Incyte Corporation (INCY) and Merck (MRK), today announced that an external Data Monitoring Committee review of the pivotal Phase 3 ECHO-301/KEYNOTE-252 study results evaluating Incyte’s epacadostat in combination with Merck’s KEYTRUDA in patients with unresectable or metastatic melanoma determined that the study did not meet the primary endpoint of improving progression-free survival in the overall population compared to KEYTRUDA monotherapy.

The study’s second primary endpoint of overall survival also is not expected to reach statistical significance.

Based on these results, and at the recommendation of the eDMC, the study will be stopped. The safety profile observed in ECHO-301/KEYNOTE-252 was consistent with that observed in previously reported studies of epacadostat in combination with KEYTRUDA.

With these findings, what should you do?

While the company is certainly disappointed that this study did not confirm the efficacy of epacadostat in combination with KEYTRUDA in patients with unresectable or metastatic melanoma, shareholders are getting throatpunched. All is not lost. The data from ECHO-301/KEYNOTE-252, including analyses of an extensive biomarker panel, will contribute to the company’s ability to understand the role of IDO1 inhibition in combination with PD-1 antagonist.

In addition, the study’s findings could help inform the company;s broader epacadostat clinical development program. The company will continue to explore how IDO1 inhibition and other novel mechanisms can potentially improve outcomes for patients in need. But is there value in the name after the selloff?

With no debt on the balance sheet and $1.54 billion in 2017 sales, Incyte may be a buying opportunity even as the stock hit a new 52 week low of $63. There are still more catalysts to come.

The FDA will soon discuss the resubmitted new drug application for Olumiant at an arthritis Advisory Committee meeting on April 23rd. A pooled analysis from Olumiant clinical trials was published in July and showed that baricitinib-treated patients had similar rates of serious infection incidents to a placebo-treated control group.

Furthermore, the treatment group showed that two years of baricitinib treatment significantly lowered the rate of joint damage progression throughout the treatment period.

This should go a long way to allaying the FDA’s safety concerns and will bolster the case for efficacy.

One of the most attractive values that Incyte stock represents is that it has a relatively stable, easily understood and predictable revenue stream – ruxolitinib and baricitinib. These two assets alone make a buy here compelling.

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