Price Forecast:

Bullish Case: Incyte's positive trial results for Zynyz and the continued market traction of Opzelura may enhance investor sentiment and drive stock prices up, especially as it seeks FDA approval.

Bearish Case: The impending Jakafi patent expiration in 2025, coupled with recent insider selling and operational cost increases, may undermine Incyte's profitability, leading to stock declines.

Potential Outcomes:

1. Successful FDA approvals driving stock prices higher (60%).

2. Revenue impacts due to Jakafi patent expiry (35%).

3. Continued market volatility affecting stock (5%).

Trading Oracle: Adopt a bullish long volatility strategy; buy INCY $75 calls while selling $80 calls expiring in February 2025. This captures the upcoming FDA catalyst with a favorable risk/reward ratio amidst positive sentiment and higher implied volatility. The strategy’s alignment with historical mean reversion patterns offers a robust profit potential.

November 17, 2024