Incyte Shares Jump on Trials, Upgrade

Incyte Surges to New 52-Week High on Positive Trial Results of HIV, Diabetes Drugs

NEW YORK- Shares of Incyte Corp. surged in Monday trading after the biotechnology drug developer reported promising results from clinical trials of its HIV and diabetes candidates, and an analyst upgraded the stock predicting its pipeline would see breakthroughs in 2007.

Piper Jaffray & Co. analyst Thomas Wei lifted Incyte to "Outperform" from "Market Perform," expecting positive news about INCB9471, a once-a-day HIV drug, and INCB13739, a type 2 diabetes treatment.

Wei also raised his price target for Incyte by $4 to $8 per share, which implies growth of 32.5 percent over its Friday closing price of $6.04 on the Nasdaq.

"We remain impressed with Incyte's proliferative medicinal chemistry effort and the speed with which it has developed deep biology expertise around its targets," the analyst said, adding that he believes "that 2007 could be a breakthrough year for that 2007 could be a breakthrough year for Incyte's pipeline."

At the JPMorgan HealthCare Conference, Incyte revealed the results of clinical trials for both drugs. Seven HIV patients improved after taking INCB9471 for 14 days. The improvement continued in the 20 days after the trial. Separately, the company revealed a study of six obese type II diabetes patients also showed positive results.

Wilmington, Del.-based Incyte also announced that it will begin trials for another HIV drug, and an oral compound that could treat multiple sclerosis, lupus and other autoimmune diseases.

Incyte stock climbed 29 cents, or 4.8 percent, to $6.66 in midday Nasdaq trading. Earlier in the session, the stock rose to a fresh 52-week high of $6.49, breezing past its prior peak of $6.25.

INCB9471 is a novel class of drug that is a receptor antagonist. Receptor antagonists bind to a distinct specific cellular receptor and inhibit it's activity. The ligand, here INCB9471, binds to the receptor and downregulates it (shuts it off). The significant thing here is that it binds to CCR5 receptor, which is the main entry way into the cell by HIV. Thus they have conceptually blocked entry into the cell. The virus uses several other routes of entry ( CD3, B7 etc) but blocking the main entry route in combination with protease therapy could mean a significant contribution to the market.