FDA Panel on Lilly’s Arthritis Drug Is the Next Big Test for Biotech Investors

Biopharma investors face another test next week as a highly anticipated U.S. Food and Drug Administration advisory panel is set to spark moves in shares of Eli Lilly & Co., Incyte Corp. and other companies developing medicines for rheumatoid arthritis.

Analysts are cautious after the FDA last year rejected Lilly and Incyte’s baricitinib and asked for more data about potential safety concerns and optimal dosing. Credit Suisse estimates that a positive recommendation for both doses of baricitinib at Monday’s meeting could boost Lilly shares by 3 percent to 5 percent and lift Incyte by 10 percent to 15 percent. The worst-case scenario -- if neither dose wins panel backing -- might send Lilly lower by 5 percent and Incyte by 13 percent, according to the bank.