What Happened?

Shares of biopharmaceutical company Incyte Corporation (NASDAQ:INCY) fell 15.2% in the pre-market session after the company released phase three trial data for a skin condition treatment, which fell below Wall Street's expectations. According to the data, the drug was effective for less than half of the participants who took it in the trials.

The shares closed the day at $62, down 8.6% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Incyte? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Incyte’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Incyte and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was about a month ago when the stock dropped 8.9% on the news that the company reported weak fourth-quarter results with full-year guidance for key products such as Jakafi and Opzelura, indicating a significant deceleration in growth. Also, earnings fell short of expectations during the quarter, suggesting profit might be under pressure. On the other hand, revenue exceeded expectations, but markets tend to focus more on the long term. Overall, this quarter could have been better.

Incyte is down 10.8% since the beginning of the year, and at $61.99 per share, it is trading 25.7% below its 52-week high of $83.38 from November 2024. Investors who bought $1,000 worth of Incyte’s shares 5 years ago would now be looking at an investment worth $880.92.

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