FDA Rejects Eli Lilly and Incyte Rheumatoid-Arthritis Drug -- Update

By Anne Steele 

Eli Lilly & Co. and Incyte Corp. on Friday said the U.S. Food and Drug Administration didn't approve their new drug application for a rheumatoid arthritis treatment that some analysts estimate could generate more than $2 billion in annual sales.

The companies said they received a so-called complete response letter, which details the agency's reasons for rejection, asking for more clinical data to determine the most appropriate doses and clarify safety concerns for baricitinib, a once-daily oral medication for the treatment of moderate-to-severe rheumatoid arthritis.

Lilly and Incyte said the timing of resubmitting an application seeking the drug's approval will be based on further discussions with U.S. regulators.

"We are disappointed with this action," said Christi Shaw, president of Lilly Bio-Medicines. "We will continue to work with the FDA to determine a path forward and ultimately bring baricitinib to patients in the U.S."

The FDA's decision is a blow to Lilly and Incyte, and it comes a few months after European Union granted regulatory approval on the drug, whose brand name is Olumiant.

Olumiant is taken as a pill and is seen as a competitor to strong-selling injected rheumatoid arthritis drugs such as AbbVie Inc.'s Humira.

Lilly and Incyte struck a world-wide license and collaboration agreement for baricitinib in 2009. The agreement called for Lilly to handle global commercialization of the drug and to pay royalties on sales once the drug hits the market to Incyte.

The companies submitted the new drug application for baricitinib to the FDA in January 2016.

In January of this year, the FDA gave a three-month extension to allow time to review additional data.

On Friday, Lilly reaffirmed its earnings guidance for 2017. Incyte said it is evaluating the impact of the decision on prior guidance on milestone payments and full-year research-and-development expenses. Incyte expects to provide an update its first-quarter earnings call.

Lilly and Incyte shares, up 14% and 79%, respectively, over the past 12 months, were inactive on Good Friday.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

April 14, 2017 12:35 ET (16:35 GMT)

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