Lilly rolls toward EU approval with a potential psoriasis blockbuster

Eli Lilly ($LLY) is moving toward European approval for its injectable psoriasis therapy, hoping to challenge Novartis ($NVS) among a pack of companies on the way to the market.

Lilly's treatment, ixekizumab, works by blocking a cytokine called interleukin-17A, tamping down the inflammation at the heart of many autoimmune diseases. The European Medicines Agency adopted a positive opinion of the therapy, recommending it for approval based on Phase III results in which ixekizumab beat out placebo and Amgen's ($AMGN) blockbuster Enbrel in clearing up plaque psoriasis.

The EMA generally grants recommended approvals within three months.

The nod positions Lilly to become the second company to launch an IL-17A treatment in Europe, following Novartis' Cosentyx. Novartis' therapy, which won FDA approval last year, is cleared in Europe to treat psoriasis, psoriatic arthritis and ankylosing spondylitis.

Lilly is expecting to win U.S. approval in psoriasis in the first half of this year, with a decision on psoriatic arthritis to follow.

Analysts figure ixekizumab could bring in more than $1 billion in peak sales if Lilly can win approvals in both indications. But the interleukin antibody field is poised to get crowded, as Merck ($MRK) and Johnson & Johnson ($JNJ) work through late-stage trials with similar therapies, and Valeant Pharmaceuticals ($VRX) pushes forward with an IL-17A treatment salvaged from AstraZeneca ($AZN).

Lilly's proposed brand name for ixekizumab is Taltz.

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