Transcript:Hi. My name is Jing He and am a biotech analyst at Gabelli. We initiated coverage on Incyte with a Buy recommendation and a 2018 PMV of 174 dollars per share. The company has 213 million shares out, closed at $125.90, equity market cap $26.8 billion, net cash $840 million and total enterprise value $25.9 billion. We believe Incyte is the best mid-cap oncology asset, despite recent setback of baricitinib. Its key revenue driver, Jakafi is approved to treat rare blood cancers and is expected to generate peak sales of over $2 billon. Its immuno oncology drug, Epacadostat, has the potential to be the next backbone oncology treatment with estimated peak sales of $5 billion. In combination with PD-1 inhibitors, the drug is in Phase III with the potential to treat multiple tumor types in first-line setting including melanoma and lung cancers. Incyte has been speculated to be taken out by Gilead, and we believe Merck and Sanofi may also be interested. However, we have not taken into consideration the speculation in our valuation, as we are confident in Incyte’s long-term growth as a stand-alone company.
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