Eli Lilly and Company
) suffered another pipeline setback with the company reporting
that its phase III depression candidate, edivoxetine, failed to
meet the primary endpoint in three studies. Edivoxetine failed to
show superiority over placebo in the three acute randomized
placebo-controlled phase III studies (LNBM, LNBQ and LNBR).
Although the safety and tolerability profile was similar to
that seen in earlier studies, Eli Lilly said that the efficacy
profile did not support regulatory filings for the use of
edivoxetine as an add-on treatment in patients with major
depressive disorder (MDD).
Given these disappointing results, Eli Lilly has decided that
it will scrap the development of edivoxetine as an add-on
treatment for depression. An ongoing study evaluating the
long-term maintenance effect of edivoxetine will, however,
Eli Lilly expects to take a charge of 1 cent in the fourth
quarter related to the discontinuation of the development of
edivoxetine for the MDD indication. Eli Lilly maintained its 2013
reported earnings guidance of $4.33 - $4.38 per share. Adjusted
earnings guidance is $4.10 - $4.15 per share.
Like many of its peers, Eli Lilly is facing stiff generic
competition and its pipeline needs to deliver to make up for the
revenues lost to generic competition. The phase III results on
edivoxetine are disappointing and mark another late-stage failure
for Eli Lilly.
Some pipeline failures in the past few months include the
termination of the development of oncology candidate,
enzastaurin, the termination of a mid-stage study being conducted
with Alzheimer's disease candidate, LY2886721, Alimta's failure
to achieve the primary endpoint in the randomized, open-label
phase III superiority study - PRONOUNCE and the discontinuation
of the phase III rheumatoid arthritis program for tabalumab.
On the brighter side, the Animal Health business should offer
some downside support. We are also pleased to see Eli Lilly
pursuing small acquisitions and in-licensing deals to boost its
pipeline. Share buybacks and cost control should help Eli Lilly
achieve its 2013 guidance despite the presence of generic
competition for key products.
Eli Lilly is a Zacks Rank #3 (Buy) stock. Some better-ranked
stocks in the pharma/biotech sector are
). While Actelion is a Zacks Rank #1 (Strong Buy) stock, Bayer
and Acorda are Zacks Rank #2 (Buy) stocks.
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