Eli Lilly’s (LLY) Cymbalta will be coming up for review before the US Food and Drug Administration’s (FDA) Anesthetic and Life Support Drugs Advisory Committee on Aug 19, 2010. Eli Lilly is seeking to expand Cymbalta’s label so that the product can be used for the management of chronic low back pain and treatment of chronic pain due to osteoarthritis.
Concerns Raised Regarding Liver Damage
The FDA advisory panel will vote on Cymbalta’s efficacy, safety and overall risk-benefit profile for the chronic pain indication. The panel has been asked to pay special attention to the incidence of hepatotoxicity (liver damage) associated with the use of Cymbalta.
Eli Lilly has been working on expanding Cymbalta’s label for the chronic pain indication, though without much success. The company had initially filed for approval for this indication in May 2008. However, Eli Lilly had to withdraw the application in November 2008 as questions were raised regarding the efficacy results that were submitted by the company. The company, subsequently, resubmitted its application in June 2009 with additional data.
Label Expansion Will Boost Sales
Cymbalta, approved for several indications, is a major contributor to Eli Lilly’s top-line. It is currently approved for the treatment of diabetic peripheral neuropathic pain (DPNP), fibromyalgia (FM), major depressive disorder (MDD), and generalized anxiety disorder (GAD) in adults. Cymbalta sales came in at $3.07 billion in 2009, accounting for 14% of total revenues. Additional indications should help drive sales further.
It is estimated that although more than 45 million Americans suffer from chronic pain, only one-fourth of the people suffering from chronic pain receive proper treatment. Currently used treatments include non-steroidal anti-inflammatory drugs (NSAIDs), opioids, and COX-II inhibitors. Cymbalta’s approval for the chronic pain indication would expand the patient base for the drug significantly.
A positive recommendation from the FDA’s advisory panel would be a major boost for Eli Lilly, which has been in the news for all the wrong reasons lately. The company recently received two unfavorable court rulings in patent infringement cases involving Gemzar and Strattera.
Moreover, the company faced a major pipeline setback when it had to halt the development of its late-stage Alzheimer’s disease candidate, semagacestat, based on disappointing preliminary results from two ongoing phase III studies.
Neutral on Eli Lilly
Several major products in Eli Lilly’s portfolio are scheduled to lose patent protection in the next few years and the company needs to bring new products to market so as to help make up for the loss of revenues that will take place once products like Zyprexa lose exclusivity.
Barring significant cost-cutting efforts or additional revenue catalysts, 2013 will be the beginning of a very challenging period with Cymbalta losing US patent protection during the year. On the flip side, strong performance of the diabetes business, the ramp of Effient and upside from the ImClone deal should offer some downside support. We are also pleased to see Eli Lilly pursuing small acquisitions and in-licensing deals to boost its pipeline. We currently have a Neutral recommendation on Eli Lilly, which is supported by a Zacks #3 Rank (short-term ‘Hold’ rating).
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