Lilly falls short on 'field goal' attempt

October 13, 2010

Eli Lilly and Co.’s “miss” on a new use for its cancer drug Alimta was a rare failure to get an existing drug approved for a new use—even though the company has struggled mightily to get entirely new drugs to market.

The Indianapolis-based drugmaker announced Monday that it will not submit Alimta to regulators as a treatment for head and neck cancer. That’s another setback for Lilly, which is desperately trying to find new sales streams before it starts hemorraghing revenue a year from now when its bestseller Zyprexa loses patent protection in the United States and Europe.

Alimta has been Lilly’s fastest-growing drug the past two years, generating $1.1 billion in sales during the first half of this year. Having approval from the U.S. Food and Drug Administration to use the drug for treating head and neck cancers certainly would have added to that total.

But a Phase 3 clinical trial showed that cancer patients taking Alimta and the chemotherapy agent cisplatin only saw insignificant benefits compared with patients taking cisplatin alone.

In the pharma world, approval for entirely new drugs is like scoring touchdowns—they get the most points (er, dollars) on the board. But approval for additional uses for an existing drug, known as a line extension, are like field goals—they still add to the score.

Line extensions are a big reason why Lilly’s sales soared from 2006 to 2009, rising nearly 40 percent, even though the company won approval for only one new drug. (And that new drug, the blood thinner Effient, has seen insignificant sales to date.)

Some of the line extensions Lilly has won approval for include the antidepressant Cymbalta as a treatment for generalized anxiety and fibromyalgia, the erectile-dysfunction drug Cialis as a treatment for hypertension, the osteoporosis drug Evista to treat breast cancer, and a once-a-month version of the antipsychotic Zyprexa.

But Lilly has drawn far more attention for its high-profile failures on experimental drugs. In August, it halted a trial of an Alzheimer’s medicine because it actually made patients worse. Lilly drugs designed to treat multiple sclerosis, osteoprosis and diabetic eye disease also have failed in recent years.

As a result of Lilly’s innovation drought, the company is looking to acquire molecules from smaller companies that have a shot at producing revenue in 2014. That will be Lilly’s most difficult year, coming right after Lilly’s No. 2 drug Cymbalta will lose patent protection.

"Our company situation means we're particularly interested in late-stage opportunities that can be revenue-generating in 2014," Jan Lundberg, president of Lilly's research arm, told the Wall Street Journal in a September interview.

Lilly has looked at roughly 1,000 potential acquisition targets this year, but has done deals with only a few companies, Lundberg said. He added that the financial struggles of biotech companies since the 2008 financial meltdown give Lilly lots of targets to consider.


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