Bristol Myers Squibb Co.
(BMY) yesterday announced the approval of a broader label for its rheumatoid arthritis drug Orencia by the U.S. Food and Drug Administration (FDA).
The agency approved an addition to the label that supports the use of Orencia (abatacept) in patients suffering from moderate to severe rheumatoid arthritis, duration of which is less than or equal to two years. The drug that recorded global sales of $129 million in 2008 is designed to reduce symptoms of rheumatoid arthritis. However, it should not be administered along with tumor necrosis factor (TNF) antagonists and is not recommended for use in tandem with other biologic rheumatoid arthritis therapies.
As a reminder, the drug was initially approved by the FDA in late 2005 and made commercially available in the U.S. in February 2006. At that time its label indicated the usage of the drug for patients with moderate to severe rheumatoid arthritis who did not respond to other treatment alternatives.
The approval of a broader label was based on clinical data from the Abatacept study that showed Orencia was of use to patients with moderate-to-severe rheumatoid arthritis of less than or equal to two years duration. The agency approved the addition of data from the AGREE trial (Abatacept study to Gauge Remission and joint damage progression in methotrexate-naïve patients with Early Erosive rheumatoid arthritis).
Rheumatoid arthritis is a chronic, autoimmune disease characterized by swollen joints, resulting in chronic pain, stiffness, swelling and fatigue. It restricts motion and results in loss of shape and alignment of joints. The indication affects women more than men.
Bristol Myers operates in a highly competitive industry consisting of a large number of pharmaceutical and biotechnology companies. In addition to branded competition, it is facing a large number of industry patent expirations and aggressive generic competition. Specifically, the patent expiration of Bristol-Myers’ lead drug, Plavix, in 2011 is a matter of concern. Additionally, the drug, an antiplatelet blood thinner indicated to reduce the risk of heart attack in patients with atherosclerosis (the build-up of plaque and hardening of the arteries), will face new competition from Eli Lilly & Co.’s (LLY) recently approved Effient.
However, the company is taking several steps like the recently announced $1 billion extension in cost cuts in 2012-2013, the extension of the Abilify agreement with Otsuka, and the acquisition of Medarex (MEDX) to prepare for the loss of exclusivity of Plavix. We have an Outperform rating on the stock.
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