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FDA quashes blockbuster dreams at Eli Lilly and Incyte, offering a severely limited approval for Olumiant

Visions of blockbuster sales for the rheumatoid arthritis drug baricitinib were quashed by the FDA’s approval today. Regulators came through with an OK for the low, 2 mg dose of the drug, to be marketed as Olumiant, spurning the 4 mg dose that they had been seeking and limiting the patient population to TNF resistant cases.

The regulatory OK also comes with a black box warning for the drug’s side effects, which includes a startling signal on thromboembolism.

Once tapped as a top franchise player for Eli Lilly $LLY and its partners at Incyte $INCY, the FDA hauled the drug back from limbo after the arrival of Scott Gottlieb as commissioner at the FDA. The agency had initially rejected the drug, demanding a new study. But then regulators abruptly reversed themselves — without explanation — and let the marketing application proceed.

Despite the commercial setback, Lilly plans to come out swinging for as much market share as it can grab. The pharma giant says it will offer Olumiant at a 60% discount to the price of the leading TNF inhibitor.

“We are pleased to provide RA patients in the U.S. an effective treatment option with Olumiant, as people with RA who have had an inadequate response to TNF inhibitors are generally considered to be some of the most difficult to treat RA patients,” said Christi Shaw, president, Lilly Bio-Medicines.

Today’s decision follows an expert panel vote which weighed heavily against the 4 mg dose after agency experts outlined their concerns about the safety profile. They also gave a thumbs up to the 2 mg dose, which is likely to be far less successful and not nearly as commercially viable as the 4 mg. Some analysts were also shaking their heads today at the restriction to patients who were resistant to TNF inhibitors.

“The Olumiant approval was a bit worse than the panel’s recommendation,” Morgan Stanley analyst David Risinger said, according to a report from Reuters.

Eliminating the 4 mg dose, notes Leerink’s Geoffrey Porges, gives Pfizer’s Xeljanz a big edge with 6 years of safety data. He adds:

Ultimately this label means that Olumiant is likely to be restricted to salvage therapy only, and expect forecasts for the product to decline even further (Lilly consensus remains >$1bn). This doesn’t mean that AbbVie’s upadacitinib and Gilead’s filgotinib will automatically get this labelling. In fact, it is likely that one or both of them avoids the thrombosis risk and gets multiple doses approved with superior efficacy. We believe that the best of the JAKs is still filgotinib, until proven otherwise, but the class as a whole is likely to be saddled with much of the language in today’s Olumiant label.

This marks the second big setback for Incyte this year, after its IDO program foundered and scuttled a whole lineup of combination studies with major industry players.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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