Abbott Laboratories

(ABT) - Get Report

said Tuesday that it is seeking U.S. regulatory approval to sell a new rheumatoid arthritis drug, setting the table for a competitive battle with current treatments from

Immunex

(IMNX)

and

Johnson & Johnson

(JNJ) - Get Report

.

As expected, Abbott said it has filed an approval application for the drug, called D2E7, with the Food and Drug Administration as well as with the agency's regulatory counterpart in Europe. These filings could put D2E7 in doctors' hands by the middle of next year.

Currently, Immunex's Enbrel and Remicade from Johnson & Johnson are the two leading drugs for the approximately 5 million people worldwide who suffer from rheumatoid arthritis. Preliminary test results released last summer showed that D2E7 reduced swelling and joint tenderness in 66% of rheumatoid arthritis patients, results comparable to those of the other two drugs.

Combined, Enbrel and Remicade totaled about $1.5 billion in sales last year.

But D2E7 has some advantages. Patients take the drug via injection just once every two weeks. By comparison, Enbrel is given via injection twice a week, while Remicade requires intravenous infusion.

All three drugs work the same way, by blocking a molecule called the antitumor necrosis factor, which causes inflammation when secreted by cells in the immune system. D2E7 is also a fully human monoclonal antibody, and that could translate into lower side effects. The three drugs have not been tested against each other.

Abbott said its approval applications for the drug are based on data from 23 clinical trials involving more than 2,300 rheumatoid arthritis patients. Some of these patients have been taking D2E7 for more than three years.

"We have confidence in the promising data for D2E7, which reflect an evaluation in the largest number of patients in clinical trials included in regulatory submissions for an anti-TNF agent in

rheumatoid arthritis," said Jeff Leiden, president and COO of Abbott's drug group.

Abbott has not yet released much of this late-stage test data on D2E7. The company plans on presenting data at upcoming medical meetings, it said.

Abbott gained control of D2E7 when it paid $6.9 billion to acquire Knoll Pharmaceutical, a unit of Germany's

BASF

last year.

Amgen

(AMGN) - Get Report

, which is in the process of acquiring Immunex, believes Enbrel sales will reach $3 billion by 2005, with growth coming from both its existing rheumatoid arthritis franchise and from treatment of other diseases such as psoriasis. When the merger deal was announced last December, Amgen CEO Kevin Sharer addressed the impending competition from drugs such as D2E7.

"We are not assuming overwhelming market share for Enbrel," he said at that time. "We are leaving plenty of room for other competitive products to be modeled in."

Separately today, Abbott posted first-quarter earnings of 54 cents a share, matching Wall Street estimates. The stock is trading up 71 cents, to $52.66.

Shares of Immunex were off 76 cents, to $29.05; shares of Johnson & Johnson were down 34 cents, to $63.04.