Slightly Lowering Our Incyte FVE as Jakafi Patent Expiration Draws Nearer; Shares Remain Undervalued

We're lowering our fair value estimate for Incyte to $105 per share from $116 after factoring in slightly steeper declines in Jakafi sales following 2028 patent expiration. We now assume U.S. sales of Jakafi peak at $3.1 billion in 2027, with double-digit declines beginning in 2028 and roughly 30% annual declines from 2029 forward, as lifecycle management efforts and combination regimens may only partly counter steep declines due to generic entrants. Jakafi remains a key pillar of Incyte's narrow moat, although we see the firm's growing portfolio and pipeline as capable of continuing to support strong ROICs beyond Jakafi's patent expiration.