Eli Lilly and Company
(
LLY
) recently provided an update on its rheumatoid arthritis
candidate, tabalumab. The company said that it intends to
discontinue its phase III rheumatoid arthritis program for the
candidate.
However, Eli Lilly will continue developing tabalumab for
systemic lupus erythematosus. ILLUMINATE, the phase III program
for the lupus indication, will continue as planned.
We note Eli Lilly had scrapped a pivotal phase III study being
conducted with tabalumab in Dec 2012. Tabalumab, an anti-BAFF
monoclonal antibody, was being evaluated in the FLEX-M study for
the treatment of moderate-to-severe rheumatoid arthritis in
patients who have not responded adequately to methotrexate
therapy.
The company's decision to halt the study was based on a
planned interim futility analysis which showed insufficient
efficacy.
Given the disappointing FLEX-M findings, Eli Lilly conducted
an interim futility analysis of FLEX-V, another study being
conducted with tabalumab on patients suffering from
moderate-to-severe rheumatoid arthritis who did not respond
sufficiently to one or more tumor necrosis factor (TNF)
inhibitors.
Based on the interim futility analyses of these studies, Eli
Lilly decided to discontinue the development of tabalumab in the
ongoing rheumatoid arthritis program.
Eli Lilly expects to record a charge of about $50 million in
the first quarter of 2013 due to the discontinuation of the
rheumatoid arthritis program.
Our Take
The discontinuation of the tabalumab rheumatoid arthritis
program is disappointing. However, we note that Eli Lilly has
another promising rheumatoid arthritis candidate, baricitinib, in
its pipeline. Eli Lilly and partner,
Incyte Corporation
(
INCY
) recently presented encouraging phase II data on the candidate,
which is being developed for the treatment of patients with
moderate-to-severe rheumatoid arthritis who had an inadequate
response to treatment with methotrexate. We expect investor focus
to remain on baricitinib and other pipeline candidates.
Eli Lilly currently carries a Zacks Rank #2 (Buy). Other
large-cap companies like
Sanofi
(
SNY
) and
Novo Nordisk
(
NVO
) currently carry a Zacks Rank #2 and a Zacks Rank #1 (Strong
Buy), respectively.
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