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I admit it. I feel silly talking about price targets and valuations in this market.

After all everything is just going to the sky. Infinity and Beyond!!!

But, as silly as I may feel, I don’t think the gods of investing have repealed the laws of valuation. At some point–when, only the world’s central bankers know–we’ll revert to a world where a company’s revenue and profit prospects matter.

Which brings me to Incyte (INCY). The stock is up 58.5% in the last three months and it has blown through my $97 a share target to close at $108.93 today, June 22, up another 3.35%.

In a normal market, I’d call the stock fully valued and more in spite of the huge progress in the company’s drug pipeline. (More on that later.) But in the current market, where anything that might treat any aspect of the coronavirus gets a big dose of rocket fuel, and where “risk” is a four-letter word, I’m going to let my position in Incyte in my Jubak’s Picks Portfolio run just a little longer. I’m raising my target price today to $120 a share, but the elastic on the upside doesn’t stretch forever even in this market. The shares are up 144.6% since I added them to the Jubak Picks Portfolio on April 17, 2014.

Most of Incyte’s revenue comes from its Jakafi drug. U.S. sales sales in the first quarter of $460 million were up 22% and in line with Wall Street forecasts.

The stock hasn’t soared on the Jakafi sales numbers but on the progress in the company’s drug pipeline including trials that show promise in coronavirus patients who are about to begin time on a ventilator.

There’s a lot of recent momentum in that pipeline. In April the Food and Drug Administration approved cholangiocarcinoma drug Pemazyre (pemigatinib) as a treatment for relapsed patients. In May the FDA approved with FGFR2 lung cancer drug Tabrecta (capmatinib) to treat first-line or relapsed patients with specific MET mutations.  Incyte’s PD-1 antibody is about to go into a Phase 3 chemo combination study in first-line lung cancer and Phase 2 data in anal cancer is expected later this year. Incyte continues to expand the label for Jakafi, which initially gained traction in 2011 as the only drug approved for severe myelofibrosis, a rare blood disorder, to polycythemia vera in late 2014 and to steroid refractory acute graft versus host disease in May 2019. Jakafi is also under evaluation in essential thrombocythemia. These expansions are forecast to push peak U.S. Jakafi sales to over $3 billion.

Eli Lilly (LLY) recently started a Phase 3 clinical trial testing Olumiant (baricitinib), an oral JAK1/JAK2 inhibitor licensed from Incyte, in hospitalized COVID-19 patients including those with at least one elevated marker of inflammation but who are not yet on mechanical ventilation. The primary endpoint is the proportion of patients receiving baricitinib each day who die or require non-invasive ventilation/high-flow oxygen or invasive mechanical ventilation by day 28 compared to placebo. The trial will enroll  approximately 400 participants. Baricitinib and Jakafi both have the proven ability to stop cytokine storm, a key inflection point in the COVID-19 infection, just before a ventilator is required.