Incyte (INCY) faces "near certain revenue erosion" over the long term as generic competition for its blood-disease drug Jakafi looms before the end of the decade, Oppenheimer said Tuesday in a report.

"Based on the Jakafi patent cliff," consensus revenue estimates reflect a steep decline in 2029 with almost $4 billion in sales to offset, Oppenheimer said.

Positive prospects for Incyte's provocation to treat hidradenitis suppurativa, a chronic inflammatory skin condition, are unlikely to fully address concerns around Jakafi's loss of exclusivity, while opportunities in chronic spontaneous urticaria, another skin condition, and asthma "have yet to be proven with relatively high bars across the competitive landscape, the report said.

Oppenheimer downgraded Incyte's stock to perform from outperform with a price target of $82.

The "solid stretch" for Incyte shares "has run its course and reached fair valuation" following successes in immunology, dermatology, and oncology, as well as the arrival of new management, Oppenheimer said.

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