Lilly's Arzoxifene Defeat: Pharma Giant's Pipeline Looks Awfully Dry Now

Eli Lilly (LLY) has finally admitted defeat in its long-running battle to make arzoxifene, a follow-on osteoporosis drug to its own blockbuster Evista, an approvable and commercially viable product. Although the results of a pivotal phase III trial met its primary endpoints, the drug failed on multiple secondary measures which would have provided an advantage over existing treatments, leaving Lilly with little option but to abandon plans to file for regulatory approval.

As previously highlighted by EP Vantage when arzoxifene reported positive phase III data earlier this year (Lilly’s positive arzoxifene data tinged with disappointment , April 9, 2009), its chequered developmental history represented a classic example of a missed opportunity, mired by clinical setbacks, patent expiries, patent challenges and the development of superior competing products. To some extent these factors probably made Lilly’s decision easier but it will do little to answer critics who claim the pharma giant has one of the driest pipelines amongst its peers.

No unique selling points

Following positive results from the first two pivotal trials which showed significant increases in bone mineral density compared to Evista and placebo in postmenopausal women, the hope was that data from the third trial, called Generations, would provide evidence of efficacy in a number of further related settings.

Although arzoxifene met its primary endpoints in significantly reducing the risk of vertebral fracture and invasive breast cancer, it failed to demonstrate a significant difference for key secondary efficacy endpoints, including: non-vertebral fractures, clinical vertebral fractures, cardiovascular events and cognitive function, when compared to placebo.

As if that was not enough to dampen the drug’s regulatory and commercial prospects, patients in the arzoxifene group also suffered more frequent adverse events, including venous thromboembolic events, hot flushes and gynaecological-related events.

Clearly Lilly would have had a hard task in justifying an attempt to get the product through the FDA and last week’s advisory committee thumbs up for Amgen’s (AMGN) denosumab (Amgen's Dmab clips regulatory hurdle but remains on course, August 14, 2009) to treat postmenopausal osteoporosis (PMO) probably helped persuade Lilly against such a move.

Despite some safety concerns, denosumab is expected to provide a significant advance in the treatment of PMO, a claim that Lilly now admits cannot be made for arzoxifene.

Financial implications

Despite the already low expectations for arzoxifene, analysts had still pencilled in sales of $407m by 2014, making it potentially Lilly’s biggest-selling pipeline product, worth $907m according to EvaluatePharma’s NPV Analyzer, or 2% of the company’s current market capitalisation of $37.7bn.

Lilly’s shares were down around 1% in early trade yesterday to $32.52 as the company also revealed the ditching of arzoxifene will result in a charge to earnings in the third quarter of $0.03 to $0.04 per share, although overall profit guidance for the year remains unchanged at $4.14 to $4.24 per share.

Dry pipeline accusations

Although Lilly’s chief executive officer, John Lechleiter, attempted to counter criticism of the company’s pipeline failures by claiming the group has, “the largest and most promising clinical stage pipeline in our history with more than 60 molecules in clinical development”, the absence of any internally discovered and developed new product in the last five years points to a pipeline that has been running dry for some time.

Arzoxifene’s launch next year would have been Lilly’s first internally developed product on the market in six years since anti-depressant drug Cymbalta was approved in 2004.

As such, the company may now have to wait another two to three years for their next in-house new product to reach the market. Protein kinase C inhibitor products, Arxxant and Enzastaurin, which themselves also have chequered developmental pathways, now represent Lilly’s next best chances of proving that its internal research efforts over the past few years have not been in vain.

Comments

[Focus Advisory:]

Lack of LLY pipleline is one reason I am buying AMLN at these levels. Will be shocked if LLY has not aquired its Byetta partner by this time next year.
Regards

Aug 20 03:00 PM