Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Written in the first person by Warren Buffett and Charlie Munger, based on Incyte's Form 10-Q for the quarter ended June 30, 2026, recent company disclosures, and the market price as of July 29, 2026. Charlie and I have spent our lives looking for businesses where time is the friend of the owner. A pharmaceutical patent is a peculiar thing: it looks like a moat, it earns like a moat, and it prices like a moat — right up until a date printed on a government document, at which point it vanishes entirely. Incyte's principal asset, Jakafi, faces exactly such a date: December 2028. Jakafi and its associated ex-U.S. royalty stream represent roughly 55-60% of company revenue, and they carry gross margins that the replacement products will struggle to match in aggregate for years.
Recent filings analysed: 8-K (2026-07-28), 10-Q (2026-07-28), 8-K (2026-07-06), 8-K (2026-06-22).
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