Despite Trulicity success, Lilly can't escape diabetes concerns
- Eli Lilly reported $6.06 billion worth of revenue for the third quarter, a 7% increase from the same period a year prior. Key to that growth were products launched in the last several years, including Type 2 diabetes medicine Trulicity and anti-inflammation agent Taltz.
- Basaglar and Jardiance, two more of Lilly's newer diabetes medications, also saw year-over-year increases between 30% and 40%, yet Credit Suisse analyst Vamil Divan noted the drugs still performed below Wall Street analyst expectations.
- On a Tuesday earnings call, those analysts drilled Lilly about headwinds facing its broader diabetes portfolio. Notably, the questions came just a day after the company touted Trulicity's success in a "precedent-setting" cardiovascular outcomes trial.
Despite double-digit growth, analysts aren't convinced that Basaglar (insulin glargine), Jardiance (empagliflozin) or even Trulicity (dulaglutide) — which happens to be Lilly's top-seller — are immune from the broader pricing and competitive pressures crimping the diabetes drug market.
Insulins, for instance, have faced intense pushback on pricing from both payers and lawmakers.
Enrique Conterno, president of Lilly Diabetes, acknowledged on the Tuesday earnings call the company has seen "a lot of volatility" with its flagship insulin Humalog, as well as price erosion for Basaglar. He noted too that Basaglar recently gained access to the Medicare Part D formulary, a market segment known to be highly rebated.
What's more, the budget deal signed earlier this year will require drugmakers to pay more of the costs for Medicare recipients who are in the "donut hole" coverage gap beginning in 2019.
"Basaglar and our diabetes products are in that segment strongly, so we'll see a little bit of a headwind there," Conterno said.
Lilly made sure to point out that there are tailwinds as well.
For one, the company doesn't see copycat insulins as imminent threats, at least in the next few years.
And while Jardiance may have underwhelmed Wall Street, Lilly highlighted how Jardiance would be returning to a major formulary next year.
While the company did not name names, in August 2017, CVS decided to exclude the sodium/glucose cotransporter 2 (SGLT2) inhibitor from its formulary.
Conterno said the SGLT2 inhibitor class has been experiencing around 15% growth, and will benefit from recent guideline changes from the American Diabetes Association.
"It reminds me a bit of the re-acceleration of the GLP1 class, but when Trulicity was launched," he said.
On Trulicity, Lilly recently hinted at impressive results in a large cardiovascular outcomes study called REWIND. Lilly's keeping more comprehensive results from the trial under lock and key until mid-2019.
"I heard the Novo Nordisk call, and they also mentioned that GLP1s are not all the same. I think we agree with them," Conterno said, in a thinly veiled jab at a rival.
The company intends to submit the REWIND data sometime next year, and expects a potential label expansion in 2020.
- BioPharma Dive Lilly strengthens Trulicity's leading position with REWIND results
- Eli Lilly Q3 presentation
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