Translating successful phase 2 results into a positive phase 3 trial can require a bit of luck, especially for a disease such as rheumatoid arthritis where the outcomes are somewhat subjective.

Take Pfizer (NYSE: PFE)'s oral rheumatoid arthritis drug, tasocitinib, where 26.7% of the patients taking placebo reported a 20% improvement in their symptoms. That's a huge baseline to jump over, but tasocitinib did it without much problem. In its first phase 3 trial, 59.8% of patients reported 20% improvement of their symptoms, while the higher dose helped 65.7% of patients to report the same.

Pfizer is in a race with Rigel Pharmaceuticals (Nasdaq: RIGL) and Incyte (Nasdaq: INCY) to develop an oral medication to treat rheumatoid arthritis. Of course, there's likely room for all three if they can all pass their phase 3 trials.

The current market is dominated by a trio of multi-billion drugs: Humira from Abbott Labs (NYSE: ABT), Remicade from Johnson & Johnson and Merck (NYSE: MRK), and Enbrel from Amgen (Nasdaq: AMGN) and Pfizer. All three have to be injected or infused, so the market is wide open for an oral medication.

Pfizer towering over tiny Rigel and Incyte may not be much of an advantage, since both drugmakers have partnered out their drugs to large pharma. AstraZeneca licensed Rigel's R788 and Eli Lilly (NYSE: LLY) has dibs on Incyte's INCB28050.

Pfizer is in the lead, but being first isn't nearly as important as being best. We won't know the full scope of the latter until Pfizer releases more phase 3 data -- four studies are expected to be completed in the first half of next year -- and the competitors begin to release their phase 3 data.

Investors can still breathe a sigh of relief that the drug worked in a larger phase 3 trial. The risk of failure isn't completely mitigated, but it's gone down substantially.

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