Analysts demand news on next Lilly blockbuster

Back to TopCommentsE-mailPrintBookmark and Share

Eli Lilly and Co. spends a lot of time these days telling the rest of the story—how well it’s doing in areas not connected to highly lucrative drugs about to see their patents expire. But for the most part, investors and analysts just want to know when the next blockbuster will be coming.

That was certainly the case Monday morning, when analysts peppered Lilly’s R&D chief Jan Lundberg with questions about Lilly’s experimental Alzheimer’s medicine, solanezumab.

Lundberg fielded four questions about the drug during a one-hour conference call. At one point he chuckled and replied, “I appreciate your interest in solanezumab. It certainly could be a tremendous agent for patients with Alzheimer’s.”

Indeed, as no existing medicine does more than temporarily mask the symptoms of Alzheimer's, a drug that actually halts progression of the disease would be a monumental breakthrough. Some analysts have pegged the sales potential at $5 billion a year.

Only a drug of that magnitude could really offset the massive revenue Lilly will lose to patent expirations in the next three years. Three key drugs—Zyprexa, Cymbalta and Evista—will face competition from generic copies between now and 2014. Lilly will lose the lion’s share of those drugs' sales, which last year was a combined $9.5 billion.

In addition, Lilly lost patent protection late last year on its cancer drug Gemzar, which brought in another $1 billion a year.

Linda Bannister, a pharmaceutical analyst at Edward Jones in St. Louis, cited Lilly’s Alzheimer’s program and an experimental cholesterol drug, known as a CETP inhibitor, as its best shots at new blockbusters.

“Those are the things that really come to mind that could be game changers, if successful,” she said.

But both are high-risk ventures. Lilly was embarrassed late last summer when another experimental Alzheimer’s drug failed spectacularly in a late-stage clinical trial, actually worsening some patients’ condition. Lilly halted the trial of that medicine, semagacestat.

Lundberg said Monday that Lilly was seeing better safety results in its clinical trials of solanezumab.

“What I can say is that the safety profile so far in these trials looks better than for semagacestat, and there are actually less patients that have stopped the trials because of safety issues,” Lundberg said.

Lilly expects final data from its clinical trials to be available in mid-2012.

Even so, the company has no chance of bringing new drugs to market in time to substantially offset its looming revenue loss over the next few years.

“That’s clearly not going to be the case,” Bannister said, adding, “It’s going to be a little too late.”

Instead, Lilly is letting its profit drop—by as much as 12 percent this year. And many analysts don’t expect profits to grow anytime before 2015.

In the meantime, the company is trying to woo investors by talking about its rapid growth rates in Japan and China, as well as in its animal health business. Those three areas experienced first-quarter sale growth of 34 percent, 23 percent and 25 percent, respectively.

Those are impressive rates. But combined sales in those business areas were $3.4 billion last year—about one-seventh of Lilly’s overall revenue.

“Our clients are interested in the emerging markets story. We believe that could be an engine for growth,” Bannister said. “But that’s more of a long-term story. It’s really the near-term challenges that everyone is focused on.”


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. If I were a developer I would be looking at the Fountain Square and Fletcher Place neighborhoods instead of Broad Ripple. I would avoid the dysfunctional BRVA with all of their headaches. It's like deciding between a Blackberry or an iPhone 5s smartphone. BR is greatly in need of updates. It has become stale and outdated. Whereas Fountain Square, Fletcher Place and Mass Ave have become the "new" Broad Ripples. Every time I see people on the strip in BR on the weekend I want to ask them, "How is it you are not familiar with Fountain Square or Mass Ave? You have choices and you choose BR?" Long vacant storefronts like the old Scholar's Inn Bake House and ZA, both on prominent corners, hurt the village's image. Many business on the strip could use updated facades. Cigarette butt covered sidewalks and graffiti covered walls don't help either. The whole strip just looks like it needs to be power washed. I know there is more to the BRV than the 700-1100 blocks of Broad Ripple Ave, but that is what people see when they think of BR. It will always be a nice place live, but is quickly becoming a not-so-nice place to visit.

  2. I sure hope so and would gladly join a law suit against them. They flat out rob people and their little punk scam artist telephone losers actually enjoy it. I would love to run into one of them some day!!

  3. Biggest scam ever!! Took 307 out of my bank ac count. Never received a single call! They prey on new small business and flat out rob them! Do not sign up with these thieves. I filed a complaint with the ftc. I suggest doing the same ic they robbed you too.

  4. Woohoo! We're #200!!! Absolutely disgusting. Bring on the congestion. Indianapolis NEEDS it.

  5. So Westfield invested about $30M in developing Grand Park and attendance to date is good enough that local hotel can't meet the demand. Carmel invested $180M in the Palladium - which generates zero hotel demand for its casino acts. Which Mayor made the better decision?