Incyte Corp. scored two firsts with Jakafi, its first product out the pipeline: It's the first JAK inhibitor approved by the FDA. And it's the first drug approved to treat the bone marrow disease myelofibrosis (MF).

The approval came in well ahead of the Dec. 3 PDUFA date and triggered a $10 million milestone from Incyte's European partner, Novartis AG, raising Incyte's year-end revenue guidance to $92 million – up from $82 million.

In making Jakafi (ruxolitinib) the first approved myelofibrosis treatment, the FDA broadened the label beyond the scope of the pivotal trial to include intermediate-1 patients, as well as the intermediate-2 and high-risk MF patients evaluated in the trials. The label has no boxed warnings, contraindications or demands for a risk evaluation and mitigation strategy.

'It's incredibly good news,' Incyte President and CEO Paul Friedman said in a conference call Wednesday, barely an hour after the FDA announced it had approved the drug.

The quick approval is in keeping with Jakafi's rapid jaunt from discovery to approval. Incyte initiated discovery in mid-2004 and dosed its first patient in a clinical trial in 2007. That's 'quite an achievement,' Friedman said.

Although the folks at the Wilmington, Del.-based Incyte seemed a bit breathless by the FDA's announcement, they have their strategy lined up to launch the orphan drug at a wholesale price of $7,000 for a 30-day supply of the tablets, regardless of dosage.

The price is based on the drug's benefits and on the pricing of other treatments for chronic cancer conditions, Patricia Andrews, Incyte's chief commercial officer, said during the call.

At $85,000 a year, Jakafi comes in considerably above the anticipated price range. Early guidance had been for $40,000 to $60,000 a year, according to J.P. Morgan analyst Cory Kasimov.

Incyte may have scored big on the development and approval aspects of Jakafi, but it remains to be seen how it performs on the launch.

'While we see good long-term sales potential for Jakafi, [Incyte] now becomes the next 'launch story' in biotech, which may represent some risk given recent market performance of companies launching new drugs,' Kasimov said.

Jakafi, to be distributed through five specialty pharmacies, will be available sometime next week, Andrews said. The company has an education program and a sales force of 60 representatives ready to meet with hematologists and oncologists.

One of the biggest hurdles facing the sales reps is that many physicians treat only a handful of myelofibrosis patients with varying stages of the disease, so they will need to be educated about the use of the new drug.

Treating myelofibrosis can be tricky. The diagnostic process involves multiple steps, and 10 different mutations can be involved, said Srdan Verstovsek, associate professor in the leukemia department at the University of Texas MD Anderson Cancer Center.

Physicians need to understand that even if a JAK mutation is not involved in a specific patient's disease, Jakafi can help control it, he added.

While physicians will need to be educated about Jakafi, Verstovsek told BioWorld Today the benefits of the drug will drive its adoption.

Once physicians have one patient who is successfully treated, they will prescribe the drug again

That's what Incyte is counting on, Andrews said, noting that the uptake of Jakafi will be gradual. However, she expects it to become the standard of care for the disease.

'We believe we can fundamentally change the way myelofibrosis is treated today,' she said.

Competition a Few Years Down the Road

While Jakafi has the space to itself right now, it could face competition in a few years. YM BioSciences Inc., of Mississauga, Ontario, is developing its own JAK1/JAK2 inhibitor, CYT387, which is in a Phase II trial for myelofibrosis. (See BioWorld Today, June 7, 2011.)

Incyte's 'experience should aid YM in designing its pivotal registration path forward for CYT387, which has, to date, shown clinically meaningful spleen reduction, anemia responses and achieved transfusion independence,' Roth Capital Partners analyst Joseph Pantginis said.

Meanwhile, S*Bio Pte Ltd., of Singapore, plans to initiate a Phase III trial of its JAK2 inhibitor pacritinib in myelofibrosis during the first half of next year. Pacritinib is being developed to treat a subset not addressed by Jakafi, Tamar Howson, interim CEO of S*Bio, told BioWorld Today.

Although myelofibrosis is a small therapeutic space, there is a need for multiple options, she said.

Howson hopes Jakafi's approval will build excitement and awareness about myelofibrosis, which would help her company in its ongoing search for a partner.

All three companies will be presenting data at the American Society of Hematology meeting next month.

Despite the competition waiting in the wings, analysts expect Jakafi to be profitable.

In addition to myelofibrosis, the JAK1/JAK2 inhibitor has demonstrated efficacy in Phase II studies in polycythemia vera (PV) and essential thrombocythemia. Data from the RESPONSE trial in refractory PV is expected in 2013.

Kasimov predicted U.S. sales of Jakafi to hit $51 million next year and $135 million in 2013, growing to more than $500 million by 2015.

Outside the U.S., ruxolitinib will be marketed by Novartis, which filed for European marketing authorization in June.

Under its partnership agreement with Incyte, Novartis paid $150 million up front and an immediate $60 million development milestone. Total payments could add up to more than $1 billion. (See BioWorld Today, Nov. 30, 2009, and Dec. 22, 2010.)

That investment should pay off. Cowen and Co. analysts Eric Schmidt and Nicholas Bishop expect ruxolitinib to achieve more than $1 billion in worldwide sales by 2015.

News of Jakafi's approval sparked nearly a 17 percent jump in trading Wednesday morning, with Incyte shares (NASDAQ:INCY) hitting a high of $14.72. But by the end of the day, with more than 9.3 million shares traded, Incyte closed at $12.94, again of only 34 cents