UPDATE 1-Pfizer arthritis drug wins approval, to challenge Humira

Nov 6 (Reuters) - U.S. regulators on Tuesday approved Pfizer Inc's Xeljanz treatment for rheumatoid arthritis, one of the company's most potentially lucrative experimental drugs, which is now poised to compete with Abbott Laboratories Inc's top-selling Humira.

The U.S. Food and Drug Administration said in a release it had approved Pfizer's pill for patients with moderate to severe rheumatoid arthritis who have not benefited from or been able to tolerate the standard oral treatment, methotrexate.

Industry analysts have predicted Pfizer's drug, better known by its chemical name tofacitinib, could garner annual peak sales of up to $3 billion. As a pill, it could prove more attractive to some patients than Abbott's $8 billion-a-year injectable Humira. Abbott has said the Pfizer drug poses no major competitive threat to its flagship product.

Rheumatoid arthritis is an autoimmune disease in which the body's immune system mistakenly attacks healthy tissue, causing inflammation and pain in the joints. It affects an estimated 1.5 million Americans, the FDA said.

Pfizer's drug works by blocking molecules called Janus kinases which are implicated in joint inflammation. The drug was associated with an increased risk of serious infections, tuberculosis, cancers and lymphoma. It carries a boxed warning, the most serious available, related to its side effects.

The FDA said it approved the drug with a risk evaluation and mitigation strategy, requiring safety information on the drug's package insert label and a communication plan to inform healthcare workers about its risks.

The agency is also requiring Pfizer to conduct a postmarketing study to evaluate the drug's long terms effects on heart disease, cancer and serious infections.