European regulators declined to approve marketing of Pfizer Inc's new rheumatoid arthritis treatment Xeljanz, citing the risks of the drug compared with its potential benefit, the company said on Thursday.
Pfizer said it plans to appeal and "immediately seek a re-examination of the opinion" by the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP).
Shares of Pfizer, which rose 1 percent to close at $30.26 on the New York Stock Exchange, were down 2.7 percent at $29.45 after hours.
The rejection will cut about 3 percent from future earnings per share estimates for the drugmaker, said ISI Group analyst Mark Schoenebaum in a note to investors. He also said "history teaches that the odds are against them," in terms of the company's planned appeal.
Pfizer said in a statement that the committee considered that treatment with Xeljanz improved the signs and symptoms of rheumatoid arthritis and the physical function of patients but did not believe that a consistent reduction in disease activity and structural damage to joints had been sufficiently demonstrated.
The CHMP also raised questions about side effects including serious infections, gastrointestinal perforations and malignancies observed in trials of the pill.
Xeljanz is approved in the United States, Japan and Russia for the treatment of adults with moderate-to-severe active rheumatoid arthritis.
As a twice-daily pill, analysts have said, Xeljanz could prove more attractive to some patients than current drugs such as AbbVie Inc's $8 billion-a-year Humira, which is given by injection every other week.
Pfizer's drug works by blocking molecules called Janus kinases, which are linked to joint inflammation.
Rheumatoid arthritis and related diseases have been one of the most lucrative segments for drugmakers, with more than $20 billion in annual sales.
The disease is an autoimmune disorder in which the body's own immune system mistakenly attacks healthy tissue, causing inflammation and pain in the joints.
(Reporting by Deena Beasley; Editing by Marguerita Choy and Steve Orlofsky)