Incyte Corporation Experimental Station Route 141 & Henry Clay Road / Building E336 Wilmington, Delaware 19880 302.498.6700 www.incyte.com I N C Y T E 2 0 1 0 A N N U A L R E P O R T THE DRIVE TO DISCOVER. THE EXPERIENCE TO DELIVER. t r o p e R l a u n n A 0 1 0 2 Incyte developed ruxolitinib internally, advanced the compound through the clinic, and is prepared to make a difference in the lives of patients who suffer from myelofibrosis. BOARD OF DIRECTORS EXECUTIVE MANA GEMEN T STOCKHOLDER IN FORMATION Market Information Incyte’s Common Stock trades on The Nasdaq Global Market under the symbol INCY. Investor Relations You can obtain recent press releases and other publicly available information on Incyte by visiting our web site at www.incyte.com. Contact Pamela Murphy Vice President, Investor Relations and Corporate Communications Email: pmurphy@incyte.com Corporate Headquarters Incyte Corporation Experimental Station Route 141 & Henry Clay Road Building E336 Wilmington, Delaware 19880 302.498.6700 © 2011 Incyte Corporation. All rights reserved. Transfer Agent and Registrar BNY Mellon Shareowner Services PO Box 358015 Pittsburgh, PA 15252-8015 or 480 Washington Boulevard Jersey City, NJ 07310-1900 Phone: 800.851.9677 TDD for Hearing Impaired: 800.231.5469 Foreign Shareowners: 201.680.6578 TDD Foreign Shareowners: 201.680.6610 www.bnymellon.com/ shareowner/equityaccess Annual Meeting The Annual Meeting of Stockholders will be held May 20, 2011, at 10:00 a.m., Eastern Daylight Time, at the Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801. Outside Counsel Pillsbury Winthrop Shaw Pittman LLP Independent Registered Public Accounting Firm Ernst & Young LLP Richard U. De Schutter Chairman of the Board Formerly Chairman and Chief Executive Officer DuPont Pharmaceuticals Company Paul A. Friedman, M.D. President and Chief Executive Officer Incyte Corporation Barry M. Ariko Formerly President, Chief Executive Officer and Chairman Mirapoint, Inc. Julian C. Baker Managing Member Baker Bros. Advisors, LLC Paul A. Friedman, M.D. President and Chief Executive Officer Patricia S. Andrews Executive Vice President and Chief Commercial Officer David C. Hastings Executive Vice President and Chief Financial Officer Reid M. Huber, Ph.D. Senior Vice President, Discovery Biology Richard S. Levy, M.D. Executive Vice President and Chief Drug Development and Medical Officer Paul A. Brooke Founder and Managing Director venBio LLC Brian W. Metcalf, Ph.D. Executive Vice President and Chief Drug Discovery Scientist Patricia A. Schreck Executive Vice President and General Counsel Paula J. Swain Executive Vice President, Human Resources Wenqing Yao, Ph.D. Senior Vice President, Discovery Chemistry Wendy L. Dixon, Ph.D. Formerly Chief Marketing Officer and President, Global Marketing Bristol-Myers Squibb Company John F. Niblack, Ph.D. Formerly Vice Chairman and President of Global Research and Development Pfizer Inc. Roy A. Whitfield Formerly Chairman of the Board and Chief Executive Officer Incyte Corporation FORWARD-LOOKING STATEMENTS Except for the historical information set forth herein, the matters set forth in this annual report, including statements regarding our planned NDA submission and potential commercialization of ruxolitinib, anticipated future success in drug discovery and development, plans and expected timelines for advancing our drug candidates through clinical trials, NDA submission and potential commercialization, including our objectives and agenda for 2011, and potential therapeutic and commercial value, including attributes and indications of our drug candidates, contain predictions, estimates and other forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the risk that results of clinical trials may be unsuccessful or insufficient to meet applicable regulatory standards, the high degree of risk and uncertainty associated with drug development and clinical trials, the uncertainty associated with the regulatory approval processes, risks related to the timing of and patient enrollment in clinical trials, unanticipated developments in and risks related to the efficacy or safety of our compounds in clinical trials, the results of further research and development, risks associated with our dependence on our relationships with our collaboration partners, risks related to market competition, and the other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2010. Incyte disclaims any intent or obligation to update these forward-looking statements. To Our Stockholders: The achievement of key clinical and financial goals in 2010 has positioned us for a very promising and eventful 2011. We are preparing a New Drug Application (NDA) for ruxolitinib (INCB18424) for myelofibrosis (MF) and look to our first potential launch in the United States later this year. This NDA could result in the approval of the first JAK inhibitor drug to treat MF, which makes our discovery of this compound even more satisfying. An approval would also represent an important and significant event for the MF community as this disease is life-shortening and can be profoundly disabling, placing a tremendous burden on the patients. SUBSTANTIAL PROGRESS a variety of sales and marketing approaches The success we expect in 2011 is supported to reach the hematologists and oncologists by the substantial progress we achieved in the who treat MF in the United States as rapidly, clinic. Last December we reported statistically effectively and efficiently as possible. significant results for ruxolitinib versus placebo in our Phase III COMFORT-I trial. Then, in March of this year, we announced that the second Phase III trial, COMFORT-II, conducted in Europe by our collaborator, Novartis, achieved statistically significant results for ruxolitinib versus best available therapy. These findings were consistent with the results from our previous clinical studies and will now form the basis for the planned regulatory submissions in As a potent, selective inhibitor of the janus kinase (JAK) cell pathway, ruxolitinib may have applications in the treatment of several other cancers, which we are now exploring or planning to explore in clinical studies. In October, we and Novartis launched the global Phase III RESPONSE trial with ruxolitinib in patients with advanced polycythemia vera, another myeloproliferative neoplasm related to MF. the United States and the European Union. We plan to initiate a Phase II trial this year in SUBSTANTIAL EXPERIENCE patients with pancreatic cancer to build on encouraging results from our preclinical studies. Our commercial team has substantial experience We also have plans to study the drug in cancers with oncology, hematology and specialty such as lymphoma and solid tumors where the products and with the launch, marketing and disease may be resistant or poorly responsive to reimbursement of new drugs. They plan to use current therapies. t r o p e R l a u n n A 0 1 0 2 m o c . e t y c n i “Our achievements reflect the productivity of our R&D team and the continuing success of our drug development programs and collaborations.” Although ruxolitinib is our most advanced STRENGTHENED FINANCIAL POSITION product candidate, it is not the only promising JAK inhibitor in our pipeline. We have an exclusive worldwide license and collaboration agreement with Eli Lilly for the development of LY3009104 (INCB28050), our second JAK compound, for inflammatory and autoimmune diseases. Last year Lilly advanced this compound to Phase Importantly, we continue to be rewarded for our clinical successes and last year we earned more than $100 million in milestone payments from our collaborators, which strengthened our financial position and helped us advance our pipeline. IIb development in patients with rheumatoid DRUG DISCOVERY CONTINUES TO BEAR FRUIT arthritis based upon impressive 6-month results from our Phase IIa study. We exercised our co-development rights for this compound in 2010 and are now responsible for funding thirty percent of the associated global development costs in rheumatoid arthritis through regulatory approval in exchange for tiered royalty rates ranging up to the high twenties on potential future global sales. We believe JAK inhibition represents an important new approach to inflammatory and autoimmune diseases and we look forward to seeing this compound progress, initially in rheumatoid arthritis and potentially in other conditions. Our commitment to investing in drug discovery continues to bear fruit. We recently began a new clinical program in oncology with INCB24360, a selective, orally available inhibitor of indoleamine 2, 3-dioxygenase (IDO), an immune regulatory enzyme. Preclinical studies have shown that inhibition of this enzyme increases the anti-tumor immune response and dramatically increases the efficacy of various chemotherapeutic agents in controlling tumor growth. We are currently conducting a dose- escalation study of this compound in patients with solid tumors. Discovery: Development: Commercialization: Our pharmaceutically experienced biologists and chemists utilize an integrated approach with the development teams to generate high quality proprietary compounds to build and sustain our pipeline. Our drug development team carefully plans and conscientiously executes the clinical programs. Our studies are designed with a focus on patient safety and clinically meaningful endpoints. Based upon a deep understanding of market dynamics, our commercial team creates the strategies and materials to support the launch of a new product and sustain its growth. Our achievements reflect the productivity of our team and the continuing success of our drug ··> Completing the initial studies for our c-MET inhibitor in solid tumors and then development programs and collaborations. transferring the program to Novartis; and LOOKING AHEAD This year, we plan to focus our resources on: ··> Obtaining FDA approval of ruxolitinib; ··> Initiating Phase I testing of a novel oncology compound that we have not yet disclosed. This is an ambitious agenda and one that I am confident we have the talent and resources to ··> Successfully launching the drug in the accomplish this year. United States; ··> Completing enrollment in the global Phase III RESPONSE clinical study of ruxolitinib in polycythemia vera; In closing, I thank our employees for their hard work and disciplined efforts. I also want to recognize and thank the physicians and patients who have participated in our clinical programs ··> Initiating new studies of ruxolitinib in and aided us in the development of ruxolitinib. lymphoma and pancreatic cancer; Sincerely, ··> Determining future clinical plans for the development of our Sheddase inhibitor, INCB7839, in breast cancer; ··> Completing the Phase I study of our IDO inhibitor, INCB24360, and selecting doses for Phase II testing; Paul A. Friedman, M.D. President and Chief Executive Officer March 31, 2011 t r o p e R l a u n n A 0 1 0 2 m o c . e t y c n i Our Pipeline Incyte’s pipeline is focused in oncology and inflammation and includes multiple programs in various stages of development. We have established several collaborations with major pharmaceutical companies to advance the clinical development and global commercialization of our compounds. This year, we plan to submit a new drug application for our lead compound in myelofibrosis and look to the potential U.S. approval of ruxolitinib. Discovery/ Preclinical Phase I Phase II Phase III Market Myelofibrosis ruxolitinib1,4 – JAK Polycythemia vera ruxolitinib1,4 – JAK Essential thrombocythemia ruxolitinib1,4 – JAK Breast cancer INCB7839 – Sheddase Solid/hematologic tumors ruxolitinib1,4 – JAK Solid tumors INCB28060 2 – c-MET Solid tumors INCB24360 – IDO Other programs Rheumatoid arthritis LY30091043,5 – JAK Psoriasis INCB18424 – JAK (topical) Other programs ONCOLOGY INFLAMMATION 1 Incyte: U.S. rights; Novartis: ex U.S. rights 2 Novartis: worldwide rights 3 Lilly: worldwide rights 4 Formerly INCB18424 5 Formerly INCB28050 Incyte developed ruxolitinib internally, advanced the compound through the clinic, and is prepared to make a difference in the lives of patients who suffer from myelofibrosis. BOARD OF DIRECTORS EXECUTIVE MANA GEMEN T STOCKHOLDER IN FORMATION Market Information Incyte’s Common Stock trades on The Nasdaq Global Market under the symbol INCY. Investor Relations You can obtain recent press releases and other publicly available information on Incyte by visiting our web site at www.incyte.com. Contact Pamela Murphy Vice President, Investor Relations and Corporate Communications Email: pmurphy@incyte.com Corporate Headquarters Incyte Corporation Experimental Station Route 141 & Henry Clay Road Building E336 Wilmington, Delaware 19880 302.498.6700 © 2011 Incyte Corporation. All rights reserved. Transfer Agent and Registrar BNY Mellon Shareowner Services PO Box 358015 Pittsburgh, PA 15252-8015 or 480 Washington Boulevard Jersey City, NJ 07310-1900 Phone: 800.851.9677 TDD for Hearing Impaired: 800.231.5469 Foreign Shareowners: 201.680.6578 TDD Foreign Shareowners: 201.680.6610 www.bnymellon.com/ shareowner/equityaccess Annual Meeting The Annual Meeting of Stockholders will be held May 20, 2011, at 10:00 a.m., Eastern Daylight Time, at the Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801. Outside Counsel Pillsbury Winthrop Shaw Pittman LLP Independent Registered Public Accounting Firm Ernst & Young LLP Richard U. De Schutter Chairman of the Board Formerly Chairman and Chief Executive Officer DuPont Pharmaceuticals Company Paul A. Friedman, M.D. President and Chief Executive Officer Incyte Corporation Barry M. Ariko Formerly President, Chief Executive Officer and Chairman Mirapoint, Inc. Julian C. Baker Managing Member Baker Bros. Advisors, LLC Paul A. Friedman, M.D. President and Chief Executive Officer Patricia S. Andrews Executive Vice President and Chief Commercial Officer David C. Hastings Executive Vice President and Chief Financial Officer Reid M. Huber, Ph.D. Senior Vice President, Discovery Biology Richard S. Levy, M.D. Executive Vice President and Chief Drug Development and Medical Officer Paul A. Brooke Founder and Managing Director venBio LLC Brian W. Metcalf, Ph.D. Executive Vice President and Chief Drug Discovery Scientist Patricia A. Schreck Executive Vice President and General Counsel Paula J. Swain Executive Vice President, Human Resources Wenqing Yao, Ph.D. Senior Vice President, Discovery Chemistry Wendy L. Dixon, Ph.D. Formerly Chief Marketing Officer and President, Global Marketing Bristol-Myers Squibb Company John F. Niblack, Ph.D. Formerly Vice Chairman and President of Global Research and Development Pfizer Inc. Roy A. Whitfield Formerly Chairman of the Board and Chief Executive Officer Incyte Corporation FORWARD-LOOKING STATEMENTS Except for the historical information set forth herein, the matters set forth in this annual report, including statements regarding our planned NDA submission and potential commercialization of ruxolitinib, anticipated future success in drug discovery and development, plans and expected timelines for advancing our drug candidates through clinical trials, NDA submission and potential commercialization, including our objectives and agenda for 2011, and potential therapeutic and commercial value, including attributes and indications of our drug candidates, contain predictions, estimates and other forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the risk that results of clinical trials may be unsuccessful or insufficient to meet applicable regulatory standards, the high degree of risk and uncertainty associated with drug development and clinical trials, the uncertainty associated with the regulatory approval processes, risks related to the timing of and patient enrollment in clinical trials, unanticipated developments in and risks related to the efficacy or safety of our compounds in clinical trials, the results of further research and development, risks associated with our dependence on our relationships with our collaboration partners, risks related to market competition, and the other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2010. Incyte disclaims any intent or obligation to update these forward-looking statements. Incyte Corporation Experimental Station Route 141 & Henry Clay Road / Building E336 Wilmington, Delaware 19880 302.498.6700 www.incyte.com I N C Y T E 2 0 1 0 A N N U A L R E P O R T THE DRIVE TO DISCOVER. THE EXPERIENCE TO DELIVER. t r o p e R l a u n n A 0 1 0 2