Incyte Corporation (INCY) is a biopharmaceutical company with headquarters in Wilmington, Delaware. Incyte’s business includes the discovery, development, and commercialization of various products to cater to unmet medical needs in oncology and the treatment of other diseases.
The above chart compares Incyte’s revenues and EPS since Q1 2017. The company reported EPS of -$0.19 on revenue of $382.3 million in Q1 2018 compared to revenue of $384.1 million in Q1 2017.
PE multiples represent what one share of a company can buy for an equity investor. However, in Incyte’s case, its PE multiple is quite high compared to its peers in the biotechnology industry.
As of May 25, Incyte was trading at a forward PE of 37.8x compared to the industry average of ~12.9x. The company is trading at a much higher PE than its peers. Regeneron Pharmaceuticals (REGN), Alexion Pharmaceuticals (ALXN), and Vertex Pharmaceuticals (VRTX) are trading at PEs of 14.8x, 15.4x, and 41.3x, respectively.
On a capital-structure-neutral and excess-cash-adjusted basis, Incyte is currently trading at a forward EV-to-EBITDA (enterprise value-to-EBITDA) multiple of ~28.6x, much higher than the industry average of ~9.3x. Its competitors Regeneron Pharmaceuticals, Alexion Pharmaceuticals, and Vertex Pharmaceuticals are trading at forward EV-to-EBITDA multiples of 10.7x, 12.1x, and 35.8x, respectively.
Notably, the SPDR S&P Biotech ETF (XBI) holds 1.0% of its total investments in Incyte, 1.3% in Regeneron Pharmaceuticals, 1.4% in Alexion Pharmaceuticals, and 1.3% in Vertex Pharmaceuticals.
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