David,
The answer to the question you've asked tonight here and on the INCY, T/FIF, and VD's Model Portfolio threads - why should you buy INCY? - is laid out in some detail on those other threads, and it's not too hard to dig for it, since it consists mostly of posts by Rocketman. Try, for example, the exchanges around posts 612, 625 and 659 on the INCY thread, and around 4869, 4880, 4974, 5127-28 and 5320 on the VD's Model Portfolio thread.
The short version (lacking detail and nuance) is something like this:
INCY keeps on expanding the genomic information it develops and patents, while expanding its data management technology and services to handle the data (INCY employs [this is from memory] 125 biologists, 175 computer programmers, and 20+ patent lawyers). Its intellectual property thus continues to become more valuable and more attractive to its customers. These customers are most of the 20 or so largest pharmas, who continue to sign up for wider access to INCY's enlarging databases, and who, so far unanimously, have always renewed their agreements when they expired. All this accounts for INCY's rapidly growing current and near-term revenues.
The kicker - see Rman's #4880 on VDXX, among others - is that under the agreements with the big pharmas, INCY is entitled to a royalty on any drugs that are discovered through use of its databases/software. This modest little slice, maybe 1%, is easily agreed to by the pharmas, but may well yield huge cash inflows to INCY when a few drugs reach market a few years down the road, while in the meanwhile INCY's lead in genomic databases and database management keep the revenues and profits flowing.
IMO, this one's a winner, although not a short-term play - because it trades at a trailing PE of nearly 80, even at 45% off its 52-week high, the market (which has no comprehension of the science involved) will be nervous about it, and the stock will trade choppily, presenting numerous buying opportunities.
Disclaimer, disclaimer. I could be wrong about this, and you should do your own due diligence before you risk a real dollar.
-- RCM
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