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Incyte CEO Touts Prospects of New Cancer Drug


Paul Friedman isn't predicting sales for his new drug Jakafi but he points out what makes his company different than Dendreon. "It gets a little bit depressing to get painted with the same brush as these other failures," the CEO says.

If you want to get Incyte (INCY) Chief Exec Paul Friedman's dander up, remind him that investors have little patience for a slow product launch of a new drug.

In an interview, Friedman was upbeat this week about the future of Incyte's just-approved drug Jakafi for myelofibrosis, a rare type of blood cancer. But he also doesn't want any details of the drug's early sales leaked out. Incyte execs say they are asking that no prescription information be released to industry tracking firms because they consider those details competitive. That means limited detail for investors as well.

Analysts predict Jakafi will be a big-selling drug that eventually tops $1 billion in annual sales and turns money-losing Incyte into a profitable company. The treatment is the first among a new drug class known as JAK inhibitors and really has no competition yet (though potential rivals are being tested by other companies). To be sure, there's plenty of reason for Friedman to be optimistic.

The CEO is also aware that investors are looking for missteps because a botched sales launch can be disastrous for the future of any promising new drug. The poster child for drug launch disasters this year is Dendreon (DNDN), which saw its value decimated because of disappointing sales of the Provenge prostate cancer vaccine. (See Dendreon's Stock Plunges on Low Provenge Sales.)

"They're making a lot of money -- they just over promised," Friedman says of Dendreon.

Friedman doesn't want to be compared to Dendreon or Human Genome Sciences (HGSI), which has reported tepid initial demand for its lupus drug Benlysta after the product was approved for sale in the US last March.

"These are not analogous to what we have here," Friedman says, noting that Jakafi is the first drug ever approved for the debilitating disease. "It's somewhat frustrating … You have very different situations."

Jakafi carries a big price, $84,000 a year, but the product has a lot of things going for it. It's shown to be effective and reasonably safe, serves an unmet medical need and is out on the market ahead of the competition. (See Incyte Pulls Further Ahead of YM Biosciences.) Incyte will sell the drug alone in the US, while Novartis (NVS) has rights to sell the treatment outside the US.

"It's an unmet need," Friedman says. "There's nothing else that works."

After rising above $14 late morning Wednesday on news of the US approval of Jakafi, Incyte's shares tumbled, trading at $12.30 midday Friday. The stock is down 26% this year.

There has been some controversy with the drug. A Mayo Clinic researcher testing Jakafi questioned the drug's safety and effectiveness in a letter to the New England Journal of Medicine last month. Friedman said the doctor's study of 51 people was "a very small subset of patients" who were "very rapidly taken off the drug."

While some investors are selling, a number of analysts recommend buying the stock. For instance, Leerink Swann analyst Joshua Schimmer has a $20 price target on the stock, while Robert W. Baird analyst Thomas Russo has a $24 a share estimate.

Friedman wants investors to simply consider his company's drug on its own merits. Not all drug launches are doomed, he says.

"It's not by any means a layup," Friedman says, "but it gets a little bit depressing to get painted with the same brush as these other failures."

Twitter: @brettchase

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