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Lilly: Forget Alzheimer's; think diabetes

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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.
 

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  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

  4. downtown in the same area as O'malia's. 350 E New York. Not sure that another one could survive. I agree a Target is needed d'town. Downtown Philly even had a 3 story Kmart for its downtown residents.

  5. Indy-area residents... most of you have no idea how AMAZING Aurelio's is. South of Chicago was a cool pizza place... but it pales in comparison to the heavenly thin crust Aurelio's pizza. Their deep dish is pretty good too. My waistline is expanding just thinking about this!

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