2016 Review/2017 Preview – Eli Lilly

What went right, what could have gone better and what's next for Eli Lilly

What went right…

Win, lose or ambiguous result, solanezumab was going to be the top headline for Eli Lilly in 2016, which in retrospect means that many of the company’s accomplishments may have been overshadowed a bit. Among its notable successes were the launches of psoriasis medicine Taltz (ixekizumab) and diabetes drug Trulicity (dulaglutide), as well as the long-awaited approval from the FDA for Basaglar, a biosimilar version of Sanofi’s Lantus.

Indeed, despite the fact that Eli Lilly shares modestly underperformed those of its peer group over the past 12 months – the pharma ticked down 11 percent versus a 10-percent drop for the NYSE Arca Pharmaceutical Index – the company appears to have accomplished a lot this year that will begin to bear fruit in 2017, including the recent label expansion for diabetes drug Jardiance (empagliflozin), which last month became the first SGLT2 inhibitor to receive a label highlighting a mortality benefit.

Physician Views Poll Results: New indication to grow Jardiance sales and broader SGLT-2 inhibitor market

What’s more, Eli Lilly is among four companies that have been making steady progress with anti-CGRP mAbs, an encouraging new class of migraine products that moved into pivotal testing in 2016 that most analysts have earmarked as having blockbuster potential. Even further below the radar is its NGF inhibitor tanezumab, a product that has thus far navigated around the problems, which have bedevilled others in the same class to make it into Phase III testing for pain. The company itself has described the product as its most underappreciated R&D candidate.

KOL Views: Despite question marks, leading expert believes anti-NGF mAbs will play major role in treating chronic pain and combating opioid epidemic

What could have gone better

Eli Lilly came up empty in what was arguably the most highly anticipated readout in all of biopharma in 2016 when solanezumab was found to have failed the EXPEDITION-3 trial in November, making it the third straight Phase III study in which the mAb against beta-amyloid had failed to differentiate itself from placebo as a treatment for Alzheimer’s disease (AD).

The results served as the final death knell for solanezumab and touched off another round of debate about the viability of the "amyloid hypothesis" – that plaque-forming beta-amyloid fibrils play a key role in the pathogenesis of AD – though despite the disappointment companies like Biogen and Merck & Co., and even Eli Lilly itself, remain committed to using the pathway as a favoured target for developing therapeutics. (See ViewPoints: Heads I win, tails you lose – solanezumab’s near-miss seen as ideal result for others.)

KOL Views: Neurology expert cautions against over-interpreting results from EXPEDITION3 of Eli Lilly’s solanezumab

Another setback the company faced last year was a slight delay for CDK 4/6 inhibitor abemaciclib, which did not achieve the early stopping criteria in a Phase III trial for breast cancer in August, thus allowing Novartis’ ribociclib to grab the lead as the likely second-to-market challenger to Pfizer’s Ibrance (palbociclib), the first drug in the class to be approved. (See ViewPoints: Eli Lilly's MONARCH delay could crown Novartis' ribociclib as second-to-market player behind Pfizer's Ibrance.)

What comes next…

The complete removal of solanezumab from expectations means a fresh start of sorts for Eli Lilly heading into 2017, where execution will be the name of the game and is expected to help the company achieve its recently unveiled financial projections calling for annual revenue growth of 5 percent between 2015 and 2020.

Indeed, even in the face of an increasingly difficult commercial environment for diabetes drugmakers, Eli Lilly appears to have put itself in a relatively enviable position relative to peers thanks to the unique value propositions offered by Jardiance, which it and partner Boehringer Ingelheim will hope to leverage rapidly into greater market share, and Trulicity, which the company appears to have had some success in positioning as an alternative to Novo Nordisk’s Victoza (liraglutide).

Taltz got off to a strong start in 2016, according to Morgan Stanley analyst David Risinger, and should receive an added boost from the expected approval of rheumatoid arthritis drug in baricitinib, a JAK inhibitor with a PDUFA date in 1Q17.

Two important milestones on the horizon for Eli Lilly next year are the expected readouts from Phase III trials of tanezumab and abemaciclib, a strong showing by the latter will be important to boost the company’s chances for winning market share from the more advanced CDK 4/6 inhibitors in the hotly contested breast cancer arena.

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