Eli Lilly and Co (NYSE:LLY) and Incyte Corporation (NASDAQ:INCY) are experiencing volatility at Tuesday’s open, initially moving in different directions before both started above yesterday’s close, even though both companies have announced that the results of a Phase 3 study for their rheumatoid arthritis drug are positive. Shares of Eli Lilly opened the day up nearly 1%, and are climbing, as the firms announced that their baricitinib monotherapy was shown to be non-inferior to methotrexate monotherapy in the Phase 3 study based on the ACR20 response rate after 24 weeks of treatment. However, shares of Incyte initially opened down over 1% before paring losses and eventually trading up nearly 2%. Interestingly, the latest round of 13F filings showed that hedge funds are more bullish on one company than the other. Read on to see which company you should bet on based on the hedge fund sentiment.
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The successful results for the drug being co-developed by Eli Lilly and Co (NYSE:LLY) and Incyte Corporation (NASDAQ:INCY) in this latest Phase 3 study called RA-BEGIN comes after positive results in two other Phase 3 studies. Baricitinib was successful compared to Enbrel and Humira in results announced in 2014, and it also had positive marks in a study against placebo conducted this summer. RA-BEGIN included patients with inadequate responses to traditional disease-modifying antirheumatic drugs and had limited or no prior exposure to methotrexate. Furthermore, both companies said that adverse effects triggered by baricitinib were similar for all treatment groups in the study. A fourth Phase 3 study’s results are expected later this year, and if all goes well, the drug may be approved and marketed in 2016.
The positive opening today for Eli Lilly is welcomed, since it experienced an over 5% decline yesterday as the healthcare sector registered a 2% fall. The decline came on the back of a settlement deal with Sanofi SA (ADR) (NYSE:SNY) regarding the latter’s patents for insulin product Lantus SoloStar. The same cannot be said for Incyte seeing its shares opening down today, extending yesterday’s decline of nearly 11%. On the year, however, it is a different story as Eli Lilly’s stock has gained 14.82% and Incyte’s stock has advanced by an even more impressive 28.13%.