0000879169-22-000010 | 10-Q | XBRL Viewer

Stock Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

We recorded $45.4 million and $135.7 million of stock compensation expense on our condensed consolidated statements of operations for the three and nine months ended September 30, 2022, respectively. We recorded $42.7 million and $134.8 million of stock compensation expense on our condensed consolidated statements of operations for the three and nine months ended September 30, 2021, respectively. Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $25.8 million, $80.2 million, $26.3 million and $84.2 million for the three and nine months ended September 30, 2022 and 2021, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $18.9 million, $53.5 million, $15.9 million and $49.5 million for the three and nine months ended September 30, 2022 and 2021, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included cost of product revenues of $0.7 million, $2.0 million, $0.5 million and $1.1 million, respectively, for the three and nine months ended September 30, 2022 and 2021.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions:


	Employee Stock Options												Employee Stock Purchase Plan
	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Nine Months Ended
	September 30,												September 30,
	2022			2021			2022			2021			2022			2021			2022			2021
Average risk-free interest rates	2.90		%	0.76		%	2.03		%	0.60		%	4.22		%	0.28		%	3.44		%	0.22		%
Average expected life (in years)	5.17			5.16			4.88			5.00			0.50			0.50			0.50			0.50
Volatility	35		%	38		%	36		%	39		%	31		%	25		%	27		%	31		%
Weighted-average fair value (in dollars)	$	27.57		$	28.84		$	25.96		$	29.32		$	16.46		$	18.20		$	15.38		$	18.82

The risk-free interest rate is derived from the U.S. Federal Reserve rate in effect at the time of grant. The expected life calculation is based on the observed and expected time to the exercise of options by our employees based on historical exercise patterns for similar type options. Expected volatility is based on the historical volatility of our common stock over the period commensurate with the expected life of the options. A dividend yield of zero is assumed based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Nonemployee awards are measured on the grant date by estimating the fair value of the equity instruments to be issued using the expected term, similar to our employee awards.

Option activity under our 2010 Stock Incentive Plan (the “2010 Stock Plan”) was as follows:


	Shares Subject to Outstanding Options
	Shares	Weighted Average Exercise Price
Balance at December 31, 2021	12,763,460	$	88.39
Options granted	1,755,963	$	75.32
Options exercised	(477,371)	$	66.69
Options cancelled	(989,465)	$	88.60
Balance at September 30, 2022	13,052,587	$	87.41

Our annual stock option grants generally have a 10-year term and vest over four years, with 25% vesting after one year and the remainder vesting in 36 equal monthly installments.

Restricted stock unit (“RSU”) and performance share (“PSU”) award activity under the 2010 Stock Plan was as follows:


	Shares Subject to Outstanding Awards
	Shares	Grant Date Value
Balance at December 31, 2021	3,966,888	$	84.91
RSUs granted	2,473,892	77.14
PSUs granted	154,685	77.67
RSUs released	(845,095)	87.06
PSUs released	(184,401)	69.25
RSUs cancelled	(337,265)	83.94
PSUs cancelled	(1,720)	65.76
Balance at September 30, 2022	5,226,984	$	81.29

RSUs and PSUs are granted to our employees at the share price on the date of grant. Each RSU represents the right to acquire one share of our common stock. Each RSU granted in connection with our annual equity awards will vest 25% annually over four years, while each RSU granted as outstanding merit awards or as part of retention award programs will vest in a single installment at the end of four years.

We grant PSUs with performance and/or service-based milestones with graded and/or cliff vesting over three to four years. The shares of our common stock into which each PSU may convert is subject to a multiplier based on the level at which the financial, developmental and market performance conditions are achieved over the service period. Compensation expense for PSUs with financial and developmental performance conditions is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. For PSUs containing performance conditions which were not deemed probable of achievement, no stock compensation expense is recorded. Compensation expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period. For the three and nine months ended September 30, 2022 we recorded $3.2 million and $5.1 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations. For the three and nine months ended September 30, 2021 we recorded $1.7 million and $5.0 million of stock compensation expense for PSUs on our condensed consolidated statements of operations.

The following table summarizes our shares available for grant under the 2010 Stock Plan. Each RSU and PSU grant reduces the available share pool by 2 shares.


			Shares Available for Grant
Balance at December 31, 2021			10,113,298
Options, RSUs and PSUs granted			(7,013,475)
Options, RSUs and PSUs cancelled			1,680,482
Balance at September 30, 2022			4,780,305

Based on our historical experience of employee turnover, we have assumed an annualized forfeiture rate of 5% for our options, RSUs and PSUs. Under the true-up provisions of the stock compensation guidance, we will record additional expense if the actual forfeiture rate is lower than we estimated, and will record a recovery of prior expense if the actual forfeiture is higher than we estimated.

Total compensation cost of options granted but not yet vested, as of September 30, 2022, was $51.2 million, which is expected to be recognized over the weighted average period of approximately 1.1 years. Total compensation cost of RSUs granted but not yet vested, as of September 30, 2022, was $235.5 million, which is expected to be recognized over the weighted average period of approximately 2.0 years. Total compensation cost of PSUs granted but not yet vested, as of September 30, 2022, was $19.6 million, which is expected to be recognized over the weighted average period of 2.2 years, should the underlying performance conditions be deemed probable of achievement.

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2021 has been derived from our audited consolidated financial statements. Although we believe that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. Principles of Consolidation. The condensed consolidated financial statements include the accounts of Incyte Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have been eliminated in consolidation. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Recent Accounting Pronouncements There were no new accounting pronouncements issued nor adopted since our filing of the Annual Report on Form 10-K for the year ended December 31, 2021, which could have a significant effect on our condensed consolidated financial statements.

Net Income Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Income Per Share

Net income per share was calculated as follows for the periods indicated below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Basic net income	$	112,775	$	181,739	$	312,199	$	384,730

Weighted average common shares outstanding	222,415		220,845		221,801		220,243

Basic net income per share	$	0.51	$	0.82	$	1.41	$	1.75

Diluted net income	$	112,775	$	181,739	$	312,199	$	384,730

Weighted average common shares outstanding	222,415		220,845		221,801		220,243
Dilutive stock options and awards	1,760		1,403		1,825		1,870
Weighted average shares used to compute diluted net income per share	224,175		222,248		223,626		222,113

Diluted net income per share	$	0.50	$	0.82	$	1.40	$	1.73

The potential common shares that were excluded from the diluted net income per share computation are as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Outstanding stock options and awards	11,150,022	11,841,440	10,979,096	9,917,824

License Agreements - InnoCare (Details) - InnoCare - tafasitamab - USD ($) $ in Millions		1 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
License Agreements
Upfront payment received under license agreement		$ 35.0
Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement	$ 82.5

Inventory (Tables)

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Schedule of inventory

Our inventory balance consists of the following (in thousands):


	September 30, 2022		December 31, 2021
Raw materials	$	32,289	$	1,275
Work-in-process	35,465		39,895
Finished goods	33,379		15,768
Total inventory	$	101,133	$	56,938

Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Schedule of net periodic benefit cost

The net periodic benefit cost was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Service cost	$	2,376	$	1,975	$	7,336	$	5,927
Interest cost	61		23		187		68
Expected return on plan assets	(1,008)		(15)		(3,114)		(45)
Amortization of prior service cost	193		54		580		162
Amortization of actuarial losses	89		288		266		864
Net periodic benefit cost	$	1,711	$	2,325	$	5,255	$	6,976

Net Income Per Share - Antidilutive securities (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-Based Payment Arrangement
Anti-dilutive securities
Potential common shares excluded from diluted net income (loss) per share computation ( in shares)	11,150,022	11,841,440	10,979,096	9,917,824

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Oct. 25, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-12400
Entity Registrant Name	INCYTE CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3136539
Entity Address, Address Line One	1801 Augustine Cut-Off
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19803
City Area Code	302
Local Phone Number	498-6700
Title of 12(b) Security	Common Stock, $.001 par value per share
Trading Symbol	INCY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		222,475,468
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000879169
Amendment Flag	false

Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Revenues (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues
Total revenues	$ 823,303	$ 812,987	$ 2,467,935	$ 2,123,414
Product revenues, net
Revenues
Total revenues	713,010	594,013	1,982,682	1,673,974
JAKAFI
Revenues
Total revenues	619,595	547,373	1,761,732	1,542,138
ICLUSIG
Revenues
Total revenues	25,929	28,522	78,222	82,356
PEMAZYRE
Revenues
Total revenues	23,414	17,562	60,429	48,924
MINJUVI
Revenues
Total revenues	5,932	556	14,845	556
OPZELURA
Revenues
Total revenues	38,140	0	67,454	0
Product royalty revenues
Revenues
Total revenues	110,293	183,974	350,253	404,440
JAKAVI Royalty Revenues
Revenues
Total revenues	85,808	94,655	240,386	242,295
OLUMIANT Royalty Revenues
Revenues
Total revenues	20,371	86,572	98,689	154,875
TABRECTA Royalty Revenues
Revenues
Total revenues	4,114	2,747	11,178	7,270
Milestone and contract revenues
Revenues
Total revenues	$ 0	$ 35,000	$ 135,000	$ 45,000

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares	3 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021
Statement of Stockholders' Equity [Abstract]
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares	578,106	274,693	323,582	459,084	390,001	389,512
Issuance of shares of Common Stock under the ESPP		189,684			153,082
Issuance of shares of Common Stock for services rendered	1,337	1,469	1,535	1,466	1,288	1,357

Stock Compensation - Option activity under the 2010 stock plan (Details) - Share-based Payment Arrangement, Option - $ / shares	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Option Activity Shares
Outstanding at the beginning of the period (in shares)	12,763,460
Options granted (in shares)	1,755,963
Options exercised (in shares)	(477,371)
Options cancelled (in shares)	(989,465)
Outstanding at the end of the period (in shares)	13,052,587
Stock Options Weighted Average Price
Exercise prices of options outstanding (in USD per share)	$ 87.41	$ 88.39
Granted (in USD per share)	75.32
Exercised (in USD per share)	66.69
Cancelled (in USD per share)	$ 88.60

Accrued and Other Current Liabilities

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):


	September 30, 2022		December 31, 2021
Royalties	$	248,455	$	168,412
Clinical related costs	152,764		109,486
Sales allowances	186,112		136,541
Sales and marketing	31,001		35,750
Construction in progress	8,836		27,098
Operating lease liabilities	8,492		10,554
Other current liabilities	64,154		45,754
Total accrued and other current liabilities	$	699,814	$	533,595

License Agreements - Zai Lab (Details) - Zai Lab Ltd - Maximum $ in Millions	1 Months Ended
	Jul. 31, 2019 USD ($)
Development and Regulatory Milestones
License Agreements
Upfront and immediate milestone payment to be received under license agreement	$ 22.5
Commercialization Milestones
License Agreements
Upfront and immediate milestone payment to be received under license agreement	$ 37.5

Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Retirement Benefits [Abstract]
Defined contribution expense	$ 5.1	$ 4.4	$ 14.7	$ 12.8
Location of costs excluding the service component	Other income (expense), net
Current year expected contributions total	$ 6.4		$ 6.4

License Agreements - Nimble (Details) - Nimble - Maximum $ in Millions	Sep. 30, 2022 USD ($)
Future contingent discovery milestones
License Agreements
Additional milestone payments under the license agreement	$ 8.0
Development and Regulatory Milestones
License Agreements
Additional milestone payments under the license agreement	127.0
Commercialization Milestones
License Agreements
Additional milestone payments under the license agreement	$ 130.0

Concentrations of Credit Risk and Current Expected Credit Losses (Tables)

9 Months Ended

Sep. 30, 2022

Risks and Uncertainties [Abstract]

Schedule of concentration of credit risk related to collaborative partners

In November 2011, we began commercialization and distribution of JAKAFI, in April 2020, we began commercialization and distribution of PEMAZYRE, and in October 2021, we began commercialization and distribution of OPZELURA. Our product revenues are concentrated in a number of these customers. The concentration of credit risk related to our JAKAFI, PEMAZYRE and OPZELURA product revenues is as follows:


	Percentage of Total Net Product Revenues for the Three Months Ended				Percentage of Total Net Product Revenues for the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Customer A	19	%	19	%	19	%	19	%
Customer B	10	%	11	%	11	%	12	%
Customer C	15	%	17	%	18	%	18	%
Customer D	5	%	9	%	5	%	10	%
Customer E	9	%	11	%	10	%	11	%

Stock Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Stock compensation
Stock compensation expense	$ 45.4	$ 42.7	$ 135.7	$ 134.8
Dividend yield (as a percent)			0.00%
Assumed annualized forfeiture rate (as a percent)			5.00%
Share-based Payment Arrangement, Option
Stock compensation
Stock option grant term			10 years
Vesting period			4 years
Percentage of units vesting at the end of each calendar year (as a percent)			25.00%
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	51.2		$ 51.2
Vesting period of recognition of the unrecognized compensation cost of nonvested awards			1 year 1 month 6 days
Share-based Payment Arrangement, Option \| Share-based Payment Arrangement, Tranche One
Stock compensation
Vesting period			1 year
Share-based Payment Arrangement, Option \| Share-based Payment Arrangement, Tranche Two
Stock compensation
Vesting period			36 months
Restricted Stock Units (RSUs)
Stock compensation
Vesting period			4 years
Percentage of units vesting at the end of each calendar year (as a percent)			25.00%
Number of shares awarded for each RSU (in shares)			1
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	235.5		$ 235.5
Vesting period of recognition of the unrecognized compensation cost of nonvested awards			2 years
Performance Shares
Stock compensation
Stock compensation expense	3.2	1.7	$ 5.1	5.0
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	19.6		$ 19.6
Vesting period of recognition of the unrecognized compensation cost of nonvested awards			2 years 2 months 12 days
Performance Shares \| Minimum
Stock compensation
Vesting period			3 years
Performance Shares \| Maximum
Stock compensation
Vesting period			4 years
Research and Development Expense
Stock compensation
Stock compensation expense	25.8	26.3	$ 80.2	84.2
Selling, General and Administrative Expenses
Stock compensation
Stock compensation expense	18.9	15.9	53.5	49.5
Cost of Sales
Stock compensation
Stock compensation expense	$ 0.7	$ 0.5	$ 2.0	$ 1.1

Revenues

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues

Revenues are recognized under guidance within ASC 606, Revenue from Contracts with Customers. The following table presents our disaggregated revenue for the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
JAKAFI revenues, net	$	619,595	$	547,373	$	1,761,732	$	1,542,138
ICLUSIG revenues, net	25,929		28,522		78,222		82,356
PEMAZYRE revenues, net	23,414		17,562		60,429		48,924
MINJUVI revenues, net	5,932		556		14,845		556
OPZELURA revenues, net	38,140		—		67,454		—
Total product revenues, net	713,010		594,013		1,982,682		1,673,974
JAKAVI product royalty revenues	85,808		94,655		240,386		242,295
OLUMIANT product royalty revenues	20,371		86,572		98,689		154,875
TABRECTA product royalty revenues	4,114		2,747		11,178		7,270
Total product royalty revenues	110,293		183,974		350,253		404,440
Milestone and contract revenues	—		35,000		135,000		45,000
Total revenues	$	823,303	$	812,987	$	2,467,935	$	2,123,414

For further information on our revenue-generating contracts, refer to Note 7.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 13
-Subparagraph (b)(2)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
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-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Concentrations of Credit Risk and Current Expected Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Concentration of risk
Allowance for doubtful accounts	$ 0.0		$ 0.0		$ 0.0
Revenue, Product and Service Benchmark \| Customer Concentration Risk \| Customer A
Concentration of risk
Percentage of concentration risk	19.00%	19.00%	19.00%	19.00%
Revenue, Product and Service Benchmark \| Customer Concentration Risk \| Customer B
Concentration of risk
Percentage of concentration risk	10.00%	11.00%	11.00%	12.00%
Revenue, Product and Service Benchmark \| Customer Concentration Risk \| Customer C
Concentration of risk
Percentage of concentration risk	15.00%	17.00%	18.00%	18.00%
Revenue, Product and Service Benchmark \| Customer Concentration Risk \| Customer D
Concentration of risk
Percentage of concentration risk	5.00%	9.00%	5.00%	10.00%
Revenue, Product and Service Benchmark \| Customer Concentration Risk \| Customer E
Concentration of risk
Percentage of concentration risk	9.00%	11.00%	10.00%	11.00%
Accounts Receivable \| Credit Concentration Risk \| Collaboration Partner A, B, C and D
Concentration of risk
Percentage of concentration risk			19.00%		36.00%
Accounts Receivable \| Credit Concentration Risk \| Customer A, B, C, D and E
Concentration of risk
Percentage of concentration risk			36.00%		31.00%

Fair Value of Financial Instruments - Level 3 liabilities (Details) - Fair Value, Inputs, Level 3 - Estimate of Fair Value Measurement $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Roll forward of Level 3 liabilities
Balance at the beginning of the period	$ 244,000
Contingent consideration earned during the period but not yet paid	(25,802)
Change in fair value of contingent consideration	(12,198)
Balance at the end of the period	$ 206,000

License Agreements - Innovent (Details) - Innovent - USD ($) $ in Millions	1 Months Ended	9 Months Ended
	Mar. 31, 2022	Sep. 30, 2022
Development and Regulatory Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement		$ 94.0
Regulatory Milestones \| PEMAZYRE
License Agreements
Amount recognized and received for the achievement of a predefined milestone	$ 5.0
Commercialization Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement		$ 202.5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income	$ 312,199	$ 384,730
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	49,637	42,986
Stock-based compensation	135,741	134,784
Deferred income taxes	40,432	(178)
Other, net	15,097	5,268
Unrealized loss on long term investments	72,142	28,394
(Gain) loss on change in fair value of acquisition-related contingent consideration	(12,198)	13,068
Changes in operating assets and liabilities:
Accounts receivable	(1,888)	(34,695)
Prepaid expenses and other assets	(40,016)	(24,784)
Inventory	(48,316)	(16,215)
Accounts payable	(8,935)	15,742
Accrued and other liabilities	172,384	85,037
Net cash provided by operating activities	686,279	634,137
Cash flows from investing activities:
Purchase of long term investments	0	(8,662)
Sale of long term investments	0	10,473
Capital expenditures	(56,560)	(146,543)
Purchases of marketable securities	(59,058)	(228,170)
Sale and maturities of marketable securities	57,988	231,250
Net cash used in investing activities	(57,630)	(141,652)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock plans	42,989	48,432
Tax withholdings related to restricted and performance share vesting	(25,724)	(29,380)
Payment of finance lease liabilities	(2,106)	(1,788)
Payment of contingent consideration	(13,473)	(20,093)
Net cash provided by (used in) financing activities	1,686	(2,829)
Effect of exchange rates on cash, cash equivalents, restricted cash and investments	2,728	(3,718)
Net increase in cash, cash equivalents, restricted cash and investments	633,063	485,938
Cash, cash equivalents, restricted cash and investments at beginning of period	2,059,160	1,514,765
Cash, cash equivalents, restricted cash and investments at end of period	2,692,223	2,000,703
Supplemental Schedule of Cash Flow Information
Income taxes paid	116,537	45,872
Unpaid purchases of property and equipment	8,836	23,892
Leased assets obtained in exchange for new operating lease liabilities	3,650	9,068
Leased assets obtained in exchange for new finance lease liabilities	$ 1,448	$ 455

Property and Equipment, net - Property and equipment, net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property and equipment, net
Property and Equipment, gross	$ 917,713	$ 899,640
Less accumulated depreciation and amortization	(201,980)	(175,720)
Property and equipment, net	715,733	723,920
Office Equipment
Property and equipment, net
Property and Equipment, gross	22,527	22,554
Equipment
Property and equipment, net
Property and Equipment, gross	115,507	105,040
Computer Equipment
Property and equipment, net
Property and Equipment, gross	88,239	79,871
Land
Property and equipment, net
Property and Equipment, gross	10,139	10,494
Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross	432,748	434,321
Operating lease right-of-use assets
Property and equipment, net
Property and Equipment, gross	23,111	27,308
Construction in Progress
Property and equipment, net
Property and Equipment, gross	$ 225,442	$ 220,052

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 112,775	$ 181,739	$ 312,199	$ 384,730
Other comprehensive loss:
Foreign currency translation loss	(2,513)	(629)	(5,132)	(4,061)
Unrealized loss on marketable securities, net of tax	(1,135)	(86)	(5,322)	(251)
Defined benefit pension gain, net of tax	282	342	846	1,026
Other comprehensive loss	(3,366)	(373)	(9,608)	(3,286)
Comprehensive income	$ 109,409	$ 181,366	$ 302,591	$ 381,444

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Stock Compensation - Valuation assumptions used for value of stock compensation granted (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Employee Stock
Weighted-average fair value assumptions
Average risk-free interest rates (as a percent)	4.22%	0.28%	3.44%	0.22%
Average expected life (in years)	6 months	6 months	6 months	6 months
Volatility (as a percent)	31.00%	25.00%	27.00%	31.00%
Weighted-average fair value (in dollars per share)	$ 16.46	$ 18.20	$ 15.38	$ 18.82
Share-based Payment Arrangement, Option
Weighted-average fair value assumptions
Average risk-free interest rates (as a percent)	2.90%	0.76%	2.03%	0.60%
Average expected life (in years)	5 years 2 months 1 day	5 years 1 month 28 days	4 years 10 months 17 days	5 years
Volatility (as a percent)	35.00%	38.00%	36.00%	39.00%
Weighted-average fair value (in dollars per share)	$ 27.57	$ 28.84	$ 25.96	$ 29.32

Organization and Business (Details)	9 Months Ended
Organization and Business (Details)	Sep. 30, 2022 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

Revenues (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of disaggregated revenue

Revenues are recognized under guidance within ASC 606, Revenue from Contracts with Customers. The following table presents our disaggregated revenue for the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
JAKAFI revenues, net	$	619,595	$	547,373	$	1,761,732	$	1,542,138
ICLUSIG revenues, net	25,929		28,522		78,222		82,356
PEMAZYRE revenues, net	23,414		17,562		60,429		48,924
MINJUVI revenues, net	5,932		556		14,845		556
OPZELURA revenues, net	38,140		—		67,454		—
Total product revenues, net	713,010		594,013		1,982,682		1,673,974
JAKAVI product royalty revenues	85,808		94,655		240,386		242,295
OLUMIANT product royalty revenues	20,371		86,572		98,689		154,875
TABRECTA product royalty revenues	4,114		2,747		11,178		7,270
Total product royalty revenues	110,293		183,974		350,253		404,440
Milestone and contract revenues	—		35,000		135,000		45,000
Total revenues	$	823,303	$	812,987	$	2,467,935	$	2,123,414

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning Balance at Dec. 31, 2020	$ 2,611,268	$ 219	$ 4,352,864	$ (15,360)	$ (1,726,455)
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes	20,028	1	20,027
Issuance of shares of Common Stock for services rendered	108		108
Stock compensation	47,903		47,903
Other comprehensive income (loss)	(4,998)			(4,998)
Net income	53,535				53,535
Ending Balance at Mar. 31, 2021	2,727,844	220	4,420,902	(20,358)	(1,672,920)
Beginning Balance at Dec. 31, 2020	2,611,268	219	4,352,864	(15,360)	(1,726,455)
Increase (Decrease) in Stockholders' Equity
Other comprehensive income (loss)	(3,286)
Net income	384,730
Ending Balance at Sep. 30, 2021	3,148,657	221	4,508,807	(18,646)	(1,341,725)
Beginning Balance at Mar. 31, 2021	2,727,844	220	4,420,902	(20,358)	(1,672,920)
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and shares of Common Stock under the ESPP	11,016		11,016
Issuance of shares of Common Stock for services rendered	109		109
Stock compensation	45,351		45,351
Other comprehensive income (loss)	2,085			2,085
Net income	149,456				149,456
Ending Balance at Jun. 30, 2021	2,935,861	220	4,477,378	(18,273)	(1,523,464)
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes	(11,992)	1	(11,993)
Issuance of shares of Common Stock for services rendered	108		108
Stock compensation	43,314		43,314
Other comprehensive income (loss)	(373)			(373)
Net income	181,739				181,739
Ending Balance at Sep. 30, 2021	3,148,657	221	4,508,807	(18,646)	(1,341,725)
Beginning Balance at Dec. 31, 2021	3,770,004	221	4,567,111	(19,454)	(777,874)
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes	14,237		14,237
Issuance of shares of Common Stock for services rendered	112		112
Stock compensation	44,320		44,320
Other comprehensive income (loss)	(3,593)			(3,593)
Net income	37,992				37,992
Ending Balance at Mar. 31, 2022	3,863,072	221	4,625,780	(23,047)	(739,882)
Beginning Balance at Dec. 31, 2021	3,770,004	221	4,567,111	(19,454)	(777,874)
Increase (Decrease) in Stockholders' Equity
Other comprehensive income (loss)	(9,608)
Net income	312,199
Ending Balance at Sep. 30, 2022	4,226,651	222	4,721,166	(29,062)	(465,675)
Beginning Balance at Mar. 31, 2022	3,863,072	221	4,625,780	(23,047)	(739,882)
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and shares of Common Stock under the ESPP	16,601	1	16,600
Issuance of shares of Common Stock for services rendered	109		109
Stock compensation	46,496		46,496
Other comprehensive income (loss)	(2,649)			(2,649)
Net income	161,432				161,432
Ending Balance at Jun. 30, 2022	4,085,061	222	4,688,985	(25,696)	(578,450)
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes	(13,572)		(13,572)
Issuance of shares of Common Stock for services rendered	94		94
Stock compensation	45,659		45,659
Other comprehensive income (loss)	(3,366)			(3,366)
Net income	112,775				112,775
Ending Balance at Sep. 30, 2022	$ 4,226,651	$ 222	$ 4,721,166	$ (29,062)	$ (465,675)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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-Subparagraph (SX 210.5-02(29))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

+ Details

Fair Value of Financial Instruments - Narrative (Details) - ARIAD $ in Millions		9 Months Ended	12 Months Ended
	Jun. 01, 2016	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Accrued and other current liabilities
Fair value of financial instruments
Contingent consideration earned during the period but not yet paid		$ (25.8)	$ (19.6)
Liability
Fair value of financial instruments
Projected cash flows period	18 years
Liability \| Measurement Input, Discount Rate
Fair value of financial instruments
Valuation input (as a percent)	0.10	0.10	0.10

License Agreements - Novartis (Details) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended		155 Months Ended
	May 31, 2022	Apr. 30, 2022	Nov. 30, 2009	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021
License Agreements
Revenues				$ 823,303	$ 812,987	$ 2,467,935	$ 2,123,414
Product royalty revenues
License Agreements
Revenues				110,293	183,974	350,253	404,440
JAKAFI
License Agreements
Revenues				619,595	547,373	1,761,732	1,542,138
Milestone and contract revenues
License Agreements
Revenues				0	35,000	135,000	45,000
Novartis
License Agreements
Royalties payable				221,700		$ 221,700		$ 221,700	$ 148,100
Novartis \| JAKAVI \| Minimum
License Agreements
Royalty payments on future global net sales (as a percent)						12.00%
Novartis \| JAKAVI \| Maximum
License Agreements
Royalty payments on future global net sales (as a percent)						14.00%
Novartis \| JAKAFI \| UNITED STATES
License Agreements
Royalties payable on net sales				30,300	26,900	$ 81,300	70,600
Novartis \| JAKAFI \| Non-US
License Agreements
Royalties payable on net sales				85,800	94,700	240,400	242,300
Novartis \| Milestone and contract revenues
License Agreements
Revenues				0		60,000
Novartis \| TABRECTA PROD SERV \| Non-US
License Agreements
Royalties payable on net sales				$ 4,100	$ 2,700	11,200	$ 7,300
Novartis \| Development Milestones
License Agreements
Amount recognized and received for the achievement of a predefined milestone								157,000
Novartis \| Development Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement			$ 174,000
Novartis \| Regulatory Milestones
License Agreements
Amount recognized and received for the achievement of a predefined milestone								340,000
Novartis \| Regulatory Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement			495,000
Novartis \| Regulatory Milestones \| TABRECTA
License Agreements
Amount recognized and received for the achievement of a predefined milestone		$ 15,000
Novartis \| Regulatory Milestones \| JAKAVI
License Agreements
Amount recognized and received for the achievement of a predefined milestone	$ 45,000
Novartis \| Commercialization Milestones
License Agreements
Amount recognized and received for the achievement of a predefined milestone								$ 200,000
Novartis \| Commercialization Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement			$ 500,000
Novartis \| Development and Regulatory Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement						$ 75,000

Stock Compensation - Shares available for grant (Details)	9 Months Ended
	Sep. 30, 2022 shares
Available Shares for Grant
Beginning Balance (in shares)	10,113,298
Options, RSUs and PSUs granted (in shares)	(7,013,475)
Options, RSUs and PSUs cancelled (in shares)	1,680,482
Ending Balance (in shares)	4,780,305

License Agreements - Calithera (Details) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2022 shares	Jan. 31, 2017 USD ($) $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2017 shares	Dec. 31, 2021 USD ($)
License Agreements
Fair market long term investments			$ 149,124		$ 149,124			$ 221,266
Unrealized gain (loss) on long term investments			(660)	$ (27,450)	(72,142)	$ (28,394)
Calithera
License Agreements
Fair market long term investments			300		300			$ 1,100
Calithera \| Other Comprehensive Income (Loss)
License Agreements
Unrealized gain (loss) on long term investments			$ 0	$ 200	$ (900)	$ (4,600)
Calithera
License Agreements
Funding of future development costs (as a percent)		70.00%
Stock purchase agreement \| Calithera
License Agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares							1,700,000
Purchase price of common stock		$ 8,000
Per share price (In USD per share) \| $ / shares		$ 4.65
Effected stock split (as a percent)	0.05
Ownership (in shares) \| shares	86,021

License Agreements - MorphoSys (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		33 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Jan. 31, 2020
License Agreements
Unrealized gain (loss) on long term investments	$ (660)	$ (27,450)	$ (72,142)	$ (28,394)
Collaboration loss sharing	1,769	9,149	9,055	29,476
Research and development expense	384,007	334,945	1,084,576	985,352
MorphoSys AG
License Agreements
Fair market value of our long term investments	18,300		18,300		$ 18,300	$ 34,200
Unrealized gain (loss) on long term investments	800	(27,300)	(15,900)	(60,200)
MorphoSys AG
License Agreements
Research and development expense	21,900	21,500	70,400	55,800
Accrued and other liabilities	$ 72,500		$ 72,500		72,500	$ 21,500
MorphoSys AG \| UNITED STATES
License Agreements
Profit (loss) sharing ratio	50.00%		50.00%
MorphoSys AG \| UNITED STATES \| Tafasitamab Product and Service
License Agreements
Collaboration loss sharing	$ 1,800	$ 9,100	$ 9,100	$ 29,500
MorphoSys AG \| Development and Regulatory Milestones
License Agreements
Milestone payment made under license agreement					$ 2,500
MorphoSys AG \| Development and Regulatory Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement							$ 737,500
MorphoSys AG \| Commercialization Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement							$ 315,000
MorphoSys AG \| MorphoSys AG
License Agreements
Funding of future development costs (as a percent)			45.00%
MorphoSys AG \| Incyte
License Agreements
Funding of future development costs (as a percent)			55.00%

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2021 has been derived from our audited consolidated financial statements. Although we believe that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Principles of Consolidation	Principles of Consolidation. The condensed consolidated financial statements include the accounts of Incyte Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have been eliminated in consolidation.
Use of Estimates	Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Recent Accounting Pronouncements	Recent Accounting PronouncementsThere were no new accounting pronouncements issued nor adopted since our filing of the Annual Report on Form 10-K for the year ended December 31, 2021, which could have a significant effect on our condensed consolidated financial statements.

Fair Value of Financial Instruments - Marketable securities portfolio (Details) - Debt securities (government) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Summary of marketable security portfolio
Amortized Cost	$ 292,941	$ 291,871
Net Unrealized Losses	(6,441)	(1,119)
Estimated Fair Value	$ 286,500	$ 290,752
Minimum
Summary of marketable security portfolio
Contractual maturity dates	12 months
Maximum
Summary of marketable security portfolio
Contractual maturity dates	18 months

Inventory

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventory

Our inventory balance consists of the following (in thousands):


	September 30, 2022		December 31, 2021
Raw materials	$	32,289	$	1,275
Work-in-process	35,465		39,895
Finished goods	33,379		15,768
Total inventory	$	101,133	$	56,938

Inventories, stated at the lower of cost and net realizable value, consist of raw materials, work in process and finished goods. At September 30, 2022, $45.9 million of inventory was classified as current on the condensed consolidated balance sheet as we expect this inventory to be consumed for commercial use within the next twelve months. At September 30, 2022, $55.3 million of inventory was classified as non-current on the condensed consolidated balance sheet as we did not expect this inventory to be consumed for commercial use within the next twelve months. We obtain some inventory components from a limited number of suppliers due to technology, availability, price, quality or other considerations. The loss of a supplier, the deterioration of our relationship with a supplier, or any unilateral violation of the contractual terms under which we are supplied components by a supplier could adversely affect our total revenues and gross margins.

We capitalize inventory after U.S. Food and Drug Administration (FDA) approval as the related costs are expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval are recorded as research and development expense in our statements of operations. At September 30, 2022, inventory with approximately $56.8 million of product costs incurred prior to FDA approval had not yet been sold. We expect to sell the pre-commercialization inventory over the next 28 months and, as a result, cost of product revenues will reflect a lower average per unit cost of materials.

Employee Benefit plans - Net periodic benefit cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Retirement Benefits [Abstract]
Employer service cost	$ 2,376	$ 1,975	$ 7,336	$ 5,927
Interest cost	61	23	187	68
Expected return on plan assets	(1,008)	(15)	(3,114)	(45)
Amortization of prior service cost	193	54	580	162
Amortization of actuarial losses	89	288	266	864
Net periodic benefit cost	$ 1,711	$ 2,325	$ 5,255	$ 6,976

Concentrations of Credit Risk and Current Expected Credit Losses

9 Months Ended

Sep. 30, 2022

Risks and Uncertainties [Abstract]

Concentrations of Credit Risk and Current Expected Credit Losses

In November 2009, we entered into a collaboration and license agreement with Novartis Pharmaceutical International Ltd. (“Novartis”). In December 2009, we entered into a license, development and commercialization agreement with Eli Lilly and Company (“Lilly”). In December 2018, we entered into a research collaboration and licensing agreement with Innovent Biologics, Inc. (“Innovent”). In July 2019, we entered into a collaboration and license agreement with Zai Lab (Shanghai) Co., Ltd., a subsidiary of Zai Lab Limited (collectively, “Zai Lab”). The above collaboration partners comprised, in aggregate, 19% and 36% of the accounts receivable balance as of September 30, 2022 and December 31, 2021, respectively. For further information relating to these collaboration and license agreements, refer to Note 7.


	Percentage of Total Net Product Revenues for the Three Months Ended				Percentage of Total Net Product Revenues for the Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Customer A	19	%	19	%	19	%	19	%
Customer B	10	%	11	%	11	%	12	%
Customer C	15	%	17	%	18	%	18	%
Customer D	5	%	9	%	5	%	10	%
Customer E	9	%	11	%	10	%	11	%

We are exposed to risks associated with extending credit to customers related to the sale of products. Customers A, B, C, D and E comprised, in aggregate, 36% and 31% of the accounts receivable balance as of September 30, 2022 and December 31, 2021, respectively. The concentration of credit risk relating to our other product revenues or accounts receivable is not significant.

We assessed our collaborative and customer receivable assets as of September 30, 2022 according to our accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible receivables and the continued perceived creditworthiness of our third party sales relationships, upon which the expected credit losses were considered de minimis. As of September 30, 2022 and December 31, 2021, we had no allowance for doubtful accounts.

Subsequent Events - Narrative (Details) - Villaris - Subsequent Event $ in Millions	1 Months Ended
	Oct. 31, 2022 USD ($)
Subsequent Event [Line Items]
Upfront payment under license agreement	$ 70.0
Development and Regulatory Milestones
Subsequent Event [Line Items]
Upfront and immediate milestone payment to be received under license agreement	310.0
Commercialization Milestones
Subsequent Event [Line Items]
Milestone payments for net sales of product	$ 1,050.0

License Agreements - Agenus (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended			93 Months Ended
	Feb. 28, 2017	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2017	Sep. 30, 2022
License Agreements
Fair market long term investments		$ 149,124		$ 149,124		$ 221,266			$ 149,124
Unrealized gain (loss) on long term investments		(660)	$ (27,450)	(72,142)	$ (28,394)
Agenus
License Agreements
Shares divested (in shares)						2.0	3.7
Gross proceeds from sale of stock						$ 10,500	$ 17,200
Fair market long term investments		24,800		24,800		$ 38,900			24,800
Unrealized gain (loss) on long term investments		1,300	$ (2,800)	(14,100)	$ 29,100
Royalty-bearing product GITR, OX40 and one undisclosed target \| Agenus \| Maximum
License Agreements
Royalty payments on future global net sales (as a percent)	15.00%
Agenus
License Agreements
Period of notice for termination of license agreement	12 months
Agenus \| Royalty-bearing product other than GITR, OX40 and one undisclosed target \| Minimum
License Agreements
Royalty payments on future global net sales (as a percent)	6.00%
Agenus \| Royalty-bearing product other than GITR, OX40 and one undisclosed target \| Maximum
License Agreements
Royalty payments on future global net sales (as a percent)	12.00%
Agenus \| Development, Regulatory and Commercialization Milestones
License Agreements
Milestone payment made under license agreement									30,000
Additional milestone payments under the license agreement		$ 500,000		$ 500,000					$ 500,000
Stock purchase agreement \| Agenus
License Agreements
Purchase of common stock under Stock Purchase Agreement (in shares )								10.0
Purchase price of common stock								$ 60,000
Per share price (In USD per share)								$ 6.00

License Agreements - Syros (Details) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2022	Jan. 31, 2018 USD ($) item	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 USD ($)	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)
License Agreements
Fair market long term investments			$ 149,124		$ 149,124			$ 221,266
Unrealized gain (loss) on long term investments			(660)	$ (27,450)	(72,142)	$ (28,394)
Syros Pharmaceuticals, Inc.
License Agreements
Fair market long term investments			600		600			$ 3,100
Unrealized gain (loss) on long term investments			$ (300)	$ (900)	$ (2,500)	$ (6,000)
Syros Pharmaceuticals, Inc.
License Agreements
Number of program targets \| item		7
Syros Pharmaceuticals, Inc. \| Maximum
License Agreements
Target selection and option exercise fee payment		$ 54,000
Syros Pharmaceuticals, Inc. \| Development and Regulatory Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement		50,000
Syros Pharmaceuticals, Inc. \| Commercialization Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement		$ 65,000
Stock purchase agreement \| Syros Pharmaceuticals, Inc.
License Agreements
Purchase price of common stock							$ 10,000
Per share price (In USD per share) \| $ / shares							$ 12.61
Ownership (in shares) \| shares			93,753		93,753
Effected stock split (as a percent)	0.01
Stock purchase agreement \| Syros Pharmaceuticals, Inc. \| Pre September 2022 -Stock Split Shares
License Agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares							800,000
Amended stock purchase agreement \| Syros Pharmaceuticals, Inc.
License Agreements
Purchase price of common stock							$ 1,400
Per share price (In USD per share) \| $ / shares							$ 9.55
Amended stock purchase agreement \| Syros Pharmaceuticals, Inc. \| Pre September 2022 -Stock Split Shares
License Agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares							100,000

Fair Value of Financial Instruments - Assets measured on a recurring basis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair value of financial instruments
Fair market long term investments	$ 149,124	$ 221,266
Fair Value, Recurring \| Estimate of Fair Value Measurement
Fair value of financial instruments
Cash and cash equivalents	2,690,622	2,057,440
Amortized Cost	286,500	290,752
Fair market long term investments	149,124	221,266
Total assets	3,126,246	2,569,458
Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair value of financial instruments
Cash and cash equivalents	2,690,622	2,057,440
Amortized Cost	0	0
Fair market long term investments	149,124	221,266
Total assets	2,839,746	2,278,706
Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair value of financial instruments
Cash and cash equivalents	0	0
Amortized Cost	286,500	290,752
Fair market long term investments	0	0
Total assets	286,500	290,752
Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair value of financial instruments
Cash and cash equivalents	0	0
Amortized Cost	0	0
Fair market long term investments	0	0
Total assets	$ 0	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Marketable securities-amortized cost	$ 292,941	$ 291,871
Marketable securities-allowance for credit losses	$ 0	$ 0
Preferred stock, par value (in USD per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	222,454,839	221,084,433
Common stock, shares outstanding	222,454,839	221,084,433

Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued and Other Current Liabilities
Royalties	$ 248,455	$ 168,412
Clinical related costs	152,764	109,486
Sales allowances	186,112	136,541
Sales and marketing	31,001	35,750
Construction in progress	8,836	27,098
Operating lease liabilities	8,492	10,554
Other current liabilities	64,154	45,754
Total accrued and other current liabilities	$ 699,814	$ 533,595

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Villaris In October 2022, we announced that we entered into an agreement to acquire Villaris Therapeutics, Inc. ("Villaris"), a biopharmaceutical company focused on the development of novel antibody therapeutics for vitiligo. Under the terms of the agreement, Incyte will acquire Villaris and the exclusive global rights to develop and commercialize auremolimab (VM6), an anti-IL-15Rβ monoclonal antibody, for all uses, including in vitiligo and other autoimmune and inflammatory diseases. Upon effectiveness of the agreement, Incyte will make an upfront payment of $70.0 million, and Villaris shareholders will be eligible for up to $310.0 million upon achievement of certain development and regulatory milestones, as well as up to an additional $1.05 billion in commercial milestones on net sales of the product. The agreement is subject to clearance by the U.S. antitrust authorities under the Hart-Scott-Rodino Act and will become effective as soon as this condition has been met.

License Agreements - Merus (Details) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended	70 Months Ended
	Jan. 31, 2022 item	Jan. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) item $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2016 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
License Agreements
Unrealized gain (loss) on long term investments				$ (660)	$ (27,450)	$ (72,142)	$ (28,394)
Merus
License Agreements
Fair market value of our long term investments				$ 71,100		$ 71,100			$ 71,100	$ 112,900
Ownership percentage (as a percent)				8.00%		8.00%			8.00%
Unrealized gain (loss) on long term investments				$ (9,300)	$ 3,300	$ (41,800)	$ 13,300
Merus \| IPO
License Agreements
Per share price (In USD per share) \| $ / shares		$ 24.75
Common shares purchased (in shares) \| shares		350,000
Number of shares in underwritten public offering (in shares) \| shares		4,848,485
Value of shares acquired		$ 8,700
Merus
License Agreements
Number of independent programs \| item			10
Number of additional preclinical discovery programs \| item	10
Number of programs under the resulting products are co-funded for development \| item	2
Associated future global development costs , if elected to co-develop (as a percent)	35.00%
Milestone payment made under license agreement									$ 3,000
Merus \| UNITED STATES
License Agreements
Profit sharing (as a percent)									50.00%
Percentage of profit (losses)									50.00%
Merus \| Minimum
License Agreements
Royalty payments on future global net sales (as a percent)									6.00%
Merus \| Minimum \| Non-US
License Agreements
Royalty payments on future global net sales (as a percent)									6.00%
Merus \| Maximum
License Agreements
Royalty payments on future global net sales (as a percent)									10.00%
Merus \| Maximum \| UNITED STATES
License Agreements
Royalty payments on future global net sales (as a percent)									4.00%
Merus \| Maximum \| Non-US
License Agreements
Royalty payments on future global net sales (as a percent)									10.00%
Merus \| Maximum \| Development and Regulatory Milestones
License Agreements
Additional milestone payments under the license agreement				100,000		100,000			$ 100,000
Merus \| Maximum \| Commercialization Milestones
License Agreements
Additional milestone payments under the license agreement				$ 250,000		$ 250,000			$ 250,000
Stock purchase agreement \| Merus
License Agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares								3,200,000
Purchase price of common stock			$ 80,000					$ 80,000
Per share price (In USD per share) \| $ / shares			$ 25.00					$ 25.00

Net Income Per Share - Net income (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Basic Net Income (Loss) Per Share
Basic net income	$ 112,775	$ 181,739	$ 312,199	$ 384,730
Weighted average common shares outstanding (in shares)	222,415	220,845	221,801	220,243
Basic net income per share ( in USD per share)	$ 0.51	$ 0.82	$ 1.41	$ 1.75
Diluted Net Income (Loss) Per Share
Diluted net income (loss)	$ 112,775	$ 181,739	$ 312,199	$ 384,730
Weighted average common shares outstanding (in shares)	222,415	220,845	221,801	220,243
Dilutive stock options and awards ( in shares)	1,760	1,403	1,825	1,870
Weighted average shares used to compute diluted net income per share ( in shares)	224,175	222,248	223,626	222,113
Diluted net income per share ( in USD per share)	$ 0.50	$ 0.82	$ 1.40	$ 1.73

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
-URI https://asc.fasb.org/extlink&oid=126732423&loc=SL123482106-238011

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
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Organization and Business	9 Months Ended
Organization and Business	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Business	Incyte Corporation (including its subsidiaries, “Incyte,” “we,” “us,” or “our”) is a biopharmaceutical company focused on developing and commercializing proprietary therapeutics. Our portfolio includes compounds in various stages, ranging from preclinical to late stage development, and commercialized products JAKAFI® (ruxolitinib), ICLUSIG® (ponatinib), PEMAZYRE® (pemigatinib), OPZELURA™ (ruxolitinib cream), MINJUVI® (tafasitamab) and MONJUVI® (tafasitamab-cxix), which is co-commercialized. Our operations are treated as one operating segment.

Inventory (Details) - USD ($) $ in Thousands	9 Months Ended
Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Raw materials	$ 32,289	$ 1,275
Work-in-process	35,465	39,895
Finished goods	33,379	15,768
Total inventory	101,133	56,938
Inventories - current	45,869	27,904
Inventories-noncurrent	55,264	$ 29,034
Inventory incurred prior to FDA approval	$ 56,800
Maximum
Period of lower average per unit cost of materials	28 months

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Summary of marketable securities portfolio

The following is a summary of our marketable security portfolio for the periods presented (in thousands):


	Amortized Cost		Net Unrealized Losses		Estimated Fair Value
September 30, 2022
Debt securities (government)	$	292,941	$	(6,441)	$	286,500

December 31, 2021
Debt securities (government)	$	291,871	$	(1,119)	$	290,752

Schedule of fair value of assets measured on recurring basis

The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of September 30, 2022
Cash and cash equivalents	$	2,690,622	$	—	$	—	$	2,690,622
Debt securities (government)	—		286,500		—		286,500
Long term investments (Note 7)	149,124		—		—		149,124
Total assets	$	2,839,746	$	286,500	$	—	$	3,126,246


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2021
Cash and cash equivalents	$	2,057,440	$	—	$	—	$	2,057,440
Debt securities (government)	—		290,752		—		290,752
Long term investments (Note 7)	221,266		—		—		221,266
Total assets	$	2,278,706	$	290,752	$	—	$	2,569,458

Schedule of fair value of liabilities measured on recurring basis

The following fair value hierarchy table presents information about each major category of our financial liabilities measured at fair value on a recurring basis as (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of September 30, 2022
Acquisition-related contingent consideration	$	—	$	—	$	206,000	$	206,000
Total liabilities	$	—	$	—	$	206,000	$	206,000


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2021
Acquisition-related contingent consideration	$	—	$	—	$	244,000	$	244,000
Total liabilities	$	—	$	—	$	244,000	$	244,000

Schedule of roll forward of Level 3 liabilities

The following is a rollforward of our Level 3 liabilities (in thousands):


	2022
Balance at January 1,	$	244,000
Contingent consideration earned during the period but not yet paid	(25,802)

Change in fair value of contingent consideration	(12,198)
Balance at September 30,	$	206,000

Property and Equipment, net - Buildings and construction (Details) $ in Thousands, ft² in Millions	1 Months Ended	9 Months Ended
	Jul. 31, 2018 USD ($)	Sep. 30, 2022 USD ($) ft²	Dec. 31, 2021 USD ($)	Dec. 31, 2019 ft²	Sep. 30, 2019 USD ($)	Feb. 28, 2018
Property and equipment, net
Property and Equipment, gross		$ 917,713	$ 899,640
Finance lease right-of-use assets, net		26,679	27,548
Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross		432,748	434,321
Construction in Progress
Property and equipment, net
Property and Equipment, gross		$ 225,442	220,052
Office Building in Wilmington, Delaware
Property and equipment, net
Square footage \| ft²				0.2
Office Building in Wilmington, Delaware \| Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross			$ 158,200
Office Building in Morges, Switzerland
Property and equipment, net
Square footage \| ft²		0.1
Initial lease term						15 years
Options to extend		true
Renewal term of agreement to rent						20 years
Financing lease liabilities					$ 31,100
Finance lease right-of-use assets, net					29,100
Finance lease, lease incentive receivable					$ 2,000
Office Building in Morges, Switzerland \| Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross		$ 19,500
Land in Y-PARC, Switzerland's largest technology park, Yverdon
Property and equipment, net
Purchase price	$ 4,800
Land in Y-PARC, Switzerland's largest technology park, Yverdon \| Construction in Progress
Property and equipment, net
Property and Equipment, gross		$ 190,500

Employee Benefit Plans

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

Defined Contribution Plans

We have a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code covering all U.S. employees and defined contribution plans for other Incyte employees in Europe and Japan. Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations. Defined contribution expense for the three and nine months ended September 30, 2022 was $5.1 million and $14.7 million, respectively. Defined contribution expense for the three and nine months ended September 30, 2021 was $4.4 million and $12.8 million, respectively.

Defined Benefit Pension Plans

We have defined benefit pension plans for our employees in Europe which provide benefits to employees upon retirement, death or disability. The assets of the pension plans are held in collective investment accounts represented by the cash surrender value of an insurance policy and are classified as Level 2 within the fair value hierarchy.

The net periodic benefit cost was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Service cost	$	2,376	$	1,975	$	7,336	$	5,927
Interest cost	61		23		187		68
Expected return on plan assets	(1,008)		(15)		(3,114)		(45)
Amortization of prior service cost	193		54		580		162
Amortization of actuarial losses	89		288		266		864
Net periodic benefit cost	$	1,711	$	2,325	$	5,255	$	6,976

The components of net periodic benefit cost other than the service cost component are included in other income (expense), net on the condensed consolidated statements of operations. We expect to contribute a total of $6.4 million to the pension plans in 2022 inclusive of the amounts contributed to the plan during the current period.

- Definition

The entire disclosure for retirement benefits.

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-Section 50
-Paragraph 1
-Subparagraph (l)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 2,690,622,000	$ 2,057,440,000
Marketable securities—available-for-sale (amortized cost $292,941 and $291,871 as of September 30, 2022 and December 31, 2021, respectively; allowance for credit losses $0 as of September 30, 2022 and December 31, 2021)	286,500,000	290,752,000
Accounts receivable	618,188,000	616,300,000
Inventory	45,869,000	27,904,000
Prepaid expenses and other current assets	179,932,000	126,278,000
Total current assets	3,821,111,000	3,118,674,000
Restricted cash and investments	1,601,000	1,720,000
Long-Term Investments	149,124,000	221,266,000
Inventory	55,264,000	29,034,000
Property and equipment, net	715,733,000	723,920,000
Finance lease right-of-use assets, net	26,679,000	27,548,000
Other intangible assets, net	134,603,000	150,755,000
Goodwill	155,593,000	155,593,000
Deferred income tax asset	426,840,000	467,538,000
Other assets, net	23,666,000	37,304,000
Total assets	5,510,214,000	4,933,352,000
Current liabilities:
Accounts payable	163,175,000	172,110,000
Accrued compensation	106,309,000	108,962,000
Accrued and other current liabilities	699,814,000	533,595,000
Finance lease liabilities	3,112,000	2,635,000
Acquisition-related contingent consideration	34,186,000	37,006,000
Total current liabilities	1,006,596,000	854,308,000
Acquisition-related contingent consideration	171,814,000	206,994,000
Finance lease liabilities	30,476,000	31,632,000
Other liabilities	74,677,000	70,414,000
Total liabilities	1,283,563,000	1,163,348,000
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.001 par value; 400,000,000 shares authorized; 222,454,839 and 221,084,433 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	222,000	221,000
Additional paid-in capital	4,721,166,000	4,567,111,000
Accumulated other comprehensive loss	(29,062,000)	(19,454,000)
Accumulated deficit	(465,675,000)	(777,874,000)
Total stockholders’ equity	4,226,651,000	3,770,004,000
Total liabilities and stockholders’ equity	$ 5,510,214,000	$ 4,933,352,000

Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of calculation of net income (loss) per share

Net income per share was calculated as follows for the periods indicated below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Basic net income	$	112,775	$	181,739	$	312,199	$	384,730

Weighted average common shares outstanding	222,415		220,845		221,801		220,243

Basic net income per share	$	0.51	$	0.82	$	1.41	$	1.75

Diluted net income	$	112,775	$	181,739	$	312,199	$	384,730

Weighted average common shares outstanding	222,415		220,845		221,801		220,243
Dilutive stock options and awards	1,760		1,403		1,825		1,870
Weighted average shares used to compute diluted net income per share	224,175		222,248		223,626		222,113

Diluted net income per share	$	0.50	$	0.82	$	1.40	$	1.73

Schedule of antidilutive securities excluded from the computation of earnings per share

The potential common shares that were excluded from the diluted net income per share computation are as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Outstanding stock options and awards	11,150,022	11,841,440	10,979,096	9,917,824

License Agreements	9 Months Ended
License Agreements	Sep. 30, 2022
License Agreements
License Agreements	Novartis In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the terms of the agreement, Novartis received exclusive development and commercialization rights outside of the United States to our JAK inhibitor ruxolitinib and certain back-up compounds for hematologic and oncology indications, including all hematological malignancies, solid tumors and myeloproliferative diseases. We retained exclusive development and commercialization rights to JAKAFI (ruxolitinib) in the United States and in certain other indications. Novartis also received worldwide exclusive development and commercialization rights to our MET inhibitor compound capmatinib and certain back-up compounds in all indications. Under this agreement, we were initially eligible to receive up to $174.0 million for the achievement of development milestones, up to $495.0 million for the achievement of regulatory milestones and up to $500.0 million for the achievement of sales milestones. In addition, under an amendment to this agreement, we were initially eligible to receive up to $75.0 million of additional potential development and regulatory milestones relating to graft-versus-host-disease (“GVHD”). We have recognized and received, in the aggregate, $157.0 million for the achievement of development milestones, $340.0 million for the achievement of regulatory milestones, and $200.0 million for the achievement of sales milestones through September 30, 2022. In April 2022, we recognized a $15.0 million regulatory milestone for the positive opinion issued by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) that recommends granting marketing authorization for capmatinib (TABRECTA) as a monotherapy for the treatment of adults with advanced non-small cell lung cancer. Additionally, in May 2022, we recognized a $45.0 million regulatory milestone as a result of the European Commission’s approval of JAKAVI (ruxolitinib) as the first post-steroid treatment for acute and chronic GVHD. We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-twenties on future JAKAVI net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12% to 14%. We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States contingent on certain conditions. During the three and nine months ended September 30, 2022, such royalties on net sales within the United States totaled $30.3 million and $81.3 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations. During the three and nine months ended September 30, 2021, such royalties on net sales within the United States totaled $26.9 million and $70.6 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations. At September 30, 2022 and December 31, 2021, $221.7 million and $148.1 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets. Each company is responsible for costs relating to the development and commercialization of ruxolitinib in its respective territories, with costs of collaborative studies shared equally. Novartis is also responsible for all costs relating to the development and commercialization of capmatinib. We had no milestone and contract revenue under the Novartis agreement for the three months ended September 30, 2022, and we had $60.0 million for the nine months ended September 30, 2022. Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and nine months ended September 30, 2022 was $85.8 million and $240.4 million, respectively. Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and nine months ended September 30, 2021 was $94.7 million and $242.3 million, respectively. Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and nine months ended September 30, 2022 was $4.1 million and $11.2 million, respectively. Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and nine months ended September 30, 2021 was $2.7 million and $7.3 million, respectively. Lilly – Baricitinib In December 2009, we entered into a License, Development and Commercialization Agreement with Lilly. Under the terms of the agreement, Lilly received exclusive worldwide development and commercialization rights to our JAK inhibitor baricitinib, and certain back-up compounds for inflammatory and autoimmune diseases. Under this agreement, we were initially eligible to receive up to $150.0 million for the achievement of development milestones, up to $365.0 million for the achievement of regulatory milestones and up to $150.0 million for the achievement of sales milestones. We have recognized and received, in aggregate, $149.0 million for the achievement of development milestones, $335.0 million for the achievement of regulatory milestones and $50.0 million for the achievement of sales milestones through September 30, 2022. We are also eligible to receive tiered, double-digit royalty payments on future global sales with rates ranging up to the mid-twenties if a product is successfully commercialized. In May 2020, we amended our agreement with Lilly to enable Lilly to develop and commercialize baricitinib for the treatment of COVID-19. As part of the amended agreement, in addition to the royalties described above, we will be entitled to receive additional royalty payments with rates in the low teens on global net sales of baricitinib for the treatment of COVID-19 that exceed a specified aggregate global net sales threshold. In June 2022, we recognized a $40.0 million regulatory milestone for the FDA approval of OLUMIANT as a first-in-disease systemic treatment for adults with severe alopecia areata. Additionally, in June 2022 we recognized a $20.0 million regulatory milestone for the European Commission’s approval for OLUMIANT for the treatment of adults with severe alopecia areata, and a $10.0 million regulatory milestone for the Ministry of Health, Labour and Welfare of Japan’s approval for OLUMIANT for the treatment of adults with severe alopecia areata in Japan. We had no milestone and contract revenue under the Lilly agreement for the three months ended September 30, 2022, and we had $70.0 million for the nine months ended September 30, 2022. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and nine months ended September 30, 2022 was $20.4 million and $98.7 million, respectively. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and nine months ended September 30, 2021 was $86.6 million and $154.9 million, respectively. Lilly - Ruxolitinib In March 2016, we entered into an amendment to the agreement with Lilly that amended the non-compete provision of the agreement to allow us to engage in the development and commercialization of ruxolitinib in the GVHD field. Lilly is eligible to receive up to $40.0 million in regulatory milestone payments relating to ruxolitinib in the GVHD field. In May 2019, the approval of JAKAFI in steroid-refractory acute GVHD triggered a $20.0 million milestone payment to Lilly. In March 2022, the positive recommendation from the European Medicines Agency for regulatory approval of ruxolitinib in the GVHD field triggered an additional $20.0 million milestone payment to Lilly, which was recorded as research and development expense in our condensed consolidated statements of operations. Agenus In January 2015, we entered into a License, Development and Commercialization Agreement with Agenus Inc. and its wholly-owned subsidiary, 4-Antibody AG (now known as Agenus Switzerland Inc.), which we collectively refer to as Agenus. Under this agreement, which was amended in February 2017, the parties have agreed to collaborate on the discovery of novel immuno-therapeutics using Agenus’ antibody discovery platforms. Under the terms of the amended agreement, we received exclusive worldwide development and commercialization rights to four checkpoint modulators directed against GITR, OX40, LAG-3 and TIM-3 as well as two undisclosed targets. Targets may be designated profit-share programs, where all costs and profits are shared equally by us and Agenus, or royalty-bearing programs, where we are responsible for all costs associated with discovery, preclinical, clinical development and commercialization activities. There are currently no profit-share programs. For each royalty-bearing product other than GITR and one undisclosed target, Agenus will be eligible to receive tiered royalties on global net sales ranging from 6% to 12%. For GITR and one undisclosed target, Agenus will be eligible to receive 15% royalties on global net sales. The agreement may be terminated by us for convenience upon 12 months’ notice and may also be terminated under certain other circumstances, including material breach. On October 19, 2022 we notified Agenus that we were terminating the OX40 project. As of September 30, 2022, we have paid Agenus milestones totaling $30.0 million and Agenus is eligible to receive up to an additional $500.0 million in future contingent development, regulatory and commercialization milestones across all programs in the collaboration. In addition, in 2017 we purchased 10.0 million shares of Agenus Inc.’s common stock for an aggregate purchase price of $60.0 million in cash, or $6.00 per share. In 2020, we sold an aggregate of approximately 3.7 million shares of Agenus Inc.’s common stock resulting in gross proceeds of approximately $17.2 million. In 2021, we sold an aggregate of approximately 2.0 million shares of Agenus Inc.’s common stock resulting in gross proceeds of approximately $10.5 million. The fair market value of our long term investment in Agenus Inc. at September 30, 2022 and December 31, 2021 was $24.8 million and $38.9 million, respectively. We intend to hold the investment in Agenus Inc. for the foreseeable future and therefore, are accounting for our shares held in Agenus Inc. at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three and nine months ended September 30, 2022, we recorded an unrealized gain of $1.3 million and an unrealized loss of $14.1 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods. For the three and nine months ended September 30, 2021, we recorded an unrealized loss of $2.8 million and an unrealized gain of $29.1 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods. Merus In December 2016, we entered into a Collaboration and License Agreement with Merus N.V. (“Merus”). Under this agreement, the parties have agreed to collaborate with respect to the research, discovery and development of bispecific antibodies utilizing Merus’ technology platform. The collaboration encompasses up to ten independent programs. In January 2022, we decided to opt-out of the continued development of MCLA-145, a bispecific antibody targeting PD-L1 and CD137. We continue to collaborate with Merus and leverage the Merus platform to develop a pipeline of novel agents, as we continue to hold worldwide exclusive development and commercialization rights to up to ten additional programs. Of these ten additional programs, Merus retained the option, subject to certain conditions, to co-fund development of up to two such programs. If Merus exercises its co-funding option for a program, Merus would be responsible for funding 35% of the associated future global development costs and, for certain of such programs, would be responsible for reimbursing us for certain development costs incurred prior to the option exercise. Merus will also have the right to participate in a specified proportion of detailing activities in the United States for one of those co-developed programs. All costs related to the co-funded collaboration programs are subject to joint research and development plans and overseen by a joint development committee, but we will have final determination as to such plans in cases of dispute. We will be responsible for all research, development and commercialization costs relating to all other programs. For each program as to which Merus does not have commercialization or development co-funding rights, Merus is eligible to receive up to $100.0 million in future contingent development and regulatory milestones, and up to $250.0 million in commercialization milestones as well as tiered royalties ranging from 6% to 10% of global net sales. For each program as to which Merus exercises its option to co-fund development, Merus is eligible to receive a 50% share of profits (or sustain 50% of any losses) in the United States and be eligible to receive tiered royalties ranging from 6% to 10% of net sales of products outside of the United States. If Merus opts to cease co-funding a program as to which it exercised its co-development option, then Merus will no longer receive a share of profits in the United States but will be eligible to receive the same milestones from the co-funding termination date and the same tiered royalties described above with respect to programs where Merus does not have a right to co-fund development and, depending on the stage at which Merus chose to cease co-funding development costs, Merus will be eligible to receive additional royalties ranging up to 4% of net sales in the United States. As of September 30, 2022, we have paid Merus milestones totaling $3.0 million. In addition, in 2016 we entered into a Share Subscription Agreement with Merus, pursuant to which we purchased 3.2 million common shares of Merus for an aggregate purchase price of $80.0 million in cash, or $25.00 per share. In January 2021, we purchased 350,000 common shares in Merus’ underwritten public offering of 4,848,485 common shares at the public offering price of $24.75 per share, or an aggregate purchase price of $8.7 million. The fair market value of our total long term investment in Merus at September 30, 2022 and December 31, 2021 was $71.1 million and $112.9 million, respectively. As of September 30, 2022, we owned approximately 8% of the outstanding common shares of Merus. We have concluded that we have the ability to exercise significant influence, but not control, over Merus based primarily on our ownership interest, the level of intra-entity transactions between us and Merus related to development expenses, as well as other qualitative factors. We have elected the fair value option to account for our long term investment in Merus whereby the investment is marked to market through earnings in each reporting period. We believe the fair value option to be the most appropriate accounting method to account for securities in publicly held collaborators for which we have significant influence. For the three and nine months ended September 30, 2022, we recorded an unrealized loss of $9.3 million and $41.8 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods. For the three and nine months ended September 30, 2021, we recorded an unrealized gain of $3.3 million and $13.3 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods. Calithera In January 2017, we entered into a Collaboration and License Agreement with Calithera Biosciences, Inc. (“Calithera”). Under this agreement, we received an exclusive, worldwide license to develop and commercialize small molecule arginase inhibitors, including INCB01158. We had initially agreed to co-fund 70% of the global development costs for the development of the licensed products for hematology and oncology indications, but effective September 30, 2020 Calithera opted out of its co-funding obligation, and we became responsible for funding all of the development costs of INCB01158 and any other licensed products. In September 2022, we notified Calithera of our exercise of our right to terminate the Collaboration and License Agreement for convenience, effective in December 2022. As a result of the termination, rights to INCB01158 and the other licensed products will revert to Calithera. In addition, in 2017, we entered into a Stock Purchase Agreement with Calithera, pursuant to which we purchased 1.7 million shares of Calithera common stock for an aggregate purchase price of $8.0 million in cash, or $4.65 per share. In June 2022, Calithera effected a one-for-twenty stock split of its outstanding common stock, adjusting our ownership to 86,021 shares of Calithera’s common stock. The fair market value of our long term investment in Calithera at September 30, 2022 and December 31, 2021 was $0.3 million and $1.1 million, respectively. We intend to hold the investment in Calithera for the foreseeable future and therefore, are accounting for our shares held in Calithera at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three months ended September 30, 2022 we recorded a nominal unrealized gain, and for the nine months ended September 30, 2022 we recorded an unrealized loss of $0.9 million, based on the change in fair value of Calithera’s common stock during the respective periods. For the three and nine months ended September 30, 2021 we recorded an unrealized gain of $0.2 million and an unrealized loss of $4.6 million, respectively, based on the change in fair value of Calithera’s common stock during the respective periods. MacroGenics In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc. (“MacroGenics”). Under this agreement, we received exclusive development and commercialization rights worldwide to MacroGenics’ INCMGA0012 (formerly MGA012), an investigational monoclonal antibody that inhibits PD-1. Except as set forth in the succeeding sentence, we have sole authority over and bear all costs and expenses in connection with the development and commercialization of INCMGA0012 in all indications, whether as a monotherapy or as part of a combination regimen. MacroGenics has retained the right to develop and commercialize, at its cost and expense, its pipeline assets in combination with INCMGA0012. In addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and commercial supply needs of INCMGA0012. In July 2022, we amended our agreement with MacroGenics to reflect changes related to the payment of certain milestones and paid MacroGenics $30.0 million. As of September 30, 2022, we have paid MacroGenics developmental milestones totaling $100.0 million. After the amendment, MacroGenics will be eligible to receive up to an additional $335.0 million in future contingent development and regulatory milestones, and up to $330.0 million in sales milestones as well as tiered royalties ranging from 15% to 24% of global net sales. Research and development expenses for the three and nine months ended September 30, 2022 also included $41.6 million and $69.9 million, respectively, of development costs incurred pursuant to the MacroGenics agreement. Research and development expenses for the three and nine months ended September 30, 2021 also included $17.8 million and $49.0 million, respectively, of development costs incurred pursuant to the MacroGenics agreement. At September 30, 2022 and December 31, 2021, a total of $2.7 million and $0.7 million of such costs were included in accrued and other liabilities on the condensed consolidated balance sheets. Syros In January 2018, we entered into a Target Discovery, Research Collaboration and Option Agreement with Syros Pharmaceuticals, Inc. (“Syros”). Under this agreement, Syros will use its proprietary gene control platform to identify novel therapeutic targets with a focus in myeloproliferative neoplasms and we have received options to obtain exclusive worldwide rights to intellectual property resulting from the collaboration for up to seven validated targets. We will have exclusive worldwide rights to develop and commercialize any therapies under the collaboration that modulate those validated targets. We have agreed to pay Syros up to $54.0 million in target selection and option exercise fees should we decide to exercise all of our options under the agreement. For products resulting from the collaboration against each of the seven selected and validated targets, we have agreed to pay up to $50.0 million in potential development and regulatory milestones and up to $65.0 million in potential sales milestones. Syros is also eligible to receive low single-digit royalties on net sales of products resulting from the collaboration. In addition, in 2018, we entered into a Stock Purchase Agreement with Syros, pursuant to which we purchased 0.8 million shares of Syros common stock for an aggregate purchase price of $10.0 million in cash, or $12.61 per share. Subsequently in 2018, we entered into an Amended Stock Purchase Agreement with Syros, pursuant to which we purchased an additional 0.1 million shares of Syros common stock for an aggregate purchase price of $1.4 million in cash, or $9.55 per share. In September 2022, Syros effected a one-for-ten stock split of its outstanding common stock, adjusting our ownership to 93,753 shares of Syros’s common stock. The fair market value of our long term investment in Syros as of September 30, 2022 and December 31, 2021 was $0.6 million and $3.1 million, respectively. We intend to hold the investment in Syros for the foreseeable future and therefore, are accounting for our shares held in Syros at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three and nine months ended September 30, 2022, we recorded an unrealized loss of $0.3 million and $2.5 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods. For the three and nine months ended September 30, 2021, we recorded an unrealized loss of $0.9 million and $6.0 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods. Innovent In December 2018, we entered into a Research Collaboration and Licensing Agreement with Innovent. Under the terms of this agreement, Innovent received exclusive development and commercialization rights to our clinical-stage product candidates pemigatinib, itacitinib and parsaclisib in hematology and oncology in mainland China, Hong Kong, Macau and Taiwan. We are eligible to receive up to an additional $94.0 million in potential development and regulatory milestones. We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of Innovent and decisions made by regulatory agencies. In March 2022, we recognized a $5.0 million milestone for approval of PEMAZYRE (pemigatinib) in China. In the event of commercialization of the licensed molecule, we are eligible to receive up to $202.5 million in potential sales milestones from Innovent. We will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Innovent. We are also eligible to receive tiered royalties from the high-teens to the low-twenties on future sales of products resulting from the collaboration. We retain an option to assist in the promotion of the three product candidates in the Innovent territories. Zai Lab In July 2019, we entered into a Collaboration and License Agreement with Zai Lab. Under the terms of this agreement, Zai Lab received development and exclusive commercialization rights to INCMGA0012 in hematology and oncology in mainland China, Hong Kong, Macau and Taiwan. The agreement allows for Zai Lab to continue development of the licensed molecule and to submit the licensed molecule to authorities for regulatory approval within the agreement territory, upon which we are eligible for up to $22.5 million in potential development and regulatory milestones. We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of Zai Lab and decisions made by regulatory agencies. In the event of commercialization of the licensed molecule, we are eligible to receive up to $37.5 million in potential sales milestones from Zai Lab. We will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Zai Lab. We are also eligible to receive tiered royalties from the low to mid-twenties on future product sales resulting from the collaboration. We also retain an option to assist in the promotion of INCMGA0012 in Zai Lab’s licensed territories. MorphoSys In January 2020, we entered into a Collaboration and License Agreement with MorphoSys AG and MorphoSys US Inc., a wholly-owned subsidiary of MorphoSys AG (together with MorphoSys AG, “MorphoSys”), covering the worldwide development and commercialization of MOR208 (tafasitamab), an investigational Fc engineered monoclonal antibody directed against the target molecule CD19 that is currently in clinical development by MorphoSys. MorphoSys has exclusive worldwide development and commercialization rights to tafasitamab under a June 2010 collaboration and license agreement with Xencor, Inc. Under the terms of the agreement, we received exclusive commercialization rights outside of the United States, and MorphoSys and we have co-commercialization rights in the United States, with respect to tafasitamab. MorphoSys is responsible for leading the commercialization strategy and booking all revenue from sales of tafasitamab in the United States, and we and MorphoSys are both responsible for commercialization efforts in the United States and will share equally the profits and losses from the co-commercialization efforts. We will lead the commercialization strategy outside of the United States, and will be responsible for commercialization efforts and book all revenue from sales of tafasitamab outside of the United States, subject to our royalty payment obligations set forth below. We and MorphoSys have agreed to co-develop tafasitamab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and MorphoSys responsible for 45% of such costs. Each company is responsible for funding any independent development activities, and we are responsible for funding development activities specific to territories outside of the United States. All development costs related to the collaboration are subject to a joint development plan. MorphoSys is eligible to receive up to $737.5 million in future contingent development and regulatory milestones and up to $315.0 million in commercialization milestones as well as tiered royalties ranging from the mid-teens to mid-twenties of net sales outside of the United States. MorphoSys’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising tafasitamab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country. As of September 30, 2022, we have paid MorphoSys milestones totaling $2.5 million. In addition, under the terms of the agreement and pursuant to a related purchase agreement, we purchased American Depositary Shares (“ADSs”), each representing 0.25 of an ordinary share of MorphoSys AG, for an aggregate purchase price of $150.0 million or $41.33 per ADS (such ADSs to be purchased, the “New ADSs”). The fair market value of our long term investment in MorphoSys as of September 30, 2022 and December 31, 2021 was $18.3 million and $34.2 million, respectively. We intend to hold the investment in MorphoSys for the foreseeable future and therefore, are accounting for our shares held in MorphoSys at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three and nine months ended September 30, 2022, we recorded an unrealized gain of $0.8 million and an unrealized loss of $15.9 million, respectively, based on the change in fair value of MorphoSys’ ordinary shares during the respective periods. For the three and nine months ended September 30, 2021, we recorded an unrealized loss of $27.3 million and $60.2 million, respectively, based on the change in fair value of MorphoSys’ ordinary shares during the respective periods. Our 50% share of the United States loss for the commercialization of tafasitamab for the three and nine months ended September 30, 2022 was $1.8 million and $9.1 million, respectively, and is recorded as collaboration loss sharing on the condensed consolidated statement of operations. Our 50% share of the United States loss for the commercialization of tafasitamab for the three and nine months ended September 30, 2021 was $9.1 million and $29.5 million, respectively, and is recorded as collaboration loss sharing on the condensed consolidated statement of operations. Research and development expenses for the three and nine months ended September 30, 2022, includes $21.9 million and $70.4 million, respectively, related to our 55% share of the co-development costs for tafasitamab. Research and development expenses for the three and nine months ended September 30, 2021, includes $21.5 million and $55.8 million, respectively, related to our 55% share of the co-development costs for tafasitamab. At September 30, 2022 and December 31, 2021, $72.5 million and $21.5 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheets for amounts due to MorphoSys under the agreement. Nimble In September 2020, we entered into a Collaboration and License Agreement with Nimble Therapeutics, Inc. (“Nimble”). Under the terms of this agreement, Nimble will utilize their peptide synthesis, screening and optimization platform for discovery and validation of peptides against specified targets. Under the agreement, Nimble is eligible to receive up to $8.0 million in future contingent discovery milestones and up to $127.0 million in future contingent development and regulatory milestones. Additionally, in the event of successful commercialization, Nimble is eligible to receive up to $130.0 million in future contingent sales milestones and tiered royalties on net sales in the low single digits. InnoCare In August 2021, we entered into a Collaboration and License Agreement with Sunny Investments Limited, a wholly-owned subsidiary of InnoCare Pharma Limited (“InnoCare”). InnoCare received development and exclusive commercialization rights to tafasitamab in hematology and oncology in mainland China, Hong Kong, Macau and Taiwan. In September 2021, we recognized an upfront payment under this agreement of $35.0 million upon our transfer of technology related to the licensed product candidate to InnoCare, which was recorded in milestone and contract revenues on the consolidated statement of operations for the year ended December 31, 2021. Under the terms of this agreement, we are eligible to receive up to an additional $82.5 million in potential development, regulatory and commercial milestones. We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of InnoCare and decisions made by regulatory agencies. In the event of commercialization, we will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by InnoCare. Syndax In September 2021, we entered into a Collaboration and License Agreement with Syndax Pharmaceuticals, Inc. (“Syndax”), covering the worldwide development and commercialization of SNDX-6352 (“axatilimab”). Axatilimab, currently in clinical development by Syndax, is a monoclonal antibody that blocks the colony stimulating factor-1 (CSF-1) receptor. Syndax has exclusive worldwide development and commercialization rights to axatilimab under a June 2016 license agreement with UCB Biopharma Sprl. The agreement became effective in December 2021. Under the terms of the agreement, we received exclusive commercialization rights outside of the United States, and Syndax and we have co-commercialization rights in the United States, with respect to axatilimab. We will be responsible for leading the commercialization strategy and booking all revenue from sales of axatilimab globally, and Syndax will have the option to co-commercialization axatilimab with Incyte in the United States. Incyte and Syndax will share equally the profits and losses from the co-commercialization efforts in the United States. Sales of axatilimab outside the United States will be subject to our royalty payment obligations to Syndax, as set forth below. We and Syndax have agreed to co-develop axatilimab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and Syndax responsible for 45% of such costs. Each company is responsible for funding any independent development activities. All development costs related to the collaboration are subject to a joint development plan. In December 2021, we paid Syndax an upfront, non-refundable payment of $117.0 million, which was recorded in research and development expense on the consolidated statement of operations for the year ended December 31, 2021. Syndax is eligible to receive up to $220.0 million in future contingent development and regulatory milestones and up to $230.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe and Japan and low double digit percentage on net sales in the rest of the world outside of the United States. Syndax’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising axatilimab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country. In addition, under the terms of the agreement and pursuant to a related stock purchase agreement, we purchased approximately 1.4 million shares of Syndax common stock for an aggregate purchase price of $35.0 million, or $24.62 per share. We completed the purchase of the shares on December 9, 2021 when the closing price on The Nasdaq Stock Market was $17.48 per share. Of the $35.0 million aggregate purchase price paid, $24.8 million was allocated to our stock purchase and was recorded within long term investments and $10.2 million, representing premium paid on the purchase, was allocated to research and development expense on the consolidated statement of operations for the year ended December 31, 2021. The fair market value of our long term investment in Syndax as of September 30, 2022 and December 31, 2021 was $34.2 million and $31.1 million. We intend to hold the investment in Syndax for the foreseeable future and therefore, are accounting for our shares held in Syndax at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three and nine months ended September 30, 2022, we recorded an unrealized gain of $6.8 million and $3.1 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods. Maruho In April 2022, we entered into a strategic alliance agreement with Maruho, Co., Ltd (“Maruho”) for the development, manufacturing and exclusive commercialization of ruxolitinib cream, for treatment of autoimmune and inflammatory dermatology indications in Japan. Maruho will receive the rights to develop, manufacture and exclusively commercialize ruxolitinib cream, and other potential future topical formulations of ruxolitinib, in autoimmune and inflammatory dermatologic diseases, including vitiligo and atopic dermatitis, in Japan. Under the terms of the agreement, we received an upfront payment from Maruho which was deferred and recorded in other liabilities on the condensed consolidated balance sheet and we are eligible to receive additional potential development, regulatory and commercial milestones and royalties on net sales of the licensed product in Japan.

Accrued and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Schedule of accrued and other current liabilities

Accrued and other current liabilities consisted of the following (in thousands):


	September 30, 2022		December 31, 2021
Royalties	$	248,455	$	168,412
Clinical related costs	152,764		109,486
Sales allowances	186,112		136,541
Sales and marketing	31,001		35,750
Construction in progress	8,836		27,098
Operating lease liabilities	8,492		10,554
Other current liabilities	64,154		45,754
Total accrued and other current liabilities	$	699,814	$	533,595

Property and Equipment, net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


	September 30, 2022		December 31, 2021
Office equipment	$	22,527	$	22,554
Laboratory equipment	115,507		105,040
Computer equipment	88,239		79,871
Land	10,139		10,494
Building and leasehold improvements	432,748		434,321
Operating lease right-of-use assets	23,111		27,308
Construction in progress	225,442		220,052
	917,713		899,640
Less accumulated depreciation and amortization	(201,980)		(175,720)
Property and equipment, net	$	715,733	$	723,920

In March 2017, we acquired additional adjacent buildings to our global headquarters in Wilmington, Delaware and in 2019, began demolition of these buildings and construction of a new laboratory and office building totaling approximately 200,000 square feet. The certificate of occupancy was received in December 2021 and we capitalized approximately $158.2 million in building and office equipment that was previously included in construction in progress as of December 31, 2021.

In February 2018, we signed an agreement to rent a building in Morges, Switzerland for an initial term of 15 years plus one year of free rent, with multiple options to extend for an additional 20 years. The building serves as our new European headquarters and consists of approximately 100,000 square feet of office space. This building allowed for consolidation of our European operations that were located in Geneva and Lausanne, Switzerland. In June 2019, we obtained control of the Morges building to begin our construction activity, which was completed in 2020. At that time, we determined the lease to be a finance lease and recorded a lease liability of $31.1 million and a finance lease right-of-use asset of $29.1 million, net of a lease incentive from our landlord of $2.0 million. We have capitalized approximately $19.5 million in leasehold improvements as of September 30, 2022 relating to Morges.

In July 2018, we signed an agreement to purchase land located in Yverdon, Switzerland. The land was purchased, in cash, for approximately $4.8 million. Upon this parcel, we are constructing a large molecule production facility. Construction activity commenced in July 2018, and as of September 30, 2022, we have capitalized approximately $190.5 million in costs for construction, ground preparation and architectural and engineering studies. Inspection from competent authorities was finalized in March 2022, and in June 2022 Swissmedic authorities granted the GMP drug manufacturing license for this facility.

Label	Element	Value
ADSs
Share Price	us-gaap_SharePrice	$ 41.33
Equity Method Investment, Aggregate Cost	us-gaap_EquityMethodInvestmentAggregateCost	$ 150,000,000
Subsidiary Stock, Conversion Ratio	incy_SubsidiaryStockConversionRatio	0.25

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	For the three and nine months ended September 30, 2022, we recorded income tax expense of approximately $35.8 million and $136.3 million, respectively. For the three and nine months ended September 30, 2021, we recorded income tax expense of approximately $27.7 million and $65.7 million, respectively. The tax expense for the three and nine months ended September 30, 2022 increased as compared to that for the prior year periods due to the release of our valuation allowance against a majority of our U.S. research and development tax credit carryforwards and other deferred tax assets at December 31, 2021. In the fourth quarter of 2021, we assessed the valuation allowance and considered positive evidence, including significant cumulative consolidated and U.S. income over the three years ended December 31, 2021, consistent growth in product revenues, and expectations regarding future profitability. We also assessed negative evidence, including the potential impact of competition, clinical failures and patent expirations on our projections. After assessing both the positive evidence and negative evidence, we determined it was more likely than not that the majority of our U.S. deferred tax assets would be realized in the future and released the associated valuation allowance as of December 31, 2021. This resulted in a benefit of $569.0 million. As of December 31, 2021, we maintained a valuation allowance of $408.2 million against a portion of our remaining U.S. deferred tax assets as well as select state and foreign deferred tax assets. The balance of our unrecognized tax benefits (including penalties and interest) increased by approximately $11.2 million during the nine months ended September 30, 2022, resulting in movements to other liabilities and deferred income tax asset on the condensed consolidated balance sheet. The overall increase is primarily driven by unrecognized tax benefits related to current year operations and research and development tax credits. We accrue interest and penalties related to unrecognized tax benefits as a component of its provision for income taxes. In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law. The IRA includes a 15% corporate alternative minimum tax and a 1% excise tax on share repurchases. We do not expect the IRA to have a material impact on our consolidated financial statements.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
Income taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ 35,813		$ 27,730	$ 136,302	$ 65,694
One-time benefit from associated valuation allowance		$ 569,000
Valuation allowance		$ 408,200
Increase in unrecognized tax benefits				$ 11,200

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

License Agreements - Lilly (Details) - USD ($) $ in Thousands	1 Months Ended				3 Months Ended		9 Months Ended		154 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	May 31, 2019	Dec. 31, 2009	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Jun. 30, 2016
License Agreements
Revenues					$ 823,303	$ 812,987	$ 2,467,935	$ 2,123,414
OLUMIANT Royalty Revenues
License Agreements
Revenues					20,371	86,572	98,689	154,875
Eli Lilly \| Development Milestones
License Agreements
Amount recognized and received for the achievement of a predefined milestone									$ 149,000
Eli Lilly \| Development Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement				$ 150,000
Eli Lilly \| Regulatory Milestones
License Agreements
Amount recognized and received for the achievement of a predefined milestone									335,000
Eli Lilly \| Regulatory Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement				365,000
Eli Lilly \| Commercialization Milestones
License Agreements
Amount recognized and received for the achievement of a predefined milestone									$ 50,000
Eli Lilly \| Commercialization Milestones \| Maximum
License Agreements
Upfront and immediate milestone payment to be received under license agreement				$ 150,000
Eli Lilly \| OLUMIANT
License Agreements
Revenues					0		70,000
Eli Lilly \| OLUMIANT \| Regulatory Milestones \| UNITED STATES
License Agreements
Amount recognized and received for the achievement of a predefined milestone	$ 40,000
Eli Lilly \| OLUMIANT \| Regulatory Milestones \| Europe
License Agreements
Amount recognized and received for the achievement of a predefined milestone	20,000
Eli Lilly \| OLUMIANT \| Regulatory Milestones \| JAPAN
License Agreements
Amount recognized and received for the achievement of a predefined milestone	$ 10,000
Eli Lilly \| OLUMIANT Royalty Revenues \| Non-US
License Agreements
Royalties payable on net sales					$ 20,400	$ 86,600	$ 98,700	$ 154,900
Eli Lilly \| GVHD \| Regulatory Milestones
License Agreements
Milestone payment made under license agreement			$ 20,000
Eli Lilly \| GVHD \| Regulatory Milestones \| Europe
License Agreements
Milestone payment made under license agreement		$ 20,000
Eli Lilly \| GVHD \| Regulatory Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement										$ 40,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Total revenues	$ 823,303	$ 812,987	$ 2,467,935	$ 2,123,414
Costs and expenses:
Cost of product revenues (including definite-lived intangible amortization)	54,584	39,869	147,834	107,117
Research and development	384,007	334,945	1,084,576	985,352
Selling, general and administrative	266,460	190,704	729,321	513,358
(Gain) loss on change in fair value of acquisition-related contingent consideration	(21,893)	2,910	(12,198)	13,068
Collaboration loss sharing	1,769	9,149	9,055	29,476
Total costs and expenses	684,927	577,577	1,958,588	1,648,371
Income from operations	138,376	235,410	509,347	475,043
Other income (expense), net	11,513	1,948	13,295	4,931
Interest expense	(641)	(439)	(1,999)	(1,156)
Unrealized loss on long term investments	(660)	(27,450)	(72,142)	(28,394)
Income before provision for income taxes	148,588	209,469	448,501	450,424
Provision for income taxes	35,813	27,730	136,302	65,694
Net income	$ 112,775	$ 181,739	$ 312,199	$ 384,730
Net income per share:
Basic (in USD per share)	$ 0.51	$ 0.82	$ 1.41	$ 1.75
Diluted (in USD per share)	$ 0.50	$ 0.82	$ 1.40	$ 1.73
Shares used in computing net income per share:
Basic (in shares)	222,415	220,845	221,801	220,243
Diluted (in shares)	224,175	222,248	223,626	222,113
Product revenues, net
Revenues:
Total revenues	$ 713,010	$ 594,013	$ 1,982,682	$ 1,673,974
Product royalty revenues
Revenues:
Total revenues	110,293	183,974	350,253	404,440
Milestone and contract revenues
Revenues:
Total revenues	$ 0	$ 35,000	$ 135,000	$ 45,000

License Agreements - MacroGenics (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		57 Months Ended
	Jul. 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2022	Dec. 31, 2021
License Agreements
Research and development		$ 384,007	$ 334,945	$ 1,084,576	$ 985,352
MacroGenics
License Agreements
Research and development		41,600	$ 17,800	69,900	$ 49,000
MacroGenics \| Accrued Liabilities
License Agreements
Accrued and other liabilities		2,700		2,700			$ 700
MacroGenics \| Minimum
License Agreements
Royalty payments on future global net sales (as a percent)						15.00%
MacroGenics \| Maximum
License Agreements
Royalty payments on future global net sales (as a percent)						24.00%
MacroGenics \| Development and Regulatory Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement		$ 335,000		$ 335,000
MacroGenics \| Development Milestones
License Agreements
Milestone payment made under license agreement	$ 30,000					$ 100,000
MacroGenics \| Commercialization Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement						$ 330,000

License Agreements - Syndax (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions		1 Months Ended		3 Months Ended		9 Months Ended
	Dec. 09, 2021	Dec. 31, 2021	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
License Agreements
Fair market long term investments		$ 221,266		$ 149,124		$ 149,124
Research and development				384,007	$ 334,945	1,084,576	$ 985,352
Unrealized gain (loss) on long term investments				(660)	$ (27,450)	(72,142)	$ (28,394)
Investment in Syndax
License Agreements
Fair market long term investments		31,100		34,200		34,200
Unrealized gain (loss) on long term investments				6,800		3,100
Syndax
License Agreements
Upfront payment under license agreement		$ 117,000
Syndax \| Development and Regulatory Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement				220,000		220,000
Syndax \| Commercialization Milestones \| Maximum
License Agreements
Additional milestone payments under the license agreement				230,000		230,000
Syndax \| Syndax \| UNITED STATES
License Agreements
Funding of future development costs (as a percent)			45.00%
Syndax \| Incyte \| UNITED STATES
License Agreements
Funding of future development costs (as a percent)			55.00%
Stock purchase agreement \| Investment in Syndax
License Agreements
Purchase of common stock under Stock Purchase Agreement (in shares )			1.4
Purchase price of common stock	$ 35,000			$ 35,000		$ 35,000
Per share price (In USD per share)	$ 17.48		$ 24.62		$ 24.62		$ 24.62
Fair market long term investments	$ 24,800
Research and development	$ 10,200

Fair Value of Financial Instruments - Liabilities measured on a recurring basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Estimate of Fair Value Measurement
Fair value of financial instruments
Acquisition-related contingent consideration	$ 206,000	$ 244,000
Total liabilities	206,000	244,000
Fair Value, Inputs, Level 1
Fair value of financial instruments
Acquisition-related contingent consideration	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 2
Fair value of financial instruments
Acquisition-related contingent consideration	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 3
Fair value of financial instruments
Acquisition-related contingent consideration	206,000	244,000
Total liabilities	$ 206,000	$ 244,000

Stock compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of valuation assumptions used for valuation of fair value of stock compensation granted

We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions:


	Employee Stock Options												Employee Stock Purchase Plan
	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Nine Months Ended
	September 30,												September 30,
	2022			2021			2022			2021			2022			2021			2022			2021
Average risk-free interest rates	2.90		%	0.76		%	2.03		%	0.60		%	4.22		%	0.28		%	3.44		%	0.22		%
Average expected life (in years)	5.17			5.16			4.88			5.00			0.50			0.50			0.50			0.50
Volatility	35		%	38		%	36		%	39		%	31		%	25		%	27		%	31		%
Weighted-average fair value (in dollars)	$	27.57		$	28.84		$	25.96		$	29.32		$	16.46		$	18.20		$	15.38		$	18.82

Schedule of option activity under the 2010 Stock Plan

Option activity under our 2010 Stock Incentive Plan (the “2010 Stock Plan”) was as follows:


	Shares Subject to Outstanding Options
	Shares	Weighted Average Exercise Price
Balance at December 31, 2021	12,763,460	$	88.39
Options granted	1,755,963	$	75.32
Options exercised	(477,371)	$	66.69
Options cancelled	(989,465)	$	88.60
Balance at September 30, 2022	13,052,587	$	87.41

Schedule of RSU award and PSU activity under the 2010 Stock Plan

Restricted stock unit (“RSU”) and performance share (“PSU”) award activity under the 2010 Stock Plan was as follows:


	Shares Subject to Outstanding Awards
	Shares	Grant Date Value
Balance at December 31, 2021	3,966,888	$	84.91
RSUs granted	2,473,892	77.14
PSUs granted	154,685	77.67
RSUs released	(845,095)	87.06
PSUs released	(184,401)	69.25
RSUs cancelled	(337,265)	83.94
PSUs cancelled	(1,720)	65.76
Balance at September 30, 2022	5,226,984	$	81.29

Summary of shares available for grant

The following table summarizes our shares available for grant under the 2010 Stock Plan. Each RSU and PSU grant reduces the available share pool by 2 shares.


			Shares Available for Grant
Balance at December 31, 2021			10,113,298
Options, RSUs and PSUs granted			(7,013,475)
Options, RSUs and PSUs cancelled			1,680,482
Balance at September 30, 2022			4,780,305

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	We have entered into the collaboration agreements described in Note 7, as well as various other collaboration agreements that are not individually, or in the aggregate, significant to our operating results or financial condition at this time. We may in the future seek to license additional rights relating to technologies or drug development candidates in connection with our drug discovery and development programs. Under these agreements, we may be required to pay upfront fees, milestone payments, and royalties on sales of future products. In the ordinary course of our business, we may become involved in lawsuits, proceedings, and other disputes, including commercial, intellectual property, regulatory, employment, and other matters. We record a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

The following is a summary of our marketable security portfolio for the periods presented (in thousands):


	Amortized Cost		Net Unrealized Losses		Estimated Fair Value
September 30, 2022
Debt securities (government)	$	292,941	$	(6,441)	$	286,500

December 31, 2021
Debt securities (government)	$	291,871	$	(1,119)	$	290,752

Our available-for-sale debt securities generally have contractual maturity dates of between 12 to 18 months. Debt security assets were assessed for risk of expected credit losses. As of September 30, 2022 and December 31, 2021, the available-for-sale debt securities were held in U.S.-government backed securities and in Treasury bonds and were assessed on an individual security basis to have a de minimis risk of credit loss.

Fair Value Measurements

FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (“the exit price”) in an orderly transaction between market participants at the measurement date. The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

Recurring Fair Value Measurements

Our marketable securities consist of investments in U.S. government debt securities that are classified as available-for-sale.

At September 30, 2022 and December 31, 2021, our Level 2 U.S. government debt securities were valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of investments. Our long term investments classified as Level 1 were valued using their respective closing stock prices on The Nasdaq Stock Market. We did not experience any transfers of financial instruments between the fair value hierarchy levels during the nine months ended September 30, 2022.

The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of September 30, 2022
Cash and cash equivalents	$	2,690,622	$	—	$	—	$	2,690,622
Debt securities (government)	—		286,500		—		286,500
Long term investments (Note 7)	149,124		—		—		149,124
Total assets	$	2,839,746	$	286,500	$	—	$	3,126,246


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2021
Cash and cash equivalents	$	2,057,440	$	—	$	—	$	2,057,440
Debt securities (government)	—		290,752		—		290,752
Long term investments (Note 7)	221,266		—		—		221,266
Total assets	$	2,278,706	$	290,752	$	—	$	2,569,458

The following fair value hierarchy table presents information about each major category of our financial liabilities measured at fair value on a recurring basis as (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of September 30, 2022
Acquisition-related contingent consideration	$	—	$	—	$	206,000	$	206,000
Total liabilities	$	—	$	—	$	206,000	$	206,000


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2021
Acquisition-related contingent consideration	$	—	$	—	$	244,000	$	244,000
Total liabilities	$	—	$	—	$	244,000	$	244,000

The following is a rollforward of our Level 3 liabilities (in thousands):


	2022
Balance at January 1,	$	244,000
Contingent consideration earned during the period but not yet paid	(25,802)

Change in fair value of contingent consideration	(12,198)
Balance at September 30,	$	206,000

The fair value of the contingent consideration was determined on the date of acquisition, June 1, 2016, using an income approach based on projected future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment over 18 years, and discounted to present value at a rate of 10%. The fair value of the contingent consideration is remeasured each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The valuation inputs utilized to estimate the fair value of the contingent consideration as of September 30, 2022 and December 31, 2021 included a discount rate of 10% and updated projections of future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment. The gain on change in fair value of the contingent consideration during the three and nine months ended September 30, 2022 was due primarily to the changes in foreign currency exchange rates included within the updated projections of future net revenues of ICLUSIG.

We generally make payments to Takeda Pharmaceutical Company Limited quarterly based on the royalties or any additional milestone payments earned in the previous quarter. At September 30, 2022 and December 31, 2021, contingent consideration earned but not yet paid was $25.8 million and $19.6 million, respectively, and was included in accrued and other current liabilities.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of property and equipment, net

Property and equipment, net consists of the following (in thousands):


	September 30, 2022		December 31, 2021
Office equipment	$	22,527	$	22,554
Laboratory equipment	115,507		105,040
Computer equipment	88,239		79,871
Land	10,139		10,494
Building and leasehold improvements	432,748		434,321
Operating lease right-of-use assets	23,111		27,308
Construction in progress	225,442		220,052
	917,713		899,640
Less accumulated depreciation and amortization	(201,980)		(175,720)
Property and equipment, net	$	715,733	$	723,920

Stock Compensation - RSU award and PSU activity under the 2010 stock plan (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
RSU and PSU Activity Shares
Outstanding at the beginning of the period (in shares)	3,966,888
Outstanding at the end of the period (in shares)	5,226,984
RSU and PSU Grant Price
Share price of shares available (in USD per share)	$ 81.29	$ 84.91
Restricted Stock Units (RSUs)
RSU and PSU Activity Shares
Granted (in shares)	2,473,892
Released (in shares)	845,095
Cancelled (in shares)	337,265
RSU and PSU Grant Price
Granted (in USD per share)	$ 77.14
Released (in USD per share)	87.06
Cancelled (in USD per share)	$ 83.94
Performance Shares
RSU and PSU Activity Shares
Granted (in shares)	154,685
Released (in shares)	184,401
Cancelled (in shares)	1,720
RSU and PSU Grant Price
Granted (in USD per share)	$ 77.67
Released (in USD per share)	69.25
Cancelled (in USD per share)	$ 65.76