Incyte Corp. (INCY) announced that it has entered into a definitive agreement to acquire Escient Pharmaceuticals (a private company) for $750 million. The company’s key drug development candidates include EP262, a first in-class, potent, highly selective, once-daily small molecule antagonist of Mas-related G protein-coupled receptor X2 (MRGPRX2) and EP547, a first-in-class oral MRGPRX4 antagonist, writes John McCamant, editor of The Medical Technology Stock Letter.

In Phase I healthy volunteer studies, both drugs demonstrated a favorable safety/tolerability profile, and management expects clinical proof-of-concept for EP262 in chronic inducible urticaria (currently in Phase Ib), chronic spontaneous urticaria (Phase IIa), and atopic dermatitis (Phase IIs) in early-2025; and for EP547 in cholestatic pruritus (Phase IIa) also in early-2025 (with potential US approvals in 2029 for both drugs, according to INCY management).

Incyte Corp. (INCY)
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With regard to the opportunity in atopic dermatitis, management views the mechanism of EP262 as highly complementary to Opzelura and thus could potentially be used in combination or post-Opzelura in inadequate responders. In our view, the acquisition makes strategic sense with the commercial and R&D synergies across dermatology and autoimmune disease.

INCY expects significant synergies, including utilization of commercial and R&D infrastructure and limited impact on 2024 R&D expenses. In our view, the acquisition makes strategic sense with the synergies across dermatology and autoimmune disease.

With the Escient acquisition, INCY now possesses different agents for a few overlapping indications (e.g., vitiligo, CSU, PN, asthma) with both oral and topical solutions. MRGPRX2 targets mast cells just like CLDX’ Barzo. Data to date show Barzo to be a much better drug with almost complete mast cell inhibition. That being said, there is an opportunity for an oral with less potency which could also be combined with a topical like Opzelura.

Recommended Action: Buy INCY.

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