Lilly's Olumiant Gets Breakthrough Therapy Tag For Hair Loss

Eli Lilly (NYSE:LLY) announced that the FDA has granted Breakthrough Therapy designation to its oral JAK inhibitor, Olumiant (baricitinib) as a treatment for alopecia areata (“AA”), an autoimmune disorder that may lead to unpredictable hair loss from the scalp, face and other areas of the body. The drug is currently in late-stage development as a treatment for AA.

FDA’s Breakthrough Therapy designation is granted to speed up development and review of drugs that target serious or life-threatening conditions. The designation also indicates that Olumiant can be eligible for accelerated approval and priority review depending upon certain criteria. The designation also reinforces the potential of Olumiant to be the first FDA-approved treatment for AA.

The FDA granted the designation based on positive data from the phase II portion of the phase II/III study – BRAVE-AA1. The company started evaluating Olumiant in the phase III portion of the BRAVE-AA1 study based on interim phase II result. It is also evaluating the drug in a separate phase III study — BRAVE-AA2 — in a similar patient population.

Please note that Olumiant is already approved for treating moderately-to-severely active rheumatoid arthritis. Successful development as a treatment for AA patients will further boost its prospect.

However, competition may rise going forward as Pfizer (NYSE:PFE) is also developing its oral JAK inhibitor for treating AA in a pivotal study.

So far this year, shares of Lilly have declined 1.6% compared with the industry's decrease of 11%.

Apart from AA, the company is also focused on expanding the label of Olumiant to include other auto-immune indications. The drug is under review in Europe and Japan for atopic dermatitis, a type of eczema, and a regulatory application will be filed seeking approval for the same in the United States later in 2020. A phase III study is also evaluating the drug in patients with systemic lupus erythematosus.

Baricitinib is being co-developed by Lilly and Incyte (NASDAQ:INCY) under an exclusive global license and collaboration agreement inked in December 2009.

Eli Lilly and Company Price

Eli Lilly and Company Price

Eli Lilly and Company price | Eli Lilly and Company Quote

Zacks Rank & Stock to Consider

Lilly currently carries a Zacks Rank #3 (Hold).

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is better-ranked stock, sporting a Zacks Rank #1 (Strong Buy). Regeneron’s earnings estimates for 2020 have gone up from $28.31 to $29.18 and from $28.93 to $30.97 for 2021 over the past 30 days. Regeneron’s stock has returned 17.4% so far in 2020

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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