inc., as well as oral and injectable therapies such as prednisone and other oral steroids, injectable DUPIXENT (dupilimab) from Sanofi and Regeneron Pharmaceuticals, Inc., and oral CIBINQO (abrocitinib) from Pfizer Inc. and RINVOQ (upadacitinib) from AbbVie Inc.
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.
The entry of a competitive drug product from another company or a generic version of JAKAFI could result in a decrease in JAKAFI sales and materially harm our business, operating results and financial condition.
The entry of a competitive drug product from another company or a generic version of one of our products could result in a decrease in sales of our products and materially harm our business, operating results, and financial condition. 43 Table of Contents Factors similar to those listed above also apply to our collaborator Novartis for JAKAVI and TABRECTA in jurisdictions in which it has commercialization rights and to our collaborator Lilly for OLUMIANT all jurisdictions.
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. 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.

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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.
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

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also conduct clinical development and commercial operations from our European headquarters in Morges, Switzerland and our Japanese office in Tokyo. Our large molecule production facility is located in Yverdon, Switzerland. Our Canadian office is in Montreal. 63 Table of Contents
Biggest changeWe lease approximately 116,000 square feet of office space in Chadds Ford, Pennsylvania. We also conduct clinical development and commercial operations from our European headquarters in Morges, Switzerland and our Tokyo and Shanghai offices in East Asia. Our large molecule production facility is located in Yverdon, Switzerland. Our Canadian office is in Montreal.
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 544,000 square feet of laboratory and office space at this site. We lease approximately 112,000 square feet of office space in Chadds Ford, Pennsylvania.
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.
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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. The acquired office buildings are undergoing renovations and we currently expect to occupy the office buildings in 2026.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeShe 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. Stamoulis started her career as a strategy consultant at The Boston Consulting Group. Ms.
Biggest changeStamoulis 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.
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 US of Aventis Pharmaceuticals, Inc. from 2000 to 2003 and Vice President US Oncology Operations of Rhone-Poulenc Rorer Pharmaceuticals, Inc. from 1998 to 2000. Mr. Hoppenot holds a Diploma from ESSEC International Business School.
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.
Michael Morrissey , age 60, 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.
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.
Item 4. Mine Safety Disclosures Not applicable. Information about our Executive Officers Our executive officers are as follows: Hervé Hoppenot, age 64, 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: 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.
Pablo J. Cagnoni, age 60, 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.
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.
Swain , age 66, 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.
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.
Morrissey received a B.Sc. in Physics and Applied Mathematics from the University of London, United Kingdom. Christiana Stamoulis, age 53, 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. Christiana Stamoulis, age 54, joined Incyte in February 2019 as Executive Vice President and Chief Financial Officer.
Prior to joining Incyte, from May 2011 to February 2015, he was the Senior Vice President, US Clinical Development & Medical Affairs at Novartis Pharmaceuticals. From February 2004 to April 2011, Dr. Stein was the Vice President, Global Oncology, Clinical Development and the Head of Medicines Development for Hematology and Supportive Care for GlaxoSmithKline. Dr.
Prior to joining Incyte, from May 2011 to February 2015, he was the Senior Vice President, U.S. Clinical Development & Medical Affairs at Novartis Pharmaceuticals. From February 2004 to April 2011, Dr. Stein was the Vice President, Global Oncology, Clinical Development and the Head of Medicines Development for Hematology and Supportive Care for GlaxoSmithKline. Dr.
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. 65 Table of Contents Steven Stein, age 57, 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.
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.
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. Sheila Denton , age 58, 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. 65 Table of Contents Sheila Denton , age 59, joined Incyte in October 2023 as Executive Vice President, General Counsel and Corporate Secretary.
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. 66 Table of Contents PART II
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.
Vijay Iyengar , age 51, 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. 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.
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. From January 2014 until she joined Unum, Ms. Stamoulis was an independent advisor to biopharmaceutical companies. From 2009 until December 2013, Ms.
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.
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. 64 Table of Contents Jonathan E.
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.
Removed
Dickinson , age 56, has served as Executive Vice President and General Manager, Europe, since June 2019 and joined Incyte as Senior Vice President and General Manager, Europe in June 2016. Mr.
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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.
Removed
Dickinson joined Incyte from ARIAD Pharmaceuticals (Luxembourg) S.à.r.l, the parent company of ARIAD Pharmaceuticals, Inc.’s European subsidiaries responsible for the development and commercialization of ICLUSIG in the European Union and other countries, where he most recently held the position of Senior Vice President and General Manager, Europe. Prior to joining ARIAD in February 2013, Mr.
Added
From October 2013 to January 2020, he held senior roles at Celgene Corporation, a biopharmaceutical company, most recently as President of Worldwide Markets, Inflammation & Immunology. Earlier in his career, Mr. Heeson held leadership positions at Galderma and Schering-Plough. Mr. Heeson holds a B.A., with honors, from Sheffield Hallam University.
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Dickinson served as European oncology brand lead at Bristol-Myers Squibb, a pharmaceutical company, and before that, he held several key leadership positions, including lifecycle leader, during his 13-year tenure at Hoffmann-La Roche, a pharmaceutical company. At Roche, he had assignments both in the United States and Switzerland that included leadership roles for Roche’s three leading oncology medicines. Mr.
Added
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.
Removed
Dickinson began his career at Novartis, where he held commercial roles in its oncology and endocrinology businesses, including medical sales, product manager and business director in the United Kingdom. Mr. Dickinson received a B.S. in Genetics and an M.B.A. from the University of Nottingham. Barry P.
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Immunology, Neuroscience and Oncology businesses, most recently as Senior Vice President, US Immunology of Janssen Pharmaceuticals. Earlier in his career, he was co-founder and CEO of a consumer healthcare company and held various roles in sales, brand management and strategy in biopharmaceuticals. Dr. Issa holds a Pharm.D. from St.
Removed
Flannelly , age 66, has served as Executive Vice President and General Manager, North America since June 2015 and joined Incyte as Executive Vice President, Business Development and Strategic Planning in August 2014. Prior to joining Incyte, he served as Chief Executive Officer of OSS Healthcare Inc., a biotechnology start-up company, from August 2013 to July 2014.
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Stamoulis started her career as a strategy consultant at The Boston Consulting Group. Ms.
Removed
He served as Vice President, Global Product Strategy and Commercial Planning of Nektar Therapeutics, a biopharmaceutical company, from April 2011 until April 2013, and as Senior Vice President, Commercial, of Onyx Pharmaceuticals, Inc., a biopharmaceutical company, from August 2008 until January 2011. Prior thereto, Dr.
Added
Matteo 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.
Removed
Flannelly held key positions at biopharmaceutical and pharmaceutical companies such as Abraxis BioScience, Inc. and Novartis. Dr. Flannelly earned his doctorate in pharmacy from the University of Maryland, School of Pharmacy, his master’s degree in business administration from the University of Baltimore, and his B.S. in Pharmacy from Massachusetts College of Pharmacy.
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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.
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Stamoulis was a Senior Vice President of Corporate Strategy and Business Development at Vertex Pharmaceuticals, Inc., a biopharmaceutical company. Prior to joining Vertex, Ms. Stamoulis spent nearly 15 years in the investment banking and management consulting industries.
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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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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, 2023, our common stock was held by 112 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, 2024, our common stock was held by 107 stockholders of record.

Item 7. Management's Discussion & Analysis

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

56 edited+14 added−12 removed56 unchanged
Biggest changeThe loss on change in fair value of the contingent consideration during the years ended December 31, 2023 and 2022 was due primarily to fluctuations in foreign currency exchange rates impacting future revenue projections of ICLUSIG and the passage of time.
Biggest changeThe 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.
During 2023, net cash used in investing activities was $207.7 million, which represents purchases of marketable securities of $456.0 million, payments for intangible assets of $15.0 million, capital expenditures of $32.5 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.
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.
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.
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.
Salary and benefits related expense increased from 2022 to 2023 due primarily to increased development 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 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.
A discussion of our financial performance for the year ended December 31, 2023 as compared to the year ended December 31, 2022 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, 2022 compared to the year ended December 31, 2021 can be found under the same captions in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 7, 2023, 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, 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 .
The stock compensation process requires significant judgment and the use of estimates, particularly surrounding Black-Scholes assumptions such as stock price volatility over the option term and expected option lives, as well as expected forfeiture rates and the probability of PSUs vesting.
The stock compensation process requires the use of estimates, particularly surrounding Black-Scholes assumptions such as stock price volatility over the option term and expected option lives, as well as expected forfeiture rates and the probability of PSUs vesting.
If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. 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. 69 Table of Contents Chargebacks: Chargebacks are discounts that occur when certain indirect contracted customers purchase directly from our wholesalers at a discounted price.
Any interest and penalties on uncertain tax positions are included within the tax provision. 70 Table of Contents We record estimates and prepare and file tax returns in various jurisdictions across the United States, Canada, Europe, and Asia based upon our interpretation of local tax laws and regulations.
Any interest and penalties on uncertain tax positions are included within the tax provision. We record estimates and prepare and file tax returns in various jurisdictions across the United States, Canada, Europe, and Asia based upon our interpretation of local tax laws and regulations.
For the year ended December 31, 2023 and 2022, our 50% share of the costs for tafasitamab was $2.0 million and $8.0 million, respectively, as recorded in (profit) and loss sharing under collaboration agreements on the consolidated statement of operations.
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.
During 2023, net cash used in financing activities was $20.0 million, and in 2022, net cash used in financing activities was $0.8 million, respectively, 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 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.
At December 31, 2023, we had available cash, cash equivalents and marketable securities of $3.7 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.
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.
For the years ending December 31, 2023 and 2022, our Black-Scholes assumptions included a weighted-average stock price volatility of 32% in 2023 and 36% in 2022, average expected option life of approximately five years and an estimated annualized forfeiture rate of 5%.
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%.
As of December 31, 2023, we have accrued approximately $59.5 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, 2023, is approximately 6.5%.
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%.
Increases in certain government reimbursement rates are limited to a measure of inflation, and when the price of a drug increases faster than this measure of inflation it will result in a penalty adjustment factor that causes a larger sales allowance to those government related entities.
Increases in certain U.S. government reimbursement rates are limited to a measure of inflation, and when the price of a drug increases faster than this measure of inflation it will result in a penalty adjustment factor th at causes a larger sales allowance to those government related entities.
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. 72 Table of Contents Our milestone and contract revenues were $7.0 million and $165.0 million for the years ended December 31, 2023 and 2022, respectively.
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.
The change in fair value of the acquisition-related contingent consideration for the years ended December 31, 2023 and 2022 was expense of $29.2 million and $12.1 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, 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.
Cost of Product Revenues For the Year Ended December 31, 2023 2022 (in millions) Product costs $ 89.2 $ 57.1 Salary and benefits related 11.9 9.5 Stock compensation 3.1 2.7 Royalty expense 128.2 116.2 Amortization of definite-lived intangible assets 22.6 21.5 Total cost of product revenues $ 255.0 $ 207.0 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.
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.
Cash provided by operating activities. The decrease in cash provided by operating activities from 2022 to 2023 was due primarily to changes in working capital. 75 Table of Contents Cash used in investing activities. Our investing activities, other than purchases, sales and maturities of marketable securities, have consisted predominantly of capital expenditures and purchases of long term investments.
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.
The average risk-free interest rate assumption used in the Black-Scholes valuations increased from 2.14% in 2022 to 4.01% in 2023. 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 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.
As of December 31, 2023, we had no outstanding borrowings and were in compliance with all covenants under this facility. The amendment to the credit facility is discussed further in Note 16 of Notes to the Consolidated Financial Statements.
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.
Our effective tax rates for 2023 and 2022 were higher than the U.S. statutory rate primarily due to foreign losses with no associated tax benefit (i.e., full valuation allowance) and an increase in our valuation allowance against certain U.S. federal and state deferred tax assets.
Our effective tax rate for 2023 was higher than the U.S. statutory rate primarily due to foreign losses with no associated tax benefit and an increase in our valuation allowance against certain U.S. federal and state deferred tax assets.
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. In August 2021, we entered into a $500.0 million, three-year senior unsecured revolving credit facility, which was subsequently amended in May 2023.
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”).
As of December 31, 2023, a 5% change in our sales allowance and accruals would have had an approximate $64.3 million impact on our income before taxes. 68 Table of Contents Customer Credits: Our customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts.
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.
We also assess collectability based primarily on the customer’s payment history and on the creditworthiness of the customer. Product Revenues Our product revenues consist of sales of JAKAFI, OPZELURA, ICLUSIG, PEMAZYRE, MINJUVI, and ZYNYZ. Product revenues are recognized once we satisfy the performance obligation at a point in time under the revenue recognition criteria as described above.
We also assess collectability based primarily on the customer’s payment history and on the creditworthiness of the customer. Product Revenues Product revenues are recognized once we satisfy the performance obligation at a point in time under the revenue recognition criteria as described above.
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.
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.
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 office in Tokyo and our Canadian headquarters in Montreal.
Unrealized gains and losses on long term investments will fluctuate from period to period, based on the change in fair value of the securities we hold in our publicly held collaboration partners.
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.
As a result of releasing the valuation allowance on the majority of our U.S. deferred tax assets in 2021, 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.
We expect our sales allowances to fluctuate from quarter to quarter as a result of the Medicare Part D Coverage Gap, 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.
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.
Rebates are 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’ unpaid rebates.
Our estimates for expected utilization of commercial insurance rebates are based on data received from our customers. Rebates are 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’ unpaid rebates.
Results of Operations Years Ended December 31, 2023 and 2022 We recorded net income for the years ended December 31, 2023 and 2022 of $597.6 million and $340.7 million, respectively. 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.
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.
Liquidity and Capital Resources 2023 2022 (in millions) December 31: Cash, cash equivalents, and marketable securities $ 3,656.0 $ 3,239.0 Working capital $ 3,405.0 $ 2,935.8 Year ended December 31: Cash provided by (used in): Operating activities $ 496.5 $ 969.9 Investing activities $ (207.7) $ (78.5) Financing activities $ (20.0) $ (0.8) Capital expenditures (included in investing activities above) $ (32.5) $ (77.8) Sources and Uses of Cash.
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.
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) and OPZELURA (ruxolitinib) cream, as well as MINJUVI (tafasitamab) and MONJUVI (tafasitamab-cxix), which prior to our February 2024 acquisition of global rights to tafasitamab, were co-commercialized, and ZYNYZ (retifanlimab-dlwr).
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.
Selling, general and administrative expenses For the Year Ended December 31, 2023 2022 (in millions) Salary and benefits related $ 300.1 $ 269.1 Stock compensation 86.1 73.2 Other contract services and outside costs 775.1 659.8 Total selling, general and administrative expenses $ 1,161.3 $ 1,002.1 Salary and benefits related expense increased from 2022 to 2023 due primarily to increased headcount.
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.
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. Product revenues are recorded net of sales allowances.
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.
Operating Expenses Research and development expenses For the Year Ended December 31, 2023 2022 (in millions) Salary and benefits related $ 399.1 $ 345.6 Stock compensation 126.7 112.5 Clinical research and outside services 936.7 978.9 Occupancy and all other costs 165.1 148.9 Total research and development expenses $ 1,627.6 $ 1,585.9 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, 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.
Research and development expenses for the years ended December 31, 2023 and 2022 were net of $49.1 million and $52.2 million, respectively, of costs reimbursed by our collaborative partners. 73 Table of Contents In addition to one-time expenses resulting from upfront fees in connection with the entry into any new or amended collaboration agreements and payment of milestones under those agreements, research and development expenses may fluctuate from period to period depending upon the stage of certain projects and the level of pre-clinical and clinical trial related activities.
In addition to one-time expenses resulting from upfront fees in connection with the entry into any new or amended collaboration agreements and payment of milestones under those agreements, research and development expenses may fluctuate from period to period depending upon the stage of certain projects and the level of pre-clinical and clinical trial related activities.
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.
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.
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 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.
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. 69 Table of Contents Milestone and Contract Revenues At the inception of a contract, we determine the transaction price, in addition to any upfront payment, by estimating the amount of variable consideration, including milestone payments, at the outset of the contract utilizing the most likely amount method.
Milestone and Contract Revenues At the inception of a contract, we determine the transaction price, in addition to any upfront payment, by estimating the amount of variable consideration, including milestone payments, at the outset of the contract utilizing the most likely amount method.
Revenues For the Year Ended, December 31, 2023 2022 (in millions) JAKAFI revenues, net $ 2,593.7 $ 2,409.2 OPZELURA revenues, net 337.9 128.7 ICLUSIG revenues, net 111.6 105.8 PEMAZYRE revenues, net 83.6 83.5 MINJUVI revenues, net 37.1 19.7 ZYNYZ revenues, net 1.3 — Total product revenues, net 3,165.2 2,746.9 JAKAVI product royalty revenues 367.6 331.6 OLUMIANT product royalty revenues 136.1 134.5 TABRECTA product royalty revenues 17.8 15.4 PEMAZYRE product royalty revenues 1.9 1.2 Total product royalty revenues 523.4 482.7 Milestone and contract revenues 7.0 165.0 Total revenues $ 3,695.6 $ 3,394.6 The increase in JAKAFI product revenues from 2022 to 2023 was comprised of a volume increase of $135.3 million and a price increase of $49.2 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.
Research and development expenses include upfront and milestone expenses related to our collaborative agreements and the asset acquisition of Villaris in 2022, which were $36.7 million and $126.0 million for the years ended December 31, 2023 and 2022, respectively.
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.
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. We exercise judgment in determining whether the information provided is sufficiently reliable for us to base our royalty revenue recognition thereon.
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.
During the year ended December 31, 2022, our milestone and contract revenues were derived from total regulatory milestones achieved of $135.0 million, in addition to a $30.0 million upfront payment received upon our transfer of functional intellectual property to one of our collaboration partners.
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.
Cost of product revenues increased from 2022 to 2023 due primarily to growth in net product revenues and inventory reserves for obsolescence.
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 following table provides a summary of those unrealized gains and (losses): For the Years Ended, December 31, 2023 2022 (in millions) Agenus $ (18.9) $ (9.9) Calithera (0.2) (0.9) Merus 45.2 (58.0) MorphoSys 22.9 (21.2) Syndax (5.5) 5.1 Syros 0.4 (2.7) Total unrealized gain (loss) on long term investments $ 43.9 $ (87.6) Provision for income taxes.
The 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.
Interest income and other, net, for the years ended December 31, 2023 and 2022 was $172.3 million and $39.9 million, respectively.
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.
During 2022, net cash used in investing activities was $78.5 million, which represents purchases of marketable securities of $79.9 million, capital expenditures of $77.8 million, offset in part by the sale and maturity of marketable securities of $79.2 million. Cash used in financing activities.
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.
We accrue a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. During the fourth quarter of 2021 and fiscal year 2022, we also offered a full buy-down program to non-covered patients of OPZELURA as we were obtaining commercial insurance coverage for OPZELURA.
We accrue a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. Product Royalty Revenues Royalty revenues on commercial sales for JAKAVI and TABRECTA by Novartis are estimated based on information provided by Novartis.
The decrease in clinical research and outside services expense from 2022 to 2023 was primarily due to a decrease in one-time collaboration related expenses. The increase in total research and development expense from 2022 to 2023 was primarily due to continued investment in our late stage development assets.
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.
(Profit) and loss sharing under collaboration agreements Under the now terminated collaboration and license agreement with MorphoSys, which was executed in March 2020, we and MorphoSys were both responsible for the commercialization efforts of tafasitamab in the United States and will share equally the profits and losses from the co-commercialization efforts.
Under the collaboration agreement with Syndax, as described further in Note 7 of the Notes to the Consolidated Financial Statements, we and Syndax are both responsible for the co-commercialization of axatilimab in the United States and share equally in the profits and losses from those efforts.
The other therapeutic area is Inflammation and Autoimmunity (IAI), which includes our Dermatology commercial franchise. We are also eligible to receive milestones and royalties on molecules discovered by us and licensed to third parties. Our global headquarters is located in Wilmington, Delaware, where we conduct discovery, clinical development and commercial operations.
We are also eligible to receive milestones and royalties on molecules discovered by us and licensed to third parties.
Our revenue recognition policies require estimates of the aforementioned sales allowances each period. 71 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, 2023 Discounts and Distribution Fees Government Rebates and Chargebacks Co-Pay Assistance and Other Discounts Product Returns Total Balance at January 1, 2023 $ 25,316 $ 148,465 $ 25,580 $ 6,366 $ 205,727 Allowances for current period sales 132,062 994,597 136,745 11,986 1,275,390 Allowances for prior period sales (729) 5,338 3,314 3,033 10,956 Credits/payments for current period sales (114,055) (811,357) (135,550) — (1,060,962) Credits/payments for prior period sales (22,115) (95,108) (17,073) (10,364) (144,660) Balance at December 31, 2023 $ 20,479 $ 241,935 $ 13,016 $ 11,021 $ 286,451 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. 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.
The increase in OPZELURA net product revenues from 2022 to 2023 was driven by growth in patient demand, refills and expansion in payer coverage as the launch in atopic dermatitis and vitiligo continues.
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.
Our effective tax rate of 28.4% for the year ended December 31, 2023 decreased as compared to 35.6% for the prior year period primarily due to the dilution of the rate impact of foreign losses with no associated tax benefit, an increase in the tax rate benefits associated with research and development and orphan drug tax credits and a decrease in certain non-deductible expenses.
Provision for income taxes The provision for income taxes for the years ended December 31, 2024 and 2023 was $284.0 million and $236.6 million, respectively. 76 Table of Contents Our effective tax rate of 89.7% for the year ended December 31, 2024 increased as compared to 28.4% for the prior year primarily due to non-deductible charges of $710.9 million associated with the Escient acquisition.
The increase in interest income and other, net primarily relates to an increase in interest earned on our cash equivalents and marketable securities generally due to higher interest rates. 74 Table of Contents Unrealized gain (loss) on long term investments.
The decrease in Interest income for the year ended December 31, 2024 primarily relates to a decrease in interest earned on our cash equivalents and marketable securities generally due to lower cash equivalent and marketable securities balance in the second half of 2024 as compared to the corresponding period in 2023.
Removed
We are focused in two therapeutic areas that are defined by the indications of our approved medicines and the diseases for which our clinical candidates are being developed. One therapeutic area is Hematology/Oncology, which comprises Myeloproliferative Neoplasms (MPNs), Graft-Versus-Host Disease (GVHD), solid tumors and hematologic malignancies.
Added
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).
Removed
See Part I, Item 1A of this report, “Risk Factors” for a further discussion of certain factors that could impact our future product revenues. 67 Table of Contents Regulatory Achievements In March 2023, under our collaboration agreement with MacroGenics, we received FDA approval of ZYNYZ for the treatment of adults with Merkel cell carcinoma.
Added
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.
Removed
In April 2023, the European Commission granted a marketing authorization for OPZELURA(ruxolitinib) cream 15mg/g for the treatment of non-segmental vitiligo with facial involvement in adults and adolescents from 12 years of age. In September 2023, under our collaboration agreement with Novartis, we received the regulatory approval of JAKAVI (ruxolitinib) in GVHD by the Japanese Ministry of Health, Labour and Welfare.
Added
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.
Removed
In December 2023, the BLA was submitted for axatilimab in chronic graft-versus-host disease for the treatment of patients with chronic GVHD after failure of two or more lines of systemic therapy.
Added
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).
Removed
In the fourth quarter of 2021 and fiscal year 2022 for non-covered patients of OPZELURA, we offered a full buy-down program as we were in the process of obtaining commercial insurance coverage for OPZELURA. During 2022, we contracted with the three largest group purchasing organizations to obtain coverage for OPZELURA.
Added
Product revenues are recorded net of estimated product returns, pricing discounts including rebates offered pursuant to mandatory federal and state government programs and chargebacks, prompt pay discounts and distribution fees and co-pay assistance.
Removed
All full buy-down programs for OPZELURA ended effective January 31, 2023. Our estimates for expected utilization of commercial insurance rebates are based on data received from our customers.
Added
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.
Removed
All full buy-down programs for OPZELURA ended effective January 31, 2023. Product Royalty Revenues Royalty revenues on commercial sales for JAKAVI and TABRECTA by Novartis are estimated based on information provided by Novartis. Royalty revenues on commercial sales for OLUMIANT by Lilly are estimated based on information provided by Lilly.
Added
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.
Removed
On a per share basis, basic net income was $1.53 and diluted net income was $1.52 for the year ended December 31, 2022.
Added
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.
Removed
The increase in OLUMIANT product royalty revenues for the year ended December 31, 2023 as compared to the corresponding period in 2022 includes unfavorable changes in foreign currency exchange rates.
Added
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.
Removed
The increase in other contract services and outside costs was primarily due to expenses related to promotional activities to support the launch of OPZELURA for the treatment of vitiligo.
Added
We are the principal in the U.S. axatilimab co-commercialization efforts and will record 100% of all product revenues and associated costs in accordance with our profit sharing from co-commercialization activities accounting policy outlined in Note 1 of the Notes to the Consolidated Financial Statements.
Removed
In February 2024, we entered into a purchase agreement with MorphoSys, as a result of which we now hold exclusive global rights for tafasitamab. See Note 18 of Notes to the Consolidated Financial Statements for further information relating to this agreement. Interest income and other, net Interest income and other, net.
Added
For the year ended December 31, 2024, there were no revenues from sales of axatilimab, however, there was $22.4 million of expense incurred in connection with the co-commercialization efforts, 50% of which is recorded as selling, marketing and administrative expense in our consolidated statement of operations.
Removed
The provision for income taxes for the years ended December 31, 2023 and 2022 was $236.6 million and $188.5 million, respectively.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed1 unchanged
Biggest changeAs of December 31, 2023, marketable securities were $442.7 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, 2023, the decline in fair value would not be material. 76 Table of Contents
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

Other INCY 10-K year-over-year comparisons