Incyte: Best in Class?

02/23/2017 9:00 am EST


John McCamant

Editor, Medical Technology Stock Letter

Incyte (INCY) and their partner Lilly announced that the European Commission has granted marketing authorisation for Olumiant (baricitinib) in Europe for certain adults for the treatment of moderate-to-severe active rheumatoid arthritis (RA), explains John McCamant, editor The Medical Technology Stock Letter.

This is the first regulatory approval around the world for Olumiant – the first JAK inhibitor approved to treat RA in the European Union – which may be used as monotherapy or in combination with methotrexate.

As a result of the approval of Olumiant by the European Commission, Incyte will get $65 million from Lilly, plus >30% royalties.

This is significant positive for INCY and increases our confidence that the FDA will also approve Bari/Olumiant in the second quarter after the recent domestic delay.

Detailed results from RA-BEAM – a pivotal Phase III trial of baricitinib in the treatment of moderate-to-severe rheumatoid arthritis (RA) – were published in the New England Journal of Medicine.

This is very powerful data showing that a pill is significantly better when directly compared to an injectable.

Humira is a true blockbuster with $10 billion+ in sales, and the prospects for Bari, trade named Olumiant, in our view, are equal or better than Humira as the new oral RA drug has “Best in Class” potential.

INCY continues to have an excellent 2017 with the Bari/Olumiant approval in the EU and the superiority data over Humira also being published in the gold standard of medical journals, the NEJOM.

The second quarter will feature two significant catalysts for the company as FDA approval for Bari is expected and the IDO/PD-1 combo data at ASCO should be one of the conference’s highlights.

INCY also remains a prime M&A target as Jakafi, bari/Olumiant, and their huge oncology pipeline make then one of the scarcest assets in the biotech universe.

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