INCY discuss 1

I'm in this for the long haul. However, you seem to have overlooked a few items in your price comparison vs. early 2009.

1. INCY has issued about 25% common equity since then. They raised 22 million shares at $6.75/share recenlty, but in the ensuing 15 months they have used cash for their operation of over $130 million.

2. INCY issued new convertible debt to replace the old one, but with a lower conversion strike price. The difference between the old ($11+/share), vs. current conversion strike price of $8.75/share is $2.25/share. On a base of $11+, this is a 20% INCREMENTAL dilution on an apples-to-apples basis that amounts to about another 10 million shares.


The big difference though is the $210 million + $90 million in upfront payments from the 2 deals.

So, there is a lot of cloudiness in the quantitative waters on this stock and I would submit that there are many who see what they want to see.

I believe we are seriously, or significantly undervalued, but a comparison of just the price in early '09 vs. now, in my view, misses a lot of the different elements.

I expect the next catalysts will be:

1) Jan 12th INCY presentation at Chase investor meeting,

2) Feb's annual investor update, including projections for full year '10 (which I expect will be outstanding) and in currentlu underappreciated,

3) the Phase 2 050 data in April '10,

4) Early data on Phase III for 424 in MF (assuming it is unblinded early), sometime in May/June '10, and

5) Potential start of Phase 3 PV trials in late 1H'10.