Eli Lilly and Company's
(
LLY
) Cialis (tadalafil) recently received a positive opinion from the
Committee for Medicinal Products for Human Use (CHMP) of the
European Medicines Agency (EMA). The CHMP issued an opinion in
favor of approving Eli Lilly's erectile dysfunction (ED) drug,
Cialis (5 mg), for the once-daily treatment of the signs and
symptoms of benign prostatic hyperplasia (BPH).
A response from the European Commission regarding Cialis'
regulatory status should be out in two months. The CHMP's opinion
was based on a review of safety and efficacy data on 1,500 patients
from four clinical studies of BPH, including a study of BPH and
ED.
Cialis' label expansion would provide patients suffering from
both ED and BPH with a new treatment option. Approval for the
additional indication will help boost Cialis sales, which came in
at $1.9 billion in 2011.
Cialis, which is approved for the treatment of ED in the EU, is
approved for the treatment of ED as well as the treatment of BPH in
the US.
Cialis' main competitors in the ED market include
Pfizer's
(
PFE
) Viagra and
GlaxoSmithKline's
(
GSK
) Levitra.
The BPH market is also pretty crowded with products like Glaxo's
Avodart and Jalyn,
Sanofi's
(
SNY
) Uroxatral and
Watson Pharmaceuticals'
(
WPI
) Rapaflo (silodosin) among others.
We currently have a Neutral recommendation on Eli Lilly, which
carries a Zacks #3 Rank (short-term Hold rating). The biggest
near-term challenge for Eli Lilly will be to replace the revenues
that will be lost to generic competition now that Zyprexa has lost
US and EU exclusivity. We expect the top-and bottom-line to remain
under pressure as the contraction in Zyprexa sales more than
offsets growth in Cymbalta, diabetes and new product sales.
The late-stage pipeline is also yet to deliver. The generic
threat will continue to pose challenges for Eli Lilly with Cymbalta
slated to lose patent protection in late 2013 and Evista in 2014.
On the flip side, the Animal Health business and the diabetes
franchise should provide some downside support. We are also pleased
to see Eli Lilly pursuing small acquisitions and in-licensing deals
to boost its pipeline.
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