Incyte drops four early-stage programs from its pipeline as part of strategic review

Incyte culled four early-stage assets and one mid-stage drug in a bid to stay competitive, particularly in the LAG-3 market.

In its second-quarter earnings update, Incyte announced that it discontinued the development of two oral small molecule PD-L1 inhibitors, a LAG-3 monoclonal antibody, a TIM-3 monoclonal antibody and a LAG-3xPD-1 bispecific. According to clinicaltrials.gov, the assets were all in early-stage trials, except for the LAG-3 antibody, which was in a Phase 2 trial that had yet to start recruiting.

Pablo Cagnoni

Incyte’s head of R&D Pablo Cagnoni told investors on Tuesday that the pipeline changes were “based on available data, the evolving treatment landscape and the evolution of our internal pipeline.”

He also said the decision to discontinue the LAG-3 program was based on the “competitive landscape,” and the company will decide on the right time to disclose data from some of the programs. Bristol Myers Squibb markets Opdualag, and Immutep announced positive Phase 2b data for its own LAG-3 drug earlier this month.

“We are behind in both cases, far behind our competitors,” Cagnoni said. “There’s a LAG-3, obviously — a proven combination with PD-1 — and there’s at least one bispecific LAG-3 that is well ahead of us already in randomized trials. So that was the main determinant.”

Incyte now plans to focus on the three assets in dermatology, inflammation and autoimmunity that it gained as part of its $750 million acquisition of Escient Pharmaceuticals in April. It’s continuing to develop its own assets in myeloproliferative neoplasms, graft-versus-host disease and oncology.

In a note on Tuesday, Cantor analysts described the pipeline changes as “another shareholder-friendly initiative” and “another step in the right direction,” noting they’re optimistic about several Incyte programs, including povorcitinib for vitiligo, Escient’s MRGPR antagonists and a CDK2i for ovarian cancer.

That said, the analysts also raised concern about Incyte’s spending on its pipeline. “We are skeptical that [Incyte] can generate a favorable return on much of its R&D investment,” they wrote, noting that the company also increased projected R&D expenditures for the year from between $1.72 billion and $1.76 billion to between $1.755 billion and $1.8 billion.