Lilly thriving in beaten-down diabetes market
- Bolstered by higher-than-expected sales of diabetes drugs, including decades-old Humalog and new Trulicity (dulaglutide), Eli Lilly reported fourth quarter 2016 revenue Jan. 31 that topped analysts’ estimates.
- All of Lilly’s new pharmaceutical products performed well, but Trulicity, approved by the Food and Drug Administration in 2014, was the company’s top-performer in the category. Trulicity’s global quarterly sales of $337 million were triple its sales of $112.5 million in fourth quarter 2015.
- "Newly launched products - including Trulicity, Cyramza, Jardiance and Taltz - led Lilly's volume-driven growth in 2016," said David A. Ricks, Lilly's president and CEO.
For 2016, Lilly CEO Ricks cited continuing pipeline progress, "with approvals of new products and new indications for existing products in [Lilly’s] core therapeutic areas of diabetes, oncology and immunology." The company expects this momentum to continue in 2017, he said.
Overall, Lilly’s fourth-quarter 2016 U.S. revenue rose 14% to $3.2 billion, driven mainly by increased volumes for four diabetes drugs — Trulicity, Humalog, Jardiance (empagliflozin) and Humulin — plus Taltz (ixekizumab) and companion animal products, the company said.
And Lilly said its global revenue of $5.76 billion was in part driven by increased volume for diabetes drug Basaglar (insulin glargine injection), a follow-on biologic to Sanofi's blockbuster Lantus that was approved by the FDA in late 2015.
Against this backdrop, much of Lilly’s 2016 earnings call focused on diabetes products. In a question-and-answer session with analysts, Enrique A. Conterno, president of Lilly Diabetes, described the company as being excited about the growth of Trulicity and its expanding market share.
"We're having great sequential growth, both driven by the overall strength and the health of the GLP-1 class, but also because of the share growth with Trulicity," he said during Lilly’s Jan. 31 earnings call. "I was just reviewing our latest data, and Trulicity now nearly has a 32% new-to-brand share in the GLP-1 class as of last week."
Overall, he said, "continued class growth is probably the most important factor." Late in 2016 Lilly started reaching additional prescribers for Trulicity, and the company has seen significant continued adoption by new prescribers. That "basically speaks to continued growth as we look ahead for this product," he said.
Asked about the competitive marketplace, Conterno said Lilly looks at Novo Nordisk’s semaglutide "as a potential competitor in the near future. And they do have good efficacy data in a number of trials, including a head-to-head against Trulicity. But they also have reported an increasing retinopathy that was significant as part of one of their trials. So we need to see at the end of the day what the full label will be. And we are of course very prepared, but we really like our chances."
Contreno noted that earnings numbers in the diabetes category can be volatile based on the estimates for rebates and discounts. "This is not just an item for Lilly," he said. "It's an item for any company in the diabetes space given the sizable rebates that are paid to payers."
Lilly believes that it has the right infrastructure in place to support continued growth in diabetes without having to add more commercial infrastructure, Conterno said.
"When we look at the number of people out there, we are a little bit below some of our competitors when it comes to diabetes, even post some of the reductions that we've seen from them," he said. "But at the end of the day, we have to do what works for us. And I think the numbers [show] not only very good revenue growth, but we are basically gaining share across all of our products in all of the key geographies."
“So it is a pretty good run that we're having right now,” he added.