Incyte Downgraded After Graft vs. Host Disease Drug Fails Trial

Incyte is cut to neutral from buy at Mizuho Securities USA after a Phase 3 trial of the biotech company's treatment for graft vs. host disease didn't meet its primary endpoint.
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Incyte  (INCY) - Get Report was cut to neutral from buy at Mizuho Securities USA following the failure of a promising drug from the biotech company.

Analyst Mara Goldstein also set the price target on Incyte shares to $79, implying a drop of 8.1% from the stock's closing price Thursday of $85.97.

The average price target on Wall Street for Incyte is $92.65, according to Bloomberg.

Incyte fell 11.68% to $75.93 in trading Friday after a Phase 3 trial of the biotech company's treatment for graft vs. host disease didn't meet its primary endpoint.

Incyte's GRAVITAS-301 study evaluated itacitinib in combination with corticosteroids to treat acute graft vs. host disease. In GvHD, donated bone marrow or peripheral blood stem cells view the recipient's body as foreign, and the donated cells/bone marrow attack the body, according to Cleveland Clinic.

The treatment, Incyte said, vs. placebo "was not statistically significant."

“The result of this study is disappointing. However, we remain committed to building on the success of the REACH program for ruxolitinib, which showed positive results in steroid refractory acute GVHD. Additionally we will continue to study the role of JAK inhibition in chronic GVHD and in the prophylactic setting, as we seek to develop treatments for patients with this debilitating and often fatal disease,” said Dr. Steven Stein, chief medical officer at Incyte. 

Itacitinib "is a novel and selective JAK1 inhibitor currently in clinical studies for the first-line treatment of patients with acute and chronic GVHD," Incyte said on its website.

Piper Jaffray analyst Tyler Van Buren said while the failure of Gravitas-301 was “surprising," the selloff was an overreaction that creates a buying opportunity.