Why Incyte's Shares Could Soon Hit $100

Incyte  (INCY)  reported very strong third-quarter results thanks to the company's therapy for certain types of blood cancers, which is being used by more patients. Although the stock, which closed at $90 Tuesday, is down 4% in the pre-market, here's why I see the stock hitting $100.

Incyte reported third-quarter earnings of 19 cents per share, 17 cents better than the consensus. Revenue rose 43.7% to $269.5 million versus the $261.4 million estimate.

Incyte has one Food and Drug Administration-approved therapy called Jakafi (Jakavi in Europe) for the treatment of polycythemia vera and myelofibrosis. Primary myelofibrosis (MF) is a chronic blood cancer in which excessive scar tissue forms in the bone marrow and impairs its ability to produce normal blood cells.

Polycythemia vera (PV) is a rare type of blood cancer that starts in the bone marrow. This disorder causes the bone marrow to produce too many red blood cells. This causes the blood to thicken and blood clots to form. Jakafi is known as a JAK2 inhibitor. It targets the JAK2 gene mutations to prevent clotting. Jakafi is often given to patients who cannot tolerate Hydroxyurea. Hydroxyurea prevents bone marrow from creating new cells without stopping. Hydroxyurea is often the first line of defense for patients with PV.

The company also markets Iclusig, an oral treatment for chronic myeloid leukemia that was developed by Ariad Pharmaceuticals  (ARIA) . The company sells Iclusig in Europe.

Management raised full-year 2016 guidance on Jakafi product revenue to $850 million to $855 million from $825 million to $835 million. The company now expects Iclusig to produce between $25 million and $30 million in product revenue. The company will also receive a milestone payment of $40 million from Novartis  (NVS)  for its work on Jakavi in Europe.

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