IBJNews

Lilly: Forget Alzheimer's; think diabetes

Back to TopCommentsE-mailPrintBookmark and Share

For more than a year, Eli Lilly and Co. has been viewed by investors as a laggard stock with one, slim shot at producing a huge jackpot: its experimental Alzheimer’s drug. But now company leaders are trying to direct investor attention toward what they view as a sure-fire bet: the drugmaker’s diabetes portfolio.

Lilly brass spent significant time during an investor conference call last month talking up their diabetes pipeline. Then last week they scheduled a special 90-minute call on June 11 that will be devoted to nothing but the diabetes pipeline.

There’s good reason for this. Some analysts put the chances of success of solanezumab, Lilly’s experimental Alzheimer’s medicine, at 10 percent or less. If it succeeds, the drug could generate $10 billion in annual sales and negate challenges posed by the string of patent loses on blockbuster drugs through which Lilly is suffering.

But diabetes has a 100-percent chance of bringing Lilly significantly more revenue over the next few years, as the incidence of the chronic disease rises sharply across the globe. That will help Lilly sell more of its insulins and its latest product, called Tradjenta.

Most analysts expect Lilly’s diabetes sales to grow more than 30 percent over the next four years—even before any new drugs coming out of its pipeline. That would mean an additional $1.3 billion in annual revenue.

And if the pipeline starts producing winners, the potential is even greater.

“LLY has one of the most attractive diabetes portfolios amongst its peer group,” Barclays Capital analyst Tony Butler wrote in an April 25 research note, referring to Lilly by its ticker symbol. “While there are inherent risks in all clinical programs, we believe diabetes could be an area that offers a lower risk profile as compared to that of Alzheimer’s or oncology.”

What’s in Lilly’s diabetes pipeline? A drug called empagliflozin is designed to boost glucose re-absorption in patients' kidneys, thus reducing levels of glucose in their blood.

Another drug is a glucagon-like peptide called dulaglutide, which Lilly thinks so highly of that it sold off its rights to the pioneer of this class of drugs, Byetta, which it launched in 2005 along with the drug’s creator, California-based Amylin Pharmaceuticals Inc.

Also, Lilly is developing two once-daily basal insulins—which if approved could finally stem the losses Lilly has suffered since the 2000 launch of the first basal insulin, Lantus.

“So I think all of this augurs well for us being able to offer a broad range of products to the dietologist, to the physician to really focus on what the patient needs and not just on what we have to offer,” Lilly CEO John Lechleiter said during the April 25 conference call.

Lilly is admittedly trying to play catch up to Denmark-based Novo Nordisk A/S and France-based Sanofi-Aventis SA in the diabetes business. In 1923, Lilly was the global pioneer of insulin. But its diabetes sales in recent years have grown half as fast as the overall global market.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

ADVERTISEMENT