Ever wonder why acquisition-minded CEO John Lechleiter has been cool to the idea of Eli Lilly and Co. buying Amylin Pharmaceuticals Inc., Lilly’s partner on the diabetes medicine Byetta?
One reason might be that Lilly is developing its own entrant into the promising new class of GLP-1 diabetes drugs, which was pioneered by the 2005 launch of Byetta.
On Saturday, Indianapolis-based Lilly unveiled impressive data about its GLP medicine, currently known only as LY2189265. Type 2 diabetes patients in a Phase 2 clinical trial of the experimental 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 are counting on to reignite Byetta 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 Byetta’s gross U.S. profits evenly. But the drug 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 on Saturday showed that Victoza did a better job than Byetta at lowering blood sugar and helping diabetics lose weight.
Third, concerns about Byetta causing inflammation of the pancreas have spooked doctors into prescribing Byetta less frequently. Lilly and Amylin released data on Saturday 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 the GLPs. But 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 that Lilly itself is the “most concerning potential competitor” to Amylin and Byetta.