Eli Lilly and Company, along with its partner Incyte, have seen a drop in the share prices after the FDA rejects its drug to treat rheumatoid arthritis (RA) — baricitinib.
Stock drop
Shares of Eli Lilly closed at more than 4% lower after the rejection announcement and for Incyte this drop was nearly 11%. It was believed that the treatment would have generated over a billion dollars in sales by the year 2020.
In its response letter concerning baricitinib, the FDA stated that it was unable to approve the application in its current form and indicated that clinical data are needed to determine the most appropriate doses. Moreover, the FDA stated that additional data are required to further characterise safety concerns across treatment arms.
“We are disappointed with this action,” stated Christi Shaw, president of Lilly Bio-medicines. “We remain confident in the benefit/risk of baricitinib as a new treatment option for adults with moderate-to-severe RA. We will continue to work with the FDA to determine a path forward and ultimately bring baricitinib to patients in the US.
Financial guidance for 2017 and mid-term guidance for the remainder of the decade is being reaffirmed for Eli Lilly. Incyte is evaluating the impact of the complete response on its previously-issued milestone and R&D expense guidance for the year.