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[DewDiligence]

Lilly Bets on Prasugrel

[A helpful companion read is #msg-18197555.]

http://online.wsj.com/article/SB118713994336698008.html

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By PETER LOFTUS
August 15, 2007

Eli Lilly & Co.'s long-term prognosis hinges on whether its experimental heart drug is better than a current blockbuster, and an answer is expected soon.

By early November, the Indianapolis pharmaceutical company hopes to release results of a large patient trial of prasugrel, the most important experimental drug in its pipeline. Prasugrel is a blood-thinning agent designed to prevent recurring heart attacks and strokes in people with cardiovascular disease.

The market opportunity is huge. The leading blood thinner, Plavix, generated nearly $6 billion in sales last year for its co-marketers, Sanofi-Aventis and Bristol-Myers Squibb Co. Lilly and its Japanese development partner, Daiichi Sankyo Co., hope their drug will prove superior to Plavix and -- if it receives regulatory approval -- begin to take away market share from Plavix.

"If prasugrel really is demonstrably better, it can get a major share of that business," said Stephen Laveson, an analyst with Becker Capital Management, a Portland, Ore., investment firm that owns Lilly shares. Wall Street analysts predict annual prasugrel sales could approach $4 billion.

Earlier studies have suggested prasugrel is more potent than Plavix in blocking blood-platelet activity, which is a mechanism that helps ward off heart attacks. The latest trial of nearly 14,000 patients in 30 countries will show whether that potency translates into a reduction in cardiovascular deaths, heart attacks and strokes in people undergoing a certain heart procedure.

But for a blood-thinning agent, potency could come at a cost: a side effect is bleeding. The latest trial must also show that the risk of serious bleeding with prasugrel isn't significantly worse than that for Plavix, if prasugrel is to gain regulatory approval and market acceptance.

"One of the questions is, 'What's the trade-off?' " said Christopher Granger, director of the cardiac-care unit at Duke University Medical Center. "How potent can we get before we go too far and have caused intolerable bleeding?"

Lilly executives have said an earlier study showed no statistically significant difference in overall bleeding rates between the drugs. Also, a committee of experts met periodically to monitor safety issues in the latest trial, and cleared it to run to completion.

Trial investigators are now examining data from the new Lilly-funded study, which began in 2004 and ended in July. Lilly hopes to present the data at a medical meeting in early November, but hasn't ruled out publicly disclosing preliminary results before then. If the data are positive, Lilly hopes to submit prasugrel for Food and Drug Administration approval by the end of this year. If the drug gets timely FDA approval, it could hit the market in 2008. Initially, the approved uses for prasugrel would be narrower than those for Plavix, but Lilly and Daiichi might seek additional approvals later.

Prasugrel is crucial to Lilly because its current best seller, the antipsychotic Zyprexa, is set to lose U.S. patent protection in 2011. Zyprexa generated more than one-fourth of Lilly's total revenue last year, or about $4.4 billion. Lilly needs another big seller on the market before much of Zyprexa's sales are lost to cheaper, generic competition. If prasugrel fails, Lilly's newer products and other experimental drugs may not be enough to fill the void.

Lilly has suggested it isn't overly dependent on prasugrel. "While it's a very important compound in late-stage development, it's not the only product in late-stage development," Chief Financial Officer Derica Rice said. He said the company is developing an inhaled form of insulin for diabetics, as well as an injectable form of Zyprexa. Still, the company has had pipeline setbacks, including a delay in regulatory approval of a drug for diabetic eye disease.

Investors seem to be taking a cautious approach in advance of the release of the new prasugrel data. "I don't think investors are making a big bet on it" ahead of the trial data, said Deutsche Bank analyst Barbara Ryan.

If successful, prasugrel would follow in the footsteps of Plavix and, before that, aspirin. All are known as antiplatelet agents, which work by blocking the formation of dangerous blood clots that lead to heart attacks and strokes. Studies have shown aspirin and Plavix reduce the risk of heart attacks and other cardiovascular events. Other companies are developing antiplatelet agents, including AstraZeneca PLC and Schering-Plough Corp. [#msg-18197555].

One limitation of Plavix is that its effect on blood platelets is variable, and some patients don't respond to it. Dr. Granger, the Duke cardiologist, said prasugrel appears to have a more consistent effect on platelets.

The effect of Plavix is predictable across the patient populations for which it is approved, said John Tsai, vice president of cardiovascular and metabolics research at Bristol-Myers. "It strikes a good balance between efficacy and safety," he said.

Dr. Granger thinks prasugrel needs to demonstrate at least a 15% reduction in risk of cardiovascular events compared with Plavix, if prasugrel is to be a success.

The prasugrel study has important implications for Bristol-Myers. The New York company recorded $3.3 billion in Plavix sales last year, or about 18% of its total revenue. Sales growth could slow if prasugrel reaches the market.

"We are taking prasugrel seriously, but we believe it will be focusing on a much smaller set of patients," Lamberto Andreotti, Bristol's chief operating officer of world-wide pharmaceuticals, told analysts on a conference call last month. He added that Bristol is waiting to see the late-stage prasugrel data before making a final assessment of how Plavix might be affected.
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