U.S. health regulators on Friday approved a Celgene Corp drug to treat psoriatic arthritis, a type of arthritis associated with the skin disease psoriasis that causes joint pain, stiffness and swelling.
The drug, known chemically as apremilast, will be sold under the brand name Otezla. It is also being studied by the U.S. biotechnology company as a treatment for psoriasis and ankylosing spondylitis.
Celgene has projected Otezla sales of $1.5 billion to $2 billion by 2017.
"We're cautious about achievability of management's guidance for this product," Sanford Bernstein analyst Geoffrey Porges said.
"It's a highly competitive category and there are a lot of drugs with greater efficacy," added Porges, who is forecasting annual sales reaching $800 million by 2019.
"Relief of pain and inflammation and improving physical function are important treatment goals for patients with active psoriatic arthritis," Curtis Rosebraugh, director of the Food and Drug Administration Office of Drug Evaluation II, said in a statement.
"Otezla provides a new treatment option for patients suffering from this disease," he added.
The FDA is expected to make a decision by September on Otezla for psoriasis, a much larger market than psoriatic arthritis.
"We think that the psoriatic arthritis market will be a solid fit for Otezla given the dissatisfaction with current drugs," Cantor Fitzgerald analyst Mara Goldstein said in a research note. "We think the drug has a good chance of widespread use."
Current treatments for the condition include corticosteroids and a class of injected biotech medicines known as tumor necrosis factor (TNF) blockers, such as AbbVie Inc's big selling Humira and Remicade from Johnson & Johnson. The TNF blockers are highly effective but have more potential serious side effects.
As a condition of approval, the FDA is requiring a registry of pregnant women who use the drug to assess the risks to pregnant women related to Otezla exposure, the agency said.
It also said Otezla patients should be monitored for potentially significant weight loss. If unexplained or clinically significant weight loss occurs, the weight loss should be evaluated and discontinuation of treatment should be considered, the FDA said.
Celgene shares, which had been off as much as 4.6 percent amid a wider biotech sell-off on Friday, recovered somewhat and were down 3.8 percent at $144.29 in afternoon trading on Nasdaq.
(Reporting by Bill Berkrot; Editing by Tom Brown and Marguerita Choy)