Shares of Incyte INCY were down 8.62% on Monday after the announcement of data from two late-stage studies on an oral small-molecule JAK1 inhibitor, povorcitinib, for the treatment of hidradenitis suppurativa (HS).

HS, a chronic inflammatory skin condition, is characterized by painful nodules and abscesses.

While both the late studies STOP-HS1 and STOP-HS2 studies met their primary endpoint, the results lagged investor expectations, and consequently, shares declined.

Shares of Incyte have lost 7.2% in the past six months compared with the medical biomedical/genetics industry’s 9.6% decline.

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More on INCY’s Povorcitinib

Povorcitinib is an oral small-molecule JAK1 selective inhibitor currently in phase III studies for HS, vitiligo and prurigo nodularis (PN), as well as phase II trials for asthma and chronic spontaneous urticaria (CSU).

The phase III studies STOP-HS1 (NCT05620823) and STOP-HS2 (NCT05620836) are evaluating the efficacy and safety of povorcitinib in adult patients with moderate to severe HS. Both studies include a 12-week double-blind, placebo-controlled treatment period, followed by a 42-week extension period and 30-day safety follow-up.

The studies have enrolled approximately 600 patients (age ≥18 years) each with HS patients diagnosed at least three months prior to the screening visit. The patients were also required to meet certain criteria: total abscess and inflammatory nodule count (AN) count of greater or equal to five, lesions in at least two distinct anatomical areas and a documented history of inadequate response to at least a three-month course of at least one conventional systemic therapy (oral antibiotic or biologic drug) for HS, or intolerance to or a contraindication to such conventional systemic therapies.

Both studies met their primary endpoint at both tested doses (45 mg and 75 mg). Data showed a significantly higher proportion of patients treated with povorcitinib once daily (QD) compared with placebo achieved Hidradenitis Suppurativa Clinical Response (HiSCR) and a greater or equal to 50% reduction from baseline in the total AN count, with no increase from baseline in an abscess or draining tunnel count.

At week 12, data from the STOP-HS1 study showed 40.2% of patients achieved HiSCR50 compared with 29.7% at the 45mg dose and 40.6% achieved HiSCR50 compared with 29.7% at the 75mg dose.

Data from the STOP-HS2 study showed 42.3% of patients achieved HiSCR50 compared with 28.6% at the 45mg dose and 42.3% achieved HiSCR50 compared with 28.6% at the 75mg dose.

Povorcitinib demonstrated greater differential efficacy (HiSCR50) when compared with placebo within a predefined subgroup of patients previously exposed to biologics.

Among these patients, data from the STOP-HS1 study showed 34.2% of patients achieved HiSCR50 compared with 21.9% at the 45mg dose and 37.8% achieved HiSCR50 compared with 21.9% at the 75mg dose.

Data from the STOP-HS2 study showed 45% of patients achieved HiSCR50 compared with 19.5% at the 45mg dose and 40% achieved HiSCR50 compared with 19.5% at the 75mg dose.

The overall safety profile of povorcitinib is consistent with previous data.

Per INCY, the data support the planned regulatory submission of povorcitinib for the treatment of HS worldwide.

However, the results did not meet analysts’ expectations who are also skeptical about the potential role of povorcitinib given multiple biologics with higher levels of activity.

INCY Needs to Diversify Portfolio

Although the uptake of recently approved drugs has been good and a potential approval of the additional drugs should diversify its portfolio, INCY is heavily dependent on Jakafi for its top-line growth.

Incyte Corporation Stock Price, Consensus and EPS Surprise

Incyte Corporation price-consensus-eps-surprise-chart | Incyte Corporation Quote

Moreover, competition has increased for some of Jakafi’s approved indications with the FDA’s approval of GSK plc’s GSK Ojjaara for the treatment of intermediate or high-risk MF, including primary MF or secondary MF (post-polycythemia vera and post-essential thrombocythaemia), in adults with anemia.

GSK posted strong growth in Ojjaara sales in 2024 (£353 million), driven by continued uptake in the United States since its launch in the third quarter of 2023.

Jakafi is also expected to lose patent protection in a few years.

INCY’s Zacks Rank and Other Stocks to Consider

Incyte currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the biotech sector are Gilead Sciences GILD and BioMarin Pharmaceutical BMRN, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gilead Sciences

In the past 30 days, Gilead Sciences’ earnings per share (EPS) estimate for 2025 has increased from $7.80 to $7.87. During the same timeframe, the figure for 2026 has increased to $8.27 from $8.12.

GILD’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.47%.

BioMarin Pharmaceutical

In the past 30 days, estimates for BioMarin Pharmaceutical’s 2025 EPS have increased from $4.01 to $4.24. The estimate for 2026 EPS has increased to $5.38 from $5.20 during the same timeframe. BMRN’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 32.36%.

 

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This article originally published on Zacks Investment Research (zacks.com).

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