Pending Jak verdicts take on great significance

More evidence emerged yesterday to suggest that an era of regulatory permissiveness is ending in the US: the FDA seems to be taking a closer look at the safety of the Jak inhibitor class. A delay to new approval decisions for Abbvie's Rinvoq sliced $10bn, or 5%, from the company's market cap; sellside revenue forecasts show that Abbvie potentially has the most to lose here, should toxicity concerns prompt the regulator to try to restrict these drugs' use. With several other regulatory decisions on the Jak class looming, the extent of the FDA's worries should soon become clear. Both of Pfizer's Jaks are awaiting verdicts: a line extension into ankylosing spondylitis for the older Xeljanz and a much more important first approval for the follow-on project abrocitinib in atopic dermatitis. The latter is a disease in which serious safety concerns will not be tolerated, as it is considered less severe than Jak settings like RA. Lilly too has an atopic dermatitis decision pending for Olumiant. Investors should also be considering the broader message: Leerink analysts believe that any phase III project with known controversies should be considered at heightened risk of delay, a complete response letter or restricted labelling.