All eyes on Lilly’s fast-growing diabetes drug, Trulicity

Diabetes is a huge business for Eli Lilly and Co. The company’s six major diabetes medicines rang up more than $2 billion in worldwide sales last year and are expected to exceed $4 billion by 2020.

And for the next few months, all eyes in the diabetes community will be on one of those drugs, Trulicity, a popular, once-weekly injectable that is catching on fast with patients and doctors.

Since it was launched in 2014, Trulicity has made a name for itself by causing some patients to lose weight by slowing down how quickly food leaves the stomach and suppressing appetite.

In the first six months of 2018, Trulicity reaped $1.46 billion in sales, up 71 percent from a year ago. The Motley Fool predicts that Trulicity will be the No. 1 top-selling diabetes drug in the world by 2024, with annual sales of $4.6 billion.

Later this year, the Indianapolis-based drugmaker is expected to release data on a late-stage clinical trial designed to study whether Trulicity can reduce heart attacks and other “major cardiovascular events” in patients with type 2 diabetes.

The trial is called REWIND–short for Researching Cardiovascular Events With a Weekly Incretin in Diabetes. The clinical tests are wrapping up this month, and Lilly says it will release summary data in the fourth quarter and detailed data at the American Diabetes Association’s conference next summer.

The stakes are high for Lilly. Diabetes is its oldest and perhaps most famous franchise. The company was the first to mass produce insulin in the 1920s. The company is now trying to increase its dominance in the $10 billion diabetes drug market.

Some analysts say the trial results could give a huge boost to Trulicity if successful.

“Trulicity is one of Lilly’s largest assets,” Louise Chen, an analyst at Cantor Fitzgerald, wrote in a note July 17. She said she has been talking to doctors about likely outcomes of the REWIND trial and feels optimistic the results will be good for patients—and for Lilly.

“Based on our calls, most of the physicians expect a positive outcome for REWIND,” she wrote. “This could increase [prescriptions] by 20-30% or by multiples of current sales, which leads us to believe that significant upside remains in the drug, if the doctors are right.”

But some analysts are less confident, noting that Danish pharmaceutical company Novo Nordisk is developing a drug in the same class, called semaglutide (or sema, for short) that has shown good early clinical results.

“We would expect sema to be a fairly formidable competitor to Trulicity and slow down the growth of what we see as Lilly’s most important product,” wrote Vamil Divan, an analyst with Credit Suisse.

And some other analysts are coming down somewhere in the middle.

“We see REWIND as a 50/50 event that could limit Trulicity’s long-term prospects” (if unsuccessful), wrote BMO Capital Markets analyst Alex Arfaei.