Incyte Should Consider Significant Stock Buyback And Prioritize R&D, Analyst Recommends
Portfolio Pulse from Vandana Singh
Incyte Corporation (NASDAQ:INCY) has agreed to acquire Escient Pharmaceuticals for $750 million, aiming to enhance its portfolio with EP262 and EP547, targeting inflammatory diseases. Cantor Fitzgerald initiated coverage on Incyte with a Neutral rating, citing undervaluation due to its cash flow and concerns over its pipeline prospects. The analyst suggests a significant stock buyback and prioritizing R&D to improve valuation. William Blair remains optimistic, highlighting the potential of povorcitinib and the Escient deal's complement to Incyte's portfolio.
April 23, 2024 | 7:03 pm
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Incyte's acquisition of Escient Pharmaceuticals for $750 million is aimed at strengthening its pipeline with EP262 and EP547. Analysts have mixed views, with Cantor Fitzgerald rating it Neutral due to valuation concerns and pipeline prospects, while William Blair remains optimistic, especially about povorcitinib's potential.
The acquisition of Escient Pharmaceuticals directly impacts Incyte's portfolio and future prospects. Analysts' mixed ratings and suggestions for stock buybacks and R&D prioritization indicate uncertainty in short-term stock performance, but the strategic move could potentially stabilize and improve valuation over time.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Cantor Fitzgerald highlights the potential value for Incyte in acquiring U.S. rights to MorphoSys AG's pelabresib, suggesting it could complement Incyte's Jakafi, indicating strategic moves to strengthen Incyte's portfolio.
While the direct impact of acquiring rights to pelabresib on MorphoSys's stock is not explicitly mentioned, the strategic importance for Incyte suggests a potentially positive outlook for MorphoSys if the deal goes through, reflecting a beneficial partnership.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 60