Incyte (INCY) 10-K risk factor changes: FY2021 vs FY2020

JAKAFI was approved by the U.S. Food and Drug Administration, or FDA, in November 2011 for the treatment of patients with intermediate or high-risk myelofibrosis, in December 2014 for the treatment of patients with polycythemia vera who have had an inadequate response to or are intolerant of hydroxyurea, which we refer to as uncontrolled polycythemia vera, [removed: and] in May 2019 for the treatment of steroid-refractory acute graft-versus-host disease in adult and pediatric patients 12 years and [added: older and in September 2021 for the treatment of steroid-refractory chronic graft-versus-host disease in adult and pediatric patients 12 years and] older.

[added: While we also sell ICLUSIG in the European Union, or EU, and other countries for the treatment] of [added: certain types of] leukemia, PEMAZYRE in the United [removed: States] [added: States, Europe and Japan] for the treatment of [removed: specified] [added: certain metastatic] cholangiocarcinoma indications, [removed: and] MONJUVI in the United States [added: and MINJUVI in the European Union] for the treatment of certain lymphoma [added: indications, and OPZELURA in the Unites States for the treatment of certain] indications [added: of atopic dermatitis,] and our exclusive licensees sell OLUMIANT (baricitinib) for the treatment of specified rheumatoid arthritis and atopic dermatitis indications and TABRECTA for the treatment of a certain type of non small-cell lung cancer, we anticipate that JAKAFI product sales will continue to contribute a significant percentage of our total revenues over the next several years.

In addition, [added: revenues from] our [added: other products and our] receipt of royalties under our collaboration agreements with Novartis for sales of JAKAVI outside the United States and TABRECTA globally and with Eli Lilly and Company for worldwide sales of OLUMIANT will depend on factors similar to those listed above, with similar regulatory, pricing and reimbursement issues driven by applicable regulatory authorities and governmental and third-party payors affecting jurisdictions outside the United States.

If we are unable to obtain, or maintain at anticipated levels, [added: coverage and] reimbursement for our products from government health administration authorities, private health insurers and other organizations, our pricing may be affected [removed: or] [added: and] our product sales, results of operations [removed: or] [added: and] financial condition could be harmed.

The costs of JAKAFI, ICLUSIG, [removed: PEMAZYRE] [added: PEMAZYRE, MONJUVI/MINJUVI] and [removed: MONJUVI] [added: OPZELURA] are not insignificant and almost all patients will require some form of third-party coverage to afford their cost.

Reimbursement in the EU must be negotiated on a country-by-country basis and in many countries [removed: the] [added: a drug] product cannot be commercially launched until reimbursement is approved.

Risks related to [removed: pricing] [added: proposed changes in government regulations] and [removed: reimbursement] [added: health care reform measures] are described below under “—Other Risks Relating to our Business—Health care reform measures could impact the pricing and profitability of pharmaceuticals, and adversely affect the commercial viability of our or our collaborators’ products and drug candidates.

[removed: Our ability to generate revenues will be diminished if we or our collaborators are unable to obtain an adequate level of reimbursement from private insurers, government insurance programs or other third party payors of health care costs, which could be affected by current and potential healthcare reform legislation, and diminished revenues will harm our operating results and financial condition and could adversely affect our ability to conduct our research and development operations.” If government and other third-party payors refuse to provide coverage and reimbursement with respect to our products,] determine to provide a lower level of coverage and reimbursement than anticipated, reduce previously approved levels of coverage and reimbursement, or delay reimbursement payments due to budgetary constraints relating to the COVID-19 [removed: Pandemic,] [added: pandemic,] then our pricing or reimbursement for our products may be affected and our product sales, results of operations or financial condition could be harmed.

We depend upon a limited number of specialty pharmacies and wholesalers for a significant portion of any revenues from [removed: JAKAFI,] [added: JAKAFI] and [added: most of our other drug products, and] the loss of, or significant reduction in sales to, any one of these specialty pharmacies or wholesalers could adversely affect our operations and financial condition.

We sell JAKAFI [added: and our other drug products other than OPZELURA] primarily to specialty pharmacies and wholesalers.

Specialty pharmacies dispense JAKAFI [added: and our other drug products] to patients in fulfillment of prescriptions and wholesalers sell JAKAFI [added: and our other drug products] to hospitals and physician offices.

We do not promote JAKAFI [added: or our other drug products] to specialty pharmacies or wholesalers, and they do not set or determine demand for [removed: JAKAFI.][added: JAKAFI or our other drug products.]

Our ability to successfully commercialize JAKAFI [added: and our other drug products] will depend, in part, on the extent to which we are able to provide adequate distribution of JAKAFI [added: and our other drug products] to patients.

This could result in their refusal to carry smaller volume products such as [removed: JAKAFI,] [added: JAKAFI and our other drug products,] or lower margins or the need to find alternative methods of distributing our product.

Although we believe we can find alternative channels to distribute JAKAFI [added: or our other drug products] on relatively short notice, our revenue during that period of time may suffer and we may incur additional costs to replace any such specialty pharmacy or wholesaler.

[added: Our expenses associated with building and] maintaining the sales force and distribution capabilities may be disproportional compared to the revenues we may be able to generate on sales of our products.

[removed: To the extent that we] [added: We] are [removed: able to obtain marketing approval for ruxolitinib cream for dermatology indications such as atopic dermatitis and vitiligo, we will have] [added: working] to establish and maintain sales, marketing and distribution capabilities [added: for OPZELURA] that will generally be separate from our existing capabilities for oncology indications, and we have no prior experience in commercializing products for dermatology indications.

Successful commercialization of our drug candidates for dermatology [removed: indications, if approved, will require] [added: indications requires] us to establish new physician and payor relationships, reimbursement strategies and governmental interactions.

[removed: These regulations continue to apply after product marketing approval,] and cover, among other things, testing, manufacturing, quality control and assurance, labeling, advertising, promotion, risk mitigation, and adverse event reporting requirements.

The testing of JAKAFI, ICLUSIG, [removed: PEMAZYRE] [added: PEMAZYRE, MONJUVI/MINJUVI] and [removed: MONJUVI,] [added: OPZELURA,] the manufacturing, marketing and sale of [removed: JAKAFI and] [added: JAKAFI,] PEMAZYRE and [added: OPZELURA and] the marketing and sale of ICLUSIG and [removed: MONJUVI] [added: MONJUVI/MINJUVI] expose us to product liability and other risks.

Similar results could occur with respect to our commercialization of ICLUSIG, [removed: PEMAZYRE] [added: PEMAZYRE, MONJUVI/MINJUVI] and [removed: MONJUVI.][added: OPZELURA.]

Similar risks exist for our marketing of PEMAZYRE and [removed: our] [added: OPZELURA] and our collaborator MorphoSys’s marketing of MONJUVI.

The entry of a [added: competitive drug product from another company or a] generic version of JAKAFI could result in a decrease in JAKAFI sales and materially harm our business, operating results and financial condition.

[removed: MONJUVI] [added: MONJUVI/MINJUVI] currently competes with existing therapies that are approved for the treatment of patients with diffuse large B-cell lymphoma on the basis of, among other things, efficacy, cost, breadth of approved use and the safety and side-effect profile.

[removed: Potential] [added: Competitors and potential] competitors for PEMAZYRE [removed: could] include major pharmaceutical and biotechnology companies, as well as specialty pharmaceutical firms.

Public health epidemics, such as the COVID-19 [removed: Pandemic,] [added: pandemic, have adversely affected and] could [added: in the future] adversely affect our business, results of operations, and financial condition.

[removed: The extent to which the COVID-19 Pandemic and the measures taken to limit COVID-19’s spread impact our operations and those of our suppliers, collaborators, service providers and healthcare organizations] serving patients, as well as demand for our drug products, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak and any future resurgence of the outbreak, additional or modified government actions, including any further restrictions or reopening of local, state or national social or economic activity, new information that may emerge concerning the severity of COVID-19 and the actions taken to contain COVID-19 or treat its impact, among others.

As a result of the COVID-19 [removed: Pandemic,] [added: pandemic,] we [added: have experienced and] may [added: in the future] experience disruptions that could severely impact our business, results of operations and financial condition, including the following:

| | ● | [removed: To] [added: When the COVID-19 pandemic commenced, to] protect the health of our employees and their families, and our communities, in accordance with – and in some cases in advance [removed: or -] [added: of –] direction from state and local government authorities, we [removed: currently have] limited access to [removed: certain of] our facilities and [removed: instituted additional precautions in our facilities that have reopened, and] a significant percentage of our personnel [removed: continue to work remotely a significant portion of their time.] [added: worked remotely.] In the event that governmental authorities were to [removed: modify current restrictions or] re-establish [removed: greater] [added: workplace] restrictions, our employees conducting research and development activities may not be able to access our laboratory [removed: space,] [added: space or access may be limited,] and our research and development activities may be significantly limited or curtailed, possibly for an extended period of time. These research and development activities could include completing Investigational New Drug (IND)/Clinical Trial Application (CTA)-enabling studies, our ability to select future development candidates, and initiation of additional clinical trials for our development programs. Having a significant portion of our employees work from home can strain our information technology infrastructure, which may affect our ability to operate effectively, may make us more susceptible to communications disruptions, and expose us to greater cybersecurity risks. |

| | ● | Our sales and marketing activities, including our interactions with healthcare professionals, have been limited and made more difficult by [removed: the] [added: government or employer imposed] work from home orders and travel [removed: restrictions.] [added: and workplace visitor restrictions resulting from measures to address the COVID-19 pandemic, as well as employee-initiated remote work and travel limitations resulting from, among other things, the spread of the COVID-19 variants.] In addition, demand for our products has been affected by decreases in new patients, which we believe resulted in large part from decreases in patient visits to healthcare professionals and prioritization of hospital resources for the COVID-19 [removed: Pandemic,] [added: pandemic,] resulting in decreases in disease screening and diagnosis. We cannot predict the effects on patient demand or future sales if there are prolonged quarantines, work from home orders or travel restrictions. |

| | ● | Our clinical trials have been and [removed: may in the future] [added: will likely continue to] be affected by delays in site initiation, patient screening, patient enrollment, and monitoring and data collection as a result of prioritization of hospital resources for the COVID-19 [removed: Pandemic, travel restrictions,] [added: pandemic, difficulty in recruiting] and [added: retaining healthcare providers and staff due to their diversion toward treating COVID-19 patients,] the [added: potential unwillingness of patients to enroll or continue in clinical trials for fear of exposure to COVID-19 at sites, and the] inability to access sites for initiation and monitoring. In addition, some patients may be unable to comply with clinical trial protocols if quarantines or [removed: stay at home orders] [added: travel restrictions] impede patient movement or interrupt health services, we may be unable to obtain blood samples for testing, and we may not be able to provide the trial drug candidate to patients. [added: Also, we rely on independent clinical investigators, contract research organizations and other third-party service providers to assist us in managing, monitoring and otherwise carrying out our preclinical studies and clinical trials, and the COVID-19 pandemic has affected and may continue to affect their ability to devote sufficient time and resources to our programs or to travel to sites to perform work for us.] |

| | [removed: ●] | [removed: The outbreak and measures taken to limit the spread of the outbreak, especially if prolonged, could also disrupt our supply chain or limit our ability to obtain sufficient materials for our drug] products and product [removed: candidates, which could adversely affect our revenues and clinical trial timelines. Currently, our supply chain for our drug products and product] candidates depends on operations by us and by other companies in multiple countries around the world, and the effects of the COVID-19 [removed: Pandemic] [added: pandemic] on any or all of these countries is uncertain and unpredictable and potential disruption is possible. In addition, our third-party manufacturers might experience capacity constraints and delays in producing materials for our drug products and product candidates if they are required, under the U.S. Defense Production Act or similar governmental mandates, to prioritize production of raw materials, supplies, drugs or vaccines to address COVID-19. And, for JAKAFI, while our strategy is to maintain a 24 month stock of active pharmaceutical ingredient, or API, inclusive of finished product, ruxolitinib phosphate might be used by us either to make JAKAFI or for ruxolitinib drug candidates in clinical trials. |

We do not yet know the full extent of potential impacts or delays on our or our collaborators’ businesses, our revenues, including milestone and royalty revenues from our collaborators, our and our collaborators’ clinical trials, healthcare systems or the [added: global economy as a whole.]

Our long-term success, revenue growth and diversification of revenues depends on our ability to obtain regulatory approval for new drug products and [removed: new] [added: additional] indications for our existing drug products.

| | ● | develop products internally or license [added: or acquire] drug candidates from others; |

For [removed: example: in early 2016, we decided to discontinue the clinical trials of ruxolitinib in pancreatic cancer and solid tumors and itacitinib in pancreatic cancer; and,] [added: example,] in April 2018, we along with Merck stopped the ECHO-301 study with epacadostat, and we also significantly downsized the epacadostat development program.

If a product is developed but not approved or marketed, [added: or becomes approved for a narrower set of indications than those for which] we [added: initially conducted clinical trials, we] may have spent significant amounts of time and money on [removed: it,] [added: it without achieving potential returns initially anticipated,] which could adversely affect our operating results and financial condition as well as our business plans.

In addition, regulatory authorities may refuse or delay approval as a result of other factors, such as changes in regulatory [added: policy during the period of product development and regulatory agency review.]

Even if any of our applications receives an FDA [added: Fast Track or] priority review designation (including based on a priority review voucher, one of which we recently acquired and used in connection with our submission seeking FDA approval of ruxolitinib cream for atopic dermatitis), [removed: this designation] [added: these designations] may not result in faster review or approval for our product candidate compared to product candidates considered for approval under conventional FDA procedures and, in any event, [removed: does] [added: do] not assure ultimate approval of our product candidate by FDA.

Health care reform measures could impact the pricing and profitability of pharmaceuticals, and adversely affect the commercial viability of our or our collaborators’ products and drug [removed: candidates.][added: candidates.]

Governments and other third-party payors continue to pursue initiatives to manage drug costs.

Pricing and reimbursement for our products may be adversely affected by a number of factors, including;

| | ● | actions of federal, state and foreign governments and other third-party payors to implement or modify laws, regulations or policies addressing payment and reimbursement for drugs; |

| | ● | pressure by employers on private health insurance plans to reduce costs or moderate cost increases, as well as continued public scrutiny of the price of drugs and other healthcare costs; and |

| | ● | consolidation of third-party payors and continued initiatives of government and other third-party payors to reduce costs by seeking price discounts or rebates, reducing reimbursement rates or imposing restrictions on access to or coverage of particular drugs based on perceived value. |

In many markets outside of the United States, including countries of the EU, drug pricing and reimbursement are subject to government control, and government authorities are making greater efforts to limit or regulate the price of drug products.

Some countries set prices by reference to prices in other countries, and countries may refuse to reimburse or may restrict the reimbursed population for a drug product based on their national health technology assessments and cost effectiveness thresholds.

In addition, governmental authorities in many countries may reduce prices for approved drug products from previously established prices.

Third party pharmacy benefit managers, or PBMs, other similar organizations and payors can limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication, and to exclude drugs from their formularies in favor of competitor drugs or alternative treatments, or place drugs on formulary tiers with higher patient co-pay obligations, and/or to mandate stricter utilization criteria.

Formulary exclusion effectively encourages patients and providers to seek alternative treatments, make a complex and time-intensive request for medical exemptions, or pay 100% of the cost of a drug.

In addition, in many instances, certain PBMs, other similar organizations and third party payors may exert negotiating leverage by requiring incremental rebates, discounts or other concessions from manufacturers in order to maintain formulary positions, which could continue to result in higher gross to net deductions for affected products.

There has been significant consolidation in the health insurance industry, resulting in large insurers and PBMs exerting greater pressure and leverage in pricing and usage negotiations with drug manufacturers.

In this regard, we are in the process of negotiating agreements with PBMs and payor accounts to provide rebates to those entities related to formulary coverage for OPZELURA, but we cannot guarantee that we will be able to agree to coverage terms with these PBMs and other third party payors.

Payors could decide to exclude OPZELURA from formulary coverage lists, impose step edits that require patients to try alternative, including generic, treatments before authorizing payment for OPZELURA, limit the types of diagnoses for which coverage will be provided or impose a moratorium on coverage for products while the payor makes a coverage decision.

An inability to maintain adequate formulary positions could increase patient cost-sharing for OPZELURA and cause some patients to determine not to use OPZELURA.

Any delays or unforeseen difficulties in reimbursement approvals could limit patient access, depress therapy adherence rates, and adversely impact our ability to successfully commercialize OPZELURA.

If we are unsuccessful in obtaining and maintaining broad coverage and reimbursement for OPZELURA, our anticipated revenue from and growth prospects for OPZELURA could be negatively affected.

” If government and other third-party payors refuse to provide coverage and reimbursement with respect to our products,

Our collaborators Novartis and Eli Lilly are affected by similar considerations for the drugs that they market and for which we may receive royalties.

These regulations continue to apply after product marketing approval,

In addition, in September 2021, the FDA approved a labeling update for JAKAFI, adding warnings of increased risk of major adverse cardiovascular events, thrombosis, and secondary malignancies related to another JAK-inhibitor treating rheumatoid arthritis, a condition for which JAKAFI is not indicated.

As part of the FDA labeling update for oral JAK inhibitors in treating inflammatory conditions, class “boxed” warnings were also included in the OPZELURA label.

We cannot predict the effects on sales of JAKAFI with the updated warnings or OPZELURA as a result of the “boxed” warnings, but it is possible that future sales of JAKAFI and OPZELURA can be negatively affected, which could have a material and adverse effect on our business, results of operations and prospects.

Our products compete, and our product candidates may in the future compete, with currently existing therapies, including generic drugs, product candidates currently under development by us and others, or future product candidates, including new chemical entities that may be safer or more effective or more convenient than our products.

Any products that we develop may be commercialized in competitive markets, and our competitors, which include large global pharmaceutical and biopharmaceutical companies and smaller research-based biotechnology companies, may succeed in developing products that render our products obsolete or noncompetitive.

Many of our competitors, particularly large pharmaceutical and biopharmaceutical companies, have substantially greater financial, operational and human resources than we do.

Smaller or earlier stage companies may also prove to be significant competitors, particularly through focused development programs and collaborative arrangements with large, established companies.

In addition, many of our competitors deploy more personnel to market and sell their products than we do, and we compete with other companies to recruit, hire, train and retain pharmaceutical sales and marketing personnel.

If our sales force and sales support organization are not appropriately resourced and sized to adequately promote our products, the commercial potential of our current and any future products may be diminished.

In any event, the commercial potential of our current products and any future

products may be reduced or eliminated if our competitors develop or acquire and commercialize generic or branded products that are safer or more effective, are more convenient or are less expensive than our products.

See “Item 1.

Business —Competition” in this Annual Report on Form 10-K for additional information regarding the effects of competition.

If we are unable to compete successfully, our commercial opportunities will be reduced and our business, results of operations and financial conditions may be materially harmed.

Competitors for OPZELURA include existing over-the-counter topical treatments, prescription topical treatments, including generic versions, such as tacrolimus, pimecrolimus, topical steroids, and EUCRISA (crisaborole) from Pfizer Inc., as well as oral and injectable therapies such as prednisone and other oral steroids and injectable DUPIXENT (dupilimab) from Sanofi and Regeneron Pharmaceuticals, Inc.

The extent to which the COVID-19 pandemic and the measures taken to limit COVID-19’s spread impact our operations and those of our suppliers, collaborators, service providers and healthcare organizations

| | ● | The outbreak and measures taken to limit the spread of the outbreak, especially if prolonged, could also disrupt our supply chain or limit our ability to obtain sufficient materials for our drug products and product candidates, which could adversely affect our revenues and clinical trial timelines. Currently, our supply chain for our drug |

We have a number of drug candidates in Phase III clinical trials as monotherapies or in combination with other drugs and drug candidates, including itacitinib, parsaclisib, pemigatinib, ruxolitinib, ruxolitinib cream and tafasitamab.

In addition, in January 2022, we announced that we withdrew the NDA seeking approval of parsaclisib for the treatment of patients with relapsed or refractory follicular lymphoma, marginal zone lymphoma and mantle cell lymphoma.

The decision to withdraw the NDA followed discussions with FDA regarding confirmatory clinical trials that we determined cannot be completed within the time period to support the investment.

While we also sell ICLUSIG in the European Union, or EU, and other countries for the treatment of certain types

Our expenses associated with building and

global economy as a whole.

We and our collaborator MorphoSys have submitted a European Marketing Authorization Application with the EMA for tafasitamab in combination with lenalidomide for the treatment of patients with a specified type of lymphoma.

Ruxolitinib is in Phase

III clinical trials for the treatment of patients with steroid-refractory graft-versus-host disease and patients with COVID-19 and is in other clinical trials.

Ruxolitinib cream is in Phase III clinical trials for the treatment of patients with atopic dermatitis and vitiligo.

Itacitinib is in Phase III clinical trials for the treatment of patients with chronic graft-versus-host disease.

Further, we have a number of drug candidates in Phase I and Phase II clinical trials.

In addition, in January 2020 we announced that itacitinib did not meet the primary endpoint in the Phase III clinical trial for the treatment of patients with acute graft-versus-host disease.

policy during the period of product development and regulatory agency review.

Our ability to generate revenues will be diminished if we or our collaborators are unable to obtain an adequate level of reimbursement from private insurers, government insurance programs or other third-party payors of health care costs, which could be affected by current and potential healthcare reform legislation, and diminished revenues will harm our operating results and financial condition and could adversely affect our ability to conduct our research and development operations.

Adoption of our

uses or have to expend funds that were not otherwise budgeted or anticipated in connection with the collaboration, and such developments could have a material adverse effect on our stock price and our ability to pursue other transactions.

specifications.

Violations of governmental regulation by us, our vendors

in the production of hazardous waste products.

Further, we or our future collaborators or licensees

determine the validity of our U.S. patents.

data to unauthorized persons or to the public.

A discussion of our financial performance for the year ended December 31, [removed: 2020] [added: 2021] as compared to the year ended December 31, [removed: 2019] [added: 2020] appears below under the captions “Results of Operations” and “Liquidity and Capital Resources.” A discussion of our financial performance for the year ended December 31, [removed: 2019] [added: 2020] compared to the year ended December 31, [removed: 2018] [added: 2019] can be found under the same captions in Item 7 of our Annual Report on Form 10-K for the year ended December 31, [removed: 2019,] [added: 2020,] filed with the SEC on February [removed: 13, 2020,] [added: 9, 2021,] which is available free of charge on the SEC’s website at _www.sec.gov_ and our Investor Relations website at _investor.incyte.com/financial-information/annual-reports_.

We [added: also] conduct [removed: our international] [added: commercial and] clinical development [removed: and commercial] operations from our European [removed: office] [added: headquarters] in Morges, [removed: Switzerland, our Japanese office in Tokyo] [added: Switzerland] and our [removed: Canadian] [added: Japanese] office in [removed: Montreal.][added: Tokyo.]

Our portfolio includes compounds in various stages, ranging from preclinical to late stage development, and commercialized products [removed: JAKAFI] [added: JAKAFI®] (ruxolitinib), [removed: ICLUSIG] [added: ICLUSIG®] (ponatinib), [removed: PEMAZYRE (pemigatinib)] [added: PEMAZYRE® (pemigatinib), OPZELURA™ (ruxolitinib) cream, MINJUVI® (tafasitamab)] and [removed: MONJUVI (tafasitamab-cxix)] [added: MONJUVI® (tafasitamab-cxix),] which is [removed: co-commercialized with MorphoSys.][added: co-commercialized.]

In March 2020, the World Health Organization declared COVID-19 a pandemic [removed: (“the COVID-19 Pandemic”)] and certain governments, including the State of Delaware where our primary offices and laboratory spaces are located, enacted stay-at-home orders and sweeping restrictions to travel and business activity were initiated by corporations and governments.

To date, we have not experienced a material effect on the results of our commercial operations, or our manufacturing supply [removed: chain, and we have increased manufacturing efforts of ruxolitinib to respond to the COVID-19 Pandemic and to pre-clinical and clinical study requests.][added: chain.]

New patient starts for [removed: JAKAFI] treatment decreased as a result of shelter in place and other protective measures, and if decreases in new patient starts occur in future periods, our revenues in future periods could be adversely affected.

[removed: In April 2020,] PEMAZYRE [removed: (pemigatinib), a selective fibroblast growth factor receptor (FGFR) inhibitor,] was approved by the [removed: U.S.] Food and Drug Administration (FDA) [added: in April 2020] for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or other rearrangement as detected by an FDA-approved test.

[removed: In July 2020, under our collaboration and license agreement with MorphoSys AG, we received FDA approval of] MONJUVI [removed: (tafasitamab-cxix),] [added: (tafasitamab-cxix) was approved by the FDA] in [added: July 2020 in] combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant.

[removed: Below summarizes] [added: Summarized below are] the significant achievements under our existing collaboration and license agreements and additional agreements we entered into during the year ended December 31, [removed: 2020.][added: 2021.]

In December [removed: 2020,] [added: 2021,] we recognized a [removed: $80.0] [added: $50.0] million sales milestone for [removed: Novartis] [added: Lilly] achieving annual net sales of a [removed: JAK] licensed product of [removed: $1.2] [added: $1.0] billion.

Under the terms of [removed: the] [added: this] agreement, we received exclusive commercialization rights outside of the United [removed: States and MorphoSys] [added: States,] and [removed: we have] [added: Syndax has] co-commercialization rights in the United [removed: States,] [added: States] with respect to [removed: tafasitamab.][added: axatilimab.]

[removed: MorphoSys] [added: Syndax] is eligible to receive up to [removed: $740.0] [added: $220.0] million in future contingent development and regulatory milestones and [removed: up to $315.0] [added: $230.0] million in [removed: commercialization] [added: sales] milestones as well as tiered royalties ranging [removed: from] [added: in] the mid-teens [removed: to mid-twenties of] [added: on] net sales [added: in Europe and Japan and low double digit percentage on net sales in the rest of the world] outside of the United States.

We believe the following critical accounting policies reflect the more significant judgments and estimates used in the preparation of [removed: our] [added: the] consolidated financial statements.

We apply the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation, which for the Company is [removed: generally] at a point in time.

Our product revenues consist of [removed: U.S.] sales of [removed: JAKAFI and PEMAZYRE] [added: JAKAFI, OPZELURA, PEMAZYRE, ICLUSIG,] and [removed: European sales of ICLUSIG.][added: MINJUVI.]

Service fees are also deducted [added: from total product sales as they are earned.]

If actual future chargebacks vary from these estimates, we may need to adjust prior [removed: period accruals, which would affect revenue in the period of adjustment.]

The fair value of RSUs that are subject to cliff vesting are recognized as compensation expense over the requisite service period using the straight-line attribution method, and the fair value of RSUs that are subject to graded vesting are recognized as compensation expense over the requisite service [removed: period using the accelerated attribution method.]

Acquisition-related contingent consideration. Acquisition-related contingent consideration, which consists of our future royalty obligations to ARIAD/Takeda, was recorded on the acquisition date at the estimated fair value of the obligation, in accordance with the acquisition method of [removed: accounting.][added: accounting using an income approach based on projected future net revenues of ICLUSIG in the European Union and other countries.]

The assumptions used to determine the fair value of the acquisition-related contingent consideration include projected [removed: ICLUSIG] [added: future net] revenues [added: of ICLUSIG] and a discount rate which, require significant judgement and are analyzed on a quarterly basis.

While we use the best available information to prepare our [removed: projected ICLUSIG] [added: projections of future net] revenues [added: of ICLUSIG] and discount rate assumptions, actual ICLUSIG revenues and/or market conditions could differ significantly.

Years Ended December 31, [removed: 2020] [added: 2021] and [removed: 2019][added: 2020]

We recorded net [removed: loss] [added: income] for the year ended December 31, [removed: 2020] [added: 2021] of [removed: $295.7] [added: $948.6] million and net [removed: income] [added: loss] for the year ended December 31, [removed: 2019] [added: 2020] of [removed: $446.9] [added: $295.7] million.

On a per share basis, basic net income was [removed: $2.08] [added: $4.30] and diluted net income was [removed: $2.05] [added: $4.27] for the year ended December 31, [removed: 2019.][added: 2021.]

| JAKAFI revenues, net | ​ | $ | [removed: 1,937.9] [added: 2,134.5] | ​ | $ | [removed: 1,685.0] [added: 1,937.8] | ​ |

| ICLUSIG revenues, net | ​ | ​ | [removed: 105.0] [added: 109.4] | ​ | ​ | [removed: 90.0] [added: 105.0] | ​ |

| PEMAZYRE revenues, net | ​ | [removed: ​] [added: ​] | [removed: 25.9] [added: 68.5] | ​ | [removed: ​] [added: ​] | [removed: —] [added: 25.9] | ​ |

| Total product revenues, net | ​ | ​ | [removed: 2,068.8] [added: 2,322.0] | ​ | ​ | [removed: 1,775.0] [added: 2,068.7] | ​ |

| JAKAVI product royalty revenues | ​ | ​ | [removed: 277.9] [added: 338.0] | ​ | ​ | [removed: 225.9] [added: 277.9] | ​ |

| OLUMIANT product royalty revenues | ​ | ​ | [removed: 110.9] [added: 220.9] | ​ | ​ | [removed: 80.4] [added: 110.9] | ​ |

| TABRECTA product royalty revenues | ​ | ​ | [removed: 4.1] [added: 10.4] | ​ | ​ | [removed: —] [added: 4.2] | ​ |

| Total product royalty revenues | ​ | | [removed: 392.9] [added: 569.3] | ​ | | [removed: 306.3] [added: 393.0] | ​ |

| Milestone and contract revenues | ​ | | [removed: 205.0] [added: 95.0] | ​ | | [removed: 77.5] [added: 205.0] | ​ |

| Total revenues | ​ | $ | [removed: 2,666.7] [added: 2,986.3] | ​ | $ | [removed: 2,158.8] [added: 2,666.7] | ​ |

The increase in JAKAFI product revenues from [removed: 2019 to] 2020 [added: to 2021] was comprised of a volume increase of [removed: $220.4] [added: $110.1] million and a price increase of [removed: $32.5] [added: $86.6] million.

| Year Ended December 31, [removed: 2020] [added: 2021] | | Fees | | | Chargebacks | | | Discounts | | | Returns | | | Total | | |

| Allowances for prior period sales | ​ | | [removed: (160)] [added: 91] | ​ | ​ | [removed: 431] [added: (889)] | ​ | ​ | — | ​ | ​ | [removed: (589)] [added: 609] | ​ | | [removed: (318)] [added: (189)] | ​ |

| Balance at [removed: December 31, 2020] [added: January 1, 2021] | ​ | $ | 8,536 | ​ | $ | 66,991 | ​ | $ | 1,284 | ​ | $ | 1,568 | ​ | $ | 78,379 | ​ |

Our milestone and contract revenues were [removed: $205.0] [added: $95.0] million and [removed: $77.5] [added: $205.0] million for the years ended December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively.

During the year ended December 31, [removed: 2019,] [added: 2021,] our milestone and contract revenues were derived from a [removed: $40.0] [added: $50.0] million [removed: upfront payment] [added: sales milestone under the Lilly license, development] and [added: commercialization agreement,] a [removed: $20.0] [added: $10.0] million milestone under the Innovent [added: research collaboration and licensing] agreement and a [removed: $17.5] [added: $35.0] million upfront payment under the [removed: Zai Lab] [added: InnoCare collaboration and license] agreement.

Our global headquarters is located in Wilmington, Delaware, where we conduct global clinical development and commercial operations.

However, the spread of the Omicron variant beginning late in 2021 has led to renewed restrictions in some jurisdictions and a voluntary reduction in travel and in-person meetings even where restrictions were not imposed.

In March 2021, PEMAZYRE (pemigatinib) was approved by the Japanese Ministry of Health, Labour and Welfare for the treatment of patients with unresectable biliary tract cancer with an FGFR2 fusion gene, worsening after cancer chemotherapy.

Also in March 2021, PEMAZYRE was approved by the European Commission for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or rearrangement that have progressed after at least one prior line of systemic therapy.

In August 2021, under our collaboration and license agreement with MorphoSys AG, the European Commission granted conditional marketing authorization for MINJUVI (tafasitamab) in combination with lenalidomide, followed by MINJUVI monotherapy, for the treatment of adult patients with relapsed or refractory DLBCL who are not eligible for autologous stem cell transplant.

In September 2021, the FDA approved JAKAFI for the treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older.

We have retained all development and commercialization rights to JAKAFI in the United States and are eligible to receive development and sales milestones as

well as royalties from product sales outside the United States.

In September 2021, the FDA approved OPZELURA (ruxolitinib) cream, a novel cream formulation of our selective JAK1/JAK2 inhibitor ruxolitinib, for the topical short-term and non-continuous chronic treatment of mild to moderate atopic dermatitis in non-immunocompromised patients 12 years of age and older whose disease is not adequately controlled with topical prescription therapies, or when those therapies are not advisable.

Innovent

In June 2021, we recognized a $10.0 million milestone for approval of PEMAZYRE in Taiwan, which was recorded in milestone and contract revenues.

InnoCare

In August 2021, we entered into a Collaboration and License Agreement with a subsidiary of InnoCare Pharma Limited.

Under the terms of this agreement, InnoCare’s subsidiary received development and exclusive commercialization rights to tafasitamab in hematology and oncology in mainland China, Hong Kong, Macau and Taiwan.

In September 2021, we recognized an upfront payment under this agreement of $35.0 million upon our transfer of technology related to the licensed product candidate to InnoCare which was recorded in milestone and contract revenues.

Under the terms of this agreement, we are eligible to receive up to an additional $45.0 million in potential development and regulatory milestones and up to $37.5 million in potential sales milestones from InnoCare.

We are also eligible to receive tiered royalties from the low to mid-twenties on future product sales resulting from the collaboration.

Syndax

In September 2021, we entered into a Collaboration and License Agreement with Syndax covering the worldwide development and commercialization of SNDX-6352 (axatilimab), Syndax’s anti-CSF-1R monoclonal antibody.

The Agreement became effective in December 2021 with the expiration of the initial waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

We paid Syndax an upfront payment of $117.0 million upon effectiveness of the agreement.

As of December 31, 2021, a 5% change in our sales allowance and accruals would have had an approximate $29.2 million impact on our income before taxes.

period accruals, which would affect revenue in the period of adjustment.

We recognize royalty revenues in the period the sales occur.

Historically, adjustments to these estimates to reflect actual royalty revenues have not been material to our financial results and have been less than 1% of royalty revenues.

For the years ending December 31, 2021 and 2020, our Black-Scholes assumptions have remained unchanged with a weighted-average stock price volatility of 39% to 40%, average expected option life of approximately five years and an estimated annualized forfeiture rate of 5%.

period using the accelerated attribution method.

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.

As a result of releasing the valuation allowance on the majority of our U.S. deferred tax assets in 2021, we expect that our reported income tax expense (current plus deferred) for future periods will be higher than that recorded for prior periods.

The valuation inputs utilized to estimate the fair value of the contingent consideration as of December 31, 2021 and 2020 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.

For the year ended December 31, 2021, we recorded a benefit from income taxes of $569.0 million when we released the valuation allowance on the majority of our U.S. deferred tax assets.

This benefit increased net income by $2.58 per basic and $2.56 per diluted share for the year ended December 31, 2021.

| ​ | | 2021 | | | 2020 | | |

| MINJUVI revenues, net | ​ | ​ | 4.9 | ​ | ​ | — | ​ |

| OPZELURA revenues, net | ​ | ​ | 4.7 | ​ | ​ | — | ​ |

| Allowances for current period sales | ​ | | 74,688 | ​ | ​ | 434,800 | ​ | ​ | 69,056 | ​ | ​ | 4,740 | ​ | | 583,284 | ​ |

| Credits/payments for current period sales | ​ | | (62,250) | ​ | ​ | (359,936) | ​ | ​ | (45,859) | ​ | ​ | — | ​ | | (468,045) | ​ |

| Credits/payments for prior period sales | ​ | | (6,387) | ​ | ​ | (41,662) | ​ | ​ | (407) | ​ | ​ | (2,177) | ​ | | (50,633) | ​ |

| Balance at December 31, 2021 | ​ | $ | 14,678 | ​ | $ | 99,304 | ​ | $ | 24,074 | ​ | $ | 4,740 | ​ | $ | 142,796 | ​ |

| ​ | | 2021 | | | 2020 | | |

Our global headquarters is located in Wilmington, Delaware.

PEMAZYRE is the first and only FDA-approved treatment for this indication, which was approved under accelerated approval based on overall response rate and duration of response.

In May 2020, under our collaboration agreement with Novartis International Pharmaceutical Ltd., the FDA approved TABRECTA (capmatinib) for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC) whose tumors have a mutation that leads to MET exon 14 skipping (METex14) as detected by an FDA-approved test.

TABRECTA is the first and only treatment approved to specifically target NSCLC with this driver mutation and is approved for first-line and previously treated patients regardless of prior treatment type.

In June 2020, the Japanese Ministry of Health, Labour and Welfare granted marketing approval for TABRECTA for METex14 mutation-positive advanced and/or recurrent unresectable NSCLC.

In October 2020, under our collaboration agreement with Eli Lilly and Company, the European Commission approved OLUMIANT (baricitinib) for the treatment of moderate-to-severe atopic dermatitis in adult patients who are candidates for systemic therapy and in December 2020, Japan’s Ministry of Health, Labor and Welfare (MHLW) approved OLUMIANT for the treatment of moderate-to-severe atopic dermatitis in adult patients who are candidates for systemic therapy.

Novartis

In May 2020, we recognized a $25.0 million development milestone and a $45.0 million regulatory milestone for the FDA approval of capmatinib as TABRECTA.

In June 2020, we recognized a $20.0 million regulatory milestone for the MHLW approval of TABRECTA.

Exclusive of the upfront payment of $150.0 million received in 2009 and the immediate milestone of $60.0 million earned in 2010, we have recognized and received, in the aggregate, $157.0 million for the achievement of development milestones, $280.0 million for the achievement of regulatory milestones and $200.0 million for the achievement of sales milestones through December 31, 2020.

In October 2020, we recognized a $20.0 million regulatory milestone for the European Commission approval of OLUMIANT and in December 2020, we recognized a $10.0 million regulatory milestone for the MHLW approval of OLUMIANT for the treatment of moderate-to-severe atopic dermatitis in adult patients who are candidates for systemic therapy.

Exclusive of the upfront payment of $90.0 million received in 2009, we have recognized and received, in the aggregate, $149.0 million for the achievement of development milestones and $265.0 million for the achievement of regulatory milestones through December 31, 2020.

MorphoSys

In January 2020, we entered into a Collaboration and License Agreement with MorphoSys AG and MorphoSys US Inc., a wholly-owned subsidiary of MorphoSys AG, covering the worldwide development and commercialization of MOR208 (tafasitamab), an investigational Fc engineered monoclonal antibody directed against the target molecule CD19.

We and MorphoSys have agreed to co-develop tafasitamab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and MorphoSys responsible for 45% of such costs.

In March 2020, we paid MorphoSys an upfront non-refundable payment of $750.0 million and, under a related agreement, purchased American Depositary Shares (ADSs) of MorphoSys for an aggregate purchase price of $150.0 million.

Of the $150.0 million aggregate purchase price paid for the ADSs, $95.5 million was allocated to our stock purchase in MorphoSys and was recorded within long term investments and $54.5 million, representing the premium paid on the purchase, was

allocated to research and development expense.

Nimble

In September 2020, we entered into a collaboration and license agreement with Nimble Therapeutics, Inc. Under the terms of this agreement, Nimble will utilize their peptide synthesis, screening and optimization platform for discovery and validation of peptides against specified targets.

Under the agreement, Nimble is eligible to receive up to $8.0 million in future contingent discovery milestones and up to $127.0 million in future contingent development and regulatory milestones.

Additionally, in the event of successful commercialization, Nimble is eligible to receive up to $130.0 million in future contingent sales milestones and tiered royalty payments in the low single digits.

Changes in estimates for sales allowances and accruals for product shipped in prior periods have resulted in immaterial adjustments to product revenues.

from total product sales as they are earned.

The fair value of the contingent consideration was determined using an income approach based on estimated ICLUSIG revenues in the European Union and other countries.

| ​ | | 2020 | | | 2019 | | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at January 1, 2020 | ​ | $ | 6,530 | ​ | $ | 54,762 | ​ | $ | 703 | ​ | $ | 1,660 | ​ | $ | 63,655 | ​ |

| Allowances for current period sales | ​ | | 58,921 | ​ | ​ | 332,656 | ​ | ​ | 14,790 | ​ | ​ | 861 | ​ | | 407,228 | ​ |

| Credits/payments for current period sales | ​ | | (51,002) | ​ | ​ | (280,867) | ​ | ​ | (13,957) | ​ | ​ | — | ​ | | (345,826) | ​ |

| Credits/payments for prior period sales | ​ | | (5,753) | ​ | ​ | (39,991) | ​ | ​ | (252) | ​ | ​ | (364) | ​ | | (46,360) | ​ |

The increase in clinical research and outside services expense from 2019 to 2020 was primarily due to upfront consideration of $804.5 million related to our collaborative agreement with MorphoSys, the cost of purchasing an FDA priority review voucher for $120.0 million, which we used in connection with our submission seeking FDA approval of ruxolitinib cream for the treatment of atopic dermatitis, and milestones achieved under our collaboration and license agreement with MacroGenics of $40.0 million.

The increase in other contract services and outside costs was primarily due to an increase in sales and marketing spend to support the commercialization of Pemazyre in the United States and to prepare for the potential launch of ruxolitinib cream in the United States and pemigatinib and tafasitamab in the European Union.

The increase in provision for income taxes primarily relates to increased federal and state tax liabilities that are not fully sheltered by net operating losses or research and development tax credit carryforwards.

| ​ | ​ | 2020 | | ​ | 2019 | | |

The following summarizes our significant contractual obligations as of December 31, 2020 and the effect those obligations are expected to have on our liquidity and cash flow in future periods (in millions):

| ​ | | ​ | ​ | | Less Than | | | Years | | | Years | | | Over | | |

| ​ | | Total | | | 1 Year | | | 2 - 3 | | | 4 - 5 | | | 5 Years | | |

| Contractual Obligations: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

As of December 31, [removed: 2020,] [added: 2021,] marketable securities were [removed: $288.4] [added: $290.8] million.

Due to the nature of these investments, if market interest rates were to increase immediately and uniformly by 10% from levels as of December 31, [removed: 2020,] [added: 2021,] the decline in fair value would not be material.

Our global headquarters is located in Wilmington, Delaware, where we conduct global [removed: commercial and] clinical development [added: and commercial] operations.

We also conduct [removed: commercial and] clinical development [added: and commercial] operations from our [added: country offices across Europe, including our] European headquarters in Morges, [removed: Switzerland and clinical development operations from] [added: Switzerland,] our Japanese office in [removed: Tokyo.][added: Tokyo and our Canadian headquarters in Montreal.]

As described in more detail below, [removed: our business is composed of three franchises] [added: we operate in two therapeutic areas] that are defined by the indications of our approved medicines and the diseases for which our clinical candidates are being developed.

Our hematology and oncology franchise is comprised of four approved products, which are JAKAFI (ruxolitinib), MONJUVI [removed: (tafasitamab-cxix),] [added: (tafasitamab-cxix)/MINJUVI (tafasitamab),] PEMAZYRE (pemigatinib) and ICLUSIG (ponatinib), as well as numerous clinical development programs.

It was approved by the U.S. Food and Drug Administration (FDA) in November 2011 for the treatment of adults with intermediate or high-risk myelofibrosis (MF), in December 2014 for the treatment of adults with polycythemia vera (PV) who have had an inadequate response to or are intolerant of [removed: hydroxyurea and] [added: hydroxyurea,] in May 2019 for the treatment of steroid-refractory acute graft-versus-host disease (GVHD) in adult and pediatric patients 12 years and [added: older and in September 2021 for the treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and] older.

JAKAFI was the first FDA-approved JAK inhibitor for any [removed: indication and] [added: indication,] was the first FDA-approved product in [removed: all three of its current indications.][added: MF, PV and steroid-refractory acute GVHD, and was recently approved in steroid-refractory chronic GVHD.]

JAKAFI remains the first-line standard of care in MF and remains the only FDA-approved product for [removed: PV and] steroid-refractory acute GVHD.

The FDA has granted JAKAFI orphan drug status for MF, [removed: PV, ET, acute lymphoblastic leukemia (ALL)] [added: PV] and GVHD.

_Myelofibrosis._ [removed: Myelofibrosis] [added: MF] is a rare, life-threatening condition.

We hold patents that cover the composition of matter and use of ruxolitinib, which patents, including applicable extensions, expire in [removed: late 2027.][added: mid-2028.]

MONJUVI [removed: (tafasitamab-cxix)][added: (tafasitamab-cxix) / MINJUVI (tafasitamab)]

In July 2020, we and MorphoSys announced that the FDA approved MONJUVI (tafasitamab-cxix), which is indicated in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not [added: eligible for autologous stem cell transplant (ASCT).]

We estimate that there are [removed: ~10.000] [added: ~10,000] patients diagnosed in the United States each year with [removed: relapsed or refractory diffuse large B-cell lymphoma (r/r DLBCL)] [added: r/r DLBCL] who are not eligible for ASCT.

[removed: The approval of] MONJUVI was [added: approved under accelerated approval] based on [removed: data] [added: overall response rate] from the MorphoSys-sponsored Phase II L-MIND study, an open label, multicenter, single arm trial of MONJUVI in combination with lenalidomide as a treatment for adult patients with r/r DLBCL.

PEMAZYRE is the first [removed: and only] FDA-approved treatment for this indication, which was approved under accelerated approval based on overall response rate and duration of response (DOR).

[removed: No new safety signals were observed,] [added: The overall efficacy] and [removed: the ruxolitinib] safety profile [removed: in REACH2] [added: of ruxolitinib cream] was consistent with [removed: that seen in] previously reported [removed: studies in steroid-refractory acute GVHD.][added: Phase II data, and no new safety signals were observed.]

In [removed: April] [added: December] 2020, we and [removed: Novartis] [added: Lilly] announced that data from [removed: REACH2] [added: ACTT-2 supportive of the EUA] were published in the New England Journal of Medicine.

Itacitinib is [added: a selective JAK1 inhibitor] being evaluated in GRAVITAS-309, a [removed: pivotal] Phase [removed: III] [added: II/III] trial of itacitinib in patients with steroid-naïve chronic GVHD.

Based on positive Phase II data, we [removed: have] opened two pivotal trials of ruxolitinib in combination with parsaclisib (PI3Kδ) in first-line MF (LIMBER-313) and in MF patients with a suboptimal response to ruxolitinib monotherapy (LIMBER-304), [removed: respectively.][added: and both trials are ongoing.]

firstMIND is a Phase Ib safety trial of tafasitamab as a first-line therapy for patients with DLBCL, and frontMIND, a placebo-controlled Phase III trial evaluating tafasitamab in combination with lenalidomide added to rituximab plus chemotherapy (R-CHOP) as a first-line therapy for patients with DLBCL, is [removed: planned to begin in 2021.][added: ongoing.]

A placebo-controlled Phase III trial (inMIND) of tafasitamab added to lenalidomide plus rituximab (R2) in patients with relapsed or refractory follicular or marginal zone lymphomas is [removed: now recruiting patients, and we are preparing to initiate both] [added: ongoing, as is] a proof-of-concept study [removed: of] [added: (topMIND) evaluating] tafasitamab in combination with parsaclisib (PI3Kδ) in patients with relapsed or refractory B-cell [removed: malignancies and a proof-of-concept study of tafasitamab, lenalidomide and plamotamab in patients][added: malignancies.]

The program initially included three Phase II trials – FIGHT-201 in patients with bladder cancer, FIGHT-202 in patients with cholangiocarcinoma, and FIGHT-203 in patients with [removed: 8p11 myeloproliferative syndrome (8p11 MPN).][added: myeloid/lymphoid neoplasms with FGFR1 rearrangement.]

[removed: Based on data generated from these ongoing trials, we have initiated additional trials, including] FIGHT-207, [removed: which is] a solid tumor-agnostic trial evaluating pemigatinib in patients with driver-alterations of [removed: FGF/FGFR.][added: FGF/FGFR, is now closed to recruitment.]

Pemigatinib [removed: was previously granted Breakthrough Therapy designation by the FDA as a treatment for patients with previously treated, advanced/metastatic or unresectable FGFR2 translocated cholangiocarcinoma and] has Breakthrough Therapy designation as a treatment for patients with myeloid/lymphoid neoplasms [added: (MLN)] with FGFR1 rearrangement [removed: (8p11 MPN)] who have relapsed or are refractory to initial chemotherapy.

[removed: In January] [added: Also in March] 2021, [removed: we announced that the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending] [added: PEMAZYRE was approved by] the [removed: conditional marketing authorization of pemigatinib] [added: European Commission (EC)] for the treatment of adults with [removed: unresectable] locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or rearrangement that [removed: is relapsed or refractory,] [added: have progressed] after at least one [added: prior] line of systemic therapy.

We initiated the CITADEL clinical program to evaluate parsaclisib in non-Hodgkin lymphomas, [removed: and we are currently running] [added: including] Phase II trials in follicular lymphoma, marginal zone lymphoma and mantle cell lymphoma.

The FDA [removed: has] granted orphan drug designation and Fast Track designation to parsaclisib as a treatment for patients with follicular lymphoma, marginal zone lymphoma and mantle cell lymphoma.

Potentially registration-enabling trials in [removed: squamous cell carcinoma of the anal canal (SCAC),] microsatellite instability-high (MSI-H) endometrial cancer and Merkel cell carcinoma are ongoing.

| | [added: |] Indication and status | [added: |]

| itacitinib (JAK1) | Treatment-naïve chronic GVHD: Phase [removed: III] [added: II/III] (GRAVITAS-309) | [added: | |]

| Once-a-day ruxolitinib (JAK1/JAK2) | Myelofibrosis, polycythemia vera and GVHD: clinical pharmacology studies | [added: | |]

| ruxolitinib + parsaclisib (JAK1/JAK2 + PI3Kδ) | Myelofibrosis: Phase III (first-line therapy) [added: (LIMBER-313)] Myelofibrosis: Phase III (suboptimal responders to ruxolitinib) [added: (LIMBER-304)] | [added: | |]

| ruxolitinib + INCB57643 (JAK1/JAK2 + BET) | Myelofibrosis: Phase II in preparation | [added: | |]

| ruxolitinib + INCB00928 (JAK1/JAK2 + ALK2) | Myelofibrosis: Phase II in preparation | [added: | |]

| ruxolitinib + [removed: CK08042] [added: CK08041] (JAK1/JAK2 + CB-Tregs) | Myelofibrosis: PoC in preparation | [added: | |]

| tafasitamab (CD19)3 | r/r DLBCL: Phase II (L-MIND); Phase III [removed: (B-MIND); MAA and NDS under review] [added: (B-MIND)] 1L DLBCL: Phase [removed: Ib (firstMIND); Phase] III (frontMIND) [removed: in preparation] r/r follicular & marginal zone lymphomas: Phase III (inMIND) [removed: in preparation] r/r B-cell malignancies: PoC with parsaclisib (PI3Kδ) [removed: in preparation] [added: (topMIND)] r/r B-cell malignancies: PoC with lenalidomide and plamotamab in preparation4 ​ | [added: | |]

| retifanlimab (PD-1)5 | [added: SCAC: Phase III (PODIUM-303)] MSI-high endometrial cancer: Phase II (POD1UM-101, POD1UM-204) Merkel cell carcinoma: Phase II (POD1UM-201) [removed: SCAC: Phase II (POD1UM-202); Phase III (PODIUM-303)] NSCLC: Phase III (POD1UM-304) | [added: | |]

| Small molecules | [removed: INCB01158 (ARG)1,] INCB81776 (AXL/MER), epacadostat (IDO1), INCB86550 (PD-L1), [added: INCB99280 (PD-L1), INCB99318 (PD-L1),] INCB106385 (A2A/A2B) ​ | |

| Monoclonal [removed: antibodies2] [added: antibodies1] | INCAGN1876 (GITR), INCAGN2385 (LAG-3), INCAGN1949 (OX40), INCAGN2390 [removed: (TIM-3)] [added: (TIM-3), INCA00186 (CD73)] ​ | |

Ruxolitinib cream is a potent, selective inhibitor of JAK1 and JAK2 that provides the opportunity to directly target diverse pathogenic pathways that underlie certain dermatologic conditions, including atopic [removed: dermatitis] [added: dermatitis, vitiligo] and [removed: vitiligo.][added: chronic hand eczema.]

One therapeutic area is Hematology/Oncology, which is comprised of Myeloproliferative Neoplasms (MPNs), Graft-Versus-Host Disease (GVHD), as well as solid tumors and hematologic malignancies.

The other therapeutic area is Inflammation and Autoimmunity (IAI), which includes our newly established Dermatology commercial franchise.

We are also eligible to receive milestones and royalties on molecules discovered by us and licensed to third parties.

In September 2021, the FDA approved JAKAFI for the treatment of chronic GVHD after failure of one or two lines of systemic therapy in adult and pediatric patients 12 years and older.

This approval was based on data from REACH3, a Phase III, randomized, open-label, multicenter study of JAKAFI in comparison to best available therapy for treatment of steroid-refractory chronic GVHD after allogeneic stem cell transplantation.

The overall response rate through Cycle 7 Day 1 was 70% for JAKAFI compared to 57% for best available therapy.

The most common hematologic adverse reactions (incidence > 35%) were anemia and thrombocytopenia.

The most common nonhematologic adverse reactions (incidence ≥ 20%) were infections (pathogen not specified) and viral infection.

In addition, the FDA updated labeling for JAKAFI to include warnings of increased risk of major adverse cardiovascular events, thrombosis, and secondary malignancies related to another JAK-inhibitor treating rheumatoid arthritis, a condition for which JAKAFI is not indicated.

In patients with MF and PV treated with JAKAFI in clinical trials, the rates of thromboembolic events were similar in JAKAFI and control treated patients.

Updated three-year data from L-MIND were presented at the American Society of Clinical Oncology (ASCO) 2021.

In August 2021, we and MorphoSys announced that the European Commission (EC) granted conditional marketing authorization for MINJUVI (tafasitamab) in combination with lenalidomide, followed by MINJUVI monotherapy, for the treatment of adult patients with relapsed or refractory DLBCL who are not eligible for autologous stem cell transplant (ASCT).

The conditional approval was based on the three-year results from the L-MIND study evaluating the safety and efficacy of MINJUVI in combination with lenalidomide as a treatment for patients with r/r DLBCL who are not eligible for ASCT.

The results showed best objective response rate (ORR) of 56.8% (primary endpoint), including a complete response (CR) rate of 39.5% and a partial response rate (PR) of 17.3%, as assessed by an independent review committee.

The median duration of response (mDOR) was 43.9 months after a minimum follow up of 35 months (secondary endpoint).

MINJUVI together with lenalidomide was shown to provide a clinically meaningful response and the side effects were manageable.

Warnings and precautions for MINJUVI include infusion-related reactions, myelosuppression, including neutropenia and thrombocytopenia, infections and tumour lysis syndrome.

In the EU, we estimate there are ~14,000 patients diagnosed each year with r/r DLBCL who are not eligible for ASCT.

PEMAZYRE is the first internally discovered product to be internationally commercialized by us.

In March 2021, PEMAZYRE was approved by the Japanese Ministry of Health, Labour and Welfare (MHLW) for the treatment of patients with unresectable biliary tract cancer (BTC) with an FGFR2 fusion gene, worsening after

cancer chemotherapy.

In July 2021, the UK’s National Institute for Health and Care Excellence (NICE) recommended PEMAZYRE for patients with cholangiocarcinoma with a fibroblast growth factor receptor 2 (FGFR2) fusion or rearrangement that have progressed after at least one prior line of systemic therapy.

NICE’s guidance enables all eligible patients in England and Wales to have access to PEMAZYRE through the National Health Service (NHS).

Bioavailability and bioequivalence data were published for ruxolitinib’s once-daily (QD) extended release (XR) formulation at the European Hematology Association (EHA) 2021 Virtual Congress in June 2021.

In September 2021, we and Syndax Pharmaceuticals, Inc. announced an exclusive worldwide collaboration and license agreement to develop and commercialize axatilimab, Syndax’s anti-CSF-1R monoclonal antibody.

Together, we plan to develop axatilimab as a therapy for patients with chronic GVHD as well as in additional immune-mediated diseases where CSF-1R-dependent monocytes and macrophages are believed to contribute to organ fibrosis.

In December, updated positive data were presented at ASH from the Phase I/II trial evaluating axatilimab as a monotherapy in patients with recurrent or refractory chronic GVHD after two or more prior lines of therapy.

A 68% overall response rate and broad clinical benefit across multiple organs were observed at doses being assessed in AGAVE-201, a global pivotal trial evaluating axatilimab monotherapy in patients with chronic GVHD in the third line setting.

Additional trials of axatilimab are planned in patients with chronic GVHD, including a Phase II trial in combination with a JAK inhibitor in patients with steroid-refractory cGVHD.

We are also preparing to initiate a proof-of-concept study of tafasitamab, lenalidomide and plamotamab in patients with r/r DLBCL.

In January 2021, the FDA granted orphan drug designation to tafasitamab as a treatment for patients with follicular lymphoma.

Based on data generated from these ongoing trials, we have initiated additional trials.

Based on findings from this study, we have identified populations that may potentially benefit from treatment with pemigatinib and intend to initiate Phase II studies in glioblastoma and non-small cell lung cancer.

In October 2021, we announced the FDA acceptance of a NDA seeking approval of parsaclisib for the treatment of patients with relapsed or refractory follicular lymphoma, marginal zone lymphoma and mantle cell lymphoma.

The submission was based on data from several Phase 2 studies (CITADEL-203, -204 and -205) evaluating parsaclisib as a treatment for relapsed or refractory NHLs (follicular, marginal zone and mantle cell).

In January 2022, we announced that we withdrew the NDA seeking approval of parsaclisib for the three indications in NHL.

The decision to withdraw the NDA followed discussions with FDA regarding confirmatory studies that we determined cannot be completed within a reasonable time period to support an accelerated approval.

We have an ongoing EMA submission under review for MZL.

In June 2021, data from the Phase II trial were presented at EHA.

The majority of patients achieved a response with parsaclisib over the initial 12-week treatment period and treatment with parsaclisib was generally well tolerated.

To help ensure that all eligible patients have access to JAKAFI, we have established a patient assistance program called IncyteCARES (CARES stands for Connecting to Access, Reimbursement, Education and Support).

IncyteCARES helps ensure that any patient with intermediate or high-risk MF, uncontrolled PV or steroid-refractory acute GVHD who meets certain eligibility criteria and is prescribed JAKAFI has access to the product regardless of ability to pay and has access to ongoing support and educational resources during treatment.

eligible for autologous stem cell transplant (ASCT).

MONJUVI was approved under accelerated approval based on overall response rate.

As part of our development efforts to evaluate JAK inhibition in GVHD, the REACH clinical program is evaluating ruxolitinib in patients with steroid-refractory GVHD and includes REACH2, a Novartis-sponsored Phase III trial in steroid-refractory acute GVHD, and REACH3, a Phase III trial in steroid-refractory chronic GVHD that is co-sponsored by Incyte and Novartis.

In October 2019, we and Novartis announced that REACH2 met its primary endpoint of superior ORR at Day 28 with ruxolitinib treatment compared to best available therapy.

In July 2020, we and Novartis announced that REACH3 met its primary endpoint of superior ORR at Month 6 with ruxolitinib treatment compared to best available therapy (BAT), as well as both key secondary endpoints, significantly improving patient-reported symptoms and failure-free survival.

No new safety signals were observed, and the ruxolitinib safety profile in REACH3 was consistent with that seen in previously reported studies in steroid-refractory chronic GVHD.

Additional data announced in December 2020 showed that best overall response (BOR) rate, defined as any response up to week 24, was achieved in a significantly higher percentage of patients with ruxolitinib therapy compared to BAT.

An sNDA seeking FDA approval of ruxolitinib in steroid-refractory chronic GVHD has been submitted.

A second JAK inhibitor in development is itacitinib, which is a selective JAK1 inhibitor.

with r/r DLBCL.

In May 2020, we announced the validation of the European Marketing Authorization Application (MAA) for tafasitamab seeking approval of tafasitamab in combination with lenalidomide, followed by tafasitamab monotherapy, for the treatment of adult patients with r/r DLBCL; the validation of the MAA by the European Medicines Agency (EMA) confirms that the submission is ready to enter the formal review process.

In January 2021, we announced that Health Canada accepted the New Drug Submission (NDS) for tafasitamab in combination with lenalidomide, followed by tafasitamab monotherapy, as a treatment for adults with r/r DLBCL.

In April 2020, we announced the FDA approval of pemigatinib as PEMAZYRE for the treatment of adults with previously treated, unresectable locally advanced or metastatic cholangiocarcinoma with an FGFR2 fusion or other rearrangement as detected by an FDA-approved test.

In September 2020, we submitted a J-NDA seeking approval for pemigatinib as a treatment for CCA in Japan.

In October 2020, we announced that Health Canada accepted the New Drug Submission (NDS) for pemigatinib as a treatment for adults with previously treated, locally advanced or metastatic cholangiocarcinoma with FGFR2 fusion or other rearrangement.

In January 2021, we announced that the FDA had accepted for Priority Review the Biologics License Application (BLA) for retifanlimab as a treatment for previously treated patients with advanced squamous cell carcinoma of the anal canal (SCAC) who have progressed following standard platinum-based chemotherapy.

The BLA submission was based on data from the Phase II POD1UM-202 trial of retifanlimab in patients with advanced SCAC who have progressed following standard platinum-based chemotherapy, preliminary results of which were presented at ESMO in September 2020.

| | |

| --- | --- |

| ruxolitinib (JAK1/JAK2) | Steroid-refractory chronic GVHD1: sNDA submitted |

| itacitinib (JAK1) | Myelofibrosis: Phase II (low platelets) |

| pemigatinib (FGFR) | CCA: Phase II (FIGHT-202), Phase III (FIGHT-302); NDS and J-NDA under review 8p11 MPN: Phase II (FIGHT-203) Tumor agnostic: Phase II (FIGHT-207) |

| parsaclisib (PI3Kδ) | r/r follicular lymphoma: Phase II (CITADEL-203) r/r marginal zone lymphoma: Phase II (CITADEL-204) r/r mantle cell lymphoma: Phase II (CITADEL-205) |

Clinical development of ruxolitinib in GVHD conducted in collaboration with Novartis.

2.

| Bispecific antibodies | MCLA-145 (PD-L1xCD137)3 | ​ |

INCB01158 licensed from Calithera Biosciences, Inc.

MCLA-145 development in collaboration with Merus N.V.

We do not yet have any approved products in IAI.

In anticipation of the potential FDA approval of our most advanced program, ruxolitinib cream for use in mild-to-moderate atopic dermatitis (AD), we recently established Incyte Dermatology as a new commercial franchise in the United States.

In April 2020, safety and efficacy data from the two Phase III trials in the TRuE-AD program evaluating ruxolitinib cream in mild-to-moderate atopic dermatitis (AD) were presented at the Revolutionizing Atopic Dermatitis (RAD) virtual symposium; both trials met their primary endpoints.

The 44-week long-term safety and efficacy portion of both the TRuE-AD1 and TRuE-AD2 trials have been completed.

In September 2020, we purchased a priority review voucher (PRV) from a third party, with the intent to use it in connection with our submission seeking FDA approval of ruxolitinib cream for the treatment of AD.

In December 2020, we submitted an NDA along with the PRV, seeking approval for ruxolitinib cream as a treatment for patients with AD.

In June 2019, primary endpoint data after 6 months of therapy from the Phase II trial of ruxolitinib cream in patients with vitiligo showed a significant benefit over vehicle control, and a global, pivotal Phase III program was initiated in September 2019.

In October 2019, updated data from the Phase II trial showed, after 12 months of therapy, additional improvement in the repigmentation of vitiligo lesions.

baricitinib in patients with SLE.

The potential impact of baricitinib on the IFN pathway is highly relevant to SLE, as clinical and preclinical studies have established that this pathway is involved in the pathogenesis of SLE.

Additional information regarding our current legal proceedings can be found in Note 16 of notes to our consolidated financial statements included in Item 8 of this report.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer”, “accelerated [removed: filer” and] [added: filer”,] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

The aggregate market value of Common Stock held by non-affiliates (based on the closing sale price on The Nasdaq Global Select Market on June 30, [removed: 2020)] [added: 2021)] was approximately [removed: $19.1] [added: $16.0] billion.

As of February [removed: 2, 2021] [added: 1, 2022] there were [removed: 219,843,497] [added: 221,325,189] shares of Common Stock, $.001 par value per share, outstanding.

Items 10 (as to directors and [removed: Delinquent] Section 16(a) [removed: Reports),] [added: Beneficial Ownership Reporting Compliance),] 11, 12, 13 and 14 of Part III incorporate by reference information from the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the registrant’s [removed: 2021] [added: 2022] Annual Meeting of Stockholders to be held on [removed: May 26, 2021.][added: June 15, 2022.]

| [Item 1A.](#Item_1A_Risk_Factors) | [Risk Factors](#Item_1A_Risk_Factors) | [removed: 33] [added: 36] |

| [Item 1B.](#Item_1B_Unresolved_Staff_Comments) | [Unresolved Staff Comments](#Item_1B_Unresolved_Staff_Comments) | [removed: 58] [added: 63] |

| [Item 2.](#Item_2_Properties) | [Properties](#Item_2_Properties) | [removed: 58] [added: 63] |

| [Item 3.](#Item_3_Legal_Proceedings) | [Legal Proceedings](#Item_3_Legal_Proceedings) | [removed: 59] [added: 64] |

| [Item 4.](#Item_4_Mine_Safety) | [Mine Safety Disclosures](#Item_4_Mine_Safety) | [removed: 59] [added: 64] |

| ​ | [Information about our Executive Officers](#InformationaboutourExecutiveOfficers) | [removed: 59] [added: 64] |

| [Item 5.](#Item_5_Market_for_Registrant) | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#Item_5_Market_for_Registrant) | [removed: 61] [added: 66] |

| [Item 6.](#Item_6_Selected_Financial_Data) | [removed: [Selected Financial Data](#Item_6_Selected_Financial_Data)] [added: \[[Reserved](#Item_6_Selected_Financial_Data)\]] | [removed: 62] [added: 66] |

| [Item 7.](#Item_7_Management_Discussion) | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#Item_7_Management_Discussion) | [removed: 63] [added: 66] |

| [Item 7A.](#Item_7A_Quantitative) | [Quantitative and Qualitative Disclosures About Market Risk](#Item_7A_Quantitative) | [removed: 74] [added: 77] |

| [Item 8.](#Item_8_Financial_Statements) | [Financial Statements and Supplementary Data](#Item_8_Financial_Statements) | [removed: 75] [added: 78] |

| [Item 9.](#Item_9_Changes_in_and_Disagreements) | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#Item_9_Changes_in_and_Disagreements) | [removed: 120] [added: 119] |

| [Item 9A.](#Item_9A_Controls_and_Procedures) | [Controls and Procedures](#Item_9A_Controls_and_Procedures) | [removed: 120] [added: 119] |

| | ● | _the discovery, development, formulation, manufacturing and commercialization of our compounds, our drug candidates and JAKAFI_®_/JAKAVI_® _(ruxolitinib), [removed: PEMAZYRE_ ®] [added: PEMAZYRE_®] _(pemigatinib), ICLUSIG_® [removed: _(ponatinib)] [added: _(ponatinib), MONJUVI_®_(tafasitamab-cxix)_ _/MINJUVI_® _(__tafasitamab),] and [removed: MONJUVI® (__tafasitamab-cxix)__;_] [added: OPZELURA™ (ruxolitinib) cream__;_] |

| | ● | _our licensing, investment and commercialization strategies, including our plans to commercialize [removed: JAKAFI, PEMAZYRE, ICLUSIG] [added: our drug products] and [removed: MONJUVI;_] [added: drug candidates;_] |

| | ● | _the regulatory approval process, including obtaining U.S. Food and Drug Administration and other international health [removed: authorities] [added: authorities’] approval for our products in the United States and abroad;_ |

| | ● | _the costs associated with resolving matters in [removed: litigation;_] [added: litigation and governmental proceedings;_] |

| | ● | _expectations relating to [removed: our new European headquarters and] the anticipated completion [removed: date] [added: and GMP approval dates] for our large molecule production facility;_ |

| | ● | _our ability to successfully commercialize [removed: JAKAFI, ICLUSIG, PEMAZYRE] [added: our drug products] and [removed: MONJUVI;_] [added: drug candidates;_] |

| | ● | _our ability to [added: obtain, or] maintain at anticipated [removed: levels] [added: levels, coverage and] reimbursement for our products from government health administration authorities, private health insurers and other organizations;_ |

| | ● | _unanticipated construction, other delays or changes in plans [added: or regulatory agency interactions] relating to our [removed: new European headquarters and] large molecule production facility;_ |

[removed: _Incyte, JAKAFI and PEMAZYRE are our registered trademarks._ _We] [added: We] also refer to trademarks of other corporations and organizations in this Annual Report on Form 10-K._

| | ● | If we or our collaborators are unable to obtain, or maintain at anticipated levels, [added: coverage and] reimbursement for [removed: JAKAFI/JAKAVI or] our [removed: other] products from government and other third-party payors, our results of operations and financial condition could be harmed. |

| | ● | A limited number of specialty pharmacies and wholesalers represent a significant portion of revenues from [removed: JAKAFI,] [added: JAKAFI] and [added: most of our other products, and] the loss of, or significant reduction in sales to, any one of these specialty pharmacies or wholesalers could harm our operations and financial condition. |

| | ● | Competition for our [removed: products, in particular JAKAFI/JAKAVI,] [added: products] could harm our business and result in a decrease in our revenue. |

| | ● | The COVID-19 pandemic and measures to address the pandemic have adversely affected and [removed: can] [added: could] in the future adversely affect our business and results of operations. |

| | ● | Our marketable securities and long term investments are subject to risks that could adversely affect our overall financial [removed: position.] [added: position, and tax law changes could adversely affect our results of operations and financial condition.] |

| | ● | _risks relating to our ability to sustain profitability;_ |

_Incyte, JAKAFI and PEMAZYRE are our registered trademarks and OPZELURA is our trademark.

(check one)

| | ● | _our history of operating losses;_ |

We own [removed: two] [added: three] buildings comprising approximately [removed: 344,000] [added: 544,000] square feet of [added: laboratory and office space at this site.]

We [added: also] conduct [removed: our international] clinical development and commercial operations from our European [removed: office] [added: headquarters] in Morges, [removed: Switzerland, our Japanese office in Tokyo] [added: Switzerland] and our [removed: Canadian] [added: Japanese] office in [removed: Montreal.][added: Tokyo.]

In July 2018, we purchased [removed: a parcel of] land in [removed: Yverdon-les-Bains,] [added: Yverdon,] Switzerland upon which we are building a large molecule production facility.

Construction commenced in July 2018 and we currently expect the facility will be operational in the second half of [removed: 2021.][added: 2022.]

Our global headquarters is located in Wilmington, Delaware, where we conduct global clinical development and commercial operations.

Our Canadian office is in Montreal.

Our global headquarters is in Wilmington, Delaware, which is where our principal drug discovery and development operations are also located.

laboratory and office space at this site.

In March 2017, we acquired additional adjacent buildings and in 2019, began demolition of these buildings and construction of a new laboratory and office building totaling approximately 200,000 square feet.

The construction of this building is currently expected to be completed in the second half of 2021.

_Hervé Hoppenot,_ age [removed: 61,] [added: 62,] joined Incyte as President and Chief Executive Officer and a Director, in January 2014 and was appointed Chairman of the Board in May 2015.

_Dashyant Dhanak_, age [removed: 60,] [added: 61,] joined Incyte in December 2018 as Executive Vice President, Chief Scientific Officer.

Dickinson_, age [removed: 53,] [added: 54,] has served as Executive Vice President and General Manager, Europe since June 2019 and joined Incyte as Senior Vice President and General Manager, Europe in June 2016.

Flannelly_, age [removed: 63,] [added: 64,] has served as Executive Vice President and General Manager, [removed: NA] [added: North America] since June 2015 and joined Incyte as Executive Vice President, Business Development and Strategic Planning in August 2014.

[removed: He served as Vice President, Global Product Strategy and Commercial Planning of Nektar] Therapeutics, a biopharmaceutical company, from April 2011 until April 2013, and as Senior Vice President, Commercial, of Onyx Pharmaceuticals, Inc., a biopharmaceutical company, from August 2008 until January 2011.

_Vijay Iyengar_, age [removed: 48,] [added: 49,] joined Incyte in May 2016 as Executive Vice President, Global Strategy and Corporate Development.

_Michael Morrissey_, age [removed: 57,] [added: 58,] has served as Executive Vice President and Head of Global Technical Operations since June 2019 and joined Incyte in January 2016 as Corporate Senior Vice President and Head of Global Technical Operations.

Pasquale_, age [removed: 55,] [added: 56,] joined Incyte in April 2018 as Executive Vice President and General Counsel.

_Christiana Stamoulis,_ age [removed: 50,] [added: 51,] joined Incyte in February 2019 as Executive Vice President and Chief Financial Officer.

Prior to joining Incyte, she served as President from February 2018 until January 2019 and Chief Financial Officer [added: from January 2015 to January 2019 of Unum Therapeutics Inc., a biopharmaceutical company.]

_Steven Stein,_ age [removed: 54,] [added: 55,] has served as Executive Vice President and Chief Medical Officer since May 2016 and joined Incyte as Senior Vice President and Chief Medical Officer in March 2015.

Swain_, age [removed: 63,] [added: 64,] has served as Executive Vice President, Human Resources since August 2002 and joined Incyte as Senior Vice President of Human Resources in January 2002.

He served as Vice President, Global Product Strategy and Commercial Planning of Nektar

from January 2015 to January 2019 of Unum Therapeutics Inc., a biopharmaceutical company.

_Wenqing Yao_, age 58, has served as Executive Vice President, Head of Discovery Chemistry since October 2014.

Dr. Yao joined Incyte as Director, Chemistry in February 2002 and held roles of increasing responsibility at Incyte.

Prior to joining Incyte, Dr. Yao held scientific research positions with DuPont Pharmaceuticals and Bristol-Myers Squibb Company from 1996 to 2002.

Dr. Yao received his B.S. in chemistry from Xuzhou Normal University, his M.S. in organic chemistry from NanKai University and his Ph.D. in organic/medicinal chemistry from the University of Pennsylvania.

Our common stock, $.001 par value per share, is traded on The Nasdaq Global Select Market under the symbol “INCY.” As of December 31, [removed: 2020,] [added: 2021,] our common stock was held by [removed: 122] [added: 120] stockholders of record.

Selected Consolidated Financial Data

(in thousands, except per share data)

The data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 and the Consolidated Financial Statements and related Notes included in Item 8 of this Report.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ​ | ​ | Year Ended December 31, | | | | | | | | | | | | | | |

| ​ | ​ | 2020 | | ​ | 2019 | | ​ | 2018 | | ​ | 2017 | | ​ | 2016 | | |

| Consolidated Statements of Operations Data: | | | ​ | | | ​ | | | ​ | | | ​ | | | ​ | |

| Revenues: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Product revenues, net(1) | ​ | $ | 2,068,736 | ​ | $ | 1,774,922 | ​ | $ | 1,466,900 | ​ | $ | 1,200,312 | ​ | $ | 882,404 | ​ |

| Product royalty revenues(2) | ​ | | 392,966 | ​ | | 306,337 | ​ | | 234,780 | ​ | | 160,791 | ​ | | 110,711 | ​ |

| Milestone and contract revenues(3) | ​ | | 205,000 | ​ | | 77,500 | ​ | | 180,000 | ​ | | 175,000 | ​ | | 112,512 | ​ |

| Other revenues | ​ | | — | ​ | | — | ​ | | 203 | ​ | | 113 | ​ | | 92 | ​ |

| Total revenues | ​ | | 2,666,702 | ​ | | 2,158,759 | ​ | | 1,881,883 | ​ | | 1,536,216 | ​ | | 1,105,719 | ​ |

| Costs and expenses: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Cost of product revenues (including definite-lived intangible amortization) | ​ | | 131,328 | ​ | | 114,249 | ​ | | 94,123 | ​ | | 79,479 | ​ | | 58,187 | ​ |

| Research and development(4) | ​ | | 2,215,942 | ​ | | 1,154,111 | ​ | | 1,197,957 | ​ | | 1,326,134 | ​ | | 581,861 | ​ |

| Selling, general and administrative(4) | ​ | | 516,922 | ​ | | 468,711 | ​ | | 434,407 | ​ | | 366,286 | ​ | | 303,251 | ​ |

| Change in fair value of acquisition-related contingent consideration | ​ | | 23,385 | ​ | | 19,682 | ​ | | 26,173 | ​ | | 7,704 | ​ | | 17,422 | ​ |

| Collaboration loss sharing | ​ | ​ | 42,801 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ |

| Total costs and expenses | ​ | | 2,930,378 | ​ | | 1,756,753 | ​ | | 1,752,660 | ​ | | 1,779,603 | ​ | | 960,721 | ​ |

| Income (loss) from operations | ​ | | (263,676) | ​ | | 402,006 | ​ | | 129,223 | ​ | | (243,387) | ​ | | 144,998 | ​ |

| Other income (expense), net(4) | ​ | | 23,206 | ​ | | 52,182 | ​ | | 31,760 | ​ | | 17,153 | ​ | | 4,412 | ​ |

| Interest expense | ​ | | (2,174) | ​ | | (1,855) | ​ | | (1,543) | ​ | | (6,900) | ​ | | (38,745) | ​ |

| Unrealized gain (loss) on long term investment | ​ | ​ | 10,426 | ​ | ​ | 34,458 | ​ | ​ | (44,093) | ​ | ​ | (24,275) | ​ | ​ | (3,261) | ​ |

| Expense related to senior note conversions | ​ | | — | ​ | | — | ​ | | — | ​ | | (54,881) | ​ | | — | ​ |

| Income (loss) before provision for income taxes | ​ | | (232,218) | ​ | | 486,791 | ​ | | 115,347 | ​ | | (312,290) | ​ | | 107,404 | ​ |

| Provision for income taxes | ​ | | 63,479 | ​ | | 39,885 | ​ | | 5,854 | ​ | | 852 | ​ | | 3,182 | ​ |

| Net income (loss) | ​ | $ | (295,697) | ​ | $ | 446,906 | ​ | $ | 109,493 | ​ | $ | (313,142) | ​ | $ | 104,222 | ​ |

| Net income (loss) per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Basic | ​ | $ | (1.36) | ​ | $ | 2.08 | ​ | $ | 0.52 | ​ | $ | (1.53) | ​ | $ | 0.55 | ​ |

| Diluted | ​ | $ | (1.36) | ​ | $ | 2.05 | ​ | $ | 0.51 | ​ | $ | (1.53) | ​ | $ | 0.54 | ​ |

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

| Basic | ​ | ​ | 218,073 | ​ | ​ | 214,913 | ​ | ​ | 212,383 | ​ | ​ | 204,580 | ​ | ​ | 187,873 | ​ |

| Diluted | ​ | ​ | 218,073 | ​ | ​ | 217,657 | ​ | ​ | 215,635 | ​ | ​ | 204,580 | ​ | ​ | 194,125 | ​ |

| (1) | 2020 product revenues, net, include our product sales of JAKAFI, ICLUSIG and PEMAZYRE. 2019, 2018, 2017 and 2016 product revenues, net, relate to our product sales of JAKAFI and ICLUSIG from the date of acquisition on June 1, 2016. |

| --- | --- |

| (2) | 2020 product royalty revenues relate to Novartis net sales of TABRECTA worldwide, Novartis net sales of JAKAVI outside of the United States and Lilly net sales of OLUMIANT outside of the United States. 2019, 2018 and 2017 product royalty revenues relate to Novartis net sales of JAKAVI outside of the United States and Lilly net sales of OLUMIANT outside of the United States. 2016 product royalty revenues relate to Novartis net sales of JAKAVI outside the United States. |

| (3) | 2020 milestone and contract revenues relate to our collaborative research and license agreements with Novartis, Lilly and Innovent. 2019 milestone and contract revenues relate to our collaborative research and license agreements with Innovent and Zai Lab. 2018, 2017 and 2016 milestone and contract revenues relate to our collaborative research and license agreements with Novartis and Lilly. |

| (4) | Upon the retrospective adoption of ASU No. 2017-07 on January 1, 2018, the presentation of other components of net periodic benefit cost were reclassed out of operating income and into other income (expense), net for the periods presented, as applicable. |

| [Report of Ernst & Young LLP, Independent Registered Public Accounting Firm](#ReportofIndependentRegisteredPublicAccou) [added: (PCAOB ID: 42)] | [removed: 76] [added: 79] |

| [Consolidated Balance Sheets as of December 31, [removed: 2020] [added: 2021] and [removed: 2019](#BALANCE_SHEETS)] [added: 2020](#BALANCE_SHEETS)] | [removed: 78] [added: 82] |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#STATEMENTS_OF_OPERATIONS)] [added: 2019](#STATEMENTS_OF_OPERATIONS)] | [removed: 79] [added: 83] |

| [Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#COMPREHENSIVE_LOSS)] [added: 2019](#COMPREHENSIVE_LOSS)] | [removed: 80] [added: 84] |

| [Consolidated [removed: Statement] [added: Statements] of Stockholders’ Equity for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#STOCKHOLDERS_DEFICIT)] [added: 2019](#STOCKHOLDERS_DEFICIT)] | [removed: 81] [added: 85] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CASH_FLOWS)] [added: 2019](#CASH_FLOWS)] | [removed: 82] [added: 86] |

| [Notes to the Consolidated Financial Statements](#Notes_To_Financials) | [removed: 83] [added: 87] |

We have audited the accompanying consolidated balance sheets of Incyte Corporation (the Company) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 9, 2021] [added: 8, 2022] expressed an unqualified opinion thereon.

| *​* | ​ | Allowances for [removed: rebates, discounts] [added: rebates] and [removed: chargebacks] [added: discounts] owed to governmental entities |

| _Description of the Matter_ | ​ | As discussed in Note 1 to the consolidated financial statements, the Company recognizes revenues for product received by its customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance programs, and government rebates. Liabilities related to sales allowances are presented within accrued and other current liabilities on the consolidated balance sheet and totaled [removed: $73.2] [added: $136.5] million as of December 31, [removed: 2020. Auditing the allowances for rebates, discounts and chargebacks owed to governmental entities was complex and highly judgmental due to the significant estimation uncertainty involved in management’s assumptions, including the levels of expected utilization of these rebates, discounts] [added: 2021.] |

| | | [added: Auditing the allowances for rebates] and [removed: chargebacks] [added: discounts owed to governmental entities, including the Medicaid Drug Rebate Program in the U.S. and Medicare Part D Coverage Gap, was complex and highly judgmental due to the significant estimation uncertainty involved in management’s assumptions, including the levels of expected utilization of these rebates and discounts] based on the amount of drugs sold to eligible patients, as well as the complexity of the government mandated calculations. The allowances for [removed: rebates, discounts] [added: rebates] and [removed: chargebacks] [added: discounts] owed to governmental entities are sensitive to these significant assumptions and calculations. |

| _How We Addressed the Matter in Our Audit_ | ​ | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s review of the allowances for [removed: rebates, discounts] [added: rebates] and [removed: chargebacks] [added: discounts] owed to governmental entities. For example, we tested controls over management’s review of the significant assumptions, such as the utilization of these [removed: rebates, discounts] [added: rebates] and [removed: chargebacks] [added: discounts] as well as controls over management’s review of the application of the government mandated calculations. To test the allowances for [removed: rebates, discounts,] [added: rebates] and [removed: chargebacks] [added: discounts] owed to governmental entities, we performed audit procedures that included, among others, evaluating the methodologies used and testing the significant assumptions discussed above. We compared the significant assumptions used by management to historical trends, evaluated the change in the accruals from prior periods, and assessed the historical accuracy of management’s estimates against actual results. We also tested the completeness and accuracy of the underlying data used in the Company’s calculations through reconciliation to third-party invoices, claims data and actual cash payments. In addition, we involved our governmental pricing specialists to assist in evaluating management’s methodology and calculations used to measure certain estimated [removed: rebates, discounts] [added: rebates] and [removed: chargebacks.] [added: discounts.] |

| _Description of the Matter_ | ​ | As discussed in Note 3 to the consolidated financial statements, the Company’s acquisition-related contingent consideration liability, which consists of certain future royalty obligations on future net [removed: sales] [added: revenues] of ICLUSIG, is remeasured to its estimated fair value each reporting period, with changes in fair value recorded in the consolidated statements of operations. As of December 31, [removed: 2020,] [added: 2021,] the acquisition-related contingent consideration liability was [removed: $266.0] [added: $244.0] million. Auditing the valuation of the acquisition-related contingent consideration liability was complex and highly judgmental due to the significant estimation required in determining the fair value. In particular, the fair value estimate was sensitive to significant assumptions such as the [removed: weighted average cost of capital] [added: discount rate] and projected future [removed: ICLUSIG revenues,] [added: net revenues of ICLUSIG,] which are affected by expectations about future industry, market or economic conditions, and are forward-looking and inherently uncertain. |

| _How We Addressed the Matter in Our Audit_ | ​ | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s valuation of the acquisition-related contingent consideration liability. For example, we tested the Company's controls over management’s review of the valuation model, including controls over the significant assumptions utilized in the calculation, such as the [removed: weighted average cost of capital] [added: discount rate] and the projected future [removed: ICLUSIG revenues.] [added: net revenues of ICLUSIG.] To test the estimated fair value of the acquisition-related contingent consideration liability, we performed audit procedures that included, among others, assessing the terms of the arrangement, evaluating the methodology used, and testing the significant assumptions discussed above used by the Company in its analysis. We involved our valuation specialists to assist in the evaluation of the significant assumptions and methodology used by the Company. We also compared the significant assumptions to current industry, market and economic trends and to the Company's budgets and forecasts. In addition, we assessed the historical accuracy of management’s estimates against actual performance. |

| ​ | [removed: ​] | [added: 2021 | | |] 2020 | | | 2019 | | |

| Cash and cash equivalents | ​ | $ | [removed: 1,513,008] [added: 2,057,440] | ​ | $ | [removed: 1,832,684] [added: 1,513,008] | ​ |

| Marketable securities—available-for-sale (amortized cost [removed: $288,199;] [added: $291,871 and $288,199 as of December 31, 2021 and 2020, respectively;] allowance for credit losses [removed: $0)] [added: $0 as of December 31, 2021 and 2020)] | ​ | | [removed: 288,369] [added: 290,752] | ​ | | [removed: 284,870] [added: 288,369] | ​ |

| Accounts receivable | ​ | | [removed: 481,994] [added: 616,300] | ​ | | [removed: 308,809] [added: 481,994] | ​ |

| Inventory | ​ | | [removed: 16,425] [added: 27,904] | ​ | | [removed: 11,400] [added: 16,425] | ​ |

| Prepaid expenses and other current assets | ​ | ​ | [removed: 60,098] [added: 126,278] | ​ | ​ | [removed: 43,725] [added: 60,098] | ​ |

| Total current assets | ​ | | [removed: 2,359,894] [added: 3,118,674] | ​ | | [removed: 2,481,488] [added: 2,359,894] | ​ |

| Restricted cash and investments | ​ | | [removed: 1,757] [added: 1,720] | ​ | ​ | [removed: 1,023] [added: 1,757] | ​ |

| Long term investments | ​ | | [removed: 222,301] [added: 221,266] | ​ | ​ | [removed: 133,657] [added: 222,301] | ​ |

| Inventory | ​ | | [removed: 19,548] [added: 29,034] | ​ | ​ | [removed: 5,105] [added: 19,548] | ​ |

| Property and equipment, net | ​ | | [removed: 559,625] [added: 723,920] | ​ | ​ | [removed: 377,567] [added: 559,625] | ​ |

| Finance lease right-of-use assets, net | ​ | ​ | [removed: 28,451] [added: 27,548] | ​ | ​ | [removed: 29,058] [added: 28,451] | ​ |

| Other intangible assets, net | ​ | ​ | [removed: 172,291] [added: 150,755] | ​ | ​ | [removed: 193,828] [added: 172,291] | ​ |

| Other assets, net | ​ | | [removed: 41,458] [added: 37,304] | ​ | ​ | [removed: 49,431] [added: 39,404] | ​ |

| Total assets | ​ | $ | [removed: 3,560,918] [added: 4,933,352] | ​ | $ | [removed: 3,426,750] [added: 3,560,918] | ​ |

| Accounts payable | ​ | $ | [removed: 98,767] [added: 172,110] | ​ | $ | [removed: 83,647] [added: 98,767] | ​ |

| Accrued compensation | ​ | | [removed: 113,340] [added: 108,962] | ​ | | [removed: 90,706] [added: 113,340] | ​ |

| Accrued and other current liabilities | ​ | | [removed: 378,404] [added: 533,595] | ​ | | [removed: 285,979] [added: 378,404] | ​ |

| Finance lease liabilities | ​ | ​ | [removed: 2,284] [added: 2,635] | ​ | ​ | [removed: 664] [added: 2,284] | ​ |

| Acquisition-related contingent consideration | ​ | ​ | [removed: 38,400] [added: 37,006] | ​ | ​ | [removed: 34,044] [added: 38,400] | ​ |

| Total current liabilities | ​ | | [removed: 631,195] [added: 854,308] | ​ | | [removed: 513,340] [added: 631,195] | ​ |

| Acquisition-related contingent consideration | ​ | ​ | [removed: 227,600] [added: 206,994] | ​ | ​ | [removed: 242,956] [added: 227,600] | ​ |

| Finance lease liabilities | ​ | ​ | [removed: 32,573] [added: 31,632] | ​ | ​ | [removed: 31,918] [added: 32,573] | ​ |

| Other liabilities | ​ | | [removed: 58,282] [added: 70,414] | ​ | ​ | [removed: 40,130] [added: 58,282] | ​ |

| *​* | ​ | Realizability of deferred tax assets |

| --- | --- | --- |

| _Description of the Matter_ | ​ | As discussed in Note 12 to the consolidated financial statements, at December 31, 2021, the Company had deferred tax assets related to deductible temporary differences and tax credit carryforwards of $507.9 million, net of a $408.2 million valuation allowance. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. During the fiscal year ended December 31, 2021, the Company concluded that certain of its deferred tax assets were more likely than not to be realized in the future and released the valuation allowance on a portion of its U.S. deferred tax assets resulting in a tax benefit. Auditing management’s assessment of the realizability of its deferred tax assets involved complex auditor judgment because management’s estimate of future taxable income is highly judgmental and based on significant assumptions that may be affected by future market or economic conditions and the Company’s performance. |

| _How We Addressed the Matter in Our Audit_ | ​ | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s assessment of the realizability of deferred tax assets. For example, we tested controls over management’s review of the significant assumptions used in estimating the projections of future taxable income, exclusive of reversing temporary differences, as well as controls over management’s review of the scheduling of the future reversals of existing temporary differences. To test the realizability of deferred tax assets, we performed audit procedures that included, among others, evaluating the assumptions used by the Company to develop projections of future taxable income, exclusive of reversing temporary differences, and tested the completeness and accuracy of the underlying data used in its projections. For example, we compared the projections with the actual results of prior periods, as well as management’s consideration of current industry and economic trends. We also assessed the historical accuracy of management’s projections and compared the projections with other forecasted financial information prepared by the Company. Additionally, we performed sensitivity analyses over the forecasted financial information. We also tested the scheduling of the future reversals of existing temporary differences. ​ |

February 8, 2022

| ​ | ​ | 2021 | | | 2020 | | |

| Deferred income tax asset | ​ | ​ | 467,538 | ​ | ​ | 2,054 | ​ |

| Net income (loss) | ​ | $ | 948,581 | ​ | $ | (295,697) | ​ | $ | 446,906 | ​ |

| Stock compensation | ​ | | — | ​ | ​ | 185,129 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 185,129 | ​ |

| Net income | ​ | | — | ​ | | — | ​ | | — | ​ | | 948,581 | ​ | | 948,581 | ​ |

| Balances at December 31, 2021 | ​ | $ | 221 | ​ | $ | 4,567,111 | ​ | $ | (19,454) | ​ | $ | (777,874) | ​ | $ | 3,770,004 | ​ |

| Net income (loss) | ​ | $ | 948,581 | ​ | $ | (295,697) | ​ | $ | 446,906 | ​ |

| Deferred income taxes (including benefit from valuation allowance release) | ​ | ​ | (465,604) | ​ | ​ | (350) | ​ | ​ | (377) | ​ |

| Change in fair value of acquisition-related contingent consideration | ​ | ​ | 14,741 | ​ | ​ | 23,385 | ​ | ​ | 19,682 | ​ |

| Tax withholdings related to restricted and performance share vesting | ​ | ​ | (29,940) | ​ | ​ | (22,759) | ​ | ​ | (16,751) | ​ |

We sell PEMAZYRE in Japan to an exclusive wholesaler.

the primary payers for healthcare.

In making these assessments,

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.

As of December 31, 2021, there were no other recently issued accounting standards that may have a material impact on the Company's financial position, results of operations, or cash flows upon their adoption.

| MINJUVI revenues, net | ​ | ​ | 4,910 | ​ | ​ | — | ​ | ​ | — | ​ |

| OPZELURA revenues, net | ​ | ​ | 4,668 | ​ | ​ | — | ​ | ​ | — | ​ |

| Debt securities (government) | ​ | $ | 291,871 | ​ | $ | — | ​ | $ | (1,119) | ​ | $ | 290,752 | ​ |

| Total assets | ​ | $ | 2,278,706 | ​ | $ | 290,752 | ​ | $ | — | ​ | $ | 2,569,458 | ​ |

| ​ | ​ | 2021 | | ​ | 2020 | | ​ |

The change in fair value of the contingent consideration during the year ended December 31, 2021 was due primarily to the impact of updated projections of future net revenues of ICLUSIG in the European Union and the passage of time.

| Customer E | ​ | 11 | % | 10 | % | 8 | % |

| ​ | | 2021 | | ​ | 2020 | | ​ |

| Total inventory | ​ | $ | 56,938 | ​ | $ | 35,973 | ​ |

We capitalize inventory after FDA approval as the related costs are expected to be recoverable through the commercialization of the product.

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

At December 31, 2021, inventory with approximately $71.9 million of product costs incurred prior to FDA approval had not yet been sold.

We retained exclusive development and

Under the terms of the amended

In 2020, we sold an aggregate of approximately 3.7 million shares of Agenus common stock resulting in gross proceeds of approximately $17.2 million.

In 2021, we sold an aggregate of approximately 2.0 million shares of Agenus common stock resulting in gross proceeds of approximately $10.5 million.

As of December 31, 2021, we owned less than 5% of the outstanding shares of Agenus common stock.

In January 2022, we decided to opt-out of the continued development of MCLA-145, a bispecific antibody targeting PD-L1 and CD137.

We continue to collaborate with Merus and leverage the Merus platform to develop a pipeline of novel agents, as we continue to hold worldwide exclusive development and commercialization rights to up to ten additional programs.

If Merus opts to cease co-funding a program as to which it exercised its co-development option, then Merus will no longer receive a share of profits in the United States but will be eligible to

| --- | --- |

| [Interim Consolidated Financial Information (unaudited)](#Interim_Consolidated_Financial_Informati) | 119 |

February 9, 2021

| Convertible senior notes | ​ | ​ | — | ​ | ​ | 18,300 | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Other revenues | ​ | | — | ​ | | — | ​ | | 203 | ​ |

​

| Balances at December 31, 2017 | ​ | $ | 211 | ​ | $ | 3,627,433 | ​ | $ | (7,010) | ​ | $ | (1,990,005) | ​ | $ | 1,630,629 | ​ |

| Stock compensation | ​ | | — | ​ | | 148,266 | ​ | | — | ​ | | — | ​ | | 148,266 | ​ |

| Net income | ​ | ​ | — | ​ | | — | ​ | | — | ​ | | 109,493 | ​ | ​ | 109,493 | ​ |

| Adoption of ASU No. 2016-02 (Note 1) | ​ | | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 95 | ​ | | 95 | ​ |

| Deferred income taxes | ​ | ​ | (350) | ​ | ​ | (377) | ​ | ​ | (459) | ​ |

| Reclassification to common stock and additional paid in capital in connection with conversions of 1.25% convertible senior notes due 2020 | ​ | $ | 18,999 | ​ | $ | — | ​ | $ | — | ​ |

relationships in which we are able to assert control.

_Lease Accounting._ Accounting Standard Codification (“ASC”) 842, Leases, was adopted for the fiscal year beginning on January 1, 2019 using the modified retrospective method.

amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Business and in Item 1A.

reversal of previously recognized revenue will not occur.

_Collaboration loss sharing._ Under collaboration and license agreements with shared commercialization efforts, we record our share of the losses from the co-commercialization efforts in collaboration loss sharing on the consolidated statement of operations.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance applies to all entities and impacts how entities account for credit losses for financial assets measured at amortized cost and available for sale debt securities.

ASU 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts.

An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances.

For trade receivables, loans and held-to-maturity debt securities, entities are required to estimate expected credit losses over the lifetime of the asset.

For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than an other-than-temporary impairment that reduces the cost basis of the investment.

Further, an entity recognizes any improvements in estimated credit losses on its available-for-sale debt securities immediately in earnings.

Upon adoption, we assessed each financial asset measured at amortized cost and each available-for-sale debt security held for the impact of the guidance as of January 1, 2020 and noted an insignificant impact due to the minimal credit risk associated with our financial assets subject to ASC 326.

As such, it was concluded that a reserve for credit losses was de minimis on the adoption date.

Financial assets will continue to be assessed on a quarterly basis in future periods.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which eliminates the required disclosure of the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy.

The guidance also eliminates the required disclosure of the entity’s valuation process for Level 3 fair value measurements, however public entities are required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.

This guidance is effective for fiscal years beginning after December 15, 2019.

financial statements to comply with the standard.

In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General,” an update to Subtopic ASC 715-20.

The guidance amended year-end disclosure requirements related to defined benefit pension plans, and does not affect interim disclosures.

The guidance is effective for fiscal years ending after December 15, 2020 and is permitted for early adoption.

The standard is to be applied on a retrospective basis.

Incyte sponsors defined benefit plans for employees located in Europe and have adopted this guidance for the period ending December 31, 2020 as reflected in our disclosures in Note 15.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software,” an update to Subtopic ASC 350-40.

[removed: The design] of [removed: any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of] future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

_Changes in internal control over financial reporting._ There were no changes in our internal control over financial reporting (as defined in [removed: Rules] [added: Rule] 13a-15(f) [removed: and 15d-15(f)] under the Exchange Act) for the quarter ended December 31, [removed: 2020,] [added: 2021,] that [added: have] materially affected or are reasonably likely to materially affect our internal control over financial reporting.

_Management’s annual report on internal control over financial reporting._ Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act [removed: Rules] [added: Rule] 13a-15(f).

Based on our evaluation under the framework in _Internal Control—Integrated Framework_, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2020] [added: 2021] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

We have audited Incyte Corporation’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Incyte Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Incyte Corporation as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and our report dated February [removed: 9, 2021] [added: 8, 2022] expressed an unqualified opinion thereon.

The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood

February 8, 2022

February 9, 2021

The information required by this item (with respect to Directors) is incorporated by reference from the information under the caption “Election of Directors” contained in our Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for our [removed: 2021] [added: 2022] Annual Meeting of Stockholders to be held on [removed: May 26, 2021] [added: June 15, 2022] (the “Proxy Statement”).

To the extent disclosure for delinquent reports is being made, it can be found under the caption [removed: “Delinquent Section] [added: “Section] 16(a) [removed: Reports”] [added: Beneficial Ownership Reporting Compliance”] in the Proxy Statement and is incorporated herein by reference.

| [removed: Exhibit Number] [added: ExhibitNumber] | | Description of Document |

| 3(ii) | | [Bylaws of the Company, as amended as of [removed: November 15, 2017] [added: February 18, 2021] (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed [removed: November 17, 2017).](http://www.sec.gov/Archives/edgar/data/879169/000110465917069305/a17-27253_1ex3d1.htm)] [added: February 19, 2021).](https://www.sec.gov/Archives/edgar/data/0000879169/000110465921025501/tm217190d1_ex3-1.htm)] |

| 10.1# | | [Incyte Corporation Amended and Restated 2010 Stock Incentive [removed: Plan] [added: Plan, as amended and restated May 13, 2021] (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed [removed: April 30, 2019).](http://www.sec.gov/Archives/edgar/data/879169/000110465919025327/a19-8991_1ex10d1.htm)] [added: May 27, 2021).](https://www.sec.gov/Archives/edgar/data/0000879169/000110465921073209/tm2117670d1_ex10-1.htm)] |

| [removed: 10.8#*] [added: 10.8#] | | [1997 Employee Stock Purchase Plan of Incyte Corporation, as [removed: amended.](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex10d8.htm)] [added: amended and restated effective November 17, 2020 (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020).](https://www.sec.gov/Archives/edgar/data/0000879169/000155837021000825/incy-20201231xex10d8.htm)] |

| 10.10# | | [Form of Amended and Restated Employment Agreement, effective as of April 18, 2012, between the Company and Paula J. Swain [removed: and Wenqing Yao] (incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012).](http://www.sec.gov/Archives/edgar/data/879169/000110465912029092/a12-6693_1ex10d14.htm) |

| [removed: 10.19.1††*] [added: 10.19.1††] | | [First Amendment, dated as of July 17, 2020, to Collaboration and License Agreement entered into as of January 12, 2020 by and among the Company, MorphoSys AG and MorphoSys US [removed: Inc.](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex10d19d1.htm)] [added: Inc. (incorporated by reference to Exhibit 10.19.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020).](https://www.sec.gov/Archives/edgar/data/0000879169/000155837021000825/incy-20201231xex10d19d1.htm)] |

| 21.1* | | [Subsidiaries of the [removed: Company.](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex21d1.htm)] [added: Company.](https://www.sec.gov/Archives/edgar/data/879169/000155837022000902/incy-20211231xex21d1.htm)] |

| 23.1* | | [Consent of Ernst & Young LLP, Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex23d1.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/879169/000155837022000902/incy-20211231xex23d1.htm)] |

| 31.1* | | [Rule 13a 14(a) Certification of the Chief Executive [removed: Officer.](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex31d1.htm)] [added: Officer.](https://www.sec.gov/Archives/edgar/data/879169/000155837022000902/incy-20211231xex31d1.htm)] |

| 31.2* | | [Rule 13a 14(a) Certification of the Chief Financial [removed: Officer.](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex31d2.htm)] [added: Officer.](https://www.sec.gov/Archives/edgar/data/879169/000155837022000902/incy-20211231xex31d2.htm)] |

| 32.1 | | [Statement of the Chief Executive Officer under Section 906 of the Sarbanes Oxley Act of 2002 (18 U.S.C Section [removed: 1350).](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex32d1.htm)] [added: 1350).](https://www.sec.gov/Archives/edgar/data/879169/000155837022000902/incy-20211231xex32d1.htm)] |

| 32.2 | | [Statement of the Chief Financial Officer under Section 906 of the Sarbanes Oxley Act of 2002 (18 U.S.C Section [removed: 1350).](https://www.sec.gov/Archives/edgar/data/879169/000155837021000825/incy-20201231xex32d2.htm)] [added: 1350).](https://www.sec.gov/Archives/edgar/data/879169/000155837022000902/incy-20211231xex32d2.htm)] |

| ExhibitNumber | | Description of Document |

| ExhibitNumber | | Description of Document |

| 10.19.2 | | [Second Amendment, dated as of January 8, 2021, to Collaboration and License Agreement entered into as of January 12, 2020 by and among the Company, MorphoSys AG and MorphoSys US Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021).](https://www.sec.gov/Archives/edgar/data/0000879169/000155837021005692/incy-20210331xex10d1.htm) |

| 10.21 | | [Revolving Credit and Guaranty Agreement, dated as of August 18, 2021, among the Company, the guarantors party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).](https://www.sec.gov/Archives/edgar/data/0000879169/000155837021014131/incy-20210930xex10d1.htm) |

| 24.1* | | [Power of Attorney (included on the signature page to this Annual Report on Form 10-K).](#PowerOfAttorney) |

| ExhibitNumber | | Description of Document |

| 24.1* | | [Power of Attorney.](#PowerOfAttorney) |

Date: February [removed: 9, 2021][added: 8, 2022]

| ​ /s/ Hervé Hoppenot | Chairman, President, and Chief Executive Officer (Principal Executive Officer) and Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Christiana Stamoulis | Chief Financial Officer (Principal Financial Officer) | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Paul Trower | [added: Division] VP, Finance (Principal Accounting Officer) | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Julian C. Baker | Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Jean-Jacques Bienaimé | Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Paul J. Clancy | Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Wendy L. Dixon | Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Jacqualyn A. Fouse | Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Edmund P. Harrigan | Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Katherine A. High | Director | February [removed: 9, 2021] [added: 8, 2022] |

| /s/ Otis W. Brawley | Director | February 8, 2022 |

| Otis W. Brawley | ​ | ​ |

| /s/ Paul A. Friedman | Director | February 9, 2021 |

| Paul A. Friedman | ​ | ​ |