Title: Friday POW! — Incyte (INCY): Pick of the Week Show: Haymaker (Substack, paid post) Guest: David Hay / The Haymaker Team Date: 2026-09-04 URL: https://haymaker.substack.com/p/friday-pow-3cb Length: written post — no timestamps Note: Written Substack post (no video). Body text captured verbatim from the paid post via logged-in session. The post's two Bloomberg chart images are transcribed below as [Chart image — …] blocks (originals not reproduced). Standard Haymaker legal disclosures retained in abbreviated form at the end. Byline date on the page: SEP 04, 2026.
Friday POW! Pick of the Week
HAYMAKER SEP 04, 2026 ∙ PAID
(All data as of this writing on 9/2)
Acronym Legend
PDAC — Pancreatic Ductal Adenocarcinoma
GemNabP — Gemcitabine plus nab-Paclitaxel
mFOLFIRINOX — modified Folinic acid, Fluorouracil, Irinotecan, Oxaliplatin
H&O — Hematology and Oncology
NDA — New Drug Application
ESMO — European Society for Medical Oncology
JAK — Janus Kinase (to "dial down" an excessive immune system response)
KRAS G12D — Kirsten Rat Sarcoma viral proto-oncogene, Glycine-to-Aspartate substitution at 12
Key Highlights
Stock at ~$129; 52-week range $83.07–$132.60; market cap ~$26.4B; up 23% YTD, up 49% over 12 months
Q2 2026 (July 28): revenue $1.67B, +38% YoY; net sales $1.49B, +40%; EPS $3.09 vs. $1.84 consensus (68% beat, includes $246M non-cash Medicaid settlement; operational beat vs. $1.99 adj. consensus ~55%)
Q2 product breakdown: Jakafi $817M (+7% YoY); Opzelura $450M; H&O portfolio $204M+ (Niktimvo, Monjuvi/Minjuvi, Zynyz)
FY2026 guidance raised: net sales $5.13–$5.26B; EPS consensus ~$7.50, +106% YoY estimate
Pipeline: 10 Phase 3 studies; four anticipated approvals next 12 months; Povorcitinib positive Phase 3 vitiligo; NDA accepted for hidradenitis suppurativa
$4.0B+ net cash; no meaningful debt; balance sheet supports pipeline and M&A
Analyst consensus Buy; 28 analysts; average target $127.13; Leerink $155 Outperform; Canaccord $152 Buy; H.C. Wainwright $150 Buy; Mizuho $137 Outperform; Piper Sandler $130 Overweight; JPMorgan $120 Neutral; Bernstein $104 Market Perform
Next earnings October 27, 2026; ESMO data October; no dividend; beta ~0.41
INCY is a biopharmaceutical company focused on hematology, oncology, inflammation, and autoimmunity, headquartered in Wilmington, Delaware. It is best known for Jakafi, the first FDA-approved treatment for myelofibrosis and the dominant oral JAK inhibitor at commercial scale. The company also has Opzelura, a ruxolitinib cream approved for atopic dermatitis and vitiligo that has become one of the fastest-growing dermatology products in the U.S.
Incyte's stock is trading at approximately $129, up 23% year-to-date and 49% over the trailing 12 months, with a market cap of approximately $26.4 billion. It posted Q2 2026 EPS of $3.09 against a consensus of $1.84 (a 68% beat) that included a $246 million non-cash Medicaid rebate settlement. Stripping that out, the operational beat was approximately 55% against the $1.99 adjusted consensus, on revenue of $1.67 billion growing 38% year-over-year, while raising full-year net sales guidance to $5.13 to $5.26 billion. The case for owning it from here is about what comes next, and specifically what is being said about the KRAS G12D data.
The bull case is a company in the midst of a commercial and pipeline inflection that the market has partially recognized but we don't think has fully priced. Jakafi is the cash cow, while Opzelura is the growth driver that has consistently outrun consensus estimates. Four anticipated product approvals in the next 12 months are what we see as the near-term catalysts.
Ten Phase 3 studies underway represent the pipeline depth that simultaneously provides optionality across multiple disease areas. And early data from the KRAS G12D inhibitor program in first-line pancreatic ductal adenocarcinoma (response rates of 62.5% to 75% at interim data in heavily pre-treated patients) suggests this may be less of a lottery ticket and more of a practice-changing drug. Obviously, it would also be great for humanity if pancreatic cancer is no longer the almost absolute death sentence it is now.
Jakafi and Opzelura: The Commercial Foundation
Jakafi remains the dominant treatment for myelofibrosis, polycythemia vera, and graft-versus-host disease. Q2 net sales of $817 million put the drug on pace for approximately $3.2 billion annually, shared with Novartis outside the U.S.
Note: U.S. compound patent protection runs through 2028, with formulation patents potentially extending exclusivity to 2033.
The patent cliff is real and is the primary structural bear case (which we address in the risks section), but Incyte has spent five years building the commercial depth to manage this transition rather than absorb a cliff.
Opzelura at $450 million in Q2 net sales is evidence that this shift is already underway. The drug was approved for atopic dermatitis in 2021 and vitiligo in 2022, the first and still the only FDA-approved treatment that can restore skin color in vitiligo patients, and has consistently exceeded the most optimistic consensus estimates. The label expansion pipeline makes Opzelura increasingly important to the long-term revenue trajectory, and it is far down the trial pathways for treating other types of skin disease. Each approved indication adds a new patient population at minimal marginal cost.
KRAS G12D Data Looking Increasingly Legitimate
Pancreatic ductal adenocarcinoma kills more reliably than almost any other major cancer. It has five-year survival below 12% for all stages, below 3% for metastatic disease, with KRAS mutations in approximately 90% of cases that were considered undruggable for three decades. KRAS G12C inhibitors in lung cancer proved the mechanism could work in humans; KRAS G12D — present in approximately 40% of pancreatic cancers — is the next frontier.
What the DAWN-303 EU registry data shows changes the framing of this program in a big way. Incyte's therapy combined with GemNabP produced a 62.5% response rate and a 95.8% disease control rate. When paired with mFOLFIRINOX: 75% response rate, 100% disease control rate. First-line chemotherapy alone typically produces 20% to 30% response rates in pancreatic cancer.
62% to 75% responses against chemotherapy looks like a signal that the drug may be fundamentally changing the treatment landscape for a disease that has been devastatingly untreatable.
RBC stated the European Society for Medical Oncology (ESMO) update is "likely to be very competitive" and the oral presentation at this event in October will confirm or challenge this reading. If the data holds, the commercial opportunity and the acquisition value of this program are both sizable. If it does not, Incyte absorbs it from a diversified multi-franchise platform rather than a binary single-asset position.
Valuation
At $129 and approximately $26.4 billion market cap, Incyte trades around 16.5x the 2026 EPS consensus of approximately $7.50. Enterprise value of approximately $22.4 billion (market cap minus $4 billion net cash) against full-year 2026 net sales guidance of $5.2 billion at the midpoint implies approximately 4.3x EV/revenue, which is modest for a business growing net sales 40% year-over-year. The consensus target of $127.13 is essentially at the current price, which suggests the consensus model is a Jakafi-plus-Opzelura base case with limited KRAS credit. The bull case targets (Leerink $155, Canaccord $152, H.C. Wainwright $150) are the analysts adding in KRAS optionality.
At current prices, the market is paying almost nothing for a program that is showing 62% to 75% response rates in one of the most lethal cancers in existence.
INCY's headline ~4.4x price-to-sales ratio looks only moderately cheap, but its ~$4.5B cash pile reduces the more meaningful EV/sales multiple to ~3.6x. For a highly profitable biopharma growing underlying product sales at double digits with a deep Phase III pipeline, we view that as pretty attractively valued, and the discount largely reflects the fear that its newer products won't replace its legacy ones.
[Chart image — Bloomberg, "Five-year Price/Sales and P/E Ratios," INCY US Equity, 2021 through 2026. Two series: Price to Sales Ratio (LTM), last 4.4233 (right axis, 2.50–6.50), and PE Ratio (1GBF Est), last 17.7901 (left axis, 9.00–23.00). Both peak in late 2021/early 2022 (P/S ~6.2, P/E ~22), fall through 2022–2023, bottom in mid-2024 (P/S ~2.6, P/E ~9.5), and rally through 2025–2026 back to roughly 4.4x sales and ~17.8x earnings — i.e. the current multiples are mid-range for the five-year window, well below the 2021 peak.]
Technical Profile
Frankly, we are a bit late to this one from a timely breakout signal standpoint. As you can see below, that was generated late last year when it initially broke into the $90s. But the appreciation since then hasn't been excessive and, encouragingly, it's been earnings-driven per the above profits data. It's also somewhat stretched over the 200-day moving average. Consequently, a retracement back to $110 or so would not be at all surprising. More conservative investors might want to hold off to see if that happens.
[Chart image — Bloomberg, "Five-year Price Chart (prior overhead resistance displayed)," INCY US Equity daily line chart 09/04/2021–09/03/2026 with moving averages and a volume panel. Last price 127.15; moving-average readings printed on the right axis at 120.41, 109.57 and 104.60 (the 200-day the lowest). A horizontal white line marks prior overhead resistance at roughly $85 — the 2021–2022 highs — which capped the stock through 2022–2024 and was broken to the upside in late 2025, after which price ran from the low-$80s to the high-$120s. Volume panel last reading 97,052.]
Let's Argue the Other Side
The bear case for the stock, which we alluded to earlier, is primarily the Jakafi patent cliff. U.S. compound patent protection expires in 2028; generic competition could begin as early as that date in a scenario where formulation patents do not extend exclusivity. Jakafi at $817 million quarterly is approximately 55% of current net sales, and a meaningful portion of that revenue is at risk. The bear case is that Opzelura and the new product launches grow too slowly to offset genericization. The KRAS data, while striking, comes from a small interim cut with maturity limitations (basically, constraints based on very young and very old study participants).
The 62% to 75% response rates are extraordinary, but the registrational trial is randomized and placebo-controlled (Phase 1 combination data has misled markets before). Durability and long-term safety data are also not yet available. And the stock at $129 with 49% 12-month appreciation is not a margin-of-safety purchase. A KRAS ESMO miss or any regulatory stumble on the four anticipated approvals hits a stock priced for continued execution with limited consensus upside buffer.
We are aware of these risks and think that at 4.3x EV/revenue on 40% sales growth, $4 billion in net cash, and KRAS data that multiple analysts have described as potentially game-changing, the current price embeds almost no credit for the upside scenario that the DAWN-303 registry data suggest may already be in hand.
The Bottom Line
Adding Incyte to the Haymaker portfolio is the continuation of the healthcare sleeve we started building with the inclusions of MDT and DGX in early June, as well as GILD a month ago. We believe healthcare and biotech are entering (or are in) a bullish recovery mode that will continue for the foreseeable future.
Additionally, this stock provides exposure to the largest independent JAK inhibitor franchise in the world at $817 million per quarter, the fastest-growing dermatology drug in the U.S. at $450 million per quarter (with label expansions in four additional indications pending), and drugs that are in 10 Phase 3 studies. As a kicker, the company has a KRAS G12D inhibitor showing extraordinary response rates in first-line pancreatic cancer.
We recommend a Buy on INCY
The Haymaker Team
[IMPORTANT DISCLOSURES — abbreviated. Informational and educational purposes only; not a solicitation or an offer to buy any security. Past performance is no guarantee of future results. David Hay is a passive owner of Evergreen Gavekal, a registered investment adviser, with no involvement in its day-to-day operations, research or investment management as of 03/31/2025; the views here are his personal views and may differ materially from Evergreen's strategies. Investors should seek financial advice regarding the appropriateness of any security or strategy discussed.]