Despite many twists and turns, the U.S. stock market has had a stupendous run since it reached a bottom in Mar 2009. The bull run has continued for eight years with the S&P 500 gaining 198.1% during this period.

While several stocks performed well during this period, Incyte Corporation (INCY - Free Report) tops the list -- this bull market outperformer gained a whopping 5797.9% during this 8-year period, outperforming the Zacks-categorized Medical-Biomedical/Genetics industry as well as the S&P 500 by a huge margin.

(Click on image to enlarge)

So what are the factors that made Incyte a Wall Street favorite during this period?

(Click on image to enlarge)

Jakafi’s Growth Trajectory: The company’s flagship product, Jakafi, a JAK1/JAK2 inhibitor approved by the FDA in Nov 2011, looks well-positioned for growth with sales expected to cross $1 billion in 2017 with long-term peak sales expected to be reach $2 billion. Growth is being driven by patient demand. Moreover, with Gilead Sciences, Inc. (GILD - Free Report) dropping the development of its experimental JAK inhibitor, momelotinib, the competitive threat for Jakafi has gone down considerably. Jakafi is approved for two types of rare blood cancers -- polycythemia vera (PV) and myelofibrosis (MF) -- and has potential for additional indications like graft versus host disease (GVHD) and essential thrombocythemia. Jakafi was the first FDA approved JAK inhibitor for any indication and remains the first and only product to be approved by the FDA for both MF and PV.

Lucrative Collaboration Agreements with Big Players: Incyte struck two major deals in 2009 for its pipeline candidates -- while one agreement was with Swiss drugmaker Novartis AG (NVS - Free Report) , the other was with large-cap pharma company Eli Lilly and Company (LLY - Free Report) . The licensing deal with Novartis covered Jakafi (ruxolitinib) as well as some other compounds and saw the company getting an upfront payment as well as an immediate milestone payment of $210 million. The deal, worth more than a billion dollars, was a huge boost for Incyte and led to a surge in the company’s share price. The company received another boost with the signing of the Lilly agreement for Olumiant (baricitinib). Incyte has several other collaboration agreements as well which have helped the company build and strengthen its pipeline over the years.

Immuno-Oncology a Focus Area: Incyte has a strong immuno-oncology focused pipeline. Cancer immunotherapy or immuno-oncology is a hot therapeutic area that has been garnering a lot of interest and activity. These treatments hold huge commercial potential and have the ability to change the treatment paradigm. Incyte has an extensive oncology pipeline and is well positioned with both large and small molecule approaches to immuno-oncology. In order to maximize the value of its pipeline programs, Incyte has collaboration agreements with companies like Merck & Co., Inc. (MRK - Free Report) , Roche AG (RHHBY - Free Report) , AstraZeneca plc (AZN - Free Report) , Agenus and Bristol-Myers.

The company’s immuno-oncology pipeline includes IDO1 inhibitors (IDO1 inhibition shifts the immune system from an immunosuppressive state to an activated state thereby allowing the body to mount a more effective anti-tumor immune response), PI3K-delta inhibitors (PI3K-delta pathway mediates oncogenic signaling in B cell malignancies), and JAK inhibitors (JAK promotes tumor growth by integrating pro-inflammatory cytokine signals).

Acquisition Target: Incyte has often been considered an acquisition target thanks to the commercial potential of Jakafi and the company’s deep and promising pipeline. While Jakafi is expected to bring in peak sales of $2 billion, Olumiant also represents blockbuster potential if all goes well for the drug which is approved in the EU and under FDA review. Another pipeline candidate with immense commercial potential is epacadostat, which is in phase III development for melanoma. Epacadostat is being evaluated for several other types of cancer as well. Incyte’s early-stage pipeline is also progressing well.

(Click on image to enlarge)

However, the Wilmington, DE-based company is currently seeing downward revisions in EPS estimates for 2017 and 2018. The main reason for this is Incyte’s 2017 Jakafi guidance, which fell short of expectations, while guidance for R&D spend was significantly above Street expectations. Over the last 30 days, earnings estimates for 2017 and 2018 are down 62.5% and 20.6%, respectively. While Incyte currently carries a Zacks Rank #5 (Strong Sell).