Xeljanz train derails in Europe

The concerns about long-term patient exposure to Pfizer’s rheumatoid arthritis pill Xeljanz have come home to roost in Europe. The European Medicines Agency’s human drugs committee recommended against the drug's approval, saying that Pfizer had not demonstrated that the JAK-3 inhibitor was effective enough to justify the increased risk of cancer and serious infections.

The decision was surprising enough to send shares of the mighty New York group tumbling 4% at the bell today, although this had recovered to a 2% loss at $29.67 in mid-morning trading. While some analysts were viewing the decision as a delay rather than a rejection, they estimated that half a billion dollars in sales is now at risk.

Unpleasant surprise

Xeljanz’s progress through the FDA made it appear unstoppable, yet the agency's European counterpart has been cautious enough to bring the pill to a halt. Some signs had already pointed toward caution: the US panel called to review the drug said Xeljanz, known generically as tofacitinib, had failed to demonstrate prevention of joint deterioration consistently when compared with placebo (Pfizer’s JAK inhibitor gets backing for broad RA label, May 10, 2012).

Meanwhile, the safety concerns were real enough for the FDA to impose a black box warning over infections – a common side effect with drugs designed to suppress an immune system attacking its host – and cancer, particularly haematological disease. The risk of cancer rises with duration of treatment; pivotal trials were of two months' duration or less while RA drugs are taken chronically, and there were lingering concerns about the long-term effects (ACR– Pfizer's tofacitinib heads to FDA as role in RA debated, November 8, 2011).

As it was, the agent was recommended in the US for second-line use – for patients who have failed on methotrexate – an indication that could still be upgraded if long-term studies confirmed its safety.

European Union regulators had been reviewing the drug for use after patients failed on two disease-modifying anti-rheumatic drugs (DMARDs), a more limited indication. Even with this restriction, the EU panel could not be certain that the drug's benefit in improving joint soreness or tenderness, endpoints on which Xeljanz had proved itself clearly better than placebo, outweighed the infection and tumour risk.

Pfizer said it would appeal against the EMA’s recommendation, but it would be unusual for the decision to be overturned. An appeal procedure takes about three months.

Inconsistency the hobgoblin

The EMA recommendation came in spite of Pfizer’s submission of one-year interim data from the Oral Start trial, which included positive results from a primary endpoint of joint deterioration measured by radiological exams. An earlier trial, Oral Scan, had failed to demonstrate any significant effect on this endpoint at the US-approved 5mg twice-daily dosage.

The likely problem is both in the inconsistency of results and in the fact that neither trial included the population for which Pfizer was seeking EU approval: those who had failed on two DMARDs. To address that particular concern, a new study could be necessary if there is not sufficient subgroup analysis, or if the agency finds such analysis unacceptable.

It is also possible that Pfizer could re-file its application to seek an indication in the Oral Start population – patients who have yet to be treated with methotrexate – but then that would make the European regulator’s safety concerns even more pronounced.

As the news broke, analysts removed some or all of their European sales from forecasts. EvaluatePharma forecasts $2.58bn in worldwide sales in 2018, although about half of this, $1.35bn, is ascribed to the US. At the end of March Xeljanz received approval in Japan, where Pfizer has partnered with Takeda.

Analysts from Bernstein forecast European sales of $518m in 2020, while ISI Group estimated $510m by 2018. Leerink Swann put 2020 EU revenue at $800-$900m, with at-risk sales of $300-$350m.

In making the at-risk estimate, Leerink Swann analyst Seamus Fernandez described a “worst-case scenario” as a two to three-year delay, although this does not account for the possibility that Xeljanz might never win EU approval if it is unable to address the safety and efficacy concerns.

The stock market’s reaction suggests that the news is slightly negative for Pfizer, but for the sector at large it made what was already a bad week look a little worse (Calling the top? Ever-rising valuations spark biotech worries, April 25, 2013). It might not take many more knocks to sentiment to make exuberant biotech investors revisit their valuations.

To contact the writer of this story email Jonathan Gardner in London at JonathanG@EPVantage.com or follow @JonEPVantage on Twitter

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