An FDA rejection of Galapagos NV's rheumatoid arthritis drug filgotinib, announced Wednesday, was "disappointing and unexpected," CEO Onno van de Stolpe said. The regulator cited both concerns about the overall risk/benefit profile for one dose of the drug and sought additional trial data regarding another element, said Gilead Sciences Inc., the Belgian firm's U.S. partner for the product.

In particular, the agency's reviewers want completed data from the Manta and Manta-Ray studies evaluating filgotinib's impact on sperm parameters before completing their review. Top-line results of those studies are anticipated in the first half of 2021.

Galapagos shares (Belgium:GLPG) fell 24.4% to close at €118.55 (US$141.15) following the news. Shares in Gilead (NASDAQ:GILD) also fell, trading about 3.9% lower at midday.

Filgotinib's NDA was based on data from the phase III Finch trial program that produced a range of strong results in patient settings in moderate-to-severe RA. The trial program also supported an MAA filing with the EMA in August 2019, meeting a positive CHMP opinion in July of this year, and an application seeking Japanese approval for the JAK-1 inhibitor.

"We are disappointed in this outcome and will evaluate the points raised in the CRL for discussion with the FDA," said Gilead's Chief Medical Officer Merdad Parsey. "We continue to believe in the benefit/risk profile of filgotinib in RA, which has been demonstrated in the Finch phase III clinical program,” he said.

Development of filgotinib has transformed Mechelen, Belgium-based Galapagos into one of Europe’s bellwether biotechs, helping to persuade Foster City, Calif.-based Gilead to put down about $5 billion in cash to get access to ex-European rights to the Galapagos pipeline. With the CRL, Galapagos will have to wait for a potential $100 million milestone payment tied to U.S. approval of filgotinib. Reflecting that, it revised its full year 2020 operational cash burn guidance to between €490 million (US$583.4 million) and €520 million.

The RA market is expected to experience a slight decline after reaching a peak of over $30.1 billion in 2024, up from approximately $28.3 billion in 2018, according to DRG. Factors influencing market dynamics include the uptake of IL-6 and JAK inhibitors, increasing drug-treated population use of biosimilars. The crowded market means new therapies need to offer advantages in efficacy, safety, or cost-effectiveness compared with currently marketed agents, DRG noted.

The market is dominated by small molecules and biologics. Leaders in major markets in 2018 were adalimumab (Humira, biosimilars) from Abbvie Inc. and Eisai Co. Ltd., bringing in $7.4 billion; etanercept (Enbrel, biosimilars) from Amgen Inc., Pfizer Inc. and Takeda Pharmaceutical Corp. Ltd., bringing in $5.39 billion; and infliximab (Remicade, biosimilars) from Janssen Biotech Inc. and Merck & Co. Inc., which brought in $3.12 billion.