Eli Lilly and Company LLY announced that it will discontinue the development of its late-stage diabetes candidate, basal insulin peglispro (BIL) that was being developed as a once-daily treatment of patients suffering from type I and type II diabetes.
Eli Lilly, which was at one point of time looking to file for regulatory approval for BIL in the first quarter of 2015, had reported a delay in its filing plans earlier this year (Feb 2015). The company wanted to generate additional data to understand and characterize the potential effects, if any, of changes in liver fat observed with BIL treatment compared with insulin glargine treatment in the phase III (IMAGINE) studies and thereafter expected regulatory filings to take place after 2016.
The company mentioned that so far no cases of drug-induced liver impairment or Hy's Law were observed in the IMAGINE development program conducted in more than 6,000 patients with type I and type II diabetes treated for up to 18 months (about 3,900 patients were treated with BIL).
Eli Lilly said that the decision was not based on new safety concerns rather on conversations with regulatory authorities and other external experts and that it would take more time and cost to understand the liver fat data observed in the studies. Instead, the company intends to focus its research and development (R&D) efforts on other assets in its portfolio and pipeline.
Eli Lilly expects to take a fourth-quarter R&D charge of $55 million (pre-tax) or about 3 cents per share (after-tax) to reflect the development setback. Meanwhile, the company confirmed that its earnings outlook for 2015 remains unchanged. The company continues to expect earnings in the range of $3.40–$3.45 per share. It is scheduled to report its 2015 results on Jan 28, 2016.
The discontinuation of the development of BIL is a blow for Eli Lilly’s diabetes pipeline. We note that insulins like Novo Nordisk A/S’ NVO Tresiba and Sanofi’s SNY Toujeo are currently available in the market. Several companies are also working on bringing new and improved treatments to market.
Eli Lilly is a Zacks Rank #2 (Buy) stock. A favorably ranked stock in the health care sector is Achillion Pharmaceuticals, Inc. ACHN carrying a Zacks Rank #1 (Strong Buy).
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