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FDA OKs once-a-day insulin that could be blockbuster for Lilly

December 16, 2015
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Federal health officials have approved a cheaper version of the world's top-selling insulin from Sanofi for millions of U.S. patients with diabetes. The drug could mean hundreds of millions of dollars in new revenue for Eli Lilly and Co.

The Food and Drug Administration approved a new form of Sanofi's pen-like injector, Lantus, from drugmakers Lilly and Boehringer Ingelheim.

Those companies received tentative FDA approval for their drug, called Basaglar, in August 2014. But the launch was delayed by a patent dispute with Sanofi. The three drugmakers reached an agreement in September allowing the launch of the new drug.

Insulin is a hormone that is crucial for controlling sugar levels in the blood. People with diabetes either do not produce enough insulin or cannot properly use it.

Lantus is the top product for Sanofi and the third best-selling medicine in the world by revenue. British research firm GlobalData said Lantus had sales of $12.4 billion in 2014.

The FDA said Wednesday it approved Basaglar based on data showing it is safe and effective and works similarly to Lantus. The most common side effects reported in company trials included allergic reactions, injection site reactions, itching, rash and weight gain.

Indianapolis-based Lilly and Boehringer already sell Basaglar in several European countries. The two companies have not set a U.S. price yet, but it likely will be significantly lower than the price for the original product.

Wall Street analysts expect Basaglar to become a blockbuster in its own right, although not on the scale of Lantus. Lilly also must split the revenue from Basaglar with Boehringer as part of a co-development agreement.

Dr. Tim Anderson, a pharmaceutical analyst at Bernstein Research, estimated in September that Basaglar will bring in $1.3 billion in sales in 2020, with Lilly and Boehringer splitting those proceeds 50-50. That puts Lilly’s take at $660 million annually.

Jeffrey Holford, an analyst at Jefferies & Co., estimated Lilly’s annual share at $850 million in 2020, implying overall sales of Basaglar at $1.7 billion.

The diabetes market is fiercely competitive, and top rivals recently have been introducing new products across several classes of diabetes pills, as well as easier-to-use insulins.

About 95 percent of the estimated 29 million Americans with diabetes have Type 2 diabetes, which is often linked to obesity and a sedentary lifestyle. Type 1 diabetes, often called insulin-dependent diabetes, typically is diagnosed in childhood or adolescence, while Type 2 diabetes typically strikes in middle age.

Lilly shares rose 20 cents in after-market trading, to $86.49 each.

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