Incyte Terminates Long-Standing Partnership with Agenus, Shifts Focus in Immuno-Oncology

In a significant shift within the immuno-oncology landscape, Incyte Corporation has formally ended its partnership with Agenus Inc., a collaboration that dates back to 2015. This decision, announced by Agenus in a recent SEC filing, marks a turning point for both companies and signals a broader strategic realignment in the pharmaceutical industry.

Partnership Dissolution and Program Rights

The termination, which took effect on February 4, 2025, comes as part of what Incyte describes as a "strategic portfolio reprioritization." As a result, Agenus has regained full rights to several key immuno-oncology programs, including those targeting LAG-3 and TIM-3. The Massachusetts-based biotech is now evaluating its options for these programs, considering both internal development and potential new partnerships.

The dissolution of this partnership has been a gradual process. Incyte had previously discontinued the OX40 program in October 2023, followed by the termination of GITR and an undisclosed asset in May 2024. The company then announced the discontinuation of LAG-3 and TIM-3 programs in July 2024, leading to the final termination of the partnership.

Historical Context and Financial Implications

The initial agreement between Incyte and Agenus was forged in January 2015, with Incyte making a substantial upfront payment of $60 million. This comprised $25 million in cash and a $35 million equity investment in Agenus. The deal granted Incyte access to Agenus' proprietary Retrocyte Display platform and checkpoint modulator inhibitor programs targeting TIM-3, LAG-3, GITR, and OX40.

The partnership also included potential milestone payments of up to $350 million across the four initial programs. In February 2017, Incyte increased its investment in Agenus, taking full control of the GITR and OX40 programs while agreeing to pay royalties to Agenus.

Incyte's Financial Performance and Future Outlook

Despite the termination of this partnership, Incyte reported strong financial performance in its recent fourth-quarter and full-year earnings report. The company saw a 16% year-on-year increase in quarterly revenue, reaching $1.18 billion and surpassing analyst expectations of $1.14 billion.

Incyte's oral kinase inhibitor Jakafi led sales figures with $773 million in the quarter, exceeding the consensus estimate of $747 million. Additionally, Opzelura, which shares an active ingredient with Jakafi but is formulated as a cream, generated $162 million in quarterly sales, outperforming expectations of $151 million.

Looking ahead, Incyte is anticipating several key catalysts in 2025. Of particular importance is the Phase III readout for povorcitinib, a small molecule JAK1 blocker being studied for hidradenitis suppurativa. Pivotal data from this trial are expected in the first half of the year. Analysts at Truist Securities note that this could be a crucial development for Incyte, potentially offering a new revenue stream to offset the expected loss of exclusivity for Jakafi in December 2028.