Bristol-Myers Squibb is turning to a contract manufacturer to ensure it can meet demand for Orencia, a new rheumatoid arthritis treatment predicted to become a big seller for the drugmaker.

Yesterday, B-MS won US approval to license the production of the active ingredient in Orencia, abatacept, to Swiss company Lonza.

Orencia is the first in a new class of so-called T cell co-stimulation modulators that work in a different way to current disease-modifying antirheumatic drugs (DMARDS) for arthritis, including stalwarts such as methotrexate and biologic agents like Johnson & Johnson's Remicade (infliximab), Wyeth's Enbrel (etanercept) and Abbott Laboratories' Humira (adalimumab).

Orencia is indicated for patients who fail to respond or cannot tolerate these first-line DMARDs, and was launched onto the market in February. B-MS did not give any sales figures for Orencia in its first-quarter results statement, saying merely that the drug was ‘tracking above our expectations’.

B-MS is in the throes of building up its manufacturing capacity for the drug – investing $200 million in an expansion of an existing biologics plant in Puerto Rico and earmarking a further $660 million for a new build, but the time required to bring these on-line had led to questions about the firm’s ability to meet demand for Orencia. The new agreement with Lonza should allay those fears.

Orencia will be in direct competition in the marketplace with Genentech’s Rituxan (rituximab) which was also recently approved for the treatment of rheumatoid arthritis after the failure of first-line DMARD therapy

Prudential Equity group analysts said after Orencia’s approval that they expected peak sales of the drug to be in the region of $1.8 billion, with Rituxan largely held back as a third-line agent, after Orencia, because of its long-term effects in depleting B cells.