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Incyte Reports 2010 Financial Results; Provides 2011 Key Objectives And Financial Guidance

Increased selling, general and administrative expenses for the full year 2010 reflected the Company's preparation for the potential commercialization of ruxolitinib for MF.

Interest Expense

Interest expense for the quarter and full year ended December 31, 2010 was $10.6 million and $43.3 million, respectively, as compared to $12.9 million and $32.1 million for the comparable periods in 2009. Included in interest expense for the quarter and the year ended December 31, 2010, was $5.6 million and $23.4 million, respectively, of non-cash charges to amortize the discount on the Company's convertible senior notes, as compared to $5.7 and $12.7 million for the same periods in 2009. Increased interest expense for the full year 2010 is primarily attributable to the increase in coupon interest and the accretion of the discount related to our 4.75% Convertible Senior Notes.

2011 Financial Guidance

The Company expects cash use in 2011 to range from $185 million to $200 million, not including any potential milestones from its collaborative partners or proceeds from stock option exercises. This increase as compared to 2010 is primarily a result of the Company's increased investments in sales and marketing and its clinical pipeline, particularly ruxolitinib in MF, PV and additional indications, advancement of its earlier stage compounds, the portion of its clinical development costs for the ongoing Phase IIb trial with Lilly for LY3009104 for rheumatoid arthritis, and commercial preparation for the launch of ruxolitinib in MF. Excluded from this guidance is the use of restricted cash escrowed for 2011 interest payments on the Company's 4.75% Convertible Senior Notes. The Company's guidance is as follows:
  • revenues of $67 million, consisting of amortization of deferred revenue related to the Company's collaborations with Novartis and Lilly, but excluding any potential milestones received from collaborations;
  • research and development expenses of $175 - $185 million, including a non-cash expense of $18 - $20 million related to the impact of expensing employee stock options;
  • selling, general and administrative expenses of $50 - $55 million, including a non-cash expense of $10 - $12 million related to the impact of expensing employee stock options; and
  • interest expense of approximately $44 million, including a non-cash expense of $25 million related primarily to the amortization of the discount on the 4.75% Convertible Senior Notes.

Conference Call Information

Incyte will hold its fourth quarter/year-end 2010 financial results conference call this morning at 8:30 a.m. ET. To access the conference call, please dial 877-407-8037 for domestic callers or 201-689-8037 for international callers. When prompted, provide the conference identification number, 366256.

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