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Incyte s Q4 Revenues Jump, while Losses Widen: $240M Revenues Expected for 2001

NEW YORK, Feb 1 – Bolstered by solid revenues on its custom genomics programs, Incyte posted increased fourth quarter revenues Thursday, and forecasted a continuing growth curve throughout 2001.

Incyte expects to post revenues of between $220 and $240 million in the coming year, said John Vuko, Incyte’s Chief Financial officer.

Separately, the company also reiterated its confidence that a judge had ruled favorably in a January 22 patent litigation hearing with Affymetrix. Lee Bendekegey, the company’s general counsel, said he was confident the ruling set up Incyte to file for summary judgment, a motion that would have Affymetrix’s claims dismissed without trial.

Incyte’s revenue for the fourth quarter increased 20 percent to $55.4 million, versus $46.0 million for the year-ago quarter. These included database and partnership revenues of $40.6 million, compared with $30.6 million in the same period of 1999, and custom genomics revenues of $14.8 million, or 48 percent greater than the $10 million in revenue posted for the same quarter last year.

“The Internet has been a major driving force for the growth in the custom genomics area," Incyte CEO Roy Whitfield said, referring to Incyte’s Web-based e-commerce site that allows medical researchers to purchase information on Incyte’s library of full length genes. “We would expect custom genomics to [continue to] outpace general development in the coming quarter."

Incyte posted net losses of $7.4 million for the quarter, meeting Wall Street’s expectations of 11 cents per share, according to a poll of 10 brokers conducted by FirstCall/Thomson financial. These losses widened slightly compared to the 1999 fourth quarter losses of $6.4 million.

During the fourth quarter, the company continued to sink significant investments into R&D, spending $53.9 million for the quarter, compared to $42.6 million for the same period in 1999. The company’s sales and administrative expenses also surged to $18.5 million from $10.3 million for the year-ago quarter.

In the last year, said Whitfield, “Incyte’s direct sales and marketing organization has grown from a ten-person group located exclusively in Palo Alto to a 100 person global initiative.”

The company will continue to invest significantly in these areas during the coming year, Whitfield said. Incyte

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ill spend $60 million on “further development of Incyte's intellectual property portfolio and internal disease pathway and therapeutic drug discovery programs."

For 2001, the company’s most important goal is the hiring of a new president. Other priorities include partnerships with pharma in selected therapeutic areas, and collaboration with an antibody development company, said Whitfield.

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