Incyte Reports 2019 Third Quarter Financial Results and Provides Updates on Key Clinical Programs - Total product and royalty revenues of $534 million (+24% vs. Q3 2018) and Jakafi (ruxolitinib) revenues of $433 million

Incyte Reports 2019 Third Quarter Financial

and Provides Updates on Key Clinical Programs

Conference Call and Webcast Scheduled Today

WILMINGTON, Del. - October 29, 2019 - Incyte

Corporation (Nasdaq:INCY) today reports 2019 third quarter financial results and provides a status update on the Company's

development portfolio.

"Revenue growth continues to be very strong, driven by

robust demand for Jakafi (ruxolitinib) in all three approved indications and, as a result, we are raising guidance for full year

Jakafi net sales," stated Herv Hoppenot, Chief Executive Officer, Incyte. "At the beginning of 2019, we laid

out an ambitious set of development goals for our late-stage portfolio, and in the third quarter we have continued to execute against

them. The recent clinical success in the REACH2 trial of ruxolitinib in steroid-refractory acute GVHD; the updated data from pemigatinib

in cholangiocarcinoma and subsequent NDA submission; and the recently-presented 52-week data from the randomized Phase 2 trial

of ruxolitinib cream in vitiligo are all illustrative of the significant progress we have made this year."

Oncology - key highlights

The positive result of REACH2, the Phase 3 study evaluating

ruxolitinib in patients with steroid-refractory acute graft-versus-host disease (GVHD), was announced in October. The study met

its primary endpoint of superior overall response rate (ORR) at Day 28 with ruxolitinib treatment compared to best available therapy.

No new safety signals were observed, and the ruxolitinib safety profile in REACH2 was consistent with that seen in previously reported

studies in steroid-refractory acute GVHD.

A recent interim efficacy and safety analysis conducted by an

Independent Data Monitoring Committee (IDMC) recommended that the Phase 3 REACH3 trial of ruxolitinib in patients with steroid-refractory

chronic GVHD should continue without modification. The result of REACH3 is expected in 2020.

The top-line result from GRAVITAS-301, the Phase 3 trial

of itacitinib as a treatment for patients with newly diagnosed acute GVHD, is expected to be available at the end of

2019. GRAVITAS-309, a Phase 3 trial of itacitinib as a treatment for patients with newly diagnosed chronic GVHD, was

initiated in January of this year with results expected in 2021.

The NDA seeking approval for pemigatinib as a second-line treatment

for cholangiocarcinoma patients with FGFR2 fusions or rearrangements was submitted to the U.S. Food and Drug Administration

(FDA) under Breakthrough Therapy designation. Data from FIGHT-202, which supported the NDA, were presented at the recent European

Society for Medical Oncology (ESMO) Congress.

Enrollment in the continuous dosing cohort of FIGHT-201, the

Phase 2 trial of pemigatinib in patients with bladder cancer, is expected to complete by the end of 2019 and FIGHT-207, a Phase

2 solid tumor-agnostic trial evaluating pemigatinib in patients with driver-activations of FGF/FGFR, has been initiated.

Inflammation and autoimmunity (IAI) - key highlights

Evidence of continued improvement with longer-term treatment

was shown in the 52-week data from the randomized Phase 2 trial of ruxolitinib cream in patients with vitiligo, which were recently

presented at the European Academy of Dermatology and Venereology (EADV) Congress. The Phase 3 TRuE-V development program of ruxolitinib

cream in patients with vitiligo was initiated in September, with initial results expected in 2021.

The Phase 3 TRuE-AD development program of ruxolitinib cream

in patients with atopic dermatitis is ongoing, with initial results expected in the first half of 2020.

Discovery and early development - key highlights

Incyte's portfolio of earlier-stage clinical candidates

Partnered - key highlights

The status of Incyte's partnered compounds is detailed

2019 Third-Quarter and Year-to-Date Financial Results

The financial measures presented in this press release

for the three and nine months ended September 30, 2019 and 2018 have been prepared by the Company in accordance with U.S.

Generally Accepted Accounting Principles ("GAAP"), unless otherwise identified as a Non-GAAP financial measure.

Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte's

GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and

financial planning purposes. These metrics are also used to manage the Company's business and monitor performance. The

Company adjusts, where appropriate, for expenses in order to reflect the Company's core operations. The Company

believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the

Company's core operations. The metrics have been adopted to align the Company with disclosures provided by industry

Beginning in the first quarter of 2019, after reviewing our

Reconciliation of GAAP Net Income to Selected Non-GAAP Adjusted Information with the U.S. Securities & Exchange Commission,

we no longer adjust for upfront consideration and milestones that are part of collaboration agreements with new or existing partners.

This revised methodology is reflected in this press release for the three and nine months ended September 30, 2019 and 2018.

Non-GAAP information is not prepared under a comprehensive set

of accounting rules and should only be used in conjunction with and to supplement Incyte's operating results as reported

under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.

The Company's 2019 financial guidance related to research

and development and selling, general and administrative expenses does not include estimates associated with any potential future

strategic transactions.

Revenues For the quarter ended September 30, 2019,

net product revenues of Jakafi were $433 million as compared to $348 million for the same period in 2018, representing 25 percent

growth. For the nine months ended September 30, 2019, net product revenues of Jakafi were $1.2 billion as compared to $1.0 billion

for the same period in 2018, representing 21 percent growth. For the quarter ended September 30, 2019, net product revenues of

Iclusig (ponatinib) were $21 million as compared to $20 million for the same period in 2018. For the nine months

ended September 30, 2019, net product revenues of Iclusig were $66 million as compared to $61 million for the same period in 2018.

For the quarter and nine months ended September 30, 2019, product

royalties from sales of Jakavi (ruxolitinib), which has been out-licensed to Novartis outside of the United

States, were $58 million and $161 million, respectively, as compared to $51 million and $139 million, respectively, for the same

periods in 2018. For the quarter and nine months ended September 30, 2019, product royalties from sales of Olumiant

(baricitinib), which has been out-licensed to Lilly globally, were $22 million and $57 million, respectively, as compared to $11

million and $26 million, respectively, for the same periods in 2018.

For the quarter and nine months ended September 30, 2019, milestone

and contract revenues earned from our collaborative partners were $18 million and $78 million, respectively, as compared to $20

million and $120 million, respectively, for the same periods in 2018.

For the quarter and nine months ended September 30, 2019,

total revenues were $552 million and $1.6 billion, respectively, as compared to $450 million and $1.4 billion, respectively, for

the same periods in 2018.

Year Over Year Revenue Growth

(in thousands, unaudited)

Cost of product revenues GAAP cost of product revenues

for the quarter and nine months ended September 30, 2019 was $30 million and $82 million, respectively, as compared to $25 million

and $68 million, respectively, for the same periods in 2018. Non-GAAP cost of product revenues for the quarter and nine months

ended September 30, 2019 was $24 million and $65 million, respectively, as compared to $19 million and $52 million, respectively,

for the same periods in 2018. Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for

Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation.

Research and development expenses GAAP research

and development expenses for the quarter and nine months ended September 30, 2019 were $281 million and $841 million, respectively,

as compared to $293 million and $894 million, respectively, for the same periods in 2018. The decrease in GAAP research and development

expenses over the prior year quarter and prior year nine month period was driven primarily by our decision to no longer co-fund

the development of baricitinib with Lilly and lower costs related to the epacadostat program, partially offset by costs to advance