Lilly says complete Sola failure unlikely
- Higher sales of Eli Lilly's recently approved products helped drive revenue growth of 5% in the third quarter, the Indianapolis drugmaker reported Tuesday. Yet, flagging performance from the fast-acting insulin Humalog and other aging drugs caused quarterly revenues to miss consensus estimates.
- Lower realized prices of Humalog in the U.S., driven in part by increased rebates, washed out higher volumes and fueled a 14% drop in U.S. sales of the drug. Enrique Conterno, president of Lilly Diabetes, noted the company has seen more business growing though less profitable channels like Medicaid.
- Lilly's six new drugs accounted for nearly all sales growth in Q3, brightening the drugmaker's quarter despite increased pricing pressures in diabetes. Even so, Lilly's near-term outlook will likely hinge on the outcome of Lilly's much-watched Phase 3 study of its Alzheimer's drug solanezumab, which reads out in December.
Along with its earnings results, Lilly reported the last patient visit in solanezumab's study had been recorded earlier this month and indicated the company would issue a top-line press release sometime before the end of the year, likely in early December.
Speaking on a call with analysts, David Ricks, current president of Lilly Bio-Medicines and newly appointed CEO, said Lilly continues to see solanezumab as "high risk, high reward," but believes a total failure to be the "least probable" outcome of the trial.
A success would buoy Lilly tremendously and could more broadly lift the biotech industry as a whole, validating the theory that buildup of amyloid plaques contributes to disease progression. Outgoing CEO John Lechleiter even suggested a success could help blunt criticism of the drug industry, proving the potential of pharma to reshape the standard of care.
Still, Alzheimer's has proved a notoriously hard disease to solve and any mixed results for solzanezumab could make it difficult to win over regulators.
Among Lilly's newly approved products, the GLP-1 Trulicity (dulaglutide) continued to grow strongly, notching nearly $244 million in sales in Q3. Lilly said the drug currently commands a 28% share of new patient starts in the GLP-1 class, boosted by continued growth from the entire class. It is trying to steal market share away from Novo Nordisk's Victoza (liraglutide), which has run into challenges with payer coverage.
Yet, lower prices weighed on Lilly's mainstay diabetes drugs Humalog (insulin lispro) and Humulin (insulin regular), while competition from immuno-oncology drugs in lung cancer hurt sales of Alimta (pemetrexed), another top-earner.
This competitive pressure from new lung cancer drugs like Merck's Keytruda (pembrolizumab) and Bristol-Myers Squibb's Opdivo (nivolumab) also hurt U.S. sales of Cyramza (ramucirumab), which fell 12% in the third quarter. Sales outside of the U.S. now make up roughly 60% of Cyramza's revenues, said Derica Rice, chief financial officer of Lilly.
As Keytruda and Opdivo continue to gain steam in non-small cell lung cancer, sales of Alimta and Cyramza in that indication will likely continue to drop.
Profits fell by 3% to $778 million and Lilly knocked $0.02 off of its GAAP earnings per share guidance, now expected to be between $2.68 and $2.78 per share.
- Eli Lilly Earnings report
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