Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



A Blockbuster in the Making

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The Food and Drug Administration approval of Pfizer's (NYSE: PFE  ) rheumatoid arthritis drug tofacitinib was mostly expected. The clinical trial data was strong, and the drug received a solid 8-2 recommendation from the FDA advisory committee.

The big question was where in the progression of the disease the FDA would place tofacitinib, which is now known by its branded name Xeljanz. As confusing as the name is -- the X is pronounced like a Z and the Z is pronounced like an S -- the label for the drug is pretty straightforward.

Xeljanz is approved for use after methotrexate, typically one of the first drugs that rheumatoid arthritis patients are prescribed. The drug can be used by itself or in combination with methotrexate. That's about the best label Pfizer could have hoped for. Given doctors' extensive experience with methotrexate, Xeljanz wasn't going to get used before doctors tried methotrexate, even if it was approved that early. And the monotherapy indication will allow Pfizer to capture patients that can't tolerate methotrexate.

There was a second, higher dose that Pfizer had applied for, but the FDA decided the risk profile of the higher dose didn't warrant approval without further data. Most patients would start on the lower dose and move to the higher one if it wasn't working, so the lack of a higher dose won't affect Pfizer's ability to capture the patients, although having the higher dose approved might help keep the patients longer before they try something else. It appears that the FDA is open to approving the higher dose later if Pfizer can come up with additional data to support its use.

Now the question is: Will doctors actually use Xeljanz that early in the disease progression? Doctors are pretty comfortable with the TNF inhibitors -- Abbott Labs' (NYSE: ABT  ) Humira, Pfizer and Amgen's (Nasdaq: AMGN  ) Enbrel, and Remicade sold by Merck (NYSE: MRK  ) and Johnson & Johnson (NYSE: JNJ  ) -- as witnessed by their multibillion-dollar sales. Xeljanz has the distinct advantage that it can be taken orally, while the TNF inhibitors need to be injected or infused. But Pfizer needs to get doctors comfortable with the new class of drug, which will likely take some time.

That's time Pfizer might not have. Two drugs in the same class -- one from Incyte (Nasdaq: INCY  ) and Eli Lilly (NYSE: LLY  ) , and another from Rigel (Nasdaq: RIGL  ) and AstraZeneca (NYSE: AZN  ) -- are working their way through the clinical development process.

Dividends can help investors ride the volatile waves of drug development. Check out the Fool's new free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" where you'll find one drug developer and eight other promising companies. Just click here to get your free copy.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2100552, ~/Articles/ArticleHandler.aspx, 10/22/2016 3:44:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
PFE $32.18 Down -0.36 -1.11%
Pfizer CAPS Rating: ****
ABT $40.50 Down -0.24 -0.59%
Abbott Laboratorie… CAPS Rating: *****
AMGN $158.51 Down -2.99 -1.85%
Amgen CAPS Rating: ****
AZN $30.72 Down -0.28 -0.90%
AstraZeneca CAPS Rating: ****
INCY $87.72 Down -0.77 -0.87%
Incyte CAPS Rating: **
JNJ $113.44 Down -1.43 -1.24%
Johnson and Johnso… CAPS Rating: ****
LLY $78.25 Down -0.49 -0.62%
Eli Lilly and Co. CAPS Rating: ***