ecently, Eli Lilly and Company (LLY) announced that the Gastrointestinal Drugs Advisory Committee of the US Food and Drug Administration (FDA) did not recommend the candidate- liprotamas’ approval . Eli Lilly is seeking approval for the candidate to treat patients suffering from pancreatic deficiencies (exocrine pancreatic insufficiency) which may arise due to causes such as cystic fibrosis – a serious genetic disorder. Exocrine pancreatic insufficiency results in improper digestion.

While rejecting the pancreatic enzyme, which is not derived from pigs, the panel questioned its safety and efficacy and asked Eli Lilly to conduct additional trials on the candidate. We note that while the FDA is not bound to follow the recommendations of its advisory panels, it usually does so.

Eli Lilly added liprotamas to its pipeline through the acquisition of Alnara Pharmaceuticals Inc. in 2010. The purchase marked Eli Lilly’s entry in the enzyme replacement therapy market, which is characterized by a huge unmet need. Consequently, if the pancreatic enzyme is approved then it would not only bolster Eli Lilly’s top line but would allow treatment of exocrine pancreatic insufficiency through fewer pills than currently available therapies.

We note that Eli Lilly is looking to bolster its revenues through partnering deals and acquisitions to counter the loss of revenues arising from the impending loss of exclusivity of its key product, Zyprexa. Last month, Eli Lilly acquired Avid Radiopharmaceuticals, Inc. to bolster its Alzheimer’s disease portfolio.

The worldwide Alzheimer’s disease market represents huge commercial potential with companies like Pfizer (PFE) and Johnson & Johnson (JNJ) working on developing treatments for the disease. Eli Lilly currently has a phase III Alzheimer’s disease candidate, solanezumab, in its pipeline.

Our Recommendation

Currently we have a ‘Neutral’ recommendation on Eli Lilly, which is supported by a Zacks #3 Rank (short-term “Hold” rating).

 

 

 
 

 
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