While Eli Lilly and Co. continues to work with a biotech firm on the diabetes medicine Byetta, it's developing a potential
competitor to Byetta all on its own.
Indianapolis-based Lilly unveiled impressive data June 6 about its experimental drug LY2189265. Type 2 diabetes patients in a Phase 2 clinical trial of the drug saw their blood sugar and their weight drop and their production of insulin increase.
LY2189265 would be administered through once-weekly injections, just like the long-acting version of Byetta that Lilly and San Diego-based Amylin Pharmaceuticals Inc. are counting on to reignite the drug's sales. The companies asked U.S. regulators to approve the long-acting version earlier this year.
Byetta racked up $751 million in sales last year. Lilly and Amylin split its gross U.S. profits evenly. But the medicine has several problems.
First, it currently comes in an inconvenient, twice-daily injection.
Second, it's about to get serious competition from other products. Denmark-based Novo Nordisk will launch a competing drug this summer called Victoza. Data released by Novo June 6 showed that Victoza, which would be delivered through a daily injection, did a better job than Byetta at lowering blood sugar and helping diabetics lose weight.
Third, concerns about Byetta's causing inflammation of the pancreas have spooked doctors into prescribing it less frequently. After enjoying 16-percent growth last year, its U.S. sales were flat in the first quarter.
Lilly and Amylin released data on June 6 from 25,000 Byetta patients showing no increase in pancreatitis.
"Despite this news, we believe this class of drug has more or less peaked and with other entrants like Novo Nordisk we do not see much upside," health care stock analyst Les Funtleyder of New York-based Miller Tabak & Co. wrote in a report to investors.
That's why Amylin and Lilly are so set on winning approval for a once-weekly version of their diabetes drugs. If Lilly could come up with the best drug all on its own, it would be far more lucrative than its partnership with Amylin.
Jason Napodano, a biotech analyst at Zacks.com, said Lilly itself is the "most concerning potential competitor" to Amylin and Byetta.