Update May 9, 2016. Incyte (INCY) reported earnings of 12 cents a share for the first quarter today before the markets opened. That was below the 15 cents a share expected by Wall Street analysts. Of course, the stock fell–NOT. Incyte finished up by 3.07% for the day. At any young biotech, it’s all about the future. Can the company keep generating the numbers that keep hopes high for the future? If it can, nobody much cares about a miss in the present. The question in valuing a stock of this sort is figuring out how much future you get for your investing buck. The future reported by Incyte looks pretty good. Of course, there’s current growth. Revenue climbed 65.4% from the first quarter of 2015. Operating income rose 622%. On top of that the company announced higher guidance for future sales of its current lead drug, Jakafi. Instead of 2016 sales of $800 -$815 million, Incyte told Wall Street to expect $815-$830 million from Jakafi. Revenue for the first quarter for Jakafi came to $183 million, so the company is pointing to a significant increase in quarterly run rate in Jakafi sales. (Jakafi sales were up 59% in the first quarter of 2016 from the first quarter of 2015.) In addition, in the future category, Incyte announced that it would acquire the European operations of ARIAD Pharmaceuticals (ARIA) and an exclusive license to develop and commercial ARIAD’s cancer drug Iclusig in Europe and 12 other countries. Incyte will also pay up to $135 million to fund the ongoing clinical development of Iclusig for other cancers including leukemia. As important as Iclusig may or may not be (sales doubled in 2015 from 2014 to $112 million) for investors with an eye to the future what’s intriguing about the deal for Incyte is that the company has bought ARIAD’s European marketing operation. Between a quarter and a third of ARIAD’s 2015 sales of Iclusig came from Europe (with the rest from the United States) so it looks like there’s solid upside for Iclusig sales in Europe with a bigger sales budget. Adding to its European marketing muscle also gives Incyte the potential to capture more of the sales in Europe of its own future drugs. That potential will be important if Incyte and its marketing partner Eli Lilly (LLY) get approval for Incyte’s second drug, baricitinib for rheumatoid arthritis and psoriasis. The companies have submitted the drug to the U.S. Food and Drug Administration and to its European counterpart. In its release today Incyte pointed toward a potential 2017 approval. And finally, in the future, there’s a drug called Epacadostat that is in clinical trials in combination with cancer drugs. The upside in Epadadostat is that it could be a way to work around some of the key problems with drugs that use the body’s own immune system to fight cancer. Tumors have their own defense systems that protect them from the attacks launched by the immune system and Epadaostat offers solutions to some of these problems. In addition the drug seems to work in combination with other immune-system cancer drugs without triggering negative responses in the patient that require ending treatment. With immune therapies for cancer being one of the hottest areas of drug development, the future for Epacadostat would seem potentially highly promising. So far 2016 hasn’t been kind of shares to Incyte–down 33% for the year to date as of the May 9 close. The year hasn’t been kind to biotech in general as the market has steered away from the risk presented by a stock that is valued on future prospects that can be difficult, shall we say, to project accurately. The fear, of course, is that a biotech trading on future earnings won’t deliver and will then take a huge fall. So far, at least that doesn’t seem a danger for Incyte, where the future hangs on more than one product. To me the drop this year offers a buying opportunity–if you agree with my assessment of future prospects. My first target price goal is a return to the 200-day moving average of $108 from today’s close at $72.86.