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Shares of Eli Lilly closed down more than 4 percent Monday after the Food and Drug Administration rejected its drug to treat rheumatoid arthritis. Shares of Incyte, Lilly's partner on

the drug, baricitinib, closed down nearly 11 percent. Wall Street analysts believed the treatment would have generated more than $1 billion in sales by 2020 if it had been approved,

according to Bloomberg data. Lilly said Friday that the FDA needed additional data to "characterize safety concerns across treatment arms" and to determine "the most

appropriate doses." Christi Shaw, president of Lilly Bio-Medicines, said in a statement: "We will continue to work with the FDA to determine a path forward and ultimately bring

baricitinib to patients in the U.S." Analysts at BMO Capital Markets downgraded Lilly's stock to underperform from market perform and lowered their price target on the shares to

$71 from $73. The analysts called baricitinib's rejection a "surprising, and significant, setback for Lilly." "Overall, we highly doubt that the stated FDA concerns could

be addressed without new clinical trials; therefore, we believe the timing for Bari's U.S. RA launch is most likely pushed back at least three years," BMO said in a Monday note,

adding it lowered its 2017 global sales forecast on the company to $1.6 billion from $2.2 billion. Eli Lilly's shares closed at $82.38 per share on Monday, up 12 percent year-to-date.

LLY IN 2017 _Source: FactSet_