Johnson & Johnson (JNJ) recently received a complete response letter (CRL) from the US Food and Drug Administration (FDA) for a supplemental Biologics License Application (sBLA). The company was looking to expand Simponi’s (golimumab) label in the treatment of active psoriatic arthritis.
Johnson & Johnson had filed the sBLA in Nov 2010. The sBLA included data from a phase III study that evaluated the effect of Simponi in inhibiting the progression of structural damage and maintaining improvement in signs and symptoms and physical function in the treatment of patients with active psoriatic arthritis. Johnson & Johnson intends to meet with the FDA to determine the steps needed to gain approval.
We note that this is the second time this year that Johnson & Johnson has faced failure in its plans to expand Simponi’s label. In July 2011, the company had received a complete response letter from the FDA for Simponi.
Johnson & Johnson was looking to expand Simponi’s label to include inhibiting the progression of structural damage, inducing major clinical response (MCR) and maintenance of reduction of signs and symptoms and maintenance of improved physical function in the treatment of moderately to severely active RA.
Simponi, a once-monthly anti-tumor necrosis factor (TNF)-alpha therapy, first gained approval in the US, Europe and Canada in 2009 for the treatment of moderately to severely active rheumatoid arthritis (RA) in combination with methotrexate, active psoriatic arthritis and active ankylosing spondylitis.
Earlier this year, Simponi gained EU approval for use in combination with methotrexate for the treatment of adults with severe, active and progressive RA not previously treated with methotrexate, and for the reduction in the rate of progression of joint damage as measured by X-ray in patients with RA. This was followed by approval in Japan for the treatment of RA including the prevention of articular structural damage in patients who showed inadequate response to conventional therapies.
While Johnson & Johnson markets Simponi in the US, Canada, Central and South America, the Middle East, Africa and Asia Pacific, Mitsubishi Tanabe Pharma Corporation has distribution rights in Japan, Indonesia, and Taiwan. Johnson & Johnson has retained co-marketing rights in these countries.
Meanwhile, Merck & Co, Inc. (MRK) has distribution rights in Europe, Russia and Turkey. Simponi sales came in at $67 million in the second quarter of 2011, up 13.6%.
We currently have a Neutral recommendation on Johnson & Johnson, which carries a Zacks #3 Rank (short-term Hold rating). Even though Johnson & Johnson has been facing challenges in the form of OTC product recalls, pricing austerity in the EU and generic competition, we believe that the company’s diversified business model, lack of cyclicality and strong financial position will help it in tough situations.
