Incyte Annual Report 2014

FY2014 Annual Report · Incyte

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SCIENCE DRIVEN.
PATIENT FOCUSED.

2014
ANNUAL
REPORT

SHAREHOLDER LETTER

Our vision at Incyte is to become one of the leading global oncology companies. We were
founded on the premise that investment in good science and the rigorous pursuit of R&D
excellence can translate into new medicines which can positively affect patients’ lives,
and we are proud to report to you a further year of significant progress across our broad
portfolio of product candidates.

Jakafi® (ruxolitinib), our JAK1/JAK2 inhibitor is now approved for two indications in the
U.S. In December last year, the U.S. FDA approved Jakafi for patients with uncontrolled
polycythemia vera (PV), a rare blood cancer. We launched Jakafi in PV immediately, using
the same team that is already in the field across the U.S. promoting Jakafi for the treatment
of patients with intermediate or high-risk myelofibrosis.

The field of oncology continues to evolve at an incredible pace, and I believe that Incyte
is well-placed to be at the center of the ongoing transformation of cancer treatment.

In our R&D group, our goal is to maintain and extend our leading position in JAK inhibition.
Beyond the second indication for Jakafi, our leadership in the field is further evidenced by
the initiation of a series of pivotal and proof-of-concept studies of ruxolitinib in solid tumors.
Our next generation JAK1 selective inhibitors, INCB39110 and INCB52793, provide even
further potential for us to extend our competitive advantage here.

Our IDO1 inhibitor, epacadostat, provides us with a potentially exciting entrance into
immuno-oncology, which involves seeking to harness the body’s own immune system to
tackle cancer. We are moving forward quickly to recruit our proof-of-concept studies of
epacadostat in combination with PD-1 / PD-L1 immune checkpoint inhibitors, and we expect
that the global alliance that we recently signed with Agenus should give us additional
strategic flexibility within the immuno-oncology arena.

Among the targeted therapies in our portfolio we have made good progress in the development
of our two PI3Kδ inhibitors, and we have recently disclosed three new compounds in our
pipeline. We have an FGFR inhibitor that has recently entered clinical trials as well as a BRD
inhibitor and a PIM inhibitor.

The fourth segment of our portfolio contains our two partnered compounds, which, we believe,
significantly expand our opportunities. Capmatinib, with Novartis, continues to move forward in
lung and liver cancer trials, and baricitinib, with Eli Lilly and Company, has now reported positive
top line results in the first two trials within its global Phase 3 program in rheumatoid arthritis.

Continued on next page

www.incyte.com

SHAREHOLDER LETTER (cont.)

Financially, the growth of our top-line revenue continues to outpace both our R&D and SG&A
expenses. In 2014, sales of Jakavi® (ruxolitinib) grew over 50% in the U.S., and Novartis’ sales
of Jakavi have grown over 70% in ex-U.S. territories compared to 2013. We also recorded
revenue of over $100 million from milestones in 2014, and ended the year with $600 million in
cash, cash equivalents and marketable securities. This leaves us in a strong financial position as
we move into 2015. For the full year 2015, we expect U.S. sales of Jakafi to be in the range of
$525 million to $565 million, reflecting projected year-over-year growth of approximately 50%.

We achieved another corporate milestone in 2014 by moving into our new headquarters.
This iconic building, originally the John Wanamaker department store outside Wilmington,
Delaware, was completely repurposed and refurbished for us. It provides us with over 190,000
square feet of laboratory and office space, and is already fostering even greater cross-functional
interaction and integration. This is especially so between chemistry and biology, and across
discovery and development.

In January this year we announced the appointment of two new Directors. We are delighted to
welcome Jean-Jacques Bienaimé, CEO of BioMarin Pharmaceutical, Inc. and Paul J. Clancy, CFO
of Biogen to our Board, and we look forward to benefiting from their extensive and relevant
experience in building successful biotechnology companies. In addition, both Richard De Schutter
(the current Chairman of our Board of Directors) and Barry Ariko have informed us of their
decisions to retire as Directors at the upcoming Annual Meeting. We are very grateful for
their years of service to Incyte.

In closing, I want to once again thank the patients, researchers and physicians who participate
in our clinical trials for giving their time and effort to help advance new and innovative science.
I also want to thank the entire Incyte team for their efforts and success in 2014, and to you,
our stockholders, for your continued support and encouragement.

Looking ahead, I am confident that we can deliver on our vision of becoming one of the
leading global oncology companies, and that we can bring forward new medicines which
can have a profoundly positive impact on patients’ lives around the world. By doing this,
we believe we can build sustainable value for all of our key stakeholders.

Best regards,

www.incyte.com

Hervé Hoppenot
President and Chief Executive Officer

2014 ACCOMPLISHMENTS

INCYTE PORTFOLIO

MPN COMMUNITY

COMPANY INFORMATION

2014 ACCOMPLISHMENTS

JAKAFI® (RUXOLITINIB)

Myeloproliferative Neoplasms

■ Received approval from the U.S. FDA for Jakafi (ruxolitinib), a selective JAK1/JAK2 inhibitor,

for the treatment of patients with polycythemia vera (PV) who have had an inadequate response
to or are intolerant to hydroxyurea. The approval was based on the positive and statistically
significant results of the pivotal Phase III RESPONSE trial, which was conducted in collaboration
with Novartis under a Special Protocol Assessment (SPA) from the FDA.

■ Presented full results from the RESPONSE trial at the American Society of Clinical Oncology (ASCO)
Annual Meeting. This open-label randomized trial met its primary endpoint, demonstrating that
PV patients treated with Jakafi had superior hematocrit control and reductions in spleen volume
compared with best available therapy. In addition, a greater proportion of PV patients in the
ruxolitinib treatment arm achieved complete hematologic remission, which was defined as
achieving hematocrit control, and lowering platelet and white blood cell counts.

■ Expanded the product label for Jakafi for the treatment of patients with intermediate or high-risk
myelofibrosis to include Kaplan-Meier overall survival curves and additional safety and dosing
information based on three-year data from the pivotal Phase III COMFORT-I and -II trials.

Solid Tumors

■ Presented full results from the Phase II proof-of-concept RECAP trial of ruxolitinib in combination
with capecitabine in patients with metastatic pancreatic cancer at the ASCO Annual Meeting.
Results showed that ruxolitinib plus capecitabine prolonged survival over capecitabine alone in
a pre-specified subgroup of patients with high levels of C-reactive protein (CRP), a well-established
marker of systemic inflammation.

■ Initiated two double-blind, placebo-controlled pivotal Phase III trials to evaluate the safety and

efficacy of ruxolitinib in patients with advanced or metastatic pancreatic cancer with high levels
of systemic inflammation – JANUS 1, which is being conducted under an SPA, and JANUS 2.

■ Initiated three blinded Phase II proof-of-concept trials of ruxolitinib in patients with non-small
cell lung cancer, breast cancer or colorectal cancer, respectively, including patients with high
levels of systemic inflammation as assessed by CRP.

www.incyte.com

2014 ACCOMPLISHMENTS (cont.)

EXPANDING CLINICAL PORTFOLIO

INCB39110

■ Initiated multiple proof-of-concept trials of INCB39110, a selective JAK1 inhibitor, in

patients with solid tumors, selecting for patients with high levels of systemic inflammation.
We believe that JAK1-selective inhibition may lead to equivalent efficacy but with reduced
myelosuppression relative to inhibiting both JAK1 and JAK2.

INCB52793

■ Initiated a Phase I/II dose-escalation trial of INCB52793, a selective JAK1 inhibitor,

in hematology/oncology.

epacadostat (INCB24360)

■ Presented positive, preliminary results from a proof of concept study of epacadostat,

an investigational oral indoleamine 2,3-dioxygenase-1 (IDO1) inhibitor, in combination
with ipilimumab in patients with unresectable or metastatic melanoma at the
ASCO Annual Meeting.

■ Initiated four Phase I/II trials under collaboration agreements with Merck & Co.,

AstraZeneca/MedImmune, Bristol-Myers Squibb and Roche/Genentech to evaluate
the safety and efficacy of each collaboration company’s respective PD-1/PD-L1
immunotherapy checkpoint inhibitor in combination with epacadostat across
a variety of oncology indications.

barcitinib

■ Together with Incyte’s collaboration partner Lilly, reported positive top-line
results from the first of four pivotal Phase III trials of baricitinib, a JAK1
and JAK2 inhibitor. Results showed the RA-BEACON study met its primary
endpoint of improved ACR20 response compared with placebo after
12 weeks of treatment in patients with moderately-to-severely active
rheumatoid arthritis who previously failed one or more tumor necrosis
factor (TNF) inhibitors and who were taking stable doses of conventional
disease-modifying anti-rheumatic drug (cDMARD) therapy.

capmatinib

■ Incyte’s collaboration and license partner Novartis continued to conduct

a Phase II trial to evaluate capmatinib, a potent and selective c-MET
inhibitor, as monotherapy in patients with advanced c-MET positive
hepatocellular carcinoma; a Phase II trial to evaluate capmatinib in
patients with c-MET positive/EGFR-TKI-resistant non-small cell lung
cancer; and Phase I/II trials in patients with c-MET dependent
advanced solid malignancies.

INCB40093

STRONG BALANCE SHEET

■ Completed a Phase I monotherapy dose-escalation trial of INCB40093, a PI3Kδ

inhibitor, in patients with B-lymphoid malignancies, and advanced the study into the
dose-expansion phase.

■ Initiated a Phase I/II trial to evaluate INCB40093 in combination with INCB39110,

the company’s selective JAK1 inhibitor, in patients with B-cell malignancies.

■ Achieved net product revenues from sales of Jakafi of $358 million,

representing 52 percent growth over 2013.

■ Announced two milestone payments from Novartis – $60 million related
to reimbursement of Jakavi in Europe and $25 million for the approval
of Jakavi in Japan for the treatment of myelofibrosis.

■ Ended the year in a strong financial position with $600 million in cash,
cash equivalents and marketable securities, positioning Incyte well to
fund its expanding pipeline.

www.incyte.com

INCYTE PORTFOLIO

COMPOUND

TARGET

DISEASE

DISCOVERY/
PRECLINICAL

CLINICAL PROOF
OF CONCEPT

PIVOTAL

APPROVED

ONCOLOGY

Jakafi® (ruxolitinib)a

ruxolitiniba

INCB39110

JAK1/JAK2

JAK1

Myelofibrosisb

Polycythemia verac

Pancreatic cancer

Non-small cell lung cancer

Breast cancer

Colorectal cancer

Pancreatic cancer

Non-small cell lung cancer

INCB39110+INCB40093

JAK1+PI3Kδ

B-lymphoid malignancies

INCB52793

INCB50465

epacadostat

epacadostatd

epacadostate

epacadostatf

epacadostatg

capmatinibh

INCB54828

INCB54329

INFLAMMATION

baricitinibi

baricitinibj

baricitinibk

JAK1

PI3Kδ

IDO1

c-MET

FGFR

BRD

Hematology/Oncology

B-lymphoid malignancies

Metastatic melanoma

Non-small cell lung cancer

Multiple solid tumors

Solid tumors

Hepatocellular carcinoma

Non-small cell lung cancer

Solid tumors

Hematology/Oncology

JAK1/JAK2

Rheumatoid arthritis

Psoriasis

Diabetic nephropathy

JAK = Janus-associated kinase; IDO1=indoleamine 2,3-dioxygenase; PI3K= phosphatidylinositol 3-kinase; FGFR = fibroblast growth factor receptor; BRD= bromodomain

aIncyte licensed rights outside the United States to Novartis and retained US rights. bJakafi is approved for treatment of people with intermediate or high-risk myelofibrosis (MF), including primary MF, post–polycythemia vera MF,
and post–essential thrombocythemia MF. cJakafi is approved for treatment of people with polycythemia vera (PV) who have had an inadequate response to or are intolerant of hydroxyurea. dIn combination with Merck’s pembrolizumab.
eIn combination with Genentech’s MPDL3280A. fIn combination with AstraZeneca/MedImmune’s MEDI4736. gIn combination with Bristol-Myers Squibb’s nivolumab. hIncyte licensed worldwide rights to Novartis and retained codevelopment
and copromotion options. iIncyte licensed worldwide rights to Eli Lilly and Company and elected to codevelop with Lilly and retained a copromotion option. jIncyte licensed worldwide rights to Lilly and retained a copromotion option.
kIncyte licensed worldwide rights to Lilly and retained codevelopment and copromotion options.

www.incyte.com

MPN COMMUNITY

MAKING A MEANINGFUL DIFFERENCE FOR PATIENTS

At Incyte, we are committed to developing important medicines to treat cancer,
and to bringing these treatments and associated support tools to the patient
communities we serve.

Voices of MPN

Patients with myeloproliferative neoplasms (MPNs), which include myelofibrosis and
polycythemia vera, two types of rare blood cancers, face many challenges. One of the
most important things people affected by MPNs can do is connect with others who are
living with or caring for someone with an MPN.

Visit VoicesofMPN.com

IncyteCARES

The program offers patients prescription insurance verification and prior authorization
support, co-pay assistance or free drug for those who qualify, referrals to independent
non-profit organizations who may also be able to provide financial assistance,
and access to oncology nurses to support ongoing use of Jakafi.

Visit IncyteCares.com

www.incyte.com

BOARD OF DIRECTORS

EXECUTIVE MANAGEMENT

Richard U. De Schutter
Former Chairman and Chief Executive Officer
DuPont Pharmaceuticals

Barry M. Ariko
Former President, Chief Executive Officer and Chairman
Mirapoint, Inc.

Julian C. Baker
Managing Partner
Baker Brothers Investments

Jean-Jacques Bienaimé
Chief Executive Officer
BioMarin

Paul A. Brooke
Founder and Managing Director
venBio

Paul J. Clancy
Chief Financial Officer
Biogen

Wendy Dixon, Ph.D.
Former Chief Marketing Officer and
President, Global Marketing
Bristol-Myers Squibb Company

Paul A. Friedman, M.D.
Former President and Chief Executive Officer
Incyte Corporation

Hervé Hoppenot
President and Chief Executive Officer
Incyte Corporation

Hervé Hoppenot
President and Chief Executive Officer

James M. Daly, MBA
Executive Vice President, Chief Commercial Officer

Barry P. Flannelly, Pharm.D., MBA
Executive Vice President, Business Development
and Strategic Planning

David W. Gryska, MBA
Executive Vice President, Chief Financial Officer

Reid M. Huber, Ph.D.
Executive Vice President, Chief Scientific Officer

Richard S. Levy, M.D.
Executive Vice President,
Chief Drug Development Officer

Eric H. Siegel, J.D., MBA
Executive Vice President, General Counsel

Steven H. Stein, M.D.
Senior Vice President, Chief Medical Officer

Paula J. Swain
Executive Vice President, Human Resources

Wenqing Yao, Ph.D.
Executive Vice President, Discovery Medicinal
and Process Chemistry

www.incyte.com

Market Information
Incyte Common Stock trades on
The Nasdaq Global Select Market
under the symbol INCY.

Investor Relations
You can obtain recent press releases
and other publicly available information
on Incyte by visiting our website
at www.incyte.com.

Contact
Michael Booth, D.Phil
Vice President, Investor Relations
Email: mbooth@incyte.com

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855/446-2983