Lilly and Incyte's oral arthritis drug tops Humira in a big Phase III trial

A new pill from Eli Lilly ($LLY) and Incyte ($INCY) beat AbbVie's ($ABBV) injectable Humira, the world's top-selling drug, in a Phase III rheumatoid arthritis trial, setting the stage for an FDA submission.

In a study on more than 1,300 patients, Lilly and Incyte's daily baricitinib met its primary endpoint of significantly improving RA symptoms compared with placebo after 12 weeks. The drug also proved superior to Humira on two common clinical measures of RA, meeting the study's secondary goals, the companies said.

According to Lilly, the latest Phase III success makes baricitinib the first oral treatment to beat standard injected therapies, a class that includes Humira and Amgen's ($AMGN) blockbuster Enbrel. The drug has now cleared four late-stage studies designed to support its approval, and Lilly plans to submit baricitinib to the FDA before the end of this year, the company said.

Invented by Incyte, baricitinib works by blocking JAK1 and JAK2, a pair of kinases that play a role in the inflammatory process. Its developers hope the drug can disrupt the multibillion-dollar market for antibodies that target the protein TNF, providing an easier, more tolerable alternative to regular injections.

But the first approved JAK inhibitor for RA, Pfizer's ($PFE) Xeljanz, hasn't blazed much of a trail. Approved in 2012, Pfizer's drug has underperformed analyst expectations, bringing in just $224 million in the first half of 2015 after launching with peak sales pegged as high $3 billion. Johnson & Johnson ($JNJ) walked away from a similar program last year, terminating a partnership with Astellas worth up to $945 million and handing back the rights to an oral JAK treatment for RA on the eve of Phase III development.

Lilly bought into baricitinib's potential back in 2009, signing a deal that paid Incyte $90 million up front and promised up to $665 million more in exchange for the worldwide rights to the drug. Incyte is also in line for double-digit royalties on eventual sales.

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