INCYTE CORP 10-Q

Item 1. Financial Statements INCYTE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except number of shares and par value) June 30, 2026 December 31, 2025* (unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,982,375 $ 3,097,817 Marketable securities—available-for-sale (amortized cost $ 555,856 and $ 480,793 as of June 30, 2026 and December 31, 2025, respectively; allowance for credit losses $ 0 as of June 30, 2026 and December 31, 2025) 553,365 482,787 Accounts receivable 1,125,203 1,024,407 Inventory 112,542 101,060 Prepaid expenses and other current assets 253,087 317,831 Total current assets 6,026,572 5,023,902 Restricted cash 1,816 1,852 Long term equity investments 104,387 47,991 Inventory 345,026 342,232 Property and equipment, net 709,469 730,885 Finance lease right-of-use assets, net 25,559 27,520 Other intangible assets, net 103,196 117,131 Goodwill 133,000 133,000 Deferred income tax asset 336,863 515,294 Other assets, net 86,759 18,166 Total assets $ 7,872,647 $ 6,957,973 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 250,401 $ 209,938 Accrued compensation 148,319 228,071 Accrued and other current liabilities 870,306 1,031,501 Finance lease liabilities 4,259 4,516 Acquisition-related contingent consideration 38,811 41,144 Total current liabilities 1,312,096 1,515,170 Acquisition-related contingent consideration 63,189 79,856 Finance lease liabilities 28,420 30,199 Other liabilities 124,515 165,270 Total liabilities 1,528,220 1,790,495 Commitments and contingencies (Note 15) Stockholders’ equity: Preferred Stock, $ 0.001 par value; 5,000,000 shares authorized; none issued or outstanding — — Common Stock, $ 0.001 par value; 400,000,000 shares authorized; 200,977,687 and 198,460,009 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 201 198 Additional paid-in capital 5,221,804 4,928,049 Accumulated other comprehensive income 19,718 25,462 Retained earnings 1,102,704 213,769 Total stockholders’ equity 6,344,427 5,167,478 Total liabilities and stockholders’ equity $ 7,872,647 $ 6,957,973 * The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited consolidated financial statements at that date. See accompanying notes. 3 Table of Contents INCYTE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Net sales $ 1,488,149 $ 1,059,414 $ 2,592,633 $ 1,981,688 Product royalty revenues 174,690 151,115 325,882 281,739 Milestone and contract revenues 11,200 5,000 28,200 5,000 Total revenues 1,674,039 1,215,529 2,946,715 2,268,427 Costs, expenses and other: Cost of sales (including definite-lived intangible amortization) 104,957 78,766 209,480 151,954 Contract dispute settlement — ( 242,251 ) — ( 242,251 ) Research and development 516,950 494,917 1,032,853 932,196 Selling, general and administrative 351,735 331,022 679,822 656,713 Asset impairment and related disposal costs — — 23,214 — Loss on change in fair value of acquisition-related contingent consideration 2,499 22,761 2,331 34,333 Total costs, expenses and other 976,141 685,215 1,947,700 1,532,945 Income from operations 697,898 530,314 999,015 735,482 Interest income 38,118 25,136 71,805 48,065 Interest expense ( 582 ) ( 594 ) ( 1,151 ) ( 1,254 ) Gain (loss) on equity investments 9,805 ( 4,151 ) 16,396 ( 5,494 ) Other, net 6,275 7,307 9,049 15,403 Income before provision for income taxes 751,514 558,012 1,095,114 792,202 Provision for income taxes 165,909 153,013 206,179 229,000 Net income $ 585,605 $ 404,999 $ 888,935 $ 563,202 Net income per share: Basic $ 2.92 $ 2.09 $ 4.45 $ 2.91 Diluted $ 2.81 $ 2.04 $ 4.28 $ 2.84 Shares used in computing net income per share: Basic 200,378 193,995 199,860 193,853 Diluted 208,216 198,744 207,670 198,526 See accompanying notes. 4 Table of Contents INCYTE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited, in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 585,605 $ 404,999 $ 888,935 $ 563,202 Other comprehensive (loss) income: Foreign currency translation (loss) gain ( 826 ) 19,065 ( 1,723 ) 24,505 Unrealized (loss) gain on marketable securities, net of tax ( 2,000 ) 36 ( 4,485 ) 967 Defined benefit pension gain, net of tax 230 576 464 1,088 Other comprehensive (loss) income ( 2,596 ) 19,677 ( 5,744 ) 26,560 Comprehensive income $ 583,009 $ 424,676 $ 883,191 $ 589,762 See accompanying notes. 5 Table of Contents INCYTE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited, in thousands, except number of shares) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders’ Equity Balances at January 1, 2026 $ 198 $ 4,928,049 $ 25,462 $ 213,769 $ 5,167,478 Issuance of 1,473,992 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes 2 90,967 — — 90,969 Issuance of 955 shares of Common Stock for services rendered — 92 — — 92 Stock compensation — 64,126 — — 64,126 Other comprehensive loss — — ( 3,148 ) — ( 3,148 ) Net income — — — 303,330 303,330 Balances at March 31, 2026 $ 200 $ 5,083,234 $ 22,314 $ 517,099 $ 5,622,847 Issuance of 795,114 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 202,281 shares of Common Stock under the ESPP 1 71,215 — — 71,216 Issuance of 907 shares of Common Stock for services rendered — 92 — — 92 Stock compensation — 67,263 — — 67,263 Other comprehensive loss — — ( 2,596 ) — ( 2,596 ) Net income — — — 585,605 585,605 Balances at June 30, 2026 $ 201 $ 5,221,804 $ 19,718 $ 1,102,704 $ 6,344,427 6 Table of Contents INCYTE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED) (unaudited, in thousands, except number of shares) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income (Accumulated Deficit) Total Stockholders’ Equity Balances at January 1, 2025 $ 193 $ 4,533,437 $ ( 13,121 ) $ ( 1,072,881 ) $ 3,447,628 Issuance of 363,987 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes — ( 6,215 ) — — ( 6,215 ) Issuance of 1,208 shares of Common Stock for services rendered — 82 — — 82 Stock compensation — 60,982 — — 60,982 Other comprehensive income — — 6,883 — 6,883 Net income — — — 158,203 158,203 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 — 82 — — 82 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 See accompanying notes. 7 Table of Contents INCYTE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 888,935 $ 563,202 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 50,278 45,281 Stock-based compensation 131,389 125,591 Deferred income taxes 179,037 110,071 Other, net 14,385 ( 3,220 ) (Gain) loss on equity investments ( 16,396 ) 5,494 Loss on change in fair value of acquisition-related contingent consideration 2,331 34,333 Changes in operating assets and liabilities: Accounts receivable ( 100,822 ) 10,726 Prepaid expenses and other assets ( 4,849 ) ( 148,440 ) Inventory ( 24,105 ) ( 48,099 ) Accounts payable 45,880 17,752 Accrued and other liabilities ( 289,050 ) ( 401,883 ) Net cash provided by operating activities 877,013 310,808 Cash flows from investing activities: Purchase of long term investments ( 40,000 ) — Sale of equity investments — 7 Capital expenditures ( 22,613 ) ( 22,243 ) Payments for intangible assets ( 5,000 ) — Purchases of marketable securities ( 174,083 ) ( 97,346 ) Maturities of marketable securities 101,700 101,807 Net cash used in investing activities ( 139,996 ) ( 17,775 ) Cash flows from financing activities: Excise tax paid on repurchase of Common Stock — ( 19,100 ) Proceeds from issuance of Common Stock under stock plans 173,073 18,123 Tax withholdings related to restricted and performance share vesting ( 10,888 ) ( 10,366 ) Payment of finance lease liabilities ( 2,342 ) ( 2,245 ) Payment of contingent consideration ( 9,565 ) ( 10,334 ) Net cash provided by (used in) financing activities 150,278 ( 23,922 ) Effect of exchange rates on cash, cash equivalents, and restricted cash ( 2,773 ) ( 1,749 ) Net increase in cash, cash equivalents, and restricted cash 884,522 267,362 Cash, cash equivalents, and restricted cash at beginning of period 3,099,669 1,689,451 Cash, cash equivalents, and restricted cash at end of period $ 3,984,191 $ 1,956,813 Supplemental Schedule of Cash Flow Information Income taxes paid $ 6,445 $ 177,919 Cash paid for contract dispute settlement $ — $ 294,881 Unpaid purchase of intangible asset $ — $ 25,000 Unpaid purchases of property and equipment $ 2 $ 4,046 Leased assets obtained in exchange for new operating lease liabilities $ 572 $ 1,768 Leased assets obtained in exchange for new finance lease liabilities $ 279 $ 304 See accompanying notes. 8 Table of Contents INCYTE CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2026 (Unaudited) Note 1. Organization and Business Incyte Corporation (including its subsidiaries, “Incyte,” “we,” “us,” or “our”) is a global biopharmaceutical company engaged in the discovery, development and commercialization of proprietary therapeutics. Our portfolio includes compounds in various stages, ranging from preclinical to late stage development, and commercialized products JAKAFI®/JAKAFI XR TM (ruxolitinib), ICLUSIG® (ponatinib), PEMAZYRE® (pemigatinib), OPZELURA® (ruxolitinib cream), MINJUVI® (tafasitamab), MONJUVI® (tafasitamab-cxix), ZYNYZ® (retifanlimab-dlwr), as well as NIKTIMVO™ (axatilimab-csfr), which is co-commercialized. Our operations are treated as one operating segment. Note 2. Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) 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 June 30, 2026, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and six months ended June 30, 2026 and 2025, and the condensed consolidated statements of cash flows for the six months ended June 30, 2026 and 2025, 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, 2025 has been derived from our audited consolidated financial statements. Although we believe that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. Principles of Consolidation. The condensed consolidated financial statements include the accounts of Incyte Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have been eliminated in consolidation. Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Recent Accounting Pronouncements and Regulatory Updates In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, “ Disaggregation of Income Statement Expenses (DISE).” This new guidance applies to all public entities and requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. Public entities must adopt the new standard prospectively for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption and retrospective application are permitted. We are currently evaluating the impact ASU No. 2024-03 will have on our consolidated financial statements and related disclosures. 9 Table of Contents In July 2025, the FASB issued ASU No. 2025-05, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ” This amended guidance applies to all entities and aims to simplify the estimation of expected credit losses for current accounts receivable and contract assets by providing a practical expedient for all companies. The amendments are effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual periods. We formally adopted ASU 2025-05, effective January 1, 2026, and elected the practical expedient provided to all companies. This adoption and related practical expedient election did not have and is not expected to have a material impact on our consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU No. 2025-06, “ Intangibles - Goodwill and Other - Internal-Use (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ” This amended guidance applies to all entities and serves to modernize the accounting for software costs that are accounted for under Subtopic 305-40, Intangibles - Goodwill and Other - Internal-Use Software (referred to as “internal-use software”). The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Entities may adopt the new guidance using a prospective, modified, or retrospective transition approach. We are currently evaluating the impact ASU No. 2025-06 will have on our consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU No. 2025-07, “ Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. ” This amended guidance applies to all entities and refines the scope of derivative accounting and clarifies rules for share-based noncash consideration in revenue contracts. Specifically, this update is intended to address concerns about the application of derivative accounting to contracts that have features based on the operations or activities of one of the parties to the contract and to reduce diversity in the accounting for share-based payments in revenue contracts. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. Entities may adopt the new guidance prospectively, or on a modified retrospective basis. We are currently evaluating the impact ASU No. 2025-07 will have on our consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-10, “ Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. ” This accounting standard update establishes specific rules for the recognition, measurement, and presentation of government grants received by business entities. For public business entities, this amended guidance is applicable for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. Early adoption is permitted. Entities may adopt the new guidance using a modified prospective, modified retrospective, or full retrospective approach. We are currently evaluating the impact ASU No. 2025-10 will have on our consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-11, “ Interim Reporting (Topic 270): Narrow-Scope Improvements. ” The amendments in this update aim to enhance the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods. Lastly, this updated guidance incorporates a principle that requires entities to disclose significant events since the end of the last annual reporting period. The amendments in this update apply to all entities that provide interim financial statements and notes in accordance with U.S. GAAP. For public business entities, this amended guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments in this update can be applied either prospectively or retrospectively to any or all periods presented in the financial statements. We are currently evaluating the impact ASU No. 2025-11 will have on our future condensed consolidated financial statements and related disclosures. 10 Table of Contents Note 3. Revenues Revenues are recognized under guidance within ASC 606, Revenue from Contracts with Customers . The following table presents our disaggregated revenue for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 JAKAFI net sales 1 $ 816,659 $ 763,788 $ 1,574,414 $ 1,473,200 OPZELURA net sales 2 449,736 164,499 592,751 283,204 ICLUSIG net sales 34,394 32,729 69,857 62,273 PEMAZYRE net sales 23,418 22,192 45,961 40,632 MINJUVI/MONJUVI net sales 53,686 31,131 102,913 60,682 NIKTIMVO net sales 60,309 36,154 115,397 49,767 ZYNYZ net sales 49,947 8,921 91,340 11,930 Total net sales 1,488,149 1,059,414 2,592,633 1,981,688 JAKAVI product royalty revenues 124,190 109,714 229,746 201,859 OLUMIANT product royalty revenues 38,479 33,482 74,886 64,282 TABRECTA product royalty revenues 6,691 6,632 12,673 13,045 Other product royalty revenues 5,330 1,287 8,577 2,553 Total product royalty revenues 174,690 151,115 325,882 281,739 Milestone and contract revenues 11,200 5,000 28,200 5,000 Total revenues $ 1,674,039 $ 1,215,529 $ 2,946,715 $ 2,268,427 1 Second quarter 2026 JAKAFI net sales include JAKAFI and JAKAFI XR following the launch of JAKAFI XR in the second quarter of 2026. 2 Second quarter 2026 OPZELURA net sales includes $ 246.0 million related to our agreement with CMS to resolve our litigation related to the application of Medicaid rebate rules to OPZELURA . Refer to Note 15 for further information. For further information on our revenue-generating contracts, refer to Note 7. Note 4. Fair Value of Financial Instruments The following is a summary of our marketable security portfolio for the periods presented (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value June 30, 2026 Debt securities (government) $ 555,856 $ 266 $ ( 2,757 ) $ 553,365 December 31, 2025 Debt securities (government) $ 480,793 $ 2,028 $ ( 34 ) $ 482,787 The table below summarizes the contractual maturities of our available-for-sale debt securities as of June 30, 2026 (in thousands): Total Less than 1 Year 1-5 Years Fair value of debt securities (government) $ 553,365 $ 205,695 $ 347,670 Debt security assets were assessed for risk of expected credit losses. As of June 30, 2026 and December 31, 2025, 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. 11 Table of Contents Fair Value Measurements FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (“the exit price”) in an orderly transaction between market participants at the measurement date. The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. Recurring Fair Value Measurements Our marketable securities consist of investments in U.S. government debt securities that are classified as available-for-sale. At June 30, 2026 and December 31, 2025, 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 and six months ended June 30, 2026. 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): Fair Value Measurement at Reporting Date Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of June 30, 2026 Cash and cash equivalents $ 3,982,375 $ — $ — $ 3,982,375 Debt securities (government) — 553,365 — 553,365 Long term equity investments (Note 7) 64,387 — 40,000 104,387 Total assets $ 4,046,762 $ 553,365 $ 40,000 $ 4,640,127 Fair Value Measurement at Reporting Date Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2025 Cash and cash equivalents $ 3,097,817 $ — $ — $ 3,097,817 Debt securities (government) — 482,787 — 482,787 Long term equity investments (Note 7) 47,991 — — 47,991 Total assets $ 3,145,808 $ 482,787 $ — $ 3,628,595 12 Table of Contents The following fair value hierarchy table presents information about each major category of our financial liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using: Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of June 30, 2026 Acquisition-related contingent consideration $ — $ — $ 102,000 $ 102,000 Total liabilities $ — $ — $ 102,000 $ 102,000 Fair Value Measurement at Reporting Date Using: Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2025 Acquisition-related contingent consideration $ — $ — $ 121,000 $ 121,000 Total liabilities $ — $ — $ 121,000 $ 121,000 The following is a roll forward of our Level 3 liabilities (in thousands): 2026 Balance at January 1, $ 121,000 Contingent consideration earned during the period but not yet paid ( 10,499 ) Payments made during the period ( 10,832 ) Change in fair value of contingent consideration 2,331 Balance at June 30, $ 102,000 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 sales 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 June 30, 2026 and December 31, 2025 included a discount rate of 10 %, updated projections of future net sales of ICLUSIG in the European Union and other countries for the approved third line treatment, and related applicable royalty rates. The change in fair value of the contingent consideration during the three and six months ended June 30, 2026 was due primarily to updated projections of future net sales of ICLUSIG, including the impacts from fluctuations in foreign currency exchange rates, 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 June 30, 2026 and December 31, 2025, contingent consideration earned but not yet paid was $ 10.5 million and $ 12.1 million, respectively, and was included in accrued and other current liabilities. Note 5. Concentration of Credit Risk and Current Expected Credit Losses 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, 15 % and 17 % of the accounts receivable balance as of June 30, 2026 and December 31, 2025, respectively. For further information relating to these collaboration and license agreements, refer to Note 7. 13 Table of Contents The concentration of credit risk related to our JAKAFI and OPZELURA sales is as follows: Percentage of Total Net Sales for the Three Months Ended Percentage of Total Net Sales for the Six Months Ended June 30, June 30, 2026 2025 2026 2025 Customer A 11 % 13 % 12 % 14 % Customer B 7 % 9 % 8 % 10 % Customer C 20 % 20 % 21 % 20 % Customer D 19 % 19 % 19 % 19 % Customer E 12 % 11 % 11 % 10 % Customer F 10 % 9 % 10 % 9 % We are exposed to risks associated with extending credit to customers related to the sale of products. Customers A, B, C, D, E and F comprised, in the aggregate, 63 % and 54 % of the accounts receivable balance as of June 30, 2026 and December 31, 2025, respectively. The concentration of credit risk relating to our other sales or accounts receivable is not significant. We assessed our collaborative and customer receivable assets as of June 30, 2026 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, 2026 and December 31, 2025, we had a de minimus amount of allowance for doubtful accounts. Note 6. Inventory Our inventory balance consists of the following (in thousands): June 30, 2026 December 31, 2025 Raw materials $ 49,778 $ 27,860 API and work-in-process 337,757 343,678 Finished goods 70,033 71,754 Total inventory $ 457,568 $ 443,292 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 June 30, 2026, $ 112.5 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, 2026, $ 345.0 million of inventory was classified as non-current on the condensed consolidated balance sheet as we do 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. The loss of a supplier, the deterioration of our relationship with a supplier, or any unilateral violation of the contractual terms under which we are supplied components by a supplier could adversely affect our total revenues and gross margins. We capitalize inventory after regulatory approval as the related costs are expected to be recoverable through the commercialization of the product. Costs incurred prior to regulatory approval are recorded as research and development expense in our condensed consolidated statements of operations. At June 30, 2026, inventory with approximately $ 39.1 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 6 to 35 months and, as a result, cost of sales will reflect a lower average per unit cost of materials. 14 Table of Contents Note 7. Collaborative and Other Relationships Novartis In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the terms of the agreement, Novartis received exclusive development and commercialization rights outside of the United States to our JAK inhibitor ruxolitinib and certain back-up compounds for hematologic and oncology indications, including all hematological malignancies, solid tumors and myeloproliferative diseases. We retained exclusive development and commercialization rights to JAKAFI (ruxolitinib) in the United States and in certain other indications. Novartis also received worldwide exclusive development and commercialization rights to our MET inhibitor compound capmatinib and certain back-up compounds in all indications. Under this agreement, each company is responsible for costs relating to the development and commercialization of ruxolitinib in its respective territories, with costs of collaborative studies shared equally. Novartis is also responsible for all costs relating to the development and commercialization of capmatinib. We were initially eligible to receive up to $ 174.0 million for the achievement of development milestones, up to $ 495.0 million for the achievement of regulatory milestones and up to $ 500.0 million for the achievement of sales milestones. 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 June 30, 2026, 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, 2026, such royalties on net sales within the United States totaled $ 20.0 million and $ 36.1 million, respectively, and were reflected in cost of sales on the condensed consolidated statements of operations. 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 sales on the condensed consolidated statements of operations. At June 30, 2026 and December 31, 2025, approximately $ 20.0 million and $ 20.3 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 (the trade name used by Novartis for ruxolitinib sales outside of the United States) net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12 % to 14 %. Product royalty revenue related to Novartis’ net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2026, was $ 124.2 million and $ 229.7 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 TABRECTA worldwide for the three and six months ended June 30, 2026, was $ 6.7 million and $ 12.7 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. 15 Table of Contents Lilly – Baricitinib In December 2009, we entered into a License, Development and Commercialization Agreement with Lilly. Under the terms of the agreement, Lilly received exclusive worldwide development and commercialization rights to our JAK inhibitor baricitinib, and certain back-up compounds for inflammatory and autoimmune diseases. 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. In October 2025, the parties amended the agreement to enable Lilly to commercialize baricitinib for the treatment of Type 1 diabetes mellitus and to restructure the royalty obligations on net sales of baricitinib, certain developmental and regulatory milestones associated with baricitinib, and the marketing and sales support obligations of Lilly. Beginning in October 2025, we are now eligible to receive either a fixed royalty amount or tiered royalties based on defined levels of quarterly global net sales, with the tiered royalties up to a rate in the mid-teens. Since the inception of the agreement through June 30, 2026, we recognized and received, in aggregate, $ 149.0 million for the achievement of development milestones, $ 335.0 million for the achievement of regulatory milestones, $ 50.0 million for the achievement of sales milestones, and $ 100.0 million for the functional intellectual property transfer related to Type 1 diabetes mellitus. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2026 was $ 38.5 million and $ 74.9 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. MacroGenics In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc. (“MacroGenics”). Under this agreement, we received exclusive development and commercialization rights worldwide to MacroGenics’ INCMGA0012 (formerly MGA012), an investigational monoclonal antibody that inhibits PD-1. Except as set forth in the succeeding sentence, we have sole authority over and bear all costs and expenses in connection with the development and commercialization of INCMGA0012 in all indications, whether as a monotherapy or as part of a combination regimen. MacroGenics has retained the right to develop and commercialize, at its cost and expense, its pipeline assets in combination with INCMGA0012. 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 amendments to the agreement, through June 30, 2026, 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. 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. Syndax In September 2021, we entered into a Collaboration and License Agreement with Syndax Pharmaceuticals, Inc. (“Syndax”), covering the worldwide development and commercialization of SNDX-6352 (“axatilimab”). Under the terms of our agreement, we received exclusive commercialization rights to axatilimab outside of the United States and share commercialization rights in the United States with Syndax. We are responsible for leading the commercialization strategy and booking all revenue from sales of axatilimab globally. Incyte and Syndax share equally the profits and losses from the co-commercialization efforts in the United States. Sales of axatilimab outside the United States are subject to our royalty payment obligations to Syndax, as set forth below. We and Syndax have agreed to co-develop axatilimab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55 % of such costs and Syndax responsible for 45 % of such costs. Each company is responsible for funding any independent development activities. 16 Table of Contents Inclusive of an upfront, non-refundable payment, since the inception of the agreement through June 30, 2026, 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 $ 225.0 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 June 30, 2026, 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, 2026 and December 31, 2025 was $ 31.1 million and $ 29.9 million, respectively. For the three and six months ended June 30, 2026, we recorded an unrealized loss of $ 2.1 million and an unrealized gain of $ 1.2 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, 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. Research and development expenses for the three and six months ended June 30, 2026, includes $ 4.9 million and $ 10.3 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, 2025, includes $ 5.3 million and $ 10.0 million, respectively, related to our 55 % share of the co-development costs for axatilimab. At June 30, 2026 and December 31, 2025, $ 1.4 million and $ 2.4 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheet for amounts due to Syndax under the agreement. In connection with the United States co-commercialization efforts, Syndax’s 50 % share of profit for the three and six months ended June 30, 2026 was $ 20.2 million and $ 34.6 million, respectively, which is reflected in cost of sales on the condensed consolidated statement of operations. At June 30, 2026 and December 31, 2025, $ 26.5 million and $ 27.6 million, respectively, was included in accrued and other liability on the consolidated balance sheet for amounts due to Syndax related to United States co-commercialization activities. Prelude In November 2025, we entered into an exclusive purchase option agreement with Prelude Therapeutics Incorporated (“Prelude”). Under the terms of the agreement, we secured an exclusive option to acquire Prelude’s mutant selective JAK2V617F JH2 inhibitor program, including Prelude’s library of preclinical candidates. We paid Prelude a total of $ 60.0 million, comprised of an upfront payment of $ 35.0 million, plus a $ 25.0 million equity investment in Prelude. The $ 35.0 million upfront payment was recorded in research and development expense during the fourth quarter of 2025. We purchased 6.25 million shares of Prelude non-voting common stock at a price of $ 4.00 per share. Of this $ 25.0 million equity investment, approximately $ 17.1 million was expensed in research and development during the fourth quarter of 2025 as a premium above fair value of the stock purchase. The remaining $ 7.9 million is the initial fair value of our investment in Prelude. We are accounting for our shares held in Prelude at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three and six months ended June 30, 2026, we recorded an unrealized gain of $ 11.9 million and $ 15.2 million, respectively based on the change in fair value of Prelude’s common stock during the period. The fair market value of our total long term investment in Prelude as of June 30, 2026 and December 31, 2025 was $ 33.3 million and $ 18.1 million, respectively. Prelude expects to advance the JAK2V617F program to pre-defined milestones. We may elect to exercise our exclusive option during the option period to acquire the program and associated assets from Prelude for $ 100.0 million. In addition, if we exercise our option, Prelude would be eligible to receive up to $ 775.0 million in additional clinical and regulatory milestones, and single digit royalties on global net sales. If we elect to not exercise our option to acquire the program, all JAK2V617F global program rights and interests would remain in the sole ownership and control of Prelude. 17 Table of Contents Genesis In May 2026, we entered into a License, Research and Collaboration Agreement with Genesis Molecular AI, Inc. (“Genesis”), covering the building and deployment of artificial intelligence to accelerate the discovery of novel molecules for collaboration targets. Under the terms of the agreement, we will identify targets and Genesis will subsequently use the Genesis Exploration of Molecular Space artificial intelligence platform to identify molecular structures directed at each target. All preclinical costs related to the collaboration are subject to joint research plans. We will be responsible for leading the clinical development and global commercialization efforts. Based on the terms of the agreement, we paid Genesis a total of $ 120.0 million, comprised of an upfront non-refundable payment of $ 80.0 million plus a $ 40.0 million equity investment in Genesis. In addition, Genesis is eligible to receive up to $ 135.0 million for the achievement of development milestones, up to $ 475.0 million for the achievement of regulatory milestones and up to $ 550.0 million for the achievement of sales milestones on the initial target programs. The $ 80.0 million upfront payment was determined to be a prepayment for future research and development services and thus will be amortized over the five-year term of the agreement. Research and development expenses during the three and six months ended June 30, 2026, includes $ 2.7 million relating to the amortization of this upfront payment. Additionally, as of June 30, 2026, $ 16.0 million and $ 61.3 million were recorded in prepaid expenses and other current assets and other assets, net, respectively, on the condensed consolidated balance sheet relating to this upfront payment. We purchased approximately 4.3 million shares of Genesis Series B-3 Preferred Stock for $ 40.0 million, at a price of $ 9.332 per share. As there is no readily determinable fair value for the shares we hold in Genesis, we have elected to account for our investment using the measurement alternative under ASC 321 whereby our investment is measured at cost, less any impairment, and adjusted for observable price changes in orderly transactions for identical or similar securities of Genesis. We monitor the investment for any observable price changes or impairment indicators. Any subsequent changes in fair value of our investment will be recognized within gain (loss) on equity investments on our condensed consolidated statements of operations. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term equity investments on the accompanying condensed consolidated balance sheets. For the three months ended June 30, 2026, we did not identify any impairment or observable price changes related to our investment in Genesis. Other Agreements In addition to the license and collaboration agreements discussed above, we have various other license and collaboration agreements that are not individually material to our operating results or financial condition at this time. Pursuant to the terms of those agreements, we may be required to pay, or we may receive, additional amounts contingent upon the occurrence of various future events such as future discovery, development, regulatory or commercial milestones, which in the aggregate could be material. In addition, if any products related to these collaborations are approved for sale, we may be required to pay, or we may receive, royalties on future sales. The payment or receipt of these amounts, however, is contingent upon the occurrence of various future events, the likelihood of which cannot presently be determined. 18 Table of Contents Note 8. Property and Equipment, net Property and equipment, net consists of the following (in thousands): June 30, 2026 December 31, 2025 Office equipment $ 25,487 $ 24,411 Laboratory equipment 261,337 258,003 Computer equipment 167,619 152,156 Land 11,156 11,273 Building and leasehold improvements 606,693 610,027 Operating lease right-of-use assets 14,365 19,596 Construction in progress 26,726 30,485 1,113,383 1,105,951 Less accumulated depreciation and amortization ( 403,914 ) ( 375,066 ) Property and equipment, net $ 709,469 $ 730,885 In May 2024, we purchased additional property in Wilmington, Delaware, including land, office buildings and parking garages for a purchase price of $ 48.7 million. Subsequent to the purchase, we incurred additional construction costs of approximately $ 28.6 million through December 2025. During December 2025, the downtown Wilmington, Delaware properties met the criteria to be classified as assets held for sale. As a result of this classification, we recorded an asset impairment charge of $ 76.3 million on our consolidated statement of operations for the year ended December 31, 2025 relating to the downtown Wilmington properties in order to reflect the properties at the lower of their carrying amount or estimated fair value less cost to sell as of December 31, 2025. The estimated fair value less cost to sell of the properties was recorded within the Prepaid expenses and other current assets line item on our consolidated balance sheet as of December 31, 2025. During the three months ended March 31, 2026, we sold these downtown properties, and recognized an additional $ 23.2 million of expenses relating to disposal costs, which are included in Asset impairment and related disposal costs in the condensed consolidated statements of operations. Note 9. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands): June 30, 2026 December 31, 2025 Royalties $ 42,796 $ 40,678 Clinical related costs 164,368 175,932 Sales allowances 526,435 642,468 Sales and marketing 60,341 71,248 Accrued taxes 2,239 4,755 Operating lease liabilities 5,588 5,697 Other current liabilities 68,539 90,723 Total accrued and other current liabilities $ 870,306 $ 1,031,501 19 Table of Contents Note 10. Other Comprehensive Income (Loss) The following tables summarize the activity related to each component of accumulated other comprehensive income (loss) during the six months ended June 30, 2026 and 2025: (Amounts presented net of taxes) Foreign Currency Translation Gains (Loss) Net Unrealized Gains (Losses) on Marketable Securities Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balances at January 1, 2026 $ 51,433 $ 1,994 $ ( 27,965 ) $ 25,462 Other comprehensive loss before reclassifications ( 1,723 ) ( 4,485 ) — ( 6,208 ) Net amount reclassified from accumulated other comprehensive income (loss) — — 464 464 Net other comprehensive (loss) income ( 1,723 ) ( 4,485 ) 464 ( 5,744 ) Balances at June 30, 2026 $ 49,710 $ ( 2,491 ) $ ( 27,501 ) $ 19,718 (Amounts presented net of taxes) Foreign Currency Translation Gains Net Unrealized Gains on Marketable Securities Defined Benefit Pension Plans Accumulated Other Comprehensive Income (Loss) Balances at January 1, 2025 $ 26,456 $ 346 $ ( 39,923 ) $ ( 13,121 ) Other comprehensive income before reclassifications 24,505 967 — 25,472 Net amount reclassified from accumulated other comprehensive income — — 1,088 1,088 Net other comprehensive income 24,505 967 1,088 26,560 Balances at June 30, 2025 $ 50,961 $ 1,313 $ ( 38,835 ) $ 13,439 Note 11. Stock Compensation 2010 Stock Incentive Plan. 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”). A total of 74,953,475 shares of common stock are reserved for issuance pursuant to the 2010 Stock Plan. 2024 Inducement Stock Incentive 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 $ 67.3 million and $ 131.4 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2026, respectively. 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. Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $ 38.2 million, $ 77.4 million, $ 37.7 million and $ 74.4 million for the three and six months ended June 30, 2026 and 2025, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $ 28.2 million, $ 52.2 million, $ 26.1 million and $ 49.5 million for the three and six months ended June 30, 2026 and 2025, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included cost of sales of $ 0.9 million, $ 1.8 million, $ 0.8 million and $ 1.7 million, respectively, for the three and six months ended June 30, 2026 and 2025. 20 Table of Contents 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 Six Months Ended For the Three Months Ended For the Six Months Ended June 30, June 30, 2026 2025 2026 2025 2026 2025 2026 2025 Average risk-free interest rates 4.18 % 3.89 % 3.85 % 4.24 % 4.01 % 4.29 % 3.79 % 4.22 % Average expected life (in years) 5.58 5.46 4.91 4.89 0.50 0.50 0.50 0.50 Volatility 31 % 31 % 30 % 29 % 38 % 32 % 34 % 37 % Weighted-average fair value (in dollars) $ 36.50 $ 25.04 $ 34.05 $ 23.35 $ 20.63 $ 12.63 $ 21.51 $ 14.49 The risk-free interest rate is derived from the U.S. Federal Reserve rate in effect at the time of grant. The expected life calculation is based on the observed and expected time to the exercise of options by our employees based on historical exercise patterns for similar type options. Expected volatility is based on the historical volatility of our common stock over the period commensurate with the expected life of the options. A dividend yield of zero is assumed based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Nonemployee awards are measured on the grant date by estimating the fair value of the equity instruments to be issued using the expected term, similar to our employee awards. Option activity under our 2010 Stock Plan and 2024 Inducement Plan was as follows: Shares Subject to Outstanding Options Shares Weighted Average Exercise Price Balance at December 31, 2025 10,859,861 $ 83.46 Options granted 421,118 $ 104.23 Options exercised ( 2,058,609 ) $ 78.41 Options cancelled ( 238,870 ) $ 92.18 Balance at June 30, 2026 8,983,500 $ 85.36 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. 21 Table of Contents RSU and PSU award activity under the 2010 Stock Plan and 2024 Inducement Plan was as follows: Shares Subject to Outstanding Awards Shares Grant Date Value Balance at December 31, 2025 9,275,450 $ 66.86 RSUs granted 372,558 $ 102.78 PSUs granted 13,171 $ 116.63 Additional PSUs earned 63,187 $ 61.76 RSUs released ( 347,182 ) $ 69.02 PSUs released ( 18,750 ) $ 82.86 RSUs cancelled ( 272,605 ) $ 67.74 PSUs cancelled ( 16,599 ) $ 84.44 Balance at June 30, 2026 9,069,230 $ 68.20 RSUs and PSUs are granted to our employees at the share price on the date of grant. Each RSU represents the right to acquire one share of our common stock. Each RSU granted in connection with our annual equity awards will vest 25 % annually over four years , while each RSU granted as outstanding merit awards or as part of retention award programs will vest in a single installment at the end of four years , subject to customary retirement provisions that may accelerate the requisite service period for expense recognition purposes. We grant PSUs with performance and/or service-based milestones with graded and/or cliff vesting over three to six years . The shares of our common stock into which each PSU may convert is subject to a multiplier based on the level at which the financial, developmental and market performance conditions are achieved over the service period. Compensation expense for PSUs with financial and developmental performance conditions is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. For PSUs containing performance conditions which were not deemed probable of achievement, no stock compensation expense is recorded. 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 and six months ended June 30, 2026, we recorded $ 8.4 million and $ 15.4 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. 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 one share. Shares Available for Grant Balance at December 31, 2025 9,059,040 Options, RSUs and PSUs granted and issuance of shares for services rendered ( 871,896 ) Options, RSUs and PSUs cancelled 528,074 Balance at June 30, 2026 8,715,218 We estimate an annualized forfeiture rate 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 June 30, 2026, was $ 20.8 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, 2026, was $ 177.1 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, 2026, was $ 28.0 million, which is expected to be recognized over the weighted average period of 1.9 years, should the underlying performance conditions be deemed probable of achievement. 22 Table of Contents Note 12. Income Taxes For the three and six months ended June 30, 2026 and 2025, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Income before provision for income taxes $ 751,514 $ 558,012 $ 1,095,114 $ 792,202 Provision for income taxes 165,909 153,013 206,179 229,000 Effective tax rate 22.1 % 27.4 % 18.8 % 28.9 % Our effective tax rates for the three and six months ended June 30, 2026 were favorably impacted by tax benefits associated with the generation of tax credits and foreign tax effects. This was mostly offset by a net increase in valuation allowances against certain U.S. federal and state deferred tax assets. In addition, our effective tax rate for the six months ended June 30, 2026 was favorably impacted by changes in unrecognized tax benefits. Our effective tax rates for the three and six months ended June 30, 2025 were unfavorably impacted by an increase in valuation allowances against certain U.S. federal and state deferred tax assets. This was partially offset by tax rate benefits associated with the generation of tax credits and the effects of cross-border tax laws. The effective tax rates for the three and six months ended June 30, 2026 were favorable as compared to the three and six months ended June 30, 2025 due to reversals of certain foreign valuation allowances and the impacts of the One Big Beautiful Bill Act (“OBBBA”) discussed below. The effective tax rate for the six months ended June 30, 2026 was also favorably impacted as compared to the prior year due to the recognition of previously unrecognized tax benefits and reversals of certain U.S. valuation allowances. We accrue interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. One or more of our legal entities file income tax returns in the U.S. and in certain foreign jurisdictions. Our income tax returns may be examined by tax authorities in those jurisdictions. Significant disputes may arise with tax authorities involving issues such as the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws and regulations and relevant facts. We were under U.S. federal audit for the 2021 tax year; during the first quarter of 2026, the federal audit for tax year 2021 was completed with no material matters identified. The Organization for Economic Cooperation and Development Pillar 2 guidelines, supported by over 130 countries worldwide, establish a 15% global minimum tax on adjusted financial results. Pillar 2 legislation has been enacted in multiple jurisdictions in which we operate and became effective beginning in 2024. We have evaluated the impact of Pillar 2 on our business, and determined there are no material impacts on our effective tax rate at this time. We will continue to monitor additional enactments and guidance as they occur and assess any future impacts in the period they become effective. In July 2025, the U.S. enacted the OBBBA, which modified certain provisions of the Tax Cuts and Jobs Act of 2017, including those related to the expensing of domestic research and development costs, the deduction for foreign-derived intangible income, and the global intangible low-taxed income regime. The OBBBA also introduced multiple elections related to the treatment of domestic research and development expenditures. As a result of these changes, we expect to fully deduct certain expenditures for which deferred tax assets had previously been recorded and, accordingly, no longer maintain a valuation allowance against such amounts. The absence of these deferred tax assets and related valuation allowance continues to have a favorable impact on our effective tax rate for the current period. We will continue to evaluate the application of the OBBBA’s various elections in connection with the preparation of our income tax return. 23 Table of Contents Note 13. Net Income Per Share Net income per share was calculated as follows for the periods indicated below: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Basic net income $ 585,605 $ 404,999 $ 888,935 $ 563,202 Weighted average common shares outstanding 200,378 193,995 199,860 193,853 Basic net income per share $ 2.92 $ 2.09 $ 4.45 $ 2.91 Diluted net income $ 585,605 $ 404,999 $ 888,935 $ 563,202 Weighted average common shares outstanding 200,378 193,995 199,860 193,853 Dilutive stock options and awards 7,838 4,749 7,810 4,673 Weighted average shares used to compute diluted net income per share 208,216 198,744 207,670 198,526 Diluted net income per share $ 2.81 $ 2.04 $ 4.28 $ 2.84 The potential common shares that were excluded from the diluted net income per share computation are as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Outstanding stock options and awards 2,337,323 12,368,632 2,325,579 11,955,851 Note 14. Employee Benefit Plans Defined Contribution Plans We have a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code covering all U.S. employees and defined contribution plans for other Incyte employees in Europe and Japan. Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations. Defined contribution expense for the three and six months ended June 30, 2026 was $ 6.3 million and $ 12.7 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 Benefit Pension Plans We have defined benefit pension plans for our employees in Europe which provide benefits to employees upon retirement, death or disability. The assets of the pension plans are held in collective investment accounts represented by the cash surrender value of an insurance policy and are classified as Level 2 within the fair value hierarchy. 24 Table of Contents The net periodic benefit cost was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Service cost $ 4,043 $ 3,964 $ 8,130 $ 7,606 Interest cost 688 476 1,383 913 Expected return on plan assets ( 1,933 ) ( 1,819 ) ( 3,887 ) ( 3,491 ) Amortization of prior service cost 105 226 212 420 Amortization of actuarial losses 125 350 252 668 Net periodic benefit cost $ 3,028 $ 3,197 $ 6,090 $ 6,116 The components of net periodic benefit cost other than the service cost component are included in Other, net on the condensed consolidated statements of operations. We expect to contribute a total of $ 12.6 million to the pension plans in 2026 inclusive of the amounts contributed to the plan during the current period. Note 15. Commitments and Contingencies Commitments In August 2021, we entered into a revolving credit and guaranty agreement, which was subsequently amended in May 2023 and June 2024 (as amended, the “Credit Agreement”), among Incyte Corporation, as borrower, our subsidiary Incyte Holdings Corporation, as a guarantor, a group of lenders (the “Lenders”), and J.P. Morgan Chase Bank, N.A., as administrative agent. Under the Credit Agreement, the Lenders have committed to provide an unsecured revolving credit facility in an aggregate principal amount of up to $ 500.0 million. The June 2024 amendment to the Credit Agreement extended the maturity date of the revolving credit facility from August 2024 to June 2027. We may increase the maximum revolving commitments or add one or more incremental term loan facilities to the Credit Agreement, subject to obtaining commitments from any participating lenders and certain other conditions, in an amount not to exceed (1) $ 250.0 million plus (2) an additional amount, so long as after giving effect to the incurrence of such additional amount, our pro forma consolidated leverage ratio would not exceed 0.25 :1.00 above our consolidated leverage ratio in effect immediately prior to giving effect to such increase. Loans under the Credit Agreement will bear interest, at our option, at a per annum rate equal to either (a) a base rate (but not less than 1.00 %) plus an applicable rate per annum varying from 0.125 % to 0.875 % depending on our consolidated leverage ratio or (b) a rate based on the secured overnight financing rate (“SOFR”) plus a credit spread adjustment of 0.10 % (but not less than 0.00 %), plus an applicable rate per annum varying from 1.125 % to 1.875 % depending on our consolidated leverage ratio. Commitment fees payable on the undrawn commitment range from 0.15 % per annum to 0.225 % per annum, based on our consolidated leverage ratio. 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 June 30, 2026 and December 31, 2025, we had no outstanding borrowings or letters of credit outstanding 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. We have entered into the collaboration agreements described in Note 7, as well as various other collaboration agreements that are not individually, or in the aggregate, significant to our operating results or financial condition at this time. We may in the future seek to license additional rights relating to technologies or drug development candidates in connection with our drug discovery and development programs. Under these agreements, we may be required to pay upfront fees, milestone payments, and royalties on sales of future products. 25 Table of Contents We brought a lawsuit against CMS alleging that a regulation issued by CMS on the definition of “line extension” for purposes of the Medicaid rebate program was too broad and had the unintended consequence of treating OPZELURA as a “line extension” of JAKAFI under this program. In the second quarter of 2026, we reached an agreement with CMS to resolve our litigation related to the application of Medicaid rebate rules to OPZELURA (ruxolitinib) cream. Under the agreement, CMS will not apply the line extension regulation to OPZELURA as if it were a line extension of JAKAFI (ruxolitinib). In the second quarter of 2026, we recorded a one-time, non-cash benefit of $ 246.0 million in net sales on the condensed consolidated statements of operations, associated with the reversal of previously established accrual balances through March 31, 2026, related to liabilities associated with the potential application of the line extension regulations to OPZELURA. We will no longer accrue for the potential application of the line extension regulations to OPZELURA. 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. Note 16. Segment Information We operate in one operating segment, and therefore one reportable segment, focused on the global discovery, development and commercialization of proprietary therapeutics. We manage business activities on a consolidated basis through the development and commercialization of oncology and dermatology products, which are sold to U.S. and international customers. Our determination that we operate as a single operating segment is consistent with the financial information regularly reviewed by the chief operating decision maker for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods. Our chief operating decision maker is the Chief Executive Officer. The accounting policies for our single operating segment are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2025. Our single operating segment generates net sales from the development and commercialization of oncology and dermatology pharmaceutical products, which are developed by our research and development department, as well as from product royalties, milestone and contract revenues from the out-licensing of our intellectual property to third parties. For our segment, the chief operating decision maker uses net income or loss, that also is reported on the condensed consolidated statements of operations as consolidated net income, to allocate resources (including employees, property, and financial resources), predominantly during the annual budget and forecasting process. The chief operating decision maker also uses consolidated net income or loss, along with non-financial inputs and qualitative information, to evaluate our performance, establish compensation, monitor budget versus actual results, and decide the level of investment in our various operating activities and other capital allocation activities. The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets. 26 Table of Contents Net income for our segment was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net sales $ 1,488,149 $ 1,059,414 $ 2,592,633 $ 1,981,688 Product royalty revenues 174,690 151,115 325,882 281,739 Milestone and contract revenues 11,200 5,000 28,200 5,000 Total revenues 1,674,039 1,215,529 2,946,715 2,268,427 Costs, expenses and other: Cost of sales (including definite-lived intangible amortization) 104,957 78,766 209,480 151,954 Contract dispute settlement — ( 242,251 ) — ( 242,251 ) Research and development - internal 1 268,615 236,686 528,791 465,031 Research and development - external 2 248,335 245,681 491,462 439,115 Other research and development 3 — 12,550 12,600 28,050 Sales and marketing 285,752 256,311 545,315 513,963 General and administrative 65,983 74,711 134,507 142,750 Asset impairment and related disposal costs — — 23,214 — Loss on change in fair value of acquisition-related contingent consideration 2,499 22,761 2,331 34,333 Other segment items 4 112,293 125,315 110,080 172,280 Net income $ 585,605 $ 404,999 $ 888,935 $ 563,202 1. Research and development - internal is comprised of internally generated costs such as salaries, travel, regulatory costs, lab costs, contracting, etc. 2. Research and development - external is comprised of specific program spend with external vendors (i.e. contract manufacturing organizations, contract research organizations and lab vendors for clinical, technical operations and toxicology services). 3. Other research and development is comprised of all other costs including certain one-time costs resulting from the acquisition of IPR&D assets and one-time development milestone expenses. 4. 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 . 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, 2026 2025 2026 2025 United States $ 1,560,110 $ 1,132,353 $ 2,731,578 $ 2,113,910 Europe 105,131 78,826 197,560 147,438 Other countries 8,798 4,350 17,577 7,079 Total revenues $ 1,674,039 $ 1,215,529 $ 2,946,715 $ 2,268,427 27 Table of Contents Property and Equipment, Net by Geographic Location Property and equipment, net by geographic location was as follows (in thousands): June 30, 2026 December 31, 2025 United States $ 394,985 $ 406,829 Switzerland 301,442 309,802 Other countries 13,042 14,254 Total property and equipment, net $ 709,469 $ 730,885 Note 17. Subsequent Event On June 8, 2026, we entered into an agreement with Star Therapeutics LLC (“Star”) to acquire Vega Therapeutics, Inc. (“Vega”), a wholly owned subsidiary of Star. We completed the acquisition of Vega on July 6, 2026. Vega is a clinical-stage drug development company developing novel antibody therapies for rare blood disorders, focusing on von Willebrand disease. Based on the terms of the agreement, we acquired Vega for cash consideration of $ 1.25 billion, with up to $ 750.0 million in additional payments due to Star upon achievement of specified sales milestones. We expect to account for the acquisition as an asset acquisition, as substantially all of the fair value of the assets acquired is concentrated in a single in-process research and development asset. We expect to allocate substantially all of the upfront consideration to the in-process research and development asset and to record the expense within Research and development expense in our condensed consolidated statements of operations during the third quarter of 2026. 28 Table of Contents