Eli Lilly won regulatory approval for its rheumatoid arthritis drug Friday, nearly 14 months after the FDA rejected the once-daily pill due to safety concerns. But the approval comes with limitations that will likely hamper Lilly’s ambitions to turn the drug into a blockbuster seller.
The regulatory nod covers only the lower of the two doses of baricitinib (Olumiant) that Lilly (NYSE: [[ticker:LLY]]) hoped to bring to the market, which reduces the number of patients eligible for the new rheumatoid arthritis (RA) treatment. The drug’s label carries a black box warning—the FDA’s strictest notification of health risks associated with a drug. Those risks include serious infections and potentially deadly blood clots. And the drug is approved only for patients who have not responded to one or more biological drugs that are currently used to treat RA.
Indianapolis-based Lilly said baricitinib will launch by the end of the month, priced at a more than 60 percent discount to blockbuster AbbVie (NYSE: [[ticker:ABBV]]) RA drug adalimumab (Humira). Adalimumab’s annual cost tops $40,000, according to calculations by the Institute for Clinical and Economic Review, a non-profit group and drug price watchdog.
RA is an autoimmune disorder in which the immune system mistakenly attacks the tissues in the body’s joints, causing swelling and pain. The FDA approved baricitinb as a treatment for patients whose moderate-to-severe RA has not responded to a class of drugs that block a signaling protein called tumor necrosis factor (TNF) that causes inflammation. Adalimumab and other injectable biological drugs in the same class work are called TNF inhibitors.
Baricitinib blocks different proteins, targeting two Janus kinase enzymes that are also associated with inflammation. Lilly hoped its different approach and the easier-to-take pill formulation would offer competitive advantages to adalimumab. The company also hoped to show that its RA drug could outperform the AbbVie drug. In one of four Phase 3 studies testing baricitinib, Lilly pit its drug head-to-head against adalimumab. The Lilly drug beat the AbbVie drug, according to results published last year in the New England Journal of Medicine. But baricitinib only beat adalimumab at the 4 mg dose. That’s the dose that sparked FDA concern.
In clinical trials testing baricitinib, the most common side effects were upper respiratory tract infections, nausea, and herpes simplex. The FDA’s initial rejection of the Lilly drug focused on the risk of deadly blood clots. Patients treated with the 4 mg dose were observed to have higher platelet counts, which could lead to blood clots, FDA staff said. That’s in contrast to other approved JAK inhibitors, which have been found to lower platelet counts. Though the FDA’s assessment of baricitinib could not definitively link the drug to elevated platelet levels, the agency’s staff added that the Lilly drug did not have a safety advantage over adalimumab and other TNF inhibitors.
An independent panel that advises the FDA voted to recommend approval of the Lilly RA drug only at the lower, 2 mg dose, where the blood clot risks were not observed. The agency apparently agreed with the recommendation. The drug is approved to be taken alone, or in combination with methotrexate, an older group of drugs used to treat RA. Patients are advised not to take baricitinib while they’re also taking a biological drug for RA, which could suppress their immune systems.
Because the FDA approval extends only to those patients who have not adequately responded to TNF blocking drugs such as adalimumab, it will be harder for Lilly to take market share from the AbbVie drug, which generated more than $18 billion in 2017 revenue. Baricitinib was originally developed by Wilmington, DE-based Incyte (NASDAQ: [[ticker:INCY]]). In 2009, Lilly licensed rights to develop the drug for inflammatory and autoimmune diseases. Following baricitinib’s approval, Incyte is now eligible for a $100 million milestone payment from its partner.
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