Eli Lilly and Co. will learn a lot about its future today.
The U.S. Food and Drug Administration is scheduled to rule on Lilly's new blood-thinner prasugrel today after a nine-month review of clinical trial data. If approved, prasugrel will go on the market immediately under the name Effient.
Prasugrel is the first big test to determine if Lilly can replace revenue it will lose in 2011 when it loses patent exclusivity on its bestselling drug, the antipsychotic Zyprexa.
And Lilly needs a new drug approval. It hasn't had one since 2005, when the FDA approved its diabetes medicine Byetta.
"Given the potential for multi-billion dollar sales for the drug, there is considerable investor interest on FDA action for prasugrel," Robert Hazlitt, an analyst at BMO Capital Markets, wrote in a note to investors.
Early on, analysts tagged prasugrel with blockbuster potential since it has proved better at reducing heart-related deaths than the current leading treatment, Plavix. That drug, made by New York-based Bristol-Myers Squibb Co. and France-based Sanofi Aventis, racked up $8.5 billion last year in total sales.
But prasugrel also led to higher rates of bleeding in patients who were older, lighter weight, and who had previously suffered a stroke.
Since those negative side effects were revealed in November, analysts fear the FDA will limit the allowed uses of prasugrel. They have scaled back their sales predictions accordingly.
"We anticipate some form of approval for Prasugrel, but believe the label will be narrow," wrote Les Funtleyder, a health care analyst at Miller Tabak & Co. in New York, in a note to investors this morning. He added, "That said, Plavix still dominates the market and once it goes generic in 2011, it will continue to be the 1st line choice, but for cost reasons. Therefore we see limited peak (sales) potential for prasugrel."
If prasugrel is approved, Lilly will split any sales with its development partner on the drug, Japan-based Daiichi Sankyo Co. Ltd.
Hazlitt, at BMO Capital Markets, predicts prasugrel will bring Lilly $850 million in revenue in 2011 and $1 billion by 2013.
Steve Scala, an analyst at Cowen and Co., predicts prasugrel sales of $750 million by 2011 and as much as $1.75 billion by 2015.
Zyprexa generated $4.8 billion last year in worldwide sales, one-quarter of Lilly's total. Analysts estimate the drug produces half of Lilly's total profits. The drug will lose its U.S. and European patents in November 2011.