INCB-106385

– Total FY'22 net product revenues grew 18% to $2.75 billion; total FY'22 revenues of $3.4 billion (+14% Y/Y) – Jakafi® (ruxolitinib) net revenues of $647 million (+9% Y/Y) in Q4'22 and $2.41 billion (+13%) in FY'22; Jakafi net revenues guidance range of $2.53 - $2.63 billion for FY 2023 – Opzelura™ (ruxolitinib) Cream net revenues of $61 million in Q4'22 and $129 million in FY'22, driven by strong demand in atopic dermatitis, a successful launch in vitiligo and broadening formulary access Conference Call and Webcast Scheduled Today at 8:00 a.m. ET WILMINGTON, Del.--(BUSINESS WIRE)-- Incyte Corporation (Nasdaq:INCY) today reports 2022 fourth quarter financial results, provides 2023 financial guidance and provides a status update on the Company’s clinical development portfolio. "We are entering 2023 with significant momentum, following a year of strong commercial performance and progress of several important mid-to-late stage programs across our pipeline. Opzelura has now become the market share leader among branded agents for new atopic dermatitis patients and the adoption in vitiligo has been strong,” said Hervé Hoppenot, Chief Executive Officer, Incyte. "We are well positioned for strong growth with our current product portfolio and we expect to deliver many important updates this year as we continue to execute on our growth and diversification strategy." Portfolio Updates MPNs and GVHD – key highlights LIMBER (Leadership In MPNs and GVHD BEyond Ruxolitinib) program: Important LIMBER updates were presented at the American Society of Hematology (ASH) Annual Meeting in December 2022: Parsaclisib + ruxolitinib in myelofibrosis (MF): Final results from the Phase 2 trial in MF patients with a suboptimal response to ruxolitinib demonstrated additional spleen volume response and symptom improvement with the addition of parsaclisib. Add-on parsaclisib was generally well-tolerated. A Phase 3 trial evaluating parsaclisib as an add-on to ruxolitinib in suboptimal responders is ongoing with results expected at the end of 2023. Zilurgisertib (ALK2) ± ruxolitinib in MF: Initial results from the Phase 1 study evaluating zilurgisertib as monotherapy or in combination with ruxolitinib in patients with anemia due to MF were presented, establishing proof of mechanism in improving anemia. Updated combination data with ruxolitinib are expected later this year. INCA33989 (mCALR) in MF and essential thrombocythemia (ET): A novel anti-mutant calreticulin (mCALR) monoclonal antibody was unveiled during the ASH plenary session. These data highlight Incyte's discovery capabilities and research progress in MF and ET; two patient populations where 25-35% of patients have a CALR mutation. INCA33989 is expected to enter the clinic later this year. Ruxolitinib extended release (XR) formulation: The New Drug Application (NDA) was accepted by the U.S. Food and Drug Administration (FDA) with a Prescription Drug User Fee Act (PDUFA) target action date of March 23, 2023. Axatilimab in chronic graft-versus-host disease (GVHD): In December, Syndax and Incyte announced that results from the Phase 1/2 trial of axatilimab in patients with recurrent or refractory chronic GVHD following two or more prior lines of therapy were published in the Journal of Clinical Oncology. The data demonstrate that treatment with axatilimab resulted in an overall response rate (ORR) by cycle 7, day 1 of 67% across all patients. AGAVE-201, a global pivotal Phase 2 trial of axatilimab in patients with cGVHD, is ongoing with results expected mid-2023. A Phase 1/2 combination trial of axatilimab with ruxolitinib in patients with newly-diagnosed cGVHD is expected to initiate later this year. Jakafi patent extension: Incyte was granted pediatric exclusivity which adds six months to the expiration for all ruxolitinib patents, thereby extending the patent expiry for Jakafi through December 2028. Indication and status Ruxolitinib XR (QD) (JAK1/JAK2) Myelofibrosis, polycythemia vera and GVHD: NDA under review Ruxolitinib + parsaclisib (JAK1/JAK2 + PI3Kδ) Myelofibrosis: Phase 3 (first-line therapy) (LIMBER-313) Myelofibrosis: Phase 3 (suboptimal responders to ruxolitinib) (LIMBER-304) Ruxolitinib + INCB57643 (JAK1/JAK2 + BET) Myelofibrosis: Phase 2 Ruxolitinib + zilurgisertib (JAK1/JAK2 + ALK2) Myelofibrosis: Phase 2 Ruxolitinib + CK08041 (JAK1/JAK2 + CB-Tregs) Myelofibrosis: Phase 1 (LIMBER-TREG108) Axatilimab (anti-CSF-1R)2 Chronic GVHD: Pivotal Phase 2 (third-line plus therapy) (AGAVE-201) Ruxolitinib + axatilimab2 (JAK1/JAK2 + anti-CSF-1R) Chronic GVHD (newly diagnosed): Phase 1/2 in preparation 1 Development collaboration with Cellenkos, Inc. 2 Clinical development of axatilimab in GVHD conducted in collaboration with Syndax Pharmaceuticals. Other Hematology/Oncology – key highlights Oral PD-L1: In November, data from Incyte's oral, small molecule PD-L1 program, including Phase 1 data evaluating the safety and tolerability of INCB99280 and INCB99318, were presented at the Society for Immunotherapy of Cancer (SITC) meeting. Both INCB99280 and INCB99318 demonstrated clinical activity with tumor shrinkage and were generally well-tolerated. Updated data are expected later in 2023. INCB99280 (Oral PD-L1) + adagrasib (KRASG12C): In November, Incyte and Mirati announced a clinical trial collaboration and supply agreement to investigate the combination of INCB99280 and adagrasib, a KRASG12C selective inhibitor, in patients with KRASG12C-mutated solid tumors. We expect to initiate a Phase 1/1b trial evaluating the combination this year. Indication and status Pemigatinib (Pemazyre®) (FGFR1/2/3) Myeloid/lymphoid neoplasms (MLN): approved by FDA Cholangiocarcinoma (CCA): Phase 3 (FIGHT-302) Glioblastoma: Phase 2 (FIGHT-209) Non-small cell lung cancer (NSCLC): Phase 2 (FIGHT-210) Tafasitamab (Monjuvi®/Minjuvi®)1 (CD19) Relapsed or refractory diffuse large B-cell lymphoma (DLBCL): Phase 2 (L-MIND); Phase 3 (B-MIND) First-line DLBCL: Phase 3 (frontMIND) Relapsed or refractory follicular lymphoma (FL) and relapsed or refractory marginal zone lymphoma (MZL): Phase 3 (inMIND) Parsaclisib (PI3Kδ) Warm autoimmune hemolytic anemia: Phase 3 (PATHWAY) Retifanlimab2 (PD-1) Squamous cell anal cancer (SCAC): Phase 3 (POD1UM-303) MSI-high endometrial cancer: Phase 2 (POD1UM-101, POD1UM-204) Merkel cell carcinoma: Phase 2 (POD1UM-201) Non-small cell lung cancer (NSCLC): Phase 3 (POD1UM-304) INCB99280 (Oral PD-L1) Solid tumors: Phase 1 KRASG12C-mutated solid tumors: Phase 1/1b in combination with adagrasib, in preparation INCB99318 (Oral PD-L1) Solid tumors: Phase 1 1 Development of tafasitamab in collaboration with MorphoSys. 2 Retifanlimab licensed from MacroGenics. Inflammation and Autoimmunity (IAI) – key highlights Dermatology Opzelura growth coming from both atopic dermatitis (AD) and vitiligo in the U.S.: More than 84,000 units of Opzelura were shipped in the fourth quarter of 2022 driven by strong growth in new patient starts across AD and vitiligo, as well as broadening formulary coverage. Refills grew across both indications, helping drive net product revenues to $61 million, a growth of 61% versus the third quarter. Additionally, in late 2022, Incyte received an issued patent and allowed claims directed to the treatments of atopic dermatitis and vitiligo, respectively, with expiration dates of 2040. Ruxolitinib cream in pediatric AD: A Phase 3 trial of ruxolitinib cream in pediatric AD is ongoing, with results expected by end of year. There are an estimated 2 million pediatric AD patients ages 2 to 11 in the U.S. Ruxolitinib cream in vitiligo in Europe: A marketing authorization application (MAA) is under review at the European Medicines Agency (EMA), with the Committee for Medicinal Products for Human Use (CHMP) opinion expected in the first half of 2023. Ruxolitinib cream in other indications: Incyte continues to expand the development of ruxolitinib cream into new indications to maximize the opportunity with Opzelura. In December, a Phase 2 trial evaluating ruxolitinib cream in mild to moderate hidradenitis suppurativa (HS) was initiated. Two Phase 2 trials in lichen planus (LP) and lichen sclerosus (LS) are ongoing. There are no topical therapies approved in hidradenitis suppurativa, lichen planus or lichen sclerosus. Povorcitinib in multiple indications: In December, two Phase 3 trials (STOP-HS1 and STOP-HS2) in moderate to severe HS were initiated. Additionally, two Phase 2 trials in vitiligo and prurigo nodularis are ongoing, with results expected in 2023. Indication and status Ruxolitinib cream (OpzeluraTM)1 (JAK1/JAK2) AD: Phase 3 pediatric study (TRuE-AD3) Vitiligo: Phase 3 (TRuE-V1, TRuE-V2); approved by FDA; MAA under review Lichen planus: Phase 2 Lichen sclerosus: Phase 2 Hidradenitis suppurativa: Phase 2 Ruxolitinib cream + UVB (JAK1/JAK2 + phototherapy) Vitiligo: Phase 2 Povorcitinib (JAK1) Hidradenitis suppurativa: Phase 2b; Phase 3 (STOP-HS1, STOP-HS2) Vitiligo: Phase 2 Prurigo nodularis: Phase 2 Auremolimab (anti-IL-15Rβ) Vitiligo: Phase 1 in preparation 1 Novartis’ rights to ruxolitinib outside of the United States under our Collaboration and License Agreement with Novartis do not include topical administration. Discovery and early development – key highlights Incyte’s portfolio of other earlier-stage clinical candidates is below. Modality Candidates Small molecules INCB81776 (AXL/MER), INCB106385 (A2A/A2B), INCB123667 (CDK2) Monoclonal antibodies INCAGN1876 (GITR)1, INCAGN2385 (LAG-3)1, INCAGN2390 (TIM-3)1, INCA00186 (CD73), INCA33989 (mCALR) Bi-specific antibodies INCA32459 (LAG-3xPD-1)2 1 Discovery collaboration with Agenus. 2 Development in collaboration with Merus Partnered – key highlights Indication and status Ruxolitinib1 (JAK1/JAK2) Acute and chronic GVHD: approved in Europe; J-NDA under review Baricitinib2 (JAK1/JAK2) AD: approved in Europe and Japan Severe AA: approved in the U.S., Europe and Japan Capmatinib3 (MET) NSCLC (with MET exon 14 skipping mutations): approved in the U.S., Europe and Japan 1 ruxolitinib licensed to Novartis ex-US for use in hematology and oncology excluding topical administration. 2 baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis; approved as Olumiant in EU and Japan for certain patients with atopic dermatitis. 3 capmatinib licensed to Novartis. 2022 Fourth Quarter and Year-end Financial Results The financial measures presented in this press release for the quarter and year ended December 31, 2022 and 2021 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry. As changes in exchange rates are an important factor in understanding period-to-period comparisons, Management believes the presentation of certain revenue results on a constant currency basis in addition to reported results helps improve investors’ ability to understand its operating results and evaluate its performance in comparison to prior periods. Constant currency information compares results between periods as if exchange rates had remained constant period over period. The Company calculates constant currency by calculating current year results using prior year foreign currency exchange rates and generally refers to such amounts calculated on a constant currency basis as excluding the impact of foreign exchange or being on a constant currency basis. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as the Company presents them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. Financial Highlights Financial Highlights (unaudited, in thousands, except per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 Total GAAP revenues $ 926,700 $ 862,853 $ 3,394,635 $ 2,986,267 Total GAAP operating income 70,093 110,734 579,440 585,777 Total Non-GAAP operating income 152,503 166,013 801,545 825,032 GAAP provision (benefit) for income taxes 52,154 (443,831 ) 188,456 (378,137 ) GAAP net income 28,461 563,851 340,660 948,581 Non-GAAP net income 139,661 22,565 622,676 611,978 GAAP basic EPS $ 0.13 $ 2.55 $ 1.53 $ 4.30 Non-GAAP basic EPS $ 0.63 $ 0.10 $ 2.80 $ 2.78 GAAP diluted EPS $ 0.13 $ 2.54 $ 1.52 $ 4.27 Non-GAAP diluted EPS $ 0.62 $ 0.10 $ 2.78 $ 2.76 Revenue Details Revenue Details (unaudited, in thousands) Three Months Ended December 31, % Change (as reported) % Change (constant currency)1 Twelve Months Ended December 31, % Change (as reported) % Change (constant currency)1 2022 2021 2022 2021 Net product revenues: Jakafi $ 647,493 $ 592,370 9% 9% $ 2,409,225 $ 2,134,508 13% 13% Iclusig 27,616 27,039 2% 8% 105,838 109,395 (3%) 8% Pemazyre 23,016 19,607 17% 37% 83,445 68,531 22% 26% Minjuvi 4,809 4,354 10% 54% 19,654 4,910 300% 350% Opzelura 61,281 4,668 NM NM 128,735 4,668 NM NM Total net product revenues 764,215 648,038 18% 19% 2,746,897 2,322,012 18% 19% Royalty revenues: Jakavi 91,189 95,696 (5%) 10% 331,575 337,991 (2%) 11% Olumiant 35,858 66,000 (46%) (31%) 134,547 220,875 (39%) (32%) Tabrecta 4,233 3,119 36% NA 15,411 10,389 48% NA Pemazyre 1,205 — NM NM 1,205 — NM NM Total royalty revenues 132,485 164,815 (20%) 482,738 569,255 (15%) Total net product and royalty revenues 896,700 812,853 10% 3,229,635 2,891,267 12% Milestone and contract revenues 30,000 50,000 (40%) (40%) 165,000 95,000 74% 74% Total GAAP revenues $ 926,700 $ 862,853 7% $ 3,394,635 $ 2,986,267 14% NM = not meaningful NA = not available 1.Percentage change in constant currency is calculated using 2021 foreign exchange rates to recalculate 2022 results. Product and Royalty Revenues Product and royalty revenues for the quarter and year ended December 31, 2022 increased over the prior year comparative periods as a result of net product revenues increasing 18% for both periods year-over-year, primarily driven by increases in Jakafi and Opzelura net product revenues. Jakafi net product revenues for the year ended December 31, 2022 increased 13% over the prior year comparative period, primarily driven by growth in patient demand across all indications. Jakavi and Olumiant royalties for the year were impacted by unfavorable changes in foreign currency exchange rates, while Olumiant royalties were also impacted by a decrease in net product sales of Olumiant for use as a treatment for COVID-19. Operating Expenses Operating Expense Summary (unaudited, in thousands) Three Months Ended December 31, % Change Twelve Months Ended December 31, % Change 2022 2021 2022 2021 GAAP cost of product revenues $ 59,163 $ 43,874 35 % $ 206,997 $ 150,991 37 % Non-GAAP cost of product revenues1 53,022 37,886 40 % 182,737 127,749 43 % GAAP research and development 501,360 472,827 6 % 1,585,936 1,458,179 9 % Non-GAAP research and development2 469,048 442,693 6 % 1,473,420 1,343,863 10 % GAAP selling, general and administrative 272,819 226,202 21 % 1,002,140 739,560 36 % Non-GAAP selling, general and administrative3 253,209 208,718 21 % 928,960 652,604 42 % GAAP loss on change in fair value of acquisition-related contingent consideration 24,347 1,673 1355 % 12,149 14,741 (18 %) Non-GAAP loss on change in fair value of acquisition-related contingent consideration4 — — — % — — — % GAAP (profit) and loss sharing under collaboration agreements (1,082 ) 7,543 (114 %) 7,973 37,019 (78 %) 1 Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation. 2 Non-GAAP research and development expenses exclude the cost of stock-based compensation. 3 Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation and legal settlements. 4 Non-GAAP loss on change in fair value of acquisition-related contingent consideration is null. Research and development expenses GAAP and Non-GAAP research and development expense for the quarter ended December 31, 2022 increased 6% and for the year ended December 31, 2022 increased 9% and 10%, respectively, compared to the same periods in 2021 primarily due to continued investment in our late stage development assets and the $70 million upfront payment made as part of the Villaris acquisition. Selling, general and administrative expenses GAAP and Non-GAAP selling, general and administrative expenses for the quarter ended December 31, 2022 increased 21% and for the year ended December 31, 2022 increased 36% and 42%, respectively, compared to the same periods in 2021, primarily due to expenses related to our dermatology commercial organization and activities to support the launch of Opzelura for the treatments of atopic dermatitis and vitiligo. Other Financial Information Operating income GAAP and Non-GAAP operating income for the year ended December 31, 2022 decreased 1% and 3%, respectively, compared to the same period in 2021, primarily due to expenses related to our dermatology commercial organization and activities to support the launch of Opzelura for the treatments of atopic dermatitis and vitiligo. Cash, cash equivalents and marketable securities position As of December 31, 2022 and 2021, cash, cash equivalents and marketable securities totaled $3.2 billion and $2.3 billion, respectively. 2023 Financial Guidance Guidance does not include revenue from any potential new product launches or the impact of any potential future strategic transactions. Incyte’s guidance is summarized below. Current Jakafi net product revenues $2.53 - $2.63 billion Other Hematology/Oncology net product revenues(1) $215 - $225 million GAAP Cost of product revenues 7 – 8% of net product revenues Non-GAAP Cost of product revenues(2) 6 – 7% of net product revenues GAAP Research and development expenses $1,610 - $1,650 million Non-GAAP Research and development expenses(3) $1,485 - $1,520 million GAAP Selling, general and administrative expenses $1,050 - $1,150 million Non-GAAP Selling, general and administrative expenses(3) $965 - $1,060 million 1 Pemazyre in the U.S., EU and Japan and Iclusig and Minjuvi in the EU. 2 Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the estimated cost of stock-based compensation. 3 Adjusted to exclude the estimated cost of stock-based compensation. Conference Call and Webcast Information Incyte will hold a conference call and webcast this morning at 8:00 a.m. ET. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13735569. If you are unable to participate, a replay of the conference call will be available for 90 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13735569. The conference call will also be webcast live and can be accessed at investor.incyte.com. About Incyte Incyte is a Wilmington, Delaware-based, global biopharmaceutical company focused on finding solutions for serious unmet medical needs through the discovery, development and commercialization of proprietary therapeutics. For additional information on Incyte, please visit Incyte.com and follow @Incyte. About Jakafi® (ruxolitinib) Jakafi is a first-in-class JAK1/JAK2 inhibitor approved by the U.S. FDA for treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older. Jakafi is also indicated for treatment of polycythemia vera (PV) in adults who have had an inadequate response to or are intolerant of hydroxyurea, in adults with intermediate or high-risk myelofibrosis (MF), including primary MF, post-polycythemia vera MF and post-essential thrombocythemia MF and for treatment of steroid-refractory acute GVHD in adult and pediatric patients 12 years and older. Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi® (ruxolitinib) outside the United States. Jakafi is a registered trademark of Incyte Corporation. Jakavi is a registered trademark of Novartis AG in countries outside the United States. About Opzelura™ (ruxolitinib) Cream Opzelura, a novel cream formulation of Incyte’s selective JAK1/JAK2 inhibitor ruxolitinib, is the first and only topical JAK inhibitor approved for use in the United States, indicated for the topical treatment of nonsegmental vitiligo in adult and pediatric patients 12 years of age and older and 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. Use of Opzelura in combination with therapeutic biologics, other JAK inhibitors, or potent immunosuppressants, such as azathioprine or cyclosporine, is not recommended. In October 2021, Incyte announced the validation of the European Marketing Authorization Application (MAA) for ruxolitinib cream as a potential treatment for adolescents and adults (age >12 years) with non-segmental vitiligo with facial involvement. Incyte has worldwide rights for the development and commercialization of ruxolitinib cream, marketed in the United States as Opzelura. Opzelura is a trademark of Incyte. About Monjuvi®/Minjuvi® (tafasitamab) Tafasitamab is a humanized Fc-modified cytolytic CD19 targeting immunotherapy. In 2010, MorphoSys licensed exclusive worldwide rights to develop and commercialize tafasitamab from Xencor, Inc. Tafasitamab incorporates an XmAb® engineered Fc domain, which mediates B-cell lysis through apoptosis and immune effector mechanism including Antibody-Dependent Cell-Mediated Cytotoxicity (ADCC) and Antibody-Dependent Cellular Phagocytosis (ADCP). In the United States, Monjuvi® (tafasitamab-cxix) is approved by the U.S. Food and Drug Administration in combination with lenalidomide for the treatment of adult patients with relapsed or refractory DLBCL not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). In Europe, Minjuvi® (tafasitamab) received conditional approval, in combination with lenalidomide, followed by Minjuvi monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplant (ASCT). Tafasitamab is being clinically investigated as a therapeutic option in B-cell malignancies in several ongoing combination trials. Minjuvi® and Monjuvi® are registered trademarks of MorphoSys AG. Tafasitamab is co-marketed by Incyte and MorphoSys under the brand name Monjuvi® in the U.S., and marketed by Incyte under the brand name Minjuvi® in Europe and Canada. XmAb® is a registered trademark of Xencor, Inc. About Pemazyre® (pemigatinib) Pemazyre is a kinase inhibitor indicated in the United States for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or other rearrangement as detected by an FDA-approved test*. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). Pemazyre is also the first targeted treatment approved for use in the United States for treatment of adults with relapsed or refractory myeloid/lymphoid neoplasms (MLNs) with FGFR1 rearrangement. In Japan, Pemazyre is approved for the treatment of patients with unresectable biliary tract cancer (BTC) with a fibroblast growth factor receptor 2 (FGFR2) fusion gene, worsening after cancer chemotherapy. In Europe, Pemazyre is approved for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed after at least one prior line of systemic therapy. Pemazyre is a potent, selective, oral inhibitor of FGFR isoforms 1, 2 and 3 which, in preclinical studies, has demonstrated selective pharmacologic activity against cancer cells with FGFR alterations. Pemazyre is marketed by Incyte in the United States, Europe and Japan. Pemazyre is a trademark of Incyte Corporation. * Pemazyre® (pemigatinib) [Package Insert]. Wilmington, DE: Incyte; 2020. About Iclusig® (ponatinib) tablets Ponatinib (Iclusig®) targets not only native BCR-ABL but also its isoforms that carry mutations that confer resistance to treatment, including the T315I mutation, which has been associated with resistance to other approved TKIs. In the EU, Iclusig is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase chronic myeloid leukemia (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 Philadelphia-chromosome positive acute lymphoblastic leukemia (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. Click here to view the Iclusig EU Summary of Medicinal Product Characteristics. Incyte has an exclusive license from Takeda Pharmaceuticals International AG to commercialize ponatinib in the European Union and 29 other countries, including Switzerland, UK, Norway, Turkey, Israel and Russia. Iclusig is marketed in the U.S. by Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited. Forward-Looking Statements Except for the historical information set forth herein, the matters set forth in this release contain predictions, estimates and other forward-looking statements, including any discussion of the following: Incyte’s potential for growth and diversification; Incyte’s financial guidance for 2023, including its expectations regarding sales of Jakafi; expectations with regard to Incyte’s NDA submission in the U.S. for once-daily ruxolitinib; expectations with respect to demand for and uptake of Opzelura, including expectations for broadening formulary coverage; the marketing authorization application for ruxolitinib cream in vitiligo under review at the European Medicines Agency; the potential for ruxolitinib cream to expand into other indications; our and our collaborators’ potential for receiving additional regulatory approvals within the next 1-2 years and the corresponding potential for launches of new products and/or indications; expectations regarding ongoing clinical trials and clinical trials to be initiated, including the LIMBER program, INCA33989 (mCALR) in MF and essential thrombocythemia, axatilimab in GVHD, Incyte’s oral PD-L1 program, a phase 3 trial of ruxolitinib cream in pediatric AD, phase 2 and 3 trials of povorcitinib in multiple indications and a phase 1 trial of auremolimab in vitiligo; and our expectations regarding 2023 newsflow items. These forward-looking statements are based on Incyte’s current expectations and subject to risks and uncertainties that may cause actual results to differ materially, including unanticipated developments in and risks related to: further research and development and the results of clinical trials possibly being unsuccessful or insufficient to meet applicable regulatory standards or warrant continued development; the ability to enroll sufficient numbers of subjects in clinical trials and the ability to enroll subjects in accordance with planned schedules; the effects of the COVID 19 pandemic and measures to address the pandemic on Incyte’s clinical trials, supply chain and other third-party providers, sales and marketing efforts and business, development and discovery operations; determinations made by the FDA, EMA, and other regulatory agencies; Incyte’s dependence on its relationships with and changes in the plans of its collaboration partners; the efficacy or safety of Incyte’s products and the products of Incyte’s collaboration partners; the acceptance of Incyte’s products and the products of Incyte’s collaboration partners in the marketplace; market competition; unexpected variations in the demand for Incyte’s products and the products of Incyte’s collaboration partners; the effects of announced or unexpected price regulation or limitations on reimbursement or coverage for Incyte’s products and the products of Incyte’s collaboration partners; sales, marketing, manufacturing and distribution requirements, including Incyte’s and its collaboration partners’ ability to successfully commercialize and build commercial infrastructure for newly approved products and any additional products that become approved; greater than expected expenses, including expenses relating to litigation or strategic activities; variations in foreign currency exchange rates; and other risks detailed in Incyte’s reports filed with the Securities and Exchange Commission, including its annual report. Incyte disclaims any intent or obligation to update these forward-looking statements. INCYTE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 GAAP GAAP Revenues: Product revenues, net $ 764,215 $ 648,038 $ 2,746,897 $ 2,322,012 Product royalty revenues 132,485 164,815 482,738 569,255 Milestone and contract revenues 30,000 50,000 165,000 95,000 Total revenues 926,700 862,853 3,394,635 2,986,267 Costs and expenses: Cost of product revenues (including definite-lived intangible amortization) 59,163 43,874 206,997 150,991 Research and development 501,360 472,827 1,585,936 1,458,179 Selling, general and administrative 272,819 226,202 1,002,140 739,560 Loss on change in fair value of acquisition-related contingent consideration 24,347 1,673 12,149 14,741 (Profit) and loss sharing under collaboration agreements (1,082 ) 7,543 7,973 37,019 Total costs and expenses 856,607 752,119 2,815,195 2,400,490 Income from operations 70,093 110,734 579,440 585,777 Other income (expense), net 26,637 5,716 39,932 10,647 Interest expense (667 ) (752 ) (2,666 ) (1,908 ) Unrealized (loss) gain on long term investments (15,448 ) 4,322 (87,590 ) (24,072 ) Income before provision (benefit) for income taxes 80,615 120,020 529,116 570,444 Provision (benefit) for income taxes 52,154 (443,831 ) 188,456 (378,137 ) Net income $ 28,461 $ 563,851 $ 340,660 $ 948,581 Net income per share: Basic $ 0.13 $ 2.55 $ 1.53 $ 4.30 Diluted $ 0.13 $ 2.54 $ 1.52 $ 4.27 Shares used in computing net income per share: Basic 222,615 220,984 222,004 220,428 Diluted 224,840 221,989 223,958 222,074 INCYTE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) December 31, 2022 December 31, 2021 ASSETS Cash, cash equivalents and marketable securities $ 3,238,965 $ 2,348,192 Accounts receivable 644,879 616,300 Property and equipment, net 739,310 723,920 Finance lease right-of-use assets, net 26,298 27,548 Inventory 120,959 56,938 Prepaid expenses and other assets 194,144 165,302 Long term investments 133,676 221,266 Other intangible assets, net 129,219 150,755 Goodwill 155,593 155,593 Deferred income tax asset 457,941 467,538 Total assets $ 5,840,984 $ 4,933,352 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable, accrued expenses and other liabilities $ 1,216,603 $ 885,081 Finance lease liabilities 33,262 34,267 Acquisition-related contingent consideration 221,000 244,000 Stockholders’ equity 4,370,119 3,770,004 Total liabilities and stockholders’ equity $ 5,840,984 $ 4,933,352 INCYTE CORPORATION RECONCILIATION OF GAAP NET INCOME TO SELECTED NON-GAAP ADJUSTED INFORMATION (unaudited, in thousands, except per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 GAAP Net Income $ 28,461 $ 563,851 $ 340,660 $ 948,581 Adjustments1: Non-cash stock compensation from equity awards (R&D)2 32,312 30,134 112,516 114,316 Non-cash stock compensation from equity awards (SG&A)2 19,610 17,484 73,180 66,984 Non-cash stock compensation from equity awards (COGS)2 757 604 2,724 1,706 Non-cash interest3 143 109 431 181 Changes in fair value of equity investments4 15,448 (4,322 ) 87,590 24,072 Amortization of acquired product rights5 5,384 5,384 21,536 21,536 Loss on change in fair value of contingent consideration6 24,347 1,673 12,149 14,741 Legal settlements7 — — — 19,972 Non-operating tax adjustments8 — (568,988 ) — (568,988 ) Tax effect of Non-GAAP pre-tax adjustments9 13,199 (23,364 ) (28,110 ) (31,123 ) Non-GAAP Net Income $ 139,661 $ 22,565 $ 622,676 $ 611,978 Non-GAAP net income per share: Basic $ 0.63 $ 0.10 $ 2.80 $ 2.78 Diluted $ 0.62 $ 0.10 $ 2.78 $ 2.76 Shares used in computing Non-GAAP net income per share: Basic 222,615 220,984 222,004 220,428 Diluted 224,840 221,989 223,958 222,074 1 Included within the Milestone and contract revenues line item in the Condensed Consolidated Statements of Operations (in thousands) for the three and twelve months ended December 31, 2022 are milestones of $30,000 and $165,000, respectively, earned from our collaborative partners, as compared to milestones of $50,000 and $95,000, respectively, for the three and twelve months ended December 31, 2021. Included within the Research and development expenses line item in the Condensed Consolidated Statements of Operations (in thousands) for the three and twelve months ended December 31, 2022 are upfront consideration and milestones of $70,000 and $125,950, respectively, related to our collaborative partners, as compared to upfront consideration and milestones of $128,152 and $148,985, respectively, for the three and twelve months ended December 31, 2021. 2 As included within the Cost of product revenues (including definite-lived intangible amortization) line item; the Research and development expenses line item; and the Selling, general and administrative expenses line item in the Condensed Consolidated Statements of Operations. 3 As included within the Interest expense line item in the Condensed Consolidated Statements of Operations. 4 As included within the Unrealized (loss) gain on long term investments line item in the Condensed Consolidated Statements of Operations. 5 As included within the Cost of product revenues (including definite-lived intangible amortization) line item in the Condensed Consolidated Statements of Operations. Acquired product rights of licensed intellectual property for Iclusig is amortized utilizing a straight-line method over the estimated useful life of 12.5 years. 6 As included within the Loss on change in fair value of acquisition-related contingent consideration line item in the Condensed Consolidated Statements of Operations. 7 As included within Selling, general and administrative expenses line item in the Condensed Consolidated Statements of Operations. 8 Included within the Provision (benefit) for income taxes line item in the Condensed Consolidated Statements of Operations is portions of the provision for income taxes that are not associated with normal, recurring operations. For the three and twelve months ended December 31, 2021 (in thousands), the company recorded a one-time non-cash benefit from income taxes of $568,988 related to the release of its valuation allowance on the majority of its U.S. deferred tax assets. 9 Income tax effects of Non-GAAP pre-tax adjustments are calculated using the applicable statutory tax rate for the jurisdictions in which the charges are incurred, while taking into consideration any valuation allowances against related deferred tax assets. The tax benefit for the three months ended December 31, 2022 includes a true up from the interim quarters related to valuation allowances against deferred tax assets associated with the loss on equity investments.

– Total net product revenues grew to $713 million (+20% Y/Y) as a result of strong Jakafi® (ruxolitinib) and Opzelura™ (ruxolitinib) cream net product revenues – Jakafi net product revenues of $620 million in Q3’22 (+13% Y/Y); raising the bottom end of full year guidance to a new range of $2.38 to $2.40 billion – Opzelura net product revenues of $38 million in Q3'22 driven by robust demand and broadening payer access; launch in vitiligo underway – Pipeline progresses with positive povorcitinib data in hidradenitis suppurativa at EADV, oral PD-L1 update at SITC and the pending acquisition of Villaris Therapeutics and auremolimab, a novel anti-IL-15Rβ mAb Conference Call and Webcast Scheduled Today at 8:00 a.m. EDT WILMINGTON, Del.--(BUSINESS WIRE)-- Incyte Corporation (Nasdaq:INCY) today reports 2022 third quarter financial results, and provides a status update on the Company’s clinical development portfolio. “Our total net product revenues grew 20% year over year led by strong Jakafi® (ruxolitinib) performance and an increasing contribution from Opzelura™ (ruxolitinib) cream. Over 62,000 units of Opzelura were shipped in the quarter with growth fueled by both atopic dermatitis and vitiligo. This strong demand, coupled with an expansion of reimbursement coverage, positions Opzelura to become a meaningful long-term growth driver for Incyte,” said Hervé Hoppenot, Chief Executive Officer, Incyte. “Additionally, our pipeline is progressing across Oncology and Dermatology, and we continue to execute on our strategy for growth and diversification with multiple updates on key programs expected over the next several months.” Portfolio Updates MPNs and GVHD – key highlights LIMBER (Leadership In MPNs and GVHD BEyond Ruxolitinib) program: Key LIMBER development programs, including combination trials of ruxolitinib with parsaclisib, INCB57643 (BET) and INCB00928 (ALK2), are ongoing. Additionally, the Prescription Drug User Fee Act (PDUFA) target action date for once-daily (QD) ruxolitinib extended release (XR) formulation is March 23, 2023. Axatilimab in chronic graft-versus-host disease (cGVHD): AGAVE-201, a global pivotal Phase 2 trial of axatilimab in patients with cGVHD is ongoing with results expected mid-2023. A Phase 1/2 combination trial of axatilimab with ruxolitinib in patients with newly-diagnosed cGVHD is in preparation and is expected to initiate in the first quarter of 2023. Indication and status QD ruxolitinib (JAK1/JAK2) Myelofibrosis, polycythemia vera and GVHD: NDA under review ruxolitinib + parsaclisib (JAK1/JAK2 + PI3Kδ) Myelofibrosis: Phase 3 (first-line therapy) (LIMBER-313) Myelofibrosis: Phase 3 (suboptimal responders to ruxolitinib) (LIMBER-304) ruxolitinib + INCB57643 (JAK1/JAK2 + BET) Myelofibrosis: Phase 2 ruxolitinib + INCB00928 (JAK1/JAK2 + ALK2) Myelofibrosis: Phase 2 ruxolitinib + CK08041 (JAK1/JAK2 + CB-Tregs) Myelofibrosis: PoC (LIMBER-TREG108) axatilimab (anti-CSF-1R)2 Chronic GVHD: Pivotal Phase 2 (third-line plus therapy) (AGAVE-201) 1 Development collaboration with Cellenkos, Inc. 2 Clinical development of axatilimab in GVHD conducted in collaboration with Syndax Pharmaceuticals. Other Hematology/Oncology – key highlights Pemigatinib (Pemazyre®): In August, Pemazyre was approved by the U.S. Food and Drug Administration (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 and this approval demonstrates Incyte's commitment to improving and expanding treatments for patients living with rare blood cancers. Phase 2 open-label studies evaluating pemigatinib in glioblastoma and relapsed or refractory advanced non-small cell lung cancer are ongoing. Indication and status pemigatinib (FGFR1/2/3) Myeloid/lymphoid neoplasms (MLN): approved by FDA Cholangiocarcinoma (CCA): Phase 3 (FIGHT-302) Glioblastoma: Phase 2 (FIGHT-209) Non-small cell lung cancer (NSCLC): Phase 2 (FIGHT-210) tafasitamab (CD19)1 Relapsed or refractory diffuse large B-cell lymphoma (DLBCL): Phase 2 (L-MIND); Phase 3 (B-MIND) First-line DLBCL: Phase 3 (frontMIND) Relapsed or refractory follicular lymphoma (FL) and relapsed or refractory marginal zone lymphoma (MZL): Phase 3 (inMIND) Relapsed or refractory B-cell malignancies: PoC with lenalidomide and plamotamab2 parsaclisib (PI3Kδ) Warm autoimmune hemolytic anemia: Phase 3 (PATHWAY) retifanlimab (PD-1)3 Squamous cell anal cancer (SCAC): Phase 3 (POD1UM-303) MSI-high endometrial cancer: Phase 2 (POD1UM-101, POD1UM-204) Merkel cell carcinoma: Phase 2 (POD1UM-201) NSCLC: Phase 3 (POD1UM-304) 1 Development of tafasitamab in collaboration with MorphoSys. 2 Clinical collaboration with MorphoSys and Xencor, Inc. to investigate the combination of tafasitamab plus lenalidomide in combination with Xencor’s CD20xCD3 XmAb bispecific antibody, plamotamab. 3 Retifanlimab licensed from MacroGenics. Inflammation and Autoimmunity (IAI) – key highlights Dermatology Opzelura growth coming from both atopic dermatitis (AD) and vitiligo in the U.S.: Over 62,000 units of Opzelura were shipped in the third quarter with positive physician and patient experiences continuing to fuel uptake in AD. The launch in vitiligo is progressing well, contributing to the growth in overall demand. An increasing number of plans are adding Opzelura to formularies, helping to drive net product revenues to $38 million, a growth of 130% versus prior quarter. Ruxolitinib cream in other indications: Incyte continues to expand the development of ruxolitinib cream into new indications as we seek to maximize the opportunity with Opzelura. Two Phase 2 trials evaluating ruxolitinib cream in lichen planus and lichen sclerosus are in preparation. Lichen planus is a recurrent inflammatory condition affecting the skin and mucosal surfaces and can result in itchy, purple bumps on the skin. Lichen sclerosus is a chronic inflammatory skin disease most commonly affecting women and can result in painful ulcers and intense itching. Povorcitinib (INCB54707): In August, results from the randomized Phase 2 trial evaluating povorcitinib in patients with hidradenitis suppurativa (HS) were presented at the European Academy of Dermatology and Venereology (EADV) 31st Congress. Based on the positive Phase 2 results, Incyte plans to initiate a Phase 3 study in HS by end of this year. Indication and status ruxolitinib cream1 (JAK1/JAK2) AD: Phase 3 pediatric study (TRuE-AD3) Vitiligo: Phase 3 (TRuE-V1, TRuE-V2); approved by FDA; MAA under review Lichen planus: Phase 2 in preparation Lichen sclerosus: Phase 2 in preparation ruxolitinib cream + UVB (JAK1/JAK2 + phototherapy) Vitiligo: Phase 2 povorcitinib (JAK1) Hidradenitis suppurativa: Phase 2b; Phase 3 in preparation Vitiligo: Phase 2 Prurigo nodularis: Phase 2 1 Novartis’ rights for ruxolitinib outside of the United States under our Collaboration and License Agreement with Novartis do not include topical administration. Acquisition of Villaris Therapeutics further complements dermatology portfolio: In October, Incyte announced an agreement to acquire Villaris Therapeutics, an asset-centric biopharmaceutical company focused on the development of novel antibody therapeutics for vitiligo. Its lead asset, auremolimab (VM6) is a novel, ultra-humanized anti-IL-15Rβ monoclonal antibody designed to target and deplete autoreactive resident memory T cells (TRM) that has demonstrated efficacy as a treatment for vitiligo in preclinical models. Incyte will receive exclusive global rights to develop and commercialize auremolimab for all uses, including in vitiligo and other autoimmune and inflammatory diseases. IND-enabling studies are currently underway, and clinical development for auremolimab is expected to begin in 2023. The agreement is subject to clearance by the U.S. antitrust authorities under the Hart-Scott-Rodino Act and will become effective as soon as this condition has been met. Discovery and early development – key highlights Incyte’s portfolio of other earlier-stage clinical candidates is included below. Modality Candidates Small molecules INCB81776 (AXL/MER), INCB99280 (PD-L1), INCB99318 (PD-L1), INCB106385 (A2A/A2B), INCB123667 (CDK2) Monoclonal antibodies1 INCAGN1876 (GITR), INCAGN2385 (LAG-3), INCAGN2390 (TIM-3), INCA00186 (CD73) Bi-specific antibodies INCA32459 (LAG-3xPD-1)2 1 Discovery collaboration with Agenus. 2 Development in collaboration with Merus Partnered – key highlights Indication and status ruxolitinib (JAK1/JAK2)1 Acute and chronic GVHD: approved in Europe; J-NDA under review baricitinib (JAK1/JAK2)2 AD: Phase 3 (BREEZE-AD); approved in Europe and Japan Severe AA: Phase 3 (BRAVE-AA1, BRAVE-AA2); approved in the U.S., Europe and Japan capmatinib (MET)3 NSCLC (with MET exon 14 skipping mutations): approved in the U.S., Europe and Japan 1 Jakavi (ruxolitinib) licensed to Novartis ex-US. 2 Worldwide rights to baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate-to-severe rheumatoid arthritis; approved as Olumiant in EU and Japan for certain patients with atopic dermatitis. 3 Worldwide rights to capmatinib licensed to Novartis. 2022 Third Quarter Financial Results The financial measures presented in this press release for the three and nine months ended September 30, 2022 and 2021 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry. As changes in exchange rates are an important factor in understanding period-to-period comparisons, Management believes the presentation of certain revenue results on a constant currency basis in addition to reported results helps improve investors’ ability to understand its operating results and evaluate its performance in comparison to prior periods. Constant currency information compares results between periods as if exchange rates had remained constant period over period. The Company calculates constant currency by calculating current year results using prior year foreign currency exchange rates and generally refers to such amounts calculated on a constant currency basis as excluding the impact of foreign exchange or being on a constant currency basis. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a constant currency basis, as the Company presents them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. Financial Highlights Financial Highlights (unaudited, in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Total GAAP revenues $ 823,303 $ 812,987 $ 2,467,935 $ 2,123,414 Total GAAP operating income 138,376 235,410 509,347 475,043 Total Non-GAAP operating income 167,271 293,148 649,042 659,019 GAAP net income 112,775 181,739 312,199 384,730 Non-GAAP net income 133,795 261,824 483,015 589,413 GAAP basic EPS $ 0.51 $ 0.82 $ 1.41 $ 1.75 Non-GAAP basic EPS $ 0.60 $ 1.19 $ 2.18 $ 2.68 GAAP diluted EPS $ 0.50 $ 0.82 $ 1.40 $ 1.73 Non-GAAP diluted EPS $ 0.60 $ 1.18 $ 2.16 $ 2.65 Revenue Details Revenue Details (unaudited, in thousands) Three Months Ended September 30, % Change (as reported) % Change (constant currency)1 Nine Months Ended September 30, % Change (as reported) % Change (constant currency)1 2022 2021 2022 2021 Net product revenues: Jakafi $ 619,595 $ 547,373 13 % 13 % $ 1,761,732 $ 1,542,138 14 % 14 % Iclusig 25,929 28,522 (9 %) 6 % 78,222 82,356 (5 %) 6 % Pemazyre 23,414 17,562 33 % 41 % 60,429 48,924 24 % 38 % Minjuvi 5,932 556 967 % 1,143 % 14,845 556 2,570 % 2,916 % Opzelura 38,140 — NM NM 67,454 — NM NM Total net product revenues 713,010 594,013 20 % 21 % 1,982,682 1,673,974 18 % 20 % Royalty revenues: Jakavi 85,808 94,655 (9 %) 6 % 240,386 242,295 (1 %) 11 % Olumiant 20,371 86,572 (76 %) (71 %) 98,689 154,875 (36 %) (33 %) Tabrecta 4,114 2,747 50 % NM 11,178 7,270 54 % NM Total royalty revenues 110,293 183,974 (40 %) 350,253 404,440 (13 %) Total net product and royalty revenues 823,303 777,987 6 % 2,332,935 2,078,414 12 % Milestone and contract revenues — 35,000 (100 %) (100 %) 135,000 45,000 200 % 200 % Total GAAP revenues $ 823,303 $ 812,987 1 % $ 2,467,935 $ 2,123,414 16 % NM = not meaningful 1.Percentage change in constant currency is calculated using 2021 foreign exchange rates to recalculate 2022 results. Product and Royalty Revenues Product and royalty revenues for the quarter ended September 30, 2022 increased over the prior year comparative period as a result of net product revenues increasing 20% year-over-year, primarily driven by increases in Jakafi and Opzelura net product revenues. Jakafi net product revenues for the quarter ended September 30, 2022 increased 13% over the prior year comparative period, primarily driven by growth in patient demand across all indications. Jakavi and Olumiant royalties for the quarter were impacted by unfavorable changes in foreign currency exchange rates, while Olumiant royalties were also impacted by a decrease in net product sales of Olumiant for use as a treatment for COVID-19 and a one-time deduction related to securing intellectual property rights. Operating Expenses Operating Expense Summary (unaudited, in thousands) Three Months Ended September 30, % Change Nine Months Ended September 30, % Change 2022 2021 2022 2021 GAAP cost of product revenues $ 54,584 $ 39,869 37 % $ 147,834 $ 107,117 38 % Non-GAAP cost of product revenues1 48,521 33,965 43 % 129,715 89,863 44 % GAAP research and development 384,007 334,945 15 % 1,084,576 985,352 10 % Non-GAAP research and development2 358,268 308,675 16 % 1,004,372 901,170 11 % GAAP selling, general and administrative 266,460 190,704 40 % 729,321 513,358 42 % Non-GAAP selling, general and administrative3 247,474 168,050 47 % 675,751 443,886 52 % GAAP (gain) loss on change in fair value of acquisition-related contingent consideration (21,893 ) 2,910 (852 %) (12,198 ) 13,068 (193 %) Non-GAAP (gain) loss on change in fair value of acquisition-related contingent consideration4 — — — % — — — % GAAP collaboration loss sharing 1,769 9,149 (81 %) 9,055 29,476 (69 %) 1 Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation. 2 Non-GAAP research and development expenses exclude the cost of stock-based compensation. 3 Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation and legal settlements. 4 Non-GAAP (gain) loss on change in fair value of acquisition-related contingent consideration is null. Research and development expenses GAAP and Non-GAAP research and development expense for the quarter ended September 30, 2022 increased 15% and 16%, respectively, compared to the same period in 2021 primarily due to continued investment in our late stage development assets and certain upfront and milestone payments. Excluding the $33.5 million of upfront and milestone payments for the quarter ended September 30, 2022, GAAP and Non-GAAP research and development expense increased approximately 6% and 7%, respectively, compared to the same period in 2021. Selling, general and administrative expenses GAAP and Non-GAAP selling, general and administrative expenses for the quarter ended September 30, 2022 increased 40% and 47%, respectively, compared to the same period in 2021, primarily due to expenses related to our dermatology commercial organization and activities to support the launch of Opzelura for the treatments of atopic dermatitis and vitiligo. Other Financial Information Operating income GAAP operating income for the quarter ended September 30, 2022 decreased compared to the same period in 2021, primarily due to an increase in operating expenses partially offset by growth in net product revenues. Cash, cash equivalents and marketable securities position As of September 30, 2022 and December 31, 2021, cash, cash equivalents and marketable securities totaled $3.0 billion and $2.3 billion, respectively. 2022 Financial Guidance Incyte is tightening its full year 2022 guidance for Jakafi net product revenues to reflect strong performance of Jakafi and is revising the guidance range for other Hematology/Oncology net product revenues to reflect unfavorable changes in foreign currency exchange rates. In addition, the Company is reaffirming its research and development guidance, which now also includes the upfront payment to Villaris, anticipated in the fourth quarter, and its selling, general and administrative expense guidance. Guidance does not include revenue from any potential new product launches or the impact of any potential future strategic transactions. Incyte’s updated guidance is summarized below. Current Previous Jakafi net product revenues $2.38 - $2.40 billion $2.36 - $2.40 billion Other Hematology/Oncology net product revenues(1) $200 - $210 million $210 - $240 million GAAP Cost of product revenues 6 – 7% of net product revenues Unchanged Non-GAAP Cost of product revenues(2) 5 – 6% of net product revenues Unchanged GAAP Research and development expenses $1,550 - $1,590 million Unchanged Non-GAAP Research and development expenses(3) $1,420 - $1,455 million Unchanged GAAP Selling, general and administrative expenses $950 - $1,000 million Unchanged Non-GAAP Selling, general and administrative expenses(3) $880 - $925 million Unchanged 1Pemazyre in the U.S., EU and Japan and Iclusig and Minjuvi in the EU. 2Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the estimated cost of stock-based compensation. 3 Adjusted to exclude the estimated cost of stock-based compensation. Conference Call and Webcast Information Incyte will hold a conference call and webcast this morning at 8:00 a.m. ET. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13733379. If you are unable to participate, a replay of the conference call will be available for 90 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13733379. The conference call will also be webcast live and can be accessed at investor.incyte.com. About Incyte Incyte is a Wilmington, Delaware-based, global biopharmaceutical company focused on finding solutions for serious unmet medical needs through the discovery, development and commercialization of proprietary therapeutics. For additional information on Incyte, please visit Incyte.com and follow @Incyte. About Jakafi® (ruxolitinib) Jakafi is a first-in-class JAK1/JAK2 inhibitor approved by the U.S. FDA for treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older. Jakafi is also indicated for treatment of polycythemia vera (PV) in adults who have had an inadequate response to or are intolerant of hydroxyurea, in adults with intermediate or high-risk myelofibrosis (MF), including primary MF, post-polycythemia vera MF and post-essential thrombocythemia MF and for treatment of steroid-refractory acute GVHD in adult and pediatric patients 12 years and older. Jakafi is marketed by Incyte in the United States and by Novartis as Jakavi® (ruxolitinib) outside the United States. Jakafi is a registered trademark of Incyte Corporation. Jakavi is a registered trademark of Novartis AG in countries outside the United States. About Opzelura™ (ruxolitinib) Cream Opzelura, a novel cream formulation of Incyte’s selective JAK1/JAK2 inhibitor ruxolitinib, is the first and only topical JAK inhibitor approved for use in the United States, indicated for the topical treatment of nonsegmental vitiligo in adult and pediatric patients 12 years of age and older and 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. Use of Opzelura in combination with therapeutic biologics, other JAK inhibitors, or potent immunosuppressants, such as azathioprine or cyclosporine, is not recommended. In October 2021, Incyte announced the validation of the European Marketing Authorization Application (MAA) for ruxolitinib cream as a potential treatment for adolescents and adults (age >12 years) with non-segmental vitiligo with facial involvement. Incyte has worldwide rights for the development and commercialization of ruxolitinib cream, marketed in the United States as Opzelura. Opzelura is a trademark of Incyte. About Monjuvi®/Minjuvi® (tafasitamab) Tafasitamab is a humanized Fc-modified cytolytic CD19 targeting immunotherapy. In 2010, MorphoSys licensed exclusive worldwide rights to develop and commercialize tafasitamab from Xencor, Inc. Tafasitamab incorporates an XmAb® engineered Fc domain, which mediates B-cell lysis through apoptosis and immune effector mechanism including Antibody-Dependent Cell-Mediated Cytotoxicity (ADCC) and Antibody-Dependent Cellular Phagocytosis (ADCP). In the United States, Monjuvi® (tafasitamab-cxix) is approved by the U.S. Food and Drug Administration in combination with lenalidomide for the treatment of adult patients with relapsed or refractory DLBCL not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). In Europe, Minjuvi® (tafasitamab) received conditional approval, in combination with lenalidomide, followed by Minjuvi monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplant (ASCT). Tafasitamab is being clinically investigated as a therapeutic option in B-cell malignancies in several ongoing combination trials. Minjuvi® and Monjuvi® are registered trademarks of MorphoSys AG. Tafasitamab is co-marketed by Incyte and MorphoSys under the brand name Monjuvi® in the U.S., and marketed by Incyte under the brand name Minjuvi® in Europe and Canada. XmAb® is a registered trademark of Xencor, Inc. About Pemazyre® (pemigatinib) Pemazyre is a kinase inhibitor indicated in the United States for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or other rearrangement as detected by an FDA-approved test*. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). Pemazyre is also the first targeted treatment approved for use in the United States for treatment of adults with relapsed or refractory myeloid/lymphoid neoplasms (MLNs) with FGFR1 rearrangement. In Japan, Pemazyre is approved for the treatment of patients with unresectable biliary tract cancer (BTC) with a fibroblast growth factor receptor 2 (FGFR2) fusion gene, worsening after cancer chemotherapy. In Europe, Pemazyre is approved for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed after at least one prior line of systemic therapy. Pemazyre is a potent, selective, oral inhibitor of FGFR isoforms 1, 2 and 3 which, in preclinical studies, has demonstrated selective pharmacologic activity against cancer cells with FGFR alterations. Pemazyre is marketed by Incyte in the United States, Europe and Japan. Pemazyre is a trademark of Incyte Corporation. * Pemazyre® (pemigatinib) [Package Insert]. Wilmington, DE: Incyte; 2020. About Iclusig® (ponatinib) tablets Ponatinib (Iclusig®) targets not only native BCR-ABL but also its isoforms that carry mutations that confer resistance to treatment, including the T315I mutation, which has been associated with resistance to other approved TKIs. In the EU, Iclusig is approved for the treatment of adult patients with chronic phase, accelerated phase or blast phase chronic myeloid leukemia (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 Philadelphia-chromosome positive acute lymphoblastic leukemia (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. Click here to view the Iclusig EU Summary of Medicinal Product Characteristics. Incyte has an exclusive license from Takeda Pharmaceuticals International AG to commercialize ponatinib in the European Union and 29 other countries, including Switzerland, UK, Norway, Turkey, Israel and Russia. Iclusig is marketed in the U.S. by Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited. Forward-Looking Statements Except for the historical information set forth herein, the matters set forth in this release contain predictions, estimates and other forward-looking statements, including any discussion of the following: Incyte’s potential for long-term growth and diversification; Incyte’s financial guidance for 2022, including its expectations regarding sales of Jakafi; expectations with respect to demand for and uptake of Opzelura, including the Company’s ongoing discussions with payers; expectations with regard to the NDA submission for once-daily ruxolitinib; our and our collaborators’ potential for receiving additional regulatory approvals within the next 1-2 years and the corresponding potential for launches of new products and/or indications; expectations regarding ongoing clinical trials and clinical trials to be initiated, including the LIMBER program, trials of axatilimab in cGVHD, a phase 3 trial of povorcitinib in hidradenitis suppurativa and phase 2 trials of ruxolitinib cream in lichen planus and lichen sclerosus; expectations regarding our pending acquisition of Villaris Therapeutics and auremolimab; and our expectations regarding 2022 newsflow items. These forward-looking statements are based on the Company’s current expectations and subject to risks and uncertainties that may cause actual results to differ materially, including unanticipated developments in and risks related to: further research and development and the results of clinical trials possibly being unsuccessful or insufficient to meet applicable regulatory standards or warrant continued development; the ability to enroll sufficient numbers of subjects in clinical trials and the ability to enroll subjects in accordance with planned schedules; the effects of the COVID 19 pandemic and measures to address the pandemic on the Company’s clinical trials, supply chain and other third-party providers, sales and marketing efforts and business, development and discovery operations; determinations made by the FDA, EMA, and other regulatory agencies; the Company’s dependence on its relationships with and changes in the plans of its collaboration partners; the efficacy or safety of the Company’s products and the products of the Company’s collaboration partners; the acceptance of the Company’s products and the products of the Company’s collaboration partners in the marketplace; market competition; unexpected variations in the demand for the Company’s products and the products of the Company’s collaboration partners; the effects of announced or unexpected price regulation or limitations on reimbursement or coverage for the Company’s products and the products of the Company’s collaboration partners; sales, marketing, manufacturing and distribution requirements, including the Company’s and its collaboration partners’ ability to successfully commercialize and build commercial infrastructure for newly approved products and any additional products that become approved; greater than expected expenses, including expenses relating to litigation or strategic activities; variations in foreign currency exchange rates; and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including its annual report and the quarterly report on Form 10-Q for the quarter ended September 30, 2022. Incyte disclaims any intent or obligation to update these forward-looking statements. INCYTE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 GAAP GAAP Revenues: Product revenues, net $ 713,010 $ 594,013 $ 1,982,682 $ 1,673,974 Product royalty revenues 110,293 183,974 350,253 404,440 Milestone and contract revenues — 35,000 135,000 45,000 Total revenues 823,303 812,987 2,467,935 2,123,414 Costs and expenses: Cost of product revenues (including definite-lived intangible amortization) 54,584 39,869 147,834 107,117 Research and development 384,007 334,945 1,084,576 985,352 Selling, general and administrative 266,460 190,704 729,321 513,358 (Gain) loss on change in fair value of acquisition- related contingent consideration (21,893 ) 2,910 (12,198 ) 13,068 Collaboration loss sharing 1,769 9,149 9,055 29,476 Total costs and expenses 684,927 577,577 1,958,588 1,648,371 Income from operations 138,376 235,410 509,347 475,043 Other income (expense), net 11,513 1,948 13,295 4,931 Interest expense (641 ) (439 ) (1,999 ) (1,156 ) Unrealized loss on long term investments (660 ) (27,450 ) (72,142 ) (28,394 ) Income before provision for income taxes 148,588 209,469 448,501 450,424 Provision for income taxes 35,813 27,730 136,302 65,694 Net income $ 112,775 $ 181,739 $ 312,199 $ 384,730 Net income per share: Basic $ 0.51 $ 0.82 $ 1.41 $ 1.75 Diluted $ 0.50 $ 0.82 $ 1.40 $ 1.73 Shares used in computing net income per share: Basic 222,415 220,845 221,801 220,243 Diluted 224,175 222,248 223,626 222,113 INCYTE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) September 30, 2022 December 31, 2021 ASSETS Cash, cash equivalents and marketable securities $ 2,977,122 $ 2,348,192 Accounts receivable 618,188 616,300 Property and equipment, net 715,733 723,920 Finance lease right-of-use assets, net 26,679 27,548 Inventory 101,133 56,938 Prepaid expenses and other assets 205,199 165,302 Long term investments 149,124 221,266 Other intangible assets, net 134,603 150,755 Goodwill 155,593 155,593 Deferred income tax asset 426,840 467,538 Total assets $ 5,510,214 $ 4,933,352 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable, accrued expenses and other liabilities $ 1,043,975 $ 885,081 Finance lease liabilities 33,588 34,267 Acquisition-related contingent consideration 206,000 244,000 Stockholders’ equity 4,226,651 3,770,004 Total liabilities and stockholders’ equity $ 5,510,214 $ 4,933,352 INCYTE CORPORATION RECONCILIATION OF GAAP NET INCOME TO SELECTED NON-GAAP ADJUSTED INFORMATION (unaudited, in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 GAAP Net Income $ 112,775 $ 181,739 $ 312,199 $ 384,730 Adjustments1: Non-cash stock compensation from equity awards (R&D)2 25,739 26,270 80,204 84,182 Non-cash stock compensation from equity awards (SG&A)2 18,986 15,904 53,570 49,500 Non-cash stock compensation from equity awards (COGS)2 679 520 1,967 1,102 Non-cash interest3 72 72 288 72 Changes in fair value of equity investments4 660 27,450 72,142 28,394 Amortization of acquired product rights5 5,384 5,384 16,152 16,152 (Gain) loss on change in fair value of contingent consideration6 (21,893 ) 2,910 (12,198 ) 13,068 Legal settlements7 — 6,750 — 19,972 Tax effect of Non-GAAP pre-tax adjustments8 (8,607 ) (5,175 ) (41,309 ) (7,759 ) Non-GAAP Net Income $ 133,795 $ 261,824 $ 483,015 $ 589,413 Non-GAAP net income per share: Basic $ 0.60 $ 1.19 $ 2.18 $ 2.68 Diluted $ 0.60 $ 1.18 $ 2.16 $ 2.65 Shares used in computing Non-GAAP net income per share: Basic 222,415 220,845 221,801 220,243 Diluted 224,175 222,248 223,626 222,113 1 Included within the Milestone and contract revenues line item in the Condensed Consolidated Statements of Operations (in thousands) for the three and nine months ended September 30, 2022 are milestones of $0 and $135,000, respectively, earned from our collaborative partners, as compared to milestones of $35,000 and $45,000, respectively, for the three and nine months ended September 30, 2021. Included within the Research and development expenses line item in the Condensed Consolidated Statements of Operations (in thousands) for the three and nine months ended September 30, 2022 are upfront consideration and milestones of $33,450 and $55,950, respectively, related to our collaborative partners, as compared to upfront consideration and milestones of $4,333 and $20,833, respectively, for the three and nine months ended September 30, 2021. 2 As included within the Cost of product revenues (including definite-lived intangible amortization) line item; the Research and development expenses line item; and the Selling, general and administrative expenses line item in the Condensed Consolidated Statements of Operations. 3 As included within the Interest expense line item in the Condensed Consolidated Statements of Operations. 4 As included within the Unrealized loss on long term investments line item in the Condensed Consolidated Statements of Operations. 5 As included within the Cost of product revenues (including definite-lived intangible amortization) line item in the Condensed Consolidated Statements of Operations. Acquired product rights of licensed intellectual property for Iclusig is amortized utilizing a straight-line method over the estimated useful life of 12.5 years. 6 As included within the (Gain) loss on change in fair value of acquisition-related contingent consideration line item in the Condensed Consolidated Statements of Operations. 7 As included within Selling, general and administrative expenses line item in the Condensed Consolidated Statements of Operations. 8 Income tax effects of Non-GAAP pre-tax adjustments are calculated using the applicable statutory tax rate for the jurisdictions in which the charges are incurred, while taking into consideration any valuation allowances against related deferred tax assets.