Lilly banks on new drugs for 2019 growth, touts R&D progress
- Eli Lilly on Wednesday rolled out its expectations for the future, raising its annual revenue growth target through 2020 and establishing 2019 guidance that counts on sales increases from new drugs to drive revenue.
- Revenue next year should fall between $25.3 billion and $25.8 billion, which translates to year-over-year growth between approximately 3% and 6%, according to Lilly. To achieve that, executives are banking on a group of newer drugs more than making up for expected declines in sales from older medicines losing exclusivity, such as Cialis.
- The Indianapolis-based drugmaker also showcased progress its made over the past four years in speeding up drug development. Lilly said it has cut about two years off the average time it takes the company to move a candidate from first human dosing to commercial launch, from about 10 years in 2015 to 8 years in 2018.
Pharma shares have had a rough 2018, with the industry's stock index in the red. Lilly has been able to avoid the trend, however, with shares up nearly 30% on the year, rising from about $85 per share to $110 apiece. They were up nearly 5% at market's open Wednesday, as Lilly laid out next year's guidance and strategy as well as some data on how its business improved over the last few years.
Lilly took a victory lap at its meeting with investors, resurfacing old comments from Wall Street analysts that advised selling the pharma's stock and fretted over its risky pipeline. Lilly claims its total shareholder return from December 2009 through December 2018 topped 340%, ahead of rival pharmas.
While the company expects revenue growth in 2019, executives admitted the challenges Lilly faces from expected generic competition on Cialis (tadalafil), Effient (prasugrel) and Forteo (teriparatide) in the U.S. and Alimta (pemetrexed) in Germany.
Additionally, company execs acknowledged broader concerns for the industry, including continued U.S. pressure on pricing, foreign exchange rates and an increase in pharma's contribution to the so-called donut hole in Medicare Part D.
Helping to boost sales moving forward are a set of 10 drugs that have launched in the past five years. Chief Financial Officer Joshua Smiley said these therapies are expected to make up roughly 45% of Lilly's human pharmaceutical sales in 2019.
Combined sales of eight of those drugs have grown from about $100 million in the first quarter of 2015 to $1.86 billion in the most recent financial quarter. Among that group, however, sales growth has been uneven — Trulicity (dulaglutide) and Taltz (ixekizumab) have recorded strong sales, while Cymraza (ramucirumab), Lartruvo (olaratumab) and Olumiant (barictinib) have made much more modest contributions.
Daniel Skovronsky, Lilly's chief scientific officer, said the pharma remains on pace to reach its 2016 goal of 20 new medicine launches in 10 years, from 2014 to 2023.
Lilly also provided data showing it has sped up its drug development process, a perennial goal among slower-moving pharma companies. Lilly contested it's getting faster — though it was still third-to-market in the competitive CGRP inhibitor class for migraines, trailing Amgen and Teva Pharmaceuticals.
The drugmaker has also arrived behind competitors with its IL-17 inhibitor Taltz, which launched more than a year after Novartis' Cosentyx (secukinumab), and with its CDK 4/6 inhibitor Verzenio (abemaciclib), which trailed Pfizer's rival treatment by more than two years.
Before 2020, the company plans to narrow its focus solely to human pharma, expand its presence in immunology and pain and selectively invest in targets for Alzheimer's disease, according to Lilly's presentation.
For R&D updates next year, the company plans to start four Phase 3 trials and read out topline results on 11 Phase 3 studies. It also plans to have six regulatory submissions, with four in the U.S.
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