Investing.com -- Shares in pharmaceutical group Incyte (NASDAQ:INCY) dropped in premarket U.S. trading on Tuesday after analysts at BMO Capital Markets downgraded their rating of the stock to "Underperform" from "Market Perform."
In a note to clients, the analysts said the decision was in part influenced by concerns that revenues would likely be "challenged" from Incyte's key Opzelura cream for patients with pigmentation disorder vitiligo and the inflammatory skin condition atopic dermatitis, also known as eczema.
"While we remain confident in Opzelura’s efficacy in indications like vitiligo and atopic dermatitis, we believe that it will be increasingly challenging for management to compete in atopic dermatitis given appealing long cost topical steroids," the BMO analysts said, adding that competition in topical skin creams is particularly strong.
Incyte's plan to buy back up to $2 billion of its common stock has cut its capacity to expand its drug pipeline, the BMO analysts argued. The move has done "little to increase shareholder value," they said.