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Incyte/Merck to Start More Epacadostat-Keytruda Studies


Incyte Corporation INCY, along with its partner Merck & Co., Inc. MRK, announced that they have decided to initiate additional pivotal studies on epacadostat, in combination with Merck’s anti-PD-1 therapy, Keytruda. Shares of Incyte gained 9.4% on the news, while Merck’s shares inched up 1.4%.

A look at Incyte’s share price movement in the past one year shows that the company has outperformed the Zacks classified Medical-Biomedical/Genetics industry. Specifically, the stock gained 28.6 % during this period, compared to the industry’s plunge of 13.5%.

Similarly, shares of Merck have outperformed the Large Cap Pharma industry during this period, with the stock increasing 19.2%, compared with the industry’s rise of 1.6%.

Coming back to the latest news, the additional phase III studies will evaluate epacadostat in patients with non-small cell lung (NSCLC), renal, bladder and head and neck cancers. These studies are expected to start in 2017.

Currently, epacadostat, in combination with Keytruda is being evaluated in the phase III ECHO-301 study for the first-line treatment of patients with advanced or metastatic melanoma. Initial data from the study are expected to be available in 2018. The combination is also being evaluated in the phase II ECHO-202 study for the treatment of multiple tumors.

Additionally, epacadostat is being evaluated in several phase I and phase II studies in combination with PD-1 and PD-L1 inhibitors across a variety of solid tumor types as well as hematological malignancies.

With a number of ongoing studies, investors are expected to focus on further updates by the company on its pipeline candidates, going forward.

Both Incyte and Merck currently carry a Zacks Rank #3 (Hold).

Key Picks in the Sector

A couple of better-ranked stocks in the health care sector are Kite Pharma, Inc. KITE and Anika Therapeutics, Inc. ANIK. While Kite Pharma carries a Zacks Rank #1 (Strong Buy), Anika is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kite Pharma’s loss estimates narrowed from $5.48 to $5.48 for 2016 and from $7.00 to $6.85 for 2017 in the last 30 days. The company posted a positive surprise thrice in the four trailing quarters with an average beat of 7.89%.

Anika’s earnings estimates for 2016 and 2017 were up 3.9% and 0.5%, respectively, over the last 60 days. The company recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price was up 37.8% in the past one year.

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