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Bad news piles up for Lilly

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What a tough week for Lilly. On Thursday, a judge struck down the Indianapolis-based drugmaker’s U.S. patent on Strattera, which might cost the company about $450 million in annual revenue. Then on Tuesday, Lilly halted clinical trials on one of its experimental Alzheimer’s medicines, because patients did worse on the drug than on a placebo.

The company’s stock price has dropped 5 percent since the Strattera news, closing Tuesday at $34.75.

The company needs to hold on to all the revenue it can before five star drugs watch their patents expire between now and 2014.

But Lilly keeps shooting blanks in late-stage clinical trials. The Alzheimer’s drug is one of several in the past year that have failed in the last step before market approval.

Lilly did get some good news on Tuesday. Its Cymbalta antidepressant appears to be effective against chronic pain. If the U.S. Food and Drug Administration approves the new use of the drug, it could add $500 million a year in sales, according to one analyst’s estimate.

However, the FDA’s staff who reviewed the Cymbalta pain studies questioned some of the statistical methods they used as well as a possibility for Cymbalta to cause liver toxicity, according to Reuters. An outside panel of experts will now review the data and make a non-binding recommendation.

Lilly moved to block generic versions of Strattera, a medicine for hyperactivity, from coming on the market until it appeals the federal judge’s ruling.

Also, even after the failure of its Alzheimer’s medicine semagacestat, Lilly still has one other Alzheimer’s remedy in clinical testing.

Lilly is counting on its pipeline of nearly 70 compounds to generate new revenue. But Wall Street analysts and investors aren't buying that message. They say Lilly must make an acquisition to soften its patent expirations until it can get new drugs to market.

For more on Lilly's long-term outlook, read this IBJ story.

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  1. Great article and post scripts by Mike L (Great addition to IBJ BTW). Bobby's stubborn as a mule, and doubt if he ever comes back to IU. But the love he would receive would be enormous. Hope he shows some time, but not counting on it.

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  4. Jim, your "misleading" numbers comment is spot on. This is the spin these posers are putting on it. News flash, fans: these guys lie. They are not publicly traded so no one holds them accountable for anything they say. The TV numbers are so miniscule to begin with any "increase" produces double digit "growth" numbers. It's ridiculous to think that anything these guys have done has awakened the marketplace. What have they done? Consolidate the season so they run more races on consecutive weekends? And this creates "momentum." Is that the same momentum you enjoy when you don't race between August and March? Keep in mind that you are running teams who barely make ends meet ragged over the summer to accomplish this brilliant strategy of avoiding the NFL while you run your season finale at midnight on the East Coast. But I should not obfuscate my own point: any "ratings increase" is exactly what Jim points to - the increased availability of NBC Sports in households. Look fans, I love the sport to but these posers are running it off a cliff. Miles wants to declare victory and then run for Mayor. I could go on and on but bottom line for God's sake don't believe a word they say. Note to Anthony - try doing just a little research instead of reporting what these pretenders say and then offering an "opinion" no more informed than the average fan.

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