In this Fool Live video, Healthcare and Cannabis Bureau Chief Corinne Cardina and longtime Motley Fool contributor Brian Orelli discuss Eli Lilly's (NYSE: LLY) monoclonal antibodies that target the novel coronavirus, which causes COVID-19. The company has a pair of antibodies, LY-CoV555 and LY-CoV016 that it's testing individually and in combination with each other. After the segment was recorded, a phase 3 clinical trial testing LY-CoV555 was paused by the National Institutes of Health, which is running the study.
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Corinne Cardina: Let's talk about Eli Lilly. This company is the oldest of them all. It is 145 years old. It has a $145 billion market cap. It's based in Indianapolis. Eli Lilly has a portfolio of medicines including treatments in bone, muscle, joint, cancer, cardiovascular, diabetes, endocrine, immunology, neurodegeneration, neuroscience, and pain. That's a mouthful. They do a lot. They've been around for a long time.
In the second quarter of fiscal 2020, their revenue was $5.5 billion, down 2% from the same quarter the prior year. This stock also pays a dividend yielding about 2%. Eli Lilly has a neutralizing monoclonal antibody. They are calling it LY-CoV555. They call this a potent neutralizing immunoglobulin G, which is a type of monoclonal antibody, and it is directed at the spike protein of coronavirus that we just talked about. This was designed to block viral attachment and entry into human cells which would neutralize the virus, potentially prevent, and treat COVID-19.
On Sep. 16, they released proof of concept data from an interim analysis of the phase 2 clinical trial. This showed a reduced rate of hospitalization for patients who were treated with this treatment. Eli Lilly has completed enrollment and the primary safety assessments of the treatment in a phase 1 study of hospitalized patients with COVID-19 and they're doing an ongoing long-term follow-up. A phase 2 study in people recently diagnosed with COVID-19 is going on on an outpatient basis, so the non-hospitalized patients.
Lilly recently initiated a phase 3 study for the prevention of COVID-19 specifically in residents and staff at long-term care facilities. There's a big need there, as we know. Then lastly, the treatment is being tested in the National Institutes of Health studies of outpatient and hospitalized patients. On Wednesday, Eli Lilly announced that they had promising data for the combination of this treatment with another of their neutralizing antibody which is LY-CoV016. The company also said that it has asked the FDA for an emergency-use authorization for the initial one, 555. It plans to submit a request for an emergency-use authorization for the combination treatment next month after it gets some more safety data and it has to produce a sufficient supply. This is the second antibody that we've talked about. GlaxoSmithKline (NYSE: GSK) and Vir Biotechnology (NASDAQ: VIR) are partnered on one as well. Brian, could you explain what is a neutralizing antibody and how do these treatments differ?
Brian Orelli: Yes. A neutralizing antibody means that the antibody binds to the virus in the spot that would block its entry into a cell. You can imagine an antibody might bind to a different spot on the side, if you think of a virus, you usually see them like a point at the end. That's where the point it's going to attach. If antibody binds over here, then it might not necessarily block entry. Even though it's not blocking the entry, it could in theory stimulate the immune system to attack the virus. Antibodies that aren't neutralizing aren't necessarily bad, but certainly neutralizing antibodies are better. Regeneron (NASDAQ: REGN) doesn't call theirs a neutralizing antibody, I don't think, but I'm pretty sure it probably is because it would seem silly not to give it a neutralizing antibody.
Corinne Cardina: Absolutely. The proof of concept study for this particular monotherapy for Eli Lilly, it combined three different doses. They've got 700 milligrams, 2,800, and 7,000, all compared to the placebo, of course. Only the middle dose, 2,800, pass the primary endpoint. That was the change from the baseline in viral load at day 11. What does this tell us about the drug and its prospects?
Brian Orelli: I think they just picked the wrong endpoint, because the reason why only one of the doses worked and it was the middle dose, which you usually expect the highest dose to work better than [...] unless you were at the maximum level, and then all three of them would work. I think they picked the wrong endpoint because the placebo patients pretty much recovered, and most of the placebo people got rid of their virus at that day. You've got to cut Lilly some slack here because this is not a disease that we've been studying for years and years. Picking the right endpoint is so difficult, but you've got to pick something to measure because it's hypothesis-driven. That's what they picked in and that's the reason why only one of the doses worked. But it's pretty clear that the drug is working. Also, they measured the rate of hospitalizations, how many ER visits. That was 1.7% for the 555 versus 6% for placebo. So 1.7 versus six, and that's a 72% risk reduction, although it's a limited number of patients.
Corinne Cardina: Great. That's very good insight. What are your thoughts on the combination treatment?
Brian Orelli: I think it looked a little better than the one drug. We're getting really into the hand waving, but if we compare the 1.7 that the single dose did for rate of hospitalizations and ER, the combination was 0.9. The placebos were pretty close to each other. A six for them for the 555 versus 5.8 for the placebo group that didn't get the combination treatment. The placebos look pretty close to similar so I think we can say that, 1.7 versus 0.9, we're definitely headed in the right direction with using two antibodies compared to one.
Corinne Cardina: Great. Just so everybody knows, when we're talking about a placebo in these trials, that's typically the standard of care. The patients aren't getting nothing. They're getting what's typically administered.
Brian Orelli: Right, and the antibody would be on top of whatever's typically administered too. It'll be antibody plus standard of care versus placebo plus standard care. The reason why they do the injection on placebo is just so that the doctor doesn't know what the patient got.
Corinne Cardina: Right, so it's double blind.
Brian Orelli: Right.
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