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Shares of biotech Incyte (INCY) were down 2.60% as of 1:30 p.m. Tuesday on earnings and revenue that stomped Wall Street projections. The company reported second quarter adjusted earnings of $1.24 a share versus Wall Street projections for 50 cents a share. Earnings are up from 75 cents a share in the second quarter of 2019.

Revenue climbed to $688 million versus expectations of $609 million in revenue. In the second quarter of 2019 Incyte reported revenue of  $530 million.

The earnings per share jump amounted to 65%. The revenue gain was 30%.

So why the drop in the stock today?

Incyte doesn’t provide guidance on earnings or revenue but the company left other metrics at previous levels. And that led Wall Street analysts to calculate the earnings for the full 2020 year would be $1.44–a drop of 151% from 2019–and that revenue would climb to $2.46 billion, an increase of 14%.

That’s a huge swing in earnings even for a biotech company where big milestone payments can inflate earnings in one year and set them up for a big decline in the next.

From my perspective the question for Incyte remains whether or not the company can expand its core Jakafi franchise. Jakafi sales rose to $474 million in the quarter, a bit above estimates of $472 million.

Investors should get an update on progress on that front relatively soon. The company announced that its Phase III REACH3 study evaluating  Jakafi in patients with moderate or severe steroid-refractory or steroid dependent chronic graft-versus-host disease (GVHD) met its primary endpoint of superior overall response rate at week 24. Those results will be reported at an upcoming medical conference and will also be submitted to the U.S. Food & Drug administration in the company’s effort to get Jaakafi, already approved for acute GVHD, approved for chronic GVHD.

Incyte is also testing possible coronavirus treatments–treatments not vaccines–including one in partnership with Eli Lilly (LLY) that could be a catalyst for the stock in the second half of 2020.

Incyte has been a member of my Jubak Picks portfolio since April 17, 2014. The shares are up 128.54% since then.