Pfizer Falls as Arthritis Drug Is Rejected in Europe

Pfizer Inc., the world’s biggest drugmaker, said its new arthritis pill was rejected by European regulators as not effective enough against the condition.

Pfizer fell less than 1 percent to $30.09 at the close in New York. The New York-based drugmaker said in a statement yesterday that the European Medicines Agency’s Committee for Medicinal Products for Human Use had recommended against approving the sale of its drug, Xeljanz. The pill gained marketing clearance in the U.S. in November.

“Pfizer intends to appeal this opinion and immediately seek a re-examination of the opinion by the CHMP,” the company said. The committee decided the drug didn’t show a favorable risk versus benefit profile, Pfizer said.

Xeljanz inhibits part of the immune system that can cause rheumatoid arthritis. The first of a new type of therapies for the disease, the pill is one of Pfizer’s top new products. If approved in Europe, it may generate sales of $510 million there by 2018, according to Mark Schoenebaum, an analyst with International Strategy & Investment Group in New York. The medicine would compete with AbbVie Inc.’s Humira and Johnson & Johnson’s Remicade.

“Pfizer will appeal, but history teaches that odds are against them,” Schoenebaum said in a note to clients. More data might help Pfizer with the appeal, which may take six months, Schoenebaum said.

The European regulators said the drug didn’t show enough effectiveness in reducing the disease’s activity in the body or slowing damage to joints, even though it improved symptoms, according to Pfizer’s statement. There were also concerns about side effects including tumors and infections.

The European Commission usually adopts the committee’s advice, though it isn’t required to do so.

Pfizer shares have gained 30 percent in the past 12 months.

(Updates with closing share price in second paragraph.)
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