46 | FORBES ASIA OCTOBER 2017S
usan Waite, 48 , still remembers hearing her disease’s
name, myelofibrosis, for the first time five years ago.
“You Google,” she says. “I know you’re not supposed
to, but everybody does. And at the time the average
life expectancy was two and a half years.”
This rare cancer was turning her bone marrow, which pro-
duces blood cells, into scar tissue, leaving her anemic. She had
one child in high school and two more in college, and was so
tired she’d gone from being a social butterfly to a person who
goes to bed right after dinner. Her spleen was so enlarged with
blood cells that it hurt and prevented her from eating. Then her
doctor offered her a pill called Jakafi, manufactured by a Wilm-
ington, Delaware, company called Incyte. She felt better in days.
After dinner at a restaurant, she insisted her husband stay out
with her to hear a band play. Her spleen shrank. “I was able to
eat full meals again,” she says. “It was very exciting.” Now? She’s
still a bit anemic, but she’s doing well. “I feel almost normal,”
she says.
Jakafi has transformed Incyte into one of Wall Street’s favor-
ite stocks and a perennial subject of takeover speculation—
in part because of Jakafi’s efficacy and in part because of its list
price ($11, 58 7 a month, indefinitely, usually covered by insur-
ance). Last year Incyte had a net income of $ 104 million on
sales of $1.1 billion, up 1, 496 % and 4 7% from the prior year.
Its shares have sextupled over the past five years, and it has a
$25 billion market capitalization.
Incyte’s secret has been to stick to the traditional work
of large pharmaceutical companies even as other firms have
chased bright, shiny new technologies. Incyte’s 1,000 em-
ployees still work mostly in Delaware, a stick-in-the mud
stance at a time when companies from drug giant Merck
to biotech firm Alexion are setting up shop in Boston to be
closer to the hot zones of biology research. But more than
that, Incyte is focused on the basic chemistry of making drug
molecules, a part of the drug-discovery process that manylarger companies increasingly outsource.
Incyte already has two follow-ups: an arthritis medicine
being developed with Eli Lilly that is approved in Europe
and will be filed by early 2018 with the U.S. Food & Drug
Administration, and a second cancer drug, for which inves-
tor excitement is reaching a fever pitch. Hervé Hoppenot, the
5 7-year-old Big Pharma veteran who took over as Incyte’s chief
executive in 2014 , says he sees the company playing a role in a
transformation of the way the health care system treats cancer.
“If we are successful, the entire cost of treating cancer
should be drugs,” Hoppenot says. “That is my hope, not from a
business standpoint but from a medical standpoint. What you
would like is being able to replace palliative treatment and hos-
pital treatment for patients who are a few months from dying
with medicines that are very effective against cancer.”
Incyte was born out of one of the great names of American
business: DuPont. In June 2 001, the chemicals giant decided to
sell its pharma division to Bristol-Myers Squibb for $7. 8 billion.
During the four months it took to close the deal, the division’s
chief executive, Paul Friedman, started looking for another job.
Friedman connected with Julian Baker, a well-known bio-
tech hedge-fund investor. Baker had a stake in a company
called Incyte, which sold genetic information to drug compa-
nies. At the turn of the century, there was a tulip bubble around
gene data, allowing companies like Incyte, Celera Genomics
and Millennium Pharmaceuticals to raise huge amounts of
money. At the end of 2 001, Incyte had $5 08 million in cash. The
deal Baker and Friedman struck was this: Friedman would take
over as Incyte’s CEO but would build his research lab not near
Incyte’s Palo Alto, California, headquarters but in Wilmington,
where DuPont was based.
Friedman immediately began poaching DuPont’s best sci-
entists. “People didn’t want to go to work at Bristol-Myers
Squibb,” says Friedman, who is now chief executive of Mad-
rigal Pharmaceuticals in West Conshohocken, Pennsylvania,The Right
Chemistry
BY MATTHEW HERPERIncyte has one cancer blockbuster, and it’s got Wall Street
banking on another. Its secret: embracing an older age of pharma.FORBES ASIA
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