EU Nod for Eli Lilly/Boehringer's Jardiance (revised) - Analyst Blog


Eli Lilly and Company ( LLY ) and partner Boehringer Ingelheim announced that the European Commission (EC) has approved their sodium glucose co-transporter-2 (SGLT2) inhibitor, Jardiance (empagliflozin). Jardiance (10 mg and 25 mg once daily tablets) is approved as an adjunct to diet and exercise for improving glycemic control in adults suffering from type II diabetes. Eli Lilly intends to launch Jardiance in the EU in the third quarter of 2014.

We remind investors that in Apr 2014, empagliflozin was first approved in Australia under the trade name Jardiance.

Jardiance can be used as a monotherapy in patients unable to tolerate metformin. Alternatively, it can be used in combination with other glucose-lowering medicines such as insulin, in case of inadequate glucose control.

While EU approval was largely expected, considering a positive opinion issued by the Committee for Medicinal Products for Human Use (CHMP) in late March, Jardiance's regulatory path in the U.S. has not been as smooth. In Mar 2014, Jardiance received a complete response letter (CRL) from the U.S. Food and Drug Administration (FDA) − the agency said that previously observed deficiencies at the Boehringer Ingelheim facility where empagliflozin will be manufactured need to resolved for approval.

On a positive note, the FDA did not ask the company to conduct additional studies. Boehringer Ingelheim is waiting for feedback from the FDA and continue to expect US regulatory action in 2014. We note that the U.S. market already has SGLT2 inhibitors in the form of Johnson & Johnson's ( JNJ ) and AstraZeneca's ( AZN ) Forxiga.

Additionally, a fixed-dose combination of empagliflozin and Tradjenta is under FDA review for the treatment of adults suffering from type II diabetes. Lilly has another candidate, dulaglutide, under review in the EU for this indication.

Our Take

The EU approval of Jardiance comes as a major positive for Eli Lilly. Currently, Eli Lilly is facing a major challenge in the form of loss of exclusivity for Zyprexa and Cymbalta and needs to bring new products to market. However, the Animal Health business should provide some downside support.

We are encouraged by Eli Lilly's decision to acquire Novartis' ( NOV ) animal health business to strengthen its Animal Health division. We are also pleased to see Eli Lilly pursuing small acquisitions and in-licensing deals to boost its pipeline.

(We are reissuing this article to correct a mistake. The original article, issued yesterday, May 27, 2014, should no longer be relied upon.)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: EC , CHMP , CRL , AZN , JNJ

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