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A Look at LLY's Early Stage Oncology Pipeline - Analyst Blog
4/12/2013 3:50:00 PM
Eli Lilly and Company ( LLY ) recently provided an update on its early-stage oncology pipeline at the annual meeting of the American Association for Cancer Research (AACR).
The company highlighted and presented pre-clinical data on four molecules - LY2835219 (a CDK4/6 inhibitor), LY2875358 (a MET antibody), LY2801653 (MET small molecule), and LY2157299 (a TGF-beta inhibitor). All the candidates are being evaluated as a single agent as well in combination with other therapies.
Although these candidates are early-stage in nature, we are pleased with the company's efforts to expand its oncology product pipeline. Eli Lilly's oncology product portfolio currently consists of Alimta, Gemzar and Erbitux. The oncology product portfolio delivered sales of $3.3 billion in 2012.
Eli Lilly has several candidates in phase III development targeting therapeutic areas like diabetes, cancer, and Alzheimer's disease. Notable pipeline agents include tabalumab (phase III - lupus), edivoxetine (phase III; depression), baricitinib (rheumatoid arthritis) and ramucirumab, a fully-human monoclonal antibody that targets the vascular endothelial growth factor (VEGF) receptor.
Ramucirumab is in phase III trials for breast, liver, colorectal, and non-small cell lung cancer. Eli Lilly reported positive phase III data on ramucirumab for second line monotherapy in patients with metastatic gastric cancer and intends to file for this indication in 2013. Meanwhile, Eli Lilly moved its CETP inhibitor, evacetrapib, into phase III (ACCELERATE study) for the treatment of high-risk vascular disease. The successful development of these candidates could put Eli Lilly back on the growth trajectory.
Eli Lilly currently carries a Zacks Rank #3 (Hold). 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 exclusivity in the US and EU. 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 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.
Companies that currently look well-positioned include Allergan ( AGN ), UCB ( UCBJF ) and QLT Inc. ( QLTI ). While UCB and QLT Inc. are both Zacks Rank #1 (Strong Buy) stocks, Allergan is a Zacks Rank #2 (Buy) stock.
ALLERGAN INC (AGN): Free Stock Analysis Report
LILLY ELI & CO (LLY): Free Stock Analysis Report
QLT INC (QLTI): Free Stock Analysis Report
UCB SA (UCBJF): Get Free Report
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