07.17.13
Lilly Corporate Center
Indianapolis, IN 46285
Tel: (317) 276-2000
Fax: (317) 277-6579
www.lilly.com
Top Selling Drugs
Account for 86% of total pharma sales, same as in 2011
Lilly climbed in this year’s ranks, but only because BMS out-plummeted it. The Indianapolis pharma may hold steady in next year’s ranking, too, although it has a pretty steep patent cliff ahead. Revenues fell $2.0 billion in 2012, with Zyprexa shedding $3.0 billion in sales.
Shortly after press time last year, Lilly received a six-month extension on Cymbalta’s patent protection in the U.S., courtesy of pediatric exclusivity. (The drug isn’t approved for people under 18, and Lilly doesn’t plan on pursuing a pediatric indication.) That means Lilly’s top-selling drug will now face generic competition beginning in December 2013, cramming most of its revenue loss into a single fiscal year. That’s the best light we can shine on the prospects of the company losing most of a $5.0 billion revenue source.
Lilly also got good news in August 2012, when a U.S. court upheld its compound patent for Alimta, giving it protection through 2017. That’ll keep its #2 drug on the market long enough to become #1 (unless Humalog passes it up, as it did in 1Q13). Still, the specter of disappearing Cymbalta and Evista revenues led Lilly to lay off 1,000 sales reps in April 2013. The move cleared out almost 30% of Lilly’s U.S. sales force, at a cost of $64.7 million.
As with most of its competitors, Lilly hasn’t had enough production from its pipeline to offset its expiring drugs. Effient, the Plavix-killer co-developed with Daiichi Sankyo, seems to have plateaued below the $500 million mark, despite the multi-billion-dollar expectations for that drug. In August 2012, a head-to-head trial demonstrated no advantage for Effient over generic Plavix in acute coronary syndrome. That could kill Effient’s prospects for significant growth.
Lilly suffered other R&D failures in the past year, and the company can ill afford any more hiccups. There were so many that one analyst wondered if the company has pushed too many high-risk projects into late-stage development. (In drug development, as we know, there aren’t exactly a lot of low-risk candidates out there.)
Shortly after press time in July 2012, schizophrenia treatment pomaglumetad methionil washed out in one Phase II trial, and was dropped from development a month later, when a second trial’s results came in.
The company also stopped development of enzastaurin in May 2013, after a poor showing in a lymphoma trial. Tabalumab, a MAb that came over with Lilly’s 2008 purchase of ImClone, failed to show efficacy in Phase III trials against rheumatoid arthritis (RA) in February 2013, but the company will continue to pursue it as a treatment for lupus. In January 2013, development partner Bristol-Myers Squibb gave up its rights to another ImClone candidate, necitumumab. No official statement, but the drug had safety issues in one Phase III trial.
Lilly did receive Fast Track status from the FDA for another ImClone-derived drug, ramucirumab, to treat gastric cancer. Royalties from Erbitux sales added up to $397 million in 2012, so it would help if ImClone’s pipeline started to help pay off its $6.5 billion purchase price.
Lilly had better fortune with its oral JAK1/JAK2 inhibitor for RA. In June 2013, the company posted positive results from a Phase IIb trial of the drug, which is being co-developed with Incyte Corp. The study showed that clinical improvements observed in week 24 of the trial were maintained through 52 weeks.
Lilly’s most publicized failure — Alzheimer’s disease (AD) treatment solanezumab — is another sign that the company is swinging for the fences. In December 2012, the company announced it would keep working on solanezumab, despite trial results that would not support a BLA filing. Lilly will start a new Phase III trial in patients with mild AD beginning in 3Q13, in hopes of finding a patient population that benefits from this treatment to block beta-amyloid plaques. In June 2013, the company had to cancel another AD treatment in Phase II, due to toxicity issues.
That leaves evacetrapib as the big potential blockbuster in Lilly’s pipeline. A CETP inhibitor that raises HDL cholesterol while reducing the LDL variety, evacetrapib could be a huge seller for Lilly, or it could meet the same fate as Pfizer’s torcetrapib and Roche’s dalcetrapib. The company began a trial of evacetrapib in high-risk vascular disease in 2012 in collaboration with the Cleveland Clinic. At a recent healthcare conference, a Lilly speaker said that there will be an update on the key Phase III trial later this year.
After all of its R&D mishaps, the company’s historical focus on diabetes has become even more critical to its future. Lilly and development partner Boehringer Ingelheim submitted their oral SGLT2 inhibitor, empagliflozin, to the FDA in March 2013. The drug managed to control glucose and sustain weight loss, but will be playing catch-up with J&J’s Invokana if it gets approved in early 2014.
Lilly plans to submit dulaglutide, a once-weekly treatment for type 2 diabetes, sometime in 2013. That drug is meant to take on Sanofi’s top-seller, Lantus, which is only formulated for daily use, and also showed positive results against Byetta and Januvia. Another trial will test it against Novo Nordisk’s Victoza.
Lilly also has an insulin glargine drug (LY2963016) that may qualify in Europe as a biosimilar of Lantus, giving it a quicker path to the market than if it was submitted as a new drug. In January 2013, Boehringer Ingelheim relinquished its interest in a basal insulin product (LY2605541) from the companies’ development pact. Lilly is forging ahead with that drug, and will continue all of its pre-planned clinical trials. That’s another high-risk move, since a similar product from Novo Nordisk was rejected by the FDA, pending an extensive safety trial. If it hits, it could be big, but that’s how we got into this mess.
Lilly’s optimism about diabetes also stretches into its insulin manufacturing operations.. The company plans to add two insulin cartridge-filling lines and boost its insulin API capacity at its Indianapolis-based facilities with a $320 million investment. Previously, the company only filled insulin vials in the U.S., but the market has shown growing interest in injection pens. When complete, Lilly’s expansion will employ 175 people.
Thanks to that Cymbalta extension, Lilly got a six-month reprieve on D-day, but time is running out. It’s admirable that the company is sticking with Alzheimer’s disease, but by the end of the decade, Lilly might resemble Novo Nordisk, a high-powered diabetes company with a few interesting side programs.
Lowe Down
Doom and gloom has been the theme for these notes on Lilly over the past few years, with occasional updrafts all the way up into mere pessimism. And it’s hard to make the case for anything different this time. The company’s valiant, praiseworthy, and thus far utterly unfulfilling quest to treat Alzheimer’s has continued, with its beta-secretase inhibitor dropping out of Phase II before we could even find out if it worked or not. That comes after a valiant and not-so-praiseworthy attempt to persuade the world that its Alzheimer’s antibody trials really did work, despite every appearance of having done no such thing.
The company’s making strong efforts in oncology and diabetes, but none of these are going to make the upcoming losses of Cymbalta, Humalog, and Evista easy to take. The best case you can make is that things are going to be really nasty for a while until the newer drugs kick in. And the worst case, well . . . let’s not dwell on that one, OK? But without some headlines within the next year about drugs that actually work in Phase II and Phase III, Lilly and its investors are going to experience it. Thus the focus on Alzheimer’s — just one semi-efficacious approved drug there might turn things around. But what are the odds?
Indianapolis, IN 46285
Tel: (317) 276-2000
Fax: (317) 277-6579
www.lilly.com
Headcount | 38,100 | |
Year Established | 1876 | |
Pharma Revenues | $20,566 | -9% |
Total Revenues | $22,603 | -7% |
Net Income | $4,089 | -6% |
R&D Budget | $5,278 | $5,278 |
Top Selling Drugs
Drug | Indication | $ | (+/- %) |
Cymbalta | anxiety, depression, diabetic peripheral neuropathic pain | $4,994 | 20% |
Alimta | cancer | $2,594 | 5% |
Humalog | diabetes | $2,395 | 1% |
Cialis | erectile dysfunction | $1,926 | 3% |
Zyprexa | schizophrenia | $1,701 | -63% |
Humulin | diabetes | $1,239 | -1% |
Forteo | osteoporosis | $1,151 | 21% |
Evista | postmenopausal osteoporosis | $1,010 | -5% |
Strattera | ADHD | $621 | 0% |
Lilly climbed in this year’s ranks, but only because BMS out-plummeted it. The Indianapolis pharma may hold steady in next year’s ranking, too, although it has a pretty steep patent cliff ahead. Revenues fell $2.0 billion in 2012, with Zyprexa shedding $3.0 billion in sales.
Shortly after press time last year, Lilly received a six-month extension on Cymbalta’s patent protection in the U.S., courtesy of pediatric exclusivity. (The drug isn’t approved for people under 18, and Lilly doesn’t plan on pursuing a pediatric indication.) That means Lilly’s top-selling drug will now face generic competition beginning in December 2013, cramming most of its revenue loss into a single fiscal year. That’s the best light we can shine on the prospects of the company losing most of a $5.0 billion revenue source.
Lilly also got good news in August 2012, when a U.S. court upheld its compound patent for Alimta, giving it protection through 2017. That’ll keep its #2 drug on the market long enough to become #1 (unless Humalog passes it up, as it did in 1Q13). Still, the specter of disappearing Cymbalta and Evista revenues led Lilly to lay off 1,000 sales reps in April 2013. The move cleared out almost 30% of Lilly’s U.S. sales force, at a cost of $64.7 million.
As with most of its competitors, Lilly hasn’t had enough production from its pipeline to offset its expiring drugs. Effient, the Plavix-killer co-developed with Daiichi Sankyo, seems to have plateaued below the $500 million mark, despite the multi-billion-dollar expectations for that drug. In August 2012, a head-to-head trial demonstrated no advantage for Effient over generic Plavix in acute coronary syndrome. That could kill Effient’s prospects for significant growth.
Lilly suffered other R&D failures in the past year, and the company can ill afford any more hiccups. There were so many that one analyst wondered if the company has pushed too many high-risk projects into late-stage development. (In drug development, as we know, there aren’t exactly a lot of low-risk candidates out there.)
Shortly after press time in July 2012, schizophrenia treatment pomaglumetad methionil washed out in one Phase II trial, and was dropped from development a month later, when a second trial’s results came in.
The company also stopped development of enzastaurin in May 2013, after a poor showing in a lymphoma trial. Tabalumab, a MAb that came over with Lilly’s 2008 purchase of ImClone, failed to show efficacy in Phase III trials against rheumatoid arthritis (RA) in February 2013, but the company will continue to pursue it as a treatment for lupus. In January 2013, development partner Bristol-Myers Squibb gave up its rights to another ImClone candidate, necitumumab. No official statement, but the drug had safety issues in one Phase III trial.
Lilly did receive Fast Track status from the FDA for another ImClone-derived drug, ramucirumab, to treat gastric cancer. Royalties from Erbitux sales added up to $397 million in 2012, so it would help if ImClone’s pipeline started to help pay off its $6.5 billion purchase price.
Lilly had better fortune with its oral JAK1/JAK2 inhibitor for RA. In June 2013, the company posted positive results from a Phase IIb trial of the drug, which is being co-developed with Incyte Corp. The study showed that clinical improvements observed in week 24 of the trial were maintained through 52 weeks.
Lilly’s most publicized failure — Alzheimer’s disease (AD) treatment solanezumab — is another sign that the company is swinging for the fences. In December 2012, the company announced it would keep working on solanezumab, despite trial results that would not support a BLA filing. Lilly will start a new Phase III trial in patients with mild AD beginning in 3Q13, in hopes of finding a patient population that benefits from this treatment to block beta-amyloid plaques. In June 2013, the company had to cancel another AD treatment in Phase II, due to toxicity issues.
That leaves evacetrapib as the big potential blockbuster in Lilly’s pipeline. A CETP inhibitor that raises HDL cholesterol while reducing the LDL variety, evacetrapib could be a huge seller for Lilly, or it could meet the same fate as Pfizer’s torcetrapib and Roche’s dalcetrapib. The company began a trial of evacetrapib in high-risk vascular disease in 2012 in collaboration with the Cleveland Clinic. At a recent healthcare conference, a Lilly speaker said that there will be an update on the key Phase III trial later this year.
After all of its R&D mishaps, the company’s historical focus on diabetes has become even more critical to its future. Lilly and development partner Boehringer Ingelheim submitted their oral SGLT2 inhibitor, empagliflozin, to the FDA in March 2013. The drug managed to control glucose and sustain weight loss, but will be playing catch-up with J&J’s Invokana if it gets approved in early 2014.
Lilly plans to submit dulaglutide, a once-weekly treatment for type 2 diabetes, sometime in 2013. That drug is meant to take on Sanofi’s top-seller, Lantus, which is only formulated for daily use, and also showed positive results against Byetta and Januvia. Another trial will test it against Novo Nordisk’s Victoza.
Lilly also has an insulin glargine drug (LY2963016) that may qualify in Europe as a biosimilar of Lantus, giving it a quicker path to the market than if it was submitted as a new drug. In January 2013, Boehringer Ingelheim relinquished its interest in a basal insulin product (LY2605541) from the companies’ development pact. Lilly is forging ahead with that drug, and will continue all of its pre-planned clinical trials. That’s another high-risk move, since a similar product from Novo Nordisk was rejected by the FDA, pending an extensive safety trial. If it hits, it could be big, but that’s how we got into this mess.
Lilly’s optimism about diabetes also stretches into its insulin manufacturing operations.. The company plans to add two insulin cartridge-filling lines and boost its insulin API capacity at its Indianapolis-based facilities with a $320 million investment. Previously, the company only filled insulin vials in the U.S., but the market has shown growing interest in injection pens. When complete, Lilly’s expansion will employ 175 people.
Thanks to that Cymbalta extension, Lilly got a six-month reprieve on D-day, but time is running out. It’s admirable that the company is sticking with Alzheimer’s disease, but by the end of the decade, Lilly might resemble Novo Nordisk, a high-powered diabetes company with a few interesting side programs.
Lowe Down
Doom and gloom has been the theme for these notes on Lilly over the past few years, with occasional updrafts all the way up into mere pessimism. And it’s hard to make the case for anything different this time. The company’s valiant, praiseworthy, and thus far utterly unfulfilling quest to treat Alzheimer’s has continued, with its beta-secretase inhibitor dropping out of Phase II before we could even find out if it worked or not. That comes after a valiant and not-so-praiseworthy attempt to persuade the world that its Alzheimer’s antibody trials really did work, despite every appearance of having done no such thing.
The company’s making strong efforts in oncology and diabetes, but none of these are going to make the upcoming losses of Cymbalta, Humalog, and Evista easy to take. The best case you can make is that things are going to be really nasty for a while until the newer drugs kick in. And the worst case, well . . . let’s not dwell on that one, OK? But without some headlines within the next year about drugs that actually work in Phase II and Phase III, Lilly and its investors are going to experience it. Thus the focus on Alzheimer’s — just one semi-efficacious approved drug there might turn things around. But what are the odds?
—Derek Lowe