Pharma

EU recommendation triggers $40M milestone payment for bone marrow disease drug

A European Union regulatory committee’s recommendation to approve a drug developed by Incyte (NASDAQ:INCY) to treat the bone marrow disease myelofibrosis has triggered a $40 million milestone payment from Novartis (NYSE:NVS). The recommendation was made for Jakavi (ruxolitinib) by the European Medicines Agency’ Committee for Medicinal Products for Human Use. The EU regulatory body usually […]

A European Union regulatory committee’s recommendation to approve a drug developed by Incyte (NASDAQ:INCY) to treat the bone marrow disease myelofibrosis has triggered a $40 million milestone payment from Novartis (NYSE:NVS).

The recommendation was made for Jakavi (ruxolitinib) by the European Medicines Agency’ Committee for Medicinal Products for Human Use. The EU regulatory body usually follows the committee’s guidance, a company statement said.

Delaware-based Incyte is to get an additional $60 million from Novartis if the pharmaceutical company gets reimbursement and pricing approval for the drug in specific EU countries, the statement said.

Known as Jakafi in the U.S., the drug was approved by the U.S. Food and Drug Administration in November last year.

Up to 18,000 people in the U.S. have myelofibrosis, a condition in which bone marrow is replaced with scar or fibrous tissue that affects the production of new blood cells. It is an underserved need and has orphan drug status because it affects less than 200,000 people.

Ruxolitinib was the first in a class of drugs known as JAK inhibitors to receive FDA approval. JAK inhibitors are being used in clinical trials to treat cancer and inflammatory diseases. The FDA’s move could clear the way for other JAK inhibitors to get the green light, particularly for rheumatoid arthritis.

Eli Lilly is advancing Incyte’s second JAK1 and JAK2 inhibitor rheumatoid arthritis as well as another indication for moderate to severe psoriasis, Incyte CEO Paul Friedman told attendees at the JP Morgan investor conference earlier this year.

Incyte originated in Palo Alto, California but relocated to Delaware in 2004 where it employed a team from DuPont Pharmaceuticals following Bristol Myers-Squibb’s $7.8 billion acquisition of the division in 2001.

The Delaware company entered into the worldwide licensing agreement with Novartis in 2009, which gave the Big Pharma company exclusive rights to development and potential commercialization for all hematology and oncology indications outside the U.S. Incyte retains the U.S. rights. The deal involved an initial payment of $210 million, but if the milestones are met, it could be worth more than $1 billion.