Eli Lilly & Co. shares dropped 5.5% and Incyte Corp. shares dropped 12.7% in premarket trade Monday after the companies said that the Food and Drug Administration failed to approve their drug for moderate-to-severe rheumatoid arthritis. Eli Lilly reaffirmed its financial guidance for this year, and Incyte said it is evaluating the news’ impact and would provide any update on its first-quarter earnings call. (Incyte’s earnings are scheduled for May 4.) The FDA told the two companies that more clinical data are required to figure out dosage information and safety concerns across groups of patients. New clinical trials could greatly extend the timeline for drug approval. But Eli Lilly and Incyte said they “disagree with the agency’s conclusions” and said they would continue to work with the FDA to find a path to approval. Incyte shares have surged 23.9% over the last three months, and Eli Lilly shares have surged 11.8%, compared with a 2.7% rise in the S&P 500 .
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