Incyte (INCY) shares soared 5.8% in the last trading session to close at $113.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.3% gain over the past four weeks.
The sudden rise in the stock price was observed after the European Medicines Agency's Committee for Medicinal Products for Human Use issued a positive opinion recommending the approval of Opzelura (ruxolitinib) cream for adults with moderate atopic dermatitis whose disease is inadequately controlled with or unsuitable for topical corticosteroids or calcineurin inhibitors. The recommendation was supported by positive phase III TRuE AD4 data, which showed that Opzelura met its co-primary endpoints at Week 8, maintained disease control through Week 24 with as-needed use, and demonstrated a favorable safety profile. If approved by the European Commission, Opzelura would become the first steroid-free topical JAK inhibitor for moderate atopic dermatitis in the EU. We note that Opzelura cream 15mg/g is already approved in Europe for the treatment of non-segmental vitiligo with facial involvement in adults and adolescents aged 12 years and older.
This specialty drugmaker is expected to post quarterly earnings of $1.81 per share in its upcoming report, which represents a year-over-year change of +15.3%. Revenues are expected to be $1.37 billion, up 13% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Incyte, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on INCY going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Incyte is a member of the Zacks Medical - Biomedical and Genetics industry. One other stock in the same industry, Halozyme Therapeutics (HALO), finished the last trading session 3.2% higher at $74.96. HALO has returned 6.5% over the past month.
Halozyme Therapeutics' consensus EPS estimate for the upcoming report has changed -1.7% over the past month to $1.82. Compared to the company's year-ago EPS, this represents a change of +18.2%. Halozyme Therapeutics currently boasts a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).