Key Points
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Incyte has added to its pipeline through acquisitions.
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It anticipates four new approvals and launches through 2027.
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TG Therapeutics’ shares are up more than 90% so far this year.
- 10 stocks we like better than Incyte ›
Incyte (NASDAQ: INCY) and TG Therapeutics (NASDAQ: TGTX) are commercial-stage biotech companies that are using blockbuster drugs to fund the growth of their promising pipelines. Incyte is known for its work in Janus kinase (JAK) inhibition, focusing on dermatology, oncology, hematology, inflammation, and autoimmune disorders.TG Therapeutics is focused on the acquisition, development, and commercialization of novel treatments for B-cell diseases.
Both stocks are delivering strong returns. Shares of Incyte are up more than 17% this year, while TG Therapeutics is up nearly 90% so far in 2026.
Here are reasons to buy the pharmaceutical stocks:
Incyte has strong cash flow and operational beats
Incyte’s financial health is anchored by its blockbuster JAK inhibitor, Jakafi, for rare blood cancers, and its fast-growing dermatology cream, Opzelura, approved to treat vitiligo and eczema.
In the first quarter, Incyte reported Jakafi sales of $758 million, up 7% year over year, and Opzelura had sales of $143 million, up 20% over the same period last year. Overall revenue was $1.27 billion, up 21% year over year, and earnings per share (EPS) were $1.47, up 83.7% over the first quarter of 2025. Adjusted EPS was $1.81, beating the analysts’ consensus of $1.34.
The growing diversification of its pipeline
Incyte is aggressively using its free cash flow to buy its way out of concentration risk. A prime example is its recent $1.25 billion acquisition of Vega Therapeutics, which gives it a highly promising phase 3 subcutaneous bleeding disorder asset (VGA039). This expands its footprint into hematology outside of cancer, padding its late-stage pipeline with potential first-in-class multibillion-dollar drugs.
CEO Bill Meury said Incyte has 10 phase 3 studies underway and anticipates four new approvals and launches in cancer and immunology through early 2027. One key late-stage pipeline therapy is Monjuvi, which performed well as a combination therapy in a phase 3 trial as a first-line treatment for diffuse large B-cell lymphoma (DLBCL).
Another is povorcitinib to treat the skin conditions hidradenitis suppurativa and nonsegmental vitiligo. The company also has high hopes for INCB161734 as a treatment for pancreatic ductal adenocarcinoma.
Highly efficient financial metrics
For a biotech, Incyte demonstrates remarkable capital efficiency. It has an exceptional return on equity of more than 30%, reflecting a management team that is proficient at turning shareholder investments and cash reserves into real, tangible earnings.
TG Therapeutics is riding Briumvi momentum
Briumvi, TG Therapeutics’ IV infusion for the treatment of relapsing forms of multiple sclerosis (MS), is driving growth. Management recently raised its full-year revenue guidance to $925 million after the drug brought in $194.8 million in first-quarter U.S. sales alone. The company also raised full-year Briumi guidance to $885 million to $900 million in sales.
The drug is in a phase 3 trial as an at-home self-administered subcutaneous injection format to treat MS. It is also being examined for treatment-resistant schizophrenia in patients who do not fully respond to standard antipsychotics, as well as a subcutaneous form to treat Myasthenia Gravis, a chronic, rare autoimmune neuromuscular disorder.
It has an attractive acquisition profile
TG Therapeutics has a powerhouse gross-margin profile sitting around 83%. In the first quarter, the company reported revenue of $204.9 million, up 69.5%, year over year. EPS was $0.12, up 300% over the same period a year ago.
Given the recent wave of multibillion-dollar merger and acquisition deals sweeping the biotech sector, the company’s highly profitable, single-blockbuster commercial engine makes it a prime, highly lucrative takeover target for a pharmaceutical giant looking to buy a turnkey neurology franchise.
Potential suitors include large pharmaceutical companies with an existing footprint in neurology and immunology, such as Sanofi, which has a history of big MS drugs such as Aubagio and Lemtrada; Novartis, the maker of competing MS drugs Kesimpta and Gilenya; and Biogen, a dominant player in the MS space.
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James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Incyte. The Motley Fool recommends Biogen and TG Therapeutics. The Motley Fool has a disclosure policy.
