Incyte

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(mark one)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number: 001-12400
INCYTE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of other jurisdiction
of incorporation or organization)
94-3136539
(IRS Employer
Identification No.)
1801 Augustine Cut-Off
Wilmington, DE
(Address of principal executives offices)
19803
(zip code)
(302) 498-6700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of exchange on which registered
Common Stock, $.001 par value per share
INCY
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes ☐No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☒No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm
that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b) . ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒
The aggregate market value of Common Stock held by non-affiliates (based on the closing sale price on The Nasdaq Global Select Market on
June 28, 2024) was approximately $9.9 billion.
As of February 3, 2025 there were 193,524,350 shares of Common Stock, $.001 par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Items 10 (as to directors and Section 16(a) Beneficial Ownership Reporting Compliance), 11, 12, 13 and 14 of Part III incorporate by reference
information from the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the solicitation of
proxies for the registrant’s 2025 Annual Meeting of Stockholders to be held on June 10, 2025.

Table of Contents
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Summary Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
PART I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Item 1A.
Risk Factors
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
Item 1B.
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
Item 1C.
Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64
Item 4.
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64
Information about our Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
Item 6.
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
. . . . . . . . . . . . . . . . . . . .
78
Item 8.
Financial Statements and Supplementary Data
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121
Item 9A.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122
Item 9B.
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
124
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . .
124
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
. . . . . . . . . . . . . . . . . . . . . . .
125
Item 11.
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
125
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
125
Item 13.
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . .
126
Item 14.
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
126
PART IV
Item 15.
Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
127
Item 16.
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
131
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
132
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Forward-Looking Statements
This report contains forward-looking statements that involve risks and uncertainties. These statements
relate to future periods, future events or our future operating or financial plans or performance. Often, these
statements include the words “believe,” “expect,” “target,” “anticipate,” “intend,” “plan,” “seek,” “estimate,”
“potential,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,”
“might,” or “may,” or the negative of these terms, and other similar expressions. These forward-looking
statements include statements as to:
• the discovery, development, formulation, manufacturing and commercialization of our compounds, our
drug candidates and JAKAFI®/JAKAVI® (ruxolitinib), PEMAZYRE® (pemigatinib), ICLUSIG®
(ponatinib), MONJUVI®(tafasitamab-cxix) / MINJUVI® (tafasitamab), OPZELURA® (ruxolitinib)
cream, ZYNYZ® (retifanlimab-dlwr) and NIKTIMVOTM (axatilimab);
• our plans to further develop our operations outside of the United States;
• conducting clinical trials internally, with collaborators, or with clinical research organizations;
• our collaboration and strategic relationship strategy, and anticipated benefits and disadvantages of
entering into collaboration agreements;
• our licensing, investment and commercialization strategies, including our plans to commercialize our
drug products and drug candidates;
• the regulatory approval process, including obtaining U.S. Food and Drug Administration and other
international regulatory authorities’ approval for our products in the United States and abroad;
• the safety, effectiveness and potential benefits and indications of our drug candidates and other
compounds under development;
• the timing and size of our clinical trials; the compounds expected to enter clinical trials; timing of
clinical trial results;
• our ability to manage expansion of our drug discovery and development operations;
• future required expertise relating to clinical trials, manufacturing, sales and marketing;
• obtaining and terminating licenses to products, drug candidates or technology, or other intellectual
property rights;
• the receipt from or payments pursuant to collaboration or license agreements resulting from milestones
or royalties;
• plans to develop and commercialize products on our own;
• plans to use third-party manufacturers;
• plans for our manufacturing operations;
• expected expenses and expenditure levels; expected uses of cash; expected revenues and sources of
revenues, including milestone payments; expectations with respect to inventory;
• expectations with respect to reimbursement for our products;
• the expected impact of recent accounting pronouncements and changes in tax laws;
• expected losses; fluctuation of losses; currency translation impact associated with non-U.S. operations
and collaboration royalties;
• our profitability; the adequacy of our capital resources to continue operations;
• the need to raise additional capital;
• the costs and other financial impacts associated with resolving matters in litigation and governmental
proceedings;
• our expectations regarding competition;
1

• our investments, including anticipated expenditures, losses and expenses; and
• our patent prosecution and maintenance efforts.
These forward-looking statements reflect our current views with respect to future events, are based on
assumptions and are subject to risks and uncertainties. These risks and uncertainties could cause actual results
to differ materially from those projected and include, but are not limited to:
• our ability to successfully commercialize our drug products and drug candidates;
• our ability to obtain, or maintain at anticipated levels, coverage and reimbursement for our products
from government health administration authorities, private health insurers and other organizations;
• our ability to establish and maintain effective sales, marketing and distribution capabilities;
• the risk of reliance on other parties to manufacture our products, which could result in a short supply of
our products, increased costs, and withdrawal of regulatory approval;
• our ability to maintain regulatory approvals to market our products;
• our ability to achieve a significant market share in order to achieve or maintain profitability;
• the risk of civil or criminal penalties if we market our products in a manner that violates health care
fraud and abuse and other applicable laws, rules and regulations;
• our ability to discover, develop, formulate, manufacture and commercialize our drug candidates;
• the risk of unanticipated delays in, or discontinuations of, research and development efforts;
• the risk that previous preclinical testing or clinical trial results are not necessarily indicative of future
clinical trial results;
• risks relating to the conduct of our clinical trials, including geopolitical risks;
• changing regulatory requirements;
• the risk of adverse safety findings;
• the risk that results of our clinical trials do not support submission of a marketing approval application
for our drug candidates;
• the risk of significant delays or costs in obtaining regulatory approvals;
• risks relating to our reliance on third-party manufacturers, collaborators, and clinical research
organizations;
• risks relating to the development of new products and their use by us and our current and potential
collaborators;
• risks relating to our inability to control the development of out-licensed compounds or drug candidates;
• risks relating to our collaborators’ ability to develop and commercialize drug products and the drug
candidates licensed from us;
• costs associated with prosecuting, maintaining, defending and enforcing patent claims and other
intellectual property rights;
• our ability to maintain or obtain adequate product liability and other insurance coverage;
• the risk that our drug candidates may not obtain or maintain regulatory approval;
• the impact of technological advances and competition, including potential generic competition;
• our ability to compete against third parties with greater resources than ours;
• risks relating to changes in pricing and reimbursement in the markets in which we may compete;
• risks relating to governmental healthcare reform efforts, including efforts to control, set or cap pricing
for our commercial drugs in the U.S. and abroad;
2

• competition to develop and commercialize similar drug products;
• our ability to obtain and maintain patent protection and freedom to operate for our discoveries and to
continue to be effective in expanding our patent coverage;
• the impact of changing laws on our patent portfolio;
• developments in and expenses relating to litigation and governmental proceedings;
• our ability to in-license drug candidates or other technology;
• unanticipated delays or changes in plans or regulatory agency interactions or other issues relating to our
large molecule production facility;
• our ability to integrate successfully acquired businesses, development programs or technology;
• our ability to obtain additional capital when needed;
• fluctuations in net cash provided and used by operating, financing and investing activities;
• our ability to analyze the effects of new accounting pronouncements and apply new accounting rules;
• risks relating to our ability to sustain profitability;
• risks related to public health pandemics such as the COVID-19 pandemic, natural disasters, or
geopolitical events such as the Russian invasion of Ukraine and conflicts in the Middle East; and
• the risks set forth under “Risk Factors.”
Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.
Except as required by federal securities laws, we undertake no obligation to update any forward-looking statements
for any reason, even if new information becomes available or other events occur in the future.
In this report all references to “Incyte,” “we,” “us,” “our” or the “Company” mean Incyte Corporation
and our subsidiaries, except where it is made clear that the term means only the parent company.
Incyte, JAKAFI, MINJUVI, MONJUVI, OPZELURA, PEMAZYRE and ZYNYZ are our registered
trademarks and NIKTIMVO is our trademark. We also refer to trademarks of other corporations and
organizations in this Annual Report on Form 10-K.
3

Summary Risk Factors
Our business is subject to numerous risks and uncertainties that could affect our ability to successfully
implement our business strategy and affect our financial results. You should carefully consider all of the
information in this report and, in particular, the following principal risks and all of the other specific factors
described in Item 1A. of this report, “Risk Factors,” before deciding whether to invest in our company.
• We depend heavily on JAKAFI/JAKAVI (ruxolitinib), and if we are not able to maintain revenues
from JAKAFI/JAKAVI or those revenues decrease, our business may be materially harmed.
• If we or our collaborators are unable to obtain, or maintain at anticipated levels, coverage and
reimbursement for our products from government and other third-party payors, our results of
operations and financial condition could be harmed.
• A limited number of specialty pharmacies and wholesalers represent a significant portion of
revenues from JAKAFI and most of our other products, and the loss of, or significant reduction in
sales to, any one of these specialty pharmacies or wholesalers could harm our operations and financial
condition.
• If we are unable to establish and maintain effective sales, marketing and distribution capabilities, or
to enter into agreements with third parties to do so, we will not be able to successfully commercialize
our products.
• If we fail to comply with applicable laws and regulations, we could lose our approval to market our
products or be subject to other governmental enforcement activity.
• If the use of our products harms or is perceived to harm patients, our regulatory approvals could be
revoked or otherwise negatively impacted or we could be subject to costly product liability claims.
• If we market our products in a manner that violates various laws and regulations, we may be subject
to civil or criminal penalties.
• Competition for our products could harm our business and result in a decrease in our revenue.
• We or our collaborators may be unsuccessful in discovering and developing drug candidates, and we
may spend significant time and money attempting to do so, in particular with our later stage drug
candidates.
• If we or our collaborators are unable to obtain regulatory approval in and outside of the United
States for drug candidates, we and our collaborators will be unable to commercialize those drug
candidates.
• Health care reform measures could impact the pricing and profitability of pharmaceuticals, and
adversely affect the commercial viability of our or our collaborators’ products and drug candidates.
• Conflicts between us and our collaborators or termination of our collaboration agreements could
limit future development and commercialization of our drug candidates and harm our business.
• If we are unable to establish collaborations to fully exploit our drug discovery and development
capabilities or if future collaborations are unsuccessful, our future revenue prospects could be
diminished.
• If we fail to enter into additional in-licensing agreements or if these arrangements are unsuccessful,
we may be unable to increase our number of successfully marketed products and our revenues.
• Business disruptions, including those resulting from public health pandemics, natural disasters, and
other geopolitical events, could adversely affect our business and results of operations.
• Even if one of our drug candidates receives regulatory approval, we may determine that
commercialization would not be worth the investment.
• We have limited capacity to conduct preclinical testing and clinical trials, and our resulting dependence
on other parties could result in delays in and additional costs for our drug development efforts.
4

• Our reliance on others to manufacture our drug products and drug candidates could result in drug
supply constraints, delays in clinical trials, increased costs, and withdrawal or denial of regulatory
approvals.
• If we fail to comply with the extensive legal and regulatory requirements affecting the health care
industry, we could face increased costs, penalties and a loss of business.
• The illegal distribution and sale by third parties of counterfeit or unfit versions of our or our
collaborators’ products or stolen products could harm our business and reputation.
• As most of our drug discovery and development operations are conducted at our headquarters in
Wilmington, Delaware, the loss of access to this facility would negatively impact our business.
• If we lose any of our key employees or are unable to attract and retain additional personnel, our
business and ability to achieve our objectives could be harmed.
• If we fail to manage our growth effectively, our ability to develop and commercialize products could
suffer.
• We may acquire businesses or assets, form joint ventures or make investments in other companies
that may be unsuccessful, divert our management’s attention and harm our operating results and
prospects.
• Risks associated with our operations outside of the United States could adversely affect our
business.
• If product liability lawsuits are brought against us, we could face substantial liabilities and may be
required to limit commercialization of our products, and our results of operations could be harmed.
• Because our activities involve the use of hazardous materials, we may be subject to claims relating to
improper handling, storage or disposal of these materials that could be time consuming and costly.
• We expect to continue to incur significant expenses to discover and develop drugs, which could result
in future losses and impair our achievement of and ability to sustain profitability in the future.
• If we are unable to raise additional capital in the future when we require it, our efforts to broaden
our product portfolio or commercialization efforts could be limited.
• Our marketable securities and equity investments are subject to risks that could adversely affect our
overall financial position, and tax law changes could adversely affect our results of operations and
financial condition.
• If we are unable to achieve milestones, develop product candidates to license or renew or enter into
new collaborations, our royalty and milestone revenues and future prospects for those revenues may
decrease.
• Any arbitration or litigation involving us and regarding intellectual property infringement claims
could be costly and disrupt our drug discovery and development efforts.
• Our inability to adequately protect or enforce our proprietary information may result in loss of
revenues or otherwise reduce our ability to compete.
• If the effective term of our patents is decreased or if we need to refile some of our patent applications,
the value of our patent portfolio and the revenues we derive from it may be decreased.
• International patent protection is particularly uncertain and costly, and our involvement in opposition
proceedings may result in the expenditure of substantial sums and management resources.
• Significant disruptions of information technology systems, breaches of data security, or unauthorized
disclosures of sensitive data could harm our business and subject us to liability or reputational
damage.
• Increasing use of social media and new technology could give rise to liability, breaches of data
security, or reputational damage, which could harm our business and results of operations.
5

Item 1.
Business
Overview
Incyte is a global biopharmaceutical company engaged in the discovery, development and
commercialization of proprietary therapeutics. Our global headquarters is located in Wilmington, Delaware,
where we conduct discovery, clinical development and commercial operations. We also conduct clinical
development and commercial operations from our European headquarters in Morges, Switzerland and our
other offices across Europe, as well as our Japanese office in Tokyo and our Canadian headquarters in
Montreal.
We are focused in two therapeutic areas that are defined by the indications of our approved medicines
and the diseases for which our clinical candidates are being developed. One therapeutic area is Hematology/
Oncology, which comprises Myeloproliferative Neoplasms (MPNs), Graft-Versus-Host Disease (GVHD),
solid tumors and hematologic malignancies. The other therapeutic area is Inflammation and Autoimmunity
(IAI), which includes our Dermatology commercial franchise. We are also eligible to receive milestones
and royalties on molecules discovered by us and licensed to third parties.
Hematology and Oncology
Our hematology and oncology franchise comprises six approved products, which are JAKAFI
(ruxolitinib), MONJUVI (tafasitamab-cxix)/MINJUVI (tafasitamab), PEMAZYRE (pemigatinib),
ICLUSIG (ponatinib), ZYNYZ (retifanlimab-dlwr), and NIKTIMVO (axatilimab-csfr), as well as numerous
clinical development programs.
JAKAFI (ruxolitinib)
JAKAFI (ruxolitinib) is our first product to be approved for sale in the United States. It was approved
by the U.S. Food and Drug Administration (FDA) in November 2011 for the treatment of adults with
intermediate or high-risk myelofibrosis (MF); in December 2014 for the treatment of adults with polycythemia
vera (PV) who have had an inadequate response to or are intolerant of hydroxyurea; in May 2019 for the
treatment of steroid-refractory acute graft-versus-host disease (GVHD) in adult and pediatric patients
12 years and older; and in September 2021 for the treatment of chronic GVHD after failure of one or two lines
of systemic therapy in adult and pediatric patients 12 years and older. MF and PV are both myeloproliferative
neoplasms (MPNs), a type of rare blood cancer, and GVHD is an adverse immune response to an
allogeneic hematopoietic stem cell transplant (HSCT). Under our collaboration agreement with our
collaboration partner Novartis Pharmaceutical International Ltd., Novartis received exclusive development
and commercialization rights to ruxolitinib outside of the United States for all hematologic and oncologic
indications and sells ruxolitinib outside of the United States under the name JAKAVI.
In 2003, we initiated a research and development program to explore the inhibition of enzymes called
janus associated kinases (JAK). The JAK family is composed of four tyrosine kinases — JAK1, JAK2,
JAK3 and Tyk2 — that are involved in the signaling of a number of cytokines and growth factors. JAKs
are central to a number of biologic processes, including the formation and development of blood cells and
the regulation of immune functions. Dysregulation of the JAK-STAT signaling pathway has been associated
with a number of diseases, including myeloproliferative neoplasms, other hematological malignancies,
rheumatoid arthritis and other chronic inflammatory diseases.
We have discovered multiple potent, selective and orally bioavailable JAK inhibitors that are selective
for JAK1 or JAK1 and JAK2. JAKAFI is the most advanced compound in our JAK program. It is an oral
JAK1 and JAK2 inhibitor.
JAKAFI is marketed in the United States through our own specialty sales force and commercial team.
JAKAFI was the first FDA-approved JAK inhibitor for any indication, was the first FDA-approved product
in MF, PV and steroid-refractory acute GVHD, and was recently approved in steroid-refractory chronic
GVHD. JAKAFI remains the first-line standard of care in MF and remains the only FDA-approved product
for steroid-refractory acute GVHD. The FDA has granted JAKAFI orphan drug status for MF, PV and
GVHD.
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JAKAFI is distributed primarily through a network of specialty pharmacy providers and wholesalers
that allow for efficient delivery of the medication by mail directly to patients or direct delivery to the patient’s
pharmacy. Our distribution process uses a model that is well-established and familiar to physicians who
practice within the oncology field.
To further support appropriate use and future development of JAKAFI, our U.S. Medical Affairs
department is responsible for providing appropriate scientific and medical education and information to
physicians, preparing scientific presentations and publications, and overseeing the process for supporting
investigator sponsored trials.
In September 2023, we were notified by the Centers for Medicare and Medicaid Services (CMS) that
ruxolitinib phosphate qualified for the Small Biotech Exception.
Myelofibrosis.
MF is a rare, life-threatening condition. MF, considered the most serious of the
myeloproliferative neoplasms, can occur either as primary MF, or as secondary MF that develops in some
patients who previously had polycythemia vera or essential thrombocythemia. Based on the modern
prognostic scoring systems referred to as International Prognostic Scoring System and Dynamic International
Prognostic Scoring System, we believe intermediate and high-risk patients represent 80% to 90% of all
patients with MF in the United States and encompass patients over the age of 65, or patients who have or
have ever had any of the following: anemia, constitutional symptoms, elevated white blood cell or blast counts,
or platelet counts less than 100,000 per microliter of blood.
Most MF patients have enlarged spleens and many suffer from debilitating symptoms, including
abdominal discomfort, pruritus (itching), night sweats and cachexia (involuntary weight loss). There were
no FDA approved therapies for MF until the approval of JAKAFI.
The FDA approval was based on results from two randomized Phase 3 trials (COMFORT-I and
COMFORT-II), which demonstrated that patients treated with JAKAFI experienced significant reductions
in splenomegaly (enlarged spleen). COMFORT-I also demonstrated improvements in symptoms. The
most common hematologic adverse reactions in both trials were thrombocytopenia and anemia. These
events rarely led to discontinuation of JAKAFI treatment. The most common non-hematologic adverse
reactions were bruising, dizziness and headache.
In August 2014, the FDA approved supplemental labeling for JAKAFI to include Kaplan-Meier
overall survival curves as well as additional safety and dosing information. The overall survival information
is based on three-year data from COMFORT-I and II and shows that at three years the probability of
survival for patients treated with JAKAFI in COMFORT-I was 70% and for those patients originally
randomized to placebo it was 61%. In COMFORT-II, at three years the probability of survival for patients
treated with JAKAFI was 79% and for patients originally randomized to best available therapy it was 59%. In
December 2016, we announced an exploratory pooled analysis of data from the five-year follow-up of the
COMFORT-I and COMFORT-II trials of patients treated with JAKAFI, which further supported previously
published overall survival findings.
In September 2016, we announced that JAKAFI had been included as a recommended treatment in the
latest National Comprehensive Cancer Network (NCCN) Clinical Practice Guidelines in Oncology for
myelofibrosis, underscoring the important and long term clinical benefits seen in patients treated with
JAKAFI.
In October 2017, the FDA approved updated labeling for JAKAFI to include the addition of new patient-
reported outcome (PRO) data from the COMFORT-I study, as well as updating the warning related to
progressive multifocal leukoencephalopathy. An exploratory analysis of PRO data of patients with
myelofibrosis receiving JAKAFI showed improvement in fatigue-related symptoms at Week 24. Fatigue
response (defined as a reduction of 4.5 points or more from baseline in the PROMIS® Fatigue total score)
was reported in 35% of patients treated with JAKAFI versus 14% of the patients treated with placebo.
Polycythemia Vera.
PV is a myeloproliferative neoplasm typically characterized by elevated
hematocrit, the volume percentage of red blood cells in whole blood, which can lead to a thickening of the
blood and an increased risk of blood clots, as well as an elevated white blood cell and platelet count.
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In December 2014, the FDA approved JAKAFI for the treatment of patients with PV who have had an
inadequate response to or are intolerant of hydroxyurea. The approval of JAKAFI for PV was based on data
from the pivotal Phase 3 RESPONSE trial. In this trial, patients treated with JAKAFI demonstrated
superior hematocrit control and reductions in spleen volume compared to best available therapy. In addition,
a greater proportion of patients treated with JAKAFI achieved complete hematologic remission — which
was defined as achieving hematocrit control and lowering platelet and white blood cell counts. In the
RESPONSE trial, the most common hematologic adverse reactions (incidence > 20%) were thrombocytopenia
and anemia. The most common non-hematologic adverse events (incidence >10%) were headache,
abdominal pain, diarrhea, dizziness, fatigue, pruritus, dyspnea and muscle spasms.
In March 2016, the FDA approved supplemental labeling for JAKAFI to include additional safety data
as well as efficacy analyses from the RESPONSE trial to assess the durability of response in JAKAFI treated
patients after 80 weeks. At this time, 83% patients were still on treatment, and 76% of the responders at 32
weeks maintained their response through 80 weeks.
In June 2016, we announced data from the Phase 3 RESPONSE-2 study of JAKAFI in patients with
inadequately controlled PV that was resistant to or intolerant of hydroxyurea who did not have an enlarged
spleen. These data showed that JAKAFI was superior to best available therapy in maintaining hematocrit
control (62.2% vs. 18.7%, respectively; P<0.0001) without the need for phlebotomy.
In August 2017, we announced that JAKAFI had been included as a recommended treatment in the
latest NCCN Guidelines for patients with polycythemia vera who have had an inadequate response to first-
line therapies, such as hydroxyurea.
Graft-versus-host disease.
GVHD is a condition that can occur after an allogeneic HSCT (the transfer
of genetically dissimilar stem cells or tissue). In GVHD, the donated bone marrow or peripheral blood stem
cells view the recipient’s body as foreign and attack various tissues.
In June 2016, we announced that the FDA granted Breakthrough Therapy designation for ruxolitinib
in patients with acute GVHD. In May 2019, the FDA approved JAKAFI for the treatment of steroid-
refractory acute GVHD in adult and pediatric patients 12 years and older. The approval was based on data
from REACH1, an open-label, single-arm, multicenter study of JAKAFI in combination with corticosteroids
in patients with steroid-refractory grade II-IV acute GVHD. The overall response rate (ORR) in patients
refractory to steroids alone was 57% with a complete response (CR) rate of 31%. The most frequently
reported adverse reactions among all study participants were infections (55%) and edema (51%), and the most
common laboratory abnormalities were anemia (75%), thrombocytopenia (75%) and neutropenia (58%).
In September 2021, the FDA approved JAKAFI for the treatment of chronic GVHD after failure of
one or two lines of systemic therapy in adult and pediatric patients 12 years and older. This approval was
based on data from REACH3, a Phase 3, randomized, open-label, multicenter study of JAKAFI in
comparison to best available therapy for treatment of steroid-refractory chronic GVHD after allogeneic
stem cell transplantation. The overall response rate through Cycle 7 Day 1 was 70% for JAKAFI compared
to 57% for best available therapy. The most common hematologic adverse reactions (incidence > 35%)
were anemia and thrombocytopenia. The most common non-hematologic adverse reactions (incidence ≥
20%) were infections (pathogen not specified) and viral infection. In addition, the FDA updated labeling for
JAKAFI to include warnings of increased risk of major adverse cardiovascular events, thrombosis, and
secondary malignancies related to another JAK-inhibitor treating rheumatoid arthritis, a condition for which
JAKAFI is not indicated. In patients with MF and PV treated with JAKAFI in clinical trials, the rates of
thromboembolic events were similar in JAKAFI and control treated patients.
We have retained all development and commercialization rights to JAKAFI in the United States and
are eligible to receive development and sales milestones as well as royalties from product sales outside the
United States. We hold patents that cover the composition of matter and use of ruxolitinib and its salt. These
patents, including applicable extensions, currently expire in mid and late 2028. In December 2022, we were
granted pediatric exclusivity, which adds six months to the expiration for all ruxolitinib patents listed in FDA’s
Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) as of the date of the
grant of pediatric exclusivity.
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MONJUVI (tafasitamab-cxix) / MINJUVI (tafasitamab)
In January 2020, we and MorphoSys AG entered into a collaboration and license agreement to further
develop and commercialize MorphoSys’ proprietary anti-CD19 antibody tafasitamab (MOR208) globally.
Tafasitamab is an Fc-engineered antibody against CD19 currently in clinical development for the treatment of
B cell malignancies. Under the terms of the collaboration and license agreement, we received rights to co-
commercialize tafasitamab in the United States with MorphoSys, and exclusive development and
commercialization rights outside of the United States. As more fully described in Note 5 of Notes to the
Consolidated Financial Statements, in February 2024, we entered into a purchase agreement with MorphoSys,
and as a result, we now hold exclusive global rights for tafasitamab, and the collaboration and license
agreement was terminated.
In July 2020, we and MorphoSys announced that the FDA had approved MONJUVI (tafasitamab-
cxix), which is indicated in combination with lenalidomide for the treatment of adult patients with relapsed
or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising
from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). MONJUVI
was approved under accelerated approval based on overall response rate from the MorphoSys-sponsored
Phase 2 L-MIND study, an open label, multicenter, single arm trial of MONJUVI in combination with
lenalidomide as a treatment for adult patients with r/r DLBCL. Results from the study showed an objective
response rate (ORR) of 55% (39 out of 71 patients; primary endpoint) and a complete response (CR) rate
of 37% (26 out of 71 patients). The median duration of response (mDOR) was 21.7 months. The most
frequent serious adverse reactions were infections (26%), including pneumonia (7%) and febrile neutropenia
(6%). Updated three-year data from L-MIND were presented at the American Society of Clinical Oncology
(ASCO) 2021 and final five-year data were presented at the American Association for Cancer Research
(AACR) 2023, which showed that the MONJUVI plus lenalidomide regimen followed by MONJUVI
monotherapy provided prolonged, durable responses in adult patients with r/r DLBCL.
In August 2020, we and MorphoSys announced that MONJUVI in combination with lenalidomide
had been included in the latest NCCN Clinical Practice Guidelines in Oncology for B-cell Lymphomas.
In August 2021, we and MorphoSys announced that the European Commission had granted
conditional marketing authorization for MINJUVI (tafasitamab) in combination with lenalidomide,
followed by MINJUVI monotherapy, for the treatment of adult patients with relapsed or refractory DLBCL
who are not eligible for autologous stem cell transplant (ASCT). The conditional approval was based on
the three-year results from the L-MIND study evaluating the safety and efficacy of MINJUVI in combination
with lenalidomide as a treatment for patients with r/r DLBCL who are not eligible for ASCT. The results
showed best objective response rate (ORR) of 56.8% (primary endpoint), including a complete response (CR)
rate of 39.5% and a partial response rate (PR) of 17.3%, as assessed by an independent review committee.
The median duration of response (mDOR) was 43.9 months after a minimum follow up of 35 months
(secondary endpoint). MINJUVI together with lenalidomide was shown to provide a clinically meaningful
response and the side effects were manageable. Warnings and precautions for MINJUVI include infusion-
related reactions, myelosuppression, including neutropenia and thrombocytopenia, infections and tumour
lysis syndrome.
In December 2024, we submitted a sBLA for tafasitamab in relapsed or refractory follicular lymphoma
(FL) to the FDA.
PEMAZYRE (pemigatinib)
PEMAZYRE is the first internally discovered product to be internationally commercialized by us.
In April 2020, we announced that the FDA had approved PEMAZYRE (pemigatinib), a selective
fibroblast growth factor receptor (FGFR) kinase inhibitor, for the treatment of adults with previously
treated, unresectable locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or other
rearrangement as detected by an FDA-approved test. PEMAZYRE is the first FDA-approved treatment for
this indication, which was approved under accelerated approval based on overall response rate and duration
of response (DOR).
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In March 2021, PEMAZYRE was approved by the Japanese Ministry of Health, Labour and Welfare
(MHLW) for the treatment of patients with unresectable biliary tract cancer (BTC) with an FGFR2 fusion
gene, worsening after cancer chemotherapy. Also in March 2021, PEMAZYRE was approved by the European
Commission for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with an
FGFR2 fusion or rearrangement that has progressed after at least one prior line of systemic therapy.
In July 2021, the UK’s National Institute for Health and Care Excellence (NICE) recommended
PEMAZYRE for patients with cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2)
fusion or rearrangement that have progressed after at least one prior line of systemic therapy. NICE’s guidance
enables all eligible patients in England and Wales to have access to PEMAZYRE through the National
Health Service (NHS).
In March 2022, PEMAZYRE was approved by the National Medical Products Administration
(NMPA) of the People’s Republic of China for the treatment of adults with locally advanced or metastatic
cholangiocarcinoma with a fibroblast growth receptor 2 (FGFR2) fusion or rearrangement as confirmed by
a validated diagnostic test that has progressed after at least one prior line of systemic therapy.
Cholangiocarcinoma is a rare cancer that arises from the cells within the bile ducts. It is often diagnosed
late (stages III and IV) and the prognosis is poor. The incidence of cholangiocarcinoma with FGFR2 fusions
or rearrangements is increasing, and it is currently estimated that there are 2,000 – 3,000 patients in the
United States, Europe and Japan.
The approval of PEMAZYRE was based on data from FIGHT-202, a multi-center, open-label, single-
arm study evaluating PEMAZYRE as a treatment for adults with cholangiocarcinoma. In FIGHT-202, and
in patients harboring FGFR2 fusions or rearrangements (Cohort A), PEMAZYRE monotherapy resulted
in an overall response rate of 36% (primary endpoint), and median DOR of 9.1 months (secondary endpoint).
FIGHT-302, a Phase 3 trial of pemigatinib for the first-line treatment of patients with cholangiocarcinoma
and FGFR2 fusions or rearrangements, is ongoing.
In August 2022, PEMAZYRE was approved by the FDA as the first and only targeted treatment for
myeloid/lymphoid neoplasms (MLNs) with FGFR1 rearrangement. MLNs with FGFR1 rearrangement
are extremely rare and aggressive blood cancers.
In March 2023, PEMAZYRE was approved by the MHLW for the treatment of MLNs with FGFR1
fusion.
ICLUSIG (ponatinib)
In June 2016, we acquired the European operations of ARIAD Pharmaceuticals, Inc., and obtained an
exclusive license to develop and commercialize ICLUSIG (ponatinib) in Europe and other select countries.
ICLUSIG is a kinase inhibitor. The primary target for ICLUSIG is BCR-ABL, an abnormal tyrosine kinase
that is expressed in chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute
lymphoblastic leukemia (Ph+ ALL).
In the European Union, ICLUSIG is approved for the treatment of adult patients with chronic phase,
accelerated phase or blast phase CML who are resistant to dasatinib or nilotinib; who are intolerant to
dasatinib or nilotinib and for whom subsequent treatment with imatinib is not clinically appropriate; or who
have the T315I mutation, or the treatment of adult patients with Ph+ ALL who are resistant to dasatinib;
who are intolerant to dasatinib and for whom subsequent treatment with imatinib is not clinically appropriate;
or who have the T315I mutation.
ZYNYZ (retifanlimab-dlwr)
In October 2017, we and MacroGenics, Inc., announced an exclusive global collaboration and license
agreement for MacroGenics’ retifanlimab (formerly INCMGA0012), a humanized monoclonal antibody
targeting programmed death receptor-1 (PD-1). Under this collaboration, we obtained exclusive worldwide
rights for the development and commercialization of retifanlimab in all indications. The molecule currently is
being evaluated both as monotherapy and in combination therapy across various tumor types. Two
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Phase 3 trials evaluating retifanlimab in squamous cell anal cancer (SCAC) and non-small cell lung cancer
(NSCLC) are ongoing.
In March 2023, we announced that the FDA had approved ZYNYZ (retifanlimab-dlwr) under
accelerated approval, for the treatment of adults with metastatic or recurrent locally advanced Merkel cell
carcinoma (MCC). This represents the first regulatory approval for our PD-1 inhibitor.
In April 2024, the European Commission approved ZYNYZ (retifanlimab) as monotherapy for the first-
line treatment of adult patients with metastatic or recurrent locally advanced MCC not amenable to curative
surgery or radiation therapy following a positive opinion from the Committee for Medicinal Products for
Human Use (CHMP).
In September 2024, we announced positive results from the Phase 3 POD1UM-303/InterAACT2 trial
of ZYNYZ (retifanlimab) in combination with platinum-based chemotherapy (carboplatin — paclitaxel)
for the treatment of adults with inoperable locally recurrent or metastatic SCAC.
In December 2024, the supplemental Biologics License Application (sBLA) submission for retifanlimab
in advanced/metastatic SCAC was filed with the FDA with approval anticipated in the second half of 2025.
NIKTIMVO (axatilimab-csfr)
In September 2021, we and Syndax Pharmaceuticals, Inc. announced an exclusive worldwide
collaboration and license agreement to develop and commercialize axatilimab, Syndax’s anti-CSF-1R
monoclonal antibody. Together, we are developing axatilimab as a therapy for patients with chronic GVHD
where CSF-1R-dependent monocytes and macrophages are believed to contribute to organ fibrosis. In
December 2021, updated positive data were presented at ASH from the Phase 1/2 trial evaluating axatilimab
as a monotherapy in patients with recurrent or refractory chronic GVHD after two or more prior lines of
therapy. A 68% overall response rate and broad clinical benefit across multiple organs were observed at doses
being assessed in AGAVE-201, a global pivotal trial evaluating axatilimab monotherapy in patients with
chronic GVHD in the third line setting. In May 2022, Syndax announced that axatilimab had been granted
fast-track designation by the FDA for the treatment of patients with chronic GVHD after failure of two
or more lines of systemic therapy.
In July 2023, we and Syndax announced that AGAVE-201 had met its primary endpoint across all
cohorts with an overall response rate (ORR) of 74% at the dose of 0.3 mg/kg administered every two weeks.
The data highlight the durable response seen at the 0.3 mg/kg dose with 60% of patients who responded to
axatilimab still responding at one year. In December 2023, a Biologics License Application (BLA) was
submitted to the FDA for axatilimab for the treatment of patients with chronic GVHD after failure of two
or more lines of systemic therapy and accepted for Priority Review in February 2024. We have initiated two
combination trials with axatilimab in cGVHD in 2024, including a randomized Phase 2 combination trial
with ruxolitinib and a randomized Phase 3 combination trial with steroids, both directed at treating patients
with cGVHD in earlier lines of therapy.
In August 2024, we and Syndax announced the FDA approval of NIKTIMVO (axatilimab-csfr) for the
treatment of chronic GVHD after failure of at least two prior lines of systemic therapy in adult and pediatric
patients. NIKTIMVO is the first approved anti-CSF-1R antibody targeting the drivers of inflammation
and fibrosis seen in chronic GVHD. In September, we and Syndax announced the New England Journal of
Medicine publication of data from the pivotal AGAVE-201 trial of NIKTIMVO in chronic GVHD and the
addition of NIKTIMVO to the NCCN Clinical Practice Guidelines in Oncology for the treatment of
chronic GVHD. In January 2025, the FDA approved two smaller vial sizes (9mg and 22mg) of NIKTIMVO
to facilitate patient dosing and limit product waste. The U.S. commercial launch of NIKTIMVO
commenced at the end of January 2025.
Clinical Programs in Hematology and Oncology
Ruxolitinib
We are evaluating combinations of ruxolitinib with other therapeutic modalities, as well as developing
a once-a-day formulation of ruxolitinib for potential use as monotherapy and in combinations. Bioavailability
11

and bioequivalence data were published for ruxolitinib’s once-daily (QD) extended release (XR) formulation
at the European Hematology Association (EHA) Virtual Congress in June 2021. In March 2023, the FDA
issued a complete response letter for ruxolitinib extended-release (XR) tablets for once-daily (QD) use in the
treatment of certain types of MF, PV and GVHD. In December 2023, we received FDA feedback and
agreed on the requirements to address the complete response letter.
Phase 2 trials combining ruxolitinib with investigational agents from our portfolio such as INCB57643
(BET) in patients with MF are ongoing with data presented demonstrating early signals of clinical activity
in monotherapy and in combination with ruxolitinib.
In December 2022, new research detailing the development and mechanism of action of INCA033989,
an Incyte-discovered, investigational novel anti-mutant calreticulin (CALR)-targeted monoclonal antibody,
was featured in the Plenary Scientific Session at the 64th American Society of Hematology (ASH) Annual
Meeting. INCA033989 binds with high affinity to mutant CALR and inhibits oncogenesis, the process of cells
becoming cancerous, in cells expressing this oncoprotein. CALR mutations are responsible for disease
development in approximately 25-35% of patients with MF and ET. In July 2023, a Phase 1 study evaluating
INCA033989 was initiated.
INCB160058 (JAK2V617Fi)
In December 2023, new research detailing the development and mechanism of action of INCB160058,
an Incyte-discovered, investigational novel potent and selective JAK2 pseudokinase domain binder with
potential to be a disease modifying therapeutic was disclosed at the 65th American Society of Hematology
(ASH) Annual Meeting. Pseudokinase binding offers a new mechanism of action for selective inhibition of
JAK2V617F, with potential to eradicate mutant clones. In preclinical studies, INCB160058 inhibited
cytokine independent activity of JAK2V617F while sparing WT JAK2. The JAK2V617F mutation is found
in 55% of primary myelofibrosis, 95% of polycythemia vera and 60% of essential thrombocythemia
patients. A Phase 1 study of INCB160058 was initiated in the first quarter of 2024.
Tafasitamab
Tafasitamab is an anti-CD19 antibody and is being investigated as a therapeutic option in B cell
malignancies in a number of ongoing and planned combination trials. An open-label Phase 2 combination
trial (L-MIND) is investigating the safety and efficacy of tafasitamab in combination with lenalidomide in
patients with relapsed or refractory diffuse large B-cell lymphoma (r/r DLBCL), and the ongoing Phase 3
B-MIND trial is assessing the combination of tafasitamab and bendamustine versus rituximab and
bendamustine in r/r DLBCL. firstMIND is a Phase 1b safety trial of tafasitamab as a first-line therapy for
patients with DLBCL, and frontMIND, a placebo-controlled Phase 3 trial evaluating tafasitamab in
combination with lenalidomide added to rituximab plus chemotherapy (R-CHOP) as a first-line therapy for
patients with DLBCL, is ongoing.
In January 2021, the FDA granted orphan drug designation to tafasitamab as a treatment for patients
with follicular lymphoma.
In December 2024, we announced the full results from the pivotal Phase 3 inMIND trial evaluating
treatment with tafasitamab in combination with lenalidomide and rituximab compared with placebo plus
lenalidomide and rituximab in patients with relapsed or refractory follicular lymphoma (FL). The data
showed that the study met its primary endpoint by demonstrating a statistically significant and clinically
meaningful improvement in progression-free survival (PFS) by investigator assessment in 548 patients
with FL. Tafasitamab was generally well-tolerated, and safety was consistent with other CD19 and
immunotherapy combination regimens.
Retifanlimab
In July 2024, we announced positive topline results from both the two Phase 3 clinical studies evaluating
retifanlimab, a humanized monoclonal antibody targeting programmed cell death receptor-1 (PD-1), in
SCAC and NSCLC. The phase 3 study in SCAC met its primary endpoint of progression free survival while
the Phase 3 study in NSCLC meet its primary endpoint of overall survival. The safety analysis from both
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studies showed retifanlimab was generally well-tolerated with no new safety signals observed. POD1UM-303
is a Phase 3, global, multicenter, randomized, double-blind study evaluating carboplatin-paclitaxel with
retifanlimab or placebo in patients with inoperable locally recurrent or metastatic SCAC who have not
previously been treated with chemotherapy. POD1UM-304 is a Phase 3, global, multicenter, randomized,
double-blind study evaluating platinum-based chemotherapy with retifanlimab or placebo in patients with
first-line, metastatic squamous or nonsquamous NSCLC.
In September 2024, we presented late-breaking Phase 3 results for retifanlimab that were featured
during the 2024 European Society for Medical Oncology (ESMO) Presidential Symposium. The Phase 3
POD1UM-303/InterAACT2 trial for retifanlimab met the primary endpoint of PFS and demonstrated
improvement across key secondary endpoints in patients with SCAC receiving retifanlimab in combination
with platinum-based chemotherapy (carboplatin-paclitaxel).
MPN, GVHD and Oncology Programs
Indication and Phase
Ruxolitinib XR (QD)
(JAK1/JAK2)
Myelofibrosis, polycythemia vera and GVHD
Ruxolitinib + INCB57643
(JAK1/JAK2 + BETi)
Myelofibrosis: Phase 2
Ruxolitinib + axatilimab(1)
(JAK1/JAK2 + anti-CSF-1R)
Chronic GVHD: Phase 2
Steroids + axatilimab(1)
(Steroids + anti-CSF-1R)
Chronic GVHD: Phase 3
INCA33989
(mutCALR)
Myelofibrosis, essential thrombocythemia: Phase 1
INCB160058
(JAK2V617Fi)
Myelofibrosis: Phase 1
Tafasitamab (MONJUVI/
MINJUVI)
(CD19)
Relapsed or refractory diffuse large B-cell lymphoma (DLBCL):
Phase 3 (B-MIND)
First-line DLBCL: Phase 3 (frontMIND)
Relapsed or refractory follicular lymphoma (FL): Phase 3
(inMIND)
Retifanlimab (ZYNYZ)(2)
(PD-1)
Squamous cell anal cancer (SCAC): Phase 3 (POD1UM-303)
Non-small cell lung cancer (NSCLC): Phase 3 (POD1UM-304)
MSI-high endometrial cancer: Phase 2 (POD1UM-101,
POD1UM-204)
INCB123667
(CDK2i)
Solid tumors with CCNE1 amplification/Cyclin E overexpression:
Phase 1
INCB161734
(KRASG12D)
Advanced metastatic solid tumors with a KRASG12D mutation:
Phase 1
INCA33890
(TGFßR2×PD-1)(3)
Advanced or metastatic solid tumors: Phase 1
(1)
Clinical development of axatilimab in GVHD conducted in collaboration with Syndax Pharmaceuticals.
(2)
Retifanlimab licensed from MacroGenics.
(3)
Development collaboration with Merus.
Earlier-Stage Development Programs in Hematology and Oncology
In July 2024, we announced a strategic review of our pipeline with an increased focus on high potential
impact programs. As a result, we discontinued further development of both oral, small molecule PD-L1
inhibitors. Additionally, we plan to forgo further development of our LAG-3 monoclonal antibody,
TIM-3 monoclonal antibody and LAG-3xPD-1 bispecific program.
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INCB123667 (CDK2)
In the cell cycle, the serine threonine kinase, CDK2, regulates the transition from the G1 phase (cell
growth) to the S-phase (DNA replication). INCB123667 is a novel, potent and selective oral small molecule
inhibitor of CDK2 which has been shown to suppress tumor growth as monotherapy and in combination
with standard of care, in Cyclin E amplified tumor models, in vivo.
In April 2023, we presented data at the American Association for Cancer Research (AACR) Annual
Meeting, demonstrating that INCB123667 exhibited significant single-agent activity in vivo, in CCNE1
high breast cancer xenograft and patient-derived xenograft models. INCB123667 currently is being evaluated
in a Phase 1 clinical trial in patients with advanced malignancies including CCNE1 high TNBC and
HR+HER2- tumors post-CDK4/6 inhibitors.
In January 2024, we disclosed that early clinical activity was observed in patients with amplification/
over expression of CCNE1 in a Phase 1 clinical trial, with significant tumor shrinkage observed. Several
patients achieved partial responses (PR) across multiple tumor types including ovarian cancer patients with
CCNE1 amplification and/or over expression. The safety data seen during this disclosure aligns with
CDK2 mechanism of action. Additional data from this trial is anticipated in 2025.
In September 2024, we presented initial data from the Phase 1 CDK2 inhibitor program at the 2024
ESMO Congress. Phase 1 data of INCB123667 were presented demonstrating single-agent antitumor
activity across a range of doses and regimens, notably in patients with ovarian cancer and endometrial cancer
whose tumors overexpress Cyclin E1. The Phase 1 trial is ongoing with INCB123667 in combination with
other agents. We currently anticipate initiating a pivotal trial in ovarian cancer in 2025.
INCB161734 (KRASG12D)
A Phase 1 study evaluating INCB161734 (KRASG12D) was initiated in the first quarter of 2024.
INCB161734 is a potent, selective and orally bioavailable KRAS G12D inhibitor and, as highlighted at
AACR in April 2024, has shown excellent efficacy in several preclinical models. With no currently approved
G12D-targeting agents, INCB161734 could address an important patient need as the KRASG12D
mutation is found in 40% of pancreatic ductal adenocarcinoma, 15% of colorectal cancers, and 5% of non-
small cell lung cancers. Data from the ongoing Phase 1 study is expected in 2025.
INCA33890 (TGFβR2xPD-1)1
INCA33890 is a TGFβR2xPD-1 bispecific antibody that has been engineered to avoid the known
toxicity of broad TGFβ pathway blockade. INCA33890 has a 10-fold higher binding affinity for PD-1
relative to TGFβR2, and specifically blocks TGFβ signaling in cells co-expressing PD-1. In April 2023, we
presented preclinical data at AACR that showed that INCA33890 inhibits tumor growth in PD-1-resistant
mouse models. In July 2023, we initiated a Phase 1 study evaluating INCA33890 in patients with select
advanced solid tumors. Data from the ongoing Phase 1 study is expected in 2025.
Inflammation and AutoImmunity (IAI)
Incyte Dermatology launched its first approved product, OPZELURA (ruxolitinib) cream, in
October 2021, following FDA approval for atopic dermatitis in September 2021. OPZELURA subsequently
was approved by the FDA and European Commission for vitiligo in July 2022 and April 2023, respectively.
Our IAI efforts also include numerous clinical development programs.
OPZELURA (ruxolitinib) cream
Atopic Dermatitis.
In September 2021, we announced that the FDA approved OPZELURA
(ruxolitinib) cream, a novel cream formulation of Incyte’s selective JAK1/JAK2 inhibitor ruxolitinib, for the
topical short-term and non-continuous chronic treatment of mild to moderate atopic dermatitis (AD) in non-
immunocompromised patients 12 years of age and older whose disease is not adequately controlled with
topical prescription therapies, or when those therapies are not advisable.
1
In collaboration with Merus.
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AD is a skin disorder that causes long term inflammation of the skin resulting in itchy, red, swollen
and cracked skin. Onset can occur at any age but is more common in infants and children. In the United
States, we estimate that there are approximately 10 million diagnosed adolescent and adult patients with AD.
The approval of OPZELURA was based on data from two randomized, double-blind, vehicle-
controlled Phase 3 studies (TRuE-AD1 and TRuE-AD 2) evaluating the safety and efficacy of OPZELURA
in adolescents and adults with mild to moderate AD. Significantly more patients treated with OPZELURA
achieved Investigator’s Global Assessment (IGA) Treatment Success at Week 8 (defined as an IGA score
of 0 or 1 with at least a 2-point improvement from baseline, the primary endpoint: 53.8% in TRuE-AD1 and
51.3% in TRuE-AD2, compared to vehicle (15.1% in TRuE-AD1, 7.6% in TRuE-AD2; P<0.0001)).
Significantly more patients treated with OPZELURA experienced a clinically meaningful reduction in itch
from baseline at Week 8, as measured by a ≥4-point reduction in the itch Numerical Rating Scale (itch NRS4):
52.2% in TRuE-AD1 and 50.7% in TRuE-AD2, compared to vehicle (15.4% in TRuE-AD1, 16.3% in
TRuE-AD2; P<0.0001), among patients with an NRS score of at least 4 at baseline. The most common
(≥1%) treatment-emergent adverse reactions in patients treated with OPZELURA were nasopharyngitis,
diarrhea, bronchitis, ear infection, eosinophil count increased, urticaria, folliculitis, tonsillitis and rhinorrhea.
Vitiligo.
In July 2022, we announced that the FDA approved OPZELURA for the topical treatment
of nonsegmental vitiligo in adult and pediatric patients 12 years of age and older. OPZELURA was approved
for continuous use and no limits to duration as a treatment for nonsegmental vitiligo.
Vitiligo is a chronic autoimmune depigmenting skin disease characterized by patches of the skin losing
their pigment. OPZELURA is the first and only FDA approved treatment for repigmentation of vitiligo
lesions.
The approval of OPZELURA in vitiligo was based on two randomized, double-blind, vehicle-
controlled Phase 3 studies (TRuE-V1 and TRuE-V2) evaluating the safety and efficacy of OPZELURA in
adolescents and adults with nonsegmental vitiligo. Treatment with 1.5% ruxolitinib cream twice daily (BID)
resulted in greater improvement versus vehicle for the primary and all key secondary endpoints in both the
TRuE-V1 and TRuE-V2 studies. Results, which were consistent across both studies, showed that 29.9% of
patients applying ruxolitinib cream achieved >75% improvement from baseline in the facial Vitiligo Area
Scoring Index (F-VASI75) at Week 24, the primary endpoint. At Week 52, approximately 50% of patients
achieved F-VASI75. The most common (>1%) treatment-emergent adverse reactions in patients treated with
OPZELURA were application site acne, application site pruritus, nasopharyngitis, headache, urinary tract
infection, application site erythema and pyrexia. In March 2023, long-term 104-week safety and efficacy data
for ruxolitinib cream in vitiligo were presented at the American Academy of Dermatology (AAD)
conference, demonstrating that patients who achieved a high level of facial repigmentation (≥F-VASI90) at
Week 52 maintained durable response one year following withdrawal of treatment and that those patients who
continued treatment with OPZELURA for up to two years demonstrated sustained facial repigmentation
and further improvements in facial and total body repigmentation.
In April 2023, we announced that the European Commission had approved OPZELURA for the
topical treatment of nonsegmental vitiligo with facial involvement in adults and adolescents 12 years and
older following a positive opinion from the CHMP.
In October 2023, new results of a pooled analysis of long-term extension (LTE) data from the pivotal
Phase 3 TRuE-V program assessing OPZELURA cream 1.5% in patients 12 years of age and older with
nonsegmental vitiligo who previously experienced limited or no response to treatment at Week 24 were
presented at the European Academy of Dermatology and Venereology (EADV) Congress 2023 as a late-
breaking oral presentation. These results showed that patients who initially experienced limited or no facial or
total body repigmentation at six months achieved improved repigmentation after continued treatment with
OPZELURA for up to two years.
In October 2024, OPZELURA cream 1.5% was granted a Notice of Compliance by Health Canada for
the topical treatment of both mild to moderate atopic dermatitis and nonsegmental vitiligo in patients
12 years of age and older.
15

Clinical Programs in Dermatology
Ruxolitinib cream
Ruxolitinib cream is a potent, selective inhibitor of JAK1 and JAK2 that provides the opportunity to
directly target diverse pathogenic pathways that underlie certain dermatologic conditions, including AD,
vitiligo, lichen planus, lichen sclerosus, hidradenitis suppurativa (HS) and prurigo nodularis (PN).
In November 2022, we initiated two Phase 2 trials evaluating ruxolitinib cream in lichen planus and
lichen sclerosus. Lichen planus is a recurrent inflammatory condition affecting the skin and mucosal surfaces
and can result in itchy, purple bumps on the skin. Two Phase 3 trials evaluating ruxolitinib cream in
prurigo nodularis were initiated in 2023. We continue to expand the development of ruxolitinib cream into
new indications as part of our efforts to maximize the potential opportunity with ruxolitinib cream.
In July 2023, we announced that the Phase 3 trial (TRuE-AD3) evaluating ruxolitinib cream in pediatric
AD patients (age >2 and <12) had met its primary endpoint. The study showed that significantly more
patients treated with ruxolitinib cream 0.75% and 1.5% achieved Investigator’s Global Assessment Treatment
Success (IGA-TS) than patients treated with vehicle control. In October 2023, the expanded results from
the pivotal Phase 3 TRuE-AD3 were presented at EADV. Again, significantly more patients treated with
ruxolitinib cream (0.75% and 1.5%) achieved Investigator’s Global Assessment Treatment Success (IGA-TS)
than patients treated with vehicle control (non-medicated cream).
In January 2024, we announced positive topline results from a randomized controlled Phase 2 study
evaluating ruxolitinib cream in HS. Ruxolitinib 1.5% cream BID met the primary efficacy endpoint as
measured by a change from baseline in abscess and nodule count at Week 16 versus placebo in patients with
mild to moderate HS. Ruxolitinib cream was well tolerated and consistent with its known safety profile. A
Phase 3 study is expected to initiate in 2025.
In October 2024, we disclosed results from the Phase 2 study of ruxolitinib cream in patients with
cutaneous lichen planus. At this time, we do not plan to advance ruxolitinib cream into a registrational
study for lichen planus and plan to publish the results of this study in the future. Additionally, the Phase 2
study evaluating ruxolitinib cream for lichen sclerosus did not meet our internal bar for success and at this
time, we are not planning to advance this indication into a registrational study.
In October 2024, we announced the Phase 3 trial for ruxolitinib cream in mild to moderate HS is on
track to initiate in the first half of 2025 following achieving alignment on the study design with the FDA.
Povorcitinib
We also are developing povorcitinib, which is an oral small molecule selective JAK1 inhibitor.
Povorcitinib is undergoing evaluation in patients with hidradenitis suppurativa, nonsegmental vitiligo,
prurigo nodularis, asthma and chronic spontaneous urticaria (CSU).
Hidradenitis Suppurativa.
HS is a chronic skin condition where lesions develop as a result of
inflammation and infection of the sweat glands. In October 2020, initial results from the clinical program
were presented and a randomized Phase 2b trial of povorcitinib was initiated in patients with HS. In
August 2022, we presented positive results from the Phase 2 trial of povorcitinib in HS. In December 2022,
we initiated two Phase 3 trials (STOP-HS1 and STOP-HS2) in moderate to severe HS.
In February 2023, 52-week results from the Phase 2 study evaluating povorcitinib in HS were presented
as an oral presentation at the European Hidradenitis Suppurativa Foundation (EHSF) Annual Meeting.
The data demonstrated that longer-term treatment with povorcitinib 75 mg resulted in sustained and durable
efficacy across all treatment arms and that importantly, 22-29% of patients achieved HiSCR100, which is
defined as a 100% reduction from baseline in total AN count with no increase from baseline in abscess or
draining tunnel count.
Nonsegmental Vitiligo.
In March 2023, 36-week results from the Phase 2b study evaluating povorcitinib
in patients with extensive nonsegmental vitiligo were presented as an oral late-breaking presentation at the
American Academy of Dermatology (AAD) Annual Meeting. The data demonstrated that treatment with
16

oral povorcitinib was associated with substantial total body repigmentation in patients with extensive
nonsegmental vitiligo, as measured by total Vitiligo Area Scoring Index (T-VASI) scores. Specifically, the
study met its primary endpoint, and patients receiving povorcitinib experienced statistically superior
improvements in T-VASI at Week 24 compared to placebo.
In October 2023, positive 52-week data from a Phase 2b clinical trial evaluating the safety and efficacy
of povorcitinib in adult patients with extensive nonsegmental vitiligo were presented at EADV as a late-
breaking oral presentation. Results showed that treatment with oral povorcitinib was associated with
substantial total body and facial repigmentation across all treatment groups at Week 52 and further reinforces
the efficacy profile and potential of povorcitinib as an oral treatment for patients with extensive
nonsegmental vitiligo.
Prurigo Nodularis.
In October 2023, we announced that the Phase 2, randomized, double-blind,
placebo-controlled, dose ranging study evaluating the efficacy and safety of povorcitinib in participants
with PN had met its primary endpoint. In October 2024, following the positive Phase 2 results, two Phase 3
studies in patients with PN were initiated.
Asthma and Chronic Spontaneous Urticaria.
In July 2023, we initiated two Phase 2 trials evaluating
povorcitinib in patients with moderate to severe uncontrolled asthma and in chronic spontaneous urticaria.
Data for CSU are anticipated in the first half of 2025 and data in asthma are anticipated in the second
half of 2025.
INCB000262 (MRGPRX2) & INCB000547 (MRGPRX4)
As more fully described in Note 5 of Notes to the Consolidated Financial Statements, in May 2024, we
acquired Escient Pharmaceuticals, Inc. Escient is a clinical-stage drug discovery and development company
advancing novel small molecule therapeutics for systemic immune and neuro-immune disorders. Escient’s
clinical development portfolio includes INCB000262, a potent, highly selective, once-daily small molecule
antagonist of Mas-related G protein-coupled receptor (MRGPRX2) and INCB000547, an oral MRGPRX4
antagonist.
In November 2024, we announced that enrollment was paused in the ongoing Phase 2 study of
MRGPRX2 (INCB000262) in CSU. The decision was made following the observation of certain in vivo
preclinical toxicology findings. These data have been shared with the FDA and at this time, we have no
intention to enroll additional patients. Enrollment in the other INCB000262 proof-of-concept studies in
chronic inducible urticaria and AD is complete.
In November 2024, Incyte announced data from the Phase 2 study evaluating MRGPRX4 (INCB000547)
in cholestatic pruritus did not support further development.
IAI and Dermatology Programs
Indication and Phase
Ruxolitinib cream
(OPZELURA)(1)
(JAK1/JAK2)
Atopic dermatitis: Phase 3 pediatric study (TRuE-AD3)
Hidradenitis suppurativa: Phase 2; Phase 3 expected to
initiate in 2025
Prurigo nodularis: Phase 3 (TRuE-PN1, TRuE-PN2)
Povorcitinib
(JAK1)
Hidradenitis suppurativa: Phase 3 (STOP-HS1,
STOP-HS2)
Vitiligo: Phase 3 (STOP-V1, STOP-V2)
Prurigo nodularis: Phase 3 (STOP-PN1, STOP-PN2)
Chronic spontaneous urticaria: Phase 2
Asthma: Phase 2
INCA034460
(anti-CD122)
Vitiligo: Phase 1
(1)
Novartis’ rights for ruxolitinib outside of the United States under our Collaboration and License
Agreement with Novartis do not include topical administration.
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Earlier-Stage Development Programs in Dermatology
INCA034460 (anti-CD122)
In November 2022, we acquired Villaris Therapeutics, Inc., an asset-centric biopharmaceutical
company focused on the development of novel antibody therapeutics for vitiligo. INCA034460 is a novel,
humanized anti-IL-15Rβ monoclonal antibody designed to target and deplete autoreactive tissue resident
memory T cells (TRM) that has demonstrated efficacy as a treatment for vitiligo in preclinical models. In
July 2023, INCA034460 received Investigational New Drug application (IND) clearance and in
October 2023, we announced the first patient had been dosed.
Clinical Programs in Other IAI
In May 2022, we initiated a Phase 2 trial evaluating zilurgisertib (INCB00928) in patients with
fibrodysplasia ossificans progressiva (FOP), a disorder in which muscle tissue and connective tissue are
gradually replaced by bone. The FDA has granted Fast Track designation and orphan drug designation to
zilurgisertib as a treatment for patients with FOP.
Other IAI Program
Indication and Phase
Zilurgisertib
(ALK2)
Fibrodysplasia ossificans progressiva: Pivotal Phase 2
Collaborative Partnered Programs
As described below under “License Agreements and Business Relationships,” we are eligible for
milestone payments and royalties on certain products that we licensed to third parties. These include
OLUMIANT (baricitinib), which is licensed to our collaborative partner Eli Lilly and Company, and
JAKAVI (ruxolitinib) and TABRECTA (capmatinib), which are licensed to Novartis.
Baricitinib
We have a second JAK1 and JAK2 inhibitor, baricitinib, which is subject to our collaboration agreement
with Lilly, in which Lilly received exclusive worldwide development and commercialization rights to the
compound for inflammatory and autoimmune diseases.
Rheumatoid Arthritis.
Rheumatoid arthritis is an autoimmune disease characterized by aberrant or
abnormal immune mechanisms that lead to joint inflammation and swelling and, in some patients, the
progressive destruction of joints. Rheumatoid arthritis also can affect connective tissue in the skin and organs
of the body.
Current rheumatoid arthritis treatments include the use of non-steroidal anti-inflammatory drugs,
disease-modifying anti-rheumatic drugs such as methotrexate, and the newer biological response modifiers
that target pro-inflammatory cytokines, such as tumor necrosis factor, implicated in the pathogenesis of
rheumatoid arthritis. None of these approaches to treatment is curative; therefore, there remains an unmet
need for safe and effective treatment options for these patients. Rheumatoid arthritis is estimated to affect
about 1% of the world’s population.
The Phase 3 program of baricitinib in patients with rheumatoid arthritis incorporated all three
rheumatoid arthritis populations (methotrexate naïve, biologic naïve, and tumor necrosis factor (TNF)
inhibitor inadequate responders); used event rates to fully power the baricitinib program for structural
comparison and non-inferiority vs. adalimumab; and evaluated patient-reported outcomes. All four Phase 3
trials met their respective primary endpoints.
In January 2016, Lilly submitted a New Drug Application (NDA) to the FDA and an MAA to the
European Medicines Agency (EMA) for baricitinib as treatment for rheumatoid arthritis. In February 2017,
we and Lilly announced that the European Commission approved baricitinib as OLUMIANT for the
treatment of moderate-to-severe rheumatoid arthritis in adult patients who have responded inadequately to,
or who are intolerant to, one or more disease-modifying antirheumatic drugs (DMARDs). In July 2017,
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the MHLW granted marketing approval for OLUMIANT for the treatment of rheumatoid arthritis
(including the prevention of structural injury of joints) in patients with inadequate response to standard-of-
care therapies. In June 2018, the FDA approved the 2mg dose of OLUMIANT for the treatment of adults
with moderately-to-severely active rheumatoid arthritis (RA) who have had an inadequate response to one or
more tumor necrosis factor (TNF) inhibitor therapies.
Atopic Dermatitis.
Lilly has conducted a Phase 2a trial and a Phase 3 program to evaluate the safety
and efficacy of baricitinib in patients with moderate-to-severe atopic dermatitis. The JAK-STAT pathway
has been shown to play an essential role in the dysregulation of immune responses in atopic dermatitis.
Therefore, we believe that inhibiting cytokine pathways dependent on JAK1 and JAK2 may lead to positive
clinical outcomes in AD.
In February 2019, we and Lilly announced that baricitinib met the primary endpoint in BREEZE-AD1
and BREEZE-AD2, two Phase 3 studies evaluating the efficacy and safety of baricitinib monotherapy for
the treatment of adult patients with moderate-to-severe AD and, in August 2019, we and Lilly announced that
baricitinib met the primary endpoint in BREEZE-AD7, a Phase 3 study evaluating the efficacy and safety
of baricitinib in combination with standard-of-care topical corticosteroids in patients with moderate-to-
severe AD. In January 2020, we and Lilly announced that baricitinib met the primary endpoint in both
BREEZE-AD4 and BREEZE-AD5, the results of which completed the placebo-controlled data program
intended to support global registrations. A supplemental New Drug Application (sNDA) for baricitinib was
submitted by Lilly for the treatment of patients with moderate to severe AD. In April 2021, we and Lilly
announced the FDA extended the review period for the sNDA for baricitinib for the treatment of moderate
to severe AD by three months to allow time for additional data analyses. In July 2021, we and Lilly
announced that the FDA will not meet the PDUFA action date for the sNDA for baricitinib for the treatment
of adults with moderate to severe AD due to the FDA’s ongoing assessment of JAK inhibitors. In
January 2022, Lilly provided a regulatory update on the sNDA based on ongoing discussions with the
FDA. Lilly announced that alignment with the FDA on the indicated population had not yet been reached
and given the FDA’s position, there would be the possibility of a Complete Response Letter (CRL).
In January 2020, Lilly announced that baricitinib had been submitted for regulatory review in Europe
as a treatment for patients with moderate-to-severe AD. In October 2020, Lilly announced that the European
Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe AD in adult
patients who are candidates for systemic therapy. In December 2020, baricitinib was approved by the MHLW
for the treatment of patients with moderate-to-severe AD.
Alopecia Areata.
Alopecia areata is an autoimmune disorder in which the immune system attacks the
hair follicles, causing hair loss in patches. In March 2020, Lilly announced that baricitinib received
Breakthrough Therapy designation for the treatment of alopecia areata, based on the positive Phase 2
results of Lilly’s adaptive Phase 2/3 study BRAVE-AA1. In March 2021, we and Lilly announced positive
results from BRAVE-AA2, the Phase 3 trial evaluating the efficacy and safety of once-daily baricitinib in
adults with severe alopecia areata. In April 2021, we and Lilly announced positive results from the Phase 3
portion of BRAVE-AA1. In September 2021, we and Lilly announced detailed results from BRAVE-AA1
and BRAVE-AA2 at the European Academy of Dermatology and Venereology Congress (EADV). The two
studies showed statistically significant improvement in scalp hair regrowth across both baricitinib dosing
groups when compared to placebo. In March 2022, we and Lilly announced positive 52 week results from
BRAVE-AA1 and BRAVE-AA2 at the American Academy of Dermatology (AAD) annual meeting showing
40% of adults saw at least 80% scalp coverage. In June 2022, the FDA approved 2mg, and 4mg doses of
OLUMIANT for the treatment of adults with severe alopecia areata, becoming the first and only systemic
treatment in the indication. In June 2022, OLUMIANT was approved as a treatment for alopecia areata in
Europe and Japan.
Systemic Lupus Erythematosus.
Systemic lupus erythematosus (SLE) is a chronic disease that causes
inflammation. In addition to affecting the skin and joints, it can affect other organs in the body such as the
kidneys, the tissue lining the lungs and heart, and the brain. Lilly has conducted a Phase 2 trial to evaluate the
safety and efficacy of baricitinib in patients with SLE. Baricitinib’s activity profile suggests that it inhibits
cytokines implicated in SLE such as type I interferon (IFN), type II IFN-γ, IL-6, and IL-23 as well as other
cytokines that may have a role in SLE, including granulocyte macrophage colony stimulating factor
(GM-CSF) and IL-12.
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In January 2022, Lilly announced the discontinuation of the Phase 3 development program for
baricitinib in SLE based on top-line efficacy results from two pivotal Phase 3 trials (SLE-BRAVE-I
and — II). The primary endpoint of SRI-4 response was reached in SLE-BRAVE-I but was not reached in
SLE-BRAVE-II and key secondary endpoints were not met in either study.
COVID-19.
In May 2020, we amended our agreement with Lilly to enable Lilly to commercialize
baricitinib for the treatment of COVID-19. In November 2020, we and Lilly announced that the FDA
issued an Emergency Use Authorization (EUA) for the distribution and emergency use of baricitinib to be
used in combination with remdesivir in hospitalized adult and pediatric patients two years of age or older with
suspected or laboratory confirmed COVID-19 who require supplemental oxygen, invasive mechanical
ventilation, or extracorporeal membrane oxygenation. In December 2020, we and Lilly announced that data
from ACTT-2 supportive of the EUA were published in the New England Journal of Medicine. In July 2021,
we and Lilly announced that the FDA broadened the EUA for baricitinib to allow for treatment with or
without remdesivir. The EUA now provides for the use of baricitinib for treatment of COVID-19 in
hospitalized adults and pediatric patients two years of age or older requiring supplemental oxygen, non-
invasive or invasive mechanical ventilation or extracorporeal membrane oxygenation (ECMO). In June 2022,
we and Lilly announced the FDA approved baricitinib as OLUMIANT for the treatment of COVID-19 in
hospitalized adults requiring supplemental oxygen, non-invasive or invasive mechanical ventilation or ECMO.
Capmatinib
Capmatinib is a potent and highly selective MET inhibitor. The investigational compound has
demonstrated inhibitory activity in cell-based biochemical and functional assays that measure MET
signaling and MET dependent cell proliferation, survival and migration. Under our agreement, Novartis
received worldwide exclusive development and commercialization rights to capmatinib and certain back-up
compounds in all indications. Capmatinib is being evaluated in patients with hepatocellular carcinoma, non-
small cell lung cancer and other solid tumors, and may have potential utility as a combination agent.
MET is a clinically validated receptor kinase cancer target. Abnormal MET activation in cancer correlates
with poor prognosis. Dysregulation of the MET pathway triggers tumor growth, formation of new blood
vessels that supply the tumor with nutrients and causes cancer to spread to other organs. Dysregulation of the
MET pathway is seen in many types of cancers, including lung, kidney, liver, stomach, breast and brain.
In May 2020, we and Novartis announced the FDA approval of capmatinib as TABRECTA for the
treatment of adult patients with metastatic NSCLC whose tumors have a mutation that leads to MET exon
14 skipping (METex14) as detected by an FDA-approved test. TABRECTA is the first and only treatment
approved to specifically target NSCLC with this driver mutation and is approved for first-line and previously
treated patients regardless of prior treatment type.
The FDA approval of TABRECTA was based on results from the pivotal GEOMETRY mono-1 study.
In the METex14 population (n=97), the confirmed overall response rate was 68% and 41% among treatment-
naive (n=28) and previously treated patients (n=69), respectively, based on the Blinded Independent
Review Committee (BIRC) assessment per RECIST v1.1. In patients taking TABRECTA, the study also
demonstrated a median duration of response of 12.6 months in treatment-naive patients (19 responders) and
9.7 months in previously treated patients (28 responders). The most common treatment-related adverse
events (AEs) (incidence ≥20%) are peripheral edema, nausea, fatigue, vomiting, dyspnea, and decreased
appetite. In September 2020, we and Novartis announced that GEOMETRY mono-1 results were published
in The New England Journal of Medicine.
In June 2020, we and Novartis announced that the MHLW approved TABRECTA for METex14
mutation-positive advanced and/or recurrent unresectable NSCLC. In April 2022, we and Novartis
announced a positive opinion from the CHMP based on data from the Phase 2 GEOMETRY mono-1
study showing an overall response rate (ORR) of 51.6% in a cohort evaluating second-line patients only and
44% in all previously-treated patients with advanced non-small cell lung cancer (NSCLC) harboring
alterations leading to MET exon 14 skipping.
In June 2022, we and Novartis announced the European Commission approval of capmatinib as
TABRECTA as monotherapy treatment of adults with advanced non-small cell lung cancer (NSCLC)
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harboring alterations leading to mesenchymal-epithelial-transition factor gene (MET) exon 14 (METex14)
skipping who require systemic therapy following prior treatment with immunotherapy and/or platinum-
based chemotherapy.
NSCLC is the most common type of lung cancer, impacting more than 2 million people per year
globally. Approximately 3-4 percent of all patients with NSCLC have tumors with a mutation that leads to
MET exon 14 skipping. Though rare, this mutation is an indicator of especially poor prognosis and poor
responses to standard therapies, including immunotherapy.
Ruxolitinib
Graft-versus-host disease.
In March 2022, we and Novartis announced a positive opinion from the
CHMP for ruxolitinib in acute and chronic GVHD, based on data from the Phase 3 REACH2 and REACH3
trials. GVHD is a life-threatening complication of stem cell transplants, with no established standard of
care in Europe for patients who do not adequately respond to first-line steroid treatment. In May 2022, we
and Novartis announced the European Commission approval of ruxolitinib as JAKAVI for the treatment of
acute or chronic GVHD in patients aged 12 years and older who have inadequate response to corticosteroids
or other systemic therapies. In August 2023, Novartis announced that JAKAVI had been approved in Japan
for use in graft-versus-host disease after hematopoietic stem cell transplant.
Partnered Programs
Indication and Phase
Ruxolitinib (JAKAVI)(1)
(JAK1/JAK2)
Acute and chronic GVHD: Approved in Europe and Japan
Baricitinib
(OLUMIANT)(2)
(JAK1/JAK2)
AD: Approved in Europe and Japan
Severe alopecia areata (AA): Approved in the U.S., Europe and Japan
RA: Approved in the U.S., Europe and Japan
Capmatinib
(TABRECTA)(3)
(MET)
NSCLC (with MET exon 14 skipping mutations): Approved in the
U.S., Europe and Japan
(1)
Ruxolitinib (JAKAVI) licensed to Novartis outside of the United States for use in hematology and
oncology excluding topical administration.
(2)
Baricitinib (OLUMIANT) licensed to Lilly.
(3)
Capmatinib (TABRECTA) licensed to Novartis.
License Agreements and Business Relationships
We establish business relationships, including collaborative arrangements with other companies and
medical research institutions to assist in the clinical development and/or commercialization of certain of
our drugs and drug candidates and to provide support for our research programs. We also evaluate
opportunities for acquiring products or rights to products and technologies that are complementary to our
business from other companies and medical research institutions.
Below is a brief description of our significant business relationships and collaborations and related
license agreements that expand our pipeline and provide us with certain rights to existing and potential new
products and technologies. Additional information regarding our collaboration agreements, including
their financial and accounting impact on our business and results of operations, can be found in Note 5 and
Note 7 of Notes to the Consolidated Financial Statements.
Out-License Agreements
Novartis
In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the
terms of the agreement, Novartis received exclusive development and commercialization rights outside of
the United States to ruxolitinib and certain back up compounds for hematologic and oncology indications,
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including all hematological malignancies, solid tumors and myeloproliferative diseases. We retained
exclusive development and commercialization rights to JAKAFI (ruxolitinib) in the United States and in
certain other indications. Novartis also received worldwide exclusive development and commercialization
rights to our MET inhibitor compound capmatinib and certain back up compounds in all indications. We
retained options to co-develop and to co-promote capmatinib in the United States. In April 2016, we amended
this agreement to provide that Novartis has exclusive research, development and commercialization rights
outside of the United States to ruxolitinib (excluding topical formulations) in the GVHD field.
Lilly
In December 2009, we entered into a License, Development and Commercialization Agreement with
Lilly. Under the terms of the agreement, Lilly received exclusive worldwide development and
commercialization rights to baricitinib and certain back up compounds for inflammatory and autoimmune
diseases. In March 2016, we entered into an amendment to the agreement with Lilly that allows us to
engage in the development and commercialization of ruxolitinib in the GVHD field. In May 2020, we
amended our agreement with Lilly to enable Lilly to commercialize baricitinib for the treatment of COVID-19.
In-License Agreements
MacroGenics
In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics.
Under this agreement, we received exclusive development and commercialization rights worldwide to
MacroGenics’ INCMGA0012, an investigational monoclonal antibody that inhibits PD-1. MacroGenics
has retained the right to develop and commercialize, at its cost and expense, its pipeline assets in combination
with INCMGA0012.
Merus
In December 2016, we entered into a Collaboration and License Agreement with Merus. Under this
agreement, which became effective in January 2017, the parties have agreed to collaborate with respect to
the research, discovery and development of bispecific antibodies utilizing Merus’ technology platform. The
collaboration encompasses up to ten independent programs.
Syndax
In September 2021, we entered into a Collaboration and License Agreement with Syndax covering the
worldwide development and commercialization of NIKTIMVO (axatilimab-csfr), Syndax’s anti-CSF-1R
monoclonal antibody. Under the terms of this agreement, we received exclusive commercialization rights to
axatilimab outside of the United States, and co-commercialization rights in the United States.
Incyte’s Approach to Drug Discovery and Development
Our productivity in drug discovery is primarily a result of our core competency in medicinal chemistry
which is tightly integrated with, and supported by, an experienced team of biologists and pharmaceutical
scientists with expertise in multiple therapeutic areas. In addition to our small molecules expertise, we have
added a biologics discovery capability in-house and have expanded our discovery scope to include bispecific
antibodies through a collaboration with Merus.
This discovery team operates in concert with an equally experienced drug development organization
with expertise in clinical sciences, statistics, and regulatory affairs. Our drug development organization
manages our clinical programs and utilizes clinical research organizations (CROs), expert scientific advisory
boards, and leading consultants and suppliers as appropriate to ensure our clinical trials are conducted
efficiently, effectively, and in accordance with regulatory and compliance guidelines.
To succeed in our objective to discover and advance novel therapeutics that address serious unmet
medical needs, we have established a broad range of discovery capabilities in-house, including target
validation, high-throughput screening, medicinal chemistry, computational chemistry, structural biology,
22

pharmacological and translational sciences, ADME (absorption, distribution, metabolism and excretion)
and toxicology assessment. We augment these capabilities through collaborations with academic and contract
laboratory resources with relevant expertise.
Driven by a target- and pathway-centric discovery process, our pipeline has grown and is currently
focused primarily in targeted oncology and dermatology. We conduct a limited number of discovery
programs in parallel at any one time. This focus allows us to allocate resources to our selected programs at a
level that we believe is competitive with larger pharmaceutical companies. We resource our discovery
efforts with the goals of maximizing information content when and where we need it and ensuring that each
program, regardless of stage, is executed in the most efficient and data-rich manner possible. We believe
this approach has played a critical role in the development of our product portfolio.
Once our compounds reach clinical development, our objective is to rapidly progress the lead candidate
into a proof-of-concept clinical trial to assess quickly the therapeutic potential of the clinical candidate itself
as well as its underlying mechanism of action. This information is then used to evaluate the compound’s
development opportunities, identify the most appropriate indication(s) to pursue, and develop a clinical and
regulatory plan to advance the molecule.
Our development teams are responsible for ensuring that our clinical candidates are expeditiously
progressed through clinical safety, proof-of-concept, and formal efficacy/pivotal trials. Our development
teams include employees with expertise in drug development, including clinical trial design, statistics,
regulatory affairs, medical affairs, pharmacovigilance and project management. We have also built internal
chemistry, manufacturing and controls, and formulation teams that work closely with external GMP contract
manufacturers to support our drug development efforts.
Incyte’s Commercial Strategy
Our strategy is to develop and commercialize compounds that we have internally discovered or have
acquired rights to in the markets where we believe that a company of our size can successfully compete. We
currently commercialize six compounds in the United States, three in Europe and one in Japan. These
commercialized products are sold to specialty and retail pharmacies, specialty distributors and wholesalers
in the United States in addition to retail pharmacies, hospital pharmacies, distributors and an exclusive
wholesaler outside of the United States. We continue to expand our marketing, medical and operational
infrastructure within the United States and outside of the United States to support the commercial launch
of recently approved products and to prepare for potential approval of other products.
For certain compounds, we have established and may in the future establish collaborations or strategic
relationships to support development and commercialization in certain territories or therapeutic areas where
we do not have or do not want to build expertise. We believe the key benefits to entering into such strategic
relationships include the potential to expedite the development and commercialization of certain of our
compounds, as well as the opportunity to receive upfront payments and future milestones and royalties in
exchange for certain rights to those compounds. Refer to the “License Agreements and Business
Relationships” section above for information regarding our collaborations and strategic relationships.
Patents, Other Intellectual Property, and Product Exclusivity
We regard the protection of patents and other enforceable intellectual property rights that we own or
license as critical to our business and competitive position. Accordingly, we rely on patent, trademark, trade
secret and copyright law, as well as nondisclosure and other contractual arrangements, to protect our
intellectual property. We have established a patent portfolio of patents and patent applications owned or
licensed by us that cover aspects of our drug products and drug candidates. Our policy is to pursue patent
applications on inventions and discoveries that we believe are commercially important to the development and
growth of our business. As a general matter, we endeavor to obtain patent term extensions (PTEs) in the
United States and Japan, and other countries where available, and supplementary protection certificates
(SPCs) in each European country, upon approval by the respective regulatory agency, if patent rights are
granted in such country.
The following table sets forth the year in which the basic exclusivity loss is currently estimated to occur
in the United States, the European Union, and Japan for each of our approved medicines and for those
23

compounds in our portfolio that have been submitted to regulatory authorities seeking approval or are in
registration-directed clinical trials. We refer to the basic exclusivity loss as the “Estimated Minimum Market
Exclusivity Date,” which is, unless otherwise indicated, the latter of (i) the expiration date of the earliest
anticipated expiring composition of matter patent rights, or (ii) the date of regulatory data protection (RDP)
loss for such product or clinical candidate. There may be additional patents for our approved medicines
that claim the medicine or a method of using it that are listed in the FDA’s Approved Drug Products with
Therapeutic Equivalence Evaluations (Orange Book) — or for our unapproved clinical candidates that will be
eligible to be listed in the Orange Book upon FDA approval. Therefore, the table below also identifies the
expiration dates of certain additional patents that are Orange-Book listed for our approved medicines — or
that, for our unapproved clinical candidates, are eligible for Orange-Book listing upon product approval — in
the United States, as well as the expiration dates of certain related patents in the European Union, and Japan,
which we refer to as the “Additional Patents Expiry Dates.”
Product/Drug Candidate(1)(2)
US
EU
Japan
JAKAFI (ruxolitinib)
Estimated Minimum Market
Exclusivity Dates
2028
2027
2028
Additional Patents Expiry Dates(3)
2028
2028
2028
OPZELURA
(ruxolitinib) cream
Estimated Minimum Market
Exclusivity Dates
2028
2027
2026
Additional Patents Expiry
Dates(3)(4)
2028, 2031 & 2040
2028 & 2031
2028 & 2031
OLUMIANT
(baricitinib)
Estimated Minimum Market
Exclusivity Dates
2032(5)
2032
2033
Additional Patents Expiry Dates
2032
2032
—
TABRECTA
(capmatinib)
Estimated Minimum Market
Exclusivity Dates
2032(5)
2032(6)
2032
Additional Patents Expiry Dates
2035
2035
2035
PEMAZYRE
(pemigatinib)
Estimated Minimum Market
Exclusivity Dates
2035
2036(6)
2036
Additional Patents Expiry Dates
2039 & 2040
—
—
ICLUSIG (ponatinib)
Estimated Minimum Market
Exclusivity Dates
—
2028
—
Additional Patents Expiry Dates
—
—
—
ZYNYZ
(retifanlimab)(8)
Estimated Minimum Market
Exclusivity Dates
2036
2036
2036
MONJUVI
(tafasitamab)(9)
Estimated Minimum Market
Exclusivity Dates
2033(5)
2032(6)
2027
NIKTIMVO
(axatilimab)(10)
Estimated Minimum Market
Exclusivity Dates
2036(7)
2034
2034
ruxolitinib XR
Estimated Minimum Market
Exclusivity Dates
2028
—
—
Additional Patents Expiry
Dates(3)(11)
2028 & 2033
—
—
povorcitinib
Estimated Minimum Market
Exclusivity Dates
2034
2034
2034
Additional Patents Expiry Dates
2039 & 2041
2039
—
(1)
Estimated Minimum Market Exclusivity Dates are subject to the payment of maintenance fees, and
include the period of PTE that has been granted by the respective regulatory agency, where applicable,
or include the period of anticipated SPC term for approved products in the EU, where applicable,
even though SPCs may remain pending in some countries.
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(2)
For approved medicines in the US, the brand name for the US product is used, whereas for candidates
that have not been approved in the US, the name of the active ingredient is used. The use of a brand name
in the table does not indicate that the product has also been approved in any country outside of the
US Also, some products may be approved in one or more countries outside of the US under different
brand names.
(3)
Ruxolitinib phosphate salt patents are issued in the US, EU and Japan with anticipated expiration
dates of late-2028 in the US and mid-2028 in the EU and Japan.
(4)
Ruxolitinib cream formulation patents are issued in the US, EU and Japan with anticipated expiration
dates of 2031 in each jurisdiction. Patents are also issued in the US for the treatments of atopic dermatitis
and vitiligo with expiration dates of 2040.
(5)
Date reflects the grant of PTE in the US.
(6)
Date reflects the grant of SPC in the EU, although SPCs may remain pending in some countries.
(7)
Date reflects the RDP in the US due to product approval.
(8)
Retifanlimab licensed from MacroGenics.
(9)
Tafasitamab licensed from Xencor, Inc.
(10) Axatilimab licensed from Syndax.
(11) Once-a-day (QD) ruxolitinib formulation patents are issued in the US with anticipated expiration dates
of 2033.
Patents extend for varying periods according to the date of patent filing and the legal term of patents
in the various countries where patent protection is obtained. The actual protection afforded by a patent,
which can vary from country to country, depends on the type of patent, the scope of its coverage and the
availability of legal remedies in the country.
We may seek to license rights relating to technologies, drug candidates or drug products in connection
with our drug discovery and development programs and commercialization activities. Under these licenses,
such as our licenses from Agenus, ARIAD/Takeda, MacroGenics, Merus, Xencor and Syndax, we may be
required to pay up-front fees, license fees, milestone payments and royalties on sales of future products.
Patents extend for varying periods according to the date of patent filing or grant and the legal term
of patents in the various countries where patent protection is obtained. The actual protection afforded by a
patent, which can vary from country to country, depends on the type of patent, the scope of its coverage
and the availability of legal remedies in the country.
We may seek to license rights relating to technologies, drug candidates or drug products in connection
with our drug discovery and development programs and commercialization activities. Under these licenses,
such as our licenses from Agenus, ARIAD/Takeda, MacroGenics, Merus Xencor and Syndax, we may be
required to pay up-front fees, license fees, milestone payments and royalties on sales of future products.
Although we believe our rights under patents and patent applications provide a competitive advantage,
the patent positions of pharmaceutical and biotechnology companies are highly uncertain and involve
complex legal and factual questions. We may not be able to develop patentable products or processes and
may not be able to obtain patents in the United States or elsewhere from pending applications. Even if patent
claims are allowed, the claims may not issue, or in the event of issuance, may not be valid or enforceable or
may not be sufficient to protect the technology owned by or licensed to us or provide us with a competitive
advantage. Any patent or other intellectual property rights that we own or obtain may be circumvented,
challenged or invalidated by our competitors. Others may have patents that relate to our business or technology
and that may prevent us from marketing our drug candidates unless we are able to obtain a license to those
patents. In addition, litigation or other proceedings may be necessary to defend against claims of infringement,
to enforce patents, to protect our other intellectual property rights, to determine the scope and validity of
the proprietary rights of third parties or to defend ourselves in patent or other intellectual property right suits
brought by third parties. We could incur substantial costs in such litigation or other proceedings. An
adverse outcome in any such litigation or proceeding could subject us to significant liability or increased
competition. A discussion of certain risks and uncertainties that may affect our patents, regulatory exclusivities
or other proprietary rights is set forth in Item 1A. “Risk Factors — Risks Relating to Intellectual Property
25

and Legal Matters,” and the discussion of legal proceedings related to certain patents is set forth in Item 1A.
“Risk Factors — Risks Relating to Commercialization of Our Products — Competition for our products
could harm our business and result in a decrease in revenue.”
With respect to proprietary information that is not patentable, and for inventions for which patents are
difficult to enforce, we rely on trade secret protection and confidentiality agreements to protect our interests.
While, as a general matter, we seek to protect our interests by entering into confidentiality agreements with
our employees, consultants and potential business partners, we may not be able to adequately protect our
trade secrets or other proprietary information. Others may independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to our trade secrets.
Competition
Our drug discovery, development and commercialization activities face, and will continue to face,
intense competition from organizations such as pharmaceutical and biotechnology companies, as well as
academic and research institutions and government agencies. We face significant competition from
organizations, particularly fully integrated pharmaceutical companies, that are pursuing pharmaceuticals
that are competitive with JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA,
ZYNYZ, NIKTIMVO and our drug candidates.
Many companies and institutions, either alone or together with their collaborative partners, have
substantially greater financial resources, larger drug discovery, development and commercial staffs and
significantly greater experience than we do in:
• drug discovery;
• developing products;
• undertaking preclinical testing and clinical trials;
• obtaining FDA and other regulatory approvals of products; and
• manufacturing, marketing, distributing and selling products.
Accordingly, our competitors may succeed in obtaining patent protection, receiving FDA and other
regulatory approval or commercializing products that compete with JAKAFI, ICLUSIG, PEMAZYRE,
MONJUVI/MINJUVI, OPZELURA, ZYNYZ, NIKTIMVO or our drug candidates.
In addition, any drug candidate that we successfully develop may compete with existing therapies that
have long histories of safe and effective use. Competition may also arise from:
• other drug development technologies and methods of preventing or reducing the incidence of
disease;
• new compounds; or
• other classes of therapeutic agents.
We face and will continue to face intense competition from other companies for collaborative
arrangements with pharmaceutical and biotechnology companies, for establishing relationships with
academic and research institutions and for licenses to drug candidates or proprietary technology. These
competitors, either alone or with their collaborative partners, may succeed in developing products that are
more effective or commercially successful than ours.
Our ability to compete successfully will depend, in part, on our ability to:
• develop proprietary products;
• develop and maintain products that reach the market first, are technologically superior to and/or are
of lower cost than other products in the market;
• attract and retain scientific, product development and sales and marketing personnel;
• obtain patent or other proprietary protection for our products and technologies;
26

• obtain required regulatory approvals; and
• manufacture, market, distribute and sell any products that we develop.
In a number of countries, including in particular, developing countries, government officials and other
groups have suggested that pharmaceutical companies should make drugs available at a low cost. In some
cases, governmental authorities have indicated that where pharmaceutical companies do not do so, their
patents might not be enforceable to prevent generic competition. Some major pharmaceutical companies have
greatly reduced prices for their drugs in certain developing countries. If certain countries do not permit
enforcement of any of our patents, sales of our products in those countries, and in other countries by
importation from low-price countries, could be reduced by generic competition or by parallel importation
of our product. Alternatively, governments in those countries could require that we grant compulsory licenses
to allow competitors to manufacture and sell their own versions of our products in those countries,
thereby reducing our product sales, or we could respond to governmental concerns by reducing prices for
our products. In all of these situations, our results of operations could be adversely affected.
Government Regulation
Our ongoing research and development activities and any manufacturing and marketing of our
approved drug products and our drug candidates are subject to extensive regulation by numerous
governmental authorities in the United States and other countries. Before marketing in the United States,
any drug developed by us must undergo rigorous preclinical testing, clinical trials, and an extensive regulatory
clearance process implemented by the FDA under the United States Food, Drug and Cosmetic Act and its
implementing regulations and, in the case of biologics, the Public Health Service Act. The FDA regulates,
among other things, the research, development, testing, manufacture, safety, efficacy, record-keeping,
labeling, storage, approval, advertising, promotion, sale and distribution and import and export, of these
products.
FDA Review and Approval Process
The regulatory review and approval process is lengthy, expensive and uncertain. The steps generally
required before a drug may be marketed in the United States include:
• preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s
Good Laboratory Practice and Good Manufacturing Practice regulations;
• submission to the FDA of an Investigational New Drug application (IND) for human clinical
testing, which must become effective before human clinical trials may commence;
• performance of adequate and well-controlled clinical trials in three phases, as described below, to
establish the safety and efficacy of the drug for each indication;
• submission of an NDA or Biologics License Application (BLA) to the FDA for review;
• random inspections of clinical sites to ensure validity of clinical safety and efficacy data;
• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the
drug is produced to assess compliance with current good manufacturing practices;
• FDA approval of the NDA or BLA; and
• payment of user and program fees, if applicable.
Similar requirements exist within foreign agencies as well. The time required to satisfy FDA requirements
or similar requirements of foreign regulatory agencies may vary substantially based on the type, complexity
and novelty of the product or the targeted disease.
Preclinical testing includes laboratory evaluation of product pharmacology, drug metabolism, and
toxicity which includes animal studies, to assess potential safety and efficacy as well as product chemistry,
stability, formulation, development, and testing. The results of the preclinical tests, together with
manufacturing information and analytical data, are submitted to the FDA as part of an IND. An IND will
automatically become effective 30 days after receipt by the FDA, unless before that time, the FDA raises
27

safety concerns or questions about the conduct of the clinical trial(s) included in the IND. In the latter case,
the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical
trials can proceed. We cannot be sure that submission of an IND will result in the FDA allowing clinical trials
to commence.
Clinical trials involve the administration of the investigational drug to human subjects under the
supervision of qualified investigators and in accordance with Good Clinical Practice (GCP) regulations
covering the protection of human subjects. These regulations require all research subjects to provide informed
consent. Clinical trials are conducted under protocols detailing the objectives of the study, the parameters
to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol must be submitted
to the FDA as part of the IND and each trial must be reviewed and approved by an institutional review
board (IRB) before it can begin.
Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be
combined. Phase 1 usually involves the initial introduction of the investigational drug into healthy volunteers
to evaluate its safety, dosage tolerance, absorption, metabolism, distribution and excretion. Phase 2 usually
involves clinical trials in a limited patient population to evaluate dosage tolerance and optimal dosage, identify
possible adverse effects and safety risks, and evaluate and gain preliminary evidence of the efficacy of the
drug for specific indications. Phase 3 clinical trials usually further evaluate clinical efficacy and safety by
testing the drug in its final form in an expanded patient population, providing statistical evidence of efficacy
and safety, and providing an adequate basis for labeling. We cannot guarantee that Phase 1, Phase 2 or
Phase 3 testing will be completed successfully within any specified period of time, if at all. Furthermore, we,
the IRB, or the FDA may suspend clinical trials at any time on various grounds, including a finding that
the subjects or patients are being exposed to an unacceptable health risk.
As a separate amendment to an IND, a clinical trial sponsor may submit to the FDA a request for a
Special Protocol Assessment (SPA). Under the SPA procedure, a sponsor may seek the FDA’s agreement on
the design and size of a clinical trial intended to form the primary basis of an effectiveness claim. If the
FDA agrees in writing, its agreement may not be changed after the trial begins, except when agreed by FDA
or in limited circumstances, such as when a substantial scientific issue essential to determining the safety
and effectiveness of a drug candidate is identified after a Phase 3 clinical trial is commenced and agreement
is obtained with the FDA. If the outcome of the trial is successful, the sponsor will ordinarily be able to
rely on it as the primary basis for approval with respect to effectiveness. However, additional trials could also
be requested by the FDA to support approval, and the FDA may make an approval decision based on a
number of factors, including the degree of clinical benefit as well as safety. The FDA is not obligated to
approve an NDA or BLA as a result of an SPA agreement, even if the clinical outcome is positive.
Even after initial FDA approval has been obtained, post-approval trials, or Phase 4 studies, may be
required to provide additional data, and will be required to obtain approval for the sale of a product as a
treatment for a clinical indication other than that for which the product was initially tested and approved.
Also, the FDA will require post-approval safety reporting to monitor the side effects of the drug. Results of
post-approval programs may limit or expand the indication or indications for which the drug product may
be marketed. Further, if there are any requests for modifications to the initial FDA approval for the drug,
including changes in indication, manufacturing process, manufacturing facilities, or labeling, a supplemental
NDA or BLA may be required to be submitted to the FDA.
The length of time and related costs necessary to complete clinical trials varies significantly and may be
difficult to predict. Clinical results are frequently susceptible to varying interpretations that may delay, limit
or prevent regulatory approvals. Additional factors that can cause delay or termination of our clinical
trials, or cause the costs of these clinical trials to increase, include:
• slow patient enrollment due to the nature of the protocol, the proximity of patients to clinical sites,
the eligibility criteria for the study, competition with clinical trials for other drug candidates or other
factors;
• inadequately trained or insufficient personnel at the study site to assist in overseeing and monitoring
clinical trials;
• delays in approvals from a study site’s IRB;
28

• longer than anticipated treatment time required to demonstrate effectiveness or determine the
appropriate product dose;
• lack of sufficient supplies of the drug candidate for use in clinical trials;
• adverse medical events or side effects in treated patients; and
• lack of effectiveness of the drug candidate being tested.
Any drug is likely to produce some toxicities or undesirable side effects in animals and in humans when
administered at sufficiently high doses and/or for sufficiently long periods of time. Unacceptable toxicities
or side effects may occur at any dose level, and at any time in the course of animal studies designed to identify
unacceptable effects of a drug candidate, known as toxicological studies, or in clinical trials of our drug
candidates. The appearance of any unacceptable toxicity or side effect could cause us or regulatory authorities
to interrupt, limit, delay or abort the development of any of our drug candidates, and could ultimately
prevent their marketing approval by the FDA or foreign regulatory authorities for any or all targeted
indications.
The FDA’s fast track, breakthrough therapy, accelerated approval, and priority review designation
programs are intended to facilitate the development and expedite the review and approval of drug candidates
intended for the treatment of serious or life-threatening conditions and that demonstrate the potential to
address unmet medical needs for these conditions. Under these programs, FDA can, for example, review
portions of an NDA or BLA for a drug candidate before the entire application is complete, thus potentially
beginning the review process at an earlier time. The FDA, however, can mandate, and has mandated, post-
approval requirements that could include lengthy and extensive confirmatory clinical trials. The FDA has
recently increased its focus on accelerated approvals for oncology drugs and the confirmatory trials
required for those drugs.
We cannot guarantee that the FDA will grant any of our requests for any of these expedited program
designations, that any such designations would affect the time of review or that the FDA will approve the
NDA or BLA submitted for any of our drug candidates, whether or not these designations are granted.
Additionally, FDA approval of a product can include restrictions on the product’s use or distribution (such as
permitting use only for specified medical conditions or limiting distribution to physicians or facilities with
special training or experience). Approval of such designated products can be conditioned on additional clinical
trials after approval.
Sponsors submit the results of preclinical studies and clinical trials to the FDA as part of an NDA or
BLA. NDAs and BLAs must also contain extensive product manufacturing information and proposed
labeling. Upon receipt, the FDA initially reviews the NDA or BLA to determine whether it is sufficiently
complete to initiate a substantive review. If the FDA identifies deficiencies that would preclude substantive
review, the FDA will refuse to accept the NDA or BLA and will inform the sponsor of the deficiencies that
must be corrected prior to resubmission. If the FDA accepts the submission for review (then deemed a
“filing”), the FDA typically completes the NDA or BLA review within a pre-determined time frame. Under
the Prescription Drug User Fee Act, the FDA agrees to review NDAs and BLAs under either a standard
review or priority review. FDA procedures provide for priority review of NDAs and BLAs submitted for
drugs that, compared to currently marketed products, if any, offer a significant improvement in the treatment,
diagnosis or prevention of a disease. The FDA seeks to review NDAs and BLAs that are granted priority
status more quickly than NDAs and BLAs given standard review status. The FDA’s stated policy is to act on
90% of priority NDAs and BLAs within eight months of receipt (or six months after filing, which occurs
within 60 days after NDA or BLA submission). Although the FDA historically has not met these goals, the
agency has made significant improvements in the timeliness of the review process. NDA and BLA review
often extends beyond anticipated completion dates due to FDA requests for additional data or clarification,
the submission of a major amendment by the Sponsor, the FDA’s decision to have an advisory committee
review, and difficulties in scheduling an advisory committee meeting. The recommendations of an advisory
committee are not binding on the FDA.
To obtain FDA approval to market a product, we must demonstrate that the product is safe and
effective for the patient population that will be treated. If regulatory approval of a product is granted, the
approval will be limited to those disease states and conditions for which the product is safe and effective, as
29

demonstrated through clinical trials. Marketing or promoting a drug for an unapproved indication is
prohibited. Furthermore, approval may entail requirements for post-marketing studies or risk evaluation
and mitigation strategies, including the need for patient and/or physician education, patient registries,
medication or similar guides, or other restrictions on the distribution of the product. If an NDA or BLA
does not satisfy applicable regulatory criteria, the FDA may deny approval of an NDA or BLA or may issue
a complete response, and require, among other things, additional clinical data or analyses.
The Orphan Drug Act provides incentives to manufacturers to develop and market drugs for rare
diseases and conditions affecting fewer than 200,000 persons in the United States at the time of application
for orphan drug designation or conditions affecting 200,000 or more people in the United States where
the disease or condition occurs so infrequently that there is no reasonable expectation that the costs of drug
development and marketing will be recovered in future sales of the drug in the United States. The first
developer to receive FDA marketing approval for an orphan drug is entitled to a seven year exclusive
marketing period in the United States for the orphan drug indication. However, a drug that the FDA
considers to be clinically superior to, or different from, another approved orphan drug, even though for the
same indication, may also obtain approval in the United States during the seven year exclusive marketing
period.
Regulation of Manufacturing Process
Even when NDA or BLA approval is obtained, a marketed product, such as JAKAFI, its manufacturer
and its manufacturing facilities are subject to continual review and periodic inspections by the FDA. The
manufacturing process for pharmaceutical products is highly regulated and regulators may shut down
manufacturing facilities that they believe do not comply with regulations. Discovery of previously unknown
problems with a product, manufacturer or facility may result in restrictions on the product, manufacturer
or facility, including recalls or withdrawal of the product from the market. Manufacturing facilities are always
subject to inspection by the applicable regulatory authorities.
We and our third-party manufacturers are subject to current Good Manufacturing Practices, or
cGMP’s, which are extensive regulations governing manufacturing processes and controls, including but not
limited to release and stability testing, record keeping and quality standards as defined by FDA 21CFR,
parts 210 and 211, the International Council for Harmonisation of Technical Requirements for
Pharmaceuticals for Human Use, or ICH, and the European Medicines Agency. Similar regulations are in
effect in other countries. Manufacturing facilities are subject to inspection by the applicable regulatory
authorities and are subject to manufacturing licenses where applicable. These facilities, whether our own or
our contract manufacturers, may be inspected before we can use them in commercial manufacturing of our
related products. We or our contract manufacturers must be able to comply with all applicable cGMP’s
and FDA or other regulatory requirements. If we or our contract manufacturers fail to comply, we or our
contract manufacturers may be subject to legal or regulatory action, such as suspension of manufacturing
license(s), seizure of product, or voluntary recall of product. Furthermore, continued compliance with
applicable GMP will require continual expenditure of time, money and effort on the part of the Company
or our contract manufacturers in the areas of production and quality control and record keeping and
reporting, in order to ensure full compliance.
Post-Approval Regulation
Any products manufactured or distributed by the Company pursuant to FDA approvals are subject to
pervasive and continuing regulation by the FDA, including record-keeping requirements, reporting of adverse
experiences with the drug and other reporting, advertising and promotion restrictions. The FDA’s rules for
advertising and promotion require, among other things, that our promotion be fairly balanced and adequately
substantiated by clinical studies, and that we do not promote our products for unapproved uses. We must
also submit appropriate new and supplemental applications and obtain FDA approval for certain changes to
the approved product, product labeling or manufacturing process or controls. On its own initiative, the
FDA may require changes to the labeling of an approved drug if it becomes aware of new safety information
that the agency believes should be included in the approved drug’s labeling. The FDA also enforces the
requirements of the Prescription Drug Marketing Act, or PDMA, which, among other things, imposes
various requirements in connection with the distribution of product samples to physicians.
30

In addition to inspections related to manufacturing, we are subject to periodic unannounced inspections
by the FDA and other regulatory bodies related to the other regulatory requirements that apply to marketed
drugs manufactured or distributed by us. The FDA also may conduct periodic inspections regarding our
review and reporting of adverse events, or those related to compliance with the requirements of the PDMA
concerning the handling of drug samples. When the FDA conducts an inspection, the inspectors may
identify any deficiencies they believe exist in the form of a notice of inspectional observations. The
observations may be more or less significant. If we receive a notice of inspectional observations, we likely
will be required to respond in writing, and may be required to undertake corrective and preventive actions in
order to address the FDA’s concerns.
There are a variety of state laws and regulations that apply in the states or localities where JAKAFI
and our new drug candidates are or may be marketed. For example, we must comply with state laws that
require the registration of manufacturers and wholesale distributors of pharmaceutical products in that state,
including, in certain states, manufacturers and distributors who ship products into the state even if such
manufacturers or distributors have no place of business within the state. Some states also impose requirements
on manufacturers and distributors to establish the pedigree of product in the chain of distribution,
including some states that require manufacturers and others to adopt new technology capable of tracking
and tracing product as it moves through the distribution chain. Any applicable state or local regulations may
hinder our ability to market, or increase the cost of marketing, our products in those states or localities.
The FDA’s policies may change and additional government regulations may be enacted that could
impose additional burdens or limitations on our ability to market products after approval. Moreover,
increased attention to the containment of health care costs in the United States and in foreign markets
could result in new government regulations which could have a material adverse effect on our business. We
cannot predict the likelihood, nature or extent of adverse governmental regulation which might arise from
future legislative or administrative action, either in the United States or abroad.
Marketing Exclusivity
The FDA may grant five years of exclusivity in the United States for the approval of NDAs for new
chemical entities, and three years of exclusivity for supplemental NDAs, for among other things, new
indications, dosages or dosage forms of an existing drug, if new clinical investigations that were conducted
or sponsored by the applicant are essential to the approval of the supplemental application. Additionally,
six months of marketing exclusivity in the United States is available if, in response to a written request
from the FDA, a sponsor submits and the agency accepts requested information relating to the use of the
approved drug in the pediatric population. The six month pediatric exclusivity is added to any existing patent
or non-patent exclusivity period for which the drug is eligible. Orphan drug products are also eligible for
pediatric exclusivity if the FDA requests and the company completes pediatric clinical trials. Under the
Biologics Price Competition and Innovation Act, the FDA may grant 12 years of data exclusivity for
innovative biological products.
Foreign Regulation
Outside the United States, our ability to market a product is contingent upon receiving a marketing
authorization from the appropriate regulatory authorities in specific regions or countries. The requirements
governing the conduct of clinical trials, marketing authorization, pricing and reimbursement vary widely
from country to country. At present, foreign marketing authorizations are applied for at a national level,
although within the European Union (EU) regional registration procedures are available to companies wishing
to market a product in more than one EU member state. If the competent regulatory authority is satisfied
that adequate evidence of safety, quality and efficacy has been presented, a marketing authorization may be
granted. This foreign regulatory approval process involves all of the risks associated with FDA approval
discussed above and may also include additional risks.
Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from
regulatory authorities in non-U.S. countries prior to the commencement of clinical trials or marketing of
the product in those countries. Certain countries outside of the United States have a process that requires the
submission of a clinical trial application, or CTA, much like an IND prior to the commencement of
human clinical trials. In the European Union, a CTA must be submitted for each trial to the competent
31

health authority and to independent ethics committees by national procedure for a single country trial or by
EMA submission portal CTIS for a multinational study. Once the CTA is approved in accordance with the
requirements in the concerned countries, clinical trial development may proceed in those countries and are
conducted in accordance with GCP and other applicable regulatory requirements.
To obtain regulatory approval of an investigational drug under EU regulatory systems, we must submit
a marketing authorization application (MAA). This application is similar to the NDA or BLA in the United
States, with the exception of, among other things, regional and/or country-specific document requirements.
Drugs can be authorized in the EU by using the centralized, mutual recognition, decentralized or national
authorization procedures described below.
The European Medicines Agency implemented the centralized procedure for the approval of human
drugs to facilitate marketing authorizations that are valid throughout the EU. This procedure results in a
single marketing authorization granted by the European Commission that is valid across the EU. Under the
centralized procedure, the maximum timeframe for the evaluation of a marketing authorization application
by the EMA is 210 days (excluding clock stops, when additional written or oral information is to be provided
by the applicant in response to questions asked by the Committee for Medicinal Products for Human
Use). A positive opinion on the MAA by the CHMP then needs to be endorsed by the European Commission
within approximately 67 days. Accelerated assessment might be granted by the CHMP in exceptional cases,
in which case the EMA ensures that the evaluation for the opinion of the CHMP is completed within 150 days
(excluding clock stops) and the opinion issued thereafter.
The mutual recognition procedure (MRP) for the approval of human drugs is an alternative approach
to facilitate individual national marketing authorizations within the EU. The MRP may be applied for all
human drugs for which the centralized procedure is not obligatory. The MRP is based on the principle of the
mutual recognition by EU member states of their respective national marketing authorizations. Based on a
marketing authorization in the reference member state, the applicant may apply for marketing authorizations
in other member states. In such case, the reference member state shall update its existing assessment report
about the drug. After the assessment is completed, copies of the report are sent to all member states, together
with the approved summary of product characteristics, labeling and package leaflet. The concerned
member states then recognize the decision of the reference member state and the summary of product
characteristics, labeling and package leaflet. National marketing authorizations shall be granted within
30 days after acknowledgement of the agreement.
Should any member state refuse to recognize the marketing authorization by the reference member
state, the member states shall make all efforts to reach a consensus. If this fails, the procedure is submitted
to an EMA scientific committee for arbitration. The opinion of this EMA Committee is then forwarded to the
Commission, for the start of the decision making process. As in the centralized procedure, this process
entails consulting various European Commission Directorates General and the Standing Committee on
Human Medicinal Products or Veterinary Medicinal Products, as appropriate.
Legislation similar to the Orphan Drug Act has been enacted in other countries outside of the United
States, including the EU. The orphan legislation in the EU is available for therapies addressing conditions
that affect five or fewer out of 10,000 persons, are life-threatening or chronically debilitating conditions and
for which no satisfactory treatment is authorized. The market exclusivity period is for ten years, although
that period can be reduced to six years if, at the end of the fifth year, available evidence establishes that the
product does not justify maintenance of market exclusivity.
For other countries outside of the EU, such as non-EU countries in Eastern Europe, Middle-East,
Latin America, Japan or other countries in Asia, the requirements governing the conduct of clinical trials,
product licensing, pricing and reimbursement vary. In all cases, again, the clinical trials are conducted in
accordance with GCP and the other applicable regulatory requirements.
If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among
other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product
recalls, seizure of products, operating restrictions and criminal prosecution.
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Manufacturing
Our manufacturing strategy is to contract with third parties to manufacture the raw materials, our
active pharmaceutical ingredients, or API, and finished dosage form for clinical and commercial uses. We
currently do not operate manufacturing facilities for clinical or commercial production of JAKAFI, ICLUSIG,
PEMAZYRE, OPZELURA, MONJUVI/MINJUVI, ZYNYZ and NIKTIMVO or our drug candidates.
As such, we expect to continue to rely on third parties for the manufacture of commercial supplies of the raw
materials, API and finished drug product for drugs that we successfully develop and are approved for
commercial sale. In this manner, we continue to build and maintain our supply chain and quality assurance
resources.
In July 2018, we purchased land located in Yverdon, Switzerland, for construction of a large molecule
production facility to manufacture biologic drug substances for our drug candidates. Construction activity
commenced in July 2018, and in June 2022 Swissmedic authorities granted the GMP drug manufacturing
license for this facility. The Yverdon facility started to manufacture MONJUVI/MINJUVI drug substance
during the fourth quarter of 2022. The drug substance is usable in patients after regulatory approval, which
was granted in the fourth quarter of 2023 for the European market and is currently expected in the second
quarter of 2025 in the United States.
Manufacturing of our Products
Our supply chain for manufacturing raw materials, API and drug product ready for distribution and
commercialization is a multi-step international process. Establishing and managing the supply chain requires
a significant financial commitment and the creation and maintenance of numerous third-party contractual
relationships.
We contract with third parties to manufacture JAKAFI, ICLUSIG, MONJUVI/MINJUVI,
PEMAZYRE, OPZELURA, ZYNYZ, NIKTIMVO and our drug candidates for clinical and commercial
purposes. Third-party manufacturers supply raw materials, and other third-party manufacturers convert these
raw materials into API or convert the API into final dosage form. For most of our drug candidates, once
our raw materials are produced, we rely on one third-party to manufacture the API, another to make finished
drug product and a third to package and label the finished product. For ruxolitinib phosphate, the API for
JAKAFI and OPZELURA, we have three qualified third-party contract manufacturers from which we can
source drug substance, one of which is currently active. The manufacturing of ponatinib, the API for
ICLUSIG, is the sole responsibility of Takeda, the intellectual property holder. We procure API from Takeda,
which outsources the API manufacturing to a third party. For pemigatinib, the API for PEMAZYRE, we
have one qualified third-party contract manufacturer from which we can source drug substance.
We also rely on third-party contract manufacturers to tablet or capsulate all of our active pharmaceutical
ingredients for clinical and commercial uses. For JAKAFI and ICLUSIG, we have two qualified third-party
manufacturers from which we can source commercial drug product. Secondary packaging of ICLUSIG is
performed by a qualified third-party manufacturer. Primary packaged product for ICLUSIG can be used for
clinical and commercial purposes. For PEMAZYRE, we have one qualified third-party manufacturer from
which we can source commercial drug product. For OPZELURA, we have two qualified third-party
manufacturer from which we can source commercial drug product for the United States market, and one
qualified third-party manufacture from which we can source commercial drug product for markets outside
of the United States.
We may not be able to obtain sufficient quantities of any of our raw materials, drug candidates, API,
or finished goods if our designated manufacturers do not have the capacity or capability to manufacture
our products according to our schedule and specifications. If any of these single source suppliers were to
become unable or unwilling to supply us with API or finished product that complies with applicable regulatory
requirements, we could incur significant delays in our clinical trials or interruption of commercial supply
which could have a material adverse effect on our business.
We have established a quality assurance program intended to ensure that our third-party manufacturers
and service providers produce materials and provide services, as applicable, in accordance with the FDA and
33

EMA’s current Good Manufacturing Practices and other applicable regulations. Our quality assurance
program extends to our licensed facilities that oversee the manufacturing and distribution activities.
For our future products, we intend to continue to establish third-party suppliers to manufacture sufficient
quantities of our drug candidates to undertake clinical trials and to manufacture sufficient quantities of any
product that is approved for commercial sale. If we are unable to contract for large scale manufacturing
with third parties on acceptable terms for our future products or develop manufacturing capabilities internally,
our ability to conduct large scale clinical trials and meet customer demand for commercial products will be
adversely affected.
Third-party Manufacturers
Our third-party manufacturers are independent entities, under contract with us, who are subject to
their own unique operational and financial risks which are out of our control. If we or any of our third-party
manufacturers fail to perform as required, this could impair our ability to deliver our products on a timely
basis or cause delays in our clinical trials and applications for regulatory approval. To the extent these risks
materialize and affect their performance obligations to us, our financial results may be adversely affected.
For products manufactured by our third-party manufacturers, we have licensed the necessary aspects of
this manufacturing technology that we believe is proprietary to us to enable them to manufacture the products
for us. We have agreements with these third-party manufacturers that are intended to restrict these
manufacturers from using or revealing our technology, but we cannot be certain that these third-party
manufacturers will comply with these restrictions.
While we believe there are multiple third parties capable of providing most of the materials and
services we need in order to manufacture API and distribute finished goods, and that supply of materials
that cannot be second sourced can be managed with inventory planning, there is always a risk that we may
underestimate demand, and that our manufacturing capacity through third-party manufacturers may not be
sufficient. In addition, because of the significant lead times involved in our supply chain for ruxolitinib
phosphate, we may have less flexibility to adjust our supply in response to changes in demand than if we
had shorter lead times. Our strategy is to maintain 18 to 24 months of safety stock of API to be able to
respond to changes in demand to provide on-time supply of drug product as well as at least 6 months of semi-
finished goods inventory.
Access to Supplies and Materials
Our third-party manufacturers need access to certain supplies and products to manufacture our
products and drug candidates. If delivery of material from their suppliers were interrupted for any reason
or if they are unable to purchase sufficient quantities of raw materials used to manufacture our products and
drug candidates, they may be unable to ship our products for commercial supply or to supply our drug
candidates in development for clinical trials. For example, currently raw materials used to manufacture
ruxolitinib phosphate, the API in JAKAFI and OPZELURA, are supplied by Chinese-based companies. As
a result, an international trade dispute between China and the United States or any other actions by the
Chinese government that would limit or prevent Chinese companies from supplying these materials would
adversely affect our ability to manufacture and supply our products to meet market needs and have a material
and adverse effect on our operating results. We are currently in the process of qualifying additional
European suppliers to reduce the dependency of our key raw materials on Chinese-based suppliers.
Human Capital
Our human capital management philosophy is committed to promoting an environment where our
colleagues are fulfilled and valued. We promote a company culture based on scientific excellence as we seek
to create new treatments; we are creative in our development strategies; and we seek positive collaboration
with each other. Working collaboratively is of the utmost importance as we aim to change the treatment
landscape for patients with cancer and inflammatory and autoimmune diseases. It is our goal to conduct
business in a manner that does not compromise the health of people or the state of the environment. It is our
policy to comply with all applicable environmental, health and safety (EHS) regulatory requirements and
seek to continually improve our EHS management systems. A strong safety culture is a fundamental part of
34

how we work, and our philosophy is that everyone at Incyte has a responsibility to create and maintain a
safe and healthy workplace to reduce risk and prevent injuries.
We appreciate one another’s differences and strengths and are proud to be an Equal Opportunity
Employer. We value diversity of backgrounds and perspectives, and our policy is that we do not discriminate
based on race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical
condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, military
and veteran status, sexual orientation or any other protected characteristic as established by federal, state
or local laws. Further, we have policies in place that prohibit harassment of all kinds. At Incyte, we prohibit
retaliation in all forms and are committed to encouraging a culture where employees can freely ask
questions and raise concerns. Our management team makes themselves available to all employees and
quarterly global Town Hall events allow for an open question-and-answer dialogue.
We believe that creative solutions are best achieved by diverse teams working together, and inclusion is
therefore essential to Incyte. Diversity of thoughts, backgrounds, perceptions, and ideas help us create the
medical solutions that patients require, and represent the lifeblood of organizations such as ours. We have an
Inclusion Committee, which is co-chaired by our Chief Executive Officer and Chief Human Resources
Officer, to bring forth actionable plans across multiple focus areas. We have continued to expand our
recruitment searches to include organizations and websites dedicated to Black candidates. We post all of our
open positions on the Historically Black Colleges and Universities career pages and participate in diversity
career fairs with national organizations such as the National Black MBA Association, National Organization
for the Professional Advancement of Black Chemists & Chemical Engineers (NOBBChE) and National
Sales Network to expand our recruitment reach.
We offer what we believe is a competitive compensation package, which allows 100% of global Incyte
employees to participate in our annual incentive compensation plan as well as annual equity-based grants.
We seek to ensure our compensation package remains competitive by benchmarking against our peers several
times annually as well as conducting annual compensation reviews to confirm that our employees are being
compensated fairly, equitably and in accordance with our pay structures and job levels. In addition, we offer
what we believe is a competitive benefits package, which includes an option to participate in our Employee
Stock Purchase Plan for both full-time and part-time employees working at least 20 hours per week. We
believe that our health insurance coverage is industry-leading, as it provides 100% coverage for full-time
employees and is 95% subsidized for part-time employees working at least 20 hours per week in the United
States. Beyond compensation and benefits, we are committed to supporting our colleagues in their professional
development. Opportunities for growth are provided through challenging job assignments, performance
management and training opportunities. Globally, all full-time employees are eligible for tuition
reimbursement. We believe these professional opportunities enhance our colleagues’ skills, career aspirations
and job satisfaction as well as provide personal enrichment.
As of December 31, 2024, we had 2,617 employees, representing an increase of approximately 4% over
our 2,524 employees as of the end of the prior year. This growth is largely a result of continued expansion
of our global commercial reach for our business operations. Among our employees, 896 are in research and
development, 212 in medical affairs, 807 in sales and marketing and 702 in operations support and
administrative positions. Geographically, 72% of our employees were based in the United States and
Canada, 26% in Europe and 2% in Asia. In terms of gender diversity, 1,341 are female, 1,260 are male and
16 are non-binary/prefer not to say. Our employees in Austria, Belgium and Spain are covered by collective
agreements, and management considers relations with our employees to be good.
Available Information
We were incorporated in Delaware in 1991 and our website is located at www.incyte.com. We make
available free of charge on our website our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports, as soon as reasonably practicable after we
electronically file or furnish such materials to the Securities and Exchange Commission. Our website and
the information contained therein or connected thereto are not intended to be incorporated into this Annual
Report on Form 10-K.
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Item 1A.
Risk Factors
RISKS RELATING TO COMMERCIALIZATION OF OUR PRODUCTS
We depend heavily on our lead product, JAKAFI (ruxolitinib), which is marketed as JAKAVI outside the
United States. If we are unable to maintain revenues from JAKAFI or those revenues decrease, our business
may be materially harmed.
JAKAFI is our first product marketed by us that is approved for sale in the United States. While we
also sell our and our licensors’ other approved products ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI,
OPZELURA, ZYNYZ and NIKTIMVO and our exclusive licensees sell OLUMIANT and TABRECTA, we
anticipate that JAKAFI product sales will continue to contribute a significant percentage of our total
revenues over the next several years.
The commercial success of JAKAFI and our ability to maintain and continue to increase revenues
from the sale of JAKAFI will depend on a number of factors, including:
• the number of patients with intermediate or high-risk myelofibrosis, uncontrolled polycythemia vera
or steroid-refractory graft-versus-host disease who are diagnosed with the diseases and the number
of such patients that may be treated with JAKAFI;
• the acceptance of JAKAFI by patients and the healthcare community;
• whether physicians, patients and healthcare payors view JAKAFI as therapeutically effective and
safe relative to cost and any alternative therapies, as well as whether patients will continue to use
JAKAFI;
• the ability to obtain and maintain sufficient coverage or reimbursement by third-party payors and
pricing;
• the ability of our third-party manufacturers to manufacture JAKAFI in sufficient quantities that
meet all applicable quality standards;
• the ability of our company and our third-party providers to provide marketing and distribution
support for JAKAFI;
• the label and promotional claims allowed by the FDA;
• the maintenance of regulatory approval for the approved indications in the United States; and
• our ability to develop, obtain regulatory approval for and commercialize ruxolitinib in the United
States for additional indications or in combination with other therapeutic modalities; and
• the effects of a public health pandemic or epidemic such as the COVID-19 pandemic or of adverse
geopolitical events, regulatory, legislative or administrative developments.
If we are not able to maintain revenues from JAKAFI in the United States, or our revenues from
JAKAFI decrease, our business may be materially harmed and we may need to delay other drug discovery,
development and commercialization initiatives or even significantly curtail operations, and our ability to
license or acquire new products to diversify our revenue base could be limited.
In addition, revenues from our other products and our receipt of royalties under our collaboration
agreements, including our agreements with Novartis for sales of JAKAVI outside the United States and
TABRECTA globally and with Eli Lilly and Company for worldwide sales of OLUMIANT, will depend on
factors similar to those listed above, with similar regulatory, pricing and reimbursement issues driven by
applicable regulatory authorities and governmental and third-party payors affecting jurisdictions outside the
United States.
If we are unable to obtain, or maintain at anticipated levels, coverage and reimbursement for our products from
government health administration authorities, private health insurers and other organizations, our pricing
may be affected and our product sales, results of operations and financial condition could be harmed.
Our ability to commercialize our current and any future approved products successfully will depend in
part on the prices we are able to charge for these products and the extent to which adequate coverage and
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reimbursement levels for the cost of our products and related treatment are obtained from third-party
payors, such as private insurers, government insurance programs, including Medicare and Medicaid, health
maintenance organizations (HMOs) and other health care related organizations in the United States and
abroad. We may not be able to sell our products on a profitable basis or our profitability may be reduced if
we are required to sell our products at lower than anticipated prices or reimbursement is unavailable or limited
in scope or amount. The costs of JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA,
ZYNYZ and NIKTIMVO are not insignificant and almost all patients will require some form of
third-party coverage to afford their cost. Our future revenues and profitability will be adversely affected if
we cannot depend on government and other third-party payors to defray the cost of our products to the
patient.
Governments and other third-party payors continue to pursue initiatives to manage drug costs. Pricing
and reimbursement for our products may be adversely affected by a number of factors, including;
• actions of federal, state and foreign governments and other third-party payors to implement or
modify laws, regulations or policies addressing payment and reimbursement for drugs;
• pressure by employers on private health insurance plans to reduce costs or moderate cost increases,
as well as continued public scrutiny of the price of drugs and other healthcare costs;
• consolidation of third-party payors and continued initiatives of government and other third-party
payors to reduce costs by seeking price discounts or rebates, reducing reimbursement rates or imposing
restrictions on access to or coverage of particular drugs based on perceived value;
• pressure on healthcare budgets resulting from macroeconomic factors such as inflation, rising
interest rates and the economic effects of geopolitical conflicts; and
• the increasing number of hospitals and other covered entities that are eligible to participate in the
U.S. 340B drug pricing program, which requires drug manufacturers such as our company to sell drugs
to those entities at discounted prices in order for those drugs to be covered by Medicaid.
In many markets outside of the United States, including countries of the EU, drug pricing and
reimbursement are subject to government control, and government authorities are making greater efforts to
limit or regulate the price of drug products. Reimbursement systems in international markets vary
significantly by country and by region, and reimbursement approvals must be obtained on a country-by-
country basis. Reimbursement in the EU must be negotiated on a country-by-country basis and in many
countries a drug product cannot be commercially launched until reimbursement is approved. The timing to
complete the negotiation process in each country is highly uncertain, and in some countries, we expect that it
may exceed 12 months. Some countries set prices by reference to prices in other countries, and countries
may refuse to reimburse or may restrict the reimbursed population for a drug product based on their national
health technology assessments and cost effectiveness thresholds. In addition, governmental authorities in
many countries may reduce prices for approved drug products from previously established prices.
Third-party payors are increasingly challenging the prices charged for medical products and services,
and payors and employers are adopting benefit plan changes that shift a greater portion of prescription
drug costs to patients. Third party pharmacy benefit managers, or PBMs, other similar organizations and
payors can limit coverage to specific products on an approved list, or formulary, which might not include all
of the approved products for a particular indication, and to exclude drugs from their formularies in favor
of competitor drugs or alternative treatments, or place drugs on formulary tiers with higher patient co-pay
obligations, and/or to mandate stricter utilization criteria. Formulary exclusion effectively encourages patients
and providers to seek alternative treatments, make a complex and time-intensive request for medical
exemptions, or pay 100% of the cost of a drug. In addition, in many instances, certain PBMs, other similar
organizations and third party payors may exert negotiating leverage by requiring incremental rebates, discounts
or other concessions from manufacturers in order to maintain formulary positions, which could continue
to result in higher gross to net deductions for affected products. There has been significant consolidation in
the health insurance industry, resulting in large insurers and PBMs exerting greater pressure and leverage
in pricing and usage negotiations with drug manufacturers. In this regard, while we have entered into
agreements with a number of PBMs, we are in the process of negotiating agreements with additional PBMs
and payor accounts to provide rebates to those entities related to formulary coverage for OPZELURA,
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and we cannot guarantee that we will be able to agree to or maintain acceptable coverage terms with these
PBMs and other third party payors for OPZELURA or additional products in the future. Payors could decide
to exclude our products from formulary coverage lists, impose step edits that require patients to try
alternative, including generic, treatments before authorizing payment for our products, limit the types of
diagnoses for which coverage will be provided or impose a moratorium on coverage for products while the
payor makes a coverage decision. An inability to maintain adequate formulary positions could increase patient
cost-sharing for our products and cause some patients to determine not to use our products. Any delays or
unforeseen difficulties in reimbursement approvals could limit patient access, depress therapy adherence rates,
and adversely impact our ability to successfully commercialize our products. If we are unsuccessful in
obtaining and maintaining broad coverage and reimbursement for our products, our anticipated revenue
from and growth prospects for our products could be negatively affected.
If third parties institute high co-payment amounts or other benefit limits for our products, the demand
for our products and, accordingly, our revenues and results of operations, could be adversely affected. Our
patient assistance programs have provided support for non-profit organizations that provide financial
assistance to eligible patients or in some cases, we have provided our products without charge to eligible
patients who have no insurance coverage or are underinsured. Substantial support in this manner could harm
our profitability in the future. Further, non-profit organizations’ ability to provide assistance to patients is
dependent on funding from external sources, and we cannot guarantee that such funding will be provided at
adequate levels, or at all.
Risks related to proposed changes in government regulations and health care reform measures are
described below under “— Other Risks Relating to our Business — Health care reform measures could
impact the pricing and profitability of pharmaceuticals, and adversely affect the commercial viability of our
or our collaborators’ products and drug candidates.” If government and other third-party payors refuse to
provide coverage and reimbursement with respect to our products, determine to provide a lower level of
coverage and reimbursement than anticipated, reduce previously approved levels of coverage and
reimbursement, or delay reimbursement payments, then our pricing or reimbursement for our products may
be affected and our product sales, results of operations or financial condition could be harmed. Our
collaborators Novartis and Eli Lilly are affected by similar considerations for the drugs that they market
and for which we may receive royalties.
We depend upon a limited number of specialty pharmacies and wholesalers for a significant portion of any
revenues from JAKAFI and most of our other drug products, and the loss of, or significant reduction in sales
to, any one of these specialty pharmacies or wholesalers could adversely affect our operations and financial
condition.
We sell JAKAFI and our other drug products other than OPZELURA primarily to specialty pharmacies
and wholesalers. Specialty pharmacies dispense JAKAFI and our other drug products to patients in fulfillment
of prescriptions and wholesalers sell JAKAFI and our other drug products to hospitals and physician
offices. We do not promote JAKAFI or our other drug products to specialty pharmacies or wholesalers, and
they do not set or determine demand for JAKAFI or our other drug products. Our ability to successfully
commercialize JAKAFI and our other drug products will depend, in part, on the extent to which we are able
to provide adequate distribution of JAKAFI and our other drug products to patients. Although we have
contracted with a number of specialty pharmacies and wholesalers, they are expected generally to carry a very
limited inventory and may be reluctant to be part of our distribution network in the future if demand for
the product does not increase. Further, it is possible that these specialty pharmacies and wholesalers could
decide to change their policies or fees, or both, at some time in the future. This could result in their refusal to
carry smaller volume products such as JAKAFI and our other drug products, or lower margins or the need
to find alternative methods of distributing our product. Although we believe we can find alternative channels
to distribute JAKAFI or our other drug products on relatively short notice, our revenue during that period
of time may suffer and we may incur additional costs to replace any such specialty pharmacy or wholesaler.
The loss of any large specialty pharmacy or wholesaler as part of our distribution network, a significant
reduction in sales we make to specialty pharmacies or wholesalers, or any failure to pay for the products we
have shipped to them could materially and adversely affect our results of operations and financial condition.
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If we are unable to establish and maintain effective sales, marketing and distribution capabilities, or to enter
into agreements with third parties to do so, we will not be able to successfully commercialize our products.
We have established commercial capabilities in the United States and outside of the United States,
but cannot guarantee that we will be able to enter into and maintain any marketing, distribution or
third-party logistics agreements with third-party providers on acceptable terms, if at all. We may not be able
to correctly judge the size and experience of the sales and marketing force and the scale of distribution
capabilities necessary to successfully market and sell any new products. Establishing and maintaining sales,
marketing and distribution capabilities are expensive and time-consuming. Competition for personnel with
experience in sales and marketing can be high. Our expenses associated with building and maintaining the
sales force and distribution capabilities may be disproportional compared to the revenues we may be able to
generate on sales of our products.
We are continuing to establish and maintain sales, marketing and distribution capabilities for
OPZELURA. Successful commercialization of our drug candidates for dermatology indications requires us
to establish new physician and payor relationships, PBM and pharmacy network relationships, reimbursement
strategies and governmental interactions, separate from our existing capabilities for oncology indications.
Our inability to commercialize successfully products in indications outside of oncology could harm our
business and operating results.
If we fail to comply with applicable laws and regulations, we could lose our approval to market our products or
be subject to other governmental enforcement activity.
We cannot guarantee that we will be able to maintain regulatory approval to market our products in
the jurisdictions in which they are currently marketed. If we do not maintain our regulatory approval to
market our products, in particular JAKAFI, our results of operations will be materially harmed. We and our
collaborators, third-party manufacturers and suppliers are subject to rigorous and extensive regulation by
the FDA and other federal and state agencies as well as foreign governmental agencies. These regulations
continue to apply after product marketing approval, and cover, among other things, testing, manufacturing,
quality control and assurance, labeling, advertising, promotion, risk mitigation, and adverse event reporting
requirements.
The commercialization of our products is subject to post-regulatory approval product surveillance, and
our products may have to be withdrawn from the market or subject to restrictions if previously unknown
problems occur. Regulatory agencies may also require additional clinical trials or testing for our products, and
our products may be recalled or may be subject to reformulation, additional studies, changes in labeling,
warnings to the public and negative publicity. For example, from late 2013 through 2014, ICLUSIG was
subject to review by the European Medicines Agency, or EMA, of the benefits and risks of ICLUSIG to
better understand the nature, frequency and severity of events obstructing the arteries or veins, the potential
mechanism that leads to these side effects and whether there needed to be a revision in the dosing
recommendation, patient monitoring and a risk management plan for ICLUSIG. This review was completed
in January 2015, with additional warnings in the product information but without any change in the
approved indications. The EMA could take additional actions in the future that reduce the commercial
potential of ICLUSIG. In addition, in September 2021, the FDA updated labeling for JAKAFI and other
JAK inhibitor drugs to include warnings of increased risk of major adverse cardiovascular events, thrombosis,
and secondary malignancies related to another JAK-inhibitor treating rheumatoid arthritis, a condition for
which JAKAFI is not indicated. As part of the FDA labeling update for oral JAK inhibitors in treating
inflammatory conditions, class “boxed” warnings were also included in the OPZELURA label. We cannot
predict the effects on sales of JAKAFI with the updated warnings or OPZELURA as a result of the “boxed”
warnings, but it is possible that future sales of JAKAFI and OPZELURA can be negatively affected,
which could have a material and adverse effect on our business, results of operations and prospects.
Failure to comply with the laws and regulations administered by the FDA or other agencies could result
in:
• administrative and judicial sanctions, including warning letters;
• fines and other civil penalties;
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• suspension or withdrawal of regulatory approval to market or manufacture our products;
• interruption of production;
• operating restrictions;
• product recall or seizure;
• injunctions; and
• criminal prosecution.
The occurrence of any such event may have a material adverse effect on our business.
Furthermore, disruptions at the FDA and other regulatory agencies could prevent those agencies from
performing normal business functions on which the operation of our business relies, which could negatively
impact our business.
If the use of our products harms patients, or is perceived to harm patients even when such harm is unrelated to
our products, our regulatory approvals could be revoked or otherwise negatively impacted or we could be subject
to costly and damaging product liability claims.
The testing of JAKAFI, ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, OPZELURA, ZYNYZ
and NIKTIMVO, the manufacturing, marketing and sale of JAKAFI, PEMAZYRE, OPZELURA and
NIKTIMVO and the marketing and sale of ICLUSIG, MONJUVI/MINJUVI and ZYNYZ expose us to
product liability and other risks. Side effects and other problems experienced by patients from the use of our
products could:
• lessen the frequency with which physicians decide to prescribe our products;
• encourage physicians to stop prescribing our products to their patients who previously had been
prescribed our products;
• cause serious harm to patients that may give rise to product liability claims against us; and
• result in our need to withdraw or recall our products from the marketplace.
If our products are used by a wide patient population, new risks and side effects may be discovered, the
rate of known risks or side effects may increase, and risks previously viewed as less significant could be
determined to be significant.
Previously unknown risks and adverse effects of our products may also be discovered in connection
with unapproved, or off-label, uses of our products. We are prohibited by law from promoting or in any way
supporting or encouraging the promotion of our products for off-label uses, but physicians are permitted
to use products for off-label purposes. In addition, we are studying and expect to continue to study JAKAFI
in diseases for potential additional indications in controlled clinical settings, and independent investigators
are doing so as well. In the event of any new risks or adverse effects discovered as new patients are treated for
intermediate or high-risk myelofibrosis, uncontrolled polycythemia vera or acute graft-versus-host disease
and as JAKAFI is studied in or used by patients for off-label indications, regulatory authorities may delay or
revoke their approvals, we may be required to conduct additional clinical trials, make changes in labeling of
JAKAFI, reformulate JAKAFI or make changes and obtain new approvals. We may also experience a
significant drop in the sales of JAKAFI, experience harm to our reputation and the reputation of JAKAFI
in the marketplace or become subject to lawsuits, including class actions. Any of these results could
decrease or prevent sales of JAKAFI or substantially increase the costs and expenses of commercializing
JAKAFI. Similar results could occur with respect to our commercialization of ICLUSIG, PEMAZYRE,
MONJUVI/MINJUVI, OPZELURA, ZYNYZ and NIKTIMVO.
Patients who have been enrolled in our clinical trials or who may use our products in the future often
have severe and advanced stages of disease and known as well as unknown significant pre-existing and
potentially life-threatening health risks. During the course of treatment, patients may suffer adverse events,
including death, for reasons that may or may not be related to our products. Such events could subject us to
costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively
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impact or end our opportunity to receive or maintain regulatory approval to market our products, or
require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not
believe that an adverse event is related to our products, the investigation into the circumstance may be
time consuming or inconclusive. These investigations may interrupt our sales efforts, impact and limit the
type of regulatory approvals our products receive or maintain, or delay the regulatory approval process in
other countries.
Factors similar to those listed above also apply to our license collaborators in the jurisdictions in which
they have development and commercialization rights.
If we market our products in a manner that violates various laws and regulations, we may be subject to civil or
criminal penalties.
In addition to FDA and related regulatory requirements, we are subject to health care “fraud and
abuse” laws, such as the federal False Claims Act, the anti-kickback provisions of the federal Social Security
Act, and other state and federal laws and regulations. Federal and state anti-kickback laws prohibit,
among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce,
or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any health
care item or service reimbursable under Medicare, Medicaid, or other federally- or state-financed health care
programs. Federal false claims laws prohibit any person from knowingly presenting, or causing to be
presented, a false claim for payment to the federal government, or knowingly making, or causing to be
made, a false statement to get a false claim paid. Pharmaceutical companies have been prosecuted under
these laws for a variety of alleged promotional and marketing activities.
Although physicians are permitted, based on their medical judgment, to prescribe products for
indications other than those approved by the FDA, manufacturers are prohibited from promoting their
products for such off-label uses. Although we believe that our promotional materials for physicians do not
constitute improper promotion, the FDA or other agencies may disagree. If the FDA or another agency
determines that our promotional materials or other activities constitute improper promotion, it could request
that we modify our promotional materials or other activities or subject us to regulatory enforcement
actions, including the issuance of a warning letter, injunction, seizure, civil fine and criminal penalties. It is
also possible that other federal, state or foreign enforcement authorities might take action if they believe that
the alleged improper promotion led to the submission and payment of claims for an unapproved use,
which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting
false claims for reimbursement. Even if it is later determined we are not in violation of these laws, we may
be faced with negative publicity, incur significant expenses defending our position and have to divert significant
management resources from other matters.
The European Union and member countries, as well as governmental authorities in other countries,
impose similar strict restrictions on the promotion and marketing of drug products. The off-label promotion
of medicinal products is prohibited in the EU and in other territories, and the EU also maintains strict
controls on advertising and promotional materials. The promotion of medicinal products that are not subject
to a marketing authorization is also prohibited in the EU. Violations of the rules governing the promotion
of medicinal products in the EU and in other territories could be penalized by administrative measures, fines
and imprisonment.
The majority of states also have statutes or regulations similar to the federal anti-kickback law and
false claims laws, which apply to items and services reimbursed under Medicaid and other state programs,
or, in several states, apply regardless of the payor. Numerous states and localities have enacted or are
considering enacting legislation requiring pharmaceutical companies to establish marketing compliance
programs, file periodic reports or make periodic public disclosures on sales, marketing, pricing, clinical trials,
and other activities. Additionally, as part of the Patient Protection and Affordable Care Act, the federal
government has enacted the Physician Payment Sunshine provisions. These Physician Payment Sunshine
provisions and similar laws and regulations in other jurisdictions where we do business require manufacturers
to publicly report certain payments or other transfers of value made to physicians and teaching hospitals.
Many of these requirements are new and uncertain, and the penalties for failure to comply with these
requirements are unclear. Nonetheless, if we are found not to be in full compliance with these laws, we could
face enforcement action and fines and other penalties, which could be significant in amount or result in
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exclusion from federal healthcare programs such as Medicare and Medicaid. Any action initiated against us
for violation of these laws, even if we successfully defend against it, could require the expenditure of
significant resources and generate negative publicity, which could harm our business and operating results,
and any settlement of such action initiated against us, regardless of the merits, could result in the payment of
significant amounts, which could harm our financial condition and operating results. See also “— Other
Risks Relating to our Business — If we fail to comply with the extensive legal and regulatory requirements
affecting the health care industry, we could face increased costs, penalties and a loss of business” below.
Competition for our products could harm our business and result in a decrease in our revenue.
Our products compete, and our product candidates may in the future compete, with currently existing
therapies, including generic drugs, product candidates currently under development by us and others, or
future product candidates, including new chemical entities that may be safer or more effective or more
convenient than our products. Any products that we develop may be commercialized in competitive markets,
and our competitors, which include large global pharmaceutical and biopharmaceutical companies and
smaller research-based biotechnology companies, may succeed in developing products that render our
products obsolete or noncompetitive. Many of our competitors, particularly large pharmaceutical and
biopharmaceutical companies, have substantially greater financial, operational and human resources than
we do. Smaller or earlier stage companies may also prove to be significant competitors, particularly through
focused development programs and collaborative arrangements with large, established companies. In
addition, many of our competitors deploy more personnel to market and sell their products than we do,
and we compete with other companies to recruit, hire, train and retain pharmaceutical sales and marketing
personnel. If our sales force and sales support organization are not appropriately resourced and sized to
adequately promote our products, the commercial potential of our current and any future products may
be diminished. In any event, the commercial potential of our current products and any future products may
be reduced or eliminated if our competitors develop or acquire and commercialize generic or branded
products that are safer or more effective, are more convenient or are less expensive than our products. See
“Item 1. Business — Competition”in this Annual Report on Form 10-K for additional information regarding
the effects of competition. If we are unable to compete successfully, our commercial opportunities will be
reduced and our business, results of operations and financial conditions may be materially harmed.
Present and potential competitors for JAKAFI include major pharmaceutical and biotechnology
companies, as well as specialty pharmaceutical firms. In addition, JAKAFI could face competition from
generic products. As a result of the Drug Price Competition and Patent Term Restoration Act of 1984,
commonly known as the Hatch-Waxman Act, in the United States, generic manufacturers may seek approval
of a generic version of an innovative pharmaceutical by filing with the FDA an Abbreviated New Drug
Application, or ANDA. The Hatch-Waxman Act provides significant incentives to generic manufacturers
to challenge U.S. patents on successful innovative pharmaceutical products. In February 2016, we received a
notice letter from Apotex, Inc. regarding its filing of an ANDA that requested approval to market a
generic version of JAKAFI and purported to challenge patents covering ruxolitinib phosphate and its use
that expire (with pediatric extension) in December 2028. The notice letter does not challenge the ruxolitinib
composition of matter patent, which expires (with pediatric extension) in June 2028. To date, to our
knowledge, the FDA has taken no action with respect to this ANDA. Subsequently, we received a notice
letter in February 2024 from Apotex challenging the patent covering ruxolitinib composition of matter and
its use, which expires (with pediatric extension) in June 2028. In response, in March 2024, we initiated a
patent infringement action against Apotex in the U.S. District Court for the District of New Jersey asserting
certain FDA Orange Book listed patents. That action remains pending.
With respect to deuterated ruxolitinib, in January 2018 the Patent Trial and Appeal Board, or PTAB, of
United States Patent and Trademark Office denied institution of a petition challenging our patent covering
deuterated ruxolitinib analogs. The PTAB subsequently denied the petitioner’s request for rehearing in
May 2018. Although the PTAB’s decision is now final, the petitioner still has the right separately to challenge
the validity of our patent in federal court.
In July 2024, the FDA approved a deuterated ruxolitinib product owned by Sun Pharmaceutical
Industries Ltd. and Sun Pharmaceutical Industries, Inc., collectively referred to as Sun, for the treatment of
severe alopecia areata to be commercialized as “Leqselvi (deuruxolitinib)”. Prior to the regulatory approval
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of Leqselvi, we sued Sun for infringement of our patent covering deuterated ruxolitinib analogs in the U.S.
District Court for the District of New Jersey and sought a preliminary injunction to bar Sun’s launch of
Leqselvi during the pendency of the litigation. On November 1, 2024, the court entered an order granting
our preliminary injunction request. Sun has appealed the court’s preliminary injunction order to the U.S.
Court of Appeals for the Federal Circuit. Both our underlying infringement action and Sun’s appeal of the
court’s preliminary injunction order remain pending.
ICLUSIG currently competes with existing therapies that are approved for the treatment of patients
with chronic myeloid leukemia, or CML, who are resistant or intolerant to prior tyrosine kinase inhibitor,
or TKI, therapies, on the basis of, among other things, efficacy, cost, breadth of approved use and the safety
and side-effect profile. In addition, generic versions of imatinib are available and, while we currently
believe that generic versions of imatinib will not materially impact our commercialization of ICLUSIG,
given ICLUSIG’s various indication statements globally that are currently focused on resistant or intolerant
CML, we cannot be certain how physicians, payors, patients, regulatory authorities and other market
participants will respond to the availability of generic versions of imatinib.
MONJUVI/MINJUVI currently competes with existing therapies that are approved for the treatment
of patients with diffuse large B-cell lymphoma on the basis of, among other things, efficacy, cost, breadth of
approved use and the safety and side-effect profile. These existing therapies are offered by major
pharmaceutical and biotechnology companies, as well as specialty pharmaceutical firms. Competitors and
potential competitors for PEMAZYRE, ZYNYZ and NIKTIMVO include major pharmaceutical and
biotechnology companies, as well as specialty pharmaceutical firms.
Competitors for OPZELURA include existing over-the-counter topical treatments and prescription
topical treatments, as well as oral and injectable therapies, from major pharmaceutical and biotechnology
companies, and companies that produce generic version of prescription treatments. In September 2023, we
received a notice letter from Padagis Israel Pharmaceuticals Ltd. regarding its filing of an ANDA that
requested approval to market a generic version of OPZELURA and purported to challenge patents covering
ruxolitinib phosphate cream and its uses that expire in 2031 and 2040. The notice letter does not challenge
ruxolitinib nor the ruxolitinib phosphate composition of matter patents, providing patent coverage (with
pediatric extension) until December 2028. To date, to our knowledge, the FDA has taken no action with
respect to this ANDA. In November 2023, we initiated a patent infringement action against Padagis in the
U.S. District Court for the District of New Jersey asserting certain FDA Orange Book listed patents. That
action remains pending.
There can be no assurance that our patents will be upheld or that any litigation in which we might
engage with any generic manufacturer would be successful in protecting exclusivity of our products. The
entry of a competitive drug product from another company or a generic version of one of our products could
result in a decrease in sales of our products and materially harm our business, operating results, and
financial condition.
Factors similar to those listed above also apply to our collaborator Novartis for JAKAVI and
TABRECTA in jurisdictions in which it has commercialization rights and to our collaborator Lilly for
OLUMIANT all jurisdictions.
OTHER RISKS RELATING TO OUR BUSINESS
We may be unsuccessful in our efforts to discover and develop drug candidates and commercialize drug
products.
Our long term success, revenue growth and diversification of revenues depends on our ability to obtain
regulatory approval for new drug products and additional indications for our existing drug products. Our
ability to discover and develop drug candidates and to commercialize additional drug products and indications
will depend on our ability to:
• hire and retain key employees;
• identify high quality therapeutic targets;
• identify potential drug candidates;
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• develop products internally or license or acquire drug candidates from others;
• identify and enroll suitable human subjects, either in the United States or abroad, for our clinical
trials;
• complete laboratory testing;
• commence, conduct and complete safe and effective clinical trials on humans;
• obtain and maintain necessary intellectual property rights to our products;
• obtain and maintain necessary regulatory approvals for our products, both in the United States and
abroad;
• enter into arrangements with third parties to provide services or to manufacture our products on our
behalf;
• deploy sales, marketing, distribution and manufacturing resources effectively or enter into
arrangements with third parties to provide these functions in compliance with all applicable laws;
• obtain appropriate coverage and reimbursement levels for the cost of our products from governmental
authorities, private health insurers and other third-party payors;
• lease facilities at reasonable rates to support our growth; and
• enter into arrangements with third parties to license and commercialize our products.
The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and
significant technological change. Despite investing significant resources, we may not be successful in
discovering, developing, or commercializing additional drug products or our existing drug products in new
indications. Discovery and development of drug candidates are expensive, uncertain and time-consuming,
and we do not know if our efforts will lead to discovery of any drug candidates that can be successfully
developed and marketed. We, or our collaborators or licensees, may decide to discontinue development of
any or all of our drug candidates at any time for commercial, scientific or other reasons. Even if a drug
candidate received marketing approval, it may not be able to achieve market acceptance or compete
successfully with competitors’ products and we may have spent significant amounts of time and money on
it without achieving potential returns initially anticipated, which could adversely affect our operating results
and financial condition as well as our business plans. Of the compounds or biologics that we identify as
potential drug products or that we may in-license from other companies, including potential products for
which we are conducting clinical trials, only a few, if any, are likely to lead to successful drug development
programs and commercialized drug products.
If we or our collaborators are unable to obtain regulatory approval for our drug candidates in the United
States and foreign jurisdictions, we or our collaborators will not be permitted to commercialize products resulting
from our research.
In order to commercialize drug products in the United States, drug candidates will have to obtain
regulatory approval from the FDA. Satisfaction of regulatory requirements typically takes many years. To
obtain regulatory approval, we or our collaborators, as the case may be, must first show that our or our
collaborators’ drug candidates are safe and effective for target indications through preclinical testing (animal
testing) and clinical trials (human testing). Preclinical testing and clinical development are long, expensive
and uncertain processes, and we do not know whether the FDA will allow us or our collaborators to undertake
clinical trials of any drug candidates in addition to our or our collaborators’ compounds currently in
clinical trials. If regulatory approval of a product is granted, this approval will be limited to those disease
states and conditions for which the product is demonstrated through clinical trials to be safe and effective.
Completion of clinical trials may take several years and failure may occur at any stage of testing. The
length of time required varies substantially according to the type, complexity, novelty and intended use of
the drug candidate. Interim results of a preclinical test or clinical trial do not necessarily predict final results,
and acceptable results in early clinical trials may not be repeated in later clinical trials. For example, a drug
candidate that is successful at the preclinical level may cause harmful or dangerous side effects when tested at
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the clinical level. Our rate of commencement and completion of clinical trials may be delayed, and existing
clinical trials with our or our collaborators’ drug candidates may be stopped, due to many potential factors,
including:
• the high degree of risk and uncertainty associated with drug development;
• our inability to formulate or manufacture sufficient quantities of materials for use in clinical trials;
• variability in the number and types of patients available for each study;
• difficulty in maintaining contact with patients after treatment, resulting in incomplete data;
• unforeseen safety issues or side effects;
• poor or unanticipated effectiveness of drug candidates during the clinical trials; or
• government or regulatory delays.
Data obtained from clinical trials are susceptible to varying interpretation, which may delay, limit or
prevent regulatory approval. Many companies in the pharmaceutical and biopharmaceutical industry,
including our company, have suffered significant setbacks in advanced clinical trials, even after achieving
promising results in earlier clinical trials. In addition, regulatory authorities may refuse or delay approval as
a result of other factors, such as changes in regulatory policy during the period of product development
and regulatory agency review. For example, the FDA has in the past required, and could in the future require,
that we or our collaborators conduct additional trials of any of our drug candidates, which would result in
delays and could result in our termination of a drug development program. From time to time we and our
collaborators have experienced events that have resulted in delays, setbacks and terminations of drug
development programs. In April 2017, we and our collaborator Lilly announced that the FDA had issued a
complete response letter for the New Drug Application, or NDA, of OLUMIANT as a once-daily oral
medication for the treatment of moderate-to-severe rheumatoid arthritis. The letter indicated that additional
clinical data were needed to determine the most appropriate doses and to further characterize safety concerns
across treatment arms. In June 2018, after a resubmission of the NDA, the FDA approved the 2mg dose of
OLUMIANT for the treatment of adults with moderately-to-severely active rheumatoid arthritis who have
had an inadequate response to one or more tumor necrosis factor inhibitor therapies. The FDA did not at
that time approve any higher dose of OLUMIANT and required a warning label in connection with its
approval. In addition, in January 2022, we announced that we withdrew the NDA seeking approval of
parsaclisib for the treatment of patients with relapsed or refractory follicular lymphoma, marginal zone
lymphoma and mantle cell lymphoma. The decision to withdraw the NDA followed discussions with FDA
regarding confirmatory clinical trials that we determined cannot be completed within the time period to
support the investment. Also, in March 2023, we received a complete response letter for ruxolitinib extended-
release (XR) tablets, which identified additional requirements for approval.
Compounds or biologics developed by us or with or by our collaborators and licensees may not prove
to be safe and effective in clinical trials and may not meet all of the applicable regulatory requirements needed
to receive marketing approval. For example, in April 2018, we along with Merck announced that the
ECHO-301 study had been stopped and we also significantly downsized the epacadostat development
program and in January 2020 we stopped our Phase 3 trial of itacitinib for the treatment of acute graft-versus-
host-disease. If clinical trials of any of our or our collaborators’ compounds or biologics are stopped for
safety, efficacy or other reasons or fail to meet their respective endpoints, our overall development plans,
business, prospects, expected operating results and financial condition could be materially harmed and the
value of our company could be negatively affected.
Even if any of our applications receives an FDA Fast Track or priority review designation (including
based on a priority review voucher, one of which we recently acquired and used in connection with our
submission seeking FDA approval of ruxolitinib cream for atopic dermatitis), these designations may not
result in faster review or approval for our product candidate compared to product candidates considered for
approval under conventional FDA procedures and, in any event, do not assure ultimate approval of our
product candidate by FDA. For example, in June 2021 we were informed by the FDA that the FDA had
extended by three months the review period for the NDA for ruxolitinib cream for atopic dermatitis. Also,
in July 2021, we announced that the FDA issued a complete response letter for the BLA of retifanlimab for
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the treatment of squamous cell carcinoma of the anal canal, in which the FDA stated it cannot approve the
BLA and that additional data are needed. In addition, while the FDA had granted orphan drug designation
and Fast Track designation to parsaclisib as a treatment for patients with follicular lymphoma, marginal zone
lymphoma and mantle cell lymphoma, as discussed above we withdrew our NDA seeking approval for
treatment of patients with those lymphomas. The FDA has recently increased its attention on mandated
confirmatory trials for oncology drug candidates with accelerated approvals, and the logistics, cost and timing
required for confirmatory trials may conflict with the investment thesis for drug candidates, resulting in
withdrawal of approval applications.
Outside the United States, our and our collaborators’ ability to market a product is contingent upon
receiving a marketing authorization from the appropriate regulatory authorities. This foreign regulatory
approval process typically includes all of the risks associated with the FDA approval process described above
and may also include additional risks. The requirements governing the conduct of clinical trials, product
licensing, pricing and reimbursement vary greatly from country to country and may require us to perform
additional testing and expend additional resources. Approval by the FDA does not ensure approval by
regulatory authorities in other countries, and approval by one foreign regulatory authority does not ensure
approval by regulatory authorities in other countries or by the FDA.
Health care reform measures could impact the pricing and profitability of pharmaceuticals, and adversely
affect the commercial viability of our or our collaborators’ products and drug candidates.
In recent years, through legislative and regulatory actions and executive orders, the U.S. federal
government has made substantial changes to various payment systems under the Medicare and other
federal health care programs. Comprehensive reforms to the U.S. healthcare system were enacted, including
changes to the methods for, and amounts of, Medicare reimbursement. For example, the American
Rescue Plan Act of 2021 includes a provision that became effective in January 2024 that eliminates the
statutory cap on rebates that drug manufacturers pay to Medicaid. It is expected that this provision, as
implemented by the Centers for Medicare and Medicaid Services, or CMS, will have the effect of increasing
Medicaid rebate liability, particularly in the case of medicines that have experienced price increases at a
rate in excess of inflation. Further, in August 2022, the Inflation Reduction Act of 2022 was enacted, which
includes provisions allowing the federal government to negotiate prices for certain high-expenditure single
source Medicare drugs, to impose penalties and to implement a potential excise tax for manufacturers that fail
to comply with the negotiation by offering a price that is not equal to or less than the negotiated “maximum
fair price” under the law, and to impose rebate liability on manufacturers that take price increases that
exceed inflation. The new law also reduced the out-of-pocket prescription drug costs for Medicare Part D
beneficiaries, and to help pay for this change in benefit design, the law imposes a new discount program
starting in 2025, in which manufacturers pay specified discounts on Medicare Part D utilization of their drugs
as a condition of selling such drugs in the Medicare Part D program. The Inflation Reduction Act includes
certain exemptions for small biotech drug manufacturers, including Incyte. These exemptions apply on a
drug-specific basis, and qualifying drugs will be exempt from possible negotiation through 2028 and subject
to reduced discounts that will be phased-in over a number of years under the new Part D benefit. While
there is currently significant uncertainty regarding the implementation of some of these reforms or the scope
of amended or additional reforms, the implementation of reforms could significantly reduce net sales
resulting from the Medicare programs and limit our ability to increase the prices that we charge for our
drugs. Reforms or other changes to these payment systems may change the availability, methods and rates
of reimbursements from Medicare, private insurers and other third-party payors for our current and any
future approved products. These reforms may affect future investments in our drug development, should the
reforms affect our risk-benefit analysis of investing in a drug candidate. Some of these changes and
proposed changes could result in reduced reimbursement rates or the elimination of dual sources of payment,
which could reduce the price that we or any of our collaborators or licensees receive for any products in
the future, and which would adversely affect our business strategy, operations and financial results.
In addition, there has been an increasing legislative and enforcement interest in the United States with
respect to drug pricing practices. This has resulted in significant legislative activity and proposals from the
prior and current Administrations relating to prescription drug prices and reimbursement, any of which, if
enacted, could impose downward pressure on the prices that we can charge for our products and may
further limit the commercial viability of our products and drug candidates. Specifically, there have been
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ongoing federal congressional inquiries and proposed and enacted federal and state legislation, executive
orders and administrative agency rules designed to, among other things, bring more transparency to drug
pricing, reduce drug prices, reform government program reimbursement methodologies for prescription drugs,
expand access to government-mandated discounted pricing (known as 340B pricing) through broader
contract pharmacy arrangements, allow importation of drugs into the United States from other countries,
and limit allowable prices for drugs through reference to an average price from foreign markets that may be
substantially lower than what we currently or would otherwise charge. In certain foreign markets, pricing
or profitability of prescription pharmaceuticals is subject to government control. We expect that the health
care reform measures that have been adopted in the United States and in foreign markets, and further reforms
that may be adopted in the future, could result in more rigorous coverage criteria and additional downward
pressure on the prices that we may receive for our approved products. If reimbursement for our products
is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could
be materially harmed, including by our revenue potentially being materially adversely affected and our research
and development efforts potentially being materially curtailed or, in some cases, ceasing. There may be
future changes that result in reductions in current prices, coverage and reimbursement levels for our current
or any future approved products, and we cannot predict the scope of any future changes or the impact
that those changes would have on our operations.
Further, if we become the subject of any governmental or other regulatory hearing or investigation
with respect to the pricing of our products or other business practices, we could incur significant expenses
and could be distracted from the operation of our business and execution of our business strategy. Any such
hearing or investigation could also result in significant negative publicity and harm to our reputation,
reduced market acceptance and demand, which could adversely affect our financial results and growth
prospects.
In addition, the trend toward managed health care in the United States, the organizations for which
could control or significantly influence the purchase of health care services and products, as well as legislative
and regulatory proposals to reform health care or address the cost of government insurance programs,
may all result in lower prices for or rejection of our products. Adoption of our products by the medical
community and patients may be limited without adequate reimbursement for those products. Cost control
initiatives may decrease coverage and payment levels for our products and, in turn, the price that we will be
able to charge for any product. Our products may not be considered cost-effective, and coverage and
reimbursement may not be available or sufficient to allow us to sell our products on a profitable basis. We
are unable to predict all changes to the coverage or reimbursement methodologies that will be applied by
private or government payors to our current and any future approved products.
The continuing efforts of legislatures, health agencies and third-party payors to contain or reduce the
costs of health care, any denial of private or government payor coverage or inadequate reimbursement for
our drug candidates could materially and adversely affect our business strategy, operations, future revenues
and profitability, and the future revenues and profitability of our potential customers, suppliers, collaborators
and licensees and the availability of capital. The same risks apply to our compounds developed and
marketed by our collaborators, and our future potential milestone and royalty revenues could be affected in
a similar manner.
We depend on our collaborators and licensees for the future development and commercialization of some of our
drug candidates. Conflicts may arise between our collaborators and licensees and us, or our collaborators and
licensees may choose to terminate their agreements with us, which may adversely affect our business.
We have licensed to Novartis rights to ruxolitinib outside of the United States and worldwide rights to
our MET inhibitor compounds, including TABRECTA, and licensed to Lilly worldwide rights to baricitinib.
In addition, we have licensed certain Asian rights to some of our drug products and clinical stage compounds
to other collaborators. Under the terms of our agreements with these collaborators, we have no or limited
control over the further clinical development of these drug candidates in the relevant territories and any
revenues we may receive if these drug candidates receive regulatory approval and are commercialized in the
relevant territories will depend primarily on the development and commercialization efforts of others.
While OLUMIANT was approved by the European Commission in February 2017 for the treatment of
moderate-to-severe rheumatoid arthritis in adult patients and by Japan’s Ministry of Health, Labor and
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Welfare in July 2017 for the treatment of rheumatoid arthritis in patients with inadequate response to standard-
of-care therapies, the NDA for OLUMIANT for the treatment of moderate-to-severe rheumatoid arthritis
was approved in June 2018, and only in the lower dosage tablet and with a warning label. Delays in any
marketing approval by the FDA, European or other regulatory authorities, or any label modifications or
restrictions in connection with any such approval, or the existence of other risks relating to approved drug
products, including those described under “Risks Relating to Commercialization of Our Products,” could
delay the receipt of and reduce resulting potential royalty and milestone revenue from baricitinib or any
of our other out-licensed drug candidates.
Conflicts may arise with our collaborators and licensees if they pursue alternative technologies or
develop alternative products either on their own or in collaboration with others as a means for developing
treatments for the diseases that we have targeted. Competing products and product opportunities may lead
our collaborators and licensees to withdraw their support for our drug candidates. Any failure of our
collaborators and licensees to perform their obligations under our agreements with them or otherwise to
support our drug candidates could negatively impact the development of our drug candidates, lead to our
loss of potential revenues from product sales and milestones and delay our achievement, if any, of profitability.
Additionally, conflicts have from time to time occurred, and may in the future arise, relating to, among
other things, disputes about the achievement and payment of milestone amounts and royalties owed, the
ownership of intellectual property that is developed during the course of a collaborative relationship or the
operation or interpretation of other provisions in our collaboration agreements. These disputes have led and
could in the future lead to litigation or arbitration, which could be costly and divert the efforts of our
management and scientific staff and could diminish the expected effectiveness of the collaboration.
Our existing collaborative and license agreements can be terminated by our collaborators and licensees
for convenience, among other circumstances. If any of our collaborators or licensees terminates its agreement
with us, or terminates its rights with respect to certain indications or drug candidates, we may not be able
to find a new collaborator for them, and our business could be adversely affected. Should an agreement be
terminated before we have realized the benefits of the collaboration or license, our reputation could be harmed,
we may not obtain revenues that we anticipated receiving, and our business could be adversely affected.
The success of our drug discovery and development efforts may depend on our ability to find suitable collaborators
to fully exploit our capabilities. If we are unable to establish collaborations or if these future collaborations
are unsuccessful in the development and commercialization of our drug candidates, our research, development
and commercialization efforts may be unsuccessful, which could adversely affect our results of operations,
financial condition and future revenue prospects.
An element of our business strategy is to enter into collaborative or license arrangements with other
parties, under which we license our drug candidates to those parties for development and commercialization
or under which we study our drug candidates in combination with other parties’ compounds or biologics.
For example, in addition to our Novartis, Lilly, and our other existing collaborations, we are evaluating
strategic relationships with respect to several of our other programs. However, because collaboration and
license arrangements are complex to negotiate, we may not be successful in our attempts to establish these
arrangements. Also, we may not have drug candidates that are desirable to other parties, or we may be
unwilling to license a drug candidate to a particular party because such party interested in it is a competitor or
for other reasons. The terms of any such arrangements that we establish may not be favorable to us.
Alternatively, potential collaborators may decide against entering into an agreement with us because of our
financial, regulatory or intellectual property position or for scientific, commercial or other reasons. If we
are not able to establish collaboration or license arrangements, we may not be able to develop and
commercialize a drug product, which could adversely affect our business, our revenues and our future
revenue prospects.
We will likely not be able to control the amount and timing of resources that our collaborators or
licensees devote to our programs or drug candidates. If our collaborators or licensees prove difficult to work
with, are less skilled than we originally expected, do not devote adequate resources to the program, are
unable to obtain regulatory approval of our drug candidates, pursue alternative technologies or develop
alternative products, or do not agree with our approach to development or manufacturing of the drug
candidate, the relationship could be unsuccessful. Our collaborations with respect to epacadostat involved the
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study of our collaborators’ drugs used in combination with epacadostat on a number of indications or
tumor types, many of which were the same across multiple collaborations. We cannot assure you that potential
conflicts will not arise or be alleged among these or future collaborations. If a business combination
involving a collaborator or licensee and a third-party were to occur, the effect could be to terminate or
cause delays in development of a drug candidate.
If we fail to enter into additional licensing agreements or if these arrangements are unsuccessful, our business
and operations might be adversely affected.
In addition to establishing collaborative or license arrangements under which other parties license our
drug candidates for development and commercialization or under which we study our drug candidates in
combination with such parties’ compounds or biologics, we may explore opportunities to develop our clinical
pipeline by in-licensing drug candidates or therapeutics targets that fit within our focus on oncology, such
as our collaborations with Agenus, MacroGenics, Merus and Syndax Pharmaceuticals, or explore additional
opportunities to further develop and commercialize existing drug candidates in specific jurisdictions, such
as our June 2016 acquisition of the development and commercialization rights to ICLUSIG in certain
countries. We may be unable to enter into any additional in-licensing agreements because suitable drug
candidates that are within our expertise may not be available to us on terms that are acceptable to us or
because competitors with greater resources seek to in-license the same drug candidates. Drug candidates that
we would like to develop or commercialize may not be available to us because they are controlled by
competitors who are unwilling to license the rights to the drug candidate to us. In addition, we may enter
into license agreements that are unsuccessful and our business and operations might be adversely affected if
we are unable to realize the expected economic benefits of a collaboration or other licensing arrangement,
by the termination of a drug candidate and termination and winding down of the related license agreement,
or due to other business or regulatory issues, including financial difficulties, that may adversely affect a
licensor’s ability to continue to perform its obligations under an in-license agreement. For example, in
January 2022, we decided to opt-out of the continued development with Merus of MCLA-145, which was
the most advanced compound under our collaboration with Merus, and in 2022 and 2023, we decided to
terminate our collaborations with Calithera Biosciences and Syros Pharmaceuticals. If we make or incur
contractual obligations to make significant upfront payments in connection with licenses for late-stage drug
candidates, and if any of those drug candidates do not receive marketing approval or commercial sales as
anticipated or we have to fund additional clinical trials before marketing approval can be obtained, we will
have expended significant funds that might otherwise be applied for other uses or have to expend funds that
were not otherwise budgeted or anticipated in connection with the collaboration, and such developments
could have a material adverse effect on our stock price and our ability to pursue other transactions. As
discussed above under “We depend on our collaborators and licensees for the future development and
commercialization of some of our drug candidates. Conflicts may arise between our collaborators and
licensees and us, or our collaborators and licensees may choose to terminate their agreements with us, which
may adversely affect our business,” conflicts or other issues may arise with our licensors. Those conflicts
could result in delays in our plans to develop drug candidates or result in the expenditure of additional funds
to resolve those conflicts that could have an adverse effect on our results of operations. We may also need
to license drug delivery or other technology in order to continue to develop our drug candidates. If we are
unable to enter into additional agreements to license drug candidates, drug delivery technology or other
technology or if these arrangements are unsuccessful, our research and development efforts could be
adversely affected, and we may be unable to increase our number of successfully marketed products and our
revenues.
Public health epidemics and pandemics, such as the COVID-19 pandemic, have adversely affected and could in
the future adversely affect our business, results of operations, and financial condition.
Our global operations expose us to risks associated with public health epidemics and pandemics, such
as the COVID-19 pandemic. The extent to which a public health pandemic and the measures taken to limit
the disease’s spread can impact our operations and those of our suppliers, collaborators, service providers and
healthcare organizations serving patients, as well as demand for our drug products, will depend on
developments, that are highly uncertain, including the duration of the outbreak and any related government
actions.
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As a result of the COVID-19 pandemic, we experienced, and as a result of future pandemics we may in
the future experience disruptions that could severely impact our business, results of operations and financial
condition. These disruptions can include the following:
• the imposition of shelter-in-place orders and work-from-home policies that could affect our research
and development activities and access to our laboratory space;
• disruptions in our sales and marketing activities;
• negative impacts on the demand for our products as a result of a decrease in patient visits to
healthcare professionals and the prioritization of hospital resources for a future pandemic;
• negative impacts on our clinical trials as a result of delays in site initiation, patient screening, patient
enrollment, and monitoring and data collection;
• slower response times by the FDA and comparable foreign regulatory agencies for the review and
potential approvals of our drug candidate applications; and
• negative impacts on the global supply chain which may affect our ability to obtain sufficient
materials for our drug products and product candidates.
Our collaborators could be affected by similar factors as those that have or could affect our business.
The ultimate impact of a public health epidemic or pandemic is highly uncertain, but the potential impacts
or delays on our or our collaborators’ businesses, our revenues, including milestone and royalty revenues from
our collaborators, our and our collaborators’ clinical trials, healthcare systems or the global economy as a
whole could have a material adverse impact on our business, results of operations, and financial condition.
Even if a drug candidate that we develop receives regulatory approval, we may decide not to commercialize it if we
determine that commercialization of that product would require more money and time than we are willing to
invest.
Even if any of our drug candidates receives regulatory approval, it could be subject to post-regulatory
surveillance, and may have to be withdrawn from the market or subject to restrictions if previously unknown
problems occur. Regulatory agencies also may require additional clinical trials or testing, and the drug
product may be recalled or may be subject to reformulation, additional studies, changes in labeling, warnings
to the public and negative publicity. As a result, we may not continue to commercialize a product even
though it has obtained regulatory approval. Further, we may decide not to continue to commercialize a
product if the market does not accept the product because it is too expensive or because third parties, such
as insurance companies or Medicare, will not cover it for substantial reimbursement. In addition, we may
decide not to continue to commercialize a product if competitors develop and commercialize similar or
superior products or have proprietary rights that preclude us from ultimately marketing our products.
We have limited capacity to conduct preclinical testing and clinical trials, and our resulting dependence on other
parties could result in delays in and additional costs for our drug development efforts.
We have limited internal resources and capacity to perform preclinical testing and clinical trials. As part
of our development strategy, we often hire contract research organizations, or CROs, to perform preclinical
testing and clinical trials for drug candidates. If the CROs that we hire to perform our preclinical testing
and clinical trials do not meet deadlines, do not follow proper procedures, or a conflict arises between us and
our CROs, our preclinical testing and clinical trials may take longer than expected, may cost more, may be
delayed or may be terminated. If we were forced to find a replacement entity to perform any of our preclinical
testing or clinical trials, we may not be able to find a suitable entity on favorable terms, or at all. Even if we
were able to find another company to perform a preclinical test or clinical trial, the delay in the test or trial may
result in significant additional expenditures. Events such as these may result in delays in our obtaining
regulatory approval for our drug candidates or our ability to commercialize our products and could result in
increased expenditures that would adversely affect our operating results.
Our reliance on other parties to manufacture our drug products and drug candidates could result in a short
supply of the drugs, delays in clinical trials or drug development, increased costs, and withdrawal or denial of a
regulatory authority’s approval.
We do not currently operate manufacturing facilities for most of our clinical or commercial products,
including JAKAFI, PEMAZYRE, ICLUSIG, OPZELURA and NIKTIMVO, and our drug candidates.
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Our current manufacturing strategy for these products and drug candidates is to contract with third parties
to manufacture the related raw materials, active pharmaceutical ingredient (API), and finished drug
product. We do have a biologics production facility located in Yverdon, Switzerland, currently registered for
MINJUVI drug substance manufacturing. For ZYNYZ, together with our collaborator MacroGenics, we
are responsible for the sourcing and manufacturing of ZYNYZ. While working to increase our own
manufacturing capacity through our Swiss bioplant site, we expect to continue to rely on third parties for
the manufacture of clinical and commercial supplies of raw materials, API and finished drug product for any
drugs that we successfully develop. We also contract with third parties to package and label our products.
The FDA requires that the raw materials, API and finished product for drug products such as JAKAFI,
PEMAZYRE and OPZELURA and our drug candidates be manufactured according to its current Good
Manufacturing Practices regulations, and regulatory authorities in other countries have similar requirements.
Failure to comply with Good Manufacturing Practices and the applicable regulatory requirements of other
countries in the manufacture of our drug candidates and products could result in the FDA or a foreign
regulatory authority halting our clinical trials, withdrawing or denying regulatory approval of our drug
product, initiating product recalls or taking other enforcement actions, which could have a material adverse
effect on our business.
We may not be able to obtain sufficient quantities of our drug candidates or any drug products we may
develop if our designated manufacturers do not have the capacity or capability to manufacture them
according to our schedule and specifications. Manufacturers of pharmaceutical products often encounter
difficulties in production, especially in scaling up initial production to commercial quantities from clinical
quantities. These problems include difficulties with production costs and yields, quality control and assurance
and shortages of qualified personnel. To the extent problems such as these are experienced, we could
encounter difficulties in supplying sufficient product to meet demand or incur additional costs to remedy
the problems or to recall defective products. Any such recall could also harm our sales efforts and our
reputation. Our suppliers, which operate in multiple countries around the world, could also experience
disruptions in their operations resulting from various factors, including equipment malfunction or failure,
regulatory requirements or actions, raw material shortages, labor disputes or shortages, including from the
effects of public health pandemics, cyberattacks, natural and other disasters, and wars or other geopolitical
events. In addition, one or more of our third party contract manufacturers could be acquired and its
contract manufacturing operations could be ceased or curtailed. While our strategy is to maintain at a
minimum 24 months stock of ruxolitinib phosphate API, inclusive of finished product, ruxolitinib phosphate
might be used by us either to make JAKAFI or OPZELURA or for ruxolitinib drug candidates in clinical
trials. In addition, we may not be able to arrange for our drug candidates or any drug products that we may
develop to be manufactured by one of these parties on reasonable terms, if at all. We generally have a
single source or a limited number of suppliers that are qualified to supply each of the API and finished
product of our drug products and our other drug candidates and, in the case of JAKAFI, we only have a
single source for its raw materials. If any of these suppliers were to become unable or unwilling to supply us
with raw materials, API or finished product that complies with applicable regulatory requirements, we
could incur significant delays in our clinical trials or interruption of commercial supply that could have a
material adverse effect on our business. If we have promised delivery of a drug candidate or drug product and
are unable to meet the delivery requirement due to manufacturing difficulties, our development programs
could be delayed, we may have to expend additional sums in order to ensure that manufacturing capacity is
available when we need it even if we do not use all of the manufacturing capacity, and our business and
operating results could be harmed. Any increases in the cost of our drug candidates or drug products,
whether through conditions affecting the cost and availability of raw materials, such as inflation, decreases
in available manufacturing capacity, or otherwise, would adversely affect our results of operations.
We may not be able to adequately manage and oversee the manufacturers we choose, they may not
perform as agreed or they may terminate their agreements with us. Foreign manufacturing approval processes
typically include all of the risks associated with the FDA approval process for manufacturing and may also
include additional risks.
A number of our collaborations involve the manufacture of antibodies. Either we or our collaborators
have primary responsibility for manufacturing activities, and we intend to continue to use third-party contract
manufacturing organizations for the manufacture of antibodies in conjunction with our manufacturing
facility in Switzerland. Manufacturing antibodies and products containing antibodies is a more complex
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process than manufacturing small molecule drugs and subject to additional risks. The process of
manufacturing antibodies and products containing antibodies is highly susceptible to product loss due to
contamination, equipment failure or improper installation or operation of equipment, vendor or operator
error, inconsistency in yields, variability in product characteristics, and difficulties in scaling up the production
process. Even minor deviations from normal manufacturing processes could result in reduced production
yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered
in our product candidates or in the manufacturing facilities in which our product candidates are made,
such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy
the contamination. We may encounter delays and difficulties in scaling up production at our new facility
or in obtaining necessary regulatory approvals and registrations to do so.
If we fail to comply with the extensive legal and regulatory requirements affecting the health care industry, we
could face increased costs, penalties and a loss of business.
Our activities, and the activities of our collaborators, partners and third-party providers, are subject to
extensive government regulation and oversight both in the United States and in foreign jurisdictions. The
FDA and comparable agencies in other jurisdictions directly regulate many of our most critical business
activities, including the conduct of preclinical and clinical studies, product manufacturing, advertising and
promotion, product distribution, adverse event reporting and product risk management. States increasingly
have been placing greater restrictions on the marketing practices of healthcare companies and have instituted
pricing disclosure and other requirements for companies selling pharmaceuticals. In addition, pharmaceutical
and biotechnology companies have been the target of lawsuits and investigations alleging violations of
government regulations, including claims asserting submission of incorrect pricing information, improper
promotion of pharmaceutical products, payments intended to influence the referral of federal or state
healthcare business, submission of false claims for government reimbursement, antitrust violations, violations
of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery or anti-
corruption laws, or violations related to environmental matters. There is also enhanced scrutiny of company-
sponsored patient assistance programs, including insurance premium and co-pay assistance programs and
donations to third-party charities that provide such assistance. In December 2018, we received a civil
investigative demand from the U.S. Department of Justice, or DOJ, for documents and information relating
to our speaker programs and patient assistance programs, including our support of non-profit organizations
that provide financial assistance to eligible patients and in November 2019, the qui tam complaint underlying
the DOJ inquiry was unsealed, at which time we learned that a former employee whom we had terminated
had made certain allegations relating to the programs described above. While we deny that any improper
claims were submitted to government payers, we agreed in May 2021 to settle the matter with the DOJ
Civil Division for $12.6 million, plus certain statutory fees. Violations of governmental regulation by us, our
vendors or donation recipients may be punishable by criminal and civil sanctions, including damages, fines
and penalties and exclusion from participation in government programs, including Medicare and Medicaid.
In addition to damages, fines and penalties for violation of laws and regulations, we could be required to
repay amounts we received from government payors, or pay additional rebates and interest if we are found
to have miscalculated the pricing information we have submitted to the government. Actions taken by federal
or local governments, legislative bodies and enforcement agencies with respect to these legal and regulatory
compliance matters could also result in reduced demand for our products, reduced coverage of our products
by health care payors, or both. We cannot ensure that our compliance controls, policies, and procedures
will in every instance protect us from acts committed by our employees, collaborators, partners or third-party
providers that would violate the laws or regulations of the jurisdictions in which we operate. Whether or
not we have complied with the law, an investigation into alleged unlawful conduct could increase our expenses,
damage our reputation, divert management time and attention and adversely affect our business, and any
settlement of these proceedings could result in significant payments by us. Risks relating to compliance with
laws and regulations may be heightened as we continue to expand our global operations and enter new
therapeutic areas with different patient populations, which due to different product distribution methods,
marketing programs or patient assistance programs may result in additional regulatory burdens and
obligations.
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The illegal distribution and sale by third parties of counterfeit or unfit versions of our or our collaborators’
products or stolen products could harm our business and reputation.
We are aware that counterfeit versions of our products have been distributed or sold by entities not
authorized by us using product packaging suggesting that the product was provided by us. If unauthorized
third parties illegally distribute and sell counterfeit versions of our or our collaborators’ products, those
products may not meet our or our collaborators’ rigorous manufacturing, distribution and handling
standards. In addition, inventory that is stolen from warehouses, plants or while in-transit, and that is
subsequently improperly stored and sold through unauthorized channels, may not meet our or our
collaborators’ distribution and handling standards. A patient who receives a counterfeit or unfit drug may
suffer dangerous health consequences. Our reputation and business could suffer harm as a result of counterfeit
or unfit drugs sold under our brand name and could result in lost sales for us and decreased revenues. If
counterfeit or unfit drugs are sold under our or our collaborators’ brand names, our reputation and business
could suffer harm and we could experience decreased royalty revenues.
As most of our drug discovery and development operations are conducted at our headquarters in Wilmington,
Delaware, the loss of access to this facility would negatively impact our business.
Our facility in Wilmington, Delaware is our headquarters and is also where we conduct most of our
drug discovery, research, development and marketing activities. In addition, natural disasters, the effects of
or measures taken to limit the effects of health epidemics such as the COVID-19 pandemic, or actions of
activists opposed to aspects of pharmaceutical research may disrupt our experiments or our ability to
access or use our facility. The loss of access to or use of our Wilmington, Delaware facility, either on a
temporary or permanent basis, would result in an interruption of our business and, consequently, would
adversely affect our overall business.
We depend on key employees in a competitive market for skilled personnel, and the loss of the services of any
of our key employees or our inability to attract and retain additional personnel would affect our ability to expand
our drug discovery and development programs and achieve our objectives.
We are highly dependent on the members of our executive management team and principal members
of our commercial, development, medical, operations and scientific staff. We experience intense competition
for qualified personnel. Our future success also depends in part on the continued service of our executive
management team and key personnel and our ability to recruit, train and retain essential personnel for our
drug discovery and development programs, and for our medical affairs and commercialization activities. If we
lose the services of any of these people or if we are unable to recruit sufficient qualified personnel, our
research and product development goals, and our commercialization efforts could be delayed or curtailed.
We do not maintain “key person” insurance on any of our employees.
If we fail to manage our growth effectively, our ability to develop and commercialize products could suffer.
We expect that if our drug discovery efforts continue to generate drug candidates, our clinical drug
candidates continue to progress in development, and we continue to build our development, medical and
commercial organizations, we will require significant additional investment in personnel, management and
resources. Our ability to achieve our research, development and commercialization objectives depends on our
ability to respond effectively to these demands and expand our internal organization, systems, controls and
facilities to accommodate additional anticipated growth. If we are unable to manage our growth effectively,
our business could be harmed and our ability to execute our business strategy could suffer.
We may acquire businesses or assets, form joint ventures or make investments in other companies that may be
unsuccessful, divert our management’s attention and harm our operating results and prospects.
As part of our business strategy, we may pursue acquisitions of what we believe to be complementary
businesses or assets or seek to enter into joint ventures. We also may pursue strategic alliances in an effort to
leverage our existing infrastructure and industry experience to expand our product offerings or distribution
or make investments in other companies. For example, February 2024, we entered into a purchase agreement
with MorphoSys under which we acquired rights to tafasitamab (MONJUVI/MINJUVI) that resulted in
our holding exclusive global development and commercialization rights to tafasitamab. The success of our
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acquisitions, joint ventures, strategic alliances and investments will depend on our ability to identify,
negotiate, complete and, in the case of acquisitions, integrate those transactions and, if necessary, obtain
satisfactory debt or equity financing to fund those transactions. These strategic transactions are complex,
time consuming and expensive and entail numerous risks, including:
• unanticipated costs, delays or other operational or financial problems related to integrating the
products, product candidates, technologies, business operations, systems, controls and personnel of
an acquired company or asset with our company;
• failure to successfully develop and commercialize acquired products, product candidates or
technologies or to achieve other strategic objectives;
• delays or inability to progress preclinical programs into clinical development or unfavorable data
from clinical trials evaluating acquired or licensed products or product candidates;
• disruption of our ongoing business and diversion of our management’s and employees’ attention
from ongoing development of our existing business and other opportunities and challenges;
• inability to achieve planned synergies or cost savings;
• the potential loss of key employees of an acquired company;
• entry into markets in which we have no or limited direct prior experience or where competitors in
such markets have stronger market positions;
• uncertainties in our ability to maintain key business relationships of business we acquire;
• exposure to unknown or contingent liabilities or the incurrence of unanticipated expenses, including
those with respect to intellectual property, pre-clinical or clinical data, safety, compliance or internal
controls, and including as a result of the failure of the due diligence processes to identify significant
problems, liabilities or challenges of an acquired company or asset;
• the risk that acquired businesses may have differing or inadequate cybersecurity and data protection
controls; and
• exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as
a result of, the strategic transaction, including claims from terminated employees, customers,
former equity holders or other third parties.
Acquisition transactions may be subject to regulatory approvals or other requirements that are not
within our control. We may be unable to obtain these regulatory or other approvals, and closing conditions
required in connection with our acquisition transactions may be unable to be satisfied or waived, which could
result in our inability to complete the planned acquisition transactions. In addition, antitrust scrutiny by
regulatory agencies and changes to regulatory approval process in the U.S. and foreign jurisdictions may cause
approvals to take longer than anticipated to obtain, not be obtained at all, or contain burdensome conditions
such as required divestitures, which may jeopardize, delay or reduce the anticipated benefits of acquisitions
to us and could impede the execution of our business strategy.
As a result of these or other problems and risks, businesses, products or technologies we acquire or
invest in or obtain licenses to may not produce the revenues, earnings, business synergies or other benefits
that we anticipated, within the expected timeframe or at all. As a result, we may incur higher costs and realize
lower revenues than we had anticipated. We cannot assure you that any acquisitions or investments we
may make in the future will be completed or that, if completed, the acquired business, licenses, investments,
products, or technologies will generate sufficient revenue to offset the costs or other negative effects on
our business. Other pharmaceutical companies, many of which may have substantially greater resources,
compete with us for these opportunities., and we may be unable to effectively advance our business strategy
through strategic transactions, which could impair our ability to grow or obtain access to products or
technology that could be important to the development of our business. Any acquisitions or investments
made by us also could result in significant write-offs or the incurrence of debt and contingent liabilities, any
of which could harm our operating results. For example, in each of the fiscal quarters in 2022 and in the
third quarter of 2023 we recorded unrealized losses related to our investments in our collaboration partners,
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and we may experience additional losses related to our investments in future period. In addition, if we
choose to issue equity securities as consideration for any acquisition, dilution to our stockholders could
result.
Risks associated with our operations outside of the United States could adversely affect our business.
Our acquisition of ARIAD’s European operations significantly expanded our operations in Europe,
and we plan to continue to expand our operations and conduct certain development activities outside of the
United States. For example, as part of our plans to expand our activities outside of the United States, we
now conduct some of our operations in Canada, commercial and clinical development activities in Japan,
have opened an office in China and are working with partners in additional markets. International operations
and business expansion plans are subject to numerous additional risks, including:
• multiple, conflicting and changing laws and regulations such as tax laws, privacy regulations, tariffs,
export and import restrictions, employment, immigration and labor laws, regulatory requirements, and
other governmental approvals, permits and licenses, compliance with which can increase in
complexity as we enter into additional jurisdictions;
• difficulties in staffing and managing operations in diverse countries and difficulties in connection
with assimilating and integrating any operations and personnel we might acquire into our company;
• risks associated with obtaining and maintaining, or the failure to obtain or maintain, regulatory
approvals for the sale or use of our products in various countries;
• complexities associated with managing government payor systems, multiple payor-reimbursement
regimes or patient self-pay systems;
• financial risks, such as longer payment cycles, difficulty obtaining financing in foreign markets,
difficulty enforcing contracts and intellectual property rights, difficulty collecting accounts receivable
and exposure to foreign currency exchange rate fluctuations;
• general political and economic conditions in the countries in which we operate, including inflation,
political or economic instability, terrorism and political unrest and geopolitical events;
• public health risks, including epidemics and pandemics, and related effects on new patient starts,
clinical trial activity, regulatory agency response times, supply chain, travel and employee health and
availability; and
• regulatory and compliance risks that relate to maintaining accurate information and control over
activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, its books and
records provisions or its anti-bribery provisions, or similar anti-bribery or anti-corruption laws and
regulations in other countries, such as the U.K. Anti-Bribery Act and the U.K. Criminal Finances Act,
which may have similarly broad extraterritorial reach.
In addition, our revenues are subject to foreign currency exchange rate fluctuations due to the global
nature of our operations and unfavorable changes in foreign currency exchange rates may adversely affect
our revenues and net income. To the extent that our non-U.S. source revenues represent a more significant
portion of our total revenues, these fluctuations could materially affect our operating results. Any of the risks
described above, if encountered, could significantly increase our costs of operating internationally, prevent
us from operating in certain jurisdictions, or otherwise significantly harm our future international expansion
and operations, which could have a material adverse effect on our business, financial condition and results
of operations.
If product liability lawsuits are brought against us, we could face substantial liabilities and may be required to
limit commercialization of our products and our results of operations could be harmed.
In addition to the risks described above under “— Risks Relating to Commercialization of Our
Products — If the use of our products harms patients, or is perceived to harm patients even when such
harm is unrelated to our products, our regulatory approvals could be revoked or otherwise negatively
impacted or we could be subject to costly and damaging product liability claims,” the conduct of clinical trials
of medical products that are intended for human use entails an inherent risk of product liability. If any
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product that we or any of our collaborators or licensees develops causes or is alleged to cause injury during
clinical trials or commercialization, we may be held liable. If we cannot successfully defend ourselves
against product liability claims, we may incur substantial liabilities, including substantial damages to be
paid to the plaintiffs and legal costs, or we may be required to limit further development and commercialization
of our products. Additionally, any product liability lawsuit could cause injury to our reputation, participants
and investigators to withdraw from clinical trials, and potential collaborators or licensees to seek other
partners, any of which could impact our results of operations.
Our product liability insurance policy may not fully cover our potential liabilities. In addition, we may
determine that we should increase our coverage, and this insurance may be prohibitively expensive to us or
our collaborators or licensees and may not fully cover our potential liabilities. We have elected to self-insure a
portion of our exposure to product liability risks through our wholly-owned captive insurance subsidiary,
in tandem with third-party insurance policies. Our inability to obtain sufficient product liability insurance at
an acceptable cost to protect against potential product liability claims could prevent or inhibit the
development or commercialization of our drug candidates and products, and if our liabilities from any such
claims exceed our third-party insurance limits and self-insurance reserves, our results of operations, cash
flows and financial condition could be adversely impacted.
Because our activities involve the use of hazardous materials, we may be subject to claims relating to improper
handling, storage or disposal of these materials that could be time consuming and costly.
We are subject to various environmental, health and safety laws and regulations governing, among
other things, the use, handling, storage and disposal of regulated substances and the health and safety of
our employees. Our research and development processes involve the controlled use of hazardous and
radioactive materials and biological waste resulting in the production of hazardous waste products. We
cannot completely eliminate the risk of accidental contamination or discharge and any resultant injury from
these materials. If any injury or contamination results from our use or the use by our collaborators or
licensees of these materials, we may be sued and our liability may exceed our insurance coverage and our
total assets. Further, we may be required to indemnify our collaborators or licensees against all damages and
other liabilities arising out of our development activities or products produced in connection with these
collaborations or licenses. Compliance with the applicable environmental and workplace laws and regulations
is expensive. Future changes to environmental, health, workplace and safety laws could cause us to incur
additional expense or may restrict our operations or impair our research, development and production efforts.
Business disruptions could seriously harm our operations, future revenues and financial condition and increase
our costs and expenses.
Our operations, and those of our CROs, suppliers, and other contractors and consultants, could be
subject to geopolitical events, natural disasters, power and other infrastructure failures or shortages, public
health pandemics or epidemics, and other natural or man-made disasters or business interruptions. In addition,
geopolitical and other events, such as the Russian invasion of Ukraine or the conflicts in the Middle East,
could lead to sanctions, embargoes, supply shortages, regional instability, geopolitical shifts, cyberattacks,
other retaliatory actions, and adverse effects on macroeconomic conditions, currency exchange rates, and
financial markets, which could adversely impact our operations and financial results, as well as those of
third parties with whom we conduct business. The occurrence of any of these business disruptions could
seriously harm our operations, future revenues and financial condition and increase our costs and expenses.
RISKS RELATING TO OUR FINANCIAL RESULTS
We may incur losses in the future, and we expect to continue to incur significant expenses to discover and
develop drugs, which may make it difficult for us to achieve sustained profitability on a quarterly or annual
basis in the future.
We intend to continue to spend significant amounts on our efforts to discover and develop drugs. As a
result, we may incur losses in future periods. Our revenues, expenses and net income (loss) may fluctuate,
even significantly, due to the risks described in these “Risk Factors” and factors discussed in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” as well as the timing of
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charges and expenses that we may take, including those relating to transactions such as acquisitions and the
entry into collaborative agreements.
We anticipate that our drug discovery and development efforts and related expenditures will increase as
we focus on the studies, including preclinical tests and clinical trials prior to seeking regulatory approval, that
are required before we can sell a drug product.
The development of drug products will require us to spend significant funds on research, development,
testing, obtaining regulatory approvals, manufacturing and marketing. To date, we do not have any drug
products that have generated significant revenues other than from sales of JAKAFI and OPZELURA and
we cannot assure you that we will generate substantial revenues from the drug candidates that we license or
develop, including ICLUSIG, PEMAZYRE, MONJUVI/MINJUVI, ZYNYZ and NIKTIMVO for
several years, if ever.
We cannot be certain whether or when we will achieve sustained or increased profitability on a
quarterly or annual basis because of the factors discussed under “Risks Relating to Commercialization of
our Products” and in the above paragraphs and the significant uncertainties relating to our ability to generate
commercially successful drug products. Even if we are successful in obtaining regulatory approvals for
manufacturing and commercializing drug products in addition to JAKAFI, ICLUSIG, PEMAZYRE,
MONJUVI/MINJUVI, OPZELURA, ZYNYZ and NIKTIMVO we may incur losses if our drug products
do not generate significant revenues.
We may need additional capital in the future. If we are unable to generate sufficient funds from operations, the
capital markets may not permit us to raise additional capital at the time that we require it, which could result
in limitations on our research and development or commercialization efforts or the loss of certain of our rights
in our technologies or drug candidates.
Our future funding requirements will depend on many factors and we anticipate that we may need to
raise additional capital to fund our business plan and research and development efforts going-forward.
Additional factors that may affect our future funding requirements include:
• the acquisition of businesses, technologies, or drug candidates, or the licensing of technologies or
drug candidates, if any;
• the amount of revenues generated from our business activities;
• any changes in the breadth of our research and development programs;
• the results of research and development, preclinical testing and clinical trials conducted by us or our
current or future collaborators or licensees, if any;
• our exercise of any co-development options with collaborators that may require us to fund future
development;
• costs for future facility requirements;
• our ability to maintain and establish new corporate relationships and research collaborations;
• competing technological and market developments;
• the time and costs involved in filing, prosecuting, defending and enforcing patent and intellectual
property claims;
• the receipt or payment of contingent licensing or milestone fees or royalties on product sales from
our current or future collaborative and license arrangements, if established; and
• the timing of regulatory approvals, if any.
If we require additional capital at a time when investment in companies such as ours, or in the
marketplace generally, is limited due to the then prevailing market or other conditions, we may have to scale
back our operations, eliminate one or more of our research or development programs, or attempt to
obtain funds by entering into an agreement with a collaborator or licensee that would result in terms that
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are not favorable to us or relinquishing our rights in certain of our proprietary technologies or drug
candidates. If we are unable to raise funds at the time that we desire or at any time thereafter on acceptable
terms, we may not be able to continue to develop our drug candidates. The sale of equity or equity-linked
securities in the future may be dilutive to our stockholders and may provide for rights, preferences or
privileges senior to those of our holders of common stock, and debt financing arrangements could result in
increased financing costs due to higher interest rates and may require us to pledge certain assets or enter
into covenants that could restrict our operations or our ability to pay dividends or other distributions on our
common stock or incur further indebtedness.
Our marketable securities and equity investments are subject to risks that could adversely affect our overall
financial position.
We invest our cash in accordance with an established internal policy and customarily in money market
funds, U.S. government backed-funds and Treasury securities, which are investment grade and historically
have been highly liquid and carried relatively low risk.
Should a portion of our cash or marketable securities lose value or have their liquidity impaired, it
could adversely affect our overall financial position by imperiling our ability to fund our operations and
forcing us to seek additional financing sooner than we would otherwise. Such financing, if available, may not
be available on commercially attractive terms.
As discussed under “Other Risks Relating to Our Business — We may acquire businesses or assets,
form joint ventures or make investments in other companies that may be unsuccessful, divert our
management’s attention and harm our operating results and prospects,” any investments that we may make
in companies with which we have strategic alliances could result in our recognition of losses on those
investments. In addition, to the extent we may seek to sell or otherwise monetize those investments, we may
not be able to do so at our desired price or valuation levels, or at all, due to the limited liquidity of some
or all of those investments.
Any loss in value of our equity investments could adversely affect our financial position on the
consolidated balance sheets and consolidated statements of operations.
Changes in tax laws or regulations could adversely affect our results of operations, business and financial
condition.
New tax laws or regulations could be enacted at any time, and existing tax laws or regulations could be
interpreted, modified or applied in a manner that is adverse to us or our customers, which could adversely
affect our results of operations, business and financial condition. For example, beginning in 2022, the Tax
Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures for
tax purposes in the year incurred and instead requires taxpayers to capitalize and subsequently amortize
such expenditures over five years for research activities conducted in the United States and over 15 years for
research activities conducted outside the United States. If the requirement to amortize research and
development expenditures is not repealed or otherwise modified, it will continue to have an adverse effect
on our tax liability, and the amount of that effect could be material. As another example, in August 2022, the
Inflation Reduction Act of 2022 was enacted, which, among other things, includes a new 15% alternative
minimum tax on the adjusted financial statement income of certain large corporations for tax years beginning
after December 31, 2022. Furthermore, the enactment of some or all of the recommendations set forth or
that may be forthcoming in the Organization for Economic Co-Operation and Development, or OECD,
project on “Base Erosion and Profit Shifting,”commonly known as BEPS 2.0, by tax authorities and economic
blocs in the countries in which we operate, could unfavorably impact our effective tax rate. Broadly
speaking, BEPS 2.0 would make fundamental changes to the international tax system, including with
respect to the entitlement to tax global corporate profits and minimum global tax rates. For example, in
December 2022, the European Union member states agreed to implement in their domestic tax laws a 15%
global minimum tax on the profits of large multinational enterprises with a target effective date for fiscal years
beginning on or after December 31, 2023. Although we continue to evaluate and monitor the potential
impact of BEPS 2.0 on us, and the OECD minimum tax rules do not currently have a material impact on
us, these minimum tax rules could in the future result in tax increases in both the United States and many
foreign jurisdictions where we operate or have a presence. On January 15, 2025, the OECD released new
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guidance addressing implementation of the Pillar Two global minimum tax rules, which were effective for us
in tax year 2024. As part of the guidance, the OECD placed limitations on transactions that produce
deferred tax assets entered into during the transition period that runs from November 2021 through an
entity’s adoption of Pillar Two. On January 20, 2025, President Trump signed an executive order effectively
cancelling the United States’ commitments to the global minimum tax rules, stating that those commitments
cannot have any effect in the United States without an act of approval of the U.S. Congress. Any new tax
legislation or initiatives could not only significantly increase our tax provision, cash tax liabilities, and effective
tax rate, but could also significantly increase tax uncertainty due to differing interpretations and increased
audit scrutiny.
We derive a substantial portion of our revenues from royalties, milestone payments and other payments under
our collaboration agreements. If we are unable to achieve milestones, develop product candidates to license or
renew or enter into new collaborations, our revenues may decrease, and future milestone and royalty payments
may not contribute significantly to revenues for several years, and may never result in revenues.
We derive a substantial portion of our total revenues from product royalties and milestone payments
under our collaboration agreements, with royalties on JAKAVI and OLUMIANT representing most of our
product royalty, milestone and contract revenues for each of the three years ended December 31, 2024.
Future revenues from research and development collaborations depend upon continuation of the
collaborations, the achievement of milestones and royalties we earn from any future products developed
from our research. If we are unable to successfully achieve milestones or our collaborators fail to develop
successful products, we will not earn the future revenues contemplated under our collaborative agreements.
For example, delays in or other limitations with respect to the approval of baricitinib in the United States for
the treatment of moderate-to-severe rheumatoid arthritis, or the failure to obtain such approval as a first
line therapy, as discussed under “— We depend on our collaborators and licensees for the future development
and commercialization of some of our drug candidates. Conflicts may arise between our collaborators and
licensees and us, or our collaborators and licensees may choose to terminate their agreements with us, which
may adversely affect our business.” could affect potential future royalty and milestone and contract
revenue.
RISKS RELATING TO INTELLECTUAL PROPERTY AND LEGAL MATTERS
If we are subject to arbitration, litigation and infringement claims, they could be costly and disrupt our drug
discovery and development efforts.
The technology that we use to make and develop our drug products, the technology that we incorporate
in our products, and the products we are developing may be subject to claims that they infringe the patents
or proprietary rights of others. The success of our drug discovery and development efforts will also depend on
our ability to develop new compounds, drugs and technologies without infringing or misappropriating the
proprietary rights of others. We are aware of patents and patent applications filed in certain countries claiming
intellectual property relating to some of our drug discovery targets and drug candidates. While the validity
of issued patents, patentability of pending patent applications and applicability of any of them to our
programs are uncertain, if any of these patents are asserted against us or if we choose to license any of these
patents, our ability to commercialize our products could be harmed or the potential return to us from any
product that may be successfully commercialized could be diminished.
From time to time we have received, and we may in the future receive, notices from third parties
offering licenses to technology or alleging patent, trademark, or copyright infringement, claims regarding
trade secrets or other contract claims. Receipt of these notices could result in significant costs as a result of
the diversion of the attention of management from our drug discovery and development efforts. Parties
sending these notices may have brought and in the future may bring litigation against us or seek arbitration
relating to contract claims.
We may be involved in future lawsuits or other legal proceedings alleging patent infringement or other
intellectual property rights or contract violations. In addition, litigation or other legal proceedings may be
necessary to:
• assert claims of infringement;
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• enforce our patents or trademarks;
• protect our trade secrets or know-how; or
• determine the enforceability, scope and validity of the proprietary rights of others.
We may be unsuccessful in defending or pursuing these lawsuits, claims or other legal proceedings.
Regardless of the outcome, litigation or other legal proceedings can be very costly and can divert
management’s efforts. An adverse determination may subject us to significant liabilities or require us or our
collaborators or licensees to seek licenses to other parties’ patents or proprietary rights. We or our
collaborators or licensees may also be restricted or prevented from manufacturing or selling a drug or other
product that we or they develop. Further, we or our future collaborators or licensees may not be able to
obtain any necessary licenses on acceptable terms, if at all. If we are unable to develop non-infringing
technology or license technology on a timely basis or on reasonable terms, our business could be harmed.
We may be unable to adequately protect or enforce our proprietary information, which may result in its
unauthorized use, a loss of revenue under a collaboration agreement or loss of sales to generic versions of our
products or otherwise reduce our ability to compete in developing and commercializing products.
Our business and competitive position depends in significant part upon our ability to protect our
proprietary technology, including any drug products that we create. Despite our efforts to protect this
information, unauthorized parties may attempt to obtain and use information that we regard as proprietary.
For example, one of our collaborators may disclose proprietary information pertaining to our drug
discovery efforts. In addition, while we have filed numerous patent applications with respect to ruxolitinib
and our drug candidates in the United States and in foreign countries, our patent applications may fail to
result in issued patents. In addition, because patent applications can take several years to issue as patents, there
may be pending patent applications of others that may later issue as patents that cover some aspect of
ruxolitinib and our drug candidates. Our existing patents and any future patents we may obtain may not be
broad enough to protect our products or all of the potential uses of our products, or otherwise prevent
others from developing competing products or technologies. In addition, our patents may be challenged and
invalidated or may fail to provide us with any competitive advantages if, for example, others were first to
invent or first to file a patent application for the technologies and products covered by our patents. As noted
above under “— Risks Relating to Commercialization of Our Products — Competition for our products
could potentially harm our business and result in a decrease in our revenue,”a potential generic drug company
competitor has challenged certain patents relating to JAKAFI.
Additionally, when we do not control the prosecution, maintenance and enforcement of certain
important intellectual property, such as a drug candidate in-licensed to us or subject to a collaboration with
a third-party, the protection of the intellectual property rights may not be in our hands. If we do not
control the intellectual property rights in-licensed to us with respect to a drug candidate and the entity that
controls the intellectual property rights does not adequately protect those rights, our rights may be impaired,
which may impact our ability to develop, market and commercialize the in-licensed drug candidate.
Our means of protecting our proprietary rights may not be adequate, and our competitors may:
• independently develop substantially equivalent proprietary information, products and techniques;
• otherwise gain access to our proprietary information; or
• design around patents issued to us or our other intellectual property.
We pursue a policy of having our employees, consultants and advisors execute proprietary information
and invention agreements when they begin working for us. However, these agreements may not provide
meaningful protection for our trade secrets or other proprietary information in the event of unauthorized
use or disclosure. If we fail to maintain trade secret and patent protection, our potential future revenues may
be decreased.
If the effective term of our patents is decreased due to changes in the United States patent laws or if we need
to refile some of our patent applications, the value of our patent portfolio and the revenues we derive from it may
be decreased.
The value of our patents depends, in part, on their duration. A shorter period of patent protection
could lessen the value of our rights under any patents that we obtain and may decrease the revenues we
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derive from our patents. The United States patent laws provide a term of patent protection of 20 years from
the earliest effective filing date of the patent application. Because the time from filing to issuance of
biotechnology applications may be more than three years depending on the subject matter, a 20-year patent
term from the filing date may result in substantially shorter patent protection.
Additionally, United States patent laws were amended in 2011 with the enactment of the America
Invents Act and third parties are now able to challenge the validity of issued U.S. patents through various
review proceedings; thus rendering the validity of U.S. patents more uncertain. We may be obligated to
participate in review proceedings to determine the validity of our U.S. patents. We cannot predict the ultimate
outcome of these proceedings, the conduct of which could result in substantial costs and diversion of our
efforts and resources. If we are unsuccessful in these proceedings some or all of our claims in the patents may
be narrowed or invalidated and the patent protection for our products and drug candidates in the United
States could be substantially shortened. Further, if all of the patents covering one of our products are
invalidated, the FDA could approve requests to manufacture a generic version of that product prior to the
expiration date of those patents.
Other changes in the United States patent laws or changes in the interpretation of patent laws could
diminish the value of our patents or narrow the scope of our patent protection. For example, the Supreme
Court of the United States resolved a split among the circuit courts of appeals regarding antitrust challenges
to settlements of patent infringement lawsuits under the Hatch-Waxman Act between brand-name drug
companies and generic drug companies. The Court rejected the “scope of the patent” test and ruled that
settlements involving “reverse payments” from brand-name drug companies to generic drug companies
should be analyzed under the rule of reason. This ruling may create uncertainty and make it more difficult to
settle patent litigation if a company seeking to manufacture a generic version of one of our products
challenges the patents covering that product prior to the expiration date of those patents.
International patent protection is particularly uncertain and costly, and our involvement in opposition
proceedings in foreign countries may result in the expenditure of substantial sums and management resources.
Biotechnology and pharmaceutical patent law outside the United States is even more uncertain and
costly than in the United States and is currently undergoing review and revision in many countries. Further,
the laws of some foreign countries may not protect our intellectual property rights to the same extent as
United States laws. For example, certain countries do not grant patent claims that are directed to the
treatment of humans. We have participated, and may in the future participate, in opposition proceedings to
determine the validity of our foreign patents or our competitors’ foreign patents, which could result in
substantial costs and diversion of our efforts. Successful challenges to our patent or other intellectual property
rights through these proceedings could result in a loss of rights in the relevant jurisdiction and allow third
parties to use our proprietary technologies without a license from us or our collaborators, which may also
result in loss of future royalty payments. In addition, successful challenges may jeopardize or delay our ability
to enter into new collaborations or commercialize potential products, which could harm our business and
results of operations.
RISKS RELATING TO INFORMATION TECHNOLOGY AND DATA PRIVACY
Significant disruptions of information technology systems, breaches of data security, or unauthorized disclosures
of personal information (including sensitive personal information) could adversely affect our business, and
could subject us to liability or reputational damage.
Our business is increasingly dependent on critical, complex, and interdependent information technology
(IT) systems, including Internet-based systems, some of which are managed or hosted by third parties, to
support business processes as well as internal and external communications. The size and complexity of our
IT systems make our IT systems and data vulnerable to risks and damages from a variety of sources,
including malicious human acts, breaches of security, cyber-attacks, catastrophe or natural disaster,
telecommunications or network failures, loss of power or other natural or man-made events. In addition,
despite network security and back-up measures, we and our vendors frequently defend against and respond
to data security attacks and incidents, and our servers and our vendors’ servers are potentially susceptible
to physical or electronic break-ins, computer viruses, software vulnerabilities, ransomware attacks and similar
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disruptive problems. If our business continuity and disaster recovery plans and procedures or those of our
vendors, including our CROs and contract manufacturers, were disrupted, inadequate or unsuccessful in the
event of a problem, we could experience an interruption of all or a portion of our operations, which could
result in significant harm to our business, financial results and reputation. In addition, having a portion of
our employees work remotely can strain our IT infrastructure, which may affect our ability to operate
effectively, may make us more susceptible to communications disruptions, and expose us to greater
cybersecurity risks.
We are continuously evaluating and, where appropriate, enhancing our IT systems to address our
planned growth, including to support our planned manufacturing operations. In particular, we are currently
in the process of implementing a new enterprise resource planning system. There are inherent costs and
risks associated with implementing the enhancements to our IT systems, including potential delays in access
to, or errors in, critical business and financial information, substantial capital expenditures, additional
administrative time and operating expenses, retention of sufficiently skilled personnel to implement and
operate the enhanced systems, demands on management time, and costs of delays or difficulties in
transitioning to the enhanced systems, any of which could harm our business and results of operations. In
addition, the implementation of enhancements to our IT systems may not result in productivity improvements
at a level that outweighs the costs of implementation, or at all.
In addition, our systems and the systems of our third-party providers and collaborators are potentially
vulnerable to data security breaches which may expose sensitive data to unauthorized persons or to the public.
Such data security breaches could lead to the loss of confidential information, trade secrets or other
intellectual property, could lead to the public exposure of personal information of our employees, clinical
trial patients, customers, business partners, and others, could lead to potential identity theft, or could lead to
reputational harm. Data security breaches could also result in loss of clinical trial data or damage to the
integrity of that data. Malicious cyber attacks are growing in frequency and sophistication, including the use
of artificial intelligence, and can be made by groups and individuals with a wide range of motives, including
nation states, organized criminal groups, “hacktivists” and others acting with malicious intent. In addition,
the increased use of social media by our employees and contractors could result in inadvertent disclosure of
sensitive data or personal information, including but not limited to, confidential information, trade secrets
and other intellectual property.
Any such disruption or security breach, as well as any action by us or our employees or contractors
that might be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable
within the United States and elsewhere where we conduct business, could result in enforcement actions by
U.S. states, the U.S. Federal government or foreign governments, liability or sanctions under data privacy
laws, including healthcare laws such as HIPAA, that protect certain types of sensitive information, regulatory
penalties, other legal proceedings such as but not limited to private litigation, the incurrence of significant
remediation costs, disruptions to our development programs, business operations and collaborations, diversion
of management efforts and damage to our reputation, which could harm our business and operations.
Because of the rapidly moving nature of technology and the increasing sophistication of cybersecurity
threats, our measures to prevent, respond to and minimize such risks may be unsuccessful.
Disruptions or data security breaches within other healthcare companies could also affect our business,
results of operations and financial condition. If systems used by healthcare providers, third-party payors
and companies in our distribution network such as PBMs, pharmacies and wholesalers are disrupted by a data
security breach, the ability to process claims and fulfill prescriptions could be impacted, which could result
in adverse effects on our net product revenues.
Further, many countries and jurisdictions in which we work globally have enacted and/or are proposing
privacy and data protection laws and regulations which govern the collection and use of personal information
and these may impose large fines and penalties for noncompliance. For example in the European Union,
under the General Data Protection Regulation, potential fines for noncompliance are up to €20 million or
4% of the annual global revenue, whichever is greater. Further, some jurisdictions provide for private rights of
action if data breaches result in the loss or theft of personal data. These laws and regulations may also
require, as applicable, that:
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• we ensure individuals to whom personal information relates are informed about how their personal
information is collected and processed;
• keep personal information confidential and secure;
• transfer personal information in a compliant manner;
• respond to requests from individuals about their personal information; and
• inform authorities and individuals as may be applicable about any data breaches.
These obligations may increase our costs of doing business and the varying requirements among all
countries and jurisdictions in which we work can complicate our compliance efforts.
Increasing use of social media and new technology, including artificial intelligence software, could give rise to
liability, breaches of data security, or reputational damage.
We and our employees increasingly are utilizing social media tools as a means of communication both
internally and externally. We also are using new technology on a daily basis to enhance how we work. Despite
our efforts to monitor evolving social media communication, our internal guidelines regarding the
appropriate use of new technology and applicable and emerging rules, there is risk that the use of these
tools by us or our employees may cause us to be found in violation of applicable requirements. In addition,
our employees may knowingly or inadvertently make use of these tools in ways that may not comply with our
policies or other legal or contractual requirements, which may give rise to liability, lead to the loss of trade
secrets or other intellectual property, or result in public exposure of personal information of our employees,
patients, customers, and others. Furthermore, negative posts or comments about us or our products in
social media could seriously damage our reputation, brand image, and goodwill. Additionally, the use of
artificial intelligence based software is increasing in the biopharmaceutical industry. As with many developing
technologies, artificial intelligence based software presents risks and challenges that could affect its further
development, adoption, and use, which could affect our business. If the analyses that artificial intelligence
applications assist in producing are deficient or inaccurate, we could be subjected to competitive harm,
potential legal liability, and brand or reputational harm. Use of artificial intelligence based software may
also lead to the release of confidential proprietary information, which may impact our ability to realize the
benefit of our intellectual property.
Item 1B.
Unresolved Staff Comments
None.
Item 1C.
Cybersecurity
Incyte is committed to maintaining robust oversight and governance of potential cybersecurity risks
and to implementing processes and controls that help us identify, assess and manage such risks. To date, we
have not experienced a cybersecurity threat or incident that has resulted in a material adverse impact to
our business or operations. However, we cannot guarantee that we will not experience such a threat or incident
in the future, given the increasing sophistication of those responsible for cybersecurity incidents. While we
seek to detect and investigate unauthorized attempts and attacks against our network and to prevent their
occurrence where practicable through our internal processes and tools, we remain potentially vulnerable
to known or unknown threats. In some instances, we can be unaware of a threat or incident or its magnitude
and effects. Further, there is increasing regulation regarding responses to cybersecurity incidents, including
reporting to regulators, which could subject us to additional liability and reputational harm. See “Item 1A.
Risk Factors” for more information on our cybersecurity risks.
We aim to incorporate and align with industry best practices throughout our cybersecurity program.
Our cybersecurity strategy focuses on implementing effective and efficient controls, technologies and other
processes to assess, identify, manage and mitigate material cybersecurity risks. These include, among other
things, having mechanisms in place to detect and monitor unusual network activity, utilizing vulnerability
assessment scans and tools, and conducting external and internal penetration tests and security assessments
using the National Institute of Standards and Technology (NIST) Cybersecurity Framework. We engage
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third party experts to assist with numerous aspects of our cybersecurity program, including vulnerability
assessment scans, penetration tests and security assessments. These outside experts are utilized on a rotating
basis to enable us to receive multiple viewpoints on the security of our technological resources. Additionally,
from time to time, our internal audit function, reviews and assesses various aspects of our cybersecurity
program. We also engage in threat intelligence monitoring, including monitoring the dark web and zero-
day vulnerability and attack information, and have processes in place to assess the potential cybersecurity
impact or risk of any identified threats on our company, including potential impacts on our business partners
and other parties with whom we share information. We actively engage with industry groups for peer
benchmarking purposes and to stay current on best practices. We rely heavily on our vendors and other
third party service providers in our clinical development activities as well as to manufacture and deliver our
products, and a cybersecurity incident at a vendor or other third party service provider could have a
material and adverse impact on our business, results of operations and financial condition. We have further
processes in place to assess the cybersecurity risks associated with our vendors and other third-party
service providers, and we require such providers to take appropriate precautions to protect our data and to
notify us promptly in the event of any known or suspected data breach or cyber incident.
Our cybersecurity program is integrated into our broader approach to risk management, and ultimate
oversight for the program sits with our Board of Directors. The Board of Directors is aided by its Audit
and Finance Committee, which regularly reviews our cybersecurity program with management and reports
to the Board of Directors. Cybersecurity reviews by the Audit and Finance Committee or the Board of
Directors generally occur at least twice annually, or more frequently as determined to be necessary or
advisable.
Incyte’s Chief Information Security Officer (CISO) runs our cybersecurity program. Our CISO, who
holds numerous cybersecurity and related certifications, including Certified Information Systems Security
Professional, reports in to our Chief Information Officer (CIO). Our CISO and CIO have extensive experience
assessing and managing cybersecurity programs and cybersecurity risk. They regularly report directly to
the Audit and Finance Committee or the Board of Directors on our cybersecurity program and our efforts
to prevent, detect, mitigate and remediate cybersecurity incidents. In addition, we have an escalation process
in place to inform senior management and the Board of Directors of any material issues as they arise.
Item 2.
Properties
Our global headquarters is located in Wilmington, Delaware, where we conduct global clinical
development and commercial operations. We own three buildings comprising approximately 541,000 square
feet of laboratory and office space at this site. In May 2024, we purchased additional property in
Wilmington, Delaware, including land, office buildings and parking garages, adding an additional
approximately 517,000 square feet of office space in Wilmington, Delaware. The acquired office buildings
are undergoing renovations and we currently expect to occupy the office buildings in 2026.
We lease approximately 116,000 square feet of office space in Chadds Ford, Pennsylvania.
We also conduct clinical development and commercial operations from our European headquarters in
Morges, Switzerland and our Tokyo and Shanghai offices in East Asia. Our large molecule production facility
is located in Yverdon, Switzerland. Our Canadian office is in Montreal.
Item 3.
Legal Proceedings
From time to time, we are party to legal proceedings in the course of our business. The outcome of any
such proceedings, regardless of the merits, is inherently uncertain. Legal proceedings, including litigation,
government investigations and enforcement actions, can result in significant costs and occupy significant
management resources. We do not expect any such current legal proceedings to have a material adverse impact
on our business or financial condition.
Item 4.
Mine Safety Disclosures
Not applicable.
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Information about our Executive Officers
Our executive officers are as follows:
Hervé Hoppenot, age 65, joined Incyte as President and Chief Executive Officer and a Director in
January 2014 and was appointed Chairman of the Board in May 2015. Mr. Hoppenot served as the
President of Novartis Oncology, Novartis Pharmaceuticals Corporation, the U.S. subsidiary of Novartis AG,
a pharmaceutical company, from January 2010 to January 2014. Prior to that, Mr. Hoppenot served in
other executive positions at Novartis Pharmaceuticals Corporation, serving from September 2006 to
January 2010 as Executive Vice President, Chief Commercial Officer of Novartis Oncology and Head of
Global Product Strategy & Scientific Development of Novartis Pharmaceuticals Corporation and from 2003
to September 2006 as Senior Vice President, Head of Global Marketing of Novartis Oncology. Prior to
joining Novartis, Mr. Hoppenot served in various increasingly senior roles at Aventis S.A. (formerly
Rhône-Poulenc S.A.), a pharmaceutical company, including as Vice President Oncology U.S. of Aventis
Pharmaceuticals, Inc. from 2000 to 2003 and Vice President U.S. Oncology Operations of Rhone-Poulenc
Rorer Pharmaceuticals, Inc. from 1998 to 2000. Mr. Hoppenot holds a Diploma from ESSEC International
Business School.
Pablo J. Cagnoni, age 62, joined Incyte in June 2023 as President and Head of Research and
Development. From November 2022 to May 2023, Dr. Cagnoni served as Chief Executive of Laronde (now
Sail Biomedicines), a Flagship Pioneering Company, and Executive Partner at Flagship Pioneering. Prior
to joining Laronde and Flagship, he served as President and Chief Executive Officer of Rubius Therapeutics,
Inc., a biotechnology company, from June 2018 until November 2022. From May 2015 until June 2018,
Dr. Cagnoni served as President and Chief Executive Officer of Tizona Therapeutics, Inc., a privately held
biotechnology company. Dr. Cagnoni previously served as President of Onyx Pharmaceuticals, Inc., a
biopharmaceutical company, from October 2013 to April 2015 and Executive Vice President, Global Research
and Development and Technical Operations from March 2013 to October 2013. Prior to Onyx, Dr. Cagnoni
was Senior Vice President and Global Head of Clinical Development at Novartis Oncology from
October 2009 to March 2013. From 2007 to 2009, Dr. Cagnoni was Senior Vice President and Chief Medical
Officer at Allos Therapeutics (acquired by Spectrum Pharmaceuticals) and, prior to that, Chief Medical
Officer of OSI Pharmaceuticals (acquired by Astellas Pharma Inc.). Dr. Cagnoni received an M.D. from the
University Buenos Aires School of Medicine and completed post-doctoral work in Hematology and
Oncology at the Mount Sinai Medical Center, New York, and in Stem Cell Transplantation at the University
of Colorado Health Sciences Center.
Sheila Denton, age 59, joined Incyte in October 2023 as Executive Vice President, General Counsel and
Corporate Secretary. Ms. Denton most recently served as Senior Vice President, General Counsel and
Corporate Secretary of Boehringer Ingelheim USA, Inc., where she was responsible for the legal, compliance
and policy teams for the human health, animal health and biopharmaceutical businesses. During her 19-
year tenure with Boehringer Ingelheim, Ms. Denton held a number of other key leadership positions both
in the United States and abroad, in multiple areas such as acquisitions, the generic businesses, and litigation.
Prior to joining Boehringer Ingelheim, Ms. Denton was a partner in a New England-based law firm.
Ms. Denton received her J.D. from Western New England College School of Law, and her B.S. in Business
and Political Science from Sacred Heart University.
Lee Heeson, age 54, joined Incyte in October 2024 as Executive Vice President, Incyte International.
Prior to joining Incyte, Mr. Heeson was Executive Vice President, Commercial International, of Seagen
Inc., a biopharmaceutical company, from February 2022 to September 2024. From February 2020 to
February 2022, he was President International of Vifor Pharma Ltd., a pharmaceuticals company. From
October 2013 to January 2020, he held senior roles at Celgene Corporation, a biopharmaceutical company,
most recently as President of Worldwide Markets, Inflammation & Immunology. Earlier in his career,
Mr. Heeson held leadership positions at Galderma and Schering-Plough. Mr. Heeson holds a B.A., with
honors, from Sheffield Hallam University.
Mohamed Issa, age 42, joined Incyte in January 2025 as Executive Vice President, Head of US
Oncology. He has almost 20 years of global leadership experience in pharmaceuticals, consumer healthcare
and med-tech, with expertise spanning strategy, commercialization and business development. Before joining
Incyte, he spent 13 years at Johnson & Johnson, where he held senior roles leading U.S. Immunology,
65

Neuroscience and Oncology businesses, most recently as Senior Vice President, US Immunology of Janssen
Pharmaceuticals. Earlier in his career, he was co-founder and CEO of a consumer healthcare company
and held various roles in sales, brand management and strategy in biopharmaceuticals. Dr. Issa holds a
Pharm.D. from St. John’s University and an M.B.A. in finance and economics from New York University’s
Stern School of Business.
Vijay Iyengar, age 52, joined Incyte in May 2016 as Executive Vice President, Global Strategy and
Corporate Development. Prior to joining Incyte, from April 2014 to April 2016, he was the President of
Genoptix Corporation, a Novartis Company. From December 2011 to March 2014, he was the Vice President
and Rare Diseases Franchise Head at Novartis Oncology and from July 2009 to December 2011, he was
the Vice President and Oncology General Manager of Novartis Greece. From October 2007 to June 2009,
he was the Global Brand Executive Director at Novartis Pharmaceuticals, and from January 2006 to
October 2007, he was the Global Brand Director, Oncology at Novartis Pharmaceuticals. Dr. Iyengar received
his B.S. in Biology from Stanford University and earned his M.D. from Harvard Medical School.
Michael Morrissey, age 61, has served as Executive Vice President and Head of Global Technical
Operations since June 2019 and joined Incyte in January 2016 as Corporate Senior Vice President and Head
of Global Technical Operations. He has more than 30 years of global pharmaceutical industry experience
through his prior positions in Research and Development, Quality Assurance, and Manufacturing. From
February 2005 until joining Incyte, Mr. Morrissey worked at Celgene International, a subsidiary of Celgene
Corporation, a biopharmaceutical company, where he last served as Corporate Vice President, Head of
International Technical Operations. Prior to Celgene, he worked for Roche for 15 years in various positions.
Mr. Morrissey received a B.Sc. in Physics and Applied Mathematics from the University of London,
United Kingdom.
Christiana Stamoulis, age 54, joined Incyte in February 2019 as Executive Vice President and Chief
Financial Officer. Prior to joining Incyte, she served as President from February 2018 until January 2019
and Chief Financial Officer from January 2015 to January 2019 of Unum Therapeutics Inc., a
biopharmaceutical company. Prior to joining Unum, Ms. Stamoulis was a Senior Vice President of Corporate
Strategy and Business Development at Vertex Pharmaceuticals, Inc., a biopharmaceutical company. Prior
to joining Vertex, Ms. Stamoulis spent nearly 15 years in the investment banking and management consulting
industries. She was a Managing Director in the Investment Banking division of Citigroup and, prior to
that, she was a senior investment banker in the Healthcare Investment Banking Group of Goldman, Sachs &
Co., where she spent the majority of her investment banking career. Ms. Stamoulis started her career as a
strategy consultant at The Boston Consulting Group. Ms. Stamoulis holds two B.S. degrees from the
Massachusetts Institute of Technology (MIT) and an M.B.A. from the MIT Sloan School of Management.
Steven Stein, age 58, has served as Executive Vice President and Chief Medical Officer since May 2016
and joined Incyte as Senior Vice President and Chief Medical Officer in March 2015. Prior to joining Incyte,
from May 2011 to February 2015, he was the Senior Vice President, U.S. Clinical Development & Medical
Affairs at Novartis Pharmaceuticals. From February 2004 to April 2011, Dr. Stein was the Vice President,
Global Oncology, Clinical Development and the Head of Medicines Development for Hematology and
Supportive Care for GlaxoSmithKline. Dr. Stein held a post-doctoral fellowship in hematology/oncology at
the University of Pennsylvania from 1998 to 2001, and earned his M.D. from the University of
Witwatersrand in Johannesburg, South Africa, in 1990.
Paula J. Swain, age 67, has served as Executive Vice President, Human Resources since August 2002
and joined Incyte as Senior Vice President of Human Resources in January 2002. Ms. Swain served as
Senior Vice President of Human Resources at Bristol-Myers Squibb Company from October 2001 to
January 2002, after it acquired DuPont Pharmaceuticals Company. From July 1998 to October 2001,
Ms. Swain was Senior Vice President of Human Resources at DuPont Pharmaceuticals. From October 1992
to July 1998, Ms. Swain held a variety of human resources positions of increasing responsibility at DuPont
Pharmaceuticals. Ms. Swain received her B.A. in Psychology and Industrial Relations from Rockhurst
University.
Matteo Trotta, age 46, joined Incyte as Executive Vice President, General Manager, Dermatology US
in March 2024. Prior to joining Incyte, Mr. Trotta served as the Head of Novartis U.S. Immunology, where
he led a 400-person organization across dermatology, rheumatology, auto-inflammatory, rare diseases
66

and allergy. He additionally held leadership roles in U.S. marketing and sales, enterprise strategy and global
manufacturing and quality. Before joining Novartis in 2012, he was an Engagement Manager at
McKinsey & Company, where he served pharmaceutical and payer clients as part of their healthcare
practice. Mr. Trotta received his Engineering Degree from Politecnico di Torino, his M.S. in Engineering
from the University of Illinois Chicago, and his M.B.A. from Columbia Business School.
67

PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Our common stock, $.001 par value per share, is traded on The Nasdaq Global Select Market under
the symbol “INCY.” As of December 31, 2024, our common stock was held by 107 stockholders of record.
We have never declared or paid dividends on our capital stock and do not anticipate paying any dividends
in the foreseeable future.
Item 6.
[Reserved]
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be
read in conjunction with “Selected Consolidated Financial Data” and the Consolidated Financial Statements
and related Notes included elsewhere in this Report.
A discussion of our financial performance for the year ended December 31, 2024 as compared to the
year ended December 31, 2023 appears below under the captions “Results of Operations” and “Liquidity
and Capital Resources.” A discussion of our financial performance for the year ended December 31, 2023
compared to the year ended December 31, 2022 can be found under the same captions in Item 7 of our Annual
Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 13, 2024,
which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at
investor.incyte.com/financial-information/annual-reports. These website addresses are intended to be inactive,
textual references only. None of the materials on, or accessible through, these websites are part of this
report or are incorporated by reference herein.
Overview
Incyte is a global biopharmaceutical company engaged in the discovery, development and
commercialization of proprietary therapeutics. Our global headquarters is located in Wilmington, Delaware,
where we conduct discovery, clinical development and commercial operations. We also conduct clinical
development and commercial operations from our European headquarters in Morges, Switzerland and our
other offices across Europe, as well as our Japanese office in Tokyo and our Canadian headquarters in
Montreal.
Through the discovery, development and commercialization of proprietary therapeutics, Incyte has
established a portfolio of first-in-class and best-in-class medicines for patients and a strong pipeline of
products focused in three core therapeutic areas: Oncology, Inflammation & Autoimmunity, and
Myeloproliferative Neoplasms (MPNs) & Graft-Versus-Host Disease (GVHD). We are also eligible to
receive milestones and royalties on molecules discovered by us and licensed to third parties.
Our portfolio focuses on areas of high unmet medical need and includes compounds in various stages,
ranging from preclinical to late-stage development, and commercialized products JAKAFI (ruxolitinib),
ICLUSIG (ponatinib), PEMAZYRE (pemigatinib), OPZELURA (ruxolitinib cream), MINJUVI
(tafasitamab), MONJUVI (tafasitamab-cxix) and ZYNYZ (retifanlimab-dlwr), as well as NIKTIMVO
(axatilimab-csfr), which was approved for medical use in the United States in August 2024 and will be
co-commercialized.
Our revenues depend on continued sales of our products, and we depend substantially on product
revenues from JAKAFI. We must develop and commercialize new products to achieve revenue growth and
to offset revenue losses from when products lose their exclusivity or when competing products are launched.
For additional information, including information on the expirations of patents for various products, see
Part I, Item 1 of this report, “Business — Patents and Other Intellectual Property” and “Business —
Competition.” We devote substantial resources to research and development activities and to acquire rights
to new product candidates and technologies, but successful product development in the biopharmaceutical
industry is highly uncertain.
68

Our product revenues also face challenges from economic conditions and drug pricing initiatives driven
by governments and private payors. See Part I, Item 1A of this report, “Risk Factors” for a further discussion
of certain factors that could impact our future product revenues.
License Agreements, Business Relationships and Acquisitions
We establish business relationships, including collaborative arrangements with other companies and
medical research institutions to assist in the clinical development and/or commercialization of certain of
our drugs and drug candidates and to provide support for our research programs. We also establish business
relationships with other companies and medical research institutions to acquire products or rights to
products and technologies that are complementary to our business.
Critical Accounting Policies and Significant Estimates
The preparation of financial statements requires us to make estimates, assumptions and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent
assets and liabilities. On an ongoing basis, we evaluate our estimates. We base our estimates on historical
experience and various other assumptions that we believe to be reasonable under the circumstances, the
results of which form our basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from those estimates under different
assumptions or conditions. We believe the following critical accounting policies reflect the more significant
judgments and estimates used in the preparation of the consolidated financial statements. See Note 1 of
Notes to the Consolidated Financial Statements for a complete list of our significant accounting policies.
Revenue Recognition.
We recognize revenue only when we have satisfied a performance obligation
through transferring control of the promised good or service to a customer in an amount that reflects the
consideration we expect to receive in exchange for those goods or services. We apply the following five-step
model in order to determine this amount: (i) identification of the promised goods or services in the contract;
(ii) determination of whether the promised goods or services are performance obligations, including
whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including
the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation,
which for the Company is at a point in time. We also assess collectability based primarily on the customer’s
payment history and on the creditworthiness of the customer.
Product Revenues
Product revenues are recognized once we satisfy the performance obligation at a point in time under
the revenue recognition criteria as described above. We recognize revenues for product received by our
customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts,
returns, distribution service fees, patient assistance programs, and government rebates, such as the Medicaid
Drug Rebate Program and Medicare Part D coverage gap reimbursements in the United States and
mandated discounts in Europe. These sales allowances and accruals are recorded based on estimates which
are described in detail below. Estimates are assessed as of the end of each reporting period and are updated to
reflect current information. We believe that our sales allowances and accruals are reasonable and appropriate
based on current facts and circumstances. As of December 31, 2024, a 5% change in our sales allowance
and accruals would have had an approximate $79.9 million impact on our income before taxes.
Customer Credits:
Our customers are offered various forms of consideration, including allowances,
service fees and prompt payment discounts. We expect our customers will earn prompt payment discounts
and, therefore, we deduct the full amount of these discounts from total product sales when revenues are
recognized. Service fees are also deducted from total product sales as they are earned.
Rebates and Discounts:
We accrue rebates for mandated discounts under the Medicaid Drug Rebate
Program in the United States and mandated discounts in Europe in markets where government-sponsored
healthcare systems are the primary payers for healthcare. These accruals are based on statutory discount rates
and expected utilization as well as historical data we have accumulated since product launch.
69

Our estimates for expected utilization of commercial insurance rebates are based on data received from
our customers. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an
estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for
known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust
prior period accruals, which would affect revenue in the period of adjustment.
Chargebacks:
Chargebacks are discounts that occur when certain indirect contracted customers
purchase directly from our wholesalers at a discounted price. The wholesalers, in turn, charges back to us
the difference between the price initially paid by the wholesalers and the discounted price paid by the
contracted customers. In addition to actual chargebacks received, we maintain an accrual for chargebacks
based on the estimated contractual discounts on the inventory levels on hand in our distribution channel. If
actual future chargebacks vary from these estimates, we may need to adjust prior period accruals, which
would affect revenue in the period of adjustment.
Medicare Part D Coverage Gap:
Medicare Part D prescription drug benefit mandates manufacturers
to fund 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients.
Our estimates for the expected Medicare Part D coverage gap are based on historical invoices received and in
part from data received from our customers. Funding of the coverage gap is generally invoiced and paid in
arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the
current quarter’s activity, plus an accrual balance for known prior quarters. If actual future funding varies
from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of
adjustment.
Co-payment Assistance:
Patients who have commercial insurance and meet certain eligibility
requirements may receive co-payment assistance. We accrue a liability for co-payment assistance based on
actual program participation and estimates of program redemption using data provided by third-party
administrators.
Product Royalty Revenues
Royalty revenues on commercial sales for JAKAVI and TABRECTA by Novartis are estimated based
on information provided by Novartis. Royalty revenues on commercial sales for OLUMIANT by Lilly are
estimated based on information provided by Lilly. Royalty revenues on commercial sales for PEMAZYRE by
Innovent are estimated based on information provided by Innovent. We recognize royalty revenues in the
period the sales occur. We exercise judgment in determining whether the information provided is sufficiently
reliable for us to base our royalty revenue recognition thereon. If actual royalties vary from estimates, we
may need to adjust the prior period, which would affect royalty revenue and receivable in the period of
adjustment. Historically, adjustments to these estimates to reflect actual royalty revenues have not been
material to our financial results and have been less than 1% of royalty revenues.
Milestone and Contract Revenues
At the inception of a contract, we determine the transaction price, in addition to any upfront payment,
by estimating the amount of variable consideration, including milestone payments, at the outset of the
contract utilizing the most likely amount method. Our contractual milestones typically relate to the
achievement of pre-specified development, regulatory and commercialization events outside of our control,
such as regulatory approval of a compound, first patient dosing or achievement of sales-based thresholds.
We include milestones in the transaction price only to the extent that it is probable that a significant reversal
in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the
milestone is subsequently resolved. Given the high level of uncertainty of achievement, variable consideration
associated with milestones are fully constrained until confirmation of the satisfaction or completion of the
milestone by the third-party. We review our estimate of the transaction price each period, and make revisions
to such estimates as necessary.
Stock Compensation.
Share-based payment transactions with employees, which include stock options,
restricted stock units (RSUs) and performance shares (PSUs), are recognized as compensation expense over
the requisite service period based on their estimated fair values at the date of grant as well as expected
forfeiture rates based on actual experience, subject to customary retirement provisions that may accelerate
70

the requisite service period for expense recognition purposes. The stock compensation process requires the
use of estimates, particularly surrounding Black-Scholes assumptions such as stock price volatility over the
option term and expected option lives, as well as expected forfeiture rates and the probability of PSUs
vesting. For the years ending December 31, 2024 and 2023, our Black-Scholes assumptions included a
weighted-average stock price volatility of 30% in 2024 and 32% in 2023, average expected option life of
approximately five years and an estimated annualized forfeiture rate of 5%. The average risk-free interest rate
assumption used in the Black-Scholes valuations increased from 4.01% in 2023 to 4.15% in 2024.
The fair value of stock options, which are subject to graded vesting, are recognized as compensation
expense over the requisite service period using the accelerated attribution method. The fair value of RSUs
that are subject to cliff vesting are recognized as compensation expense over the requisite service period using
the straight-line attribution method, and the fair value of RSUs that are subject to graded vesting are
recognized as compensation expense over the requisite service period using the accelerated attribution
method. The fair value of PSUs are recognized as compensation expense beginning at the time in which the
performance conditions are deemed probable of achievement. We assess the probability of achievement
of performance conditions, including projected product revenues and clinical development milestones, as of
the end of each reporting period. Once a performance condition is considered probable, we record
compensation expense based on the portion of the service period elapsed to date with respect to that award,
with a cumulative catch-up, net of estimated forfeitures, and recognize any remaining compensation
expense, if any, over the remaining requisite service period using the straight-line attribution method for
PSUs that are subject to cliff vesting and using the accelerated attribution method for PSUs that are subject
to graded vesting. Compensation expense for PSUs with market performance conditions is calculated
using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period.
Income Taxes.
We account for income taxes using an asset and liability approach to financial
accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on
the difference between the financial statement carrying amounts and tax bases of assets and liabilities
using enacted tax rates in effect for years in which the basis differences are expected to reverse. We periodically
assess the likelihood of the realization of deferred tax assets, and reduce the carrying amount of these
deferred tax assets to an amount that is considered to be more-likely-than-not to be realizable. Our assessment
considers recent cumulative earnings experience, projections of future taxable income (losses) and ongoing
prudent and feasible tax planning strategies. When performing our assessment on projections of future taxable
income (losses), we consider factors such as the likelihood of regulatory approval and commercial success
of products currently under development, among other factors. Significant judgment is required in making
this assessment and, to the extent that a reversal of any portion of our valuation allowance against our deferred
tax assets is deemed appropriate, a tax benefit will be recognized against our income tax provision in the
period of such reversal.
We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the
position will be sustained upon examination by the taxing authorities, including resolutions of any related
appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded
for these positions is measured at the largest amount of benefit that is greater than 50 percent likely of
being realized upon ultimate settlement. We adjust the level of the liability to reflect any subsequent changes
in the relevant facts surrounding the uncertain positions. Any interest and penalties on uncertain tax
positions are included within the tax provision.
We record estimates and prepare and file tax returns in various jurisdictions across the United States,
Canada, Europe, and Asia based upon our interpretation of local tax laws and regulations. While we exercise
significant judgment when applying complex tax laws and regulations in these various taxing jurisdictions,
many of our tax returns are open to audit, and may be subject to future tax, interest, and penalty assessments.
We believe our estimates for the valuation allowances against certain deferred tax assets and the
amount of benefits associated with uncertain tax positions recognized in our financial statements are
appropriate based upon our assessment of the factors mentioned above. Given we do not record a valuation
allowance on the majority of our U.S. deferred tax assets, we expect that our reported income tax expense
(current plus deferred) for future periods will be higher than that recorded for prior periods.
71

Results of Operations
Years Ended December 31, 2024 and 2023
We recorded net income for the years ended December 31, 2024 and 2023 of $32.6 million and
$597.6 million, respectively. On a per share basis, basic net income was $0.16 and diluted net income was
$0.15 for the year ended December 31, 2024. On a per share basis, basic net income was $2.67 and diluted net
income was $2.65 for the year ended December 31, 2023.
Revenues
For the Year Ended,
December 31,
2024
2023
(in millions)
JAKAFI revenues, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,792.1
$2,593.7
OPZELURA revenues, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
508.3
337.9
ICLUSIG revenues, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
114.3
111.6
PEMAZYRE revenues, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81.7
83.6
MINJUVI/MONJUVI revenues, net
. . . . . . . . . . . . . . . . . . . . . . . . . . .
119.3
37.1
ZYNYZ revenues, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2
1.3
Total product revenues, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,618.9
3,165.2
JAKAVI product royalty revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
418.8
367.6
OLUMIANT product royalty revenues . . . . . . . . . . . . . . . . . . . . . . . . . .
135.6
136.1
TABRECTA product royalty revenues . . . . . . . . . . . . . . . . . . . . . . . . . .
22.7
17.8
PEMAZYRE product royalty revenues . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2
1.9
Total product royalty revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
579.3
523.4
Milestone and contract revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43.0
7.0
Total revenues
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,241.2
$3,695.6
The increase in JAKAFI product revenues from 2023 to 2024 was comprised of a volume increase of
$142.3 million and a price increase of $56.1 million. The increase for the year ended December 31, 2024 as
compared to the corresponding period in 2023 was primarily driven by an increase in paid demand across all
indications.
The increase in OPZELURA net product revenues from 2023 to 2024 was comprised of a volume
increase of $165.3 million and a price increase of $5.1 million. The increase was driven by continued growth
in new patient starts and refills, and approximately $60.7 million of OPZELURA net product revenues for
2024 were from Europe.
The increase in MINJUVI/MONJUVI net product revenues for the year ended December 31, 2024
compared to the prior period was driven by the acquisition completed in February 2024, under which we
gained exclusive global rights to tafasitamab marketed in the United States as MONJUVI (tafasitamab-cxix).
Refer to Note 5 of Notes to the Consolidated Financial Statements for further information related to the
acquisition.
Our product revenues may fluctuate from period to period due to our customers’ purchasing patterns
over the course of a year, including as a result of increased inventory building by customers in advance of
expected or announced price increases. Product revenues are recorded net of estimated product returns,
pricing discounts including rebates offered pursuant to mandatory federal and state government programs
and chargebacks, prompt pay discounts and distribution fees and co-pay assistance. Our revenue recognition
policies require estimates of the aforementioned sales allowances each period.
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The following table provides a summary of activity with respect to our sales allowances and accruals
(in thousands):
Year Ended December 31, 2024
Discounts and
Distribution
Fees
Government
Rebates and
Chargebacks
Co-Pay
Assistance
and Other
Discounts
Product
Returns
Total
Balance at January 1, 2024 . . . . . . . . . . . . . .
$
20,479
$
264,422 $
13,016 $ 11,021 $
308,938
Allowances for current period sales . . . . . . .
152,167
1,282,224
131,979
23,251
1,589,621
Allowances for prior period sales . . . . . . . .
429
2,718
(68)
4,386
7,465
Credits/payments for current period sales . .
(129,777)
(1,049,069)
(127,400)
(238)
(1,306,484)
Credits/payments for prior period sales . . . .
(15,858)
(117,737)
(4,237)
(15,407)
(153,239)
Balance at December 31, 2024 . . . . . . . . . . . .
$
27,440
$
382,558 $
13,290 $ 23,013 $
446,301
U.S. government rebates and chargebacks are the most significant component of our sales allowances.
Increases in certain U.S. government reimbursement rates are limited to a measure of inflation, and when
the price of a drug increases faster than this measure of inflation it will result in a penalty adjustment factor
that causes a larger sales allowance to those government related entities. We expect government rebates
and chargebacks as a percentage of our gross product sales will continue to increase in connection with any
future product price increases greater than the rate of inflation, and any such increase in these government
rebates and chargebacks will have a negative impact on our reported product revenues, net. We adjust our
estimates for government rebates and chargebacks based on new information regarding actual rebates as
it becomes available.
We brought a lawsuit against the U.S. Centers for Medicare and Medicaid Services (“CMS”) alleging
that a recent regulation issued by CMS on the definition of “line extension” for purposes of the Medicaid
rebate program is too broad and has the unintended consequence of treating OPZELURA as a “line
extension” of JAKAFI under this program. We believe that such a reading would violate CMS’s statutory
authority and be arbitrary and capricious, given that OPZELURA, among other differentiators, is indicated
to treat entirely different medical conditions and entirely different patient populations than JAKAFI. As
of December 31, 2024, we have accrued approximately $127.6 million within accrued and other current
liabilities on the consolidated balance sheet, relating to the incremental rebates that would be owed were
OPZELURA considered a line extension of JAKAFI. The impact on OPZELURA gross to net deductions
for the quarter ending December 31, 2024, is approximately 6.3%. If OPZELURA is not treated as a line
extension of JAKAFI, this would result in a reversal of our accrual and a lower future gross to net deduction
for OPZELURA.
Claims by third-party payors for rebates and chargebacks are frequently submitted after the period in
which the related sales occurred, which may result in adjustments to prior period accrual balances in the
period in which the new information becomes available. Our company-sponsored patient savings program in
which we provide financial assistance to enable commercially-insured patients to afford their insurance
premium and co-pays may fluctuate as the commercial insurance landscape evolves and may impact net
revenues, particularly for drugs like OPZELURA. We also adjust our allowance for product returns based
on new information regarding actual returns as it becomes available.
We expect our sales allowances to fluctuate from quarter to quarter due to changes in the volume of
purchases eligible for government mandated discounts and rebates as well as changes in discount percentages,
which are impacted by potential future price increases, rate of inflation, and other factors, such as changes
to the 340B drug pricing program. In 2025, we expect to see a reduction in our sales allowances owed under
Medicare Part D, due to changes from the Inflation Reduction Act, which effective January 1, 2025,
replaced the manufacturer’s coverage gap liability with a different discount structure.
Product royalty revenues on commercial sales of JAKAVI and TABRECTA by Novartis are based on
net sales of licensed products in licensed territories as provided by Novartis. Product royalty revenues on
commercial sales of OLUMIANT by Lilly are based on net sales of licensed products in licensed territories
as provided by Lilly. Product royalty revenues on commercial sales of PEMAZYRE by Innovent are based on
net sales of licensed products in licensed territories as provided by Innovent.
73

Our milestone and contract revenues were $43.0 million and $7.0 million for the years ended
December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, our milestone and
contract revenues were derived from a $25.0 million upfront payment received during the first quarter of 2024
upon our transfer of functional intellectual property to China Medical Systems Holdings Limited, and we
recognized $18.0 million of upfront and milestone payments from two of our collaboration partners during
the third quarter of 2024. During the year ended December 31, 2023, our milestone and contract revenues
were primarily derived from a regulatory milestone under the Novartis collaboration and license agreement.
Cost of Product Revenues
For the Year Ended December 31,
2024
2023
(in millions)
Product costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$129.0
$ 89.2
Salary and benefits related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.2
11.9
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3
3.1
Royalty expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
141.0
128.2
Amortization of definite-lived intangible assets . . . . . . . . . . . . . . .
23.6
22.6
Total cost of product revenues . . . . . . . . . . . . . . . . . . . . . . . . .
$312.1
$255.0
Cost of product revenues includes all product related costs, reserves for obsolescence, employee
personnel costs, including stock compensation, for those employees dedicated to the production of our
commercial products, royalties owed under our collaborative agreements and amortization of our licensed
intellectual property rights for ICLUSIG and the amortization of capitalized milestone payments. The increase
in cost of product revenues from 2023 to 2024 was primarily due to growth in net product revenues,
increased royalty expense and increased manufacturing related costs.
Operating Expenses
Research and development expenses
For the Year Ended December 31,
2024
2023
(in millions)
Salary and benefits related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 505.9
$ 399.1
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
161.3
126.7
Escient acquisition related compensation expense . . . . . . . . . . . . . .
11.3
—
Escient IPR&D expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
679.4
—
Clinical research and outside services . . . . . . . . . . . . . . . . . . . . . .
1,074.7
936.7
Occupancy and all other costs . . . . . . . . . . . . . . . . . . . . . . . . . . .
174.2
165.1
Total research and development expenses . . . . . . . . . . . . . . . . . . .
$2,606.8
$1,627.6
We account for research and development costs by natural expense line and not costs by project. Salary
and benefits related expense increased from 2023 to 2024 due primarily to increased headcount to sustain
our development pipeline. Stock compensation expense may fluctuate from period to period based on the
number of awards granted, stock price volatility and expected award lives, as well as expected award forfeiture
rates which are used to value equity-based compensation. Additionally, as described in Note 5 of the
Notes to the Consolidated Financial Statements, as part of the Escient acquisition, we recognized
compensation expense in research and development of $11.3 million associated with the accelerated vesting
for certain Escient stock awards in connection with the acquisition on our consolidated statements of
operations. Research and development expenses for the year ended December 31, 2024 also include the
$679.4 million of expense related to the acquired in-process research and development assets as part of the
Escient acquisition.
74

The increase in clinical research and outside services expense from 2023 to 2024 was primarily due to
continued investment in our late-stage development assets, additional expenses resulting from the Escient
acquisition and timing of certain expenses. Research and development expenses include upfront and milestone
expenses related to our collaborative agreements, which were $104.4 million and $36.7 million for the years
ended December 31, 2024 and 2023, respectively. Research and development expenses for the years ended
December 31, 2024 and 2023 were net of $29.9 million and $49.1 million, respectively, of costs reimbursed
by our collaborative partners.
In addition to one-time expenses resulting from upfront fees in connection with the entry into any new
or amended collaboration agreements and payment of milestones under those agreements, research and
development expenses may fluctuate from period to period depending upon the stage of certain projects and
the level of pre-clinical and clinical trial related activities. Many factors can affect the cost and timing of
our clinical trials, including requests by regulatory agencies for more information, inconclusive results
requiring additional clinical trials, slow patient enrollment, adverse side effects among patients, insufficient
supplies for our clinical trials, timing of drug supply, including API, and real or perceived lack of effectiveness
or safety of our investigational drugs in our clinical trials. In addition, the development of all of our
products will be subject to extensive governmental regulation. These factors make it difficult for us to predict
the timing and costs of the further development and approval of our products.
Selling, general and administrative expenses
For the Year Ended December 31,
2024
2023
(in millions)
Salary and benefits related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 349.6
$ 300.1
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102.5
86.1
Escient acquisition related compensation expense . . . . . . . . . . . . . .
20.2
—
Other contract services and outside costs . . . . . . . . . . . . . . . . . . . .
769.9
775.1
Total selling, general and administrative expenses . . . . . . . . . . . . . .
$1,242.2
$1,161.3
Salary and benefits related expense increased from 2023 to 2024 due primarily to increased headcount.
This increased headcount was due primarily to the establishment of our dermatology commercial
organization. Stock compensation expense may fluctuate from period to period based on the number of
awards granted, stock price volatility and expected award lives, as well as expected award forfeiture rates
which are used to value equity-based compensation. Additionally, as described in Note 5 of the Notes to the
Consolidated Financial Statements, as part of the Escient acquisition, we recognized compensation
expense in selling, general and administrative expenses of $20.2 million associated with the accelerated
vesting for certain Escient stock awards in connection with the acquisition on our consolidated statements
of operations.
Loss on change in fair value of acquisition-related contingent consideration
Acquisition-related contingent consideration, which consists of our future royalty obligations to ARIAD/
Takeda, was recorded on the acquisition date, June 1, 2016, at the estimated fair value of the obligation, in
accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent
consideration is remeasured quarterly. The change in fair value of the acquisition-related contingent
consideration for the years ended December 31, 2024 and 2023 was expense of $19.8 million and $29.2 million,
respectively, which is recorded in loss on change in fair value of acquisition-related contingent consideration
on the consolidated statements of operations. The loss on change in fair value of the contingent
consideration during the years ended December 31, 2024 and 2023 was due primarily to fluctuations in
foreign currency exchange rates impacting future revenue projections of ICLUSIG and the passage of time.
Profit sharing from co-commercialization activities
Under the former collaboration and license agreement with MorphoSys, which was executed in
March 2020 and continued through February 5, 2024 as described further in Note 5 of the Notes to the
75

Consolidated Financial Statements, we and MorphoSys were both responsible for the commercialization
efforts of tafasitamab in the United States and shared equally the profits and losses from the co-
commercialization efforts. For the period from January 1, 2024 through February 5, 2024, our 50% share of
the profits for tafasitamab was $1.0 million, as recorded in (profit) and loss sharing under collaboration
agreements on the consolidated statement of operations. For the year ended December 31, 2023, our 50%
share of the costs for tafasitamab was $2.0 million, as recorded in (profit) and loss sharing under collaboration
agreements on the consolidated statement of operations.
Under the collaboration agreement with Syndax, as described further in Note 7 of the Notes to the
Consolidated Financial Statements, we and Syndax are both responsible for the co-commercialization of
axatilimab in the United States and share equally in the profits and losses from those efforts. We are the
principal in the U.S. axatilimab co-commercialization efforts and will record 100% of all product revenues and
associated costs in accordance with our profit sharing from co-commercialization activities accounting
policy outlined in Note 1 of the Notes to the Consolidated Financial Statements. For the year ended
December 31, 2024, there were no revenues from sales of axatilimab, however, there was $22.4 million of
expense incurred in connection with the co-commercialization efforts, 50% of which is recorded as selling,
marketing and administrative expense in our consolidated statement of operations.
Non-operating Income and Expenses
Interest income
Interest income for the years ended December 31, 2024 and 2023 was $128.7 million and $158.4 million,
respectively. The decrease in Interest income for the year ended December 31, 2024 primarily relates to a
decrease in interest earned on our cash equivalents and marketable securities generally due to lower cash
equivalent and marketable securities balance in the second half of 2024 as compared to the corresponding
period in 2023.
Realized and unrealized gain (loss) on equity investments
Realized and unrealized gains and losses on equity investments will fluctuate from period to period,
based on sales of securities and the change in fair value of the securities we hold in our publicly held
collaboration partners. The following table provides a summary of those realized and unrealized gains and
(losses):
For the Years Ended,
December 31,
2024
2023
(in millions)
Agenus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (8.2)
$(18.9)
Merus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
106.1
45.2
MorphoSys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30.7
22.9
Syndax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11.9)
(5.5)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.7)
0.2
Total realized and unrealized gain on equity investments . . . . . . . . . . . . . . . .
$116.0
$ 43.9
During the year ended December 31, 2024, we sold all remaining investments in Agenus Inc., Merus
and MorphoSys AG as described further in in Note 7 of the Notes to the Consolidated Financial Statements.
Provision for income taxes
The provision for income taxes for the years ended December 31, 2024 and 2023 was $284.0 million
and $236.6 million, respectively.
Our effective tax rate of 89.7% for the year ended December 31, 2024 increased as compared to 28.4%
for the prior year primarily due to non-deductible charges of $710.9 million associated with the Escient
76

acquisition. Our effective tax rate for 2024 was higher than the U.S. statutory rate primarily due to non-
deductible charges of $710.9 million associated with the Escient acquisition. Our effective tax rate for 2023
was higher than the U.S. statutory rate primarily due to foreign losses with no associated tax benefit and an
increase in our valuation allowance against certain U.S. federal and state deferred tax assets. This was
partially offset by tax rate benefits associated with research and development and orphan drug tax credit
generations and the foreign derived intangible income deduction.
Liquidity and Capital Resources
2024
2023
(in millions)
December 31:
Cash, cash equivalents, and marketable securities . . . . . . . . . . . . . . . . . .
$ 2,158.1
$3,656.0
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,597.2
$3,405.0
Year ended December 31:
Cash provided by (used in):
Operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
335.3
$ 496.5
Investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
157.5
$ (207.7)
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(2,021.5)
$
(20.0)
Capital expenditures (included in investing activities above) . . . . . . . . . . .
$
(86.3)
$
(32.5)
Sources and Uses of Cash.
At December 31, 2024, we had available cash, cash equivalents and marketable securities of $2.2 billion.
Our cash and marketable securities balances are held in a variety of interest-bearing instruments, including
money market accounts and U.S. government debt securities. Available cash is invested in accordance with our
investment policy’s primary objectives of liquidity, safety of principal and diversity of investments.
Cash provided by operating activities.
The decrease in cash provided by operating activities from 2023
to 2024 was due primarily to the Escient acquisition and changes in working capital.
Cash used in investing activities.
Our investing activities, other than purchases, sales and maturities of
marketable securities, have consisted predominantly of capital expenditures and sales of long term investments.
During 2024, net cash provided by investing activities was $157.5 million, which primarily represented
sales of equity investments of $284.8 million and sale and maturity of marketable securities of $231.3 million,
offset in part by purchases of marketable securities of $258.4 million, payments for intangible assets of
$13.9 million, and capital expenditures of $86.3 million. During 2023, net cash used in investing activities
was $207.7 million, which represents purchases of marketable securities of $456.0 million, capital expenditures
of $32.5 million, payments for intangible assets of $15.0 million, and purchases of long term investments
of $10.0 million, offset in part by the sale and maturity of marketable securities of $305.8 million.
Cash used in financing activities.
During 2024, net cash used in financing activities was $2.0 billion
and was primarily driven by expenditures associated with the share repurchase of $2.0 billion. During 2023,
net cash used in financing activities was $20.0 million, consisting primarily of cash paid to ARIAD/
Takeda for contingent consideration, offset in part by proceeds from the issuance of common stock under
our stock plans net of tax withholdings.
Our capital expenditures for construction activities and our non-operating contractual operating and
finance lease obligations are discussed in Note 8 of Notes to the Consolidated Financial Statements.
In August 2021, we entered into a $500.0 million, senior unsecured revolving credit facility, which was
subsequently amended in May 2023 and June 2024 (as amended, the “Credit Agreement”). The
June 2024 amendment to the Credit Agreement extended the maturity date of the revolving credit facility
from August 2024 to June 2027. We may increase the maximum revolving commitments or add one or more
incremental term loan facilities, subject to obtaining commitments from any participating lenders and
certain other conditions, in an amount not to exceed $250.0 million plus a contingent additional amount
77

that is dependent on our pro forma consolidated leverage ratio. As of December 31, 2024, we had no
outstanding borrowings and were in compliance with all covenants under this facility. The Credit Agreement
is described further in Note 16 of Notes to the Consolidated Financial Statements.
Due to the full utilization of our research and development and orphan drug tax credit carryforwards
generated in prior years, our U.S. tax liabilities continue to reflect the adverse impacts of the mandatory
capitalization and amortization of research and development expenses as required under the Tax Cuts and
Jobs Act of 2017, which eliminated the immediate expensing of such expenses.
We believe that our cash flow from operations, together with our cash, cash equivalents and marketable
securities and funds available under our revolving credit facility, will be adequate to satisfy our capital needs
for the foreseeable future. Our cash requirements depend on numerous factors, including our expenditures
in connection with our drug discovery and development programs and commercialization operations;
expenditures in connection with litigation or other legal proceedings; costs for future facility requirements;
and expenditures for future strategic equity investments or potential acquisitions. We have entered into and
may in the future seek to license additional rights relating to technologies or drug development candidates
in connection with our drug discovery and development programs. Under these licenses, we may be required
to pay upfront fees, milestone payments, and royalties on sales of future products. These contingent future
payments are discussed in detail in Note 7 of Notes to the Consolidated Financial Statements.
To the extent we seek to augment our existing cash resources and cash flow from operations to satisfy
our cash requirements for future acquisitions or other strategic purposes, we expect that additional funding
can be obtained through equity or debt financings or from other sources. The sale of equity or convertible
debt securities in the future may be dilutive to our stockholders, and may provide for rights, preferences or
privileges senior to those of our holders of common stock. Debt financing arrangements may require us
to pledge certain assets or enter into covenants that could restrict our operations or our ability to incur further
indebtedness.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
Our investments in marketable securities, which are composed primarily of U.S. government securities,
are subject to default, changes in credit rating and changes in market value. These investments are also subject
to interest rate risk and will decrease in value if market interest rates increase. As of December 31, 2024,
marketable securities were $470.3 million. Due to the nature of these investments, if market interest rates were
to increase immediately and uniformly by 10% from levels as of December 31, 2024, the decline in fair
value would not be material.
78

Item 8.
Financial Statements and Supplementary Data
INDEX
Page
Consolidated Financial Statements of Incyte Corporation
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID: 42) . .
80
Consolidated Balance Sheets as of December 31, 2024 and 2023 . . . . . . . . . . . . . . . . . . . . . . . . . .
83
Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 . . . .
84
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024,
2023 and 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 . . . .
87
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
79

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Incyte Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Incyte Corporation (the Company)
as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income
(loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31,
2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted
accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31,
2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 10,
2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is
to express an opinion on the Company’s financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the
financial statements that were communicated or required to be communicated to the audit committee and
that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective or complex judgments. The communication of critical audit matters does
not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are
not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
80

Allowances for rebates owed pursuant to the Medicaid Drug Rebate
Program in the U.S.
Description of the Matter
As discussed in Note 1 to the consolidated financial statements, the
Company recognizes revenues for product received by its customers
net of allowances for customer credits, including estimated rebates,
chargebacks, discounts, returns, distribution service fees, patient
assistance programs, and government rebates. Liabilities related to
sales allowances are presented within accrued and other current
liabilities on the consolidated balance sheet and totaled $431.8 million
as of December 31, 2024.
Auditing the allowances for rebates owed pursuant to the Medicaid
Drug Rebate Program in the U.S. was complex and highly judgmental
due to the significant estimation uncertainty involved in management’s
assumptions, including the levels of expected utilization of these
rebates based on the amount of drugs sold to eligible patients, as well
as the complexity of the government mandated calculations. The
allowances for rebates owed pursuant to the Medicaid Drug Rebate
Program in the U.S. are sensitive to these significant assumptions and
calculations.
How We Addressed the Matter in
Our Audit
We obtained an understanding, evaluated the design and tested the
operating effectiveness of controls over management’s review of the
allowances for rebates owed pursuant to the Medicaid Drug Rebate
Program in the U.S. For example, we tested controls over
management’s review of the significant assumptions, such as the
utilization of these rebates as well as controls over management’s
review of the application of the government mandated calculations.
To test the allowances for rebates owed pursuant to the Medicaid Drug
Rebate Program in the U.S., we performed audit procedures that
included, among others, evaluating the methodologies used and testing
the significant assumptions discussed above. We compared the
significant assumptions used by management to historical trends,
evaluated the change in the accruals from prior periods, and assessed
the historical accuracy of management’s estimates against actual
results. We also tested the completeness and accuracy of the
underlying data used in the Company’s calculations through
reconciliation to third-party invoices, claims data and actual cash
payments. In addition, we involved our governmental pricing
specialists to assist in evaluating management’s methodology and
calculations used to measure the estimated rebates.
Evaluating the fair value of the in-process research and development
assets acquired in the Escient Pharmaceutics, Inc. acquisition
Description of the Matter
As described in Note 5 to the consolidated financial statements, on
May 30, 2024, the Company acquired all of the outstanding shares of
common stock of Escient Pharmaceuticals, Inc. (“Escient”), a
clinical-stage drug development company, for $782.5 million in cash
consideration. The Company determined substantially all of the fair
value of the gross assets acquired was concentrated in Escient’s lead
clinical-stage molecule, EP262. Therefore, the Company accounted for
the Escient transaction as an asset acquisition under U.S. GAAP. The
acquired in-process research and development asset for EP262 was
81

valued at $644.8 million, with an additional $34.6 million of fair value
allocated to the secondary molecule, EP547. As both acquired
in-process research and development assets do not have an alternative
future use at the acquisition date, the Company recognized the full
amount of $679.4 million as research and development expenses.
Auditing the Company’s fair value of the in-process research and
development assets acquired in the Escient transaction was judgmental
due to the significant estimation uncertainty and subjectivity of the
significant assumptions used by management in determining the
present value of future discounted cash flows. The significant
assumptions used in the calculation of the fair value of the in-process
research and development assets of Escient included the amount of
future product revenues, the probability of success, and the discount
rate. The fair value calculation of the in-process research and
development assets are sensitive to these significant assumptions.
How We Addressed the Matter in
Our Audit
We obtained an understanding, evaluated the design and tested the
operating effectiveness of controls over management’s review of the
estimation of the fair value of the in-process research and development
assets of Escient. For example, we tested controls over management’s
review of the significant assumptions, such as the amount of future
product revenues, the probability of success, and the discount rate, and
over the completeness and accuracy of the data used in the valuation.
To test the fair value of the in-process research and development
assets, we performed audit procedures that included, among others,
evaluating the Company’s methodologies used and testing the
significant assumptions discussed above. For example, we compared
the significant assumptions used by management to current published
scientific studies, industry, market and economic trends, and to other
relevant factors. In addition, to evaluate the probability of success, we
considered the phase of development of the in-process research and
development assets against third-party data regarding clinical trial
success rates. We also performed various sensitivity analyses of the
significant assumptions to evaluate the change in the fair value of the
in-process research and development assets resulting from changes in
the assumptions. In addition, we involved our valuation specialists to
assist in our evaluation of the methodologies and the discount rates
used in the fair value estimate.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1991.
Philadelphia, Pennsylvania
February 10, 2025
82

INCYTE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except number of shares and par value)
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,687,829
$3,213,376
Marketable securities – available-for-sale (amortized cost $469,917 and $442,816
as of December 31, 2024 and 2023 respectively; allowance for credit losses $0
as of December 31, 2024 and 2023) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
470,263
442,667
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
853,154
743,557
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,872
62,972
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
168,912
182,830
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,239,030
4,645,402
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,622
1,845
Long term equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,814
187,716
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
348,327
206,965
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
763,411
751,513
Finance lease right-of-use assets, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,803
25,535
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
113,803
123,545
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
155,593
155,593
Deferred income tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
762,071
631,886
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,848
52,107
Total assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,444,322
$6,782,107
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
197,465
$ 109,601
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
188,677
153,348
Accrued and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,212,048
935,569
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,419
3,439
Acquisition-related contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . .
39,238
38,422
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,641,847
1,240,379
Acquisition-related contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . .
153,762
173,578
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,542
29,162
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
167,543
149,151
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,996,694
1,592,270
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or
outstanding as of December 31, 2024 and 2023 . . . . . . . . . . . . . . . . . . . . . .
—
—
Common stock, $0.001 par value; 400,000,000 shares authorized; 193,434,305
and 224,286,862 shares issued and outstanding as of December 31, 2024 and
2023, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
193
224
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,533,437
5,016,122
Accumulated other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . .
(13,121)
13,106
(Accumulated deficit) retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,072,881)
160,385
Total stockholders’ equity
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,447,628
5,189,837
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,444,322
$6,782,107
See accompanying notes.
83

INCYTE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Year Ended December 31,
2024
2023
2022
Revenues:
Product revenues, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,618,888
$3,165,168
$2,746,897
Product royalty revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .
579,329
523,481
482,738
Milestone and contract revenues . . . . . . . . . . . . . . . . . . . . . .
43,000
7,000
165,000
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,241,217
3,695,649
3,394,635
Costs, expenses and other:
Cost of product revenues (including definite-lived intangible
amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
312,068
254,990
206,997
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . .
2,606,848
1,627,594
1,585,936
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . .
1,242,157
1,161,293
1,002,140
Loss on change in fair value of acquisition-related contingent
consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,803
29,202
12,149
(Profit) and loss sharing under collaboration agreements . . . . . .
(1,025)
2,045
7,973
Total costs, expenses and other . . . . . . . . . . . . . . . . . . . . . .
4,179,851
3,075,124
2,815,195
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,366
620,525
579,440
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128,710
158,414
40,451
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,280)
(2,551)
(2,666)
Realized and unrealized gain (loss) on equity investments . . . . . . .
116,025
43,893
(87,590)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,809
13,934
(519)
Income before provision for income taxes
. . . . . . . . . . . . . .
316,630
834,215
529,116
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
284,015
236,616
188,456
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
32,615
$ 597,599
$ 340,660
Net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.16
$
2.67
$
1.53
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.15
$
2.65
$
1.52
Shares used in computing net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
207,110
223,628
222,004
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
210,530
225,928
223,958
See accompanying notes.
84

INCYTE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Year Ended December 31,
2024
2023
2022
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 32,615
$597,599
$340,660
Other comprehensive income (loss):
Foreign currency translation (loss) gain . . . . . . . . . . . . . . . . . . . . . .
(17,723)
25,772
13,065
Unrealized gain (loss) on marketable securities, net of tax . . . . . . . . .
495
4,888
(3,918)
Defined benefit pension (loss) gain, net of tax . . . . . . . . . . . . . . . . .
(8,999)
(32,623)
25,376
Other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . .
(26,227)
(1,963)
34,523
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
6,388
$595,636
$375,183
See accompanying notes.
85

INCYTE CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except number of shares)
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
Balances at December 31, 2021 . . . . . . . . . . . .
$221
$4,567,111
$(19,454)
$ (777,874) $ 3,770,004
Issuance of 1,348,122 shares of Common Stock
upon exercise of stock options and
settlement of employee restricted stock units
and performance shares, net of shares
withheld for taxes, and 308,413 shares of
Common Stock under the ESPP . . . . . . . . .
2
34,812
—
—
34,814
Issuance of 5,751 shares of Common Stock for
services rendered . . . . . . . . . . . . . . . . . . . .
—
427
—
—
427
Stock compensation . . . . . . . . . . . . . . . . . . .
—
189,691
—
—
189,691
Other comprehensive income . . . . . . . . . . . . .
—
—
34,523
—
34,523
Net income . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
340,660
340,660
Balances at December 31, 2022 . . . . . . . . . . . .
$223
$4,792,041
$ 15,069
$ (437,214) $ 4,370,119
Issuance of 1,154,974 shares of Common Stock
upon exercise of stock options and
settlement of employee restricted stock units
and performance shares, net of shares
withheld for taxes, and 380,145 shares of
Common Stock under the ESPP . . . . . . . . .
1
7,285
—
—
7,286
Issuance of 5,024 shares of Common Stock for
services rendered . . . . . . . . . . . . . . . . . . . .
—
321
—
—
321
Stock compensation . . . . . . . . . . . . . . . . . . .
—
216,475
—
—
216,475
Other comprehensive loss
. . . . . . . . . . . . . . .
—
—
(1,963)
—
(1,963)
Net income . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
597,599
597,599
Balances at December 31, 2023 . . . . . . . . . . . .
$224
$5,016,122
$ 13,106
$
160,385 $ 5,189,837
Issuance of 1,776,728 shares of Common Stock
upon exercise of stock options and
settlement of employee restricted stock units
and performance shares, net of shares
withheld for taxes, and 453,312 shares of
Common Stock under the ESPP . . . . . . . . .
2
8,997
—
—
8,999
Issuance of 5,062 shares of Common Stock for
services rendered . . . . . . . . . . . . . . . . . . . .
—
321
—
—
321
Stock compensation . . . . . . . . . . . . . . . . . . .
—
266,058
—
—
266,058
Repurchase of common stock . . . . . . . . . . . .
(33)
(758,061)
—
(1,265,881) (2,023,975)
Other comprehensive loss
. . . . . . . . . . . . . . .
—
—
(26,227)
—
(26,227)
Net income . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
32,615
32,615
Balances at December 31, 2024 . . . . . . . . . . . .
$193
$4,533,437
$(13,121)
$(1,072,881) $ 3,447,628
See accompanying notes.
86

INCYTE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2024
2023
2022
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
32,615 $ 597,599 $ 340,660
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .
89,248
82,660
67,855
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
266,058
215,889
188,420
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(85,553)
(158,898)
57,091
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9,053)
22,579
17,366
Realized and unrealized (gain) loss on equity investments . . . . . . . . .
(116,025)
(43,893)
87,590
Loss on change in fair value of acquisition-related contingent
consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,803
29,202
12,149
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(111,586)
(98,678)
(28,579)
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . .
10,365
(42,491)
(30,739)
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(127,633)
(170,151)
(67,504)
Accounts payable
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88,159
(167,945)
105,436
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
278,939
230,614
220,196
Net cash provided by operating activities . . . . . . . . . . . . . . . . .
335,337
496,487
969,941
Cash flows from investing activities:
Purchase of long term investments . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(10,000)
—
Sale of equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
284,781
45
—
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(86,263)
(32,486)
(77,833)
Payments for intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13,900)
(15,000)
—
Purchases of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . .
(258,370)
(456,020)
(79,860)
Sale and maturities of marketable securities . . . . . . . . . . . . . . . . . . . .
231,269
305,784
79,151
Net cash provided by (used in) investing activities . . . . . . . . . . .
157,517
(207,677)
(78,542)
Cash flows from financing activities:
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,004,790)
—
—
Proceeds from issuance of common stock under stock plans . . . . . . . . .
49,301
35,836
61,115
Tax withholdings related to restricted and performance share vesting . . .
(40,302)
(28,550)
(26,301)
Payment of finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,798)
(3,360)
(2,862)
Payment of contingent consideration . . . . . . . . . . . . . . . . . . . . . . . .
(21,958)
(23,959)
(32,746)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . .
(2,021,547)
(20,033)
(794)
Effect of exchange rates on cash, cash equivalents, and restricted cash . .
2,923
(6,676)
3,355
Net (decrease) increase in cash, cash equivalents, and restricted cash . . .
(1,525,770)
262,101
893,960
Cash, cash equivalents, and restricted cash at beginning of period . . . . .
3,215,221
2,953,120
2,059,160
Cash, cash equivalents, and restricted cash at end of period . . . . . . . . . $ 1,689,451 $3,215,221 $2,953,120
Supplemental Schedule of Cash Flow Information
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
373,056 $ 378,206 $ 136,242
Unpaid purchases of property and equipment . . . . . . . . . . . . . . . . . . $
2,597 $
5,052 $
3,493
Unpaid excise tax on repurchase of common stock . . . . . . . . . . . . . . . $
19,185 $
— $
—
Leased assets obtained in exchange for new operating lease liabilities . . . $
9,674 $
5,275 $
6,745
Leased assets obtained in exchange for new finance lease liabilities . . . . $
8,906 $
2,257 $
1,862
See accompanying notes.
87

INCYTE CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1.
Organization and Summary of Significant Accounting Policies
Organization and Business.
Incyte Corporation (including its subsidiaries, “Incyte,” “we,” “us,” or
“our”) is a biopharmaceutical company focused on developing and commercializing proprietary therapeutics.
Our portfolio includes compounds in various stages, ranging from preclinical to late-stage development,
and commercialized products JAKAFI® (ruxolitinib), ICLUSIG® (ponatinib), PEMAZYRE® (pemigatinib),
OPZELURA® (ruxolitinib cream), MINJUVI® (tafasitamab), MONJUVI® (tafasitamab-cxix) and
ZYNYZ® (retifanlimab-dlwr), as well as NIKTIMVO™(axatilimab-csfr), which was approved for medical
use in the United States in August 2024 and will be co-commercialized. Our operations are treated as one
operating segment.
Principles of Consolidation.
The consolidated financial statements include the accounts of Incyte
Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have
been eliminated in consolidation.
Foreign Currency Translation.
Operations in non-U.S. entities are recorded in the functional currency
of each entity. For financial reporting purposes, the functional currency of an entity is determined by a review
of the source of an entity’s most predominant cash flows. The results of operations for any non-U.S.
dollar functional currency entities are translated from functional currencies into U.S. dollars using the
average currency rate during each month. Assets and liabilities are translated using currency rates at the end
of the period. Adjustments resulting from translating the financial statements of our foreign entities that
use their local currency as the functional currency into U.S. dollars are reflected as a component of other
comprehensive income (loss). Transaction gains and losses are recorded in other income (expense), net, in the
consolidated statements of operations.
Use of Estimates.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual results could differ
from those estimates.
Reclassifications.
Certain prior year amounts have been reclassified for consistency with the current
year presentation. These reclassifications had no effect on the reported results of operations.
Concentrations of Credit Risk.
Cash, cash equivalents, marketable securities, and trade receivables are
financial instruments which potentially subject us to concentrations of credit risk. The estimated fair value
of financial instruments approximates the carrying value based on available market information. By policy, we
invest our excess available funds primarily in U.S. government debt securities which are securities issued or
guaranteed by the U.S. government and money market funds that meet certain guidelines, which limits
exposure to potential credit losses. Our receivables mainly relate to our product sales and collaborative
agreements with pharmaceutical companies. We have not experienced any significant credit losses on cash,
cash equivalents, marketable securities, or trade receivables to date and do not require collateral on receivables.
Current Expected Credit Losses.
Financial assets measured at amortized cost are assessed for future
expected credit losses under guidance within ASC 326, Financial Instruments — Credit Losses, to determine
if application of an expected credit losses reserve is necessary. On a quarterly basis, receivables that
resulted from revenue transactions within the scope of ASC 606, Revenue from Contracts with Customers,
and recognized on an amortized cost basis are reviewed on a customer-level basis to analyze expectations of
future collections based upon past history of collections, payment, aging of receivables and viability of
the customer to continue payment, as well as estimates of future economic conditions. Receivables generally
consist of two types: receivables from collaborative agreements, including milestones, reimbursements for
agreed-upon activities and sales royalties; and receivables from customer product sales. Collaborative
agreement receivables are closely monitored relationships with select, reputable industry peers. Collection of
receivables is assessed within each collaborative partnership on a quarterly basis, including evaluation of
each entity’s credit quality, financial health and past history of payment. Customer product sales receivables
are independently evaluated on a monthly basis, on which unusual items or aged receivables are closely
88

monitored for signs of credit deterioration, or indications of payment refusal. Customer product sales are
with specialty pharmaceutical distributors, wholesalers, and certain public and private institutions, some of
which whose financial obligations are funded by various government agencies.
Cash and Cash Equivalents.
Cash and cash equivalents are held in banks or in custodial accounts with
banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from
date of purchase of 90 days or less that are readily convertible into cash.
Marketable Securities — Available-for-Sale.
Our marketable securities consist of investments in U.S.
government debt securities that are classified as available-for-sale. Available-for-sale securities are carried at
fair value, based on quoted market prices and observable inputs, with unrealized gains and losses, net of
tax, reported as a separate component of stockholders’ equity. We classify marketable securities that are
available for use in current operations as current assets on the consolidated balance sheets. Realized gains and
losses and declines in value judged to be other than temporary for available-for-sale securities are included
in other income (expense), net on the consolidated statements of operations. The cost of securities sold is
based on the specific identification method.
Accounts Receivable.
As of December 31, 2024 and December 31, 2023, we had a de minimis amount
of allowance for doubtful accounts. We provide an allowance for doubtful accounts based on management’s
assessment of the collectability of specific customer accounts, which includes consideration of the credit
worthiness and financial condition of those customers, aging of such receivables, history of collectability with
the customer and the general economic environment. We record an allowance to reduce the receivables to
the amount that is expected to be collected.
Inventory.
Inventories are valued at the lower of cost and net realizable value. We use the specific
identification method to account for commercial product manufactured by third-party contractors, which is
our predominant source of inventory. We apply the first-in, first-out (FIFO) method to inventories
produced at our internal manufacturing facility located in Yverdon, Switzerland. Inventories consist of
costs of materials, including shipping and handling fees, third-party contract manufacturing, and allocable
overhead associated with the production of our commercialized products. We capitalize inventory after
regulatory approval from U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA)
or Japanese Ministry of Health, Labour and Welfare (MHLW) as the related costs are expected to be
recoverable through the commercialization of the product. Costs incurred prior to approval are recorded as
research and development expense in our consolidated statements of operations.
Raw materials, active pharmaceutical ingredients (“API”) and work-in-process inventory are monitored
for obsolescence, as applicable, and generally the shelf life of the finished goods inventory is approximately
36 months from the start of manufacturing of the finished goods, with the exception of OPZELURA,
ZYNYZ and NIKTIMVO, which currently has an approximate shelf life of 24 months. We evaluate for
potential excess inventory by analyzing current and future product demand relative to the remaining product
shelf life. We build demand forecasts by considering factors such as, but not limited to, overall market
potential, market share, market acceptance and patient usage. We classify inventory as current on the
consolidated balance sheets when we expect inventory to be consumed for commercial use within the next
twelve months.
Variable Interest Entities.
We perform an initial and ongoing evaluation of the entities with which we
have variable interests, such as equity ownership, in order to identify entities (i) that do not have sufficient
equity investment at risk to permit the entity to finance its activities without additional subordinated financial
support or (ii) in which the equity investors lack an essential characteristic of a controlling financial
interest as variable interest entities (“VIE” or “VIEs”). If an entity is identified as a VIE, we perform an
assessment to determine whether we have both (i) the power to direct activities that most significantly impact
the VIE’s economic performance and (ii) have the obligation to absorb losses from or the right to receive
benefits of the VIE that could potentially be significant to the VIE. If both of these criteria are satisfied, we
are identified as the primary beneficiary of the VIE. As of December 31, 2024, there were no entities in
which we held a variable interest which we determined to be VIEs.
Equity Investments.
Our equity investments consist of investments in common stock of publicly-held
companies with whom we have entered into collaboration and license agreements. We classify our equity
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investments in common stock of publicly-held companies as either short term investments, for those
investments which we intend to sell within one year, or long term investments, for those investments which
we intend to hold for longer than one year, on the consolidated balance sheets. Our equity investments are
accounted for at fair value using readily determinable pricing available on a securities exchange on the
consolidated balance sheets. All changes in fair value are reported in the consolidated statements of
operations as a realized and unrealized gain (loss) on equity investments.
In assessing whether we exercise significant influence over any of the companies in which we hold
equity investments, we consider the nature and magnitude of our investment, any voting and protective
rights we hold, any participation in the governance of the other company, and other relevant factors such as
the presence of a collaboration or other business relationship. Currently, none of our equity investments in
publicly-held companies are considered relationships in which we have the ability to exercise significant
influence.
Property and Equipment, net.
Property and equipment, net is stated at cost, less accumulated
depreciation and amortization. Depreciation is recorded using the straight-line method over the estimated
useful lives of the respective assets. Leasehold improvements are amortized over the shorter of the estimated
useful life of the assets or lease term.
Lease Accounting.
All leases with a lease term greater than 12 months, regardless of lease type
classification, are recorded as an obligation on the balance sheet with a corresponding right-of-use asset.
Both finance and operating leases are reflected as liabilities on the commencement date of the lease based on
the present value of the lease payments to be made over the lease term. Current operating lease liabilities
are reflected in accrued and other current liabilities and noncurrent operating lease liabilities are reflected in
other liabilities on the consolidated balance sheet. Right-of-use assets are valued at the initial measurement
of the lease liability, plus any initial direct costs or rent prepayments, minus lease incentives and any deferred
lease payments. Operating lease right-of-use assets are recorded in property and equipment, net on the
consolidated balance sheet and lease cost is recognized on a straight-line basis. For finance leases, expense is
recognized as separate amortization and interest expense, with higher interest expense in the earlier
periods of a lease. Leases with an initial term of 12 months or less are not recorded on the balance sheet
and we recognize lease expense for these leases on a straight-line basis over the term of the lease. In determining
whether a contract contains a lease, asset and service agreements are assessed at onset and upon modification
for criteria of specifically identified assets, control and economic benefit.
Other Intangible Assets, net.
Other intangible assets, net consist of licensed intellectual property
rights acquired in business combinations, which are reported at acquisition date fair value, less accumulated
amortization, as well as milestone payments made to collaboration partners incurred at or after the
product has obtained regulatory approval. Intangible assets with finite lives are amortized over their
estimated useful lives using the straight-line method. Intangible assets with finite lives are tested for
recoverability whenever events or changes in circumstances indicate that the carrying amounts may not be
recoverable.
Impairment of Long-Lived Assets.
Long-lived assets with finite lives are tested for impairment
whenever events or changes in circumstances indicate that the carrying value of an asset may not be
recoverable. If indicators of impairment are present, the asset is tested for recoverability by comparing the
carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from
the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered
to be impaired and its carrying value is written down to fair value, based on the related estimated discounted
future cash flows.
Goodwill.
Goodwill is calculated as the difference between the acquisition date fair value of the
consideration transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill is
not amortized but is tested for impairment at the reporting unit level at least annually as of October 1 or
when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or
performing a quantitative analysis in determining whether it is more-likely-than-not that the fair value of
net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating
segment. Our operations are currently comprised of a single, entity wide reporting unit. We completed our
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most recent annual impairment assessment as of October 1, 2024 and determined that the carrying value of
our goodwill was not impaired.
Income Taxes.
We account for income taxes using the asset and liability approach which requires the
recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary
differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts
reportable for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not
be realized. The primary factors used to assess the likelihood of realization are our recent history of
cumulative earnings or losses, expected reversals of taxable temporary timing differences, forecasts of future
taxable income and available tax planning strategies that could be implemented to realize the deferred tax
assets. The tax effects of global intangible low-taxed income from certain foreign subsidiaries is recognized
in the income tax provision in the period the tax arises.
We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the
position will be sustained upon examination by the taxing authorities, including resolutions of any related
appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded
for these positions is measured at the largest amount of benefit that is greater than 50 percent likely of
being realized upon ultimate settlement. We adjust the level of the liability to reflect any subsequent changes
in the relevant facts surrounding the uncertain positions. Any interest and penalties on uncertain tax
positions are included within the tax provision.
Net Income Per Share.
Our basic and diluted net income per share is calculated by dividing the net
income by the weighted average number of shares of common stock outstanding during all periods presented.
Options to purchase stock, restricted stock units and performance stock units are included in diluted
earnings per share calculations, unless the effects are anti-dilutive.
Accumulated Other Comprehensive Income (Loss).
Accumulated other comprehensive income (loss)
consists of unrealized gains or losses on our marketable debt securities that are classified as available-for-
sale, foreign currency translation gains or losses and unrecognized actuarial gains or loss related to our
defined benefit pension plan.
Revenue Recognition.
Revenue-generating contracts are assessed under ASC 606, Revenue from
Contracts with Customers, to identify distinct performance obligations, determine the transaction price of
the contract and allocate the transaction price to each of the distinct performance obligations. Revenue is
recognized when we have satisfied a performance obligation through transferring control of the promised
good or service to a customer. Control, in this instance, may mean the ability to prevent other entities
from directing the use of, and receiving benefit from, a good or service. We apply the following five-step
model in order to determine this amount: (i) identification of the promised goods or services in the contract;
(ii) determination of whether the promised goods or services are performance obligations, including
whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including
the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation,
which for the Company is generally at a point in time. We also assess collectability based primarily on the
customer’s payment history and on the creditworthiness of the customer.
Product Revenues
Our product revenues consist of sales of JAKAFI, MONJUVI, OPZELURA, PEMAZYRE and
ZYNYZ in the U.S., sales of MINJUVI, PEMAZYRE, ICLUSIG and OPZELURA in Europe, sales of
OPZELURA in Canada, and sales of PEMAZYRE in Japan. Product revenues are recognized at a point in
time once we satisfy the performance obligation and control is transferred under the revenue recognition
criteria as described above. We sell JAKAFI, MONJUVI, OPZELURA, PEMAZYRE and ZYNYZ to our
customers in the U.S., which include specialty and retail pharmacies, specialty distributors and wholesalers.
We sell MINJUVI, PEMAZYRE, ICLUSIG and OPZELURA to our customers in the European Union and
certain other jurisdictions, which include retail pharmacies, hospital pharmacies and distributors. We sell
PEMAZYRE in Japan to an exclusive wholesaler.
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We recognize revenues for product received by our customers net of allowances for customer credits,
including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance
programs, and government rebates, such as the Medicaid Drug Rebate Program and Medicare Part D
coverage gap reimbursements in the U.S. and mandated discounts in Europe. Product shipping and handling
costs are included in cost of product revenues.
Customer Credits:
Our customers are offered various forms of consideration, including allowances,
service fees and prompt payment discounts. We expect our customers will earn prompt payment discounts
and, therefore, we deduct the full amount of these discounts from total product sales when revenues are
recognized. Service fees are also deducted from total product sales as they are earned.
Rebates and Discounts:
Allowances for rebates include mandated discounts under the Medicaid Drug
Rebate Program in the U.S. and mandated discounts in Europe in markets where government-sponsored
healthcare systems are the primary payers for healthcare. Rebates are amounts owed after the final dispensing
of the product to a benefit plan participant and are based upon contractual agreements or legal requirements
with public sector benefit providers. The accrual for rebates is based on statutory discount rates and
expected utilization as well as historical data we have accumulated since product launches.
Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of
the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior
quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust prior period
accruals, which would affect revenue in the period of adjustment.
Chargebacks:
Chargebacks are discounts that occur when certain indirect contracted customers,
which currently consist primarily of group purchasing organizations, Public Health Service institutions, non-
profit clinics, and Federal government entities purchasing via the Federal Supply Schedule, purchase
directly from our wholesalers. Contracted customers generally purchase the product at a discounted price.
The wholesalers, in turn, charges back to us the difference between the price initially paid by the wholesalers
and the discounted price paid by the contracted customers. In addition to actual chargebacks received, we
maintain an accrual for chargebacks based on the estimated contractual discounts on the inventory levels on
hand in our distribution channel. If actual future chargebacks vary from these estimates, we may need to
adjust prior period accruals, which would affect revenue in the period of adjustment.
Medicare Part D Coverage Gap:
Medicare Part D prescription drug benefit mandates manufacturers
to fund a portion of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible
patients. Our estimates for the expected Medicare Part D coverage gap are based on historical invoices
received and in part from data received from our customers. Funding of the coverage gap is generally invoiced
and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be
incurred for the current quarter’s activity, plus an accrual balance for known prior quarters. If actual future
funding varies from estimates, we may need to adjust prior period accruals, which would affect revenue in
the period of adjustment.
Co-payment Assistance:
Patients who have commercial insurance and meet certain eligibility
requirements may receive co-payment assistance. We accrue a liability for co-payment assistance based on
actual program participation and estimates of program redemption using data provided by third-party
administrators.
Product Royalty Revenues
Royalty revenues on commercial sales for ruxolitinib (marketed as JAKAVI® outside the United States)
by Novartis Pharmaceutical International Ltd. (“Novartis”) are based on net sales of licensed products in
licensed territories as provided by Novartis. Royalty revenues on commercial sales for baricitinib (marketed
as OLUMIANT) by Eli Lilly and Company (“Lilly”) are based on net sales of licensed products in licensed
territories as provided by Lilly. Royalty revenues on commercial sales for capmatinib (marketed as
TABRECTA®) by Novartis are based on net sales of licensed products in the licensed territories as provided
by Novartis. Royalty revenues on commercial sales for pemigatinib (marketed as PEMAZYRE®) by
Innovent Biologics, Inc. (“Innovent”) are based on net sales of licensed products in licensed territories as
provided by Innovent. We recognize royalty revenues in the period the sales occur.
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Milestone and Contract Revenues
For each collaborative research, development and/or commercialization agreement that results in
revenue under the guidance of ASC 606, we identify all material performance obligations, which may
include the license to intellectual property and know-how, research and development activities and/or other
activities. In order to determine the transaction price, in addition to any upfront payment, we estimate the
amount of variable consideration, including milestone payments, at the outset of the contract utilizing the
most likely amount method. The most likely amount method is used since the milestone payments have a
binary outcome (i.e., we receive all or none of the milestone payment). We constrain the estimate of variable
consideration such that it is probable that a significant reversal of previously recognized revenue will not
occur. When determining if variable consideration should be constrained, management considers whether
there are factors outside the Company’s control that could result in a significant reversal of revenue. In
making these assessments, management considers the likelihood and magnitude of a potential reversal of
revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction
price is established, amounts are allocated to the performance obligations that have been identified. The
transaction price is generally allocated to each separate performance obligation on a relative standalone
selling price basis.
Out-licensing arrangements contain the right to use functional intellectual property, which is the
underlying performance obligation of these collaborative arrangements. If the license of our intellectual
property is determined to be distinct from other performance obligations in the arrangement, the functional
intellectual property that is transferred to the collaborative partner at the onset of the arrangement is
concluded to have significant standalone functionality and value at the point in time at which the intellectual
property is made available to the collaborative partner. For licenses that are not distinct from other
obligations identified in the arrangement, we utilize judgment to assess the nature of the combined
performance obligation to determine whether the combined performance obligation is satisfied over time or
at a point in time. If the combined performance obligation is satisfied over time, we apply an appropriate
method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees.
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of
performance and related revenue recognition. For each of the three years ended December 31, 2024, we had
no revenues from intellectual property licenses recognized over time.
For milestone revenues related to sales-based achievements, we recognize the milestone revenues in the
corresponding period of the product sale, in accordance with the guidance of ASC 606-10-55-65 for contracts
that include a license to intellectual property and the license is the predominant item to which the product
sale relates.
Subsequent to the transfer of the intellectual property, we may earn milestones through achievement of
pre-specified developmental or regulatory events and, as such, milestones are accounted for as variable
consideration. We include developmental or regulatory milestones in the transaction price only to the extent
that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur
when the uncertainty associated with the milestone is subsequently resolved. Under the agreements currently
in place, we do not consider these events to be within our control, but rather dependent upon the
development activities of our collaborative partners and the decisions made by regulatory agencies.
Accordingly, these milestones are not included in the transaction price until the counterparty, or third-party
in the event of a regulatory submission, confirms the satisfaction or completion of the milestone triggering
event. Given the high level of uncertainty of achievement, variable consideration associated with milestones
are fully constrained until confirmation of the satisfaction or completion of the milestone by the third-party.
Generally, the milestone events contained in our collaboration agreements coincide with the progression
of our drugs from development, to regulatory approval and then to commercialization. The value of these
milestones is dictated within the contract and is fixed upon achievement and reflects the amount of
consideration which we expect to be entitled to in exchange for the satisfaction of that milestone. The
process of successfully discovering a new development candidate, having it approved and successfully
commercialized is highly uncertain. As such, the milestone payments we may earn from our partners involve
a significant degree of risk to achieve and therefore, subsequent milestone payments due to Incyte are
recognized as revenue at the point in time when such milestones are achieved.
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Our collaboration agreements may also include an option for the collaborative partner to elect to
participate in research and development activities, such as shared participation in additional clinical trials
using the compound. The presence of additional options for future participatory activities are assessed to
determine if they represent material rights offered by us to the collaborative partner. We also determine
whether the reimbursement of research and development expenses should be accounted for as collaborative
revenues or an offset to research and development expenses in accordance with the provisions of gross or net
revenue presentation and recognize the corresponding revenues or records the corresponding offset to
research and development expenses as incurred.
Our collaborative agreements may also include provisions for additional future collaborative efforts,
such as options for shared commercialization staffing or licensing of additional molecules, involvement in
joint committees, or options for inclusion in negotiations of future supply rights, which at the time of each
collaborative agreement’s inception, are assessed to determine if these meet the definition of a performance
obligation under ASC 606.
Cost of Product Revenues
Cost of product revenues includes all product related costs and royalties owed under our collaboration
and license agreements, contingent on certain conditions. In addition, cost of product revenues includes the
amortization of our licensed intellectual property for ICLUSIG and the amortization of capitalized
milestone payments, using the straight-line method over the respective estimated useful lives, which range
between approximately 10 to 14 years. Cost of product revenues also includes employee personnel costs,
including stock compensation, for those employees dedicated to the production of our commercial products.
Research and Development Costs.
Our policy is to expense research and development costs as
incurred, including amounts funded by research and development collaborations. Research and development
expenses are comprised of costs we incur in performing research and development activities, including
salary and benefits; stock-based compensation expense; outsourced services and other direct expenses,
including clinical trial and pharmaceutical development costs; collaboration payments; expenses associated
with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and
depreciation expense. If a collaboration is a cost-sharing arrangement in which both we and our
collaborator perform development work and share costs, we also recognize, as research and development
expense in the period when our collaborator incurs development expenses, our portion of the co-development
expenses that we are obligated to reimburse. Costs incurred under the collaboration arrangement that are
reimbursable to us are recorded net against the related research and development expenses in the period in
which the related expense is incurred.
We often contract with contract research organizations (“CROs”) to facilitate, coordinate and perform
agreed upon research and development of a new drug. To ensure that research and development costs are
expensed as incurred, we record monthly accruals for clinical trials and preclinical testing costs based on the
work performed under the contract. These CRO contracts typically call for the payment of fees for services
at the initiation of the contract and/or upon the achievement of certain clinical trial milestones. In the event
that we prepay CRO fees, we record the prepayment as a prepaid asset and amortize the asset into research
and development expense over the period of time the contracted research and development services are
performed. Most professional fees, including project and clinical management, data management,
monitoring, and medical writing fees are incurred throughout the contract period. These professional fees
are expensed based on their percentage of completion at a particular date. Our CRO contracts generally
include pass through fees. Pass through fees include, but are not limited to, regulatory expenses, investigator
fees, travel costs, and other miscellaneous costs, including shipping and printing fees. We expense the costs
of pass through fees under our CRO contracts as they are incurred, based on the best information available
to us at the time. The estimates of the pass through fees incurred are based on the amount of work
completed for the clinical trial and are monitored through correspondence with the CROs, internal reviews
and a review of contractual terms. The factors utilized to derive the estimates include the number of patients
enrolled, duration of the clinical trial, estimated patient attrition, screening rate and length of the dosing
regimen. CRO fees incurred to set up the clinical trial are expensed during the setup period.
Stock Compensation.
Share-based payment transactions with employees, which include stock options,
restricted stock units (“RSUs”) and performance shares (“PSUs”), are recognized as compensation expense
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over the requisite service period based on their estimated fair values as well as expected forfeiture rates,
subject to customary retirement provisions that may accelerate the requisite service period for expense
recognition purposes. The stock compensation process requires the use of estimates, particularly surrounding
Black-Scholes assumptions such as stock price volatility over the option term and expected option lives, as
well as expected forfeiture rates and the probability of PSUs vesting. The fair value of stock options, which are
subject to graded vesting, are recognized as compensation expense over the requisite service period using
the accelerated attribution method. The fair value of RSUs that are subject to cliff vesting are recognized as
compensation expense over the requisite service period using the straight-line attribution method, and the
fair value of RSUs that are subject to graded vesting are recognized as compensation expense over the requisite
service period using the accelerated attribution method. The fair value of PSUs are recognized as
compensation expense beginning at the time in which the performance conditions are deemed probable of
achievement, which we assess as of the end of each reporting period. Once a performance condition is
considered probable, we record compensation expense based on the portion of the service period elapsed to
date with respect to that award, with a cumulative catch-up, net of estimated forfeitures, and recognize any
remaining compensation expense, if any, over the remaining requisite service period using the straight-line
attribution method for PSUs that are subject to cliff vesting and using the accelerated attribution method
for PSUs that are subject to graded vesting. Compensation expense for PSUs with market performance
conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the
requisite service period.
Advertising Expenses.
Advertising expenses, comprised primarily of television, radio, print media and
Internet advertising, are expensed as incurred and are included in selling, general, and administrative
expenses. For the years ended December 31, 2024, 2023, and 2022, advertising expenses were approximately
$200.7 million, $221.9 million, and $196.4 million, respectively.
Long Term Incentive Plans.
We have long term incentive plans which provide eligible employees with
the opportunity to receive performance and service-based incentive compensation, which may be comprised
of cash, stock options, restricted stock units and/or performance shares. The payment of cash and the
grant or vesting of equity may be contingent upon the achievement of pre-determined regulatory, sales and
internal performance milestones.
Acquisitions.
To determine whether acquisitions should be accounted for as a business combination
or as an asset acquisition, we make certain judgments, which include assessing whether the acquired set of
activities and assets would meet the definition of a business under the relevant accounting rules. If the acquired
set of activities and assets meets the definition of a business, assets acquired and liabilities assumed are
required to be recorded at their respective fair values as of the acquisition date. The excess of the purchase
price over the fair value of the acquired net assets, where applicable, is recorded as goodwill. If the acquired
set of activities and assets does not meet the definition of a business, the transaction is recorded as an
asset acquisition, with the purchase price being allocated to the acquired asset, with no goodwill recorded.
For a transaction recorded as an asset acquisition, any acquired in-process research and development that
does not have an alternative future use is charged to expense at the acquisition date. See Note 5 for
additional information.
Acquisition-Related Contingent Consideration.
Acquisition-related contingent consideration consists
of our future royalty obligations on future net revenues of ICLUSIG owed to Takeda Pharmaceutical
Company Limited, which acquired ARIAD Pharmaceuticals, Inc. (“Takeda”). Acquisition-related contingent
consideration was recorded on the acquisition date of June 1, 2016 at the estimated fair value of the
obligation, in accordance with the acquisition method of accounting. The fair value measurement is based
on significant inputs that are unobservable in the market and thus represents a Level 3 measurement. The fair
value of the acquisition-related contingent consideration is remeasured each reporting period, with
changes in fair value recorded in the consolidated statements of operations.
Profit sharing from co-commercialization activities.
In profit sharing arrangements where we are
deemed to be the principal, we record 100% of all revenues and expenses associated with the co-
commercialization activities. We record our collaboration partner’s share of profit or loss to cost of product
revenues within our consolidated statement of operations. Other components of make-whole payments
between us and our collaboration partners are classified in our consolidated statement of operations based
on the nature of the underlying payable or receivable.
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In profit sharing arrangements where we are deemed to be the agent, we record our share of profit or
loss from co-commercialization activities to (profit) and loss sharing under collaboration agreements within
our consolidated statement of operations. Other components of make-whole payments between us and
our collaboration partners are classified in our consolidated statement of operations based on the nature of
the underlying payable or receivable.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2023-07,
“Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This amended guidance
applies to all public entities and aims to improve reportable segment disclosure requirements, primarily
through enhanced disclosures about significant segment expenses, to enable investors to develop more
decision-useful financial analyses. This guidance is effective for fiscal years beginning after December 15, 2023
and interim periods within fiscal years beginning after December 15, 2024. See Note 17 for additional
disclosures.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to
Income Tax Disclosures.” This amended guidance applies to all entities and broadly aims to enhance the
transparency and decision usefulness of income tax disclosures. For public business entities, the amendments
in this Update are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted
for any annual periods for which financial statements have not been issued or made available for issuance. We
are currently evaluating the impact that ASU No. 2023-09 will have on our consolidated financial statements
and related disclosures.
In March 2024, the SEC issued Release Nos. 33-11275; 34-99678 “The Enhancement and Standardization
of Climate-Related Disclosures for Investors” to require public companies to provide certain climate-related
information in their registration statements and annual reports. The compliance dates for the rules amended
by this release begin in fiscal year 2025 for large accelerated filers. On April 4, 2024, the SEC issued an
order staying the newly adopted rules. We are currently evaluating the impact of this release on our financial
disclosures.
In November 2024, the FASB issued ASU No. 2024-03, “Disaggregation of Income Statement Expenses
(DISE).” This new guidance applies to all public entities and requires disclosures about specific types of
expenses included in the expense captions presented on the face of the income statement as well as disclosures
about selling expenses. Public entities must adopt the new standard prospectively for fiscal years beginning
after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption
and retrospective application are permitted. We are currently evaluating the impact ASU No. 2024-03 will
have on our consolidated financial statements and related disclosures.
Note 2.
Revenues
As discussed in Note 1, revenues are recognized under guidance within ASC 606. The following table
presents our disaggregated revenue for the periods presented (in thousands):
For the Years Ended,
December 31,
2024
2023
2022
JAKAFI revenues, net
. . . . . . . . . . . . . . . . . . . . . . . .
$2,792,107
$2,593,732
$2,409,225
OPZELURA revenues, net . . . . . . . . . . . . . . . . . . . . .
508,293
337,864
128,735
ICLUSIG revenues, net . . . . . . . . . . . . . . . . . . . . . . . .
114,319
111,623
105,838
MINJUVI/MONJUVI revenues, net . . . . . . . . . . . . . . .
119,236
37,057
19,654
PEMAZYRE revenues, net . . . . . . . . . . . . . . . . . . . . .
81,748
83,642
83,445
ZYNYZ revenues, net . . . . . . . . . . . . . . . . . . . . . . . . .
3,185
1,250
—
Total product revenues, net . . . . . . . . . . . . . . . . . . . .
3,618,888
3,165,168
2,746,897
JAKAVI product royalty revenues . . . . . . . . . . . . . . . .
418,840
367,583
331,575
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For the Years Ended,
December 31,
2024
2023
2022
OLUMIANT product royalty revenues . . . . . . . . . . . . .
135,572
136,138
134,547
TABRECTA product royalty revenues . . . . . . . . . . . . .
22,746
17,793
15,411
PEMAZYRE product royalty revenues . . . . . . . . . . . . .
2,171
1,967
1,205
Total product royalty revenues . . . . . . . . . . . . . . . . .
579,329
523,481
482,738
Milestone and contract revenues . . . . . . . . . . . . . . . . .
43,000
7,000
165,000
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,241,217
$3,695,649
$3,394,635
For further information on our revenue-generating contracts, refer to Note 7.
Note 3.
Fair Value of Financial Instruments
The following is a summary of our marketable security portfolio for the periods presented (in
thousands):
Amortized
Cost
Unrealized
Gains
Unrealized
(Losses)
Estimated
Fair Value
December 31, 2024
Debt securities (government) . . . . . . . . . . . . . . . .
$469,917
$971
$(625)
$470,263
December 31, 2023
Debt securities (government) . . . . . . . . . . . . . . . .
$442,816
$450
$(599)
$442,667
The table below summarizes the contractual maturities of our available-for-sale debt securities as of
December 31, 2024 (in thousands):
Total
Less than 1 Year
1-5 Years
Fair value of debt securities (government) . . . . . . . . . . . .
$470,263
$265,135
$205,128
Debt security assets were assessed for risk of expected credit losses per our accounting policy as
described in Note 1. As of December 31, 2024 and 2023, the available-for-sale debt securities were held in U.S.-
government backed securities and in Treasury bonds and were assessed on an individual security basis to
have a de minimis risk of credit loss.
Fair Value Measurements
FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid
to transfer a liability (“the exit price”) in an orderly transaction between market participants at the
measurement date. The standard outlines a valuation framework and creates a fair value hierarchy in order
to increase the consistency and comparability of fair value measurements and the related disclosures. In
determining fair value, we use quoted prices and observable inputs. Observable inputs are inputs that
market participants would use in pricing the asset or liability based on market data obtained from sources
independent of us. The fair value hierarchy is broken down into three levels based on the source of inputs as
follows:
Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or
liabilities.
Level 2 — Valuations based on observable inputs and quoted prices in active markets for similar assets
and liabilities.
Level 3 — Valuations based on inputs that are unobservable and models that are significant to the
overall fair value measurement.
Recurring Fair Value Measurements
Our marketable securities consist of investments in U.S. government debt securities that are classified
as available-for-sale.
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At December 31, 2024 and 2023, our Level 2 U.S. government debt securities were valued using readily
available pricing sources which utilize market observable inputs, including the current interest rate and other
characteristics for similar types of investments. Our long term equity investments classified as Level 1 were
valued using their respective closing stock prices on The Nasdaq Stock Market. We did not experience any
transfers of financial instruments between the fair value hierarchy levels during the years ended
December 31, 2024 and 2023.
The following fair value hierarchy table presents information about each major category of our
financial assets measured at fair value on a recurring basis (in thousands):
Fair Value Measurement at Reporting Date Using:
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Balance as of
December 31, 2024
Cash and cash equivalents . . . . . . . . . . .
$1,687,829
$
—
$ —
$1,687,829
Debt securities (government) . . . . . . . . .
—
470,263
—
470,263
Long term equity investments (Note 7) . .
18,814
—
—
18,814
Total assets . . . . . . . . . . . . . . . . . . . .
$1,706,643
$470,263
$ —
$2,176,906
Fair Value Measurement at Reporting Date Using:
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Balance as of
December 31, 2023
Cash and cash equivalents . . . . . . . . . . .
$3,213,376
$
—
$ —
$3,213,376
Debt securities (government) . . . . . . . . .
—
442,667
—
442,667
Long term equity investments (Note 7) . .
187,716
—
—
187,716
Total assets . . . . . . . . . . . . . . . . . . . .
$3,401,092
$442,667
$ —
$3,843,759
The following fair value hierarchy table presents information about each major category of our
financial liabilities measured at fair value on a recurring basis (in thousands):
Fair Value Measurement at Reporting Date Using:
Quoted Prices in
Active Markets for
Identical Liabilities
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Balance as of
December 31, 2024
Acquisition-related contingent
consideration . . . . . . . . . . . . . . . . . .
$ —
$ —
$193,000
$193,000
Total liabilities . . . . . . . . . . . . . . . . .
$ —
$ —
$193,000
$193,000
Fair Value Measurement at Reporting Date Using:
Quoted Prices in
Active Markets for
Identical Liabilities
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Balance as of
December 31, 2023
Acquisition-related contingent
consideration . . . . . . . . . . . . . . . . . .
$ —
$ —
$212,000
$212,000
Total liabilities . . . . . . . . . . . . . . . . .
$ —
$ —
$212,000
$212,000
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The following is a roll forward of our Level 3 liabilities (in thousands):
2024
2023
Balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$212,000
$221,000
Contingent consideration earned during the period but not yet paid . . . . .
(9,956)
(10,260)
Payments made during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(28,847)
(27,942)
Change in fair value of contingent consideration . . . . . . . . . . . . . . . . . .
19,803
29,202
Balance at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$193,000
$212,000
The initial fair value of the contingent consideration was determined on the date of acquisition, June 1,
2016, using an income approach based on projected future net revenues of ICLUSIG in the European Union
and other countries for the approved third line treatment over 18 years, and discounted to present value at
a rate of 10%. The fair value of the contingent consideration is remeasured each reporting period, with
changes in fair value recorded in the consolidated statements of operations. The valuation inputs utilized
to estimate the fair value of the contingent consideration as of December 31, 2024 and 2023 included a
discount rate of 10% and updated projections of future net revenues of ICLUSIG in the European Union and
other countries for the approved third line treatment. The loss on change in fair value of the contingent
consideration during the years ended December 31, 2024 and 2023 was due primarily to fluctuations in
foreign currency exchange rates impacting future revenue projections of ICLUSIG and the passage of time.
We generally make payments to Takeda quarterly based on the royalties earned in the previous quarter.
As of December 31, 2024 and 2023, contingent consideration earned but not yet paid was $10.0 million and
$10.3 million, respectively, and was included in accrued and other current liabilities.
Non-Recurring Fair Value Measurements
During the years ended December 31, 2024 and 2023, there were no measurements required for any
assets or liabilities at fair value on a non-recurring basis.
Note 4.
Concentration of Credit Risk and Current Expected Credit Losses
In November 2009, we entered into a collaboration and license agreement with Novartis. In
December 2009, we entered into a license, development and commercialization agreement with Lilly. The
above collaboration partners comprised, in aggregate, 19% and 20% of the accounts receivable balance as of
December 31, 2024 and 2023, respectively. For further information relating to these collaboration and
license agreements, refer to Note 7.
In November 2011, we began commercialization and distribution of JAKAFI and in October 2021, we
began commercialization and distribution of OPZELURA. Our product revenues are concentrated in a
number of customers these products. The concentration of credit risk related to our JAKAFI and
OPZELURA product revenues is as follows:
Percentage of Total Net
Product Revenues for the
Years Ended,
December 31,
2024
2023
2022
Customer A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15%
17%
19%
Customer B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10%
10%
11%
Customer C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19%
18%
18%
Customer D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8%
10%
10%
Customer E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13%
8%
14%
Customer F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10%
10%
1%
We are exposed to risks associated with extending credit to customers related to the sale of products.
Customers A, B, C, D, E and F comprised, in the aggregate, 52% and 40% of the accounts receivable balance
99

as of December 31, 2024 and 2023, respectively. The concentration of credit risk relating to our other
product revenues or accounts receivable is not significant.
We assessed our collaborative and customer receivable assets as of December 31, 2024 according to our
accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible
receivables and the continued perceived creditworthiness of our third party sales relationships, upon which
the expected credit losses were considered de minimis.
Note 5.
Acquisitions
Tafasitamab
On February 5, 2024, pursuant to a purchase agreement with MorphoSys, we acquired exclusive global
rights to tafasitamab, a humanized Fc-modified CD19-targeting immunotherapy marketed in the United
States as MONJUVI (tafasitamab-cxix) and outside of the United States as MINJUVI (tafasitamab). We
previously had the rights to tafasitamab outside of the United States under a January 2020 collaboration and
license agreement with MorphoSys, which has now been terminated; therefore, this new agreement gave us
all of the remaining global rights to tafasitamab. Under the terms of the purchase agreement, we made a
payment of $25.0 million to MorphoSys and gained global development and commercialization rights for
tafasitamab along with MONJUVI inventory. We will recognize revenue and costs for all U.S.
commercialization and clinical development and MorphoSys will no longer be eligible to receive future
milestone, profit split and royalty payments under the now-terminated collaboration and license agreement.
We evaluated the set of activities and assets acquired under the purchase agreement and concluded that
it did not meet the definition of a business because the acquired set did not include a substantive process.
Therefore, the transaction was accounted for as an asset acquisition under U.S. GAAP and the total purchase
price, inclusive of direct transaction costs, was allocated to the acquired MONJUVI inventory, in accordance
with applicable accounting guidance.
Under the purchase agreement, we have also become the successor to MorphoSys under its collaboration
and license agreement with Xencor, Inc. (“Xencor”), pursuant to which Xencor granted MorphoSys an
exclusive, worldwide license, including the right to sublicense under certain conditions, for tafasitamab.
Xencor is entitled to receive up to $186.5 million in future contingent development and regulatory milestones
and up to $50.0 million in sales milestones. Furthermore, Xencor is eligible to receive tiered royalties on
global net sales of tafasitamab in the single-digit to sub-teen double-digit percentage range. Our royalty
obligations continue on a country-by-country basis until the later to occur of the expiration of the last valid
claim in the licensed patent covering tafasitamab in such country, or 11 years after the first sale thereof
following marketing authorization in such country. The term of the Xencor collaboration agreement will
continue until all of our royalty payment obligations have expired, unless terminated earlier. The Xencor
collaboration agreement may be terminated by either party upon written notice to the other party immediately
in the event of the other party’s insolvency or upon 120 days’ written notice for the other party’s uncured
material breach (or upon 30 days’ written notice in the case of a breach of a payment obligation). Moreover,
we may terminate the Xencor collaboration agreement without cause upon 90 days’ advance written notice
to Xencor. In the event that (i) we terminate this agreement for convenience or (ii) Xencor terminates due to
our material breach, our challenge of Xencor’s licensed patents or our insolvency, worldwide rights to
develop, manufacture and commercialize licensed products, including tafasitamab, revert back to Xencor.
Escient Pharmaceuticals, Inc. (“Escient”)
On May 30, 2024 we acquired all of the outstanding shares of common stock of Escient, a clinical-
stage drug development company advancing novel small molecule therapeutics for systemic immune and
neuro-immune disorders, for $782.5 million cash consideration, which included Escient’s net cash remaining
at the close of the transaction, subject to adjustments set forth in the merger agreement with Escient.
Escient’s lead molecule, INCB000262 (formerly EP262), is a first-in-class oral Mas-related G protein-
coupled receptor X2 (MRGPRX2) antagonist that has the potential to treat a broad range of inflammatory
disorders. We accounted for the Escient transaction as an asset acquisition under U.S. GAAP because
INCB000262 represents substantially all of the fair value of the gross assets acquired.
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In addition to the $782.5 million closing cash consideration per the terms of the merger agreement, we
incurred $2.5 million of direct transaction costs that were included in the total consideration to be allocated
to the acquired net assets. Of the $785.0 million total consideration, we recognized on our consolidated
statements of operations during the year ended December 31, 2024 related compensation expense of
$31.5 million associated with the accelerated vesting for certain Escient stock awards in connection with the
acquisition.
The following table summarizes allocation of the remaining U.S. GAAP consideration, net of
compensation expense, across the net assets acquired (in thousands):
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 48,302
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,988
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,663
In-process research and development assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
679,388
Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,811
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,110
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(26,611)
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,022)
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,118)
Total U.S. GAAP Consideration (net of compensation expense) . . . . . . . . . . . . . .
$753,511
In-process research and development (“IPR&D”) assets are related to acquired clinical-stage product
candidates: lead candidate, INCB000262, and secondary candidate, INCB000547 (formerly EP547). The
fair value of IPR&D assets was based on the present value of future discounted cash flows, which was based
on significant estimates. These estimates included the amount of future product revenues, costs required to
conduct clinical trials, future milestones and royalties payable under acquired license agreements, costs to
receive regulatory approval and potentially commercialize product candidates, as well as estimates for
probability of success and the discount rate. The concluded allocated fair values for INCB000262 and
INCB000547 was $644.8 million and $34.6 million, respectively. As both acquired IPR&D assets do not
have an alternative future use at the acquisition date, we recognized the full amount of $679.4 million as
research and development expenses on our consolidated statements of operations during the year ended
December 31, 2024.
Note 6.
Inventory
Our inventory balance consists of the following (in thousands):
December 31,
2024
2023
Raw materials
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 27,590
$ 23,282
API and Work-in-process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
331,178
209,793
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,431
36,862
Total inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$407,199
$269,937
Inventories, stated at the lower of cost and net realizable value, consist of raw materials, API, work in
process, and finished goods, inclusive of freight and inventoriable overhead. At December 31, 2024,
$58.9 million of inventory was classified as current on the consolidated balance sheet as we expect this
inventory to be consumed for commercial use within the next twelve months. At December 31, 2024,
$348.3 million of inventory was classified as non-current on the consolidated balance sheet as we did not
expect this inventory to be consumed for commercial use within the next twelve months. We obtain some
inventory components from a limited number of suppliers due to technology, availability, price, quality or
other considerations. The loss of a supplier, the deterioration of our relationship with a supplier, or any
unilateral violation of the contractual terms under which we are supplied components by a supplier could
adversely affect our total revenues and gross margins.
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We capitalize inventory after regulatory approval as the related costs are expected to be recoverable
through the commercialization of the product. Costs incurred prior to regulatory approval are recorded as
research and development expense in our consolidated statements of operations. At December 31, 2024,
inventory with approximately $28.3 million of product costs incurred prior to regulatory approval had not
yet been sold. We expect to sell the pre-commercialization inventory over the next 6 months to 41 months and,
as a result, cost of product revenues will reflect a lower average per unit cost of materials.
Note 7.
License Agreements
Novartis
In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the
terms of the agreement, Novartis received exclusive development and commercialization rights outside of
the United States to our JAK inhibitor ruxolitinib and certain back-up compounds for hematologic and
oncology indications, including all hematological malignancies, solid tumors and myeloproliferative diseases.
We retained exclusive development and commercialization rights to JAKAFI (ruxolitinib) in the United
States and in certain other indications. Novartis also received worldwide exclusive development and
commercialization rights to our MET inhibitor compound capmatinib and certain back-up compounds in
all indications.
Under this agreement, we were initially eligible to receive up to $174.0 million for the achievement of
development milestones, up to $495.0 million for the achievement of regulatory milestones and up to
$500.0 million for the achievement of sales milestones. In addition, we were initially eligible to receive up to
$75.0 million of additional potential development and regulatory milestones relating to graft-versus-host-
disease (“GVHD”). Since the inception of the agreement through December 31, 2024, we have recognized and
received, in the aggregate, $157.0 million for the achievement of development milestones, $345.0 million
for the achievement of regulatory milestones and $200.0 million for the achievement of sales milestones.
We recognize development and regulatory milestones upon confirmation of achievement of the event,
as development and regulatory approvals are events not controllable by us but rather development activities
of Novartis and decisions made by regulatory agencies. We recognize sales milestones in the corresponding
period of the product sale upon confirmation of net sales milestone threshold achievement by Novartis.
We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-
twenties on future JAKAVI net sales outside of the United States, and tiered, worldwide royalties on
TABRECTA net sales that range from 12% to 14%. We are obligated to pay to Novartis tiered royalties in
the low single-digits on future JAKAFI net sales within the United States contingent on certain conditions.
During the years ended December 31, 2024, 2023 and 2022, such royalties on net sales within the United States
totaled $131.8 million, $122.1 million and $113.1 million, respectively, and were reflected in cost of product
revenues on the consolidated statements of operations. At December 31, 2024 and 2023, $507.4 million
and $375.6 million, respectively, of accrued royalties were included in accrued and other current liabilities
on the consolidated balance sheets, payment of which is dependent on the outcome of a contract dispute with
Novartis. Each company is responsible for costs relating to the development and commercialization of
ruxolitinib in its respective territories, with costs of collaborative studies shared equally. Novartis is also
responsible for all costs relating to the development and commercialization of capmatinib.
The Novartis agreement will continue on a program-by-program basis until Novartis has no royalty
payment obligations with respect to such program or, if earlier, the termination of the agreement or any
program in accordance with the terms of the agreement. Royalties are payable by Novartis on a product-by-
product and country-by-country basis until the latest to occur of (i) the expiration of the last valid claim
of the licensed patent rights covering the licensed product in the relevant country, (ii) the expiration of
regulatory exclusivity for the licensed product in such country and (iii) a specified period from first commercial
sale in such country of the licensed product by Novartis or its affiliates or sublicensees. The agreement
may be terminated in its entirety or on a program-by-program basis by Novartis for convenience. The
agreement may also be terminated by either party under certain other circumstances, including material
breach.
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We had no milestone and contract revenue under the Novartis agreement for the year ended
December 31, 2024. Milestone and contract revenue under the Novartis agreement was $5.0 million and
$60.0 million for the years ended December 31, 2023 and 2022, respectively. In addition, for the years ended
December 31, 2024, 2023 and 2022, we recorded $418.8 million, $367.6 million and $331.6 million,
respectively, of product royalty revenues related to Novartis net sales of JAKAVI outside the United States.
For the years ended December 31, 2024, 2023 and 2022 we recorded $22.7 million, $17.8 million and
$15.4 million, respectively, of product royalty revenues related to Novartis net sales of TABRECTA
worldwide.
Lilly — Baricitinib
In December 2009, we entered into a License, Development and Commercialization Agreement with
Lilly. Under the terms of the agreement, Lilly received exclusive worldwide development and
commercialization rights to our JAK inhibitor baricitinib, and certain back-up compounds for inflammatory
and autoimmune diseases.
Under this agreement, we were initially eligible to receive up to $150.0 million for the achievement of
development milestones, up to $365.0 million for the achievement of regulatory milestones and up to
$150.0 million for the achievement of sales milestones. Since the inception of the agreement through
December 31, 2024, we have recognized and received, in aggregate, $149.0 million for the achievement of
development milestones, $335.0 million for the achievement of regulatory milestones and $50.0 million for
the achievement of sales milestones. We are also eligible to receive tiered, double-digit royalties on future
global sales with rates ranging up to the mid-twenties if a product is successfully commercialized.
We recognize development and regulatory milestones upon confirmation of achievement of the event,
as development and regulatory approvals are events not controllable by us but rather development activities
of Lilly and decisions made by regulatory agencies. We recognize sales milestones in the corresponding
period of the product sale upon confirmation of net sales milestone threshold achievement by Lilly.
The Lilly agreement will continue until Lilly no longer has any royalty payment obligations or, if earlier,
the termination of the agreement in accordance with its terms. Royalties are payable by Lilly on a product-by-
product and country-by-country basis until the latest to occur of (i) the expiration of the last valid claim
of the licensed patent rights covering the licensed product in the relevant country, (ii) the expiration of
regulatory exclusivity for the licensed product in such country and (iii) a specified period from first commercial
sale in such country of the licensed product by Lilly or its affiliates or sublicensees. The agreement may be
terminated by Lilly for convenience, and may also be terminated under certain other circumstances, including
material breach.
We had no milestone and contract revenue under the Lilly agreement for the years ended December 31,
2024 and 2023. Milestone and contract revenue under the Lilly agreement was $70.0 million for the year ended
December 31, 2022. In addition, for the years ended December 31, 2024, 2023 and 2022, we recorded
$135.6 million, $136.1 million and $134.5 million, respectively, of product royalty revenues related to Lilly
net sales of OLUMIANT outside the United States.
Agenus
In January 2015, we entered into a License, Development and Commercialization Agreement with
Agenus Inc. and its wholly-owned subsidiary, 4-Antibody AG (now known as Agenus Switzerland Inc.),
which we collectively refer to as Agenus. Under this agreement, which was amended in February 2017, the
parties have agreed to collaborate on the discovery of novel immuno-therapeutics using Agenus’ antibody
discovery platforms. Under this agreement, we are responsible for all costs associated with discovery,
preclinical, clinical development and commercialization activities for the currently active programs. Agenus
will be eligible to receive tiered royalties on global net sales ranging from 6% to 12%, for all programs but one,
in which Agenus will be eligible to receive 15% royalties on global net sales. The agreement may be terminated
by us for convenience upon 12 months’notice and also may be terminated under certain other circumstances,
including material breach.
Since the inception of the agreement through December 31, 2024, we have paid Agenus milestones
totaling $30.0 million and Agenus is eligible to receive up to an additional $500.0 million in future contingent
development, regulatory and commercialization milestones across all programs in the collaboration.
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During 2024, we sold approximately 0.6 million of Agenus Inc. common stock for proceeds of
$1.9 million. As of December 31, 2024, we had no remaining investment in Agenus Inc. common stock. The
fair market value of our equity investment in Agenus Inc. at December 31, 2023 was $10.0 million. For
the years ended December 31, 2024, 2023 and 2022, we recorded realized and unrealized losses of $8.2 million,
$18.9 million, and $9.9 million, respectively, based on the sale of shares and change in fair value of Agenus
Inc.’s common stock during the respective periods.
Merus
In December 2016, we entered into a Collaboration and License Agreement with Merus N.V. (“Merus”).
Under this agreement, the parties have agreed to collaborate with respect to the research, discovery and
development of bispecific antibodies utilizing Merus’ technology platform. The collaboration encompasses
up to ten independent programs. We hold worldwide exclusive development and commercialization rights to
those programs and are responsible for all research, development and commercialization costs, subject to
Merus’ option, subject to certain conditions, to co-fund development of up to two of such programs and
participate in certain commercialization activities for one of those co-developed programs. If Merus exercises
its co-funding option for a program, Merus would be responsible for funding 35% of the associated future
global development costs and, for certain of such programs, would be responsible for reimbursing us for
certain development costs incurred prior to the option exercise. Merus will also have the right to participate
in a specified proportion of detailing activities in the United States for one of those co-developed programs.
For each program as to which Merus does not have commercialization or development co-funding
rights, Merus is eligible to receive up to $100.0 million in future contingent development and regulatory
milestones, and up to $250.0 million in commercialization milestones as well as tiered royalties ranging from
6% to 10% of global net sales. For each program as to which Merus exercises its option to co-fund
development, Merus is eligible to receive a 50% share of profits (or sustain 50% of any losses) in the United
States and be eligible to receive tiered royalties ranging from 6% to 10% of net sales of products outside of
the United States. If Merus opts to cease co-funding a program as to which it exercised its co-development
option, then Merus will no longer receive a share of profits in the United States but will be eligible to
receive the same milestones from the co-funding termination date and the same tiered royalties described
above with respect to programs where Merus does not have a right to co-fund development and, depending
on the stage at which Merus chose to cease co-funding development costs, Merus will be eligible to receive
additional royalties ranging up to 4% of net sales in the United States.
The Merus agreement will continue on a program-by-program basis until we have no royalty payment
obligations with respect to such program or, if earlier, the termination of the agreement or any program in
accordance with the terms of the agreement. The agreement may be terminated in its entirety or on a program-
by-program basis by us for convenience. The agreement may also be terminated by either party under
certain other circumstances, including material breach, as set forth in the agreement. If the agreement is
terminated with respect to one or more programs, all rights in the terminated programs revert to Merus,
subject to payment to us of a reverse royalty of up to 4% on sales of future products, if Merus elects to pursue
development and commercialization of products arising from the terminated programs.
Since the inception of the agreement through December 31, 2024, we have paid and expensed Merus
milestones totaling $10.0 million.
During 2024, we sold approximately 4.0 million of Merus’common shares for proceeds of $216.1 million.
As of December 31, 2024, we had no remaining investment in Merus’ common shares. The fair market value
of our equity investment in Merus as of December 31, 2023 was $110.1 million. For the years ended
December 31, 2024, 2023 and 2022, we recorded realized and unrealized gains of $106.1 million, an unrealized
gain of $45.2 million, and an unrealized loss of $58.0 million, respectively, based on the sale of shares and
change in fair value of Merus’ common shares during the respective periods.
MacroGenics
In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics,
Inc. (“MacroGenics”). Under this agreement, we received exclusive development and commercialization
rights worldwide to MacroGenics’ INCMGA0012, an investigational monoclonal antibody that inhibits
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PD-1. Except as set forth in the succeeding sentence, we have sole authority over and bear all costs and
expenses in connection with the development and commercialization of INCMGA0012 in all indications,
whether as a monotherapy or as part of a combination regimen. MacroGenics has retained the right to
develop and commercialize, at its cost and expense, its pipeline assets in combination with INCMGA0012. In
addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and
commercial supply needs of INCMGA0012.
The MacroGenics agreement will continue until we are no longer commercializing, developing or
manufacturing INCMGA0012 or, if earlier, the termination of the agreement in accordance with its terms.
The agreement may be terminated in its entirety or on a licensed product by licensed product basis by us for
convenience. The agreement may also be terminated by either party under certain other circumstances,
including material breach, as set forth in the agreement.
In July 2024, the parties amended the agreement, and we agreed to pay MacroGenics $100.0 million in
exchange for MacroGenics’ agreement that all milestones for squamous cell anal cancer and non-small cell
lung cancer have been deemed either achieved or inapplicable and certain future milestones for non-small cell
lung cancer were waived. This $100.0 million milestone payment was recorded as research and development
expense in our consolidated statements of operations during the year ended December 31, 2024. Since the
inception of the agreement, inclusive of the July 2022 and July 2024 amendments to the agreement, through
December 31, 2024, we have paid MacroGenics developmental and regulatory milestones totaling
$215.0 million. After these amendments and subsequent payments, MacroGenics will be eligible to receive
up to an additional $210.0 million in future contingent development and regulatory milestones, and up to
$330.0 million in sales milestones as well as tiered royalties ranging from 15% to 24% of global net sales.
Research and development expenses for the years ended December 31, 2024, 2023 and 2022, also
included $45.7 million, $51.5 million and $89.2 million, respectively, of development costs incurred
pursuant to the MacroGenics agreement. At December 31, 2024 and 2023, a total of $0.5 million and
$0.3 million, respectively, of such costs were included in accrued and other liabilities on the consolidated
balance sheets.
MorphoSys
As described in Note 5, on February 5, 2024, we entered into a purchase agreement with MorphoSys
that became effective as of that date, as a result of which we now hold exclusive global rights for tafasitamab,
a humanized Fc-modified CD19-targeting immunotherapy marketed in the United States as MONJUVI
(tafasitamab-cxix) and outside of the United States as MINJUVI (tafasitamab). Prior to the acquisition,
pursuant to a now-terminated collaboration and license agreement, we and MorphoSys agreed to co-develop
tafasitamab and to share development costs associated with global and U.S.-specific clinical trials, with
Incyte responsible for 55% of such costs and MorphoSys responsible for 45% of such costs. Each company
was responsible for funding any independent development activities, and we were responsible for funding
development activities specific to territories outside of the United States.
During May 2024, as part of the Novartis tender offer for MorphoSys AG’s outstanding shares, we
sold all of our 3.6 million American Depository Shares, each representing 0.25 of an ordinary share of
MorphoSys AG, for proceeds of $66.6 million. The fair market value of our equity investment in MorphoSys
AG as of December 31, 2023 was $35.9 million. For the year ended December 31, 2024, we recorded a
realized gain of $30.7 million, based on the sale of shares and change in fair value of MorphoSys AG’s
ordinary shares during the period. For the years ended December 31, 2023 and 2022 we recorded an
unrealized gain of $22.9 million, and an unrealized loss of $21.2 million, respectively, based on the change
in fair value of MorphoSys AG’s ordinary shares during the respective periods.
Our 50% share of the United States loss or profit for the commercialization of tafasitamab for the
period from January 1, 2024 to the asset acquisition on February 5, 2024, was a profit of $1.0 million, and
is recorded as (profit) and loss sharing under collaboration agreements on the consolidated statement of
operations. As described in Note 5, subsequent to the asset acquisition, we recognize revenue and costs
for all commercialization and clinical development of tafasitamab in the United States. Our 50% share of
the United States loss for the commercialization of tafasitamab for the years ended December 31, 2023 and
2022 was $2.0 million and $8.0 million, respectively, and is recorded as (profit) and loss sharing under
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collaboration agreements on the consolidated statement of operations. Research and development expenses
for the period from January 1, 2024 to the asset acquisition on February 5, 2024, includes $10.7 million,
related to our 55% share of the co-development costs for tafasitamab. Research and development expenses
for the years ended December 31, 2023 and 2022, included $76.1 million and $99.7 million, respectively, of
costs for tafasitamab including our 55% share of the co-development costs. At December 31, 2023,
$18.8 million was included in accrued and other liabilities on the consolidated balance sheet for amounts
due to MorphoSys under the agreement.
Syndax
In September 2021, we entered into a Collaboration and License Agreement with Syndax
Pharmaceuticals, Inc. (“Syndax”), covering the worldwide development and commercialization of
SNDX-6352 (“axatilimab”). Under the terms of our agreement, we received exclusive commercialization
rights to axatilimab outside of the United States and share commercialization rights in the United States with
Syndax. We are responsible for leading the commercialization strategy and booking all revenue from sales
of axatilimab globally. Incyte and Syndax will share equally the profits and losses from the co-
commercialization efforts in the United States. Sales of axatilimab outside the United States will be subject
to our royalty payment obligations to Syndax, as set forth below. We and Syndax have agreed to co-develop
axatilimab and to share development costs associated with global and U.S.-specific clinical trials, with
Incyte responsible for 55% of such costs and Syndax responsible for 45% of such costs. Each company is
responsible for funding any independent development activities.
In August 2024, we made a $12.5 million regulatory milestone payment to Syndax for the FDA
approval of NIKTIMVO for the treatment of GVHD. This milestone payment was capitalized as an
intangible asset and included in other intangible assets, net on the consolidated balance sheet as of
December 31, 2024, and is being amortized through cost of product revenues over the estimated useful life
of 10 years.
Inclusive of an upfront, non-refundable payment, since the inception of the agreement through
December 31, 2024, we have made payments of $129.5 million to Syndax, which were previously recorded
in research and development expense or in other intangible assets, as discussed above. Syndax is eligible to
receive up to $207.5 million in future contingent development and regulatory milestones and up to
$230.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe
and Japan and low double digit percentage on net sales in the rest of the world outside of the United States.
Syndax’s right to receive royalties in any particular country will expire upon the last to occur of (a) the
expiration of patent rights in that particular country, (b) a specified period of time after the first post-
marketing authorization sale of a licensed product comprising axatilimab in that country, and (c) the
expiration of any regulatory exclusivity for that licensed product in that country.
As of December 31, 2024, we held an investment of approximately 1.4 million shares of Syndax
common stock. The fair market value of our long term investment in Syndax as of December 31, 2024 and
2023 was $18.8 million and $30.7 million, respectively. For the years ended December 31, 2024, 2023 and 2022,
we recorded an unrealized loss of $11.9 million, an unrealized loss of $5.5 million, and an unrealized gain
of $5.1 million, respectively, based on the change in fair value of Syndax’s common stock during the respective
periods.
Research and development expenses for the years ended December 31, 2024 and 2023, includes
$18.8 million and $25.8 million, respectively, related to our 55% share of the co-development costs for
axatilimab. At December 31, 2024 and 2023, $2.2 million and $1.8 million, respectively, was included in
accrued and other liabilities on the consolidated balance sheet for amounts due to Syndax under the
agreement.
China Medical Systems Holdings Limited
In March 2024, we entered into a Collaboration and License Agreement with China Medical System
Skinhealth, a wholly-owned dermatology medical aesthetic company and subsidiary of China Medical
System Holdings Limited (“CMSHL”), for the development and commercialization of povorcitinib, a
selective oral JAK1 inhibitor, in certain indications in certain Asian territories. In March 2024, we recognized
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an upfront payment under this agreement of $25.0 million upon our transfer of the functional intellectual
property related to povorcitinib to CMSHL which was recorded in milestone and contract revenues on the
consolidated statement of operations during the year ended December 31, 2024. We are eligible to receive
additional potential development and commercial milestones, as well as royalties on net sales of the
licensed product in CMSHL’s territory. CMSHL received an exclusive license to develop and commercialize
and a non-exclusive license to manufacture povorcitinib in autoimmune and inflammatory dermatologic
diseases, including non-segmental vitiligo, hidradenitis suppurativa, prurigo nodularis, asthma and chronic
spontaneous urticaria, for patients in mainland China, Hong Kong, Macau, Taiwan and certain countries in
Southeast Asia.
Other Agreements
In addition to the license and collaboration agreements discussed above, we have various other license
and collaboration agreements that are not individually material to our operating results or financial condition
at this time. Pursuant to the terms of those agreements, we may be required to pay, or we may receive,
additional amounts contingent upon the occurrence of various future events such as future discovery,
development, regulatory or commercial milestones, which in the aggregate could be material. In addition, if
any products related to these collaborations are approved for sale, we may be required to pay, or we may
receive, royalties on future sales. The payment or receipt of these amounts, however, is contingent upon the
occurrence of various future events, the likelihood of which cannot presently be determined.
Note 8.
Property and Equipment, net
Property and equipment, net consists of the following (in thousands):
December 31,
2024
2023
Office equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
23,710
$
23,417
Laboratory equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
229,797
220,677
Computer equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
156,859
147,570
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,395
10,931
Building and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . .
597,342
584,755
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . .
22,230
20,553
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46,062
13,544
1,091,395
1,021,447
Less accumulated depreciation and amortization . . . . . . . . . . . . . . . .
(327,984)
(269,934)
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 763,411
$ 751,513
In May 2024, we purchased additional property in Wilmington, Delaware, including land, office
buildings and parking garages for a purchase price of $48.7 million. During the year ended December 31,
2024, we capitalized $4.9 million of land, $19.5 million of building and parking garage and $30.8 million of
construction in progress relating to the downtown Wilmington properties.
Depreciation expense, including amortization expense of leasehold improvements, was $65.6 million,
$60.1 million and $46.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
We are the lessee of several contracts, including those to secure fleet vehicles, buildings and equipment.
Our lease agreements do not contain any material residual value guarantees or restrictive covenants. Some
of our building leases include options to renew and the exercise of these options is at our discretion.
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Our current operating lease liabilities are reflected in accrued and other current liabilities and our
noncurrent operating lease liabilities are reflected in other liabilities on the consolidated balance sheets and
are as follows (in thousands):
December 31,
2024
2023
Current
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,583
$ 5,686
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,419
3,439
Noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,793
14,284
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,542
29,162
Total lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$60,337
$52,571
The maturity of our lease liabilities are as follows (in thousands):
Operating
Finance
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 6,873
$ 5,647
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,000
5,276
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,514
4,445
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,465
3,655
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,376
3,342
After 2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,061
22,568
Total lease cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$25,289
$44,933
Less: discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,913
6,972
Present value of lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$22,376
$37,961
The cash paid for amounts included in the measurement of our operating lease liabilities for the years
ended December 31, 2024, 2023 and 2022 was $7.1 million, $9.4 million and $11.8 million, respectively, in
operating cash flows. The cash paid for amounts included in the measurement of our finance lease liabilities
for the years ended December 31, 2024, 2023 and 2022 was $3.8 million, $3.4 million and $2.9 million
respectively, in financing cash flows.
As of December 31, 2024, our finance and operating leases had a weighted average lease term of
approximately 10.4 years and 4.8 years, respectively. The discount rate of our leases is an approximation of
an estimated incremental borrowing rate and is dependent upon the term and economics of each agreement.
The weighted average discount rate of our finance and operating leases was approximately 3.6% and 4.5%,
respectively.
As of December 31, 2023, our finance and operating leases had a weighted average lease term of
approximately 10.8 years and 5.8 years, respectively. The weighted average discount rate of our finance and
operating leases was approximately 4.0% and 3.9%, respectively.
As of December 31, 2022, our finance and operating leases had a weighted average lease term of
approximately 12.0 years and 5.5 years, respectively. The weighted average discount rate of our finance and
operating leases was approximately 4.2% and 4.4%, respectively.
For the year ended December 31, 2024, we incurred approximately $8.1 million of expense related to
our operating leases, approximately $3.9 million of amortization on our finance lease right-of-use assets
and approximately $1.3 million of interest expense on our finance lease liabilities. For the year ended
December 31, 2023, we incurred approximately $9.8 million of expense related to our operating leases,
approximately $3.5 million of amortization on our finance lease right-of-use assets and approximately
$1.3 million of interest expense on our finance lease liabilities. For the year ended December 31, 2022, we
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incurred approximately $11.7 million of expense related to our operating leases, approximately $3.1 million
of amortization on our finance lease right-of-use assets and approximately $1.4 million of interest expense
on our finance lease liabilities.
Note 9.
Intangible Assets and Goodwill
Intangible Assets, Net
The components of intangible assets were as follows (in thousands, except for useful life):
Balance at December 31, 2024
Balance at December 31, 2023
Weighted-
Average Useful
Lives (Years)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Finite-lived intangible assets:
Licensed IP . . . . . . . . . . .
12.5
$271,000
$184,854
$86,146 $271,000
$163,318
$107,682
Capitalized milestone
payments . . . . . . . . . . .
11.9
$ 29,500
$
2,820
$26,680 $ 17,000
$
1,137
$ 15,863
Other
. . . . . . . . . . . . . . .
2.0
$
1,400
$
423
$
977 $
—
$
—
$
—
Amortization expense for the years ended December 31, 2024, 2023 and 2022, was $23.6 million,
$22.5 million, and $21.5 million, respectively, and is recorded in cost of product revenues on the consolidated
statement of operations. Estimated aggregate amortization expense based on the current carrying value of
amortizable intangible assets will be as follows for the years ending December 31 (in thousands):
2025
2026
2027
2028
2029
Thereafter
Amortization expense . . . . . . . . . . . . . . . .
$24,767
$24,359
$24,067
$24,067
$2,531
$14,012
Goodwill
There were no changes to the carrying amount of goodwill for the years ended December 31, 2024 and
2023.
Note 10.
Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following (in thousands):
December 31,
2024
2023
Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 519,881
$387,362
Clinical related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
132,446
109,618
Sales allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
438,053
279,914
Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,439
37,369
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,781
42,295
Operating lease liabilities
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,583
5,686
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,865
73,325
Total accrued and other current liabilities . . . . . . . . . . . . . . . . . . . . . .
$1,212,048
$935,569
Note 11.
Stockholders’ Equity
Preferred Stock.
We are authorized to issue 5,000,000 shares of preferred stock, none of which was
outstanding as of December 31, 2024 and 2023. The Board of Directors may determine the rights, preferences
and privileges of any preferred stock issued in the future.
Common Stock.
We are authorized to issue 400,000,000 shares of common stock.
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Share Repurchase and Modified “Dutch Auction” Tender Offer.
On May 13, 2024 we announced that
our Board of Directors approved a share repurchase authorization of $2.0 billion. Subsequently, we
commenced a modified “Dutch Auction” tender offer to repurchase shares of our common stock for an
aggregate purchase price of up to $1.672 billion (the “tender offer”). We offered to purchase up to
$1.672 billion in value of our common stock at a price not greater than $60.00 per share nor less than
$52.00 per share, net to the seller in cash, less any applicable withholding taxes and without interest, upon
the terms and subject to the conditions set forth in the tender offer documents that were distributed to
stockholders. A modified “Dutch Auction” tender offer allows stockholders to indicate how much stock they
wish to tender and at what price within the range described above. Based on the number of shares tendered
and the prices specified by the tendering stockholders, we determined the lowest price per share that
enabled us to purchase $1.672 billion of common stock at such price. On June 13, 2024 we completed the
tender offer and repurchased 27,866,666 shares at a price of $60.00 per share for an aggregate price of
approximately $1.672 billion, excluding fees and related expenses, pursuant to the tender offer.
In addition, on May 12, 2024, we entered into a separate stock purchase agreement with Julian C.
Baker (a member of our Board of Directors), Felix J. Baker, and entities affiliated with Julian C. and Felix J.
Baker, including funds advised by Baker Bros. Advisors LP (collectively, the “Baker Entities”), to repurchase
up to $328.0 million of our common stock. This would enable the Baker Entities to maintain their ownership
level as of May 9, 2024 of approximately 16.4% of Incyte’s outstanding common stock. The Baker Entities
purchase was to be at the same price per share as is determined and paid in the tender offer. On June 26, 2024,
we repurchased 5,459,183 shares at a price of $60.00 per share for an aggregate price of approximately
$328.0 million pursuant to the terms of the stock purchase agreement with the Baker Entities.
We account for share repurchases as retirements, whereby it reduces common stock and additional
paid-in capital by the amount of the original issuance, with any excess purchase price recorded as a reduction
to retained earnings (accumulated deficit). Any transaction costs, including the excise tax, directly associated
with the share repurchases are included as part of the purchase price. Under this method, the issued and
outstanding shares of common stock are reduced by the number of shares of common stock repurchased,
and no treasury stock is recognized on the consolidated financial statements.
A total of 33,325,849 common shares were repurchased during June 2024 at a price of $60.00 per share
for an aggregate purchase price of approximately $2.0 billion. We incurred $24.4 million in fees and expenses
associated with the share repurchase, which included $19.2 million for excise taxes on share repurchases in
accordance with the Inflation Reduction Act of 2022. We currently expect to pay the excise tax in the first half
of 2025. These costs are recognized within (accumulated deficit) retained earnings on the consolidated
balance sheet as of December 31, 2024 as costs to repurchase our common stock. The purchased shares
were cancelled and ceased to be outstanding.
Stock Compensation Plans.
As of December 31, 2024, we had a total of 4,302,716 shares of our
common stock available for future issuance related to our stock plans as described below.
2010 Stock Incentive Plan.
In May 2010 the Board of Directors adopted the 2010 Stock Incentive
Plan (the “2010 Stock Plan”), which was most recently amended in April 2023, for issuance of common
stock to employees, non-employee directors, consultants, and scientific advisors. Awards under the 2010
Stock Plan include stock options, RSUs and PSUs.
In June 2023, our stockholders approved an increase in the number of shares of common stock
reserved for issuance under the 2010 Stock Plan from 53,953,475 to 66,453,475.
2024 Inducement Stock Incentive Plan.
In January 2024, our Board of Directors adopted the Incyte
Corporation 2024 Inducement Stock Incentive Plan (the “2024 Inducement Plan”). In reliance on Nasdaq
Marketplace Rule 5635(c)(4), stockholder approval was not obtained. A total of 1,000,000 shares of common
stock are reserved for issuance pursuant to the 2024 Inducement Plan.
Stock Options
Options are granted to employees, consultants, and scientific advisors under the 2010 Stock Plan and
2024 Inducement Plan. Options are also granted under the 2010 Stock Plan to non-employee members of
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our Board of Directors, pursuant to a formula set forth in the 2010 Stock Plan. All options are exercisable
at the fair market value of the stock on the date of grant.
Our annual stock option grants generally have a 10-year term and vest over four years, with 25%
vesting after one year and the remainder vesting in 36 equal monthly installments, subject to customary
retirement provisions that may accelerate the requisite service period for expense recognition purposes. Non-
employee director options expire after 10 years and vest in full on the first anniversary of the date of grant
or, if earlier, the date of the next annual meeting of stockholders.
Option activity under the 2010 Stock Plan and 2024 Inducement Plan was as follows:
Shares Subject to
Outstanding Options
Shares
Weighted Average
Exercise Price
Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . .
12,457,158
$85.40
Options granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,336,397
$62.58
Options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(430,563)
$68.69
Options cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(585,018)
$88.22
Balance at December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . .
12,777,974
$83.45
Options to purchase a total of 10,381,128, 9,743,775 and 8,952,289 shares as of December 31, 2024,
2023 and 2022, respectively, were exercisable. The aggregate intrinsic value of options exercised for the years
ended December 31, 2024, 2023 and 2022 were $3.2 million, $3.2 million and $6.0 million, respectively. At
December 31, 2024, the aggregate intrinsic value of options outstanding and vested options are $15.9 million
and $15.3 million, respectively.
The following table summarizes information about stock options outstanding as of December 31, 2024
under the 2010 Stock Plan and 2024 Inducement Plan:
Options Outstanding
Options Exercisable
Range of Exercise Prices
Number
Outstanding
Weighted Average
Remaining
Contractual Life
(in years)
Weighted
Average
Exercise
Price
Number
Exercisable
Weighted
Average
Exercise
Price
$52.94 – $61.76 . . . . . . . . . . . . . . . . . . .
1,443,974
8.50
$ 60.81
533,680
$ 61.16
$62.08 – $68.62 . . . . . . . . . . . . . . . . . . .
1,373,343
6.85
66.21
674,083
68.19
$68.70 – $74.78 . . . . . . . . . . . . . . . . . . .
1,971,358
5.41
73.13
1,791,120
73.10
$74.98 – $80.50 . . . . . . . . . . . . . . . . . . .
1,517,319
5.84
78.55
1,235,573
78.82
$80.56 – $83.58 . . . . . . . . . . . . . . . . . . .
1,449,127
6.69
83.26
1,163,248
83.27
$83.83 – $90.00 . . . . . . . . . . . . . . . . . . .
1,301,907
3.70
84.80
1,264,003
84.79
$90.56 – $95.34 . . . . . . . . . . . . . . . . . . .
1,354,618
4.55
92.79
1,353,093
92.79
$95.54 – $113.64 . . . . . . . . . . . . . . . . . .
1,780,144
3.30
107.78
1,780,144
107.78
$115.19 – $134.38 . . . . . . . . . . . . . . . . .
568,742
2.39
128.65
568,742
128.65
$138.52 – $138.52 . . . . . . . . . . . . . . . . .
17,442
2.25
138.52
17,442
138.52
12,777,974
10,381,128
Restricted Stock Units and Performance Shares
RSUs and PSUs are granted to our employees at the share price on the date of grant. Each RSU
represents the right to acquire one share of our common stock. Each RSU granted in connection with our
annual equity awards will vest 25% annually over four years, while each RSU granted as outstanding merit
awards or as part of retention award programs will vest in a single installment at the end of four years,
subject to customary retirement provisions that may accelerate the requisite service period for expense
recognition purposes.
111

We grant PSUs with performance and/or service-based milestones with graded and/or cliff vesting over
three to four years. The shares of our common stock into which each PSU may convert is subject to a
multiplier based on the level at which the financial, developmental and market performance conditions are
achieved over the service period. Compensation expense for PSUs with financial and developmental
performance conditions is recorded over the estimated service period for each milestone when the
performance conditions are deemed probable of achievement. For PSUs containing performance conditions
which were not deemed probable of achievement, no stock compensation expense is recorded. Compensation
expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as
of the date of grant and recorded over the requisite service period. For the years ended December 31,
2024, 2023 and 2022, we recorded $30.1 million, $17.2 million and $7.8 million, respectively, of stock
compensation expense for PSUs on our consolidated statements of operations.
RSU and PSU award activity under the 2010 Stock Plan and 2024 Inducement Plan was as follows:
Shares Subject to
Outstanding Awards
Shares
Grant Date
Value
Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,165,342
$72.17
RSUs granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,481,911
$63.97
PSUs granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
341,943
$65.40
RSUs released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,899,523)
$75.55
PSUs released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(105,453)
$83.58
RSUs cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(317,347)
$69.60
PSUs cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10,070)
$76.59
Balance at December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,656,803
$67.81
The following table summarizes our shares available for grant under the 2010 Plan and 2024 Inducement
Plan. Each RSU and PSU grant reduces the available share pool by 2 shares.
Shares Available
for Grant
Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,815,026
Additional authorization – 2024 Inducement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,000,000
Options, RSUs and PSUs granted and issuance of shares for services rendered . . . . . . . . .
(9,033,557)
Options, RSUs and PSUs cancelled
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,232,142
Balance at December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,013,611
Employee Stock Purchase Plan.
On May 21, 1997, our stockholders adopted the 1997 Employee
Stock Purchase Plan, which was most recently amended in April 2023 (the “ESPP”). Each regular full-time
and part-time employee working 20 hours or more per week is eligible to participate after one month of
employment. In June 2023, our stockholders approved an increase in the number of shares of common stock
reserved for issuance under the ESPP from 9,600,000 to 10,350,000. We issued 453,312, 380,145 and
308,413 shares under the ESPP in 2024, 2023 and 2022, respectively. For the years ended December 31,
2024, 2023 and 2022, we recorded stock compensation expense of $5.3 million, $5.1 million and $4.7 million,
respectively, as the ESPP is considered compensatory under the FASB stock compensation rules. As of
December 31, 2024, 289,105 shares remain available for issuance under the ESPP.
Note 12.
Stock Compensation
We recorded $266.1 million, $215.9 million and $188.4 million, respectively, of stock compensation
expense for the years ended December 31, 2024, 2023 and 2022. Stock compensation expense within the
consolidated statements of operations included research and development expense for the years ended
December 31, 2024, 2023 and 2022 of $161.3 million, $126.7 million and $112.5 million, respectively. Stock
112

compensation expense within the consolidated statements of operations also included selling, general and
administrative expense for the years ended December 31, 2024, 2023 and 2022 of $102.5 million, $86.1 million
and $73.2 million, respectively. Stock compensation expense within the consolidated statements of
operations also included cost of product revenues for the years ended December 31, 2024, 2023 and 2022 of
$2.3 million, $3.1 million and $2.7 million, respectively.
Additionally, as described in Note 5, as part of the Escient acquisition, during the year ended
December 31, 2024, we recognized on our consolidated statements of operations related compensation
expense of approximately $31.5 million associated with the accelerated vesting for certain Escient stock
awards in connection with the acquisition.
We utilized the Black-Scholes valuation model for estimating the fair value of the stock options
granted, with the following weighted-average assumptions:
Employee Stock Options
For the year ended December 31,
Employee Stock Purchase Plan
For the year ended December 31,
2024
2023
2022
2024
2023
2022
Average risk-free interest rates . . . . . . . . . . . . . .
4.15%
4.01%
2.14%
4.88%
4.72%
3.74%
Average expected life (in years) . . . . . . . . . . . . . .
5.03
5.05
4.90
0.50
0.50
0.50
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30%
32%
36%
27%
25%
25%
Weighted-average fair value (in dollars) . . . . . . . .
21.07
24.35
26.06
12.34
12.68
14.99
The risk-free interest rate is derived from the U.S. Federal Reserve rate in effect at the time of grant.
The expected life calculation is based on the observed and expected time to the exercise of options by our
employees based on historical exercise patterns for similar type options. Expected volatility is based on the
historical volatility of our common stock over the period commensurate with the expected life of the options.
A dividend yield of zero is assumed based on the fact that we have never paid cash dividends and have no
present intention to pay cash dividends. Nonemployee awards are measured on the grant date by estimating
the fair value of the equity instruments to be issued using the expected term, similar to our employee
awards.
Based on our historical experience of employee turnover, we have assumed an annualized forfeiture
rate of 5% for our options, PSUs and RSUs. Under the true-up provisions of the stock compensation
guidance, we will record additional expense as the awards vest if the actual forfeiture rate is lower than we
estimated, and will record a recovery of prior expense if the actual forfeiture is higher than we estimated.
Total compensation cost of options granted but not yet vested as of December 31, 2024, was
$19.2 million, which is expected to be recognized over the weighted average period of 1.1 years. Total
compensation cost of RSUs granted but not yet vested, as of December 31, 2024, was $235.9 million, which
is expected to be recognized over the weighted average period of 1.6 years. Total compensation cost of
PSUs granted but not yet vested, as of December 31, 2024, was $27.3 million, which is expected to be
recognized over the weighted average period of 1.6 years, should the underlying performance conditions be
deemed probable of achievement.
Note 13.
Income Taxes
We are subject to U.S. federal, state and foreign corporate income taxes. The provision for income taxes
is based on income before provision for income taxes as follows (in thousands):
Year Ended December 31,
2024
2023
2022
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$401,760
$1,084,254
$ 766,781
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(85,130)
(250,039)
(237,665)
Income before provision for income taxes . . . . . . . . . . . . .
$316,630
$ 834,215
$ 529,116
113

Our provision for income taxes consists of the following (in thousands):
Year Ended December 31,
2024
2023
2022
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 322,682
$ 344,407
$ 90,088
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43,955
48,106
38,136
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,931
3,001
3,141
369,568
395,514
131,365
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(106,549)
(139,468)
62,107
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,824
(19,625)
(3,709)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(828)
195
(1,307)
(85,553)
(158,898)
57,091
Total provision for income taxes . . . . . . . . . . . . . . . . . . . .
$ 284,015
$ 236,616
$188,456
A reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes is
as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Provision at U.S. federal statutory rate . . . . . . . . . . . . . . .
$ 66,492
$
175,185
$111,114
State and local income taxes . . . . . . . . . . . . . . . . . . . . . .
51,753
21,145
26,767
Foreign tax rate differential . . . . . . . . . . . . . . . . . . . . . . .
61,026
(96,434)
13,670
Income tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(70,989)
(1,433,507)
(30,505)
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . .
21,425
1,572,951
67,056
Change in uncertain tax positions
. . . . . . . . . . . . . . . . . .
6,418
5,943
3,262
Foreign-derived intangible income . . . . . . . . . . . . . . . . . .
(31,786)
(32,891)
(36,748)
Stock based compensation
. . . . . . . . . . . . . . . . . . . . . . .
25,647
20,971
19,704
Acquisitions accounted for as research and development
expenses
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
149,287
4,200
14,700
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,742
(947)
(564)
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . .
$284,015
$
236,616
$188,456
The 2024 acquisitions accounted for as research and development expenses in the table above reflects
the impact of non-deductible charges associated with the Escient acquisition. The 2023 foreign tax rate
differential in the table above reflects the impact of operations in jurisdictions with tax rates that differ from
the U.S. federal statutory rate of 21%. It also includes a tax benefit associated with the remeasurement of
foreign deferred tax assets resulting from the cancellation of a tax holiday. The 2023 income tax credits in the
table above includes a tax benefit associated with the issuance of non-refundable Swiss income tax credits.
The 2023 remeasurement of foreign deferred tax assets and the Swiss income tax credits are fully offset with
a valuation allowance in the table above.
114

Significant components of our deferred tax assets and liabilities are as follows (in thousands):
December 31,
2024
2023
Deferred tax assets:
Net operating loss carry forwards . . . . . . . . . . . . . . . . . . . . . . . . .
$
315,969
$
326,446
Income tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,398,495
1,441,981
Capitalized research and development . . . . . . . . . . . . . . . . . . . . . .
648,989
457,603
Deferred revenue and accruals . . . . . . . . . . . . . . . . . . . . . . . . . . .
190,446
130,291
Non-cash compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100,788
96,469
Acquisition-related contingent consideration . . . . . . . . . . . . . . . . .
27,796
30,298
Intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
229,741
233,311
Long term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,697
42,975
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,814
9,044
Total gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,939,735
2,768,418
Less valuation allowance for deferred tax assets
. . . . . . . . . . . . . . .
(2,139,673)
(2,096,318)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
800,062
$
672,100
Deferred tax liabilities:
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(30,676)
$
(34,757)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,315)
(5,457)
Total gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
(37,991)
(40,214)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
762,071
$
631,886
During the year ended December 31, 2024, the Company’s net deferred tax assets increased by
$130.2 million. This was primary due to future deductible temporary differences associated with U.S.
research and development expenses required to be capitalized and amortized under the Tax Cuts and Jobs
Act of 2017, partially offset by an increase to a related valuation allowance. As part of the Escient acquisition,
the Company also recorded a net deferred tax asset of $44.8 million predominately related to U.S. net
operating losses (“NOLs”) and capitalized researched and development costs. As of December 31, 2024, the
Company continues to maintain a valuation allowance on certain U.S. temporary differences, foreign
NOLs and the non-refundable Swiss income tax credits granted in the year ended December 31, 2023.
The valuation allowance for deferred tax assets increased by approximately $43.4 million during the year
ended December 31, 2024 and increased by approximately $1.6 billion during the year ended December 31,
2023. The valuation allowance increase during 2024 was primarily due to future deductible temporary
differences mainly associated with U.S. research and development expenses required to be capitalized and
amortized under the Tax Cuts and Jobs Act of 2017 and the acquisition of Escient’s U.S. NOLs, a portion of
which is not more-likely-than-not to be realized as of December 31, 2024. This was partially offset by the
expiration of foreign NOLs with a full valuation allowance.
115

As of December 31, 2024, we had NOL carryforwards, research and development credit carryforwards
and foreign income tax credit carryforwards as follows (in thousands):
Amount
Expiring if not utilized
Net operating loss carryforwards
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 102,034
Indefinite
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
782,156
2025 through 2044; indefinite
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,749,821
2025 through 2041; indefinite
Research and development credit carryforwards
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
9,431
2039 through 2044
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,064
2025 through 2043
Swiss income tax credit carryforwards . . . . . . . . . . . . . . . . .
1,382,413
2028
The Federal NOL and tax credit carryforward are subject to an annual limitation under Internal
Revenue Code Section 382.
The financial statement recognition of the benefit for a tax position is dependent upon the benefit
being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold
is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of
being realized upon ultimate settlement. If such unrecognized tax benefits were realized, we would recognize
a tax benefit of $79.3 million. The following table summarizes the gross amounts of unrecognized tax
benefits (in thousands):
Year Ended December 31,
2024
2023
Balance at beginning of year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$69,145
$ 73,040
Additions related to prior periods tax positions . . . . . . . . . . . . . . . . . .
9,173
3,687
Reductions related to prior periods tax positions . . . . . . . . . . . . . . . . .
(2,014)
(10,382)
Additions related to current period tax positions . . . . . . . . . . . . . . . . .
5,939
3,019
Additions related to acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,114
—
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(71)
(209)
Reductions due to lapse of applicable statute of limitations . . . . . . . . .
(3,538)
(33)
Currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(25)
23
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$87,723
$ 69,145
Our policy is to recognize interest and penalties related to uncertain tax positions, if any, as a component
of income tax expense. During the years ending December 31, 2024 and 2023, we recorded interest and
penalties as a component of income tax expense of $8.5 million and $4.9 million, respectively. As of
December 31, 2024 and 2023, the Company has accrued liabilities of $18.7 million and $10.1 million,
respectively, for interest and penalties related to its uncertain tax positions. We do not expect any significant
decreases in recognized tax benefits within the next 12 months.
One or more of our legal entities file income tax returns in the U.S. and in certain foreign jurisdictions.
Our income tax returns may be examined by tax authorities in those jurisdictions. Significant disputes may
arise with tax authorities involving issues such as the timing and amount of deductions, the use of tax credits
and allocations of income and expenses among various tax jurisdictions because of differing interpretations
of tax laws and regulations and relevant facts. In the U.S., the statute of limitations remains open beginning
with tax year 2021. We are currently under U.S. federal audit for tax year 2021.
Note 14.
Net Income Per Share
Our basic net income per share is computed by dividing the net income by the number of weighted
average common shares outstanding during the period. Our diluted net income per share is computed by
116

dividing net income by the weighted average common shares outstanding during the period assuming
potentially dilutive common shares of stock options, RSUs and PSUs.
Net income per share was calculated as follows for the periods indicated below:
Year Ended December 31,
(in thousands, except per share data)
2024
2023
2022
Basic Net Income Per Share
Basic net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 32,615
$597,599
$340,660
Weighted average common shares outstanding . . . . . . . . . . . . . . . . . . . .
207,110
223,628
222,004
Basic net income per share
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.16
$
2.67
$
1.53
Diluted Net Income Per Share
Diluted net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 32,615
$597,599
$340,660
Weighted average common shares outstanding . . . . . . . . . . . . . . . . . . . .
207,110
223,628
222,004
Dilutive stock options and awards . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,420
2,300
1,954
Weighted average shares used to compute diluted net income per share . . .
210,530
225,928
223,958
Diluted net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.15
$
2.65
$
1.52
The potential common shares that were excluded from the diluted net income per share computation
are as follows:
2024
2023
2022
Outstanding stock options and awards . . . . . . . . . . . . .
12,905,281
12,710,250
10,946,703
Note 15.
Employee Benefit Plans
Defined Contribution Plans
We have a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code
covering all U.S. employees and defined contribution plans for other Incyte employees in Europe and Japan.
Employees may contribute a portion of their compensation, which is then matched by us, subject to
certain limitations. Defined contribution expense was $20.6 million, $18.9 million and $18.7 million for
the years ended December 31, 2024, 2023 and 2022, respectively.
Defined Benefit Pension Plans
We have defined benefit pension plans for our employees in Europe which provide benefits to employees
upon retirement, death or disability. The assets of the pension plans are held in collective investment accounts
represented by the cash surrender value of an insurance policy and are classified as Level 2 within the fair
value hierarchy.
The pension plans assumptions reflect the expected investment return and discount rate on plan assets
and disability rate probabilities. The benefit obligation at December 31, 2024 for the plans was determined
using a discount rate of 0.90% and rate of compensation increase of 2.25%. The 2024 net periodic benefit cost
for the plans was determined using discount rates of 1.30%, rates of compensation increase of 2.25% and
long term expected return on plan assets of 5.50%. The benefit obligation at December 31, 2023 for the plans
was determined using a discount rate of 1.30% and rate of compensation increase of 2.25%. The 2023 net
periodic benefit cost for the plans was determined using discount rates of 2.20%, rates of compensation
increase of 2.25% and long term expected return on plan assets of 5.80%.
117

Summarized information regarding changes in the obligations and plan assets, the funded status and
the amounts recorded were as follows (in thousands):
Year Ended December 31,
2024
2023
Benefit obligation, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . .
$169,667
$113,705
Employer service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,121
7,711
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,010
2,280
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,067
4,534
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,443
26,682
Transfer of benefits net of payments from fund . . . . . . . . . . . . . . . . . . .
1,382
1,866
Expenses paid from assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(101)
(118)
Translation (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(12,102)
13,007
Benefit obligation, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
195,487
169,667
Fair value of plan assets, beginning of year . . . . . . . . . . . . . . . . . . . . . .
128,482
102,023
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,562
140
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,278
9,955
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,067
4,534
Transfer of benefits net of payments from fund . . . . . . . . . . . . . . . . . . .
1,382
1,866
Expenses paid from assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(101)
(118)
Translation (loss) gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9,034)
10,082
Fair value of plan assets, end of year
. . . . . . . . . . . . . . . . . . . . . . . . . .
149,636
128,482
Unfunded liability, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 45,851
$ 41,185
The unfunded liability is reported in other liabilities on the consolidated balance sheets as of
December 31, 2024 and 2023. The accumulated benefit obligation is $182.4 million and $157.9 million as of
December 31, 2024 and 2023, respectively.
The net periodic benefit cost was as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$12,121
$ 7,711
$ 9,855
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,010
2,280
251
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,764)
(5,688)
(4,184)
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . .
801
771
773
Amortization of actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . .
673
—
356
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 8,841
$ 5,074
$ 7,051
The components of net periodic benefit cost other than the service cost component are included in
interest income and other, net on the consolidated statements of operations.
118

Other changes in the plans assets and the benefit obligation that is recognized in accumulated other
comprehensive (loss) income were as follows, net of tax (in thousands):
Year Ended December 31,
2024
2023
2022
Pension liability (asset), beginning of year
. . . . . . . . . . . . . . . .
$30,924
$ (1,699)
$ 23,677
Net prior service costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,474)
(771)
(773)
Net loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,473
$33,394
$(24,603)
Pension liability (asset), end of year . . . . . . . . . . . . . . . . . . . . .
$39,923
$30,924
$ (1,699)
We expect to contribute a total of $10.1 million to the pension plans in 2025. The following payments
are expected to be paid from the fund (in thousands):
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 6,956
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,249
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,139
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,617
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,123
2030 – 2034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,544
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$98,628
Note 16.
Commitments and Contingencies
Commitments
In August 2021, we entered into a revolving credit and guaranty agreement, which was subsequently
amended in May 2023 and June 2024 (as amended, the “Credit Agreement”), among the Incyte Corporation,
as borrower, subsidiary Incyte Holdings Corporation, as a guarantor, a group of lenders (the “Lenders”),
and J.P. Morgan Chase Bank, N.A. as administrative agent. Under the Credit Agreement, the Lenders have
committed to provide an unsecured revolving credit facility in an aggregate principal amount of up to
$500.0 million. The June 2024 amendment to the Credit Agreement extended the maturity date of the
revolving credit facility from August 2024 to June 2027. We may increase the maximum revolving commitments
or add one or more incremental term loan facilities to the Credit Agreement, subject to obtaining
commitments from any participating lenders and certain other conditions, in an amount not to exceed
(1) $250.0 million plus (2) an additional amount, so long as after giving effect to the incurrence of such
additional amount, our pro forma consolidated leverage ratio would not exceed 0.25:1.00 above its
consolidated leverage ratio in effect immediately prior to giving effect to such increase.
Loans under the Credit Agreement will bear interest, at our option, at a per annum rate equal to either
(a) a base rate (but not less than 1.00%) plus an applicable rate per annum varying from 0.125% to 0.875%
depending on the consolidated leverage ratio or (b) a rate based on the secured overnight financing rate
(“SOFR”) plus a credit spread adjustment of 0.10% (but not less than 0.00%), plus an applicable rate per
annum varying from 1.125% to 1.875% depending on the consolidated leverage ratio. Commitment fees
payable on the undrawn amount range from 0.150% per annum to 0.225% per annum, based on our
consolidated leverage ratio. We may, at our option, prepay any borrowings under the Credit Agreement, in
whole or in part, at any time and from time to time without premium or penalty, subject to customary
exceptions.
As of December 31, 2024, we were in compliance with all financial and operational covenants under
the terms of the Credit Agreement and there were no outstanding borrowings or letters of credit outstanding.
Contingencies
In the ordinary course of our business, we may become involved in lawsuits, proceedings, and other
disputes, including commercial, intellectual property, regulatory, employment, and other matters. We record
119

a reserve for these matters when it is both probable that a liability has been incurred and the amount of the
loss can be reasonably estimated.
We have entered into the collaboration agreements described in Note 7, as well as various other
collaboration agreements that are not individually, or in the aggregate, significant to our operating results
or financial condition at this time. We may in the future seek to license additional rights relating to technologies
or drug development candidates in connection with our drug discovery and development programs. Under
these agreements, we may be required to pay upfront fees, milestone payments, and royalties on sales of future
products.
We brought a lawsuit against the U.S. Centers for Medicare and Medicaid Services (“CMS”) alleging
that a recent regulation issued by CMS on the definition of “line extension” for purposes of the Medicaid
rebate program is too broad and has the unintended consequence of treating OPZELURA as a “line
extension” of JAKAFI under this program. We believe that such a reading would violate CMS’s statutory
authority and be arbitrary and capricious, given that OPZELURA, among other differentiators, is indicated
to treat entirely different medical conditions and entirely different patient populations than JAKAFI. As
of December 31, 2024, we have accrued approximately $127.6 million within accrued and other current
liabilities on the consolidated balance sheet, relating to the incremental rebates that would be owed were
OPZELURA considered a line extension of JAKAFI. The impact on OPZELURA gross to net deductions
for the quarter ending December 31, 2024, is approximately 6.3%. If OPZELURA is not treated as a line
extension of JAKAFI, this would result in a reversal of our accrual and a lower future gross to net deduction
for OPZELURA.
In addition, as described in Note 7 of the Notes to the Consolidated Financial Statements, we have an
outstanding contractual dispute with Novartis relating to royalties on JAKAFI net sales within the United
States.
Note 17.
Segment Information
We operate in one operating segment, and therefore one reportable segment, focused on the global
discovery, development and commercialization of proprietary therapeutics. We manage business activities
on a consolidated basis through the development and commercialization of oncology and dermatology
products, which are sold to U.S. and international customers. Our determination that we operate as a single
operating segment is consistent with the financial information regularly reviewed by the chief operating
decision maker for purposes of evaluating performance, allocating resources, setting incentive compensation
targets, and planning and forecasting for future periods. Our chief operating decision maker is the Chief
Executive Officer.
The accounting policies for our single operating segment are the same as those described in the
summary of significant accounting policies. Our single operating segment generates revenues from the
development and commercialization of oncology and dermatology pharmaceutical products, which are
developed by our research and development department, as well as from product royalties, milestone and
contract revenues from the out-licensing of our intellectual property to third parties.
For our segment, the chief operating decision maker uses net income or loss, that also is reported on
the consolidated statements of operations as consolidated net income (loss), to allocate resources (including
employees, property, and financial resources), predominantly during the annual budget and forecasting
process. The chief operating decision maker also uses consolidated net income or loss, along with non-financial
inputs and qualitative information, to evaluate our performance, establish compensation, monitor budget
versus actual results, and decide the level of investment in our various operating activities and other capital
allocation activities. The measure of segment assets is reported on the consolidated balance sheet as total
consolidated assets.
120

Net income for our segment was as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Product revenues, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,618,888
$3,165,168
$2,746,897
Product royalty revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
579,329
523,481
482,738
Milestone and contract revenues . . . . . . . . . . . . . . . . . . . . . . . .
43,000
7,000
165,000
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,241,217
3,695,649
3,394,635
Costs, expenses and other:
Cost of product revenues (including definite-lived intangible
amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
312,068
254,990
206,997
Research and development – internal(1) . . . . . . . . . . . . . . . . . . .
957,043
815,025
739,785
Research and development – external(2) . . . . . . . . . . . . . . . . . . .
866,005
775,919
720,201
Other research and development(3) . . . . . . . . . . . . . . . . . . . . . . .
783,800
36,650
125,950
Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
945,428
876,703
770,141
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . .
296,729
284,590
231,999
Loss on change in fair value of acquisition-related contingent
consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,803
29,202
12,149
(Profit) and loss sharing under collaboration agreements . . . . . . .
(1,025)
2,045
7,973
Other segment items(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,751
22,926
238,780
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
32,615
$ 597,599
$ 340,660
(1)
Research and development — internal is comprised of internally generated costs such as salaries, travel,
regulatory costs, lab costs, contracting, etc.
(2)
Research and development — external is comprised of specific program spend with external vendors
(i.e. contract manufacturing organization, contract research organization and lab vendors for clinical,
technical operations and toxicology services).
(3)
Other research and development is comprised of all other costs including certain one-time costs
resulting from the acquisition of IPR&D assets and one-time development milestone expenses.
(4)
Other segment items is comprised of interest income, interest expense, realized and unrealized (gain)
loss on equity investments, other, net, and provision for income taxes.
During the year ended December 31, 2024, total revenues generated by subsidiaries in the United
States was approximately $4.0 billion, total revenues generated from subsidiaries in Europe was approximately
$260.4 million, and total revenues generated from subsidiaries in other countries was approximately
$6.2 million. During the year ended December 31, 2023, total revenues generated by subsidiaries in the
United States was approximately $3.5 billion, total revenues generated from subsidiaries in Europe was
approximately $175.9 million, and total revenues generated from subsidiaries in other countries was
approximately $4.9 million. During the year ended December 31, 2022, total revenues generated by
subsidiaries in the United States was approximately $3.2 billion and total revenues generated from subsidiaries
in Europe was approximately $147.0 million.
As of December 31, 2024, property and equipment, net was approximately $474.1 million in the
United States, approximately $277.6 million in Switzerland and approximately $11.7 million in other
countries. As of December 31, 2023, property and equipment, net was approximately $432.3 million in the
United States, approximately $303.9 million in Switzerland and approximately $15.3 million in other countries.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
121

Item 9A.
Controls and Procedures
Evaluation of disclosure controls and procedures.
We maintain “disclosure controls and procedures,” as
such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that
are designed to ensure that information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified
in Securities and Exchange Commission rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure
controls and procedures, management recognized that disclosure controls and procedures, no matter how
well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to
meet reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our
management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of
possible disclosure controls and procedures. The design of any disclosure controls and procedures also is
based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions.
Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K,
our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure
controls and procedures were effective at the reasonable assurance level.
Changes in internal control over financial reporting.
There were no changes in our internal control over
financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) for the quarter ended December 31,
2024, that have materially affected or are reasonably likely to materially affect our internal control over
financial reporting.
Management’s annual report on internal control over financial reporting.
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Exchange Act Rule 13a-15(f). Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of the effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate. Our management, with the
participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the
effectiveness of our internal control over financial reporting based on the framework in Internal Control —
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework). Based on our evaluation under the framework in Internal Control — Integrated Framework,
our management concluded that our internal control over financial reporting was effective as of
December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31,
2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated
in their report which is included herein.
122

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Incyte Corporation
Opinion on Internal Control Over Financial Reporting
We have audited Incyte Corporation’s internal control over financial reporting as of December 31,
2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our
opinion, Incyte Corporation (the Company) maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024
and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’
equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes
and our report dated February 10, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting included in
the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on
our audit. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing
the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk, and performing such other procedures as we considered necessary
in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 10, 2025
123

Item 9B.
Other Information
(b) During the three months ended December 31, 2024, the following officers (as defined in Rule 16a-1(f)
under the Securities Exchange Act of 1934) of our Company adopted a prearranged trading plan relating
to our common stock and intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities
Exchange Act of 1934.
Christiana Stamoulis, our Executive Vice President and Chief Financial Officer, adopted a trading
plan on November 26, 2024 providing for the sale of up to an aggregate of 107,938 shares of our common
stock until November 26, 2025.
Sheila Denton, our Executive Vice President and General Counsel, adopted a trading plan on
November 27, 2024 providing for the sale of up to an aggregate of 32,014 shares of our common stock until
November 27, 2025.
Barry Flannelly, our Executive Vice President and General Manager, North America, adopted a
trading plan on December 13, 2024 providing for the sale of up to an aggregate of 315,415 shares of our
common stock until January 6, 2026.
During the three months ended December 31, 2024, no director or officer (as defined in Rule 16a-1(f)
under the Securities Exchange Act of 1934) of our Company adopted or terminated any contract, instruction
or written plan for the purchase or sale of our securities, whether or not intended to satisfy the affirmative
defense conditions of Rule 10b5-1(c), other than as set forth above.
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
124

PART III
Item 10.
Directors, Executive Officers and Corporate Governance
The information required by this item (with respect to Directors) is incorporated by reference from the
information under the caption “Election of Directors” contained in our Proxy Statement to be filed with
the Securities and Exchange Commission in connection with the solicitation of proxies for our 2025 Annual
Meeting of Stockholders to be held on June 10, 2025 (the “Proxy Statement”). Certain information
required by this item concerning executive officers is set forth in Part I of this Report under the caption
“Information about our Executive Officers” and is incorporated herein by reference.
Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a
report required by Section 16(a) of the Exchange Act. To the extent disclosure for delinquent reports is being
made, it can be found under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in
the Proxy Statement and is incorporated herein by reference.
We have adopted a Code of Business Conduct and Ethics that applies to all of our officers and
employees, including our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer,
Corporate Controller and other employees who perform financial or accounting functions. The Code of
Business Conduct and Ethics sets forth the basic principles that guide the business conduct of our employees.
We have also adopted a Senior Financial Officers’ Code of Ethics that specifically applies to our Chief
Executive Officer, Chief Financial Officer, Principal Accounting Officer, Corporate Controller, and others
providing similar functions. Stockholders may request a free copy of our Code of Business Conduct and
Ethics and our Senior Financial Officers’ Code of Ethics by contacting Incyte Corporation, Attention:
Investor Relations, 1801 Augustine Cut-Off, Wilmington, DE 19803 or by visiting the Corporate Governance
section of our website at investor.incyte.com/corporate-governance. Our website address listed in the prior
sentence and below is intended to be an inactive, textual reference only. None of the materials on, or accessible
through, our website is part of this report or is incorporated by reference herein.
To date, there have been no waivers under our Code of Business Conduct and Ethics or Senior
Financial Officers’ Code of Ethics. We intend to disclose future amendments to certain provisions of our
Code of Business Conduct and Ethics or Senior Financial Officers’ Code of Ethics or any waivers, if and
when granted, of our Code of Business Conduct and Ethics or Senior Financial Officers’ Code of Ethics on
our website at www.incyte.com within four business days following the date of such amendment or waiver.
We have adopted our Policy on Insider Trading governing the purchase or sale of our securities by our
officers, employees and members of the Board of Directors, as well as our contractors, consultants, secondees
and temporary workers, that we believe is reasonably designed to promote compliance with insider trading
laws, rules and regulations, and the listing standards of The Nasdaq Stock Market. A copy of our Policy on
Insider Trading is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
Information regarding our policies and practices on the timing of equity awards will be included in the
Proxy Statement and is incorporated herein by reference.
Our Board of Directors has appointed an Audit and Finance Committee of three directors, currently
comprised of Mr. Paul J. Clancy, as Chairman, Dr. Jacqualyn A. Fouse and Dr. Edmund P. Harrigan. The
Board of Directors has also determined that Mr. Clancy and Dr. Fouse are each qualified as an Audit
Committee Financial Expert under the definition outlined by the Securities and Exchange Commission. In
addition, each of the members of the Audit Committee qualifies as an “independent director” under the
applicable standards of The Nasdaq Stock Market.
Item 11.
Executive Compensation
The information required by this item is incorporated by reference from the information under the
captions “Compensation of Directors” and “Executive Compensation” contained in the Proxy Statement.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference from the information under the
captions “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners
and Management” contained in the Proxy Statement.
125

Item 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from the information under the
captions “Corporate Governance — Certain Relationships and Related Transactions” and “Corporate
Governance — Director Independence” contained in the Proxy Statement.
Item 14.
Principal Accountant Fees and Services
The information required by this item is incorporated by reference from the information under the
caption “Ratification of Independent Registered Public Accounting Firm” contained in the Proxy Statement.
126

PART IV
Item 15.
Exhibits, Financial Statement Schedules
(a)
Documents filed as part of this report:
(1)
Financial Statements
Reference is made to the Index to Consolidated Financial Statements of Incyte Corporation
under Item 8 of Part II hereof.
(2)
Financial Statement Schedules
All financial statement schedules have been omitted because they are not applicable or not
required or because the information is included elsewhere in the Consolidated Financial
Statements or the Notes thereto.
(3)
Exhibits
See Item 15(b) below. Each management contract or compensatory plan or arrangement
required to be filed has been identified.
(b)
Exhibits
Exhibit
Number
Description of Document
3(i)
Integrated copy of the Restated Certificate of Incorporation, as amended, of the
Company (incorporated by reference to Exhibit 3(i) to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2009).
3(ii)
Bylaws of the Company, as amended as of July 27, 2023 (incorporated by reference to
Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2023).
4.1
Form of Common Stock Certificate (incorporated by reference to the Exhibit 4.1 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2002).
4.2
Description of Registrant’s Securities Registered under Section 12 of the Securities
Exchange Act of 1934 (incorporated by reference to Exhibit 4.3 to the Company’s Annual
Report on Form 10-K for the year ended December 31, 2019).
10.1#
Incyte Corporation Amended and Restated 2010 Stock Incentive Plan, as amended on
April 13, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed June 15, 2023).
10.2#
Form of Global Stock Option Agreement for Executive Officers under the Incyte
Corporation Amended and Restated 2010 Stock Incentive Plan (incorporated by reference
to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020).
10.3#
Form of Global Restricted Stock Unit Award Agreement under the Incyte Corporation
Amended and Restated 2010 Stock Incentive Plan (incorporated by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020).
10.4#
Form of Performance Share Award Agreement under the Incyte Corporation Amended
and Restated 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020).
10.5#
Form of Nonstatutory Stock Option Agreement for Outside Directors under the Incyte
Corporation Amended and Restated 2010 Stock Incentive Plan (incorporated by reference
to Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2013).
127

Exhibit
Number
Description of Document
10.6#
Form of Restricted Stock Unit Award Agreement for Outside Directors under the Incyte
Corporation Amended and Restated 2010 Stock Incentive Plan (incorporated by reference
to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2019).
10.7#
Form of U.S. Stock Option Agreement for Executive Officers under the Incyte
Corporation Amended and Restated 2010 Stock Incentive Plan (incorporated by reference
to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2024).
10.8#
Form of U.S. Restricted Stock Unit Award Agreement under the Incyte Corporation
Amended and Restated 2010 Stock Incentive Plan (incorporated by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2024).
10.9#
Incyte Corporation 2024 Inducement Stock Incentive Plan (incorporated by reference to
Exhibit 99.1 to the Company’s Registration Statement on Form S-8 (File No. 333-277043).
10.10#
Form of Global Nonstatutory Stock Option Agreement for Executive Officers under the
Incyte Corporation 2024 Inducement Stock Incentive Plan (incorporated by reference to
Exhibit 99.2 to the Company’s Registration Statement on Form S-8 (File No. 333-277043).
10.11#
Form of Global Restricted Stock Unit Agreement under the Incyte Corporation 2024
Inducement Stock Incentive Plan (incorporated by reference to Exhibit 99.3 to the
Company’s Registration Statement on Form S-8 (File No. 333-277043).
10.12#
Form of Performance Share Award Agreement under the Incyte Corporation 2024
Inducement Stock Incentive Plan (incorporated by reference to Exhibit 99.4 to the
Company’s Registration Statement on Form S-8 (File No. 333-277043).
10.13#
Form of U.S. Nonstatutory Stock Option Agreement for Executive Officers under the
Incyte Corporation 2024 Inducement Stock Incentive Plan (incorporated by reference to
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2024).
10.14#
Form of U.S. Restricted Stock Unit Award Agreement for Executive Officers under the
Incyte Corporation 2024 Inducement Stock Incentive Plan (incorporated by reference to
Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2024).
10.15#
Form of Indemnity Agreement between the Company and its directors and officers
(incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on
Form S-1 (File No. 33 68138)).
10.16#
1997 Employee Stock Purchase Plan of Incyte Corporation, as amended on April 13, 2023
(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed June 15, 2023).
10.17#
Form of Employment Agreement between the Company and Barry P. Flannelly (effective
as of August 11, 2014), Christiana Stamoulis (effective as of February 11, 2019), Steven H.
Stein (effective as of March 2, 2015), Vijay K. Iyengar (effective as of May 9, 2016),
Pablo J. Cagnoni (effective as of June 7, 2023), Sheila A. Denton (effective as of October 2,
2023), Matteo Trotta (effective as of March 25, 2024), Lee Heeson (effective as of
October 1, 2024) and Mohamed Issa (effective as of January 6, 2025) (incorporated by
reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2012).
10.18#
Form of Amended and Restated Employment Agreement, effective as of April 18, 2012,
between the Company and Paula J. Swain (incorporated by reference to Exhibit 10.14 to
the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012).
128

Exhibit
Number
Description of Document
10.19#
Offer of Employment Letter, dated December 14, 2018, from the Company to Christiana
Stamoulis (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report
on Form 10-Q for the quarter ended March 31, 2019).
10.20#
Amended and Restated Employment Agreement between the Company and Hervé
Hoppenot, dated as of October 25, 2019 (incorporated by reference to Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).
10.21#
Offer of Employment Letter, dated April 21, 2023, from the Company to Pablo J. Cagnoni
(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2023).
10.22†
Collaboration and License Agreement entered into as of November 24, 2009, by and
between the Company and Novartis International Pharmaceutical Ltd. (incorporated by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2019).
10.22.1†
Amendment, dated as of April 5, 2016, to Collaboration and License Agreement entered
into as of November 24, 2009, by and between the Company and Novartis International
Pharmaceutical Ltd. (incorporated by reference to Exhibit 10.1.1 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).
10.22.2††
Amendment, dated as of March 20, 2020, to the Collaboration and License Agreement
entered into as of November 24, 2009, by and between the Company and Novartis
International Pharmaceutical Ltd. (incorporated by reference to Exhibit 10.2 to the
Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020).
10.23†
License, Development and Commercialization Agreement, entered into as of
December 18, 2009, by and between the Company and Eli Lilly and Company
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2019).
10.23.1†
Amendment, dated June 22, 2010, to License, Development and Commercialization
Agreement entered into as of December 18, 2009, by and between the Company and Eli
Lilly and Company (incorporated by reference to Exhibit 10.2.1 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).
10.23.2†
Third Amendment, entered into effective March 31, 2016, to License, Development and
Commercialization Agreement entered into as of December 18, 2009, by and between the
Company and Eli Lilly and Company (incorporated by reference to Exhibit 10.2.2 to the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).
10.23.3†
Fourth Amendment, entered into effective December 13, 2016, to License, Development
and Commercialization Agreement entered into as of December 18, 2009, by and between
the Company and Eli Lilly and Company (incorporated by reference to Exhibit 10.21.4 to
Amendment No. 2 on Form 10-K/A to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2016).
10.23.4††
Letter Agreement, dated May 13, 2020, between the Company and Eli Lilly and Company,
together with related Letter of Understanding, dated March 5, 2020, between the
Company and Eli Lilly and Company, each relating to License, Development and
Commercialization Agreement entered into as of December 18, 2009 by and between the
Company and Eli Lilly and Company (incorporated by reference to Exhibit 10.1 to the
Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020).
10.24
Registration Rights Agreement, dated as of February 12, 2016, between the Company and
667, L.P., Baker Brothers Life Sciences, L.P. and 14159, L.P. (incorporated by reference to
Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2015).
129

Exhibit
Number
Description of Document
10.25
Revolving Credit and Guaranty Agreement, dated as of August 18, 2021, among the
Company, the guarantors party thereto, the lenders party thereto, and JPMorgan Chase
Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).
10.25.1
Amendment No. 1, dated as of May 10, 2023, to Revolving Credit and Guaranty
Agreement dated as of August 18, 2021, among the Company, the guarantors party
thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative
Agent. (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2023).
10.25.2
Amendment No. 2, dated as of June 28, 2024, to Revolving Credit and Guaranty
Agreement dated as of August 18, 2021, among the Company, the guarantors party
thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative
Agent (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2024).
19.1*
Policy on insider trading.
21.1*
Subsidiaries of the Company.
23.1*
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
24.1*
Power of Attorney (included on the signature page to this Annual Report on Form 10-K).
31.1*
Rule 13a 14(a) Certification of the Chief Executive Officer.
31.2*
Rule 13a 14(a) Certification of the Chief Financial Officer.
32.1**
Statement of the Chief Executive Officer under Section 906 of the Sarbanes Oxley Act of
2002 (18 U.S.C Section 1350).
32.2**
Statement of the Chief Financial Officer under Section 906 of the Sarbanes Oxley Act of
2002 (18 U.S.C Section 1350).
97
Incyte Corporation Policy for Recoupment of Erroneously Awarded Compensation
(incorporated by reference to Exhibit 97.1 to the Company’s Amended Annual Report on
Form 10-K/A for the year ended December 31, 2023 filed February 16, 2024).
101
XBRL Instance — the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document
101.INS*
XBRL Instance Document
101.SCH*
XBRL Taxonomy Extension Schema Document
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
XBRL Taxonomy Presentation Linkbase Document
101.DEF*
XBRL Taxonomy Definition Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
*
Filed herewith.
**
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986,
Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of
Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto
are deemed to accompany this Form 10-K and will not be deemed “filed” for purpose of Section 18 of
the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing
under the Securities Act or the Exchange Act, except to the extent that the registrant specifically
incorporates it by reference.
†
Confidential treatment has been granted with respect to certain portions of these agreements.
††
Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
130

#
Indicates management contract or compensatory plan or arrangement.
Copies of above exhibits not contained herein are available to any stockholder upon written request to:
Investor Relations, Incyte Corporation, 1801 Augustine Cut-Off, Wilmington, DE 19803.
(c)
Financial Statements and Schedules
Reference is made to Item 15(a)(2) above.
Item 16.
Form 10-K Summary.
Not applicable.
131

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INCYTE CORPORATION
By: /s/ HERVÉ HOPPENOT
Hervé Hoppenot
President and Chief Executive Officer
Date: February 10, 2025
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Hervé Hoppenot, Christiana Stamoulis, and Sheila Denton, and each of them, his
or her true and lawful attorneys-in-fact, each with full power of substitution, for him or her in any and all
capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying
and confirming all that each of said attorneys-in-fact or their substitute or substitutes may do or cause to be
done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
Signature
Title
Date
/s/ HERVÉ HOPPENOT
Hervé Hoppenot
President and Chief Executive Officer
(Principal Executive Officer) and Chairman of
the Board
February 10, 2025
/s/ CHRISTIANA STAMOULIS
Christiana Stamoulis
Executive Vice President and Chief Financial
Officer (Principal Financial Officer)
February 10, 2025
/s/ THOMAS TRAY
Thomas Tray
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 10, 2025
/s/ JULIAN C. BAKER
Julian C. Baker
Director
February 10, 2025
/s/ JEAN-JACQUES BIENAIMÉ
Jean-Jacques Bienaimé
Director
February 10, 2025
/s/ OTIS W. BRAWLEY
Otis W. Brawley
Director
February 10, 2025
/s/ PAUL J. CLANCY
Paul J. Clancy
Director
February 10, 2025
132

Signature
Title
Date
/s/ JACQUALYN A. FOUSE
Jacqualyn A. Fouse
Director
February 10, 2025
/s/ EDMUND P. HARRIGAN
Edmund P. Harrigan
Director
February 10, 2025
/s/ KATHERINE A. HIGH
Katherine A. High
Director
February 10, 2025
/s/ SUSANNE SCHAFFERT
Susanne Schaffert
Director
February 10, 2025
133

STOCK PRICE PERFORMANCE GRAPH
The following graph illustrates a comparison of the cumulative total stockholder return (change in
stock price plus reinvested dividends) of the Company’s Common Stock, the Total Return Index for the
Nasdaq U.S. Stocks (the “Nasdaq Composite Index”), and the Total Return Index for the Nasdaq
Biotechnology Stocks (the “Nasdaq Biotechnology Index”) assuming an investment of $100 in each on
December 31, 2019. The Company’s Common Stock is traded on The Nasdaq Global Select Market. The
graph is required by the Securities and Exchange Commission and is not intended to forecast or be indicative
of possible future performance of the Company’s Common Stock.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Incyte Corporation, the NASDAQ Composite Index
and the NASDAQ Biotechnology Index
$0
$50
$100
$150
$200
$250
12/19
12/20
12/21
12/22
12/23
12/24
Incyte Corporation
NASDAQ Composite
NASDAQ Biotechnology
*
$100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending
December 31.
*
The return is calculated using data sourced from Capital IQ.
134