March 23, 2015 / 1:55 PM / 5 years ago

UPDATE 2-Pfizer, Lilly to resume study testing pain drug

(Adds details on FDA decision that allows resumed testing)

By Ransdell Pierson

March 23 (Reuters) - Pfizer Inc and Eli Lilly and Co will resume late-stage studies of their drug tanezumab for chronic pain after the U.S. Food and Drug Administration lifted a partial hold on trials of it and similar medicines.

Pfizer expects to receive a $200 million upfront payment from Lilly as a result of the development, the companies said on Monday.

The FDA, in December 2012, restricted clinical studies of tanezumab and other pain drugs that work by blocking a protein called nerve growth factor (NGF), because of nervous-system side effects seen in animal studies conducted by other companies. But the agency allowed trials of the non-narcotic medicine against terminal cancer pain to continue.

Pfizer and Lilly said they will now resume the chronic pain studies because the FDA, after reviewing positive nonclinical data on the nervous system responses to tanezumab, had lifted the partial hold.

If tanezumab is approved, it could have sales of $100 million in 2020, Cowen and Co has forecast, which could grow further as the drug is approved for new pain conditions.

Still, Tanezumab could face competition from anti-NGF drugs being developed by others, including a partnership of Regeneron Pharmaceuticals Inc and Sanofi.

Shares of Pfizer surged 2.9 percent to $35.23 in morning trading Monday. Eli Lilly was up 1.3 percent at $77.10.

Pfizer and Lilly agreed in 2013 to jointly develop and sell tanezumab for several pain-related conditions, with the companies equally sharing development expenses and future sales.

Tanezumab had shown initial promise in relieving pain in the knee and lower back, but Pfizer in 2010 suspended large late-stage trials of the drug for those conditions due to reports that patients’ osteoarthritis had worsened.

The FDA, however, later recommended that the osteoarthritis trials continue if safeguards were put in place and patients did not simultaneously take other nonsteroidal anti-inflammatory drugs.

One of Pfizer’s biggest products is Celebrex, another pain and arthritis drug, which had global sales last year of $2.7 billion. But its sales are expected to plunge this year, following the drug’s loss of U.S. marketing exclusivity in December.

Additional reporting by Natalie Grover in Bangalore; Editing by Bernadette Baum

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