Incyte Corporation (NASDAQ:INCY) and Eli Lilly and Co (NYSE:LLY) announced today that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) has issued a positive opinion, recommending the approval of baricitinib – which if approved would be marketed as Olumiant. Baricitinib would be indicated for the treatment of moderate to severe active rheumatoid arthritis in adult patients who have responded inadequately to, or who are intolerant to one or more disease modifying anti rheumatic drugs (DMARDs). Baricitinib may be used as monotherapy or in combination with methotrexate.

This is the first regulatory step towards the approval of baricitinib and the CHMP positive opinion is now referred for final action to the European Commission, which grants approval in the EU. The Commission usually makes a decision on marketing authorization within two to three months of the CHMP issuing its recommendation.

“Rheumatoid arthritis is a debilitating disease and can have a devastating impact on a person’s quality of life,” said Andrew Hotchkiss, president of Lilly’s European and Canadian operations. “There is no cure for rheumatoid arthritis and although improvements have been seen in the long term outcomes for patients, not all people reach low disease activity or remission. Baricitinib is the first JAK inhibitor to receive a positive CHMP opinion for the treatment of RA in the EU. It is an important milestone for people living with rheumatoid arthritis and Lilly is committed to improving outcomes for people living with this chronic condition.”

The CHMP positive opinion was based on five phase 3 clinical trials of baricitinib in adult patients with moderate to severe active rheumatoid arthritis (RA-BEGINRA-BEAMRA-BUILDRA-BEACON and RA-BEYOND). A wide range of patients participated in the clinical trial program, including those who are inadequate responders to methotrexate, inadequate responders to conventional synthetic disease modifying anti rheumatic drugs (csDMARDs), or inadequate responders to biological disease modifying anti rheumatic drugs (bDMARDs) including TNF inhibitors.

“The positive opinion for baricitinib paves the way for adults with rheumatoid arthritis to be offered a new treatment option,” said Steven Stein, M.D., chief medical officer, Incyte Corporation. “Incyte is proud to have partnered with Lilly on the research and development of this promising medicine, and we are pleased that the CHMP positive opinion brings us one step closer to providing baricitinib to the many people living with this chronic condition.”

The $65 million milestone payment that was to be paid by Lilly to Incyte upon positive CHMP opinion will now be triggered by the granting of marketing authorization by the EU Commission per a recent amendment to the parties’ Agreement. (Original Source)

Shares of Incyte closed yesterday at $104.58. INCY has a 1-year high of $115.99 and a 1-year low of $55. The stock’s 50-day moving average is $99.87 and its 200-day moving average is $88.40.

On the ratings front, Incyte has been the subject of a number of recent research reports. In a report issued on December 5, RBC analyst Simos Simeonidis maintained a Buy rating on INCY. Separately, on the same day, BMO’s Ian Somaiya reiterated a Buy rating on the stock and has a price target of $126.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Simos Simeonidis and Ian Somaiya have a yearly average loss of -27.0% and a return of 10.1% respectively. Simeonidis has a success rate of 28% and is ranked #4178 out of 4279 analysts, while Somaiya has a success rate of 50% and is ranked #406.

Overall, 12 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $120.50 which is 15.2% above where the stock closed yesterday.

Incyte Corp. is a biopharmaceutical company, which focuses on the discovery, development, development, formulation, manufacturing and commercialization of proprietary therapeutics to treat serious unmet medical needs, primarily in oncology. Its product, Jakafi, a JAK1 and JAK2 inhibitor, is currently approved in the U.S. for the treatment of intermediate or high-risk myelofibrosis and is in development as a potential treatment for other cancers.