Lilly to Go Solo with LY2605541 - Analyst Blog

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Eli Lilly and Company ( LLY ) recently announced that it will be developing diabetes candidate, LY2605541, on its own. The company said that its diabetes alliance with Boehringer Ingelheim International will be amended with Eli Lilly re-assuming sole worldwide development and commercialization rights to LY2605541.

The terms regarding the other candidates/products covered by the diabetes alliance remain unchanged. The diabetes alliance, announced in Jan 2011, covers marketed product, Tradjenta (linagliptin), and pipeline candidates - empagliflozin and LY2963016.

LY2605541 is currently in late-stage development. Eli Lilly said that it intends to initiate additional studies with the candidate in 2013 and 2014. Phase III results could be out in 2014 - positive results would allow the company to submit marketing applications in 2014.

Meanwhile, Eli Lilly and Boehringer Ingelheim announced positive top-line results on empagliflozin from four phase III trials. Empagliflozin (10 and 25 mg taken once daily), a sodium glucose co-transporter-2 (SGLT-2) inhibitor, was found to be more effective in lowering blood sugar levels compared to placebo. While the occurrence of adverse events was similar to placebo, the occurrence of genital infections was higher in the empagliflozin arm. The companies intend to seek approval for empagliflozin in the US, Europe and Japan this year.

Other SGLT-2 Inhibitors in Development

We note that Eli Lilly and Boehringer Ingelheim are not the only companies looking to develop a SGLT-2 inhibitor. Bristol-Myers Squibb ( BMY ) and AstraZeneca's ( AZN ) oral SGLT2 inhibitor, Forxiga gained EU approval in Nov 2012. However, Forxiga is yet to gain approval in the US. The companies, which received a complete response letter from the FDA for Forxiga, intend to resubmit their marketing application in mid-2013. Another SGLT2 inhibitor currently under FDA review is Johnson & Johnson's ( JNJ ) canagliflozin (proposed trade name: Invokana).

Neutral on Eli Lilly

We currently have a Neutral recommendation on Eli Lilly, which carries a Zacks #3 Rank (Hold). The company recently provided its financial guidance for 2013 and commented on its 2012 guidance as well. Although Eli Lilly's 2013 revenue guidance was in line with expectations, the earnings guidance was above expectations. Share buybacks and cost control should help the company achieve its 2013 guidance despite the presence of generic competition for key products.

Large-cap pharma companies that currently look more attractive include Novartis ( NVS ) and Sanofi ( SNY ). Both carry a Zacks #2 Rank (Buy).



ASTRAZENECA PLC (AZN): Free Stock Analysis Report

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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: AZN , BMY , JNJ , LLY , NVS

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