07.14.15
Headquarters: Indianapolis, IN
twitter.com/EliLillyCo
www.lilly.com
TOP SELLING DRUGS
For years Lilly had maintained its post as a top ten pharma company—until now. In a tough year for the drug maker, Lilly slipped from eight and nine in 2012 and 2013/2014 rankings, respectively, to 13. Exchange rates, patent losses and generic competition ate away at Lilly’s revenues, taking a toll on 2014 results.
However, this innovator’s outlook is far from dire. In addition to top sellers, Humalog, Cialis, Effient, Forteo, and Alimta, investing in its animal health business Elanco, and reducing its headcount by 5,500 during the past five years, Lilly managed to drive revenue growth and reduce costs.
The first quarter of 2015 highlights Lilly’s road to recovery, with $4.6 billion in revenues (-1%), and earnings of $529.5 million (-27%). In January, the company finalized its acquisition of Novartis Animal Health for approximately $5.4 billion in cash, with Animal Health revenues up 42% to $749.8 million, offsetting lingering effects of patent expirations for Cymbalta (-40% to $287 million) and Evista (-55% to $66.8 million). Cyramza brought in $67.5 million, Humalog sales were up 5% to $684.0 million and Cialis sales were up 1% to $538.3 million.
On the other hand, Alimta saw its first sales decline, down 9% to $573.0 million. In March, a German court ruled against Lilly in a patent case, and an English court had similarly ruled against Alimta’s patent last April. Zyprexa sales also declined (-22% to $219.5 million) as a result of generic competition.
However, several newly approved and intriguing diabetes compounds hold important revenue potential for Lilly’s post patent expiration recovery, notably, its insulin glargine product, a biosimilar to Sanofi’s Lantus, co-developed under its alliance with Boehringer Ingelheim. Glargine has been tentatively approved in the U.S. and was approved in Europe in September, becoming the first biosimilar insulin to receive regulatory approval in the EU. Other potential treatments, including fixed-dose combinations, are also under development.
Additionally, Trulicity (dulaglutide), which belongs to a category of drugs called GLP-1 receptor agonists that act by mimicking the body’s own glucagon-like peptide-1, will now compete directly against the leader in its class, Novo Nordisk’s Victoza, a $2.1 billion drug, and AstraZeneca’s Byetta and Bydureon, which brought in $767 million in 2014.
Trulicity outperformed Byetta in Phase III trials and is dosed weekly, giving it an advantage over Victoza, which must be injected daily. Analysts estimate Trulicity could eventually generate peak annual sales of around $1.7 billion. While using an immunoglobulin molecule to extend the half-life of drugs is not new, Trulicity is the only GLP-1 so far to use this mechanism.
Lastly, Lilly’s SGLT-2 inhibitor empagliflozin, a diabetes drug also co-developed under its Boehringer alliance, significantly lowered blood glucose levels compared to insulin alone, and will compete with Johnson & Johnson’s Invokana and AstraZeneca’s Forxiga.
Adapting to a burgeoning biologics business
With more than half of the company’s pipeline now comprised of biologics that require some type of injection, Lilly is building a new drug delivery and device innovation center in Cambridge, MA to explore how emerging technologies can advance drug delivery and device innovation. When operational late this year, the facility will increase its delivery and device R&D space by nearly 50% and its staff by 25%. Lilly expects its revenues from device-enabled products to double by 2020.
Additionally, Lilly is pursuing the sale of one of its three manufacturing plants in PR based on the evolution of its growing insulin and biologics portfolio, coupled with a less intensive small molecule portfolio. Lilly is continuing to invest in the two remaining manufacturing plants at Carolina, recently spending $200 million to increase capacity at its insulin active ingredient plant, and $40 million to increase capabilities at its drug product site for its oral solid dosage network.
Significantly, in one of the largest biotech drug development collaborations of its kind in China, Lilly and Innovent Biologics will work to develop and commercialize at least three cancer treatments in the next decade, expanding both companies presence in the Chinese oncology market.
Lilly will contribute its cMet monoclonal antibody gene for possible treatment of non-small cell lung cancer and Innovent will contribute its monoclonal antibody targeting protein CD-20 for investigation in hematologic malignancies, as well as an immuno-oncology asset.
Advancing the pipeline
In recent late stage developments, Lilly and AstraZeneca are co-developing AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor, which is advancing into a Phase II/III trial in patients with early Alzheimer’s disease (AD). AZD3293 has been shown to reduce levels of beta-amyloid in Alzheimer’s patients and healthy volunteers.
Also, Pfizer and Lilly resumed a Phase III program for Tanezumab in chronic pain following a decision by the FDA to lift the partial clinical hold after a review of nonclinical data characterizing the sympathetic nervous system response to tanezumab.
Holding more promise, Lilly’s Ixekizumab met its primary endpoint in a Phase III trial for the treatment of psoriatic arthritis, proving statistically superior to placebo and representing a 20% reduction in signs and symptoms of the disease. And, in February, investigational drug baricitinib proved superior in reducing rheumatoid arthritis disease compared to placebo in a second consecutive Phase III trial, meeting its primary endpoint.
While the numbers might not yet reveal success, Lilly is transitioning from a challenging period of patent expirations to growth, driven by its animal health business, mainstay products, the launch of new and promising medicines, and an advancing pipeline. If all goes well, it is likely Lilly will be out of the red by this time next year.
twitter.com/EliLillyCo
www.lilly.com
Headcount: | 41,000 | |
Year Established: | 1876 | |
Revenues: | $19,615 | (-15%) |
Net Income: | $2,391 | (-49%) |
R&D: | $4,734 | (-14%) |
TOP SELLING DRUGS
Drug | Indication | 2014 Sales | (+/-%) |
Alimta | cancer | $2,792 | 3% |
Humalog | diabetes | $2,785 | 7% |
Cialis | erectile dysfunction | $2,291 | 6% |
Cymbalta | anxiety, depression | $1,615 | -68% |
Humulin | diabetes | $1,400 | 6% |
Forteo | osteoporosis | $1,322 | 6% |
Zyprexa | schizophrenia | $1,037 | -13% |
Strattera | ADHD | $739 | 4% |
Effient | anticoagulant | $522 | 3% |
Evista | postmenopausal osteoporosis | $420 | -60% |
For years Lilly had maintained its post as a top ten pharma company—until now. In a tough year for the drug maker, Lilly slipped from eight and nine in 2012 and 2013/2014 rankings, respectively, to 13. Exchange rates, patent losses and generic competition ate away at Lilly’s revenues, taking a toll on 2014 results.
However, this innovator’s outlook is far from dire. In addition to top sellers, Humalog, Cialis, Effient, Forteo, and Alimta, investing in its animal health business Elanco, and reducing its headcount by 5,500 during the past five years, Lilly managed to drive revenue growth and reduce costs.
The first quarter of 2015 highlights Lilly’s road to recovery, with $4.6 billion in revenues (-1%), and earnings of $529.5 million (-27%). In January, the company finalized its acquisition of Novartis Animal Health for approximately $5.4 billion in cash, with Animal Health revenues up 42% to $749.8 million, offsetting lingering effects of patent expirations for Cymbalta (-40% to $287 million) and Evista (-55% to $66.8 million). Cyramza brought in $67.5 million, Humalog sales were up 5% to $684.0 million and Cialis sales were up 1% to $538.3 million.
On the other hand, Alimta saw its first sales decline, down 9% to $573.0 million. In March, a German court ruled against Lilly in a patent case, and an English court had similarly ruled against Alimta’s patent last April. Zyprexa sales also declined (-22% to $219.5 million) as a result of generic competition.
However, several newly approved and intriguing diabetes compounds hold important revenue potential for Lilly’s post patent expiration recovery, notably, its insulin glargine product, a biosimilar to Sanofi’s Lantus, co-developed under its alliance with Boehringer Ingelheim. Glargine has been tentatively approved in the U.S. and was approved in Europe in September, becoming the first biosimilar insulin to receive regulatory approval in the EU. Other potential treatments, including fixed-dose combinations, are also under development.
Additionally, Trulicity (dulaglutide), which belongs to a category of drugs called GLP-1 receptor agonists that act by mimicking the body’s own glucagon-like peptide-1, will now compete directly against the leader in its class, Novo Nordisk’s Victoza, a $2.1 billion drug, and AstraZeneca’s Byetta and Bydureon, which brought in $767 million in 2014.
Trulicity outperformed Byetta in Phase III trials and is dosed weekly, giving it an advantage over Victoza, which must be injected daily. Analysts estimate Trulicity could eventually generate peak annual sales of around $1.7 billion. While using an immunoglobulin molecule to extend the half-life of drugs is not new, Trulicity is the only GLP-1 so far to use this mechanism.
Lastly, Lilly’s SGLT-2 inhibitor empagliflozin, a diabetes drug also co-developed under its Boehringer alliance, significantly lowered blood glucose levels compared to insulin alone, and will compete with Johnson & Johnson’s Invokana and AstraZeneca’s Forxiga.
Adapting to a burgeoning biologics business
With more than half of the company’s pipeline now comprised of biologics that require some type of injection, Lilly is building a new drug delivery and device innovation center in Cambridge, MA to explore how emerging technologies can advance drug delivery and device innovation. When operational late this year, the facility will increase its delivery and device R&D space by nearly 50% and its staff by 25%. Lilly expects its revenues from device-enabled products to double by 2020.
Additionally, Lilly is pursuing the sale of one of its three manufacturing plants in PR based on the evolution of its growing insulin and biologics portfolio, coupled with a less intensive small molecule portfolio. Lilly is continuing to invest in the two remaining manufacturing plants at Carolina, recently spending $200 million to increase capacity at its insulin active ingredient plant, and $40 million to increase capabilities at its drug product site for its oral solid dosage network.
Significantly, in one of the largest biotech drug development collaborations of its kind in China, Lilly and Innovent Biologics will work to develop and commercialize at least three cancer treatments in the next decade, expanding both companies presence in the Chinese oncology market.
Lilly will contribute its cMet monoclonal antibody gene for possible treatment of non-small cell lung cancer and Innovent will contribute its monoclonal antibody targeting protein CD-20 for investigation in hematologic malignancies, as well as an immuno-oncology asset.
Advancing the pipeline
In recent late stage developments, Lilly and AstraZeneca are co-developing AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor, which is advancing into a Phase II/III trial in patients with early Alzheimer’s disease (AD). AZD3293 has been shown to reduce levels of beta-amyloid in Alzheimer’s patients and healthy volunteers.
Also, Pfizer and Lilly resumed a Phase III program for Tanezumab in chronic pain following a decision by the FDA to lift the partial clinical hold after a review of nonclinical data characterizing the sympathetic nervous system response to tanezumab.
Holding more promise, Lilly’s Ixekizumab met its primary endpoint in a Phase III trial for the treatment of psoriatic arthritis, proving statistically superior to placebo and representing a 20% reduction in signs and symptoms of the disease. And, in February, investigational drug baricitinib proved superior in reducing rheumatoid arthritis disease compared to placebo in a second consecutive Phase III trial, meeting its primary endpoint.
While the numbers might not yet reveal success, Lilly is transitioning from a challenging period of patent expirations to growth, driven by its animal health business, mainstay products, the launch of new and promising medicines, and an advancing pipeline. If all goes well, it is likely Lilly will be out of the red by this time next year.
Lilly hasn’t really had the start to the year that it would have been looking for, having fallen down the rankings this year. Lilly suffered from the ‘black hole’ patent pit that has kept them lucratively afloat during recent years. With Cymbalta, Evista and Zyprexa all having lost protection and Alimta and Cialis heading in the same direction in 2017, its drug pipeline needs to gain some muscle. Lilly is confident though that its future lies in oncology and the launch and license extensions of Cyramza will provide a scaffold to support them when the plug gets pulled with the patent expiries, but is it going to be enough? Lilly is moving its CDK 4/6 Dual Inhibitor Abemaciclib through development and has plenty of other potential drugs plotted in its pipeline, but it pulled $1 billion dollars out of R&D last year, which never looks good. There has been much speculation that Lilly will re-visit Alzheimer’s disease with solanezumab, which crashed and burned in 2012. The company continued to investigate mild forms of the disease extending the study for two years, and with the results being made available any time now maybe this could provide a financial foothold to keep them going. —Adele Graham-King |