What changed in this filing

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Item 1. Financial Statements

2025-07-29 compared with 2025-04-29 · 255 added, 117 removed, 553 unchanged (40% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 1,954,969 $ 1,687,829

Marketable securities—available-for-sale (amortized cost $ 465,659 and $ 469,917 as of March 31, 2025 and December 31, 2024, respectively;

allowance for credit losses $ 0 as of March 31, 2025 and December 31, 2024)

Marketable securities—available-for-sale (amortized cost $ 465,456 and $ 469,917 as of June 30, 2025 and December 31, 2024, respectively;

allowance for credit losses $ 0 as of June 30, 2025 and December 31, 2024)

466,769 470,263

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400,000,000 shares authorized;

193,783,446 and 193,434,305 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

194,123,265 and 193,434,305 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 4,666,949 4,533,437

Accumulated other comprehensive loss ( 6,238 ) ( 13,121 )

Accumulated other comprehensive income (loss) 13,439 ( 13,121 )

Accumulated deficit ( 509,679 ) ( 1,072,881 )

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Product revenues, net $ 1,059,414 $ 906,566 $ 1,981,688 $ 1,636,489

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Cost of product revenues (including definite-lived intangible amortization) 78,766 76,634 151,954 137,590

Contract dispute settlement ( 242,251 ) — ( 242,251 ) —

Research and development 494,917 1,138,380 932,196 1,567,640

Selling, general and administrative 331,022 305,982 656,713 606,238

Loss (gain) on change in fair value of acquisition-related contingent consideration 11,572 ( 456 )

Loss on change in fair value of acquisition-related contingent consideration 22,761 893 34,333 437

(Profit) and loss sharing under collaboration agreements — — — ( 1,025 )

Total costs, expenses and other 685,215 1,521,889 1,532,945 2,310,880

Income from operations 205,168 91,898

Income (loss) from operations 530,314 ( 478,130 ) 735,482 ( 386,232 )

Interest income 25,136 41,476 48,065 88,246

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Other, net 7,307 8,293 15,403 6,267

Income before provision for income taxes 234,190 236,159

Income (loss) before provision for income taxes 558,012 ( 389,777 ) 792,202 ( 153,618 )

Provision for income taxes 153,013 54,824 229,000 121,435

Net income $ 158,203 $ 169,548

Net income per share:

Net income (loss) $ 404,999 $ ( 444,601 ) $ 563,202 $ ( 275,053 )

Net income (loss) per share:

Basic $ 2.09 $ ( 2.04 ) $ 2.91 $ ( 1.24 )

Diluted $ 2.04 $ ( 2.04 ) $ 2.84 $ ( 1.24 )

Shares used in computing net income per share:

Shares used in computing net income (loss) per share:

Basic 193,995 218,175 193,853 221,329

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Three Months Ended

Net income $ 158,203 $ 169,548

June 30, Six Months Ended

2025 2024 2025 2024

Net income (loss) $ 404,999 $ ( 444,601 ) $ 563,202 $ ( 275,053 )

Other comprehensive income (loss):

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Other comprehensive income (loss) 19,677 752 26,560 ( 18,526 )

Comprehensive income $ 165,086 $ 150,270

Comprehensive income (loss) $ 424,676 $ ( 443,849 ) $ 589,762 $ ( 293,579 )

See accompanying notes.

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Paid-in Capital Accumulated Other

Comprehensive Loss Accumulated Deficit Total

Comprehensive (Loss) Income Accumulated Deficit Total

Stockholders’

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Net income — — — 158,203 158,203

Balance at March 31, 2025 $ 193 $ 4,588,286 $ ( 6,238 ) $ ( 914,678 ) $ 3,667,563

Balances at March 31, 2025 $ 193 $ 4,588,286 $ ( 6,238 ) $ ( 914,678 ) $ 3,667,563

Issuance of 64,400 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes, and 261,762 shares of Common Stock under the ESPP

1 13,972 — — 13,973

Issuance of 1,220 shares of Common Stock for services rendered

Stock compensation — 64,609 — — 64,609

Other comprehensive income — — 19,677 — 19,677

Net income — — — 404,999 404,999

Balances at June 30, 2025 $ 194 $ 4,666,949 $ 13,439 $ ( 509,679 ) $ 4,170,903

INCYTE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(unaudited, in thousands, except number of shares)

Stock Additional

Paid-in Capital Accumulated Other

Comprehensive Loss Retained Earnings (Accumulated Deficit) Total

Comprehensive (Loss) Income Retained Earnings (Accumulated Deficit) Total

Stockholders’

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Balances at March 31, 2024 $ 224 $ 5,070,286 $ ( 6,172 ) $ 329,933 $ 5,394,271

Issuance of 71,769 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and 291,735 shares of Common Stock under the ESPP

— 13,792 — — 13,792

Issuance of 1,345 shares of Common Stock for services rendered

Stock compensation — 56,637 — — 56,637

Repurchases of common stock ( 33 ) ( 758,061 ) — ( 1,265,778 ) ( 2,023,872 )

Other comprehensive income — — 752 — 752

Net loss — — — ( 444,601 ) ( 444,601 )

Balances at June 30, 2024 $ 191 $ 4,382,734 $ ( 5,420 ) $ ( 1,380,446 ) $ 2,997,059

See accompanying notes.

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(unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net income $ 158,203 $ 169,548

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ 563,202 $ ( 275,053 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 45,281 43,995

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Loss (gain) on equity investments 5,494 ( 139,188 )

Loss (gain) on change in fair value of acquisition-related contingent consideration 11,572 ( 456 )

Loss on change in fair value of acquisition-related contingent consideration 34,333 437

Changes in operating assets and liabilities:

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Accrued and other liabilities ( 401,883 ) 27,428

Net cash provided by operating activities 266,067 218,811

Net cash provided by (used in) operating activities 310,808 ( 356,752 )

Cash flows from investing activities:

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Capital expenditures ( 22,243 ) ( 63,692 )

Payments for intangible assets — ( 1,400 )

Purchases of marketable securities ( 97,346 ) ( 204,091 )

Sale and maturities of marketable securities 45,494 102,245

Net cash provided by (used in) investing activities 1,097 ( 73,112 )

Maturities of marketable securities 101,807 182,634

Net cash (used in) provided by investing activities ( 17,775 ) 140,708

Cash flows from financing activities:

Repurchases of common stock — ( 2,004,687 )

Excise tax paid on repurchase of common stock ( 19,100 ) —

Proceeds from issuance of common stock under stock plans 18,123 14,960

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Effect of exchange rates on cash, cash equivalents, and restricted cash ( 1,749 ) ( 663 )

Net increase in cash, cash equivalents, and restricted cash 253,936 132,610

Net increase (decrease) in cash, cash equivalents, and restricted cash 267,362 ( 2,226,297 )

Cash, cash equivalents, and restricted cash at beginning of period 1,689,451 3,215,221

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Income taxes paid $ 177,919 $ 229,674

Unpaid purchases of property and equipment $ 2,890 $ 383

Cash paid for contract dispute settlement $ 294,881 $ —

Unpaid purchase of intangible asset $ 25,000 $ —

Unpaid excise tax on repurchase of common stock $ — $ 19,185

Unpaid purchases of property and equipment $ 4,046 $ 800

Leased assets obtained in exchange for new operating lease liabilities $ 1,768 $ 2,188

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Organization and Business

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The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

The condensed consolidated balance sheet as of March 31, 2025, the condensed consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for the three months ended March 31, 2025 and 2024, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The condensed consolidated balance sheet as of June 30, 2025, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and six months ended June 30, 2025 and 2024, and the condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The condensed consolidated balance sheet at December 31, 2024 has been derived from our audited consolidated financial statements.

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

JAKAFI revenues, net $ 763,788 $ 705,973 $ 1,473,200 $ 1,277,812

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Cost Unrealized Gains Unrealized Losses

March 31, 2025

June 30, 2025

Debt securities (government) $ 465,456 $ 1,472 $ ( 159 ) $ 466,769

1 unchanged sentence

Debt securities (government) $ 469,917 $ 971 $ ( 625 ) $ 470,263

The table below summarizes the contractual maturities of our available-for-sale debt securities as of March 31, 2025 (in thousands):

The table below summarizes the contractual maturities of our available-for-sale debt securities as of June 30, 2025 (in thousands):

Total Less than 1 Year 1-5 Years

Fair value of debt securities (government) $ 466,769 $ 221,410 $ 245,359

Our available-for-sale debt securities generally have contractual maturity dates of between 12 to 18 months.

Debt security assets were assessed for risk of expected credit losses.

As of March 31, 2025 and December 31, 2024, the available-for-sale debt securities were held in U.S.-government backed securities and in Treasury bonds and were assessed on an individual security basis to have a de minimis risk of credit loss.

As of June 30, 2025 and December 31, 2024, the available-for-sale debt securities were held in U.S.-government backed securities and in Treasury bonds and were assessed on an individual security basis to have a de minimis risk of credit loss.

Fair Value Measurements

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government debt securities that are classified as available-for-sale.

At March 31, 2025 and December 31, 2024, our Level 2 U.S.

At June 30, 2025 and December 31, 2024, our Level 2 U.S.

government debt securities were valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of investments.

Our long term equity investments classified as Level 1 were valued using their respective closing stock prices on The Nasdaq Stock Market.

We did not experience any transfers of financial instruments between the fair value hierarchy levels during the three months ended March 31, 2025.

We did not experience any transfers of financial instruments between the fair value hierarchy levels during the three and six months ended June 30, 2025.

The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands):

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(Level 3) Balance as of

March 31, 2025

June 30, 2025

Cash and cash equivalents $ 1,954,969 $ — $ — $ 1,954,969

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(Level 3) Balance as of

March 31, 2025

June 30, 2025

Acquisition-related contingent consideration $ — $ — $ 207,000 $ 207,000

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Contingent consideration earned during the period but not yet paid ( 10,761 )

Payments made during the period ( 9,572 )

Change in fair value of contingent consideration 34,333

Balance at March 31, $ 195,000

Balance at June 30, $ 207,000

The initial fair value of the contingent consideration was determined on the date of acquisition, June 1, 2016, using an income approach based on projected future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment over 18 years, and discounted to present value at a rate of 10 %.

The fair value of the contingent consideration is remeasured each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations.

The valuation inputs utilized to estimate the fair value of the contingent consideration as of March 31, 2025 and December 31, 2024 included a discount rate of 10 % and updated projections of future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment.

The change in fair value of the contingent consideration during the three months ended March 31, 2025 was due primarily to fluctuations in foreign currency exchange rates impacting future revenue projections of ICLUSIG and the passage of time.

The valuation inputs utilized to estimate the fair value of the contingent consideration as of June 30, 2025 and December 31, 2024 included a discount rate of 10 % and updated projections of future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment.

The change in fair value of the contingent consideration during the three and six months ended June 30, 2025 was due primarily to fluctuations in foreign currency exchange rates impacting future revenue projections of ICLUSIG and the passage of time.

We generally make payments to Takeda Pharmaceutical Company Limited quarterly based on the royalties earned in the previous quarter.

As of March 31, 2025 and December 31, 2024, contingent consideration earned but not yet paid was $ 9.6 million and $ 10.0 million, respectively, and was included in accrued and other current liabilities.

As of June 30, 2025 and December 31, 2024, contingent consideration earned but not yet paid was $ 10.8 million and $ 10.0 million, respectively, and was included in accrued and other current liabilities.

Concentration of Credit Risk and Current Expected Credit Losses

In November 2009, we entered into a collaboration and license agreement with Novartis Pharmaceutical International Ltd.

("Novartis").

In November 2009, we entered into a collaboration and license agreement with Novartis Pharma AG (formerly known as Novartis Pharmaceutical International Ltd.) (“Novartis”).

In December 2009, we entered into a license, development and commercialization agreement with Eli Lilly and Company (“Lilly”).

The above collaboration partners comprised, in aggregate, 16 % and 19 % of the accounts receivable balance as of March 31, 2025 and December 31, 2024, respectively.

The above collaboration partners comprised, in aggregate, 18 % and 19 % of the accounts receivable balance as of June 30, 2025 and December 31, 2024, respectively.

For further information relating to these collaboration and license agreements, refer to Note 8.

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Product Revenues for the

Three Months Ended

Three Months Ended Percentage of Total Net

Product Revenues for the

Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Customer A 13 % 15 % 14 % 16 %

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We are exposed to risks associated with extending credit to customers related to the sale of products.

Customers A, B, C, D and E comprised, in the aggregate, 51 % and 52 % of the accounts receivable balance as of March 31, 2025 and December 31, 2024, respectively.

Customers A, B, C, D and E comprised, in the aggregate, 50 % and 47 % of the accounts receivable balance as of June 30, 2025 and December 31, 2024, respectively.

The concentration of credit risk relating to our other product revenues or accounts receivable is not significant.

We assessed our collaborative and customer receivable assets as of March 31, 2025 according to our accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible receivables and the continued perceived creditworthiness of our third party sales relationships, upon which the expected credit losses were considered de minimis.

As of March 31, 2025 and December 31, 2024, we had no allowance for doubtful accounts.

We assessed our collaborative and customer receivable assets as of June 30, 2025 according to our accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible receivables and the continued perceived creditworthiness of our third party sales relationships, upon which the expected credit losses were considered de minimis.

As of June 30, 2025 and December 31, 2024, we had no allowance for doubtful accounts.

On February 5, 2024, pursuant to a purchase agreement with MorphoSys AG and MorphoSys US Inc., a wholly-owned subsidiary of MorphoSys AG (together with MorphoSys AG, “MorphoSys”), we acquired exclusive global rights to tafasitamab, a humanized Fc-modified CD19-targeting immunotherapy marketed in the United States as MONJUVI (tafasitamab-cxix) and outside of the United States as MINJUVI (tafasitamab).

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Food and Drug Administration's acceptance of the Biologics License Application filing for the use of tafasitamab for follicular lymphoma.

In June 2025, we recorded a $ 25.0 million regulatory milestone owed to Xencor for the FDA approval of MONJUVI for the treatment of follicular lymphoma.

As of June 30, 2025, this milestone was accrued in accounts payable and capitalized as an intangible asset in other intangible assets, net on the condensed consolidated balance sheet as of June 30, 2025.

The intangible asset will be amortized through cost of product revenues over the estimated useful life of 8 years.

Xencor is entitled to receive up to an additional $ 149.0 million in future contingent development and regulatory milestones and up to $ 50.0 million in sales milestones.

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Escient Pharmaceuticals, Inc.

( “ Escient ” )

On May 30, 2024 we acquired all of the outstanding shares of common stock of Escient, a clinical-stage drug development company advancing novel small molecule therapeutics for systemic immune and neuro-immune disorders, for $ 782.5 million cash consideration, which included Escient's net cash remaining at the close of the transaction, subject to adjustments set forth in the merger agreement with Escient.

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GAAP because INCB000262 represents substantially all of the fair value of the gross assets acquired.

In addition to the $ 782.5 million closing cash consideration per the terms of the merger agreement, we incurred $ 2.5 million of direct transaction costs that were included in the total consideration to be allocated to the acquired net assets.

Of the $ 785.0 million total consideration, we recognized related compensation expense of $ 31.5 million associated with the accelerated vesting for certain Escient stock awards in connection with the acquisition on our condensed consolidated statements of operations for the quarter ended June 30, 2024.

The following table summarizes allocation of the remaining U.S.

GAAP consideration, net of compensation expense, across the net assets acquired (in thousands):

Cash and cash equivalents $ 48,302

Marketable securities 3,988

Prepaid expenses and other current assets 1,663

In-process research and development assets 679,388

Deferred tax asset 44,811

Other non-current assets 4,110

Accounts payable and accrued expenses ( 26,611 )

Other current liabilities ( 1,022 )

Non-current liabilities ( 1,118 )

GAAP Consideration (net of compensation expense) $ 753,511

In-process research and development (“IPR&D”) assets are related to acquired clinical-stage product candidates:

lead candidate, INCB000262, and secondary candidate, INCB000547 (formerly EP547).

The fair value of IPR&D assets was based on the present value of future discounted cash flows, which was based on significant estimates.

These estimates included the amount of future product revenues, costs required to conduct clinical trials, future milestones and royalties payable under acquired license agreements, costs to receive regulatory approval and potentially commercialize product candidates, as well as estimates for probability of success and the discount rate.

The concluded allocated fair values for INCB000262 and INCB000547 was $ 644.8 million and $ 34.6 million, respectively.

As both acquired IPR&D assets do not have an alternative future use at the acquisition date, we recognized the full amount of $ 679.4 million as research and development expenses on our condensed consolidated statements of operations during three and six months ended June 30, 2024.

Our inventory balance consists of the following (in thousands):

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Inventories, stated at the lower of cost and net realizable value, consist of raw materials, active pharmaceutical ingredients (“API”), work in process, and finished goods, inclusive of freight and inventoriable overhead.

At March 31, 2025, $ 64.0 million of inventory was classified as current on the condensed consolidated balance sheet as we expect this inventory to be consumed for commercial use within the next twelve months.

At March 31, 2025, $ 365.3 million of inventory was classified as non-current on the condensed consolidated balance sheet as we did not expect this inventory to be consumed for commercial use within the next twelve months.

At June 30, 2025, $ 83.4 million of inventory was classified as current on the condensed consolidated balance sheet as we expect this inventory to be consumed for commercial use within the next twelve months.

At June 30, 2025, $ 368.1 million of inventory was classified as non-current on the condensed consolidated balance sheet as we did not expect this inventory to be consumed for commercial use within the next twelve months.

We obtain some inventory components from a limited number of suppliers due to technology, availability, price, quality or other considerations.

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Costs incurred prior to regulatory approval are recorded as research and development expense in our condensed consolidated statements of operations.

At March 31, 2025, inventory with approximately $ 27.7 million of product costs incurred prior to regulatory approval had not yet been sold.

At June 30, 2025, inventory with approximately $ 47.4 million of product costs incurred prior to regulatory approval had not yet been sold.

We expect to sell the pre-commercialization inventory over the next 3 to 43 months and, as a result, cost of product revenues will reflect a lower average per unit cost of materials.

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In addition, we were initially eligible to receive up to $ 75.0 million of additional potential development and regulatory milestones relating to graft-versus-host-disease (“GVHD”).

Since the inception of the agreement through March 31, 2025, we have recognized and received, in the aggregate, $ 157.0 million for the achievement of development milestones, $ 345.0 million for the achievement of regulatory milestones, and $ 200.0 million for the achievement of sales milestones.

Since the inception of the agreement through June 30, 2025, we have recognized and received, in the aggregate, $ 157.0 million for the achievement of development milestones, $ 345.0 million for the achievement of regulatory milestones, and $ 200.0 million for the achievement of sales milestones.

We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States.

On May 11, 2025, we and Novartis entered into a settlement agreement (the “Settlement Agreement”) with respect to litigation initiated by Novartis relating to the duration of royalty payments owed by us to Novartis under the Collaboration and License Agreement.

As of March 31, 2025, we had approximately $ 537.1 million of accrued royalties relating to the dispute with Novartis included in accrued and other current liabilities on our condensed consolidated balance sheet.

Under the Settlement Agreement, we paid Novartis $ 280.0 million as the settlement of disputed royalties on net sales of JAKAFI in the United States through December 31, 2024, and agreed to reduce by 50 % the royalty rate payable by us on future net sales of JAKAFI in the United States beginning January 1, 2025 for a period defined in the Settlement Agreement.

The reduced royalty paid for the quarter ended March 31, 2025, was approximately $ 14.9 million.

The difference of $ 242.2 million between the total accrued royalties and the total amount paid by us to Novartis as disclosed above was recorded in Contract dispute settlement on our condensed consolidated statement of operations for three and six months ended June 30, 2025.

During the three and six months ended June 30, 2025, such royalties on net sales within the United States totaled $ 18.7 million and $ 48.5 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations.

During the three and six months ended June 30, 2024, such royalties on net sales within the United States totaled $ 34.6 million and $ 57.6 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations.

At June 30, 2025 and December 31, 2024, approximately $ 18.7 million and $ 507.4 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets.

We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-twenties on future JAKAVI net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12 % to 14 %.

We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States contingent on certain conditions.

During the three months ended March 31, 2025 and 2024, such royalties on net sales within the United States totaled $ 29.8 million and $ 23.0 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations.

At March 31, 2025 and December 31, 2024, approximately $ 537.1 million and $ 507.4 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets.

Payment of accrued royalties, if any, is dependent on the outcome of a contract dispute with Novartis pending in the U.S.

District Court for the Southern District of New York.

A trial has been scheduled for May 2025.

Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three months ended March 31, 2025 and 2024 was $ 92.1 million and $ 89.6 million, respectively.

Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three months ended March 31, 2025 and 2024 was $ 6.4 million and $ 5.2 million, respectively.

Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2025, was $ 109.7 million and $ 201.9 million, respectively.

Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2024, was $ 99.3 million and $ 188.9 million, respectively.

Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2025, was $ 6.6 million and $ 13.0 million, respectively.

Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2024, was $ 5.3 million and $ 10.5 million, respectively.

Lilly – Baricitinib

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Under this agreement, we were initially eligible to receive up to $ 150.0 million for the achievement of development milestones, up to $ 365.0 million for the achievement of regulatory milestones and up to $ 150.0 million for the achievement of sales milestones.

Since the inception of the agreement through March 31, 2025, we have recognized and received, in aggregate, $ 149.0 million for the achievement of development milestones, $ 335.0 million for the achievement of regulatory milestones and $ 50.0 million for the achievement of sales milestones.

Since the inception of the agreement through June 30, 2025, we have recognized and received, in aggregate, $ 149.0 million for the achievement of development milestones, $ 335.0 million for the achievement of regulatory milestones and $ 50.0 million for the achievement of sales milestones.

We are also eligible to receive tiered, double-digit royalties on future global sales with rates ranging up to the mid-twenties if a product is successfully commercialized.

Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three months ended March 31, 2025 and 2024 was $ 30.8 million and $ 30.6 million, respectively.

Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2025 was $ 33.5 million and $ 64.3 million, respectively.

Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2024 was $ 31.7 million and $ 62.3 million, respectively.

In January 2015, we entered into a License, Development and Commercialization Agreement with Agenus Inc.

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Under the terms of the agreement, the termination will become effective in February 2026, unless Agenus agrees to accelerate the notice period.

Since the inception of the agreement through March 31, 2025, we have paid Agenus milestones totaling $ 30.0 million, and Agenus is eligible to receive up to an additional $ 500.0 million in future contingent development, regulatory and commercialization milestones across all programs in the collaboration.

During 2024, we sold our shares of Agenus Inc.

1 unchanged sentence

common stock.

For the three months ended March 31, 2024 we recorded an unrealized loss of $ 3.0 million based on the change in fair value of Agenus Inc.’s common stock during the respective period.

For the three and six months ended June 30, 2024, we recorded an unrealized gain of $ 3.1 million and $ 0.1 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods.

In December 2016, we entered into a Collaboration and License Agreement with Merus N.V.

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The collaboration encompasses up to ten independent programs.

Since the inception of the agreement through March 31, 2025, we have paid and expensed Merus milestones totaling $ 10.0 million.

During 2024, we sold our investment of Merus’ common shares, and as of December 31, 2024, we had no remaining investment in Merus’ common shares.

For the three months ended March 31, 2024 we recorded an unrealized gain of $ 70.2 million, based on the change in fair value of remaining Merus’ common shares during the respective period.

For the three and six months ended June 30, 2024, we recorded realized and unrealized gains of $ 40.0 million and $ 110.2 million, respectively, based on the sale of shares and change in fair value of remaining Merus’ common shares during the respective periods.

In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc.

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In addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and commercial supply needs of INCMGA0012.

Since the inception of the agreement, inclusive of the July 2022 and July 2024 amendments to the agreement, through March 31, 2025, we have paid MacroGenics developmental and regulatory milestones totaling $ 215.0 million.

Since the inception of the agreement, inclusive of amendments to the agreement, through June 30, 2025, we have paid MacroGenics developmental and regulatory milestones totaling $ 215.0 million.

After these amendments and subsequent payments, MacroGenics will be eligible to receive up to an additional $ 210.0 million in future contingent development and regulatory milestones, and up to $ 330.0 million in sales milestones as well as tiered royalties ranging from 15 % to 24 % of global net sales.

Research and development expenses for the three months ended March 31, 2025 and 2024 also included $ 7.1 million and $ 12.1 million, respectively, of development costs incurred pursuant to the MacroGenics agreement.

At March 31, 2025 and December 31, 2024, a total of $ 0.0 million and $ 0.5 million of such costs were included in accrued and other liabilities on the condensed consolidated balance sheets.

In June 2025, MacroGenics sold certain of its rights to such future tiered royalties on and after June 30, 2025 to Sagard Healthcare Partners (Delaware) II LP.

As described in Note 6, on February 5, 2024, we entered into a purchase agreement with MorphoSys that became effective as of that date, as a result of which we now hold exclusive global rights for tafasitamab, a humanized Fc-modified CD19-targeting immunotherapy marketed in the United States as MONJUVI (tafasitamab-cxix) and outside of the United States as MINJUVI (tafasitamab).

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During 2024, we sold our investment of MorphoSys AG’s ordinary shares, and as of December 31, 2024, we had no remaining investment in MorphoSys AG’s ordinary shares.

For the three months ended March 31, 2024, we recorded an unrealized gain of $ 29.9 million, respectively, based on the change in fair value of MorphoSys AG’s ordinary shares during the respective period.

For the three and six months ended June 30, 2024, we recorded realized and unrealized gains of $ 0.8 million and $ 30.7 million, respectively, based on the sale of shares and change in fair value of MorphoSys AG's ordinary shares during the respective periods.

Our 50 % share of the United States loss or profit for the commercialization of tafasitamab for the period from January 1, 2024 to the asset acquisition on February 5, 2024, was a profit of $ 1.0 million, and is recorded as (Profit) and loss sharing under collaboration agreements on the condensed consolidated statement of operations.

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In August 2024, we made a $ 12.5 million regulatory milestone payment to Syndax for the FDA approval of NIKTIMVO for the treatment of GVHD.

This milestone payment was capitalized as an intangible asset and included in other intangible assets, net on the condensed consolidated balance sheet as of March 31, 2025, and is being amortized through cost of product revenues over the estimated useful life of 10 years.

Inclusive of an upfront, non-refundable payment, since the inception of the agreement through March 31, 2025, we have made payments of $ 129.5 million to Syndax, which were previously recorded in research and development expense or in other intangible assets, as discussed above.

This milestone payment was capitalized as an intangible asset and included in other intangible assets, net on the condensed consolidated balance sheet as of June 30, 2025, and is being amortized through cost of product revenues over the estimated useful life of 10 years.

Inclusive of an upfront, non-refundable payment, since the inception of the agreement through June 30, 2025, we have made payments of $ 129.5 million to Syndax, which were previously recorded in research and development expense or in other intangible assets, as discussed above.

Syndax is eligible to receive up to $ 207.5 million in future contingent development and regulatory milestones and up to $ 230.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe and Japan and low double digit percentage on net sales in the rest of the world outside of the United States.

Syndax’s right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising axatilimab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.

As of March 31, 2025, we held an investment of approximately 1.4 million shares of Syndax common stock.

The fair market value of our long term investment in Syndax as of March 31, 2025 and December 31, 2024 was $ 17.5 million and $ 18.8 million, respectively.

For the three months ended March 31, 2025 and 2024, we recorded an unrealized loss of $ 1.3 million and gain of $ 3.1 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods.

Research and development expenses for the three months ended March 31, 2025 and 2024, includes $ 4.7 million and $ 7.1 million, respectively, related to our 55 % share of the co-development costs for axatilimab.

At March 31, 2025 and December 31, 2024, $ 2.1 million and $ 2.2 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheet for amounts due to Syndax under the agreement.

As of June 30, 2025, we held an investment of approximately 1.4 million shares of Syndax common stock.

The fair market value of our long term investment in Syndax as of June 30, 2025 and December 31, 2024 was $ 13.3 million and $ 18.8 million, respectively.

For the three and six months ended June 30, 2025, we recorded an unrealized loss of $ 4.2 million and $ 5.5 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods.

For the three and six months ended June 30, 2024, we recorded an unrealized loss of $ 4.6 million and $ 1.5 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods.

Research and development expenses for the three and six months ended June 30, 2025, includes $ 5.3 million and $ 10.0 million, respectively, related to our 55 % share of the co-development costs for axatilimab.

Research and development expenses for the three and six months ended June 30, 2024, includes $ 4.7 million and $ 11.8 million, respectively, related to our 55 % share of the co-development costs for axatilimab.

At both June 30, 2025 and December 31, 2024, $ 2.2 million was included in accrued and other liabilities on the condensed consolidated balance sheet for amounts due to Syndax under the agreement.

China Medical Systems Holdings Limited

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During the year ended December 31, 2024, we capitalized $ 4.9 million of land and $ 19.5 million of building and parking garage.

As of March 31, 2025 we have $ 33.9 million of construction in progress relating to the downtown Wilmington properties.

As of June 30, 2025 we have $ 39.9 million of construction in progress relating to the downtown Wilmington properties.

Accrued and Other Current Liabilities

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Total accrued and other current liabilities $ 857,094 $ 1,212,048

Stock Compensation

For further information on the change in accrued royalties refer to Note 8.

Stockholders' Equity

2010 Stock Incentive Plan.

In May 2010 the Board of Directors adopted the 2010 Stock Incentive Plan (the “2010 Stock Plan”), which was most recently amended in April 2023, for issuance of common stock to employees, non-employee directors, consultants, and scientific advisors.

Under our Amended and Restated 2010 Stock Incentive Plan, as amended (the “2010 Stock Plan”), we may issue common stock to employees, non-employee directors, consultants, and scientific advisors.

Awards under the 2010 Stock Plan include stock options, restricted stock units (“RSUs”) and performance shares (“PSUs”).

In June 2025, our stockholders approved an increase in the number of shares of common stock reserved for issuance under the 2010 Stock Plan from 66,453,475 to 74,953,475 .

2024 Inducement Stock Incentive Plan.

In January 2024, our Board of Directors adopted the Incyte Corporation 2024 Inducement Stock Incentive Plan (the “2024 Inducement Plan”).

Our Board of Directors has adopted the Incyte Corporation 2024 Inducement Stock Incentive Plan, as amended (the “2024 Inducement Plan”).

In reliance on Nasdaq Marketplace Rule 5635(c)(4), stockholder approval was not obtained.

A total of 2,000,000 shares of common stock are reserved for issuance pursuant to the 2024 Inducement Plan.

We recorded $ 61.0 million and $ 59.8 million of stock compensation expense on our condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024, respectively.

Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $ 36.7 million, and $ 36.8 million for the three months ended March 31, 2025 and 2024, respectively.

Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $ 23.4 million and $ 22.4 million for the three months ended March 31, 2025 and 2024, respectively.

Stock compensation expense included within our condensed consolidated statements of operations also included cost of product revenues of $ 0.9 million and $ 0.6 million respectively, for the three months ended March 31, 2025 and 2024.

Share Repurchase and Modified “ Dutch Auction ” Tender Offer.

On May 13, 2024 we announced that our Board of Directors approved a share repurchase authorization of $ 2.0 billion.

Subsequently, we commenced a modified “Dutch Auction” tender offer to repurchase shares of our common stock for an aggregate purchase price of up to $ 1.672 billion (the “tender offer”).

We offered to purchase up to $ 1.672 billion in value of our common stock at a price not greater than $ 60.00 per share nor less than $ 52.00 per share, net to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions set forth in the tender offer documents that were distributed to stockholders.

A modified “Dutch Auction” tender offer allows stockholders to indicate how much stock they wish to tender and at what price within the range described above.

Based on the number of shares tendered and the prices specified by the tendering stockholders, we determined the lowest price per share that enabled us to purchase $ 1.672 billion of common stock at such price.

On June 13, 2024 we completed the tender offer and repurchased 27,866,666 shares at a price of $ 60.00 per share for an aggregate price of approximately $ 1.672 billion, excluding fees and related expenses, pursuant to the tender offer.

In addition, on May 12, 2024, we entered into a separate stock purchase agreement with Julian C.

Baker (a member of our Board of Directors), Felix J.

Baker, and entities affiliated with Julian C.

Baker, including funds advised by Baker Bros.

Advisors LP (collectively, the “Baker Entities”), to repurchase up to $ 328.0 million of our common stock.

This would enable the Baker Entities to maintain their ownership level as of May 9, 2024 of approximately 16.4 % of Incyte’s outstanding common stock.

The Baker Entities purchase was to be at the same price per share as is determined and paid in the tender offer.

On June 26, 2024, we repurchased 5,459,183 shares at a price of $ 60.00 per share for an aggregate price of approximately $ 328.0 million pursuant to the terms of the stock purchase agreement with the Baker Entities.

We account for share repurchases as retirements, whereby it reduces common stock and additional paid-in capital by the amount of the original issuance, with any excess purchase price recorded as a reduction to retained earnings (accumulated deficit).

Any transaction costs, including the excise tax, directly associated with the share repurchases are included as part of the purchase price.

Under this method, the issued and outstanding shares of common stock are reduced by the number of shares of common stock repurchased, and no treasury stock is recognized on the condensed consolidated financial statements.

A total of 33,325,849 common shares were repurchased during June 2024 at a price of $ 60.00 per share for an aggregate purchase price of approximately $ 2.0 billion.

We incurred $ 24.4 million in fees and expenses associated with the share repurchase, which included $ 19.1 million for excise taxes on share repurchases in accordance with the Inflation Reduction Act of 2022.

We paid the excise tax in April 2025.

These costs are recognized within (accumulated deficit) retained earnings on the condensed consolidated balance sheet as of June 30, 2025 as costs to repurchase our common stock.

The purchased shares were cancelled and ceased to be outstanding.

Stock Compensation

We recorded $ 64.6 million and $ 125.6 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2025, respectively.

We recorded $ 56.6 million and $ 116.4 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2024, respectively.

Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $ 37.7 million, $ 74.4 million, $ 34.5 million and $ 71.3 million for the three and six months ended June 30, 2025 and 2024, respectively.

Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $ 26.1 million, $ 49.5 million, $ 21.7 million and $ 44.1 million for the three and six months ended June 30, 2025 and 2024, respectively.

Stock compensation expense included within our condensed consolidated statements of operations also included cost of product revenues of $ 0.8 million, $ 1.7 million, $ 0.4 million and $ 1.0 million respectively, for the three and six months ended June 30, 2025 and 2024.

Additionally, as described in Note 6, as part of the Escient acquisition, during the three and six months ended June 30, 2024, we recognized related compensation expense of $ 31.5 million associated with the accelerated vesting for certain Escient stock awards in connection with the acquisition on our condensed consolidated statements of operations.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions:

Employee Stock Options Employee Stock Purchase Plan

For the Three Months Ended For the Three Months Ended

March 31, March 31,

For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Six Months Ended

June 30, June 30,

2025 2024 2025 2024 2025 2024 2025 2024

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Options cancelled ( 403,571 ) $ 88.42

Balance at March 31, 2025 13,103,299 $ 83.13

Balance at June 30, 2025 13,047,607 $ 82.71

Our annual stock option grants generally have a 10 -year term and vest over four years , with 25 % vesting after one year and the remainder vesting in 36 equal monthly installments, subject to customary retirement provisions that may accelerate the requisite service period for expense recognition purposes.

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RSUs granted 513,198 $ 70.10

PSUs granted 18,050 $ 70.81

Additional PSUs earned 32,148 $ 70.45

RSUs released ( 508,059 ) $ 81.13

RSUs cancelled ( 169,673 ) $ 66.64

Balance at March 31, 2025 8,450,295 $ 67.18

Balance at June 30, 2025 8,542,467 $ 67.67

RSUs and PSUs are granted to our employees at the share price on the date of grant.

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Compensation expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period.

For the three months ended March 31, 2025 and 2024 we recorded $ 3.1 million and $ 3.4 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations.

For the three and six months ended June 30, 2025 we recorded $ 6.9 million and $ 10.0 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations.

For the three and six months ended June 30, 2024 we recorded $ 3.5 million and $ 6.9 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations.

The following table summarizes our shares available for grant under the 2010 Stock Plan and 2024 Inducement Plan.

Each RSU and PSU grant reduces the available share pool by 2 shares.

Previously, each RSU and PSU grant reduced the available share pool by 2 shares.

In June 2025, our stockholders approved an amendment to the 2010 Stock Plan to remove the fungible ratio, and all awards granted under the 2010 Stock Plan after June 10, 2025, the date of our latest annual meeting, will reduce the share reserve on a one -for-one basis.

If awards granted under the 2010 Stock Plan on or prior to June 10, 2025 expire, become unexercisable or are forfeited or repurchased after that date, the shares that were subject to those awards will become available for future grant only on a one -for-one basis, even if the original award was a full value award that reduced the share reserve on a two -for-one basis.

The 2024 Inducement Plan was amended in June 2025 to remove the provision that stated that any shares issued in connection with awards other than options and stock appreciation rights will be counted against the authorized share limitation as 2.0 shares for every one share so issued and, as a result, all awards granted under the 2024 Inducement Plan will reduce the share reserve thereunder on a one for one basis.

Shares Available

Balance at December 31, 2024 4,013,611

Additional authorization - 2010 Stock Plan 8,500,000

Options, RSUs and PSUs granted and issuance of shares for services rendered ( 1,767,811 )

Options, RSUs and PSUs cancelled 733,814

Balance at March 31, 2025 3,159,954

Fungible ratio change adjustments 282,731

Balance at June 30, 2025 11,762,345

Based on our historical experience of employee turnover, we have assumed an annualized forfeiture rate of 5 % for our options, RSUs and PSUs.

Under the true-up provisions of the stock compensation guidance, we will record additional expense if the actual forfeiture rate is lower than we estimated, and will record a recovery of prior expense if the actual forfeiture is higher than we estimated.

Total compensation cost of options granted but not yet vested, as of March 31, 2025, was $ 22.2 million, which is expected to be recognized over the weighted average period of approximately 1.1 years.

Total compensation cost of RSUs granted but not yet vested, as of March 31, 2025, was $ 209.7 million, which is expected to be recognized over the weighted average period of approximately 1.5 years.

Total compensation cost of PSUs granted but not yet vested, as of March 31, 2025, was $ 13.7 million, which is expected to be recognized over the weighted average period of 1.4 years, should the underlying performance conditions be deemed probable of achievement.

For the three months ended March 31, 2025 and 2024, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes (in thousands):

Total compensation cost of options granted but not yet vested, as of June 30, 2025, was $ 20.4 million, which is expected to be recognized over the weighted average period of approximately 1.1 years.

Total compensation cost of RSUs granted but not yet vested, as of June 30, 2025, was $ 171.8 million, which is expected to be recognized over the weighted average period of approximately 1.2 years.

Total compensation cost of PSUs granted but not yet vested, as of June 30, 2025, was $ 12.1 million, which is expected to be recognized over the weighted average period of 1.1 years, should the underlying performance conditions be deemed probable of achievement.

For the three and six months ended June 30, 2025 and 2024, we recorded the following provisions for income taxes and effective tax rates as compared to our income (loss) before provision for income taxes (in thousands):

Three Months Ended

Income before provision for income taxes $ 234,190 $ 236,159

June 30, Six Months Ended

2025 2024 2025 2024

Income (loss) before provision for income taxes $ 558,012 $ ( 389,777 ) $ 792,202 $ ( 153,618 )

Provision for income taxes 153,013 54,824 229,000 121,435

Effective tax rate 27.4 % ( 14.1 )% 28.9 % ( 79.0 )%

Our effective tax rate for the three months ended March 31, 2025 and 2024 was higher than the U.S.

Our effective tax rate for the three and six months ended June 30, 2025 was higher than the U.S.

statutory rate primarily due to an increase in our valuation allowance against certain U.S.

federal and state deferred tax assets and foreign losses with no associated tax benefit (i.e., full valuation allowance).

federal and state deferred tax assets.

This was partially offset by tax rate benefits associated with research and development and orphan drug tax credit generations and the foreign derived intangible income deduction.

The effective tax rate for the three months ended March 31, 2025 was unfavorable as compared to the prior year period primarily due to an increase in our valuation allowance against certain U.S.

federal and state deferred tax assets, partially offset by a decrease in foreign losses with no associated tax benefit and an increase in tax credit generations.

Our effective tax rate for the three and six months ended June 30, 2024 was higher than the U.S.

statutory rate primarily due to a non-deductible charge of $ 710.9 million associated with the Escient acquisition.

The effective tax rate for the three and six months ended June 30, 2025 was favorable as compared to the three and six months ended June 30, 2024 primarily due to an the non-deductible charge associated with the Escient acquisition in the prior year period.

We accrue interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.

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As countries we operate in enact legislation implementing Pillar 2, we will assess the impact on our financial statements in the period of enactment.

Net Income Per Share

Net income per share was calculated as follows for the periods indicated below:

On July 4, 2025, the U.S.

enacted legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H.

14” and commonly referred to as the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA modified key provisions of the Tax Cuts and Jobs Act of 2017, including but not limited to, the expensing of domestic research costs, the deduction for Foreign-Derived Intangible Income, and the Global Intangible Low-Taxed Income regime.

The OBBBA introduces multiple elections and features various effective dates, with some provisions effective in 2025 and others in subsequent years.

Under ASC 740, entities are required to recognize the impact of new income tax legislation in the period of enactment.

We are currently evaluating the OBBBA’s various provisions and elections, including their potential impact on our effective tax rate and the realizability of deferred tax assets, and intend to reflect these effects in our financial statements for the period ending September 30, 2025.

Net Income (Loss) Per Share

Net income (loss) per share was calculated as follows for the periods indicated below:

Three Months Ended

Basic net income $ 158,203 $ 169,548

June 30, Six Months Ended

2025 2024 2025 2024

Basic net income (loss) $ 404,999 $ ( 444,601 ) $ 563,202 $ ( 275,053 )

Weighted average common shares outstanding 193,995 218,175 193,853 221,329

Basic net income per share $ 0.82 $ 0.76

Diluted net income $ 158,203 $ 169,548

Basic net income (loss) per share $ 2.09 $ ( 2.04 ) $ 2.91 $ ( 1.24 )

Diluted net income (loss) $ 404,999 $ ( 444,601 ) $ 563,202 $ ( 275,053 )

Weighted average common shares outstanding 193,995 218,175 193,853 221,329

Dilutive stock options and awards 4,749 — 4,673 —

Weighted average shares used to compute diluted net income per share 198,197 227,219

Diluted net income per share $ 0.80 $ 0.75

The potential common shares that were excluded from the diluted net income per share computation are as follows:

Weighted average shares used to compute diluted net income (loss) per share 198,744 218,175 198,526 221,329

Diluted net income (loss) per share $ 2.04 $ ( 2.04 ) $ 2.84 $ ( 1.24 )

All stock options and stock awards were excluded from the diluted share calculation for the three and six months ended June 30, 2024 because their effect would have been anti-dilutive, as we were in a net loss position.

The potential common shares that were excluded from the diluted net income (loss) per share computation are as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Outstanding stock options and awards 12,368,632 16,067,125 11,955,851 16,148,294

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Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations.

Defined contribution expense for the three months ended March 31, 2025 and 2024 was $ 5.8 million and $ 5.4 million, respectively.

Defined contribution expense for the three and six months ended June 30, 2025 was $ 5.7 million and $ 11.5 million, respectively.

Defined contribution expense for the three and six months ended June 30, 2024 was $ 5.2 million and $ 10.6 million, respectively.

Defined Benefit Pension Plans

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Service cost $ 3,964 $ 2,657 $ 7,606 $ 5,278

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We may, at our option, prepay any borrowings under the Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty, subject to customary exceptions.

As of March 31, 2025 and December 31, 2024, we had no outstanding borrowings and were in compliance with all covenants under this facility.

As of June 30, 2025 and December 31, 2024, we had no outstanding borrowings and were in compliance with all covenants under this facility.

Contingencies

In the ordinary course of our business, we may become involved in lawsuits, proceedings, and other disputes, including commercial, intellectual property, regulatory, employment, and other matters.

The outcome of these disputes, regardless of the merits, is inherently uncertain and it is possible that an unfavorable resolution of these matters could adversely affect us, our results of operations, financial condition or cash flows.

We record a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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Under these agreements, we may be required to pay upfront fees, milestone payments, and royalties on sales of future products.

As described in Note 8, we entered into a Settlement Agreement with Novartis during May of 2025, with respect to litigation initiated by Novartis relating to the duration of royalty payments owed by us to Novartis under the Collaboration and License Agreement dated November 24, 2009, as amended, between us and Novartis.

We brought a lawsuit against the U.S.

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We believe that such a reading would violate CMS’s statutory authority and be arbitrary and capricious given that OPZELURA, among other differentiators, is indicated to treat entirely different medical conditions and entirely different patient populations than JAKAFI.

As of March 31, 2025, we have accrued approximately $ 145.4 million within accrued and other current liabilities on the condensed consolidated balance sheet, relating to the incremental rebates that would be owed were OPZELURA considered a line extension of JAKAFI.

The impact on OPZELURA gross to net deductions for the quarter ending March 31, 2025 is approximately 7.3 %.

As of June 30, 2025, we have accrued approximately $ 165.2 million within accrued and other current liabilities on the condensed consolidated balance sheet, relating to the incremental rebates that would be owed were OPZELURA considered a line extension of JAKAFI.

The impact on OPZELURA gross to net deductions for the quarter ending June 30, 2025 is approximately 6.6 %.

If OPZELURA is not treated as a line extension of JAKAFI, this would result in a reversal of our accrual and a lower future gross to net deduction for OPZELURA.

In addition, as described in Note 8, we have an outstanding contractual dispute with Novartis relating to royalties allegedly owed or the amount of royalties owed on JAKAFI net sales within the United States, as well as various disputes related to potential generic competition for our products, as described under Part II, Item 1A.

In addition, we have various patent disputes and litigation initiated by us related to potential generic or other competition for our products, as described under Part II, Item 1A.

“Risk Factors—Risks Relating to Commercialization of Our Products— Competition for our products could harm our business and result in a decrease in our revenue” below.

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Product revenues, net $ 1,059,414 $ 906,566 $ 1,981,688 $ 1,636,489

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Cost of product revenues (including definite-lived intangible amortization) 78,766 76,634 151,954 137,590

Contract dispute settlement ( 242,251 ) — ( 242,251 ) —

Research and development - internal 1

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Other research and development 3

12,550 679,801 28,050 680,801

Sales and marketing 256,311 229,202 513,963 446,015

General and administrative 74,711 76,780 142,750 160,223

Loss (gain) on change in fair value of acquisition-related contingent consideration 11,572 ( 456 )

Loss on change in fair value of acquisition-related contingent consideration 22,761 893 34,333 437

(Profit) and loss sharing under collaboration agreements — — — ( 1,025 )

1 unchanged sentence

125,315 ( 33,529 ) 172,280 ( 111,179 )

Net income $ 158,203 169,548

Net income (loss) $ 404,999 $ ( 444,601 ) $ 563,202 $ ( 275,053 )

Research and development - internal is comprised of internally generated costs such as salaries, travel, regulatory costs, lab costs, contracting, etc.

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Other segment items is comprised of interest income, interest expense, realized and unrealized (gain) loss on equity investments, other, net, and provision for income taxes .

During the three months ended March 31, 2025, total revenues from the United States were approximately $ 981.6 million, total revenues from Europe were approximately $ 68.6 million, and total revenues from other countries were approximately $ 2.7 million.

During the three months ended March 31, 2024, total revenues from the United States were approximately $ 828.2 million, total revenues from Europe were approximately $ 51.5 million, and total revenues from other countries were approximately $ 1.2 million.

As of March 31, 2025, property and equipment, net was approximately $ 469.6 million in the United States, approximately $ 282.7 million in Switzerland and approximately $ 13.0 million in other countries.

As of December 31, 2024, property and equipment, net was approximately $ 474.1 million in the United States, approximately $ 277.6 million in Switzerland and approximately $ 11.7 million in other countries.

Total Revenues by Geographic Location

Total revenues by geographic region consisted of the following (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

United States $ 1,132,353 $ 989,029 $ 2,113,910 $ 1,817,193

Europe 78,826 53,586 147,438 105,117

Other countries 4,350 1,144 7,079 2,338

Total revenues $ 1,215,529 $ 1,043,759 $ 2,268,427 $ 1,924,648

Property and Equipment, Net by Geographic Location

Property and equipment, net by geographic location was as follows (in thousands):

2025 December 31,

United States $ 474,384 $ 474,095

Switzerland 310,206 277,623

Other countries 13,953 11,693

Total property and equipment, net $ 798,543 $ 763,411

Subsequent Event

In July 2025, we entered into a settlement and license agreement with Sun Pharmaceuticals, Inc., resolving patent infringement litigation related to Leqselvi (deuruxolitinib).

Under this agreement, we have granted Sun a limited, non-exclusive license in the U.S.

with respect to oral deuruxolitinib for certain agreed-upon non-hematology-oncology indications in the U.S., including alopecia areata.

In exchange for the limited license, Sun has agreed to pay us an upfront payment plus ongoing royalty payments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements