Incyte (NasdaqGS:INCY) Q3 2025 Earnings Call October 28, 2025 08:00 AM ET Speaker6Greetings and welcome to the Incyte Third Quarter 2025 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into the question queue at any time by pressing star one on your telephone keypad. We ask you to please limit yourselves to one question and one follow-up, then return to the queue. If anyone shou ...

Financial Data and Key Metrics Changes - The company experienced sequential improvement in volume from Q1 to Q2, but the growth was not as strong as expected, particularly in the teen treatment segment [2][3] - Guidance for Q3 was based on June data, with expectations for a step-up in Q4, particularly in Europe and North America [4][5] - Margin guidance indicates a significant increase in Q4, driven by volume leverage and benefits from UK VAT adjustments [9][10] Business Line Data and Key Metrics Changes - The iTero segment is expected to see increased sales of full systems in Q4, alongside upgrades [5][34] - New product introductions, such as mandibular advancement and occlusal blocks, are anticipated to drive volume growth in Europe [6][10] - The company is adapting its product offerings to meet changing customer preferences, with a shift towards lower-cost options [20][23] Market Data and Key Metrics Changes - The clear aligner market is facing challenges in North America, but many international markets are experiencing double-digit growth [14][15] - DSOs are growing faster than individual practices, indicating a shift in market dynamics [40][41] - The teen segment represents a significant growth opportunity, with 75% of orthodontic case starts being in this demographic [42][43] Company Strategy and Development Direction - The company aims to leverage its diverse product portfolio to meet varying customer needs, including lower-priced options [20][23] - There is a focus on educating potential patients and their parents about the benefits of clear aligners [49][50] - The company is committed to innovation and protecting its intellectual property through legal actions against competitors [67][68] Management's Comments on Operating Environment and Future Outlook - Management highlighted the impact of elevated interest rates and inflation on patient purchasing behavior, with interest rates being a key factor in elective dental procedures [11][12] - The company remains optimistic about its long-term growth potential, despite current macroeconomic challenges [58][62] - Future pricing strategies are expected to reflect a shift towards lower-priced products, impacting average selling prices [54][56] Other Important Information - The company is actively working to enhance its manufacturing capabilities to improve profitability [65][66] - There is an ongoing effort to drive conversion rates among orthodontists and dental practices [17][20] Q&A Session Summary Question: What investor feedback have you received since reporting Q2? - Discussions focused on the quarter's performance and expectations versus actual results, with a particular emphasis on the teen treatment segment [2][3] Question: How do you see the rest of the year playing out for Q3 and Q4? - Guidance for Q3 is based on June data, with expectations for a step-up in Q4 driven by seasonal trends and new product launches [4][5] Question: What is the impact of the macro environment on elective dental procedures? - Interest rates are seen as a significant factor affecting patient conversion rates, with lower rates potentially driving more patients to seek treatment [11][12] Question: How is the clear aligner market expected to recover? - While North America faces challenges, many international markets are experiencing strong growth, and the company is focused on driving conversion through education and product offerings [14][15] Question: What strategies are being deployed to overcome uneven patient case conversion? - The company is actively working with orthodontists to promote the benefits of clear aligners and provide financing options to patients [20][21] Question: What are the expectations for pricing in 2026? - Pricing is expected to trend down slightly due to a shift towards lower-priced products, but the company aims to maintain profitability through volume growth [54][56] Question: Can you provide an update on the patent infringement lawsuits? - The company is pursuing legal action against competitors for patent infringement, emphasizing the importance of protecting its intellectual property [67][68]